Commentary

The GOP and Immigration: Good Economics, but What about the Politics?

Immigration policy is an unimaginable mess. Which seems strange for a nation of immigrants. Yet today many descendents of immigrants want to pull up the drawbridge.

But the political dynamic is changing. While the majority of people still may prefer less immigration, they typically vote on other issues. Hispanics react more negatively to restrictive immigration policy — and especially the impression of being anti-immigrant. That is one reason Mitt Romney received little more than a quarter of that community’s votes in November.

Now many Republicans are pushing immigration reform. Former President George W. Bush called on the nation to act “with a benevolent spirit and keep in mind the contribution of immigrants.”

The immigration issue takes many forms. Some 30 million people visit America annually. They make deals, play tourist, and see family. Yet visa procedures are burdensome and discourage travel. Some American consular officials treat every prospective visitor as if he wants to stay in the U.S. illegally.

Just as there are costs of immigration, there are costs of attempting to restrict or eliminate immigration.”

The U.S. also is a traditional home for political refugees. Gaining asylum requires demonstrating fear of persecution. That often isn’t easy, especially since many oppressive states also are poor, leading to suspicion that asylum-seekers are covert economic migrants. Legal standards are not generous even for those whose lives may be at stake.

On average, around 2.6 million people enter America legally. About 1.1 million come as permanent residents and another 1.5 million temporarily — students and temporary workers, for instance. For more than a century there were few restrictions other than barring those with communicable diseases. In the early 1900s about 15 percent of the population was foreign born. Then Congress slammed shut the door. The U.S. refused to accept Jewish refugees even as Nazi persecution rose and World War II loomed. Eventually Washington cracked open the door again. Roughly 13 percent of the population today is foreign-born.

The immigration system is bureaucratic, arbitrary, and complicated, with rigid and overlapping quotas, national lotteries, and 25 different visa categories and subcategories. Attempt to navigate the system and you are reminded of Dante’s inscription for Hell: “abandon hope all ye who enter here.”

The most politically charged issue is illegal immigration, primarily from Mexico. Around 11 million people are thought to be in the U.S. illegally. Those here illegally are less likely to integrate into the community, develop long-term economic skills, and fulfill other legal requirements, such as buy auto insurance. They also are more vulnerable to mistreatment. Moreover, the illegal route is unfair to foreigners who “play by the rules” seeking one of the limited number of legal slots.

Immigration offers the U.S. substantial benefits. The relative openness of the American economy always has drawn the entrepreneurial minded and the more highly skilled and trained. Immigrants are more likely than natives to form businesses and generate patents. For instance, immigrants constitute 13 percent of the population but 18 percent of small-business owners. A Duke University study found that 25 percent of start-ups are run by foreign-born executives. Nearly four of every ten Fortune 500 companies were started by an immigrant or immigrant’s child.

More broadly, immigration expands the workforce and allows employers to quickly respond to changing demands. Bryan Caplan of George Mason University found that most immigrants are not directly competitive with most native workers.

Even when immigrants do compete, they encourage more productive Americans to move into higher-skilled work. Economist Giovanni Peri of the University of California (Davis) concluded that immigration raises the nation’s productive capacity by stimulating investment and promoting specialization. As companies adjust their physical capacity to the expanded labor supply they increase productivity and ultimately workers’ salaries.

Notably, over the last two decades the U.S. created two million jobs annually with rising wages despite the steady inflow of illegal immigrants. Indeed, states with the highest inflow tended to have the greatest growth.

Nevertheless, illegal immigration from Mexico may lower wages, or at least slow the growth in wages, for low-income workers, especially minorities and those without high school degrees. But protecting the least desirable jobs is a poor substitute for encouraging better education and training.

In general, the benefits of immigration overwhelm any negative impacts. For instance, the National Research Council figured that immigration results in “significant positive gains” to the existing population. Similar was the conclusion of the Council of Economic Advisers.

More difficult to quantify is immigration’s impact on culture. The U.S. long was known as a “melting pot.” While immigrants didn’t give up their identities and languages, they did join a larger common culture. Critics of immigration fear that is less so today, especially with such policies as bilingual education and foreign language ballots.

Jacob Vignor of Duke figured that cultural assimilation is lower than a century ago, but has been on the rise since the 1980s. Assimilation varies by nationality. That of Mexicans is lower than average, but that may in part reflect the significant rate of illegal immigration, which discourages fuller integration.

The Center for American Progress concluded that assimilation continues, though it may be disguised when there are a large number of visible newcomers. In fact, Bryan Caplan found that Hispanic immigrants and especially their children are learning English as well as earlier immigrants. A Michigan State study reported that 88 percent of the children of Hispanic immigrants preferred English even though 90 percent of them spoke Spanish at home.

Perhaps the biggest challenge to immigration is the welfare state. Milton Friedman warned that the latter makes open borders impossible. Immigrant eligibility for some welfare benefits is limited, but access to education and health care is automatic even for those here illegally. The prospect of receiving free medical care draws expectant mothers from Mexico into U.S. Border States.

Overall the National Research Council figured that the typical immigrant family and its descendents paid $105,000 more in federal taxes than it collected in benefits but received $25,000 more in state benefits than it paid in state taxes. Results from other studies vary. However, there is agreement that lower-skilled immigrant households, especially in which the heads lack high school degrees, are a net government cost. And education levels within these families remain below average for years. Still, these people come to work, not get on welfare. And illegal status hampers employment advancement.

