Tag: immigration

Allow Renewals for Guest Worker Visas

Reforming low-skilled guest worker visas is a vitally important part of immigration reform. It will substantially reduce unauthorized immigration by providing a lawful pathway to enter and reenter the U.S. To that specific end, an effective guest worker visa has to be designed to address how migrant and guest workers actually behave. Allowing a guest worker visa to be renewed multiple times for each worker, assuming the worker follows the law when in the U.S., will decrease the incentives to migrate unlawfully. For each theory of migrant movement, allowing a guest worker visa to be renewed multiple times is compatible with migrant actions and will decrease unauthorized immigration. Here are the theories:

Target Income Theory

Under the target income theory, migrants come to the U.S. to meet a specific monetary or life goal, like starting a business or buying a house back home, that they would be unable to meet in their home country. Upon reaching the monetary threshold for that goal, they return home.  According to this theory, a recession in the U.S. would cause migrants to stay longer until they meet their targeted goal, while higher migrant wages or an economic boom would make them return sooner. 

If a migrant behaves according to this theory, he will work until the goal is met. Let’s say a guest worker visa allows a migrant to work in the U.S. for 10 years but no longer. If, at the end of that period, the migrant requires 2 more years of work to reach his income goal, the migrant will be tempted to overstay and work illegally until the goal is met. In this case, allowing the guest worker to legally stay longer and meet his goal will decrease the incentive to overstay on the visa. If the target income theory explains migrant behavior, allowing many visa renewals will help decrease unauthorized immigration. Renewable visas will allow immigrants to satisfy their income goal and return home.

Disappointment Theory

According to this theory, migrants return home if the economic conditions in the U.S. are less favorable than they imagined, or if the economic conditions in their home country improve. Migrants would prefer to return when conditions improve, at least temporarily, but many stay in the U.S. longer because it is difficult for them to reenter should they ever want to. The depth of migrant social networks in their home and destination countries greatly influence this effect.        

Guest worker visas that could be renewed multiple times will incentivize migrants to return home when conditions there improve because they will not fear being stuck there if they deteriorate. 

Circular Migration Theory

To distinguish circular migration from the disappointment theory above, migrants come to the U.S. for seasonal or yearly work but move back and forth as labor demand for their occupations changes. Beginning in 1986, this circular movement between Mexico and the U.S. was interrupted with expanded border security that increased the length of time that unauthorized migrants stayed here, which in turn increased the likelihood that they would settle permanently. Because migrants suddenly faced the possibility of being stuck in Mexico if they ever left, they decided to stay and work.    

If those migrants had a lawful way to cross the border, many would have returned to Mexico just as they did when the Bracero Program offered a visa to do just that. Renewable guest worker visas will allow some legal migrants to move back and forth for seasonal labor, lessening the incentive to illegally stay once here.

Conclusion

Migrants come for different reasons. Migrant actions might exhibit some or all of these theories, or enter the U.S. with one in mind and then switch to another during their stay. No matter which theory provides a better explanation of why migrants come, making the visa renewable as many times as possible will substantially decrease the incentive to migrate illegally or overstay a visa. 

Creating a guest worker visa that can be renewed multiple times will allow migrants to legally work in the U.S., leave while preserving the possibility of legal return, and thus reduce unlawful entry and visa overstays. A flexible and numerically large guest worker visa program will substantially reduce the supply of unauthorized immigrants by channeling them into the legal market. The more times that such a visa can be removed, the more effective it will be at decreasing unauthorized immigration.       

