The Path Forward for Immigration - imgix



44767516954500The Path Forward for ImmigrationBy Diana Furchtgott-Roth, Senior FellowDecember 6, 2012The Path Forward for ImmigrationIntroductionAmerica has to rework immigration policy in several ways. We have to facilitate the process of obtaining high- and low-skill legal work in the United States. We are turning away too many highly qualified workers at a time when we are concerned about our international competitiveness. In addition, we are turning away tourists who can contribute to economic growth. In essence, we must embrace a more flexible system that allows the visa process to respond to market pressures. The visa quota should be amended as economic conditions change.Current immigration law places family reunification before the economy. ?Only 35 percent of green cards authorizing permanent residence—and a path to citizenship—are granted for employment purposes; 56 percent for family; and most of the remainder for refugees. In many countries the wait for American green cards can stretch for over a decade. ?Since green cards bring in few workers, most skilled workers use temporary visas. Many unskilled foreign workers are here illegally, a situation which needs to be remedied.Despite America’s need for innovation, entrepreneurship, and workers with different skill sets, it is cumbersome getting the papers needed to work legally in America. Green cards are allocated primarily on the basis of family reunification rather than on the basis of the skills our economy needs.America needs to take a rational look at a better immigration policy, one that covers costs of immigrants and allows immigrants to enter and leave depending on economic conditions. Recently several economists have proposed auctioning off work permits to employers or visas to individuals. This would raise funds that could be used to reduce the deficit or distributed to those parts of the country with the highest concentration of immigrants.The remainder of this paper is divided as follows. ?I will first discuss the visa shortages faced by those who seek to come to work and to vacation. Then I will address the traditional arguments against increased immigration, such as depressing effects on wages. ?Next, I will discuss the positive job creation effects of immigrants in America, both high-and low-skill, including workers without adequate documentation.?To conclude, I will propose a rational immigration policy, including pricing of visas and work permits.America Faces Perennial Visa ShortagesEach year the United States Center for Immigration Services accepts applications for H-1B visas. ?Recipients include 65,000 H-1B temporary visas for skilled workers certified by the Labor Department, as well as 20,000 H-1B visas for those with U.S.-awarded masters degrees. ?In addition, some companies will acquire three-year extensions on previous visa renewals. Non-profits and institutions of higher education are exempt from the visa cap, so those workers will also receive visas. In 2011, the Center issued 495,000 new or extended H1 visas. While some types of workers are “current,” highly educated Chinese workers who applied after October 22, 2007 and Indian workers who applied after September 1, 2004 are not eligible to apply. The demand for foreign labor far outstrips the supply of H-1B visas. Visa applications can be filed on April 1 of each year. In 2012, the cap was reached June 11. During the 1990s, Congress temporarily raised the quota to 195,000, a number that did not exceed demand, but the quota reverted to 65,000 in 2004.The current figure (85,000) represents a small fraction of the U.S. labor force of 156 million. Even if the quota were raised to 150,000 annually when employment growth picks up, that would be less than one tenth of one percent of the labor force. A higher quota would still block admission to the vast majority of applicants who are discouraged from applying due to the small likelihood of success.After receiving an H-1B visa, the next step is to get permanent residency, a work visa known as a “green card.” Government data show that of the 1.1 million awarded “green cards” in 2011, 15,000 went to new arrivals sponsored by an employer, and 124,000 went to current residents sponsored by an employer. Of these, about 1,400 were low-skilled workers. Applications for permanent residency, as with applications for H-1B visas, have a severe backlog. The wait times for immigration court processing are substantial. According to data from Syracuse University’s Transactional Records Access Clearinghouse, the average wait time for an immigration case decision was 525 days in the year ending October 31, 2012. Table 1 shows waiting times by country of origin. Chinese citizens, for example, had an average wait time of 786 days. The U.S. Citizenship and Immigration Services estimates that there are about 13.1 million legal permanent residents of the United States, and 495,000 workers were admitted with H-1B visas in 2011. ?The estimated number of illegal immigrants was 11.5 million in January 2011, close to the number of legal permanent residents admitted for any reason – family, sanctuary, or work. A 2012 estimate suggested