Fix immigration by next Thanksgiving

November 27, 2008

diana-furchtgott-roth1– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The opinions expressed are her own. —

The first Thanksgiving festival was celebrated in 1621 in Massachusetts by the Pilgrims, immigrants to America, out of gratitude for a plentiful harvest.

As we sit around our Thanksgiving tables this Thursday, almost all of us immigrants or their descendants, we’re reminded that one of President-elect Obama’s most important challenges will be to mend our broken immigration policy.

Instead of a rational immigration system, we have occasional raids by immigration officers on plants suspected of employing illegals. Then come deportations that may separate an undocumented parent and children whose birth in the United States made them citizens.

The most controversial facet of the immigration challenge is what to do about the estimated 12 million undocumented immigrants. Most are unlikely to return to their native lands, even in today’s tough economic climate.

Nor would we want them to do so. They work at jobs that few Americans choose to do, both in high-skill area—scientific and medical research, for instance—and in mundane yet essential low-skill jobs, such as gardening, washing cars, and cleaning.

In 2007, Congress did not pass President Bush’s comprehensive immigration proposals, supported by the Democratic leadership and many Republicans. Will Obama succeed where Bush failed?

Obama’s proposal mirrors the bill that failed: increased border protection; more visas for new immigrants; penalties for employers who hire undocumented workers; and eventual citizenship for undocumented workers already here, after payment of a fine. It would be a major improvement.

But with unemployment rising, if Congress won’t pass immigration reform, it could still improve the functioning of American labor markets with narrower action. It could authorize the Department of Labor to decide on its own the number of work permits and temporary visas to be issued each calendar quarter.

Every year, the U.S. Citizenship and Immigration Services (USCIS), as instructed by law, issues 65,000 H-1b temporary visas for skilled workers. These lucky workers are certified by the Labor Department out of approximately 630,000 approved applications from employers. Immigrants who hold H-1b visas must return to their home countries when their jobs end.

Yet, as the numbers show, most applicants do not get a visa. Many skilled foreign college graduates who have been studying in America, often at American taxpayer expense, are denied access to American jobs. They must leave, taking their intellectual achievements and valuable skills with them.

Foreign workers benefit the American economy. They pay taxes. They keep laboratories and motels, high-tech shows and construction sites, running. They cannot if they are sent away.

For 2009, the H-1b visa cap of 65,000 was reached one week after the start of the application process on April 1, 2008. That represents a tiny part of the U.S. labor force of 154 million. Even if the quota were raised to 150,000, that would be less than one tenth of 1% of the labor force. Such a quota would still deny admission to the vast majority of prospective applicants who don’t apply due to the small likelihood of success.

Whereas Congress is ill-suited to change laws each time the economy goes up or down, the Labor Department has both the expertise to evaluate changing labor markets and the flexibility to adjust visa quotas. Congress should consider letting the Labor Department make quarterly decisions about how many visas to issue.

When unemployment rises, the Department would issue fewer visas; when it goes down, visas could be increased. The Department could manage visas without causing undue burden on U.S. workers or community facilities, such as schools and hospitals.

Allowing the Labor Department to adjust legal immigration every quarter would help America. President-elect Obama could leave behind the rancor and division over immigration that have plagued the Bush administration, and set a new tone for a new year. That would be something to be thankful for next Thanksgiving.

Diana Furchtgott-Roth can be reached at dfr@hudson.org.

122 comments

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You seldom hear about the true cost of illegal immigration: health care, education, crime and other public good programs and services. The true cost is staggering and growing. It’s also unfair to deny legal applicants a fair path in (assuming you legalize the illegals). Their are political (vote) considerations, but that doesn’t address the true needs of US citizens.

