By Dean Celia, Contributing Writer
As the nation debates illegal immigration in a tense political climate, New York City and California are offering plans to cover those who are unauthorized. Our experts analyze the pros, cons, benefits, and challenges.
In early January—with the federal government mired in a partial shutdown and the nation debating illegal immigration—California and New York City came out swinging with plans to provide health care access for undocumented immigrants. New York mayor Bill DeBlasio unveiled NYC Care, a $100 million program that will enable undocumented immigrants and others who cannot afford insurance access to primary care services. Meanwhile, California’s new governor, Gavin Newsom, proposed spending $260 million a year to insure undocumented immigrants between the ages of 19 and 26 (the state already funds care for those 18 and younger).
In the current political climate, the question naturally arises: Is this the best way to allocate dollars, or should programs that address the needs of US citizens and legally-documented immigrants come first? We asked four experts to analyze the issue, address its complexities, and predict how the plans might fare.
Norm Smith, a principle payer market research consultant in Philadelphia, was pragmatic, and spoke from experience. “I worked in New York City’s hospital system back in the 1980s. It was overwhelming.” So, he understands De Blasio’s logic. “Delivering up-to-date health care in these ancient hospitals has to be tough. New York City’s large tax base is able to afford some level of care” for undocumented immigrants. The same holds true for California, he noted.
Barney Spivack, MD, national medical director of Medicare case & condition management at OptumHealth, New York, said that states and local municipalities are fed up the federal government’s inaction and are choosing to move on their own. “Practically speaking, both plans will need to be viewed as one component -and not the centerpiece – of an overall effort to improve health care services for all residents.”
F Randy Vogenberg, PhD, RPh, principal of the Institute for Integrated Health Care in Greenville, SC, was frank. “Objectively, as a health care expert, make no sense.” He believes there are too many variables to know if the efforts will pay for themselves, and argues that it is potentially throwing good money after bad, with no proof-of-concept. “California is the poster child for devastating budgetary impacts.”
Charles Karnack, PharmD, BCNSP, assistant professor of clinical pharmacy at Duquesne University in Pittsburgh, said he wonders if the proof-of-concept exists overseas. “I agree that at first glance, the plans appear to be impossible to pull off, but they are similar to what’s being done in the European Union,” where the focus is on prevention and addressing fragmented care.
Most of our experts agreed that the moves are politically-motivated. De Blasio and Newsom want to be the progressives who stand up to the controversial policies of the Trump administration. “Both probably want to be president someday,” said Mr Smith.
Beyond politics, some argue that simple math justifies the value of these programs. US citizens, they say, pay one way or another. Undocumented immigrants get sick, and without coverage end up being cared for in the emergency room or after their disease has progressed. So, it’s cheaper to fund care on the front end, and shift it to the primary care clinician’s office, they argue.
Dr Vogenberg said that layering on more plans and proposals isn’t necessarily the best solution. “There are a mishmash of coverages and stopgap programs, none of which address true long-term outcomes.” Dr Spivack said he worries about outreach. He cited an effort in New York City offering half-priced mass-transit cards to poor individuals that is reaching only 30,000 of an estimated 800,000 residents who live below the federal poverty line. Might the same issue hinder De Blasio’s health plan, especially since undocumented immigrants may fear consequences of being recognized as undocumented?
Mr Smith explained that, in theory, it is less expensive to deliver care earlier, but he cautioned that such programs are not panaceas, particularly with more complex conditions, such as rheumatoid arthritis. While undocumented immigrants are offered coverage, “they do not have access to the same standards of care that commercially-insured patients receive.”
Still, offered Dr Karnack, “treating diabetic foot ulcer in the emergency room is certainly costlier than preventing it through primary care visits.” Dr Spivack said he agrees, but added that it “may take years to be able to demonstrate desirable change. It’s more likely that initially, there may be much higher expenses new access to care.”
Looking at the bigger picture, Dr Karnack said that “past and current experiences with immigrant populations often demonstrate outstanding productivity once they are established in welcoming communities.”
While improving outcomes and allowing individuals to thrive are the ultimate success measures, costs and funding have to be considered. De Blasio’s plan will be paid for by savings from emergency room visits, with no additional cost to taxpayers, according to the mayor’s office. Newsom’s proposal requires legislative action and a likely tax increase. Will the New York plan really pay for itself? And are California residents who already experience high taxes willing to pay more?
In New York, “it depends on the stability of the population receiving treatment,” said Mr Smith. If patient turnover is high and clinicians are continuously treating a new cohort, it will be difficult to demonstrate benefit. For this reason, “I like the idea of a membership card to identify and track individuals’ progress.”
Dr Spivack said that the $100 million allocated for the New York program is low in his view. “I am not sure what it will be able to cover.”
Meanwhile, in California, Mr Smith said he sees smooth sailing, but others are not so sure. “Getting legislative approval should be simple,” offered Mr Smith. “Democrats have a super-majority in both houses.” Dr Vogenberg said he agrees, to a point. “You never know with California, but taxpayers there are not happy.”
For that reason, Newsom’s $260 million a year plan is no slam-dunk, explained Dr Spivack. He pointed out that last year a $140 million-per-year proposal to expand care for legally documented young adults died in budget negotiations. He believes that raises questions about whether Newsom can push his plan through.
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- Should the Government Allow Immigrants Who Are Here Illegally to Become US Citizens?
- Undocumented Student Tuition
- NH in-state tuition laws
- Federal law on in-state tuition
- POLITICO Magazine
Should the Government Allow Immigrants Who Are Here Illegally to Become US Citizens?
With over 11 million immigrants in the United States illegally, the issue of illegal immigration continues to divide Americans.
Some people say that illegal immigration benefits the US economy through additional tax revenue, expansion of the low-cost labor pool, and increased money in circulation. They contend that immigrants bring good values, have motivations consistent with the American dream, perform jobs that Americans won’t take, and that opposition to immigration stems from racism.
Opponents of illegal immigration say that people who break the law by crossing the US border without proper documentation or by overstaying their visas should be deported and not rewarded with a path to citizenship and access to social services. They argue that people in the country illegally are criminals and social and economic burdens to law-abiding, tax-paying Americans.
