Immigration can speed economic recovery

April 10, 2009

 Diana Furchtgott-Roth

– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. –

It’s welcome news that President Obama will turn his attention to immigration reform this year, as was announced on Wednesday by Deputy Assistant to the President Cecilia Muñoz. Economic recovery will happen more quickly if both high- and low-skill immigrants are permitted to enter the United States and work legally.

Two years ago, when Congress was considering comprehensive immigration reform, both President Bush’s Council of Economic Advisers and the Congressional Budget Office, headed by Peter Orszag, an economist closely identified with the Democratic Party, estimated that the benefits of additional immigrants outweighed the costs. If Congress allowed more immigration, then American taxpayers would come out ahead financially.

Yet, after Congress refused to pass President Bush’s plan to allow most undocumented workers to receive work visas and wait in line for citizenship, the Bush administration’s immigration policy deteriorated into a series of arbitrary raids on different companies, rounding up undocumented workers and deporting them, in many cases separating husbands and wives, parents and children.

We can do better. Although the unemployment rate reached 8.5 percent last month, the jobs are going to come back, and, as has been the case in the past, native-born Americans will want jobs that are different from those of immigrants, according to economics professor Giovanni Peri of the University of California at Davis.

Congress needs to overhaul immigration law and create an expanded temporary worker program with a path to citizenship, along with more verification to prevent workers from working illegally, and monitoring of tourists and students so that they do not overstay their visas.

A rational immigration policy would have numerous advantages:

  • Undocumented workers would pay taxes to federal and state governments rather than to grey-market check cashing services.
  • Payments for health care through insurance could be collected more easily, rather than burdening hospital emergency rooms with immigrants without health insurance.
  • Foreigners who want to work here could pay the government for visas rather than pay smugglers for unsafe, illicit transportation.
  • Improvements in security. Legal visas and bank accounts would make it far easier to identify and track potential terrorists, dubious financial transactions, and those who simply overstay visas.

A rational immigration policy would 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 want to do the jobs, such as fruit picking and cleaning, that 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.

Mr. Obama might want to consider transferring the authority of setting quotas from Congress to the Labor Department. The Labor Department already has the presumptive authority to judge whether demand for foreign labor is justified, through its foreign labor certifications. If the Labor Department is allowed to determine whether or not a foreign worker would displace a native one, it could also be allowed to calculate visa quotas.

High-skilled workers educated in America ought to be able to stay; otherwise, our investment in their education 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.

Mr. Obama has the opportunity to craft a sensible and dynamic immigration system. All Americans should wish him success.


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One way to get Americans to work is to pay them an adequate salary.

Perhaps the problem here is that Americans don’t want to work for inadequate salaries and immigrants haven’t yet developed an awareness of what is inadequate because they come from places much worse than ours.

Pay Americans an adequate salary and they’ll take those jobs. After all, lots of garbagemen are native-born Americans.

Posted by marik7 | Report as abusive

This writer is out of touch with reality:Doesn’t she knows country these people broke the law by illegaly entering our country. If they are granted what they want, another 12 millions of them will do the same.: Enter our country illegaly.

Posted by George | Report as abusive

Employers want more immigrants because they can pay lower wages and get their work done. This is the sole reason and it has nothing to do with “jobs Americans can’t do”. Not all professions are related to rocket science that they require some specific immigrants to be imported from specific third world countries; nor do these jobs require a very high IQ. These are jobs that any American would be able to do , especially in these times.
In other words, Diana is saying (on behalf of the American employers) that Americans should also start working for low third world kind wages, or get displaced by immigrants. Even if suppose the Americans start working for lower wages comparable to that of the immigrants, the latter would still demand lesser wages (to desperately come to America, “the land of dreams”) in competition with the American workers. In the end, both the immigrants and the American workers end up suffering. The only people who would gain from it are these employers who have nothing to lose.

Mark my words people, Diana is being funded by the elite immigrant lobby of professionals, academicians etc (largely from India, Indonesia etc) to further their agenda of pushing more and more immigrants from their countries to the US.

By large scale immigrations for different kind of professions, both the countries of the immigrants and the US are at loss. This is because the native countries lose their professionals to the US and end up remaining underdeveloped, and the Americans end up facing heavy competition from the immigrants, and in some cases, end up being unemployed.

Posted by Fallen monk | Report as abusive

With a hyphenated name, she already smacks of elitism. Her Pollyanish statements about “work that Americans will not do” are tired, trite, and completely wrong. Making illegals “legal” will keep them beholden and subservient to the current Afro-Marxist machine for decades. The iPod-water bottle-American Idol apathy of American citizens will allow this wholesale violation of American law, culture, and soil. The GOP has disappeared, and the Justice Department refuses to enforce immigration regulations, while the Homeland Security Department settles in under the leadership of a former governor who failed in border-keeping responsibilities. Will the Times ever print a contrary view to its suicidal view on illegal immigration?

