Q&A: Understanding the J-1 Program – The Star-Ledger – 9/5/11

The Star-Ledger

Q&A: Understanding the J-1 work-travel program

By Star-Ledger Staff

The State Department brings thousands of foreign students here as part of the J-1 summer work-travel program. Students pay hefty fees for visas and job placement — in addition to travel, housing and other expenses. However, the department outsources management of the program to a sponsoring organization, which, in turn, outsources to other companies. Instead of treating the students as potential goodwill ambassadors for the United States abroad, companies are treating them as a source of cheap labor.

About 300 foreign exchange students participating in the program went on strike at a Hershey’s packaging plant in Palmyra, Pa., this month. Students want a refund and say Americans should get the jobs at living wages, which is how the packing plant was once staffed. Other J-1 work-travel students have been placed in seasonal jobs at Morey’s Pier in Wildwood. The law doesn’t require companies to advertise J-1 work-travel jobs to Americans. Employers prefer J-1 workers because they’re cheap labor, for whom they don’t have to pay state or federal unemployment taxes, Social Security, Medicare or health insurance costs. Congressional hearings on the program will take place in the fall.

Editorial writer Linda Ocasio spoke with Daniel Costa, an analyst with the Economic Policy Institute in Washington, D.C., who has written a paper critical of J-1.

Q. How does the J-1 summer work-travel program operate?

A. The Department of State outsources management of the program to a sponsoring organization, which can be a for-profit or nonprofit entity. Sponsors market themselves as temp staffing firms. They work with foreign recruiters to find students. To participate, you have to be a college student in your home country, on your summer break. In South America, for example, the summer occurs during our winter, so that’s when those students would participate, and in the spring, students from Thailand and the Philippines arrive. Students work for three months and then have one month free before they return home. Last year, 132,000 foreign exchange students participated in the program.

Q. What happened at the Hershey’s plant?

A. One of the big sponsoring organizations, the Council on Educational Travel U.S.A., is involved at the Hershey’s plant. Hershey’s has had nearly 400 J-1s working year-round for a number of years. As one group finishes, another rotates in. They work day and night, long hours, packing boxes of Kit Kats — and the only cultural exchange that goes on is between J-1 students. Students paid as much as $6,000 for the Hershey’s jobs, which includes fees paid to CETUSA, for their visas, and for travel and health insurance costs. They think they’ll earn the money back, with a little left over to travel for a month. They are also responsible for their own housing. Rent, which was charged to them at twice the market rate, was automatically deducted from their paychecks. That left them with about $40 to $140 at the end of the week, so most didn’t think they’d make back the money they invested or borrowed from their parents. J-1s are usually too scared to complain because employers and sponsors threaten to deport them before they can earn enough to pay back all the debts they incurred.The students stood up and protested these abuses (for themselves), and even on behalf of local unemployed Pennsylvanians. The students also made the point that these should be full-time jobs offered to locals first. Instead, the J-1 has become a way to outsource jobs while still keeping them in the United States. This entire program is out of control, despite originally having some noble goals.

Q. What have other J-1 students experienced?

A. There have been reports and cases of some students working in strip clubs or being forced into prostitution. In Austin, Texas, some Russian students were laid off as lifeguards and ended up begging on the streets. In Laurel, Md., a Turkish kid paid his money to participate in the program, and for housing and training to be a lifeguard. He then was laid off soon after he paid for everything, was kicked out of his apartment, and the companies and landlords got to keep all the money. J-1 student workers should really have jobs that have educational, scientific or cultural value, and more importantly, where they’re not required to work 60 to 70, or even 100 hours a week, as has been reported.

Q. Who is responsible?

A. In the Hershey’s case, CETUSA contracted with another company for payroll and staffing, which then contracted with a third company to manage the Hershey’s warehouses. Four entities are involved, including Hershey’s, each pushing responsibility on to the other. I would argue they’re all responsible — and liable. And that doesn’t even count the recruiters in foreign countries who also get a cut of the profits.

Q. Is this is an embarrassment for the Obama administration?

A. This has been going on for many administrations. There have been harsh government reports on the program dating back to 1990. The State Department has broad, sweeping authority to run this thing, but no one in Congress has taken a hard look at it or exercised any type of real oversight. The State Department hasn’t been pressured enough or had the will to make the necessary fixes. It’s at Hillary Clinton’s doorstep now — she can easily fix or end the program today.

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