Posted by Mark | Report as abusive

Ah, the immigration is good, more immigration is better nostrum. The Census Bureau projects ONE BILLION people here if immigration continues as is. Maybe readers can explain how America will become sustainable in the face of such unsustainable growth.
Too many people think with their hearts instead of their brains. Again, one billion people…
http://www.census.gov/population/project ions/nation/summary/np-t1.txt

Posted by WandaGB | Report as abusive

In the last year we’ve lost over 1 million jobs. Real weekly wages have declined -3.8%. (See: http://data.bls.gov/PDQ/servlet/SurveyOu tputServlet?&series_id=CEU0500000031 ) We have 90 million working age Americans who are not employed.
(See: http://www.bls.gov/web/cpseea1.pdf )

Yes, siree. We sure do need to increase the labor supply even further. Maybe we could get real wages down another -5% if we swell the labor supply enough with cheaper foreign workers.

Illegal, or unlawful, is used to describe something that is prohibited or not authorized by law or, more generally, by rules specific to a particular situation

Posted by brandon | Report as abusive

The hidden cost of immigration is hyper-inflation in the housing market through sheer demand while wage go flat.

Home equity appreciation is an often used, politically correct term, but in reality, home equity appreciation has become hyper-inflation. Housing costs have inflated 309% in 27 years, while four-fifths of America’s wage-earners (80%) have averaged (after tax) income increases of only 18.25% in 24 years.

Percent Change in House Prices Period Ended June 30, 2007 (United States)
5 year = 50.76%
Since 1980 = 309.4%
http://www.ofheo.gov/media/pdf/2q07hpi.p df

Wage Data: http://www.cbpp.org/1-23-07inc.htm

In our flat employment market, each immigrant represents a potential housing foreclosure due to the displacement factor — most immigrants must work below market wage to become employed — thus, economically expelling an established wage-earner.

High foreclosure filing(s) by U.S. States are closely correlated to high legal immigration destination States.

Housing foreclosures & Immigration

http://immigration-weaver.blogspot.com/2 008/07/housing-foreclosures-immigration. html

The solution is to remove the dual-intent provisions of guest-worker visas and require the employer to pay a fair market housing Per-Diem.

The housing Per-Diem allows the non-immigrant to maintain a foreign residence, stimulates U.S. local service economies and levels the playing feild with American workers.

A successful retirement is dependent upon a a mortgage that is paid-off as earning power dwindles.

The immigration-boom will dwarf the baby-boom.

Posted by weaver | Report as abusive

I work for a large US corporation and I’m about to lose my job due to the weak economy.

I can tell you categorically that the numbers are well in excess of 65,000 H1-B visas. These visas are issued for 3 years and can be renewed for another 3. The renewals have no upper limits.

Also, the company I work for uses L1B visas and they bring workers over from India all the time. There is absolutely no problem in them bringing workers in from India. In fact about 80% of the people I work with are from India.

It is absolutely an outrage. This is one of the reasons that the US economy is in the toilet. How can Americans buy things if we don’t have jobs. A strong middle class is vital to the economy.

US companies have become too reliant on H1B visas, L1B visas and hiring illegal immigrants. It makes them lazy. They don’t think how they can come up with new and improved products and services, instead they are constantly looking for ways to lower wages for America’s workers. Well, it will lead to even greater economic disaster than we already have. The US middle class is being slowly destroyed.

Posted by Steve | Report as abusive

First of all, the writer is off on a few points. She asserts that the Government should “fix” immigration by next Thanksgiving. It’s already being fixed. Thanks to Director Chertoff and ICE, illegal aliens are being deported and many are fleeing to their home countries. And due to tough state laws many are fleeing Tenn., Okla, and many other states. Remittenses have been cut in half, as well as the number of aliens snesking in. Just let the laws be enforced and within five years we’ll have very few illegals living in the United States.

Second, about the so-called separation of families it is SOP that when an illegal is deported that ICE request that they take their minor children with them. Most of the time they chose to leave the child with a relative in the US rather than back to their home country. So if families are separated it is at the insistance of the aliens. The reason they chose this option is so that the child could recieve benifits from the welfare system. One way to fix this problem would be to do away with Birthright citizenship for illegal aliens.

The author also states: “. Most are unlikely to return to their native lands, even in today’s tough economic climate. Nor would we want them to do so.”