Posted by Marc | Report as abusive

It is not a matter of whether Americans “will” or “can” do these jobs. We are willing, and we CAN. Pointed out in the previous posts, employers are grateful in these times to pay an illegal worker a quarter of the wages he would have to pay a legal citizen. In these times, millions of Americans have been laid off, millions of families are without insurance, and struggling, and soon to become homeless, or close to. These same Americans are applying for these jobs that we supposedly “cannot” or “will not” do, and being turned down for them! WHY? Because it costs too much. Americans with degrees cannot get jobs because an employer would rather pay someone who can do that same job, without that degree, and pay them less. This is hurting our economy, and hurting our nation. Illegal immigration has a hand in bringing our economy to where it is today. Had our government enforced this immigration long ago, when asked to do so, we wouldn’t have the issue of having possible jobs yanked from under us, only to be given to someone less qualified. Not to mention that most of these illegal workers, are taking their earnings back to their home countries, TAX FREE… what does that do for our economy? Absolutely nothing but hurt us even more. They raise OUR taxes, to support the big guy’s spending, and give more of our money to the illegals, who in turn only spend half of their earnings in our country. We are losing more than we are gaining by allowing the illegal immigration to continue.

Posted by PJ | Report as abusive

I would also like to add, to my previous post, that this is a vicious cycle.

Bob Doe who owns Company A pays 10 American employees $10.00 each to work daily for him. Bob Doe is affected by our current economy, in that because people are being laid off, he is not getting as many calls for jobs. Bob Doe has to lay off 4 American employees.

Along comes Illegal Immigrants X, Y, and Z. They tell Bob Doe that they will work for $4.00 an hour, unreported. Bob Doe sees the opportunity to take that big job that he finally got called for, for half the cost. Not only does Bob Doe keep three American men’s wages by paying three illegals to do the same job, for just over the cost he was paying ONE American worker, he doesn’t have to report them on HIS taxes. That makes Bob Doe quite a bit of profit from this job.

Now the end of the week comes, Illegal Immigrants X, Y, and Z go back home to their country, with 100% of their earnings. That is twice that money has escaped taxation.

Next week, Illegal Immigrants X, Y, and Z bring along their cousins, Illegal Immigrants A, B, and C. They tell Bob Doe, these guys will work for you. Bob Doe then lays off four more of his LEGAL staff, and pays Illegal Immigrants A, B, and C a total of what he would have been paying ONE of the Americans he just laid off.

Now Bob Doe is back up to 8 workers, (six illegal, and two legal). However, when he had 10 American workers, he was paying an average of $100.00 per hour. He now has only two less workers, but is now only paying $44.00 per hour for labor. He just increased his profits, not only by not paying taxes and reporting his workers, but he can still take all those jobs that actually are calling, because he is still only two men short of where he started.

And this is supposed to help our economy how?

I agree. Cut small business owners taxes. Raise American workers wages.

Employers expect to be able to pay a guy with 20 years experience $16.00 an hour for his job, but expects that same worker to perform at a $30.00 per hour rate.

Where is that right??

Posted by PJ | Report as abusive

This lady is a fool no matter what degrees she has. If third world illegal immigrants are such a boon, why aren’t the places they come from the envy of the world? Furthermore, what does she expect that they will buy with their low wages and high dependence on social welfare? A house? I would like to kindly remind that banks are actually underwriting loans now, as they have not in about 5 to 8 years.

Politically correct idiocy.

Posted by concerned | Report as abusive

Wow! The hatred in some comments is astounding. The conservative logic is simple. The millions of illegal immigrants have jobs. How do we know this? Because if they didn’t we would wake up each morning to thousands of starving immigrants in the streets. Allowing a path to citizenship immediately turns immigrants into taxpayers that generate millions of dollars into our system. Seriously, the sky won’t fall on us. In fact, all Americans will benefit. It is time we all act less selfish and more compassionate and humane. I appreciate what Diana Furchtgott-Roth expressed and hope we all put away senseless anger.

Posted by Frank Beaudine | Report as abusive

a current economist wrote “the former and current economists in the government are largely idiots and wrong about most of their predictions” further he wrote “if they as experts are frequently ‘surprised’ when actual data contradicts their predictions and arguments, how expert really are they?”.

Posted by Concerned | Report as abusive

Just a few definitions of those not members of La Raza (The Race). “Undocumented” = “Illegal.” Typically Mrs. Diana Furchtgott-Roth cannot even utter the word. Unfortunately for her, illegal is the word that most Americans know truly describes the status of “undocumented” immigrants. They broke the law; they didn’t lose their paperwork. Next, “jobs Americans won’t do” = “jobs Americans won’t do for $2.00 an hour and no health insurance.” Mrs. Furchtgott-Roth delusional assumes a racist notion that Americans (White people) are just evil lazy people who won’t work. The fact is that they simply know that our country has a minimum wage and minimum standard of living. Then, she encourages ignoring that wage and standard by hiring workers who cannot say a word about others breaking the law, since they themselves are criminals. Finally, “rational” = “a racist and criminal policy that satisfies elitist hunger for illegal foreign slaves.” Oh, and it would help if those criminals felt indebted to one political party that might just need to pad the voter rolls, especially when they insist on trying to pass legislation that most Americans oppose.