Immigrants Didn’t Take Your Job – The Byron York Edition

Byron York’s anti-immigration reform piece relies on at least three weak intellectual crutches:

  1. York assumes that immigration reform will import millions of immigrant workers for jobs that do not exist. In reality, immigration reform would allow more immigrant workers to come in response to job opportunities. Throughout American history, immigrants come when there are jobs for them and stop coming when there aren’t. Unemployment rates, economic growth rates, and employment growth in industries where immigrants tend to work are great predictors of immigrant flow. In the aftermath of the housing construction collapse and Great Recession, the number of unauthorized immigrants dropped, and the cross-border flow shrank to a level not seen in 40 years.  Unauthorized immigrants don’t come when there aren’t jobs they can fill, and neither do legal workers. York doesn’t explain why that relationship would suddenly change.
  2. York ignores demand – the other half of the supply and demand model. Assuming that immigrants are just workers ignores their impacts on the demand side. When immigrants buy goods, services, rent or buy property, or start firms here, demand is stimulated. Immigrants, like the rest of us, are more than just workers in a labor market. We also consume what is produced by that market. Excluding the worker from the U.S. through immigration restrictions would also exclude the consumer. According to a University of Georgia study, Hispanic and Asian Americans have $1.9 trillion in annual purchasing power. Those groups of new Americans, mostly added in recent decades due to increases in immigrant and subsequent births, are more than just workers. Future immigrants will be more than just workers too.   
  3. York relies on the lump of labor fallacy, implying that more immigrant workers somehow decrease the quantity of jobs available to American workers. Besides immigrants mainly coming when employment is available, stimulating employment creation once here, and creating firms– there are not a fixed number of jobs in the American economy. If there were a fixed number of jobs, then the large scale movement of women into the post-World War II labor force would have resulted in mass male unemployment. The opposite occurred.

The rest of Mr. York’s piece relies on anecdotes from a biased sample that refuses to deal with the arguments and evidence that support immigration reform.    

U.S. Policies Deter Inward and Encourage Outward Business Investment

This morning, Cato published a new study of mine titled, “Reversing Worrisome Trends: How to Attract and Retain Investment in a Competitive Global Economy.” The thrust of the paper is that, despite still being the world’s premiere destination for foreign direct investment, the U.S. share of the global stock of direct investment fell from 39% in 1999 to 17% today.

This downward trend is attributable to two broad factors. First, developing economies – many of which have achieved greater political stability, sustained economic growth, improved infrastructure and higher-quality worker skill sets – are now viable options for pulling in the kinds of FDI that was once untenable in those locales. Second, a deteriorating business and investment climate in the United States – owing to burgeoning, burdensome, and uncertain regulations; an antiquated, punitive corporate tax system; incoherent immigration, energy, and trade policies; a wayward tort system; cronyism and perceptions thereof; and other perverse incentives and disincentives of policy have pushed investment away.

The first trend should be welcomed and embraced; the second must be reversed. From the study:

Unlike ever before, the world’s producers have a wealth of options when it comes to where and how they organize product development, production, assembly, distribution, and other functions on the continuum from product conception to consumption. As businesses look to the most productive combinations of labor and capital, to the most efficient production processes, and to the best ways of getting products and services to market, perceptions about the business environment can be determinative. In a global economy, “offshoring” is an inevitable consequence of competition. And policy improvement should be the broad, beneficial result.

The capacity of the United States to continue to be a magnet for both foreign and domestic investment is largely a function of its advantages, many of which are shaped by public policy. Considerations of taxes, regulations, trade openness, access to skilled workers, infrastructure, energy policy, and dozens of other policy matters factor into decisions about whether, where, and how much to invest. It should be of major concern that inward FDI has been erratic and relatively downward trending in recent years, but why that is the case should not be a mystery. U.S. scores on a variety of renowned business surveys and investment indices measuring policy and perceptions of policy suggest that the U.S. business environment is becoming increasingly less hospitable.

Although some policymakers recognize the need for reform, others seem to be impervious to the investment-repelling effects of some of the laws and regulations they create. Some see the shale gas and oil booms as more than sufficient for overcoming policy shortcomings and attracting the necessary investment. The most naive consider “American” companies to be tethered to the U.S. economy and obligated to invest and hire in the United States, regardless of the quality of the business and policy environments. They fail to appreciate that increasingly transnational U.S.-based businesses are not obligated to invest, produce, or hire in the United States.