No YOU don’t want them to. Please be careful in your wording. She also claims that many illegals are working in scientific and medical research. In what aspect of medical research are they employed? As gueana pigs? Again she doesn’t elaberate so I’ll assume she’s simply not telling the truth here.

She claims that so many immigrant students who enroll in college at taxpayer expense are denied employment. First of all, student visas are only that – STUDENT visas. It was never established that upon graduation from college that those visas would automatically convert into work visas. The system was designed to allow a student to study in the US and then return to their home countries for work. As if she didn’t know. Another cleverly crafted deception.

The author does make a point that i agree with. The issuance of visas should corrolate with market trends and the demand for labor. Currently it does not. 2 million immigrants come to our country every year regardless of economic conditions. However I believe the answer is to allow no more than a total of 300,000 immigrants per year and secure the borders against illegal immigration. No “comprehensive” solution is necassary.

Posted by Kevin B | Report as abusive

In many cases, American jobs are lost because corporations migrate their manufacturing operations to countries that offer more competitive labor costs and less regulations. Expelling inmigrants may push companies to look outside leaving less jobs.

Posted by James | Report as abusive

In the US, it takes the creation of 100-130K new jobs created per month just to absorb new graduates into the workforce. During the past 8 years, the current US president and the US Labor Secretary have rarely met that target. People who have stopped receiving unemployment insurance are not counted in the current unemployment figure, which is an outrage. It takes Uncle Sam about 3 days to calculate your witholding payroll tax when you become employed. That’s the same time it takes to calculate when your witholding payroll tax drops to zero or barely budges.

Posted by Anna Goh | Report as abusive

As always, the immigration debate brings out the best in people. It is very tempting to take an opportunity to look for a solution, as this article demands, and simply use it as fodder for xenophobic vitriol. The majority of these comments are biased against any solution to the immigration problem that attempts to recognize the humanity of the people living and working in the country illegally. Of course the counter arguments to this usually hide behind a guise of patriotism and good citizenry. The grammar is also terrible.

Posted by Ernest | Report as abusive

Diana, you seem very ignorant of the burdens imposed upon us by the unrestrained immigration of the last 35 years that has resulted in a near doubling of our population. It is difficult to add much to the well researched comments above by those who understand how very wrong you are. Suffice to say we are the ONLY country in the world that permits this madness. I wish to thank you for being one of those who has contributed much to making us the overpopulated and uneducated mess we are now. We are only a couple decades from being the largest latin american country in the world. Again, thank you for the careful thought you have put into this article. I sincerely hope that developmentally challenged individuals like yourself are not responsible for the policies of this nation going forward but I suspect that this will indeed be the case.

Posted by W. Holder | Report as abusive

Recently I was in San Jose CA at Cisco’s Headquarters. What an eyeopener! It seems every 2nd person there is Indian or Pakistan.
Considering that the median salary at Cisco is $125,000 … these certainly aren’t medial jobs. Of course this came about because American’s didn’t want these positions and not because Cisco did some major lobbying to make it happen. Right?

Posted by Randy T | Report as abusive

Fortunately , us “common” people are becoming wise to the greedy self serving few in this country.

Posted by Brad | Report as abusive

Clearly she is a person who has no real world association with illegal immigrants. Come live in Southern California for a month or two, then rewrite your silly Thanksgiving pontification. I’d be much more thankful if we’d end the idiocy of allowing illegal immigrants to commit crimes and access services in this country.

Posted by Karl | Report as abusive

To people who think that the reform will be good for the economy: I cannot believe how naive you are saying that if legalized those illegal immigrants will boost the economy by purchasing houses, cars etc. – these people LAREADY own cars and houses – in my town almost half of the houses are owned by people who are here illegally, and they have cars and go on vacations etc. – so they are already contributing to the economy and legalization will not boost the economy.

Posted by Jennifer | Report as abusive

Can the Labor Dept. issue 1/2 million visas? No. Therefore: people will continue coming here illegally. No fence can stop them. Illegal immigrants are the hardest working people in this country, very few of them engage in crime activity. Most of them get legalized (thru amnesty) after 10-15 years. Keep it this way. Only the best can survive 10 years of hard labor to become citizens. Their children learn the valuable lesson of “hard work pays” thru their parents.