PROS & CONS BY CATEGORY
- CORE QUESTION
- Should the Government Allow Immigrants Who Are Here Illegally to Become US Citizens?
- What Is Illegal Immigration?
- What Is Legal Immigration?
- Should the Term “Illegal Alien” Be Used to Define Persons in Violation of Immigration Law?
- What Is Immigration Amnesty?
- Should US Customs and Border Enforcement Use Military Equipment to Help Prevent Illegal Immigration?
- Should Volunteer Civilian Groups Such as the Minutemen Patrol the Borders?
- Should the United States Continue to Build a Fence or Wall along the US/Mexico Border?
- Birthright Citizenship
- Birthright Citizenship Debate: Should Children Born on US Soil to Undocumented Immigrants Automatically Have US Citizenship?
- Should the Undocumented Parents of US Citizen Children Be Allowed to Remain in the United States?
- Should Overstaying a Visa Be Considered a Federal Crime instead of a Civil Offense?
- Does Illegal Immigration Relate to Higher Crime Incidence?
- What Happens to Undocumented Immigrants Who Commit Crimes in the United States?
- Does Illegal Immigration Pose a Terrorist Threat to the United States?
- DACA and the DREAM Act
- Are DACA and the DREAM Act Good for America?
- Deportation Debate
- What Is Deportation?
- Are Mass Deportations a Good Method to Address Illegal Immigration?
- Economic Impact
- Is Illegal Immigration an Economic Burden to America?
- How Are Illegal Immigration and Globalization Related?
- Do Undocumented Immigrants Pay Their “Fair Share” of Taxes?
- Immigration Quotas
- Would Increasing Legal Immigration Reduce Illegal Immigration?
- Immigrants’ Rights and Access to Services
- What Constitutional Rights Do Undocumented Immigrants Have When on American Soil?
- Should States Issue Driver’s Licenses to Immigrants in the United States Illegally?
- Labor Market – American Workers and Employers
- Does Illegal Immigration Disadvantage American Workers?
- Should Employers Who Unknowingly Hire Undocumented Immigrants Receive Lighter Penalties?
- Should E-Verify Be Mandatory for All Employers?
- Law Enforcement
- Should State or Local Governments Help Enforce Federal Immigration Laws?
- Are Sanctuary Jurisdictions Good Policy?
“You could say … that we’re spending about $3.5 trillion on health care now and we’re going to move that all onto the federal tab, but I think that’s a little too simplistic,” House Budget Chairman John Yarmuth (D-Ky.), a longtime supporter of single-payer health care, said earlier this year.
But with Warren’s primary rivals pressuring her for details, lawmakers, health policy experts and academics say she has several credible options for paying to extend government health insurance to all Americans. Here are some of the taxes, spending cuts and budget shuffling ideas under consideration by experts, and the pros and cons.
Tax the rich
Warren has already made it clear that wealthy individuals and corporations will be expected to pay up for Medicare for All, but that squeeze could take a number of forms.
Raising income taxes on top earners, who are currently taxed at 37 percent, would deliver some revenue. Warren could also introduce a new tax on the richest 0.1 percent of Americans, eliminate itemized deductions for the wealthy or limit other tax breaks — such as scrapping a provision that allows rich investors to pass unrealized gains to heirs tax-free when they die. Warren has already suggested using her proposed wealth tax to fund universal childcare and tuition-free college.
Pros: Some of these proposals, or a combination of several of them, could go a long way toward paying for a single-payer system. Whacking the rich also is an appealing populist stance for a progressive candidate.
Cons: Taxing the wealthy alone wouldn’t raise the trillions of dollars in added revenue needed to completely overhaul the health system, and experts say spreading the pain to a bigger segment of the population would stoke more voter anxiety.
“You need to consider some substantial broad-based tax increases on a large number of Americans, but that’s not the kind of thing campaigns like to talk about,” said American Enterprise Institute researcher Ben Ippolito.
Just raise payroll taxes
Warren and other supporters of Medicare for All are expected to turn to employer payroll taxes to help cover the bill, because that tax already funds government health care and likely would cause the least disruption. Sen. Bernie Sanders has proposed a 7.5 percent payroll tax on employers to fund his Medicare for All plan, which he estimates would raise close to $4 trillion over a decade.
Pros: Employers would save a ton of money under Medicare for All since they wouldn’t have to pay for workers’ private coverage in a single-payer system, so it might make sense to ask them to chip in in a different way. The payroll tax could also be designed to exempt small business and low-income workers while leaning more heavily on the high end of the pay scale by lifting the cap currently in place for programs like Social Security.
“A payroll tax on the Lakers including all of Lebron James’ salary, for example, would raise a lot,” said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation.
Cons: Economists say the vast majority of higher payroll taxes would be passed on to workers in the form of lower wages. Additionally, groups like the Organization for Economic Cooperation and Development have warned against relying on payroll taxes to fortify the social safety net because the nation’s aging population and low birth rate mean fewer workers paying those taxes in the future.
Slash military spending
Fans of Medicare for All have proposed chipping away at the nation’s military budget to fund a single-payer health system. The Institute for Policy Studies, a liberal think tank, calls for diverting $300 billion a year for universal health care.
Pros: Lawmakers of all political stripes are concerned about waste, fraud and abuse at the Pentagon and have called for more oversight and stricter auditing.
Cons: Pentagon spending still is one of the most popular ways to politicians to deliver the goods to their states and districts, and few want to risk angering local contractors or suppliers. This summer’s budget deal saw congressional leaders and the White House agree to raise defense funding caps by $22 billion for the current fiscal year.
Water down the benefits
The benefits currently outlined in Sanders’ Medicare for All bill that Warren has embraced are more generous than any other government health care in the developed world, offering full coverage for nearly every procedure, drug and service free of charge to all residents, potentially including undocumented immigrants. There are ways to pare down the cost and bring the plan more in line with government-administered systems in other countries — from restricting what services are covered to charging a small yearly premium or deductible based on a person’s income.
Pros: Any reduction in benefits or a restriction on who qualifies for coverage would lower the price tag of Medicare for All considerably, meaning lawmakers would not have to raise nearly as much in taxes or cut as much in other federal spending.
Cons: Warren campaigned on free coverage for all and would quickly face accusations of flip-flopping.
