American immigration policy is simply a mess! Skills of potential immigrants receive a lower weight in determining priority for legal immigration than in any other developed country. This year, the 65,000 places under the H-1B program that gives firms the opportunity to get temporary visas for skilled immigrants (up to two terms of 3 years each) were fully subscribed five days after the program opened. Approximately 11 million illegal immigrants are in the country. They are highly unlikely ever to be deported, yet have an insecure and restless future. And these are just some of the highlights of the U.S.’ immigration problems.
Any sensible immigration reform would greatly increase the opportunities for skilled immigrants to come to this country on a permanent basis. Once that were accomplished, there would be no need for an H-1B program, or any other program of temporary visas for skilled workers. The millions of illegal immigrants in the United States will not disappear, so like it or not, ultimately most of them will have to be offered a pathway to citizenship. The years of waiting in one’s home country before receiving a green card should end, and be replaced by a process where legal entry into this country is quick and efficient.
A group of senators from both political parties has introduced a bill for major immigration reform. This bill includes a substantial expansion in the H-1B temporary visa program from 65,000 to 110,000, expanded opportunities for skilled immigrants, a pathway to citizenship for many illegal immigrants, and further tightening of the border with Mexico. The bill also proposes a “merit-based” point system, already used by some other countries, that would award points to immigrants based on their education, employment prospects, and family ties. For example, young skilled immigrants would get many points, whereas older individuals not closely related to residents here would get very few points. Potential immigrants with greater number of points would have higher priority in the immigration queue.
This bill is a clear improvement in most respects over the current immigration system. Yet this is an easy criterion, given how bad current policies, and the bill has several major drawbacks. The pathway to citizenship for illegal immigrants would be contingent on first creating a more effective border fence and greater border policing activity. One major problem with that approach is that the pressure to enter from Mexico may be greatly declining. Net illegal immigration from Mexico during the past half dozen years has been minor, and possibly even negative. Of course, this is partly the result of the weak American labor market for low skilled workers due to the recession and its aftermath.
I believe, however, that the recession is not the only reason for the drying up of illegal immigration from Mexico. Since Mexican birth rates have plummeted during the past couple of decades, the number of young Mexicans looking for work in Mexico or the US has declined considerably. In addition, the Mexican economy has done well during the past decade, despite the American recession, so that many more jobs are available in the Mexican labor market. It is likely that even when the American labor market fully recovers, many fewer illegal immigrants will want to come from Mexico than had been the case in earlier decades. The sections of the Senators’ bill designed to limit entry of illegal immigrants may be in effect fighting an old battle that is no longer so relevant.
The second big problem with the Senators’ immigration bill is that it contains many arbitrary rules and quotas for different groups. It would allow so many to be admitted under temporary skill visas, another batch would be admitted under the merit-based point system, a certain number would be accepted because they have advanced degrees in math, engineering, and the sciences, a sizable number of lesser skilled workers can come in as guest workers under a new “W” visa, and so on. These are arbitrary limits due to political compromises between different factions and the different political parties.
I understand that politics will be important, but it is essential to recognize that a much better approach is possible. This approach sets a price for legal immigration, and allows everyone to enter, or legalize their status if they are here illegally, who can meet that price. Elsewhere (see my monograph, “The Challenge of Immigration: A Radical Solution”, 2011) I use as an illustration a price of $50,000. I show that such a price would attract young, skilled, and ambitious men and women since they would gain the most from coming here. Many illegal residents would be willing to pay that price too in order to legalize their status since there are huge economic and other advantages of becoming a legal resident. A loan program analogous to the student loan program would lend money to poorer but ambitious immigrants, so that they are not kept out by the cost of entry.
Many details to the selling approach have to be worked out (some can be found in the monograph, and also in the Wall Street Journal article by Edward Lazear and me called “ A Market Solution to Immigration”, March 1, 2013). Although the Senators’ bill is a major improvement over the present immigration system, it involves many arbitrary quotas and limitations. Selling the right to immigrate removes essentially all these restrictions, and requires only a single decision about what to charge immigrants for the right to enter the United States legally.