May 28, 2007
Immigration Reform
Immigration Reform-BECKER
After extensive debate, the United States Senate last week passed a comprehensive immigration bill. I believe the bill is a mixed bag of good and bad reforms that pleased none of the vocal interest groups.
As I have argued before (see my blog entry on October 16, 2005), the United States would benefit greatly from immigration of many engineers, computer experts, scientists, and other highly skilled men and women. The increased value of skilled workers in the economy is reflected in the growth in the earnings during the past 25 years of more educated and other skilled workers relative to earnings of the less educated and skilled. The higher value placed on skilled workers is due both to the development of computers, biotech, and other technologies that favor skilled workers over less skilled workers, and to the advantages in a global market of producing skilled goods.
Large-scale immigration of more educated and other skilled workers would help satisfy the economy's thirst for skilled workers. By increasing the supply of skilled workers, such immigration would also reduce the widened earnings gap between more and less skilled workers. Skilled immigrants have many other advantages: they have very low crime rates, they are young and employed, they do not draw unemployment compensation benefits or social security benefits, they contribute a disproportionate amount in taxes, and their children generally do well in school.
By "large-scale" I mean one million or more skilled immigrants per year. This may seem like a lot, but currently the United States takes about 1 million legal immigrants each year. With a total population of over 300 million, this country should not have difficulties in absorbing one million skilled immigrants annually. The Senate bill does provide for 200,000 temporary guest workers per year plus a much smaller number of employment-based visas each year for the next 10 years. These "temporary" workers would in fact have an easy road to citizenship. Even if all these slots were filled by skilled workers-and the bill gives little if any priority to skilled workers- the numbers admitted each year would be far below my goal of a million skilled workers per year. So the Senate bill is on much too small a scale, and gives insufficient emphasis to skilled workers, which is where immigration reform should be centered.
The hardest challenge to immigration reform is to decide what to do with the 8-12 million illegal immigrants already here. The bill proposes a three-tier policy. Illegal immigrants who have been in this country for 5 years or more (estimated at over 6 million persons) would be granted immediate amnesty. Illegal immigrants who have been here between two and five years (several million more illegals) could with somewhat greater difficulty arrange to receive amnesty and lawful work permits. The roughly two million illegal immigrants here less than two years would not get amnesty, and they would be deported if apprehended.
It will be a nightmare enforcing this provision since it will impossible to determine for many immigrants whether they have been here illegally two years or more. Those who have been here less than two years have a very strong incentive to claim that they have been here much longer. One can imagine the lawsuits and other enforcement problems in trying to determine the length of stay for person who crossed illegally, and have held jobs in the underground economy where they were paid in cash with little record keeping.
In addition to these practical difficulties, amnesty is a bad approach conceptually. Granting amnesty now attracts additional illegal workers in the future since they anticipate future amnesties that would legalize their being here. The previous major amnesty of illegal entrants in the 1980's was not forgotten in the immigrant communities. These communities are kept closely informed about all the details of new proposals on immigration.
As Posner indicates, amnesties are common in other areas, and are used, for example, to collect back taxes. The attractions of amnesties are due to what economists call "time inconsistency". Amnesties do encourage violation of tax and other laws, and ex ante are undesirable. However, after the fact, amnesties are useful in order to get more tax revenue, recognize the large numbers of illegal residents already in a country, etc. So this conflict between what is desirable when formulating policies, and what is desirable after policies have been in effect for a while, is what explains the popularity of amnesties. Despite the after the fact advantages of tax amnesties, immigration amnesties, etc., countries are likely to be better off if they could avoid having them at all.
An approach better than immigration amnesties is to adapt to the illegal immigrant case my suggestion to sell the right to immigrate (see the blog entry on February 21, 2005). Under this plan illegal immigrants already here could legitimatize their status, but they would be subject to an additional penalty by being forced to pay a fee, or fine, to the federal government. The exact amount would have to be determined, but suppose it would be $10,000-$15,000. Any illegal immigrant who could pay that fee would be granted immediate legal status similar to that granted by the Senate bill to those here five or more years. If ten million illegal immigrants each paid $10,000, that would aggregate to $100 billion, or about 5 percent of the total federal government budget. Immigrants who did not buy their legitimacy would be subject to arrest and deportation, in the same way as the Senate bill would treat those immigrants who have been here less than two years.
Selling the right to stay to illegal immigrants would be recognition of the reality that America is highly unlikely to deport more than a small fraction of the millions of illegal immigrants who are already here. Requiring illegal immigrants to pay a fine to buy the right to stay would not give them a free ride, but would impose a cost on their being here illegally. By contrast, the amnesty approach in effect tells illegal immigrants they can stay without cost even though they broke American laws that determine who has the right to come here. At the same time, many illegal immigrants would jump at the opportunity to pay to stay here if that would legitimatize their immigration
Immigration Reform--Posner's Comment
I find little to disagree with in Becker's post, except with regard to his disapproval of amnesty--but here our disagreement may be merely terminological, as I shall explain.