Pay for the plan with future savings
Administrative costs are projected to drop substantially when the federal government handles health care coverage. Sanders estimates the federal government could save up to $500 billion a year on administrative costs alone by moving to a single-payer system.
Pros: Economists across the political spectrum agree that a public health care system with lower overhead that removes the profit motive is certain save the country a lot of money. Administrative overhead totals less than 2 percent of Medicare spending, compared to well over 10 percent for the private insurance market, according to the Institute of Medicine of the National Academies and the Congressional Budget Office.
Cons: Experts disagree on whether overall health care spending would fall under Medicare for All. With no out of pocket costs for care, some argue, millions of people would use more health services than they currently do, canceling out any savings from lower overhead. Even some of those in favor of Medicare for All also question whether the government is up to the task.
“My thought has always been that it would be much too difficult for the federal government to set up a bureaucracy to administer an insurance program for 330 million people,” Yarmuth told POLITICO earlier this year. “I’m not saying it’s impossible to have a fully government-run system, I just have a hard time envisioning how it would work.”
Squeeze doctors and drug companies
A key feature of Medicare for All is having the federal government bargain with medical providers and pharmaceutical companies for cheaper rates.
A House Democratic drug price plan is projected to save at least $345 billion over seven years through direct negotiations. If Medicare coverage were expanded to all Americans, that change could result in trillion-dollar savings each decade.
Pros: Leveraging the government’s bargaining power could result in massive savings. Just look at other developed countries where people pay far less on average for medication and health care procedures.
Cons: This is easier said than done. The hospital and pharmaceutical industry has already mobilized not only in opposition to Medicare for All but also against much more incremental plans to rein in health care costs, including plans under consideration in Congress to protect patients with insurance from massive out-of-network bills.
“If you’re telling me you’re going to slash the rates you provide doctors then I’d like to direct you to the current debate over surprise medical bills,” Ippolito said. “Doctors aren’t even willing to commit to normal market rates let alone much lower Medicare rates.”
Aaron Lorenzo, Bernie Becker, Jennifer Scholtes and Alex Thompson contributed to this report.
Illegal immigration is defined as the act of crossing a national border without permission with the purpose of living full-time in a new nation. When discussing the topic of illegal immigration, every country deals with these border crossings to some extent.
In North America, however, the primary topic involving illegal immigration involves unauthorized border crossings from Mexico into the United States.
There is a benefit to illegal immigration from an ethical standpoint. Opening one’s borders to allow people to have the chance to start a new life for themselves is a morally correct position. Although some will always take advantage of an open borders policy, the benefits to society by having welcoming arms will outweigh the negatives that come from bad actors.
The disadvantage of illegal immigration is that, by definition, it is a legally incorrect course of action to take. There are legal methods of immigration available in most nations today. Skipping that legal process de-emphasizes the costs and sacrifices that many households make to start a new life for themselves that does follow the law.
Here are some more of the key pros and cons of illegal immigration to discuss.
List of the Pros of Illegal Immigration
1. It provides local economies with a boost.
Illegal immigrants might cross the border without permission, but they can still contribute to local society. Many of these immigrants find work in cash-under-the-table positions that are needed, but not often worked, by those with citizenship or a legal immigration status. Increases in production create improvements in living standards and that eventually helps everyone find more success.
2. It creates more diversity within the culture.
Diversity can provide a number of positive impacts to a society. It allows the society to grow because there are new ideas, perspectives, and cultures contributing to it. It offers everyone the chance to experience higher levels of growth because there is more access to information. Illegal immigrants combine their knowledge and skills to that of everyone else to create a stronger, responsive, and more productive outlook.
3. It reduces the costs of deportation.
The vast majority of illegal immigrants break no other laws beyond their initial unpermitted border crossing. Deporting illegal immigrants is a costly venture. In FY 2016, ICE spent $3.2 billion to identity illegal immigrants, arrest them, detain them, and then remove them from the United States. They handled 240,000 of the 450,000 deportations which took place that year. Each deportation conducted by ICE cost an average of $10,854 per illegal immigrant deported. Stopping just 100 deportations could save $1 million.
4. Most illegal immigrants have established residency.
In the United States, as of 2012, about 60% of the population that immigrated to the country illegally has been present for at least 10 years. At the same time, the illegal population that has been in the U.S. for less than five years has dropped from about 40% to less than 20% in the from 2004-2012. One in three undocumented immigrants above the age of 15 lives with a child that is a U.S. citizen. About one in three undocumented immigrants even own their own homes and pay property taxes.
5. It eliminates the cost of child care for legal children, but illegal parents.
About 4 million children in the United States have citizenship, but their parents do not. If the government deports these parents, then it falls onto the government to care for them if there are no legal family members involved. Children who have their parents deported become withdrawn, anxious, and may suffer from depression. The cost of foster care per child averages about $160 per day. Multiply that figure by 4 million and that’s a cost that can be eliminated if illegal immigration was transitioned to legal immigration.
List of the Cons of Illegal Immigration
1. Many illegal immigrants fit into a less-educated, lower-income demographic.
The fiscal impact of illegal immigration is generally based on the taxes they pay minus the costs they create. A net increase in the economy can occur when immigrants are more-educated and have a higher income level. Many illegal immigrants do not fit into that category, which means they create a net fiscal drain for many communities.
2. Illegal immigration creates an ongoing security threat.
Illegal immigration provides the means and opportunity for terrorism to exist. It presents opportunities for crime. A vast majority of illegal immigrants may follow all the laws, but not all of the do. Yet criminal aliens make up 27% of the total population of federal prisoners, despite the fact that they are an estimated 9% of the total adult population in the United States. In 2003, more than 55,000 illegal immigrants had been arrested nearly 460,000 times, while committing nearly 700,000 criminal offenses.
3. It changes employment dynamics.
A free market economy relies on supply and demand for pricing and wages. If there is a lack of skilled labor available to a market, then wages go up. If there is a lot of the same product, then the price for that product goes down. When illegal immigration is present, the job market is suddenly given more workers than it would normally have if those who crossed illegally were not present. More workers correlate to depressed wages, which ultimately means the value of work is priced lower.