Posted by Stas | Report as abusive

Perhaps it’s best if readers knew something about the person/institute submitting this article.

From the Hudson Institute own website:
“From February 2003 to April 2005 Ms. Furchtgott-Roth was chief economist of the U.S. Department of Labor. Previously she served as chief of staff at the President’s Council of Economic Advisers.”

From Wikipedia:
It(Hudson Institute)was described by US foreign policy scholars John Mearsheimer and Stephen Walt as “closely associated with neoconservatives”.

The Hudson Institute is supported by donations from companies and individuals. Corporate contributors include Eli Lilly and Company, Monsanto, DuPont, Dow-Elanco, Sandoz, Ciba-Geigy, ConAgra, Cargill, and Procter & Gamble.

So fellow readers… an article from one of the chief economists during the gestation period of this current meltdown. Now associated with a neoconservative think tank.

You come to your own conclusions.

Posted by Barry | Report as abusive

I sincerely hope that developmentally challenged individuals like yourself are not responsible for the policies of this nation going forward but I suspect that this will indeed be the case.
Very true!

Posted by brandon | Report as abusive

What a shame that the front runner of capitalism is running away from competition? Lets have a “May the best man win” competition for jobs too. We dont think twice before we bomb Iraq, before we terrorise Afghanistan and when some poor sod from India comes along and works for us we dont want him here saying he takes away our jobs. Frankly, a lot of these huge corporates of ours are standing on the shoulders of hard working Asians. As the young man observed every second person in Cisco is Indian or Paki. Such spineless talk just re affirms that our days as a super power are over unless we are ready to pull up our socks and work and compete and win against all tribes and races.

Posted by Janit | Report as abusive

Ernest would like a solution for “…the humanity of the people living and working in the country illegally.”

The problem is that when Americans insist upon immigration enforcement, we get “malicious compliance” from our government.

http://en.wikipedia.org/wiki/Malicious_c ompliance

Most Americans were agreeable to the terms of the IRCA amnesty, but Congress refused to enact the employer sanctions written into the law. Instead of employer sanctions, Congress has given us troops on the border, a non-contiguous fence, workplace raids and deportations; everything but employer-sanctions. This is malicious compliance, which is also passive-aggressive behavior.

The AGJOBS bill is a perfect example of malicious compliance, offering a limited path to citizenship while removing wage protections, housing standards, transportation reimbersement and allowing profiteers to charge huge fees for guest worker visa processing in Latin America. (No CIR bill is much better than a bad CIR bill.)

The practice of hiring illegal labor was once limited to the informal economy, the practice has now infiltrated into the formal economy and employers are getting away with deducting illegal wage expenses from gross-income.

Additionally, the labor subsidy that forced-migration provides inhibits diversification and investment in Latin America where labor is plentiful. Nearshoring allows workers to attain housing equity, in an affordable market, thus preparing the worker for old age.

For most Americans, if employer sanctions (which should involve the fear of a seven year IRS audit to recover illegally deducted wages from gross income) is off the table, amnesty is also off the table.

Illegal immigrants are not the only people suffering, Americans are losing homes and retirement savings too. Economic expulsion of American citizens through immigration (labor price controls) policy, where is the compassion for these Americans?

Guest (migrant) workers must be required (and paid enough) to maintain a foreign residence. This is the true measure of “market wage” and will cause prosperity to visit Latin America through investment and larger remittances.

Give us a bill that causes employers to answer to the IRS for Social Security no-match letters. Deny the deduction of illegal wages, force illegal employers to pay these taxes and penalties on these illegal deductions and you have a bill that America will favor.

Involving the IRS in the process, will turn illegal employment enforcement into a revenue-positive vehicle and will also address the problem of visa overstays. Visa overstays are 40% of illegal immigration.

This thesis is pure economics, not “hiding behind patriotism.”

Finally, ten Dollar lettuce will never be a function of labor cost (7%), it will be a function of devaluation of the Dollar due to credit defaults.

Posted by weaver | Report as abusive