Immigrants Come to Work, So Let's Ease Their Arrival

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Can the Senate pass an immigration reform bill? No one knows for sure, but optimism is running high.

On Monday a bipartisan group of senators, including Democrats Chuck Schumer ( New York) and Dick Durbin (Illinois), and Republicans Lindsay Graham (South Carolina) and Marco Rubio (Florida), announced an outline for a broad immigration bill. It would be the first such bill to become law since the Immigration Reform and Control Act of 1986.

The proposal, which has yet to be fleshed out in the detail that often confounds agreements in principle, would offer a path to legal status to many of America's 11 million unauthorized immigrants. The senators contemplate that these immigrants would first be eligible for work permits, and then would be able to join the back of the line to get green cards and citizenship. That will be hotly debated on Capitol Hill.

The path to legal status would be open to immigrants who have not committed serious crimes and who pay back taxes they may owe, as well as a fine. For men and women who have been working here for years and have paid no taxes, that could be a high hurdle.

The proposal states that immigrants on work permits would not qualify for federal public benefits, such as food stamps, free school lunch programs, and health insurance subsidies under the Affordable Care Act. The status of state welfare programs, such as Medicaid and unemployment insurance, would presumably be decided by individual states.

The emerging bipartisan agreement would make it easier for new immigrants to enter the country legally, and strengthen enforcement measures, at the border and in the workplace.

Legal immigration confers substantial economic benefits on the United States, a country of immigrants since the settlements at Plymouth Rock, Massachusetts in 1620 and Jamestown, Virginia in 1607.

Few deny that immigrants, documented and undocumented, contribute importantly to the economy in many sectors, including hotels and restaurants, construction, landscaping, house painting, agriculture, home health care, car washing, and other services.

In science, engineering, health care, and high tech, countless highly-educated immigrants add to our national income. The shortage of nurses would be more acute without the many trained immigrants in our hospitals.

An aide to House Speaker John Boehner told me, "The Speaker welcomes the work of leaders like Senator Rubio on this issue, and is looking forward to learning more about the proposal in the coming days."

A similar immigration reform plan failed in 2005 and 2007, when Senator John McCain, Republican of Arizona, and the late Senator Edward M. Kennedy, a liberal Massachusetts Democrat, co-sponsored bills. That they were not enacted was not for want of presidential leadership, for in 2007 President George W. Bush travelled the country promoting immigration reform.

Rather, in 2007 some Republicans opposed the immigration bill because they said that it would reward people coming into the country illegally. Some Democrats didn't want to vote for it because they didn't want Mr. Bush to be the president who signed immigration reform into law.

As America emerges from a protracted recession and seeks to speed up economic growth, immigration reform should be part of the growth agenda.

Immigrants have been founders of many start-ups that have grown to be billion dollar giants, such as PayPal and Yahoo. The people who pull up their roots and come here are highly motivated (as were our immigrant forbearers), and they have a strong record of entrepreneurship.

Many newcomers have skills different from those of the native-born, and so they complement the skills of the U.S. labor force. Among native-born Americans, 91 percent have a high school diploma or higher, whereas only 62 percent of noncitizens do. Immigrants make the economy more efficient by reducing bottlenecks caused by labor shortages, both in the high- and low-skill areas, and creating jobs for native-born Americans.

Although immigrants no doubt will displace some low-skilled workers, primarily other immigrants, the negative effect on such workers is much smaller than the positive effect for everyone else. The economy as a whole gains, with substantially more winners than losers. In our society, this makes it possible for the winners to compensate those who lose from immigration, and still come out ahead.

Professor Giovanni Peri of the University of California, Davis, in a paper just published in the Journal of the European Economic Association, coauthored with Bocconi University Professor Gianmarco Ottaviano, concludes that immigration raised wages of native-born Americans by six tenths of a percent during the period from 1990 to 2006. It decreased wages of existing immigrants by 6.7 percent, because new immigrants are substitutes for prior waves of immigrants.
However, the immigrant community favors additional immigration.

Senior economist Pia Orrenius of the Federal Reserve Bank of Dallas finds a slight increase in wages for professionals and a slight decline for manual workers from immigration of less than 1 percent.

Some data suggest that immigrants may be more eager to work than are native-born Americans. In 2012, 67.5 percent of foreign-born noncitizens participated in the labor force, compared to 63.2 percent of native-born Americans, according to the Bureau of Labor Statistics.

As part of a larger strategy to encourage economic growth, America needs to issue more visas and admit more immigrants legally. This would raise more tax revenue and confer a net benefit on the economy.

Arlene Holen of the Technology Policy Institute has estimated that if there had been no constraints on green card and H-1B temporary work visas, then in 2003 to 2007 an additional 182,000 foreign graduates would have remained in the United States. Their earnings and contribution to GDP would have been $14 billion in 2008, Holen estimates, and they would have paid $2.7 billion to $3.6 billion in taxes.

Why would immigration policy succeed today when it has failed in the recent past? Here are three reasons.

First, even though Mr. Bush delivered more leadership on immigration reform than has Mr. Obama, Hispanics perceive Republicans as anti-immigration. This cost Republicans votes, and possibly the presidency, in the 2012 election. According to the Pew Research Center, 71 percent of Hispanics voted for President Obama on Election Day.

Members of Congress are above all concerned about their reelection prospects. Having fared badly with Hispanic voters at the polls, Republicans appear to be more inclined to vote for reform today than in 2007.

Second, there are new enforcement mechanisms, such as unmanned (and unarmed) aerial surveillance vehicles, or drones. They can watch both sides of the U.S.-Mexico border and make unnecessary the controversial and expensive border fences. The images the drones transmit to monitors permit deployment of border patrol forces.

The Department of Homeland Security reported in May that each drone cost about $18 million, and the U.S. Customs and Border Protection has about 10 in operation.

Finally, America's economy is in worse shape than in 2007 and immigration has slowed. To some, it means we don't need more immigrants. Others believe that more immigrants will create jobs and invigorate our economy.

Immigrants come to America because they see opportunity, gaps in our economy that they have the skills to fill. America's goal should be a policy that enables them to come legally, and fosters economic growth. The bipartisan Senate proposal is the place to start.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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