It is the responsibility of policymakers, however, to create an environment that is more attractive to prospective investors. Current laws, regulations, and other conditions affecting the U.S. business environment are conspiring to deter inward investment and to encourage companies to offshore operations that could otherwise be performed competitively in the United States.

A proper accounting of these policies, followed by implementation of reforms to remedy shortcomings, will be necessary if the United States is going to compete effectively for the investment required to fuel economic growth and higher living standards.

Details, charts, and analysis, and citations are all included here.

Path to Citizenship vs. Legalization: Let the Immigrants Choose

Representative Goodlatte (R-VA) is working toward a compromise on legalization and a path to citizenship for unauthorized immigrants.  This issue is the current bottleneck in the immigration reform debate.  Many Republican, Goodlatte included, are skeptical of a path to citizenship for current unauthorized immigrants.  Many Democrats, however, will not support immigration reform unless some unauthorized immigrants are allowed to become citizens eventually.  Could this impasse make immigration reform impossible this year?

Goodlatte’s proposal, as far as we know, would be to grant unauthorized immigrants provisional legal status.  They would then be legally allowed to work and live here but only eligible for a green card or citizenship if they use the existing immigration system.  This proposal would shrink the number of unauthorized immigration who could eventually earn a green card or gain citizenship.

I suggest a third proposal: create two paths toward legal status.

The first path should lead to permanent legal status on a work permit that cannot be used to earn a green card unless the person marries an American or serves in the military (other categories should be considered too).  This path could be relatively easy and cheap, preferably a few hundred dollars to pay for the paperwork processing fee as well as criminal, national security, and health checks.

The second path should be toward a green card and eventual citizenship.  It should probably be similar to the Senate plan, take many years, and cost more money.  This should be the more difficult legalization process but it should not be any more difficult than what is included in the Senate bill.

Creating two paths will allow the unauthorized immigrants themselves to choose the type of legal status they wish to have in the United States.  This also addresses some of the concerns of immigration reform skeptics while actually allowing a path to citizenship that, theoretically, most unauthorized immigrants could follow.  Furthermore, this plan is probably more politically feasible than a one sized fits all path to legal status.  The sooner a reform is passes, the sooner the deportations can stop.

Currently every interest group involved in immigration reform is trying to choose which legal status unauthorized immigrants should have.  The unauthorized immigrant should instead be able to choose for themselves.  Ever more complex legalization and path to citizenship plans of the type Goodlatte will propose will not accommodate most of the 11-12 million unauthorized immigrants here.  Several paths toward legal status should be created and the unauthorized immigrants should be allowed to choose for themselves.

Immigration Reform Is Not Amnesty

Many opponents of immigration reform have labeled any type of legalization for unauthorized immigrants “amnesty.”  In common terminology, an amnesty is a general forgiveness for past offenses. Calling immigration reform amnesty brands it with a scarlet letter in the minds of many who are skeptical of reform.  A recent video made by the Cato Institute explains just some of the many steps an unauthorized immigrant will have to go through to become legalized if the Senate’s immigration reform becomes law: 

Here are some of the steps (this is not an exhaustive list) an unauthorized immigrant must follow to earn the initial registered provisional immigration (RPI) status:

  • In the country prior to 2012
  • Pays any and all outstanding tax bills (not back taxes)
  • Goes through national security and background checks
  • $1,000 fine
  • $500 fee
  • Then the unauthorized immigrant will receive a work permit valid for six years 

After six years, the immigrant will need to apply for another RPI permit:

  • Proves that she’s been employed for virtually the entire six year period
  • Be at no less than 100 percent of the federal poverty level
  • $500 fee

After four years, the immigrant can apply for a green card if she:

  • Proves she can speak English
  • Proves she hasn’t been on welfare
  • Passes another round of background and security checks
  • Pays all of the normal fees associated with a green card
  • The federal government meets most of its immigration enforcement goals

That doesn’t seem like amnesty to me.