The path of reform, if one ignores the politics of immigration reform, seems obvious. If there are indeed 12 million illegal immigrants in the United States, then since only a tiny fraction will ever be deported, the status of all of them ought to be regularized, which means put on the path to U.S. citizenship. That is amnesty, which for some reason horrifies a lot of people. Amnesties are a long-established device for dealing with social problems. Tax amnesties are especially common. An amnesty need not, and in the case of tax amnesties is not, a get-out-of-jail-free card. The taxpayer has to pay his back taxes in order to be spared criminal punishment. He benefits because paying taxes is a less severe penalty than being imprisoned for nonpayment of taxes, and the government benefits by obtaining additional tax revenues that it would not have obtained had it not offered the amnesty but instead had tried to catch the tax cheats, because it would often fail. Similarly, in the immigration case, the illegal immigrant is offered the chance to avoid deportation at the cost of having to pay a fine (or in Becker's proposal, a fee for purchasing the right to remain in the United States as a lawful resident.). Hence the program currently before Congress is an amnesty program although the politicians carefully avoid the word. If the fine is too stiff, however, many illegal immigrants will prefer to remain in that status since the probability of being caught and deported is for most of them slight.
I would not, save in exceptional circumstances, approve of amnesty for people who commit serious crimes. However, an illegal immigrant whose only violation of U.S. law is entering the country without authorization or overstaying a tourist visa is, though of course subject to deportation ("removal," as it is now called), not treated as a criminal.
I agree with Becker that there is no sense in limiting amnesty to a subclass of illegal immigrants. That would just leave several million illegal immigrants in the country, their status unchanged. There is also the difficulty of determining how long an illegal immigrant has been in this country. In the context of legal proceedings potentially involving 12 million persons, anything that requires difficult evidentiary determinations in even a small percentage of those proceedings would place enormous strain on the adjudicative machinery of the federal government.
Becker is correct that the downside of an amnesty is that it reduces deterrence by creating an expectation of a future amnesty. But I do not consider that a substantial objection in the present instance. The reason is that there are two parts to sensible immigration reform. Amnesty is only one. The other is sealing our borders against future illegal immigration. If we do not seal our borders--which I do not mean literally, as that is impossible: I mean if we take effective measures to drastically reduce the flow of future illegal immigration--then in a few years we will be back where we are today, with once again millions of illegal immigrants. If we do succeed in drastically reducing the inflow of illegal immigrants, we won't have to worry a great deal about the effect of the prospect of a future amnesty on illegal immigration. For there are two methods of preventing illegal immigration. One is to deter it by threat of sanctions, such as deportation or criminal punishment. The other is physically to prevent the entry of an immigrant who is not authorized to enter the country. It is a substitute for deterrence as a mode of prevention, and if it is effective the need for deterrence is reduced.
It is possible too that the inflow of illegal Mexican immigrants will slow drastically. As I mentioned in one of my earlier posts on immigration reform, when a nation's average GDP reaches one-third the U.S. level, illegal immigration to the United States drops to a very low level. Mexico is a potentially wealthy country, held back from realizing its potential by its political culture. If there is anything we can do to help Mexico prosper, it will reduce our problem of illegal immigration. But even without our help, Mexico may turn the corner to prosperity, as so many countries have done in recent years.
The problem with sealing the borders, apart from the cost of building, maintaining, and patrolling an immensely long fence on the Mexican border, as well as controlling our coastlines, is that virtually anyone can obtain a tourist visa to enter the United States, and once here can disappear. However, there are other measures for reducing illegal immigration, including requiring all persons in the United States to carry biometric identification, imposing stiffer penalties on employers of illegal immigrants, and criminalizing first-time illegal immigrants rather than just repeats. But what I think would be particularly promising would simply be to make legal immigration from Mexico and Central America much easier.
I am not enthusiastic about guest-worker programs. Guest workers may disappear into the illegal-immigrant pool, and if they have children in the United States the children will be U.S. citizens, so that sending the guest workers back to their country of origin may result in breaking up families.
I agree completely with Becker that we should allow a million highly skilled workers a year into the United States. Everyone will benefit because workers are usually unable to capture in their wages their entire social product. Even the highly skilled workers already in this country are likely to benefit in the long run, even if their wages are temporarily depressed by the surge in competition from the new immigrants. The reason is that the increased number of highly skilled workers will increase the rate of technological progress in U.S. industry, which in turn will increase the demand for highly skilled workers.