4. Illegal immigration can lead to overcrowding.
Illegal immigration can change the population dynamics of a community very rapidly. In California, about 50% of the students starting school are either immigrants or a child of immigrants. With the added capacity of these students, nearly 15% of schools in the U.S. exceed their capacity by at least 6%, and sometimes as much as 25%.
The pros and cons of illegal immigration are variable based on each community. Some can take on more illegal immigrants without issue, while others struggle with those who are already present. Without a meaningful dialogue, this issue will remain unresolved. That is the purpose of these key points – to start the conversation.
About the Author of this Article
Natalie Regoli is a seasoned writer, who is also our editor-in-chief. Vittana’s goal is to publish high quality content on some of the biggest issues that our world faces. If you would like to contact Natalie, then go here to send her a message.
Undocumented Student Tuition
Immigrants who are in the United States illegally are not eligible for in-state tuition in New Hampshire.
NH in-state tuition laws
In 2012 New Hampshire passed a law that requires any in-state applicant to a public university in New Hampshire to sign an affidavit swearing he or she is a legal resident of the United States.
In 2014 and again in 2015 the New Hampshire Legislature considered, but ultimately killed, bills that would let some immigrants living here without permission pay in-state tuition. Both bills would have applied to immigrants who attended high school in New Hampshire and were also seeking legal status from the federal government.
In 2018, the Legislature sent SB 525 to interim study. This bill would have prohibited the University System of New Hampshire and the Community College System of New Hampshire from giving state-funded financial aid to students who did not prove their legal citizenship status.
Read more about higher education funding in New Hampshire
Federal law on in-state tuition
A 1996 federal law states that “an alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit.”
Many conservatives argue that this law bans in-state tuition for immigrants who are here illegally. Nonetheless, a little less than half of all states offer in-state tuition for some such immigrants. So far federal courts have upheld the state laws.
Deferred Action for Childhood Arrivals (DACA), started under President Barack Obama, could also impact immigrants’ eligibility for in-state tuition. DACA allowed immigrants brought illegally to the United States as children to apply for legal status. President Donald Trump ended the Obama administration policy and instructed Congress to pass an alternative to the Obama policy. So far Congress has not passed a DACA replacement.
Learn about state immigration enforcement policies
GMJ: Who benefits most from illegal immigration?
Jacobe: The most obvious beneficiaries are the companies hiring illegal immigrants and their stockholders. In essence, by allowing the open use of illegal workers, we have unofficially changed U.S. labor laws and allowed people to work at much lower wages and in much worse conditions than is supposed to be the case today. That promotes higher profits and better returns to stockholders.
Another obvious beneficiary is the U.S. consumer. Say you’re going out to eat, and the restaurant uses illegal immigrant labor. Theoretically, you will benefit as a consumer because the meal price will be lower. And any restaurant that tries to not use illegal immigrant labor will be at a competitive disadvantage. So restaurant owners have a choice: They either violate the law and use illegal labor, or they go out of business. The ultimate beneficiary is the person who’s eating out. Well, more often than not, that tends to be upper-income Americans, not lower- or middle-income workers.
Of course, there are others who benefit. The home countries of illegal immigrants benefit as this out-migration reduces population pressures and creates a pool of workers sending money back home to their families. And, the illegal immigrants themselves benefit to some degree because they are able to ignore the long line of potential legal immigrants and immediately enter the U.S. labor market. In the end, illegal immigration creates a lot of benefits for various groups within the U.S. economy.
GMJ: How does this all relate to economic growth?
Jacobe: Right now, China, India, and a number of other countries are experiencing rapid economic growth because they are the source of cheap labor for the global economy. Companies that can tap this lower-cost labor source experience higher productivity, a competitive advantage, and rapid growth. In essence, illegal immigration provides the same benefits, but within the United States. Illegal immigrants create a source of cheap labor that companies can use to grow more rapidly.
GMJ: What then would be the costs and benefits if we didn’t have this huge influx of unskilled workers flowing into the country?
Jacobe: This reminds me of the old discussions about automating the coal mines. The coal miners’ union decided that instead of trying to stop companies from automating, they would increase the skills of the miners. There would not be as many people working in the mines in the future, but the ones who did work would be skilled labor, and their pay would be better.
In theory, if you did not have the kind of global labor market pressure that you do right now, you would find that there would be increasing benefits from technological advances. So to the degree that there would be a shortage of low-skilled labor in the United States, theoretically, there would also be a substitution of capital for labor.
GMJ: In other words, businesses will either pay for technology or labor, but not both. If there’s a plentiful labor supply, they’ll pay for people. If there isn’t, they’ll pay for machinery.
Jacobe: It’s easier to go where there’s cheap labor and extract the surplus from it.
GMJ: Say Congress really does get tough on illegal immigration. How can business cope without that labor source?
Jacobe: One solution is to extend the working life of the baby boomers. Gallup surveys show that retirement to the baby boom generation is not what it was to their fathers and mothers. They’ll live longer, and they expect to be able to continue to work. They don’t expect retirement to be sitting on the beach or playing golf. They expect to continue to work as long as they’re healthy, though maybe not in the same job and maybe not with the same kind of intensity or pay. (See “Future ‘Retirees’ Planning to Keep Busy on the Job” in the “See Also” area on this page.)
I always thought that baby boomers were a great labor pool for companies. Wal-Mart uses them as greeters, and AARP is working with Home Depot to employ some older workers. So when you talk about low-paying part-time jobs, and you think of older Americans who are still healthy but want to do something part-time, that seems to be a great labor source.
It’s not clear to me that that this labor pool ever will be taken advantage of. I think many older people will be surprised to find that there is nothing for them to do because of what has happened in the lower- and moderate-income area of the labor force.
GMJ: You’re very even-handed in your views, but the moral issue is important to you, isn’t it?
Jacobe: Of course. There are a couple of things that are really troubling about the way the current structure works, both in job offshoring and in illegal immigration. For example, in the United States, we set rules and regulations, laws, and minimum standards for wages, handling of benefits, work rules, and working conditions for our citizens. But then we import people illegally and have them work in conditions that don’t necessarily meet all those laws and regulations — and for some reason as a society, we’re OK with that.
