A number of reports this weekend revealed that the AFL-CIO and the U.S. Chamber of Commerce have come to an agreement on a new foreign worker program to be included in comprehensive immigration legislation being drafted in the Senate. I applaud the months of hard work by business and labor, who managed to negotiate a deal that will, on balance, be fair to both foreign workers recruited to work in the United States as well as workers already in the country.

If the agreement becomes law, a new foreign worker program—the “W” visa program—will be created for lesser-skilled, non-seasonal occupations that don’t require a college degree. But unlike current U.S. temporary foreign worker (“guestworker”) programs, it will include many new and necessary worker protections. Also, a new Bureau of Immigration and Labor Market Research will be established to inform Congress about the impact of immigration on the labor market. As Matt Yglesias pointed out yesterday, many aspects of the agreement are exactly what the Economic Policy Institute has been proposing for years.

Here are some of the key components of the proposed program:

Size of the W visa program

The new W visa program will gradually increase from 20,000 visas in the first year to 75,000 in the fourth year. From the fifth year on, the annual number of available visas will be set according to data-driven methodology, while also taking into account the assessments and recommendations of the newly established Bureau, but with a maximum limit of 200,000 visas. A third of these are reserved for small businesses. Employers who need workers in occupations experiencing bona-fide labor shortages will have priority in terms of getting the workers they need. This method of establishing fluctuating visa levels that correspond to the needs of the economy by using data, research and analysis is an important innovation that reflects the best practices of other modern net-immigration countries. It will allow our immigration system to be policy-driven, taking into account not only the needs of employers (which are key), but also a broad set of public interests.

Bureau of Immigration and Labor Market Research

In two EPI books—Immigration for Shared Prosperity and Value-Added Immigration—as well as a recent paper, former Secretary of Labor Ray Marshall has explained the need for an independent commission on foreign workers that would study the immigration and labor market nexus. It will conduct, for example, studies on where occupational shortages exist, and recommend where it might be sensible to use immigrant labor to fill such shortages, or whether it makes more sense to invest first in additional training and education for U.S. workers. A commission could also improve immigration data collection and analysis and overall transparency in the system. Ultimately, a commission would recommend to Congress, on a regular basis, the optimal levels of temporary and permanent immigration needed by employers, while preventing employers from flooding the labor market in occupations where shortages do not exist in order to keep wages from rising.

Unfortunately, the newly agreed-upon Bureau of Immigration and Labor Market Research will not be an independent agency or commission as Secretary Marshall has recommended. Instead, it will be housed within U.S. Citizenship and Immigration Services, a sub-agency within the Department of Homeland Security. Although it would have made more sense for the Bureau to be entirely independent or located within a more appropriate agency like the Department of Labor (DOL), the Bureau will be staffed by “experts in economics, labor markets, demographics and other specialties” and has the potential to do a lot of good things. For example, it will publish occupational shortage lists and make recommendations to Congress about “the impact of immigration on labor markets as well as the methods of recruitment of U.S. workers.” If the Bureau becomes a reality, it will be exciting to see it spur improvements to our immigration system.

Worker protections in the W visa program

For years, EPI has advised against expanding existing guestworker programs without fixing their severe deficiencies, which allow employers to hire foreign workers without first recruiting U.S. workers, and to pay foreign workers less-than-average wages. Thankfully, the protections built into the W visa program are so comprehensive that it’s difficult to even refer to it as a “guestworker” program.

First, U.S. workers will be protected because employers must recruit “extensively” before hiring a W visa worker. Current requirements in the “H” visa programs are either non-existent or minimal. The Chamber and the AFL-CIO negotiated intensely the past few weeks on how to set wage levels for the program that would not negatively impact the wages of U.S. workers. Although the mechanics of how this will work are not yet known, foreign workers will be paid either the actual wage paid to other similarly situated workers or the local prevailing wage in the occupation. If managed and enforced properly, this will prevent average wages from declining.

And finally, foreign workers will now have the protections they need to be free from exploitation and abuse. As the International Labor Recruitment Working Group has explained, the first place foreign workers encounter exploitation is in their home countries, at the hands of foreign labor recruiters. The W visa program will require that recruiters be pre-certified by DOL, as a way to hold them accountable and shed light on an opaque industry that profits from vulnerable and under-informed migrants. Once workers arrive they’ll be able to switch jobs if they find themselves stuck with an unscrupulous employer. Today, most guestworkers cannot switch employers. That means if they’re fired they become deportable, a fact employers use to threaten workers if they complain about labor and employment law violations. W visa workers will also be allowed to self-petition for legal permanent resident status, instead of having to rely on their employer for it—another way employers can ensure workers keep quiet and do as they’re told. And when employers commit wage and hour violations, workers will have access to a new complaint process at DOL.

A model for reform?

Although these details are encouraging, it’s much too early to declare success. The framework of this agreement stills need to be turned into statutory language and debated in Congress. But if the new W visa program becomes a reality—and is managed and enforced properly—it has the potential to become the model for reforming all guestworker programs in ways that help grow the economy by quickly getting foreign workers to the employers and industries that need them most, while protecting the wages and working conditions of foreign- and native-born workers alike.