President Trump saved several thousand factory jobs by brow-beating some CEOs, but he could also do something much more useful: He could create about 180,000 new jobs for American college grads just by abolishing an obscure bit of the immigration machinery.
Here’s a way to help the middle class without dealing with Congress; the president can do it with a stroke of the pen. It would not be a question of saving existing jobs (as in the case of the factory workers). It would lead to the creation of an additional 180,000 jobs for U.S. residents. Good jobs, too.
Currently, thanks to prior administrations, there is a generally unknown program in which the federal government subsidizes (through tax breaks) the hiring of 180,000 foreign college grads, taking jobs that could be held by Americans. It has the misleading title of Optional Practical Training (OPT) as there is no training involved, and though dedicated to foreign college graduates, it is disguised as part of the F-1 program for foreign students.
Without a lick of input from Congress, the Obama administration, building on a scheme used by the Bush II administration, expanded the OPT program. According to the Institute for International Education (IIE), there were 147,498 aliens holding OPT jobs in the American economy in the 2015-2016 academic year.
Given the recent annual increases in the program (22 percent-plus from 2014-2015 to 2015-2016) and given the fact the IIE survey does not cover (appropriately) the worst of the visa mills, which also have the power to issue OPT certificates, the actual number of OPT jobs at the moment is probably in the neighborhood of 180,000.
That is a prize worthy of special attention. More than 180,000 good jobs.
OPT certificates are not issued by the U.S. government, they are issued by colleges and universities that graduate the alien students. An OPT certificate is good for as much as three full years of legal status in the U.S. labor market, with the longer ones going to foreigners who have trained in the STEM fields (science, technology, engineering and mathematics).
The best part of OPT for the foreign alums — and a devastating factor to U.S. resident college grads (both citizens and green card holders) — is that employers are given a $10,000-$15,000 bonus for hiring an alien rather than an American with the same salary.
This is hard to believe, but true; recent administrations have waved a magic wand over the foreign grads and called them “students” so that the usual payroll taxes (Social Security and Medicare) do not apply to either their employers or to the students.
So the employer, faced with two equally qualified candidates for, say, a $60,000 a year job (for three years), each candidate being willing to work for that salary, has his choice. If he hires the alien the total payroll costs for three years will be $180,000; if he hires the citizen alternative, the employer will pay $193,770. The higher the salary, the bigger the bonus to the employer hiring the alien.
Since this strange program is based solely on administrative rulings, the president (or Secretary Kelly at DHS) can simply abolish it with an executive order.
My suggestion would be to announce that no more new OPT certificates will be issued from the day of the order, and that no renewals will be granted, either. But aliens holding these permits should be allowed to keep working until the current permissions expire. In that way there would be no need for massive dismissals of alien workers on short notice, but the act would, over three years, open up at least 180,000 new jobs for residents of America.
And there would be a substantial bonus — one to two billion dollars a year — for our older citizens, as the undeserved current savings come right out of the hide of the Medicare and Social Security systems. So this move would not only be in line with the president’s promise to increase the number of jobs for working-age Americans, it would also fit in with his promise not to cut Social Security and Medicare benefits for one-time working Americans.
In short, a really, really good twofer!
David North, a fellow at the Center for Immigration Studies, has over 40 years of immigration policy experience.