According to the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT), the fiscal and economic effects of the Senate immigration reform bill (S. 744) would be overwhelmingly positive. If enacted, the bill would help reduce the federal budget deficit by approximately $1 trillion over 20 years, would boost the U.S. economy as whole without negatively affecting U.S. workers, and would greatly reduce future undocumented immigration. These are the conclusions laid out in three reports released in June and July 2013. On June 18, the CBO issued two reports on the version of S. 744 that was reported out of the Senate Judiciary Committee on May 28. The first one analyzes (or “scores”) the fiscal impact of the bill over the next 20 years and the second one focuses on the impact that some aspects of the bill would have on the U.S. economy. On July 3, the CBO issued a revised score on the version of the bill that passed the Senate on June 27. This version includes the Corker-Hoeven “border surge” amendment, which calls for a significant increase in border-enforcement spending.
What is a CBO score and what are its main implications?
Nearly every bill that is approved by a full committee of either house of Congress is subject to a formal cost estimate by the CBO. The report produced as a result of this analysis is known as the CBO “score.” The purpose of this analysis is to aid in economic and budgetary decisions on a wide assortment of programs covered by the federal budget. In general, the CBO estimates what the net fiscal impact of a bill would be, considering both the costs and the benefits associated with its implementation.Read more...
Contrary to the claims of critics, the immigration bill now winding its way through the Senate would not add to the ranks of the unemployed. In fact, both the legalization and “future flow” provisions of the bill would empower immigrant workers to spend more, invest more, and pay more in taxes—all of which would create new jobs. Put differently, employment is not a “zero sum” game in which workers compete for some fixed number of jobs. All workers are also consumers, taxpayers, and—in many cases—entrepreneurs who engage in job-creating economic activity every day.
Nevertheless, one of the most persistent myths about the economics of immigration is that every immigrant added to the U.S. labor force amounts to a job lost by a native-born worker, or that every job loss for a native-born worker is evidence that there is need for one less immigrant worker. However, this is not how labor-force dynamics work in the real world. The notion that unemployed natives could simply be “swapped” for employed immigrants is not economically valid. In reality, native workers and immigrant workers are not easily interchangeable. Even if unemployed native workers were willing to travel across the country or take jobs for which they are overqualified, that is hardly a long-term strategy for economic recovery.
There is no direct correlation between immigration and unemployment.Read more...
Under S. 744, “The Border Security, Economic Opportunity, and Immigration Modernization Act,” a merit-based point system is proposed as a tool to allocate a portion of new immigrant visas each year. After this new system becomes effective, a minimum of 120,000 foreign-born people would be able to obtain immigrant visas each year by accumulating points mainly based on their skills, employment history, and education credentials. At the same time, visa slots currently allocated to siblings and adult married children of U.S. citizens, as well as the diversity visa program, would be absorbed into this new system.
An evaluation of the point system requires an understanding of several different assumptions made by the drafters. First, in reallocating visas, does the new point system provide access to individuals currently eligible to enter the U.S. under the eliminated sibling and visa diversity lottery categories? If not, what does that say about the assumptions behind the proposal? Second, within the allocation of points awarded to individual applicants, what characteristics are favored and how does that affect the likelihood that different groups will be able to make use of the point system to enter the United States? At its core, the allocation of points is not a neutral act, but instead reflects a political view regarding the “desired immigrant.” While the bill overall continues to privilege family and employment-based immigration, the effort to create a “merit” system may actually be at odds with core values that the United States has traditionally embraced (in particular, the defense of equality of opportunity, the fight against discrimination of all sorts, the protection of minorities and traditionally disadvantaged groups, and the preservation of families).Read more...
One of the explicit goals of the “Border Security, Economic Opportunity, and Immigration Modernization Act’’ (S.744) is to curtail future flows of unauthorized immigration by correcting some of the flaws of the current legal immigration system. To that end, it establishes an updated system of legal immigration that, in principle, seeks to match the country’s economic and labor needs while respecting principles of family unification.
The regulation of future flows is key to the success of immigration reform because the economy is one of the primary drivers of illegal immigration. Critics of reform, including those challenging S.744, argue that immigration reform which legalizes the current undocumented population or that does not mandate a biometric entry/exit system for new workers will fail because it will lead to increased flows of illegal immigration in the future. The argument usually used is that this happened after the Immigration Control and Reform Act (IRCA) was implemented in 1986, and that this would happen again were a new reform that includes a comprehensive legalization package to be passed.
These arguments, however, are flawed. In fact, they fail to address IRCA’s shortcomings by proposing a limited interpretation that points to the presumed association between legalization and the increase of future illegal entry of migrants. But the problem with IRCA, as shown by several studies, did not reside in its legalization component. The issue, on the contrary, was largely based on IRCA’s failure to realistically regulate future immigrant flows based on an accurate and pragmatic assessment of the country’s needs.Read more...
Our legal system rests upon the principle that everyone is entitled to due process of law and a meaningful opportunity to be heard. But for far too long, immigration courts have failed to provide noncitizens with a system of justice that lives up to this standard. A noncitizen has not truly had his day in court if he is removed without ever seeing a judge, if he does not have access to counsel and necessary evidence, or if the decision in his case receives only perfunctory review. The 2013 Border Security, Economic Opportunity, and Immigration Modernization Act (“S. 744”) would take significant steps toward ensuring noncitizens have a fair hearing. This fact sheet explains some of the critical policy proposals found in S. 744 and the basis for them.