that 4.9 million illegal immigrants had entered the country between 2000 and 2011.An individual offered a job in the United States has to navigate a number of obstacles. First, the employer must have some degree of certification from the Department of Labor, demonstrating the need to hire a foreign worker rather than a U.S. one. This includes evidence that local workers are unavailable at market wages, and a commitment from the employer to pay prevailing wages.Then, a complicated game of “application tag” ensues, with the State Department and Department of Homeland Security sending documentation back and forth, validating identities and ensuring that no employer is trying to hire a criminal, terrorist or undesirable person. These may be necessary steps, but they are time-consuming. Even if the State and Homeland Security Departments would find a worker acceptable, arbitrary quotas may render the entire process moot.These protections and regulations are less burdensome for temporary workers, but still require extensive documentation and cost. Applications for "national interest waiver-based permanent residency visas" can take an entire month to complete and cost $6,000 in legal fees and $1,000 in application fees. For people looking for permanent residency, the process can take years. This adversely affects U.S. labor market competitiveness. Immigrant founders of U.S. businesses employed approximately 560,000 workers and generated $63 billion in sales during the period 2006 to 2012, according to a Kauffman Foundation study. Immigrants have a higher propensity to start businesses than native-born Americans. For example, 44 percent of high-tech Silicon Valley businesses had at least one immigrant founder. “Historically and today, the United States continues to benefit directly from the contributions of such immigrants. Far from expendable, high-skilled immigrants will remain a critical asset for maintaining U.S. competitiveness in the global economy,” the study concludes. However, the share of immigrant-founded Silicon Valley companies has declined from 52 percent between 1995 and 2005 to 44 percent between 2006 and 2012. By making it difficult for high-skill workers to stay in America, Congress is dissipating the value America receives from taxpayers' investments in research.American universities are among the world's leading research institutions, attracting the top minds, not only those from America but also from many other countries. The National Science Foundation data show that 166,000 foreign graduate students studied science and engineering in American universities in 2010, up 35 percent from 163,000 in 2009.In 2009, the most recent data available, the federal government spent more than $63 billion on science and engineering research at American universities and research institutions. This funding helps finance PhD programs, which are heavily populated with foreign students. More than $35 billion of this research spending is health-related. Other funders include the Defense Department, at $6.8 billion, and the Department of Energy, at $7.2 billion.Many universities rely on graduate students for research assistance and technical expertise. Government research trains graduate students in the latest technologies. Most research does not require security clearances, and little if any research is restricted to American students. ?Because of this, 51 percent of doctorate recipients in engineering and 41 percent of graduate students in the physical sciences were foreign-born temporary U.S. residents in 2010.On November 30, 2012, the House of Representatives passed the STEM Jobs Act of 2012, which would grant an additional 55,000 visas to immigrants who have PhDs from American universities. The Labor Department would have to certify that the position cannot be filled by a U.S. citizen. The bill awaits passage in the Senate.The sponsor of the bill, Chairman Lamar Smith of the House Judiciary Committee, said, “Many of the world’s top students come to the U.S. to obtain advanced degrees in science, technology, engineering, and math (STEM) subjects. We could boost economic growth and spur job creation by allowing American employers to more easily hire some of the most qualified foreign graduates of U.S. universities. These students have the ability to start a company that creates jobs or come up with an invention that could jump-start a whole new industry.”Apple founder Steve Jobs, whose biological father was a Syrian immigrant, agreed. In a February 2011, at a small dinner with President Obama, Jobs emphasized the need for more engineers in America. He suggested rewarding foreign engineering students earning a degree in the United States with a visa. At the time of their conversation, Apple employed 700,000 line workers in Chinese factories, because there were 30,000 engineers on-site. “You can’t find that many in America to hire... If you could educate these engineers, we could move more manufacturing plants here.” Some might say that offering visas to foreign engineers denies opportunities to native-born aspiring engineers. But, as Jobs pointed out, the demand for engineering in the United States is far from met, because not