Posted by mark | Report as abusive

The problem will not be solved by the program outlined by this writer, only worsened. The United States is either a country of laws, or it is not. Simply erasing the crimes of these illegal entrants is inequitable, unless we are going to open the doors of every prision in the country.

More to the point, it is ridiculous to suggest that these immigrants will begin paying taxes, and suddenly pay their hospital costs. The vast majority will not only not pay income taxes, but will be net RECIPIENTS of tax refunds due to earned income credits. They will not suddenly become responsible citizens, covering the cost of their own healthcare, either. How many will pay the $1,200-$1,500+ per month necessary to maintain family health coverage? They’ll still be a burden on the health system, and a growing burden on the school system. Take a family of 4….2 kids in school, at a relatively low cost of $5,000 per year each for healthcare, and $5,000 per year each for the kids in school. It adds up to $30,000 per year in costs that few, if any, will pay. IF we are so stupid as to provide them with family visas, we will multiply those numbers by 4x (system average for family visas v. work visas). The burden on our systems of adding at least 30 million MORE (non-working) immigrants will strain every system we have (schools, health, law enforcement) to the point of collapse. Obama can kiss universal health coverage goodbye if he burdens it with tens of millions of immigrants.

Posted by John B | Report as abusive

We need people into the country that are not willing to dish out $1500 on family health insurance per month.

ONLY idiots want to dish out $1500 a month on health insurance. A workforce less willing to splurge money on rapacious health insurance costs should be encouraged because it is a sign of intelligence and would drive down the costs for everybody and improve the intelligence quotient of a nation of dummies.

Since when do you go out to a supermarket and pick items off the shell without knowing how much they cost? How about someone making the choice for you of what you need to put in your cart, pass it through the register, take your credit card and then tell you to go home, you will get the bill in the mail?
Isn’t that what happens when you use your health insurance? What HI offers now is like a discount card but it will only work for the items it wants, when it so wishes, and it is free to change the terms of service at will. Like you want beans but you’ll be getting split peas instead. And don’t complain, you’re lucky to get split peas. Any extra coupons have terms attached, see back.

That is, of course, the mentality of the current consumer who feels like complaining but still accepts to pay $1500 a month for an IF (IF it happens that you get hit by a locomotive at home in your sleep, IF you are hit by an asteroid at work, IF you drown in the sea off South Dakota, IF you don’t buy insurance you’ll have a heart attack. That headache you got? is actually a brain tumor)

Given a choice between getting SCAMMED out of $1500 per month or use the free health care available, what do you think is the best option? The $1500 a month can go to a health savings account for those emergencies, for the kids braces, for that broken leg the kid got skating off a rail or that nasty infection you keep getting in your toes)

I think going against the reform of the legal avenues of immigration into the country is only distracting from real issues and genuine concerns. It’s easy to play with prejudice and pit groups against one another in order to
rule at will. Which is what the lobbies in Washington are doing today.

Posted by Dan Dan Dan | Report as abusive

Does it really matter whether the wall against the much much less affluent is built territorially? The pressure to reduce our standard of living, what a vaguely defined idea – is still there. This country doesn’t live on another planet. If the presure doesn’t come from within -it will come from without. Won’t it!

IT doesnt matter what side of the political spectrum describes the problem, the medical bills seem to doom any fix. I haven’t been able to afford it in years and at $1500/year and climbing I never will again. I called it quits when it passed $1500/year over 15 years ago.

I know people who hate illegal immagrants because they are themselves less productive, due to old age and ill health, and appreciate that they are in fact less valuable to the country than the able bodied and fully productive that are replacing them. They know they are not needed, are a burden on the system and were paid more their whole life than those who are replacing them. They may very well be costing the system more now than they were paid. Rather like decommsiioned old nuke plants, they cost more to dispose of then they actually were avble to produce during their working lives.

That’s where all the hatred is coming from and it do well for most of us to be more polite about the writer – she is only pointing out the situation. But it is obvious that she is proposing to write off a lot of the marginal citizen population in favor of fance jumpers and basically more ruthless but also brave and/or desperate, fresher, hungrier and more capable, illegal immagrants.

It’s such a stinking, raw and obvious statement about the tenuous grasp so many of us have on the homeland. I credit her with being somehwat “compassionate” but in a way that could well be strained to the point of raw violence as this situtauion is when seen in other countries of the world.

I think her point of view will win but the man who described the true bottom line – many of the new legals – if they ever become so, will quickly go either to the first class and the rest will still stay in steerage with a lot of native borns. Considering that productive labor in this country, both legal and illegal, is still surrounded by billions of much lower paid people whether they ever neter this country, will still pull the cost of living down and the age is driving the cost of actually being productive (profitable to the system) doesn’t look like it will ever be fixed.

The economist doesn’t mention the percentage of new immagrants destined for the upper decks and how many go down with the ballast? Rich people don’t keep many servatnst any more. They have been too expensive for almost a century.
My immigrant grandparents didn’t have health insurance. The system prospered because in many ways they were largely exploitable livestock with working brains.