But if that’s OK — if society thinks that’s good — then why do we have all these laws? If the rule is that we’ll let underage illegals work, why should we not allow American children to work? And what becomes of our societal standards in the process? It’s true that the cheapest possible labor working under the worst possible conditions benefits the people who consume and the owners of capital. But why make labor laws at all then?
I’ve been studying immigration for 30 years, but 2016 was the first time my research was cited in a convention speech. When he accepted his party’s nomination in July, Donald Trump used one of my economic papers to back up his plan to crack down on immigrants and build a physical wall: “Decades of record immigration have produced lower wages and higher unemployment for our citizens, especially for African-American and Latino workers,” he told the cheering crowd. But he was telling only half the story.
Hillary Clinton, for her part, seemed to be telling only the other half. At her convention a week later, Clinton claimed that immigrants, both legal and illegal, improve the economy for everyone. She told the crowd: “I believe that when we have millions of hardworking immigrants contributing to our economy, it would be self-defeating and inhumane to try to kick them out. Comprehensive immigration reform will grow our economy.”
Here’s the problem with the current immigration debate: Neither side is revealing the whole picture. Trump might cite my work, but he overlooks my findings that the influx of immigrants can potentially be a net good for the nation, increasing the total wealth of the population. Clinton ignores the hard truth that not everyone benefits when immigrants arrive. For many Americans, the influx of immigrants hurts their prospects significantly.
This second message might be hard for many Americans to process, but anyone who tells you that immigration doesn’t have any negative effects doesn’t understand how it really works. When the supply of workers goes up, the price that firms have to pay to hire workers goes down. Wage trends over the past half-century suggest that a 10 percent increase in the number of workers with a particular set of skills probably lowers the wage of that group by at least 3 percent. Even after the economy has fully adjusted, those skill groups that received the most immigrants will still offer lower pay relative to those that received fewer immigrants.
Both low- and high-skilled natives are affected by the influx of immigrants. But because a disproportionate percentage of immigrants have few skills, it is low-skilled American workers, including many blacks and Hispanics, who have suffered most from this wage dip. The monetary loss is sizable. The typical high school dropout earns about $25,000 annually. According to census data, immigrants admitted in the past two decades lacking a high school diploma have increased the size of the low-skilled workforce by roughly 25 percent. As a result, the earnings of this particularly vulnerable group dropped by between $800 and $1,500 each year.
We don’t need to rely on complex statistical calculations to see the harm being done to some workers. Simply look at how employers have reacted. A decade ago, Crider Inc., a chicken processing plant in Georgia, was raided by immigration agents, and 75 percent of its workforce vanished over a single weekend. Shortly after, Crider placed an ad in the local newspaper announcing job openings at higher wages. Similarly, the flood of recent news reports on abuse of the H-1B visa program shows that firms will quickly dismiss their current tech workforce when they find cheaper immigrant workers.
Immigration redistributes wealth from those who compete with immigrants to those who use immigrants—from the employee to the employer.
But that’s only one side of the story. Somebody’s lower wage is always somebody else’s higher profit. In this case, immigration redistributes wealth from those who compete with immigrants to those who use immigrants—from the employee to the employer. And the additional profits are so large that the economic pie accruing to all natives actually grows. I estimate the current “immigration surplus”—the net increase in the total wealth of the native population—to be about$50 billion annually. But behind that calculation is a much larger shift from one group of Americans to another: The total wealth redistribution from the native losers to the native winners is enormous, roughly a half-trillion dollars a year. Immigrants, too, gain substantially; their total earnings far exceed what their income would have been had they not migrated.
When we look at the overall value of immigration, there’s one more complicating factor: Immigrants receive government assistance at higher rates than natives. The higher cost of all the services provided to immigrants and the lower taxes they pay (because they have lower earnings) inevitably implies that on a year-to-year basis immigration creates a fiscal hole of at least $50 billion—a burden that falls on the native population.
What does it all add up to? The fiscal burden offsets the gain from the $50 billion immigration surplus, so it’s not too farfetched to conclude that immigration has barely affected the total wealth of natives at all. Instead, it has changed how the pie is split, with the losers—the workers who compete with immigrants, many of those being low-skilled Americans—sending a roughly $500 billion check annually to the winners. Those winners are primarily their employers. And the immigrants themselves come out ahead, too. Put bluntly, immigration turns out to be just another income redistribution program.
Once we understand immigration this way, it’s clear why the issue splits Americans—why many low-skilled native workers are taking one side, and why immigrants and businesses are taking another. Our immigration policy—any immigration policy—is ultimately not just a statement about how much we care about immigrants, but how much we care about one particular group of natives over another.
Is there a potential immigration policy that considers the well-being of all native Americans? Maybe so. It’s not a ban on immigrants, or even on low-skilled immigrants. High-skilled immigration really can make America wealthier. The steady influx of legal immigrants also produces more taxpayers, who can assist financially as the native population ages. Then there’s the matter of principle: Many Americans feel that it is a good thing to judiciously give some of “your tired, your poor, your huddled masses” a chance.
We’re worrying about the wrong things, with policy fights focused on how many and which immigrants to accept, and not enough on how to mitigate the harm they create along the way.
But we’re worrying about the wrong things, with policy fights focused on how many and which immigrants to accept, and not enough on how to mitigate the harm they create along the way.
To use a label recently coined by Larry Summers, a “responsible nationalist” policy cannot ignore the reality that immigration has made some natives poorer. A policy that keeps them in mind might tax the agricultural and service companies that benefit so much from low-skilled immigrants, and use the money to compensate low-skilled Americans for their losses and to help them transition to new jobs and occupations. Similarly, Bill Gates claims that Microsoft creates four new jobs for every H-1B visa granted; if true, firms like Microsoft should be willing to pay many thousands of dollars for each of those coveted visas. Those funds could be used to compensate and retrain the affected natives in the high-tech industry.
But let’s not be naive. Policy fights over immigration have often been fierce, taking decades to get resolved. To even partially compensate those Americans who lose from the current policy would require massive new government programs to supervise a massive wealth redistribution totaling tens of billions of dollars. The employers that profit from the way things are won’t go along with these transfers without an epic political struggle. And many of the libertarians who obsessively advocate for open borders will surely balk at such a huge expansion of government. To make this work, Clinton and her supporters will have to acknowledge that our current immigration policy has indeed left some Americans behind. And Trump and his supporters will have to acknowledge that a well-designed immigration plan can be beneficial. All this is probably not going to happen. But only then can we have a real debate over immigration policy.