Thomas Sowell on Immigration

Thomas Sowell is an influential and prolific writer whose books span the social sciences.  My shelves are full of them, decorated with underlines, marginalia, and dog-eared pages.  But in his recent columns and comments on immigration, Sowell has not approached that topic with the same rigorous attention to detail that he has in his books.  His reliance on incomplete historical examinations in his columns leads him to seemingly support a vast array of government interventions.  In these writings, Sowell makes the same mistakes that he accuses the “anointed” of making in many of his books.

In the column I’ll focus on, professor Sowell’s claim that today’s debate about immigration reform is not as fact-based as previous debates.  The implication is that a lack of facts will lead to poor policy decisions today whereas the policy changes 100 years ago were well thought out and fact-based.  He wrote:

A hundred years ago, the immigration controversies of that era were discussed in the context of innumerable facts about particular immigrant groups. Many of those facts were published in a huge, multi-volume 1911 study by a commission headed by Senator William P. Dillingham.

First, Sowell’s description of the Dillingham Commission’s commitment to facts is inaccurate.  It was a bi-partisan committee formed in 1907 to investigate the impacts of immigration on the United States – especially the so-called “new immigrants” from Eastern and Southern Europe.  The Commission was staffed by Progressives who believed that scientific managerial methods could effectively plan large parts of society and the economy by using the power of the government.  With the exception of one member, William S. Bennet of New York, the commission was stacked with members who had previously supported immigration restrictions. 

The Dillingham Commission produced 42 volumes by 1911, arguing that the “new immigrants” were fundamentally different from old immigrants who came from Western and Northern Europe.  Their culture, rates of economic success, and assimilative potential were supposedly severely constrained.  Those are the same claims made by today’s immigration opponents.  The Dillingham Commission suggested that immigration restrictions (ranging from relatively modest literacy tests to outright quotas and other massive interventions) could solve this “problem.” 

Thomas Sowell on the Economics of Immigration

Thomas Sowell, distinguished social scientist and columnist, recently criticized Rep. Paul Ryan (R-WI) for his statement that America needs immigration reform to avoid a “worker shortage.” Ryan was trying to explain that allowing more workers to come in the future would allow the economy to grow. He incorrectly used the word “shortage, which has a specific meaning in economics, and Sowell was right to criticize him for that. 

However, the economics of immigration are far more complex than Sowell’s writings let on. After dinging Ryan for his word choice, Sowell went on to explain that if American farmers don’t have enough workers, they will just raise their wages to attract Americans into the profession:

In agriculture, the farmers would obviously prefer to get workers who get low pay rather than workers they have to pay a higher wage… And as long as there is an unlimited supply of farm workers coming in from Mexico, they will never have to raise the wages very much… And it’s a time when millions of Americans are out of work, and are looking for any kind of work. And so this is utter nonsense.

If Sowell is going to quibble about words like “shortage,” it’s fair to criticize Sowell’s use of the word “unlimited” to describe the supply of farm workers coming from Mexico. If the supply of workers in agriculture was truly unlimited, or infinite, the wage would be 0. Furthermore, Americans are not “looking for any kind of work.” If they were, they would be lowering their wages quite a bit more than they currently are, until they become attractive hires. Relatively sticky wages even during periods of high unemployment are evidence that people are not “looking for any kind of work.”        

Issues of economic vocabulary aside, Sowell only described one possible outcome from a reduction in the supply of low-skilled immigrant farm workers: an increase in wages. The far more likely reaction is that American farmers will stop growing crops that require many workers. Without a large supply of low-skilled immigrant farm workers, labor-intensive farming would either shrink dramatically or disappear entirely.  American farmers would either grow different crops that could be profitably harvested mechanically or stop farming. American consumers would either import fruits and vegetables that require large numbers of workers from countries where those workers are abundant, or scale back their consumption of those food stuffs. Fewer workers also means fewer consumers of these agricultural goods, decreasing demand and partly offsetting some of the increase in price that would occur from a decrease in supply. Those effects would be the economically efficient outcome if increased labor scarcity was driven by changes in the free market. In this case, however, the increase in labor scarcity would come from legislation mandating such scarcity.