Tag: green cards

Defending Green Cards

The 2016 GOP platform states that:

“In light of the alarming levels of unemployment and underemployment in this country, it is indefensible to continue offering lawful permanent residence to more than one million foreign nationals every year.”

The GOP platform statement assumes that those on green cards take jobs from Americans, an assumption that is incorrect (see here, here, and here for more information). 

What’s actually indefensible about our green card system is how few of them come here for work purposes.  First, legal immigrant inflows to the U.S. as a percent of our population are small compared to other developed countries (Figure 1).  The only countries with fewer immigrant inflows as a percent of their populations are Portugal, Korea, Mexico, and Japan.  The United States does allow more immigration as an absolute number than any other country but we also have a very large population, making these annual flow figures seem small.

Figure 1

Immigrant Inflows as a Percent of Population, 2013

 

Sources: OECD, EuroStat, E-Stat, Citizenship and Immigration Canada.

These relatively small immigrant flows have only produced an immigrant percentage of our population that is midrange among the OECD countries (Figure 2).  New Zealand has the highest at 28.4 percent of their population while Mexico has the lowest at 0.84 percent of theirs.  The United States is in the middle at 13 percent.  Our legal immigration system is so restrictive that without unauthorized immigrants the U.S. population of the foreign-born would only be about 9.5 percent of our population – a 28 percent reduction in present numbers.

Figure 2

Immigrant Stock as a Percent of the Population, 2013

Source: OECD.

Green card workers admitted as a percentage of the total annual immigrant inflow are far lower here than in other countries (Figure 3).  Only about 7.7 percent of all green cards annually issued by the U.S. government are for workers – virtually all of them high skilled.  The employment-based green card system allowed about 140,000 green cards to be issued annually but that number also includes the family members of those workers.  In 2014, 56 percent of green cards set aside for skilled workers actually went to family while 44 percent were for the workers themselves.  The GOP platform wants to decrease this already small number of green cards for skilled workers even further.  

Employment-Based Green Cards Are Mostly Used by Family Members

The United States’ immigration system favors family reunification – even in the so-called employment-based categories.  The family members of immigrant workers must use employment-based green cards to enter the United States.  Instead of a separate green card category for spouses and children, they get a green card that would otherwise go to a worker. 

In 2014, 56 percent of all supposed employment-based green cards went to the family members of workers (Chart 1).  The other 44 percent went to the workers themselves.  Some of those family members are workers, but they should have a separate green card category or be exempted from the employment green card quota altogether. 

Chart 1

Employment Based Green Cards by Recipient Types

 

Source: 2014 Yearbook of Immigration Statistics, Author’s Calculations

Employment-Based Green Cards Are Mostly for Families

The United States’ immigration system favors family reunification – even in the so-called employment-based categories.  The family members of immigrant workers must use employment based green cards to enter the United States.  Instead of a separate green card category for spouses and children, they get a green card that would otherwise go to a worker. 

In 2013, 53 percent of all supposed employment-based green cards went to the family members of workers.  The other 47 percent went to the workers themselves.  Some of those family members are workers, but they should have a separate green card category or be exempted from the employment green card quota altogether. 

Source: 2013 Yearbook of Immigration Statistics, Author’s Calculations

How I-Squared Would Affect Employment Based Green Cards

Senator Orrin Hatch (R-UT) introduced the I-Squared Act of 2015 to reform the high-skilled immigration system.  Most of this bill attempts to improve the H-1B visa for temporary highly skilled workers by making the workers more legally mobile and increasing the quotas for that visa.  The H-1B is a dual-intent guest worker visa program, meaning that workers on the H-1B can pursue a green card while working on a temporary visa. The H-1B is a pipeline to the employment-based (EB) green card.

Most commentators will focus on the important and positive proposed reforms to the H-1B visa.  In contrast, I will focus on the reforms to the employment-based (EB) green card program.  I-Squared would exempt several categories of workers and their family members from the numerical quota imposed on EB green cards.  Although I-Squared does not increase the numerical quota, effectively it more than doubles the quota through exemptions.  As I detail here, this is a very positive move for U.S. economic growth.  Below I detail many of the exemptions in I-Squared and then make some suggestions for further streamlining and liberalizing the system.

