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Elliot Eisenberg, Ph.D.
GraphsandLaughs, LLC
September 2015
The current US immigration system not only doesn’t work but is not being fixed. That said, given that the race to the White House is on, immigration is sure to play a starring role in the unfolding presidential drama. Rather than rehash stale ideas - anchor babies, border patrols, and the like - below are several proposals that use market forces and not bureaucratic solutions to solve several different immigration problems in ways that not only improve our competiveness but also our balance sheet.
At present, the majority of legal immigrants who arrive do so on the basis of family reunification. Fewer than 20% of immigrants obtain green cards based on marketable skills. Instead, allocate immigration visas based primarily on occupational needs. Observe which occupations and industries are experiencing a combination of fast wage growth, lowest unemployment rates and high vacancy rates and allocate entry visas accordingly while keeping existing caps. In this way visas will go to those who skills are in shortest supply.
As for temporary H-2B non-agricultural worker visas and H-1B (high tech) visas, eliminate the quotas on them as is the case with H-2A agricultural visas. If American businesses need temporary workers, they should get them after showing that there are insufficient workers currently available. Depriving firms of workers benefits no one. As for concerns that these new workers will depress wages of existing workers, that concern is not borne out by research. Moreover, by allocating visas based on employment shortages, unanticipated downward wage pressure should be reduced.
Next, create a new visa, a U-Visa, for those who are here but undocumented. The visa would allow the holder and their family to stay and work here. The catch, the visa would not lead to citizenship and would have an annual fee. I suspect that a fair price would be about $500 to $700/year. Assuming a few million were bought, this program would bring in $1 to $2 billion annually. Charging for the visa discourages those without jobs from staying. Moreover, this approach would be bundled with severe penalties for employers caught knowingly employing illegals. Absent a job, illegals will find it difficult to remain here.
Lastly, abolish the EB-5 program that allows foreigners to invest their way into the US. At present, depending upon the location of the investment, between $500,000 and $1 million must be invested and shown to create or maintain 10 jobs. After seven years, the investor may then apply to become a naturalized US citizen. This process is convoluted, requires bureaucracy and infrastructure, lends itself to substantial fraud and because the number of visas is capped at 10,000, the wait time is several years. Instead, simply sell citizenship via an auction, similar to the way Treasury securities are sold. The households that would apply would have means, and charging for a passport would allow us to allocate this scarce resource to those who want it most. Given that Malta charges roughly $700,000 for a passport and St. Kitts and Nevis $250,000, I bet the Treasury could net close to a million per applicant with the current quota intact and raise nearly $10 billion/year.
While you may or may not agree with these proposed solutions, the point is markets and market signals can solve difficult social problems if only given a chance. It’s not as if the status quo couldn’t stand a re-think.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com. You can subscribe to have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.
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