enough Americans want to be engineers.The same holds true at the low end of the skill scale. Farms provide income to farmers, as well as to other native-born Americans employed in the industry in trucking and distribution. If farmers cannot get low-skill immigrants to pick fruit, as was the case in Washington State for the apple crop in the fall of 2012, agriculture will move offshore to where low-skill labor can be found. It makes little sense to send a whole economic sector to other countries just to avoid employing immigrants. America could import produce from abroad at little additional cost. Consumers may not care where their food comes from, but American farmers most certainly do.Immigrants choose different jobs from Americans. Low-skill immigrants come to be fruit pickers, as well as janitors and housekeepers, jobs native-born Americans typically do not want. However, they are not found as crossing guards and funeral service workers, low-skill jobs preferred by Americans. Similarly, high-skilled immigrants also take jobs Americans do not want. They are research scientists, dentists, and computer hardware and software engineers, but not lawyers, judges, or education administrators. The reason immigrants come to America is because they see opportunity – gaps in our economy that they have the skills to fill. To argue that it is the dream of any worker to compete with Americans in their own field is disingenuous. The goal for any worker is to find a market it which his skills are valued; for many workers in other countries, that is not the United States.Some foreigners want to come to America not with dreams of work opportunities, but with dreams of vacation. These people also encounter visa problems. Even though America could generate trillions in revenue from tourism, and the industry supports millions of jobs, the visa process for tourists is lengthy, bureaucratic, and mystifying. ?In 2011, tourism-related spending was $1.4 trillion. This includes direct tourism spending such as hotel accommodations, and indirect tourism-related spending, such as supplies used by hotels and restaurants. Nationally, direct tourism spending as a share of GDP has declined from about 6 percent in 2000 to 5 percent in 2011. The decline is partly the result of the terrorist attacks of September 11, 2001, and the 2007-2009 recession. But terrorism and recessions are not the only reason tourism has declined. Data from the from the U.S. Travel Association show that in many key markets, the United States is losing ground as a tourism destination. For example, while India’s travelers have increased their “long haul” trips by 149 percent from 2000 to 2010, their trips to America have increased by only 137 percent. In Japan, where long haul trips decreased by 29 percent over the decade, trips to America decreased by 33 percent. Between 2000 and 2010 British travelers increased long-haul trips by 25 percent, but decreased trip to America by 18 percent. One exception is Chinese tourists. Chinese long haul travel increased by 176 percent, but trips to America increased by 221 percent. This increase likely reflects strong economic growth in China and increased family and business connections between America and China. Tourism-related employment was 7.6 million in the second quarter of 2012, including direct workers like hotel staff, and indirect tourism workers like those who manufacture souvenirs. Hospitality is one of the few low-skilled industries in America that is growing. Importantly, services like cleaning hotels rooms and waiting tables cannot be outsourced, providing low-skilled workers with paycheck that contribute to consumption and economic growth. Providing more tourist visas would create more jobs. Instead, our embassies and consulates around the globe seek to discourage visitors with long wait times and substantial sums for a visa application, in the range of $200 to $300. If the visa application is rejected, the embassy keeps the fee. In contrast, other countries issue visas freely. For instance, hotels in Zurich, Switzerland, contain brochures in Mandarin Chinese promoting the surrounding area, unlike hotels in America. America has the potential to attract even more Chinese tourists.Addressing Arguments against ImmigrationAs America emerges from the recession and seeks to increase economic growth, immigration reform should be part of the growth agenda. Immigrants have been founders of many companies that have grown to billion dollar giants, such as Google and Yahoo. They have different skills from the native-born population, and complement the skills of the U.S. labor force. ?Immigrants make the economy more efficient by reducing bottlenecks caused by labor shortages, both in the high-skill and low-skill area. The U.S. government can charge for work permits and visas to offset costs of immigrants.The educational skills of native-born American workers are in a bell-shaped curve. ?Many Americans have high school diplomas and some college education, but relatively few adults lack high school diplomas and even fewer have PhDs in math and science. Immigrants, however, have a different pattern of skills. ?Their skills are in a U-shaped curve, with