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In no particular order, here is a list of a few problems that comprehensive immigration reform should address (a few of which are mentioned in the immigration chapter of the Cato Handbook for Policymakers):
1. A far too restrictive system overall.
2. Static immigration quotas.
3. Quotas on nationalities—the law micromanages immigrant demographics.
4. Immigrants wait in line for decades.
5. Immigrant workers are counted against multiple quotas.
6. There’s a limit for immigrants with “extraordinary ability”.
7. Workers without college degrees only get 5,000 green cards.
8. The president can end the refugee program unilaterally.
9. No immigration category for entrepreneurs.
10. No way to create new immigration categories without congressional action.
11. Immigrants generally cannot apply for permanent residency on their own.
12. Spouses and minor children of new immigrants count against the quotas.
13. There’s a quota on new spouses and minor children of current permanent residents.
14. Children of temporary workers grow up here, wait in line with their parents for permanent residency, and get kicked out of line on their 21st birthday.
15. Immigrants can live here for decades without receiving permanent residency.
16. Illegal immigrants cannot leave and reapply to return legally.
17. Spouses and children of temporary workers are banned from working.
18. The law requires immigrants to pretend that they don’t want to immigrate.
19. Forcing employers to advertise positions that are already filled.
20. Temporary workers cannot easily change jobs.
21. No temporary visas at all for year-round workers without college degrees.
22. Noncitizens can access federal welfare programs after five years.
23. The president can ban any immigrants that he doesn’t like.
24. No opportunity to appeal visa denials.
25. The burden of proof is on immigrants and their sponsors, not the government.
26. America has closed borders with a few holes.
1. A far too restrictive system overall. Since 1820, the United States admitted on average 30 percent more legal immigrants per capita (0.45 percent of the population per year) than it did in 2017 (0.35 percent of the population), so the current rate is low historically. More importantly, the U.S. net immigration rate—legal and illegal—ranks in the bottom third of the 50 countries with the highest per-capita GDP in the world, and the U.S. share of foreign-born residents is also in the bottom third. This is at a time when population growth is at its lowest levels since the Great Depression, and the U.S. birthrate is the lowest on record. Congress should make it far easier to immigrate legally.
2. Static immigration quotas. Since 1990, Congress has not updated the quotas for the legal immigration system. During that time, the population of the United States has increased 30 percent and the economy has doubled. Quotas—to the extent that they exist at all—should be linked to economic growth (in the case of employment-based immigrants) or population growth (in the case of family-sponsored immigrants), so they don’t immediately become antiquated.
3. Quotas on nationalities—the law micromanages immigrant demographics. Congress treats immigrants differently based on where they were born (literally their place of birth—they can’t even escape this system by getting citizenship in another country). No “country” (i.e. nationals or former nationals of that country) can receive more than 7 percent of the total green cards in a category. These per-country limits are why Indian immigrants sponsored by their employers may have to wait decades for a green card, while other immigrants sponsored by their employers don’t have to wait at all. Congress should repeal the per-country limits and ban discrimination based on nationality.
4. Immigrants wait in line for decades. The symptom of the low quotas and differential treatment for individual nationalities is that nationals from certain countries must wait a long time to immigrate. Siblings and adult children of U.S. citizens from Mexico and the Philippines who are receiving their green cards right now waited two decades. Those who are applying for their green cards now will die before they reach the front of the line because so many applicants have piled up in the backlog since 1998. Immigrant workers from India have had decade-long waits, but those applying right now will wait more than a century. Such wait times are not reasonable. Congress should raise the quotas, but at the same time, it should also limit wait times to no more than 5 years.
5. Immigrant workers are counted against multiple quotas. 88 percent of immigrants sponsored by their employers for permanent residence already live in the United States. Most of them entered as temporary workers on H-1B temporary visas. When they entered, many were counted against the H-1B quota of 85,000 temporary visas. Now that they are in the country, they count again against the employer-sponsored green card limits. If the goal of quotas is to limit increases in the population or rapid changes in labor force competition, it makes no sense to double count immigrants, once when they enter and once when they apply for permanent residence. Immigrants should be counted a single time at their initial entry and not again.
6. There’s a limit for immigrants with “extraordinary ability”. The EB-1 green card category is for immigrants who have “extraordinary ability in the sciences, arts, education, business, or athletics which has been demonstrated by sustained national or international acclaim” as well as internationally renowned academics and multinational executives. These are the Nobel laureates, scientists, NBA players, and business leaders whose accomplishments contribute to the U.S. economy and society in profound ways. Yet this category inexplicably has a quota of 40,000 (including spouses and children). There is even a waiting list for such immigrants of over 58,000 immigrants. Congress should exempt these workers from the green card limits.
7. Workers without college degrees only get 5,000 green cards. In the Immigration Act of 1990, Congress limited the number of green cards provided to those without a college degree to no more than 10,000. In 1997, Congress passed a law that temporarily cut this meager amount in half. In 2016, the Pew Research Center estimated that there were about 11.3 million unauthorized immigrants in the United States. The vast majority of these have no college degree or U.S. citizen family members who could sponsor them for green cards, meaning that employer sponsorship would theoretically be their only option. But the number of green cards that the law provides is literally a rounding error in Pew’s estimate of the illegal population. To prevent future illegal immigration and provide a legal way for U.S. businesses to hire these workers, Congress should make more green cards available for lesser-educated workers.
8. The president can end the refugee program unilaterally. In and of itself, the fact that the president can permit more refugees is no problem. That is important when a crisis breaks out somewhere in the world. But the idea that the president can unilaterally shut down the entire refugee program, as President Trump has almost done, is absurd. Congress should establish a floor for refugee admissions, and it should permit private refugee sponsorship by individuals, as Canada already does. The easiest way to implement private sponsorship would be to expand family sponsorship categories to extended family members and exempt immediate family of citizens and legal permanent residents who are refugees from the green card limits or, alternatively, create a new category for sponsored refugee immigrants. This category would enable U.S. citizens to have a role in the number of refugees and allow them to target refugees for aid with whom they have a personal connection.