Just as there are costs of immigration, there are costs of attempting to restrict or eliminate immigration. Border control will never be cheap for a generally free society with long borders. Attempting to wall off the world isn’t — and shouldn’t — be easy. Moreover, border controls result in more than financial cost. Internal restrictions, such as ID cards and employer sanctions, undermine the very freedoms that Americans most prize. So would rounding up and deporting the millions of people in America illegally.

When Congress addresses this complicated issue, the simplest policies should be travel visas and refugee status. Standards for both should be made more liberal and less bureaucratic. The price of “mistakes” — a few more people staying in America improperly — would be small. And if overall immigration policy was liberalized there would be less incentive for people to misuse these processes.

More generally, Republicans should, as incoming Sen. Ted Cruz (R-TX) put it, become champions of “legal immigration.” For instance, why restrict the entry of high-skilled workers? Almost everyone agrees to encouraging STEM immigrants, that is, foreign graduates of American universities in science, technology, engineering, and math. With India, China, and other nations reforming their economies, the U.S. needs to do more to maintain its drawing power for the world’s would-be entrepreneurs.

Increasing opportunities for the better skilled also would help address the GOP’s fear that immigrants inevitably support Democrats. Phyllis Schlafly warned that “The reason Hispanics vote Democratic is that two-thirds of Mexican immigrant families, although they are hard workers, are in or near poverty and 57 percent use at least one welfare program, which is twice the rate of native-born non-Hispanic households.” Changing the immigrant mix would reduce immigrant dependency.

Nevertheless, family reunification remains important. Leaving one’s loved ones is a high price to pay even for economic success. Conservative Republicans, in particular, voice support for family values. That should apply to those entering America legally. Expanding skills-based admissions would make it possible to continue to emphasize families.

The worst way to reform immigration would be to retain the existing legal structure, merely manipulating different categories and attempting to strengthen border enforcement sufficiently to prevent new illegal immigration. Whatever the gain from additional immigrants, today’s systemic problems would remain. And the more complicated the reform, the harder it would be to pass. Outgoing Sen. Kay Bailey Hutchison (R-TX) complained that in 2007 “Every time you tweaked one part of comprehensive reform, something else then became an issue or a question.”

Better it would be to expand the number of legal immigrants while simplifying the process. Open borders won’t happen, especially with a welfare state. However, a thoughtful alternative from my Cato Institute colleague Alex Nowrasteh is immigration tariffs. The level could be adjusted for desired status (citizenship or temporary work), educational achievement, skill level, and family connection. Rates also could be calibrated to the estimated cost of government services likely to be consumed or to change overall immigration levels. A similar system would result from Giovanni Peri’s proposal to auction off temporary and permanent entry rights.

These approaches would sharply reduce the incentive for people to come to America illegally. Pay the price and you have all the benefits of legal status. The alternative isn’t going to be cheap: after you paid a smuggler and suffered the physical hazards of illegal entry, you would earn less and risk deportation. Some people may still prefer the illegal option, but the overall problem would be far smaller.

Those already here illegally remain a separate problem. Since a massive round-up is unlikely — and, indeed, unimaginable in a free society — regularizing people’s status is imperative. They did break the law, but to achieve a better life for themselves and their families, not to hurt others. Many Americans, including some of the most vocal critics of immigration, would do the same if circumstances were reversed.

Yet it is important to not unfairly penalize would-be immigrants who followed the rules and remained outside of America. Rep. Raul Labrador (R-ID) advocated “a legal process where people know they can be here for a long period of time, renew their visas, but you don’t need a pathway to citizenship.” Still, many of these people have spent years in the U.S. and are American in all but legal status. One option would be to grant them temporary work visas with a longer-term path to citizenship and a higher tariff rate.

Special attention should be paid to reducing subsidies and increasing acculturation. If you choose to come to the U.S. you should expect to make your own way. Yet, reported Jillian Kay Melchior on National Review online, the number of non-citizens receiving Food Stamps has quadrupled since 2001. No humane person wants people to go without medical attention, but care for those who arrive illegally could be left to private charity. If you violate the law in coming, then perhaps you shouldn’t expect the state to educate your children.

So-called “birth right” citizenship stems from the 14th Amendment, which ensured citizenship for the free slaves; the exact parameters of constitutional requirement have never been decided. There is no obvious reason to automatically grant citizenship to the children of foreigners who are in America, especially illegally. It’s an issue that should be debated within the context of liberalizing overall immigration.

Equally important is the health of institutions which encourage assimilation. People should be free to speak whatever language they want, but that doesn’t mean public schools should teach in a foreign language. Moreover, immigrants can learn enough English to participate in the public square. These are small but symbolically important tests for acculturation. A clearer government expectation that immigrants will enter into a common national discourse might reduce opposition to increased immigration.

Renewed GOP interest in addressing immigration may nudge Washington closer to a solution. Republicans could demonstrate their appreciation for the role of immigrants while reducing both unnecessary federal bureaucracy and welfare payments. And people who have come to America to work could finally become full participants in the national community to which they now belong.

Liberalizing immigration would be good policy. The right kind of reform also would be good politics.

Doug Bandow is a Senior Fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he also is a Senior Fellow in International Religious Persecution with the Institute on Religion and Public Policy.