Foundations of Immigration Reform

Most people think America’s immigration system is broken. There are long lines to get in AND there are millions of undocumented immigrants already living in the country.

So what can Congress do to make our immigration system more sensible?

Most immigrants who receive green cards get them because someone in their family is already a resident of the US. Family ties are important, but shouldn’t trump all other priorities, like helping to fill excessive vacancies in the labor market.

More slots should be allocated on the basis of our country’s occupational needs. The easiest way to determine which industries and occupations are experiencing labor shortages is to identify those with rapid wage growth. When labor demand rises relative to supply, wages go up. Green-card limits could be adjusted periodically to reflect labor-market conditions.

Many might worry that more immigrant labor means reduced wages for native-born workers. Several studies over the years demonstrate that this is not the case. 

It is true that some are affected by competition for jobs from new immigrants. But even for them, the effects are minimal.

One study on the massive Soviet migration to Israel revealed that immigration had at most small effects on the wages of the native-born.

Another provides evidence that immigrants have negligible effects on the wages of those already in the country.

And if there is any impact, it is primarily on immigrants who arrived earlier. Using labor-market data to determine labor-market tightness will help us assure that existing workers aren’t negatively impacted. So what about the eleven million or so undocumented immigrants already in the country?

Most Americans accept that those who have entered illegally or overstayed their visas have committed a crime. Complete amnesty seems inappropriate and would encourage illegal entry in the future. As an alternative to deportation, however, one reasonable approach would be to fine undocumented immigrants rather than deport them.

Congress should create a “Z” visa, to be issued to undocumented immigrants who can demonstrate that on the day the bill is signed, they have been in the U.S. for say, three years or more and have no criminal record. The visa would allow them, their spouses and children to stay, provided that they pay an annual visa fee of, say, a few hundred dollars. Anyone with a “Z” visa could continue working while applying for a green card and paying the annual fee, but they would have to go to the back of the line, as would be the case if they were applying from their origin country. This approach neither favors nor penalizes them on their path for citizenship.

In order to discourage future illegal immigration, Congress should create appropriate incentives to apply for legal status. Employer enforcement is essential to ensure that the undocumented do not choose to stay in the shadows rather than pay the fee for a “Z” visa. Programs like E-Verify, where firms check if workers have a valid Social Security number, are necessary and should be enhanced. Firms that hire undocumented workers should be fined heavily, but should also be given safe harbor if E-Verify confirms that an applicant is permitted to work in this country. 

A system that penalizes employing those without legal status in the U.S. is also the best way to keep newillegal immigrants out. Immigrants who are unable to find work cannot afford to live and stay in the U.S.

And while border enforcement is necessary and uncontroversial, it is insufficient because nearly half of all illegal immigrants in the U.S. entered the country legally and then overstayed their visas.

Creating a system of more balanced immigration, introducing a Z visa to deal with the current population of undocumented immigrants, and adopting measures to discourage illegal entry in the future would significantly improve our immigration system.