adults without high school diplomas who want to do manual work and adults with PhDs in math and science.One reason that Congress does not increase the number of visas is the popular perception that foreign workers, especially those with low skill levels, harm job opportunities of native-born workers. However, the different patterns of skills of immigrants make the economy more efficient, increasing economic growth.The concern that immigrants drive out native-born immigrants from jobs is predicated somewhat on the assumption that large numbers of immigrants are displacing American workers. Yet annual immigration is a tiny fraction of the U.S. labor force. Annual immigration from all countries as a percent of the labor force has been declining since its peak in 1999. Documented annual immigration in 1999 equaled 1 percent of the labor force, which declined to 0.7 percent by 2011. Caribbean, Central American and South American immigrants combined were equivalent to two tenths of a percent of the labor force, whereas Mexicans accounted for one tenth of a percent of the labor force. Foreign-born workers of Hispanic origin, including undocumented workers, made up 8 percent of the labor force in 2011.Hispanic and Latino immigrants comprised 42 percent of the American unskilled labor force (defined as those without a high school diploma).Low-skilled immigrants are disproportionately represented in the service and construction sectors, with occupations such as janitors, gardeners, tailors, plasterers, and stucco masons. Manufacturing, the declining sector, employs few immigrants.A major concern of those critical of immigration, such as Harvard University professor George Borjas, is that immigrants depress wages. ?However, the research findings of most economists show little effect of immigration on wages of native-born Americans. For example, 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.David Card of the University of California, Berkeley finds a decrease in wages of about 3 percent among low-skilled workers in high immigrant cities such as Miami and Los Angeles, and smaller effects in other cities and occupational groups. Card (2009) goes on to find that immigration yields a 5 percent increase in overall wage inequality. This finding supports the other studies showing immigration increases wages of high-skilled workers and decreases wages of low-skilled workers.Giovanni Peri of the University of California, Davis finds that immigrants had a near zero effect on unskilled native workers and a positive effect on highly-skilled native workers.Why the difference? Borjas makes two assumptions in his models that mainstream economists do not. First, he assumes that immigrants are substitutes for native-born workers. Second, he assumes that capital is fixed and does not respond to changes in wage rates.Mainstream economists observe that immigrants have different skills and job preferences from native-born Americans, and so make American workers more productive. They assume that immigrants complement rather than substitute for native-born workers and that capital moves to take advantage of available labor. Although immigrants will be substitutes for some primarily low-skilled workers, many of whom are immigrants too, the negative effect on such workers is much smaller than the positive effect for everyone else.Immigrants are about 16 percent of the labor force, yet represent 49 percent of the labor force without a high school diploma, 25 percent of all doctorates, and 35 percent of doctorates working in science, math, and engineering. However, since they have a smaller share of high school diplomas and B.A.s, they do not compete directly with most native-born workers. According to Borjas, low-skilled immigrants arrive in America and take jobs away from African-Americans. Due to the lack of job opportunities, African-Americans are drawn into illegal activities, get arrested, and are then put in prison. In a 2010 paper, Borjas and his coauthors finds that a 10 percent increase in workers due to immigration led to wage decreases of 2.5 percent for black men, as well as a 5.9 decrease in employment and 1.3 percentage point increase in incarceration using Census data from 1960 through 2000. For white men the wage decrease was higher at 3.2 percent, but they experienced a 2.1 percent decrease in employment and a 0.2 percent increase in incarceration. Borjas concludes that employment and incarceration rates of black men are highly sensitive to immigration, however “much of the decline in employment or increase in incarceration in the black population remains unexplained.”One problem with Borjas’s argument is that young black men began withdrawing from the labor force in the 1960s, when the share of immigrants in the labor force was less than 1 percent.The percentage of black men between ages 16 and 24 who were not in school, not working, and not looking for work rose to 18 percent in 1982 from 9 percent in 1964. It then reached 23 percent in 1997 and remained at that level as of 2011.There are many complex factors leading to the incarceration of black men over the period 1980 to 2000. Yet Borjas only uses as variables information on