9. No immigration category for entrepreneurs. As the rest of the world tries to roll out the red carpet for entrepreneurs, the United States still has no permanent residence category specifically for immigrants who start or want to start businesses. While the United States does have a couple of temporary visa categories that allow some entrepreneurs to set up shop here (E-1 or O-1), they have no way to become permanent residents. Immigrants need a sponsor—either an employer or family member with citizenship to petition on their behalf. During their time in temporary status, entrepreneurs have to continuously apply for renewals and hope each successive administration still believes their economic contributions are valuable enough to receive renewals. As I’ve written before, this uncertainty discourages immigrant entrepreneurs from using these options to start businesses. Congress should create a broad entrepreneurship category for immigrants to receive permanent residence.
10. No way to create new immigration categories without congressional action. Congress will never perfectly predict the future needs of the United States at any point in time. Even the best reforms will leave holes that will only become apparent years later. One solution would be to allow the administration far more discretion to design and create new categories. A better idea would be to create a state-sponsored visa program where state governments could set criteria for immigrants that they believe their states need (which could factor in applications from business, family members, or humanitarian groups). Canada’s Provincial Nominee Program would be one model for this approach. This idea would decentralize the making of programs and rules among the states, so that updates wouldn’t need to wait for a national crisis to catch the attention of the federal government.
11. Immigrants generally cannot apply for permanent residency on their own. U.S. immigration law has no mechanism for immigrants without sponsorship by an employer or family members. Unlike Canada, the United States has no “points” pathway to permanent residence that would allow immigrants to apply based on characteristics (years in the United States, English language ability, etc.) without needing to wait for someone to do so for them. This deficiency results in immigrants being totally unable to control their own destinies, and particularly for immigrant workers, it requires them to rely on their employers, which have no incentives to apply on their behalf if the immigrant already has temporary status that can be extended. It also results in workers working for years in temporary statuses with no way to apply directly for green cards. In addition to the employer-sponsored pathways, Congress should create points-based tracks for higher- and lower-educated immigrants.
12. Spouses and minor children of new immigrants count against the quotas. When immigrants sponsored by family members or employers receive their green cards (permanent residence), their spouses and minor children are also eligible for green cards. Rather than only counting the primary applicant—the worker or the family member—against the immigration quotas, the government counts the spouses and children as well. If the purpose of quotas is to establish the desired level of workers or siblings, it makes little sense to reduce that level based on whether the worker or sibling is married or has children. This arbitrarily reduces the immigration quotas by up to 70 percent in certain categories. The fluctuation in the actual levels of workers or family members throws needless uncertainty into the immigration process for legal immigrants and their sponsors. Congress should exempt spouses and minor children of immigrants from the quotas.
13. There’s a quota on new spouses and minor children of current permanent residents. Although spouses and minor children of new immigrants are counted against the quotas, they at least can generally receive permanent residence more or less simultaneously. They wait longer, but they wait together. By contrast, foreign spouses who marry an immigrant who already has permanent residence in the United States must wait more than a year before they can apply to immigrate (and then they have to wait again while that application is processed). Immigration law should never treat the nuclear family in this way. There should be no quota on spouses and minor children of current residents, just as there is no quota on spouses and minor children of U.S. citizens.
14. Children of temporary workers grow up here, wait in line with their parents for permanent residency, and get kicked out of line on their 21st birthday. The law stipulates that to receive status as a child of a new immigrant (as explained in #12), they must be under the age of 21. Because of the long wait times, this means that immigrants can enter the country as the minor children of temporary worker, an employer can sponsor their parent, and then they can wait in line with their parents for 5 or 10 years, but as soon as they turn 21, they “age out,” meaning that their application for permanent residence essentially disappears. They drop out of the green card queue entirely. They either must self-deport or seek out another temporary status, such as a student visa. They essentially become legal immigrant Dreamers, as they are in an equivalent position to those illegal immigrants who entered as children and are now in DACA. This could be remedied by using the age of the immigrant at the time they initially enter the line, rather than when they reach the front of it, for the purpose of the final green card application.
15. Immigrants can live here for decades without receiving permanent residency. #14 highlights a broader issue. America has a variety of temporary statuses that foreigners can use to live in the United States temporarily. They can enter as children of temporary workers (H-4), then transition to student status (F-1), then become temporary workers themselves (H-1B), and then receive an indefinitely renewable status as an entrepreneur (E-1). They could live in this country for decades without ever being able to apply for permanent residence (see #9, #11, #14). Of course, this is an even more significant problem for illegal immigrants. A person who has lived in the United States a decade or more should be guaranteed permanent residence. At that point, America is their home. The law should recognize that fact.
16. Illegal immigrants cannot leave and reapply to return legally. One component of all good governance is self-compliance. The government should not need to rely on force to keep everyone in line. People who make mistakes need ways to correct those mistakes on their own without the intervention of law enforcement. Until 1996, this is the way immigration law worked. If someone made a mistake or entered illegally, they could leave the country and apply for whatever visa they could. But the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 created the “3-and-10-year bars”—which make it illegal to return for 3 years after living in the country illegally for 180 days or 10 years after living illegally for a year. This incentivizes immigrants to remain in the United States in illegal status. It is counterproductive and results in a larger illegal population. Congress should repeal the bars entirely.
17. Spouses and children of temporary workers are banned from working. This ban—partially lifted by the Obama administration in 2014 for certain spouses of H-1Bs who had been in the country for more than six years and soon to be reimposed by President Trump—is pointless. Why would the country want immigrants to be here and not have them contribute? It makes no sense. Anyone staying in the United States for more than a year should be permitted to work legally.
18. The law requires immigrants to pretend that they don’t want to immigrate. To qualify for most temporary visas, immigrants must show that they have “a residence in a foreign country which he has no intention of abandoning.” This requirement imposes all sorts of pointless headaches on different types of immigrants. If foreigners want to come to the United States to get married or engaged, they cannot use a tourist visa or the Visa Waiver Program, even though these are the easiest methods to use to travel to the United States. If they do visit, and their partner proposes to them, the government can accuse them of immigration fraud. This also means that employers cannot petition for green cards for foreign students or seasonal workers (H-1Bs for high skilled workers get an exception). This effectively prohibits legal immigration for them. It is one thing to require temporary visitors to prove that they will return if they will be required by law to do so, but it is pointless to require them to do so when they can legally stay in the country as a permanent resident. The law should simply require immigrants to prove that they will comply with their terms of admission.