A system without sufficient protections
Deportation without a judge
In the current system, many immigrants who are removed never see the inside of a courtroom. In fact, the majority of noncitizens are returned to their home countries through accelerated processes that do not include a hearing before a judge. Even immigrants who are entitled to hearings may not make it to court if an immigration agent convinces them to agree to be deported before their first hearing. More than 160,000 immigrants agreed to these “stipulated removal” orders between 2004 and 2010; the vast majority were unrepresented and in immigration detention. Those whose cases reach immigration court appear before overburdened judges with insufficient time and resources for the cases in front of them.
How High-Skilled Immigrants Create Jobs and Help Build the U.S. Economy
With the U.S. economy still recovering, it may seem counterintuitive to believe that any industry would benefit from having more workers. But that is precisely the case when it comes to those industries which depend upon highly skilled workers. The United States has long faced a dilemma in this respect: the U.S. economy is, in general, absorbing more high-skilled professionals than the U.S. educational system produces or that are available in our workforce. That is one reason so many highly skilled workers in the United States are immigrants. For instance, in “STEM” occupations (science, technology, engineering, and mathematics), the foreign-born account for 26.1 percent of workers with PhDs and 17.7 percent of those with master’s degrees. However, arbitrary limits imposed by the U.S. immigration system, particularly the inadequate supply of green cards and H-1B visas, have restricted the ability of the U.S. to compete in the global battle for talent and ideas. Given that highly skilled professionals tend to create jobs through their innovative work, such limits are economically self-defeating.
Innovation, Skilled Immigration, and H-1B Visas in U.S. Metropolitan Areas
Although immigration policy is debated at the national level, its impact is most often felt in local and regional communities. This is certainly true for the H-1B program, which is routinely studied at the national level, but cannot be fully understood without driving down to examine the role of H-1B workers at the metropolitan and local levels. New research at this more specific level of analysis suggests that current H-1B policies must be made both flexible and nuanced. There is no “one size fits all” approach to the recruitment, hiring, and retention of high-skilled foreign workers. As lawmakers consider changes to the H-1B program, including the creation of a High Skilled Jobs Demand Index, it is essential to remember that demand for H-1B workers in many metropolitan areas is high, varies by industry, and has ripple effects throughout a regional economy. Thus, predicting and calculating the need for H-1B workers requires an understanding of the dynamics at the metropolitan level.
Metropolitan Area Demand for High-Skilled Workers is High, Especially in Innovation Industries
Innovation-intensive metropolitan areas tend to have higher rates of patenting, lower unemployment rates, and higher demand for high-skilled workers since patenting growth is correlated with job growth, population growth, and increases in educational attainment.Read more...
Immigration Enforcement Without Immigration Reform Has Been Failing for Decades
Opponents of a new legalization program for unauthorized immigrants living and working in the United States frequently claim that we must try “enforcement first.” That is to say, we must adequately enforce the laws on the books before we can contemplate the formulation of more reasonable laws. This stance is nonsensical for two reasons. First of all, it ignores the fact that the unworkable nature of our immigration laws is itself facilitating unauthorized immigration; so it is illogical to hope that stronger enforcement of those unworkable laws will somehow lessen unauthorized immigration. Secondly, the “enforcement first” perspective conveniently overlooks the fact that the United States has been pursuing an “enforcement first” approach to immigration control for more than two-and-a-half decades—and it has yet to work.Read more...
The Important Economic Relationship of Mexico and the United States
Mexico is the United States’ third largest trading partner, after Canada and China, in terms of total trade in goods, while the U.S. is Mexico’s largest trading partner. As such, the economic ties of the U.S. and Mexico are significantly important to the economy and society in both countries. Further, the U.S.-Mexico border is not a static line drawn on a map, but a dynamic and ever-evolving place along which substantial daily interaction takes place. Yet the resounding refrain we repeatedly hear from some members of Congress is that building a 1,969-mile fence to separate us from one of our largest economic partners, and the eleventh largest economy in the world, is a key component to solving the issues presented by an outdated immigration system and a requirement that must be completed before moving forward with proposed immigration reforms. To be clear, there is a need for secure borders, but there is also a need for further streamlining and efficiently facilitating the daily cross-border flows of people, goods, and services important to the bi-national economic relationship of the United States and Mexico – an economic relationship the following facts highlight.
The United States and Mexico have an enormous trading partnershipRead more...
by Raul Hinojosa Ojeda, Ph.D. and Sherman Robinson, Ph.D.
With immigration reform legislation now making its way through Congress, it is imperative that we estimate as accurately as possible the full range of potential economic costs and benefits associated with any particular bill. It is especially important to establish the proper criteria for a complete, robust, and accurate fiscal scoring of any bill by the Congressional Budget Office (CBO). To that end, we should consider the growing consensus of the economic literature on the strongly positive benefits of immigration in general and of the various aspects of immigration reform in particular, as calculated using a variety of different methodologies. The CBO would be well-advised to keep this consensus literature in mind as it establishes the criteria it will use for scoring immigration reform legislation.
More and more research demonstrates the economic benefits of immigration reform.
The last few years have witnessed a burst in economic research showing the strongly positive net impacts of immigration in general and comprehensive immigration reform (CIR) in particular. Broad agreement has emerged as to not only the net economic and fiscal benefits of immigration and CIR, but the acceleration of those benefits over time. Moreover, these conclusions have been arrived at in studies utilizing a variety of different methodological approaches. It is important to point out that each of these different approaches is limited by a focus on separate aspects of immigration reform (Table 1). A complete methodological framework accounting for all of the components of CIR produces the largest-scale benefits.Read more...