employment, wages, education, race, incarceration rates, and immigration. Other factors he omits are changes in laws, stricter enforcement policies, longer sentencing guidelines, and changes in welfare regulations. These conceivably have a greater effect on incarceration rates than immigration.The problem for Borjas is that the finding that immigrants substantially lower Americans' wages, a central thesis of much of his work, has been questioned by other economists. Research of mainstream economists, as well as his more recent studies, shows different effects. Take Borjas's own calculations. In 2003 Borjas found that immigrants lowered wages of average American-born workers by 3 percent and wages of high school dropouts by 9 percent. A year later, he found that the effect on high school dropouts had moderated to a 7 percent loss.By 2006 Borjas concluded that immigrants actually raised average wages of Americans by 0.1 percent and only lowered the wages of the low-skilled, those without a high school diploma, by 5 percent. This means that America has a net gain from immigrants. Since a relatively small percentage of American workers have less than a high school diploma (8.5 percent in 2012), it is possible for these workers to be compensated through transfer payments, leaving our economy still ahead. Contrary to his previous findings, Borjas and Aydemir (2007) found that high school dropouts in Canada enjoyed wage increases of 7.8 percent due to high-skilled immigration, but college educated workers saw wage decreases of 6 percent to 8 percent. Overall, they found that an immigration influx of 10 percent leads to a wage decrease of 3 percent to 4 percent. Borjas (2009) studied the effects of immigration on Americans holding PhDs and found that a 10 percent increase in doctorates due to immigration reduces earnings by 3 or 4 percent. It is interesting to note that the PhDs experienced a 5.2 percent increase in real wages during the time period 1993-2001. However, Borjas argues these wages were 40 percent lower than they would have been without immigrants increasing the supply of doctorates.If immigrants affect any wages, it is those of prior immigrants, who compete for the same jobs. But we do not see immigrants protesting in the streets to keep others out, as we see homeowners in scenic locations demonstrating against additional development. Rather, some of the biggest proponents of greater immigration are the established immigrants themselves, who see America's boundless opportunities as outweighing negative wage effects.A Benefit of Immigration: Job Creation for Native-Born AmericansThe benefits of allowing more immigrants to work in America is counter-intuitive. Detractors say that with current high levels of unemployment, America cannot afford to give more visas to foreigners. One way to understand the benefits of immigration for native-born Americans is to examine the role of foreigners in start-ups.Start-ups lead to innovation, which leads to economic growth. If America could produce another two dozen new Apples or Facebooks every year making similarly attractive products, U.S. economic growth and employment would be substantially higher. Data show that new companies, those in their first few years of existence, hire a substantial number of workers. Immigrants benefit America because they found new companies in America at greater rates than do native-born Americans. Consider Sergey Brin's Google, Andrew Grove's Intel; Jerry Yang's Yahoo; Pierre Omidyar's eBay; and Elon Musk's PayPal and SpaceX, to name but a few. Past founders include Alexander Graham Bell, Levi Strauss, Adolph Coors, and Henry Heinz.Once companies are around five years old, they appear to reach a hiring equilibrium. They keep the workers they have already hired, but on average their employee expansion rate slows down and they generate no new jobs. Hence, the best way to expand employment in an economy is to bring in entrepreneurs who create new, innovative firms. This is the aim of a bill sponsored by Senator Jerry Moran, a Kansas Republican. The Startup Act 2.0 would provide 75,000 new work visas for qualified foreign-born entrepreneurs. Eligible applicants would either hold either a nonimmigrant visa (such as the H-1B) or a graduate-level STEM degree from an American university. The entrepreneurs would be granted conditional permanent resident status, which would become permanent resident status (a green card) after four years of maintaining eligibility. In the first year entrepreneurs would be required to hire at least two full-time non-relatives and invest or raise capital investments of $100,000. After a successful first year, entrepreneurs would have an additional three years during which they would be required to employ a total of five non-relatives full-time.This visa would be especially attractive to some of the million immigrants in America who now have temporary H-1B visas, work permits obtained by employers that require workers eventually to return to their home countries. If H-1B visa holders could start companies and hire other workers, they could convert the H-1B visa to conditional permanent resident status, and then progress to the green card.Once