Will Democrats Err in Immigration Reforms?

In a speech Friday, Department of Homeland Security Secretary Janet Napolitano said the administration supports a "three-legged-stool" approach to reform "that includes a commitment to serious and effective enforcement, improved legal flows for families and workers, and a firm but fair way to deal with those who are already here." She spent almost the entire rest of the speech talking about enforcement, but offered no details about "improved legal flows."

Meanwhile, the reform taking shape on Capitol Hill appears to have only two legs: Most of the 11 million immigrants living in the United States illegally would be offered legal status, while enforcement would be ratcheted up through tighter employment verification. Missing from the agenda is a robust temporary-worker program to allow more immigrants to enter legally in the future.

This all has a familiar ring. In 1986 Congress passed the Immigration Reform and Control Act. The bill legalized 2.7 million illegal immigrants and ramped up enforcement with increased border patrols and employer sanctions for the first time in American history. Missing then, as now, was any provision to address the future labor-force needs of the U.S. economy.

By all accounts, IRCA was a failure. The one-time legalization temporarily reduced the number of illegal workers, but their numbers soon began to rise again as the U.S. economy continued to create job opportunities for low-skilled immigrants. With no legal path for entry, workers from Mexico, Central America and elsewhere crossed the border illegally or entered on nonworker visas and overstayed.

A temporary-worker program would recognize the reality that the U.S. economy benefits from low-skilled immigration. As the United States shakes off a deep recession, it is only a matter of time before job growth resumes, including lower-end jobs in retail, landscaping, food preparation and service, and home and commercial cleaning that attract low-skilled immigrants.

At the same time, the cohort of U.S. workers who have traditionally filled those jobs, namely high school dropouts, continues to shrink. In the past decade, the number of adults 25 and older without a high school diploma fell by 3.2 million, and their ranks will fall by another 2 million to 3 million in the next decade. Yet our current immigration system offers no legal pathway for anywhere near a sufficient number of foreign-born workers to fill that growing, structural gap in our labor market.

Now is the right time to fix this fundamental flaw in our system despite worries about the economy. A temporary-worker program will not aggravate the unemployment problem. If no jobs are available, immigrants will leave and potential immigrants will stay home. The economy is the main reason why apprehensions along the Mexican border have dropped by two-thirds and the illegal-immigrant population actually has declined in the past two years.

When the economic recovery picks up steam, a robust temporary-worker program will actually expand income and job opportunities for American families. An orderly inflow of legal, low-skilled immigrants will allow important segments of the economy to grow to meet rising demand. An expanding economy will create opportunities up the employment ladder, allowing American workers to produce more and earn more.

In a recent Cato Institute study, "Restriction or Legalization: Measuring the Economic Benefits of Immigration Reform," authors Peter Dixon and Maureen Rimmer found that a temporary-worker program that allows a 30 percent increase in low-skilled immigrant workers over the course of the next decade would boost the annual income of U.S. households by $180 billion.

Expanded legal immigration would increase the overall output of the economy, expand returns on investment, transfer smugglers fees to productive uses, and increase incentives for American workers to move up to better-paying jobs with higher employment rates.

In contrast, a policy of "enforcement only" promises only more political frustration, compounded by real economic losses from a downsized economy and relatively fewer job openings in better-paying occupations. Mr. Dixon and Ms. Rimmer calculate that a crackdown that managed to reduce low-skilled immigration by 30 percent would actually reduce the income of U.S. households over the same period by $80 billion a year. The advantage of legalization over restriction thus amounts to a sustainable "stimulus" for American families of a quarter of a trillion dollars year after year.

A temporary-worker program has been the missing ingredient in the ongoing effort to curb illegal immigration. We can only address this problem if both parties work together for real reform that includes the third leg — a legal channel to accommodate the future labor needs of a growing economy.

Republican leaders need to liberate themselves from the Lou Dobbs minority within their own ranks that will oppose any legalization. Democratic leaders need to face down their labor-union constituency that opposes any workable temporary-visa program. Working together, President Obama and a bipartisan majority in Congress can seize the current opportunity to reform the immigration system and finally fix the problem of illegal immigration.