Exempting Dependents

The most important exemption in I-Squared for EB green cards is for the spouses and children of workers.  Under current statutory interpretation, the family members of these workers count against the quota. Fifty-five percent of those who received the EB green card were the spouses and children of workers in 2013.  Allowing those spots to instead be filled with workers would more than double their number going forward.      

2013 Employment Based Green Cards: Families and Workers

Source: 2013 Yearbook on Immigration Statistics, Table 7.

Family Members Use Most Employment-Based Green Cards

Many critics of American immigration policy claim there is too much emphasis on family reunification and not enough on employment. It’s not a problem that families can reunify in the United States, but those critics are right that the American immigration system highly favors families – even in the employment-based green card category set-aside for workers.

The underlying issue is that the families of immigrant workers must use employment-based green cards. Instead of a separate green card category for spouses and children, they get a green card that would otherwise go to a worker. In 2012, 56 percent of all supposed employment-based green cards went to the family members of workers. The other 44 percent went to the actual workers. Some of those family members are workers, but they should have a separate green card category or be exempted from the employment green card quota of approximately 140,000 a year. If family members were exempted from the quota, or there was a separate green card for them, an additional 81,245 highly skilled immigrant workers could have entered in 2012 without increasing the quota.

In addition, 87.5 percent of those who gained an employment-based green card in 2012 were already legally living in the United States. They were able to adjust their immigration status from another type of visa, like an H-1B or F visa, to an employment-based green card. Exempting some or all of the adjustments of status from the green card cap would almost double the number of highly skilled workers who could enter.

Here are some other exemption options:

  • A certain number of workers who adjust their status could be exempted in the way the H-1B visa exempts 20,000 graduates of American universities from the cap.
  • Workers could be exempted from the cap if they have a higher level of education, like a graduate degree or a PhD.
  • Workers could be exempted if they show five or more years of legal employment in the United States.
  • Workers could be exempted based on the occupation they intend to enter. This is a problem because in involves the government choosing which occupations are deserving, but so long as it leads to a general increase in the potential numbers of skilled immigrant workers without decreasing them elsewhere, the benefits will outweigh the harms.

Selling Work Visas: Auctions or a Tariff?

Yesterday Professor Giovanni Peri presented an immigration reform plan that would auction work visas to employers.  As I wrote yesterday, Peri’s plan would diminish the misallocation of current visas but not do much to increase the quantity of work visas.  Since the real problem with America’s immigration system is a lack of work visas and green cards, Peri’s plan seeks to solve a rather miniscule problem by comparison.

Proponents of selling visas either support auctioning a limited number of visas to the highest bidders or establishing a tariff that sets prices but allows the quantity to adjust.  An immigration tariff is far superior to an auction of numerically limited work visas.  You can read my proposal in more detail here or listen  me explain it here.

Here are three reasons why an immigration tariff is better than an auction:

First, a tariff is the most market friendly way of restricting work visas.  Limiting the government’s role to setting the price of work visas, allowing the purchased quantities to adjust, would make for a much more market-friendly and flexible system.  A tariff would decrease immigration relative to open borders, but misallocation isn’t a big concern because immigrants with the most to gain would pay the tariff.

Second, an immigration tariff is more economically efficient because the quantity of work visas would adjust to market demand unlike an auction of numerically limited work visas.  When there is economic growth more people would buy work visas to keep pace with labor demand.  In slow economic times the number of visa purchases would automatically shrink.  With an immigration tariff, there is no need for a government commission to somehow figure out how many are demanded.  They can just set the price and let the market figure out the quantity.

Third, an auction system will not do much to diminish unauthorized immigration going forward.  An immigration tariff allows immigrants, temporary workers, American businesses, and families to plan ahead, save, borrow, and pool resources to pay the tariff.  Tariff prices will change, no doubt, but they won’t change all of the time as they would under Peri’s system.  An auction would provide less price certainty, fewer guarantees of entering legally, and incentivize more unauthorized immigration than a tariff.