an H-1B visa holder achieved conditional permanent residence, one market for the new entrepreneur would be his former firm. Rather than selling his services to an employer, he would sell his firm's services to his former employer—and to other employers also.Another group that could benefit from the new visas would be the 60,000 foreign students who graduate with American degrees in the technical fields of science, technology, engineering, and math.Similar to the STEM Jobs Act of 2012, discussed above, which has already passed the House of Representatives, the bill would provide an additional 50,000 visas to foreign STEM students who earn a Masters or PhD graduate from an American university. (The STEM Jobs Act would provide 55,000.) These graduates would have one year to stay in the United States and search for STEM employment as conditional permanent residents, and would be allowed to stay indefinitely if they worked in a STEM field. They would not be eligible for unemployment or any means-tested public benefits like welfare. After five years of remaining in the United States and maintained eligibility by working in STEM fields, these high-skilled immigrants would attain green cards. Importantly, the bill would lift the per-country cap on work-based visas, which inhibits skilled professionals from countries like China and India from gaining work authorization, as mentioned above.In the absence of immigration reform, the White House has taken matters into its own hands and instructed the Department of Homeland Security to interpret regulations to make them friendlier to foreign entrepreneurs. Entrepreneurs can now qualify as an individual of exceptional ability in sciences, arts, or business and clarifying H-1B visa eligibility of entrepreneurs with ownership in companies. This is a worthy goal, but it should be done through changes in the statute rather than changes in regulation.The Homeland Security Department, through regulatory reform, is also enhancing EB-5 Visa processing and expanding premium processing for employers seeking high-skilled workers. The list of STEM degrees which automatically qualify eligible graduates holding student visas for an Optional Practical Training extension is being expanded. New categories introduced in 2011 and 2012 include Neuroscience, Medical Informatics, Pharmaceutics and Drug Design, and Econometrics. This means these STEM graduates will have an additional 17 months to remain in the United States to pursue work training in their field, beyond the initial 12 months available to all graduates. Furthermore, DHS is expanding immigration regulations in other ways such as providing spouses of certain H-1B visa holders with work authorization.If immigrants do not hurt our economy, do they hurt our culture? Former Congressman Tom Tancredo in an editorial entitled “Hispanic Assimilation Has Failed” argues that low rates of identification as Americans means they “have some huge gaps still to bridge if assimilation to American society is to be achieved.” Similar concerns about assimilation were made about Jews, Italians, Irish, Germans, Poles, and even Norwegians when they first came to America. All eventually assimilated.Moreover, for those who are concerned with Spanish-speaking enclaves, research by Princeton University professor Douglas Massey shows that within two generations Mexican immigrants in California stop speaking Spanish at home, and within three generations they cease to know the language altogether. He concludes, "Like taxes and biological death, linguistic death seems to be a sure thing in the United States, even for Mexicans living in Los Angeles, a city with one of the largest Spanish-speaking urban populations in the world."A Rational Immigration PolicyHow to fix America’s broken immigration policy?The first element of a rational immigration policy should be to regularize the immigration status of the majority of the 11 million undocumented immigrants who are in America. Asking them to leave presents not only logistical difficulties, but it would harm America’s economy, because they have jobs that Americans do not want. Further, many undocumented workers are married to American citizens, and have children who are Americans. The departure of employed family members could leave their dependents in a precarious financial position, at a cost to state and local governments.The Brookings-Duke Immigration Policy Roundtable, which published a comprehensive set of immigration reform proposals in 2009, suggested implementing a legalization program. It would require unauthorized workers who have been in America for over five years to pay a fine and offer evidence of current and prior employment, taxes paid, and “good moral character.” Workers would also have to pass a background check and show proficiency in English language and U.S. history.Following the outlines of the McCain-Kennedy comprehensive immigration reform proposal in 2007, the Brookings-Duke Roundtable suggests that unauthorized workers be required pay a fine as a condition of receiving a provisional visa. After a period of responsible behavior, to be determined by Congress, they would receive a green card and a route to