19. Forcing employers to advertise positions that are already filled. As #5 points out, 88 percent of immigrants sponsored by their employers for permanent residence already live in the United States generally as temporary workers. Yet the law requires all employers to receive a “labor certification” that proves that there are no workers as qualified as the immigrant for whom they are petitioning. In and of itself, this protectionism would be unhealthy, but it is even worse that employers are required to do this theater for current employees. This wastes everyone’s time because almost no one will be as qualified as the person already doing the job.
For this reason, it is very rare for labor certifications to be denied. This means that the law requires employers to post what are essentially fake advertisements for ghost positions, but they receive real applicants who they have to interview and otherwise fool into believing this is a real position only to then reject them. In other words, the system wastes the time of not only employers and government adjudicators—it directly harms the very people it is supposed to help. Just requiring employers to pay a fee or a tariff would make more sense as a protectionist measure.
20. Temporary workers cannot easily change jobs. Because their status is entirely tied to their employment, temporary workers cannot simply walk away from a job. This places them at a substantial disadvantage when negotiating for wages and benefits. One of the main impediments to quickly transitioning from one job to another is the protectionist labor market regulations that employers must go through in order to hire a temporary worker. Once a worker is already in the United States, these regulations should not apply because an immigrant moving from one U.S. business to another does not increase the total competition for jobs.
In fact, allowing temporary workers to easily change or quit jobs helps protect U.S. workers by removing the non-market reason for employers to favor foreign workers—namely that the workers cannot easily leave the employer. Temporary workers should have an extended grace period to find a new jobs if they quit their initial employer, and their subsequent employer should be permitted to immediately hire them.
21. No temporary visas at all for year-round workers without college degrees. Because of #7, #11, and #18, the only way for lesser-educated workers to work legally in the United States is with a temporary work visa. Existing law has two options for that—the H-2A for agricultural workers and H-2B for non-agricultural workers—but both the H-2A and H-2B visa regulations prohibit year-round employment. The jobs must be seasonal, meaning that if the job is a permanent, these visas won’t work. A temporary visa for permanent positions already exists for high-skilled positions (the H-1B), but there is no counterpart for lesser-skilled workers. The effect is that industries like dairy, meat processing, and construction all operate at a disadvantage compared to industries that can access these seasonal worker programs.
22. Noncitizens can access federal welfare programs after five years. Even though the fiscal effect of immigration is quite positive overall, and even though poor immigrants use less welfare programs on average at lower rates than other poor Americans, there are still good reasons to limit the welfare state to U.S. citizens. This limitation would go a long way to assuage one of the only legitimate concerns about immigration. It would also prevent immigrants from being denied a green card based on the fear of them becoming a “public charge” and encourage them to naturalize, a process that could aid political assimilation. Most importantly, welfare acts as a disincentive to work, and for this reason, there is some suggestive evidence that when Congress in 1996 restricted welfare for immigrants during their first five years in the country, it had no significant negative effect on their overall income or health insurance rates. More entered the labor force, which resulted in higher incomes and more employer-provided health insurance.
23. The president can ban any immigrants that he doesn’t like. In 1952, Congress passed a statute that authorizes the president to suspend “the entry of all aliens or any class of aliens” if he finds them to be “detrimental.” This power is untethered by any constraints, and as the travel ban case proves, the Supreme Court is willing to allow the president to ban immigrants based on the thinnest of pretexts. Sweeping power of this kind is incompatible with the rule of law and cedes lawmaking power to the president in a way that would shock our founders. Congress should require courts to use strict scrutiny when evaluating these types of actions by the president.
24. No opportunity to appeal visa denials. Immigrants and their sponsors can appeal immigration decisions by U.S. Citizenship and Immigration Services to the Administrative Appeals Office, and if their rights are violated by immigration agencies in the United States, they can challenge the decisions in court. But visa denials by consular officers for foreign applicants seeking to travel or immigrate to the United States cannot be appealed, and thanks to the court-invented doctrine of consular non reviewability, courts almost always turn down immigrants and their U.S. citizen sponsors who challenge consular officers’ determinations—even when they are flagrantly contrary to law or violate fundamental rights of citizens. Given that a single visa denial can doom an immigrant’s chance of ever coming to the United States, such determinations should be subject to both types of review—administrative and judicial. Congress can remedy this situation by creating a Visa Appeals Board like the Administrative Appeals Office and authorizing judicial review.
25. The burden of proof is on immigrants and their sponsors, not the government. In a free society, people are innocent until proven guilty. In the immigration system, immigrants are guilty until proven innocent. The government should have to prove its reasons for keeping someone out rather than forcing immigrants and their sponsors to prove that they will not pose a problem. This is especially relevant for employers attempting to hire foreign temporary workers from abroad. In those cases, the employer must prove to the Department of Labor that the foreign worker will not adversely affect the wages and working conditions of Americans. A better system would require the Department of Labor to prove that the foreign worker will adversely affect their wages and working conditions. This was how the labor regulations worked for the Bracero guest worker program in the 1950s and 60s. Congress should return to this earlier system and require the government to prove why it wants to keep immigrants out.
26. America has closed borders with a few holes. Similar to #25, an overarching problem with America’s immigration system is that it assumes that everyone is ineligible to immigrate unless the government grants them permission to do so. A better system would presume all are eligible to immigrate unless the government has a good reason to prevent them from doing so. This system would be far simpler and focus government’s enforcement apparatus solely on those who either are threats to the property, lives, or health of Americans or who cannot support themselves without substantial government assistance. America is so far from this system right now that it is basically immigration prohibition. Like alcohol prohibition—which had exceptions for home brews, communion wine, medicinal patent liquor, rubbing alcohol, and industrial alcohol—America’s immigration prohibition has exceptions, but the basic story is this: America is closed to almost everyone who wishes to come.