citizenship.For security reasons, it is vital to regularize the status of the millions of undocumented workers currently in America. That way it is possible to distinguish between immigrants who come to work and those who come to do us harm. Furthermore, it is possible to proceed to expanding numbers of legal visas. One problem: some don’t want illegal immigrants to get legal work visas, because they say that this is "amnesty," rewarding illegal behavior. At the same time, many are against national ID cards as a way to identify and deport illegal immigrants, because national identity cards are viewed as an invasion of privacy, facilitating an Orwellian world in which a central government can monitor people’s activities. These are political problems which need to be overcome.The second step of a rational immigration policy would have immigrants cover their own costs. If immigration were legal and better controlled by government, costs of immigration, such as health and education, could be more easily collected. Currently, costs of a relatively small number of immigrants are shifted to society rather than being paid by the individual immigrants who get health care services in hospital emergency rooms.With broader access to legal work visas, foreigners who want to work here could pay the government for these permits rather than pay smugglers for unsafe, illicit transportation. Visas could be sold to those who want to buy houses in places with surplus housing. Funds from the visas and permits could be used to buy health insurance, education, and biometric identification cards for legal workers.A third element of a rational immigration policy would include clear incentives to being documented and paying taxes. Such incentives might include social services linked to some form of legal documentation, and fines or deportation for those caught without papers.This sort of immigration policy would improve America's security. Now, with an estimated level of 11 million undocumented immigrants, it is practically impossible to identify the small minority who wish us harm from the majority who come to find work. Being able to work legally and get official identification — and bank accounts — would make it far easier to identify and track potential terrorists, dubious financial transactions, and those who simply overstay visas.One possible way to a better immigration policy would be to auction visas, either to employers or to individuals. The goal is to solve several real problems the United States faces with regard to immigration. The international economy is tremendously dynamic; our immigration system is not. Temporary workers must spend months applying for admission, and due to the pile-up in April of every year, may not even get a visa. Few low-skilled workers have a legal and reliable method to enter this country and work legally, and few Americans wants to do the jobs these workers want to pursue. And even high-skilled workers trained at U.S. colleges and universities, often at taxpayer expense, might have to wait years and spend thousands of dollars to become permanent residents of the nation.The goal must be to craft a sensible and dynamic immigration system. High-skilled workers educated in America ought to be able to stay; otherwise, our investment becomes lost to another country. If the Labor Department determines that a foreign worker would not displace Americans, that worker should not be barred from entering the country due to an arbitrary quota. And people who want to enter this country in order to work in jobs Americans are not willing to take ought to have an easy, legal way to do so.Economists Pia Orrenius and Madeline Zavodny propose that the government auction off visas to employers, simplifying our complicated immigration system and creating revenue for the Treasury. The authors suggest initial minimum prices—that would fluctuate according to demand—of $10,000 for a high-skill visa, $6,000 for a low-skill visa, and $2,000 for a seasonal visa. The visas would become tradable, and their prices would fluctuate depending on demand. To simplify enforcement, the government would issue everyone—American citizens, residents, and immigrants—with biometric identification cards.This approach would replace the current alphabet soup of different visa types and redirect immigration expenses from lawyers and smugglers to the government. Congress is unlikely to adopt any immigration proposal swiftly. ?But what might tempt Congress in these days of fiscal austerity are auction revenues. ?When unemployment is high, as now, the number of visas, set by an independent commission, would be kept low. When the economy reaches full employment, the quota might be raised.Auctioned visas would be good for five years, and could be sold to other employers if original purchasers no longer needed them. ?With an active market in visas, employers would buy them from each other, as well as at quarterly government auctions.?According to Ms. Orrenius, “The advantage of having the employer buy the visa is that every immigrant who enters the United States would come with a job.”Orrenius and Zavodny want to eliminate illegal immigration, give priority to employment-based immigration, raise money to cover services immigrants use, and set visa caps that can grow with the economy. ?They would limit family reunification to spouses and children; other relatives would have to get their own permits.Foreign workers would be granted a five-year provisional work visa through an employer who would commit to hire the immigrant. ?They would be free to move to another employer who had a work permit at any time. They could stay longer if they found someone to hire them, and could eventually apply for a green card and citizenship.The number of permits offered at government auctions would depend on employer demand, as estimated by an independent group. If the price of the permits for a given skill level was high, this would be a signal for government to sell more permits for that group—and lower the number of permits if the price declined. Orrenius and Zavodny suggest starting with approximately 1 million permits per year, reflecting the number of foreign workers granted different types of visas annually now.One twist, which Orrenius and Zavodny do not propose, would allow different prices to be charged for workers with different skills. If particle physicists were in demand one year, the price of their work permits would be higher.Depending on the mix of high-skill, low-skill, and seasonal workers, revenues to the government might be about $6 billion. ?The authors suggest that these funds be allocated to communities, based on the numbers of immigrants they take, to cover local costs, such as schooling and health care.University of Chicago economics professor Gary Becker has proposed raising even more money by auctioning off green cards to individual immigrants, starting at $50,000, raising about $50 billion annually. ?This auction could occur in parallel with employer auctions.Becker’s purchasers of green cards might buy houses, go shopping to help our economy, or start businesses. ?Many affluent families facing increasing violence in other parts of the world would be glad of the chance to buy a green card to come to America. Crumbling cities such as Detroit could be rejuvenated with legal immigrants.Orrenius and Zavodny propose to give current illegal immigrants provisional work visas, with a longer path to permanent residency than legal immigrants. ?Illegal immigrants who came as children would be awarded permanent residency. ?Everyone—native-born U.S. citizens and immigrants alike—would get biometric ID cards, linked to a retina or a fingerprint, which could perhaps be used to reduce voter fraud.Some unions, such as the AFL-CIO, might object that auctioning visas sounds like an open-ended approach to expanding the number of lower-wage workers. ?Others, such as the SEIU and UNITE HERE, would welcome the opportunity to add immigrant members to generate more union dues and buttress failing pension plans.With sky-high budget deficits ahead as far as the eye can see, perhaps the temptation of billions of dollars of additional revenues from auctions will succeed in persuading different factions to compose their differences and Congress to pass immigration reform.ConclusionAmerica’s goal should be to have a situation in which there are few illegal immigrants in America. ?This requires a way to regularize the status of unauthorized immigrants who are now in the country, as well as getting additional immigrants to enter the country legally to work, both in low-and high-skill jobs which Americans prefer not to do.Since immigrants’ skills are complements to the skills of native-born Americans, this would increase the efficiency of our economy and create jobs for native-born Americans. ?With our economy in a slow process of recovery, we should be giving visas to those with innovative ideas who can help move our economy forward. This would prevent offshoring of American jobs and keep job growth here at home.One answer is to auction off visas, combined with biometric identity cards for enforcement. ?As well as a stream of visas and work permits, this would provide revenues to the Treasury—a win-win for all concerned.Immigration reform has been promised in multiple political campaigns by many candidates. But getting a legal visa still takes years, thousands of dollars in legal fees, and miles of bureaucratic red tape. ?Now is the time to act. Table 1: Immigration Processing Time by Selected Country of Origin(Year Ended October 31, 2012)NationalityAverage Days To CompletionAll Nationalities525Australia216Austria111Belgium1,070Canada362Chile567China786Czech Republic719Estonia1,950France290Germany425Greece331Hungary503Iceland885India762Ireland803Israel509Italy358Japan644Mexico472Netherlands364New Zealand364Poland581Portugal602Slovak Republic724Spain285Sweden245Switzerland106Turkey681United Kingdom508Source: Syracuse University, Transactional Records Access Clearinghouse, “Immigration Court Processing Time by Outcome,” 2012, . BibliographyAydemir, Abdurrahman and George Borjas. (June 2007). “Cross-Country Variation in the Impact of International Migration: Canada, Mexico, And The United States.” Journal of the European Economic Association 5 (4), 663–708, , George J. 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