Charging Our Way to Better Immigrants

From Atlanta to Adelaide, citizens of the major industrial democracies of the world are worried about immigration and the alleged detrimental impact it is having on economies and cultures.

These concerns are not new- Benjamin Franklin worried about German immigrants and Alexander Hamilton complained that “the US. has already felt the evils of incorporating a large number of foreigners. By the middle 19th century, some nativists formed a political party whose main objective was to thwart Immigration of allegedly inferior and religiously incompatible (Catholic) migrants.

So it goes today. Economist George Borjas claims today’s immigrants are less skilled than those of the past. Journalist Peter Brimelow worries about race: “Supporters of current Immigration policy should explain … what makes them think multiracial societies work.”

Yet the evidence suggests a different picture than promoted by critics of either the past or the current crop:

• Immigrants have typically come relatively poor and unproductive but learn quickly to adjust, with average income levels approximating native-born Americans’ a decade or so after arrival.
• Immigration does not reduce job opportunities for native-born Americans. Nor is there evidence, either earlier in our history or today, that immigration leads to increased unemployment.
• Immigrant flows today are far smaller in relation to the size of the population than over much of US history.

The notion that immigrants are a significant net burden on our population is fallacious. If anything the opposite probably is true, as a relatively young immigrant population reduces the Social Security burden of providing for older Americans.

In the long run, immigration raises national income and output, and contributes to maintaining a dynamic, growing society.

Put together, the evidence shows attempts to reduce immigration are fundamentally misguided. To be sure, some public policies that reduce economic assimilation should no doubt be changed or eliminated, such as bilingual education or public-assistance schemes that discourage working. Yet America should reaffirm its historic commitment to welcoming less fortunate persons from other lands.

Immigration restrictions will not be removed overnight. They should at least be based on market principles, designed to maximize the contributions received from new arrivals. Nobel laureate Gary Becker had a great idea: Sell visas on the open market.

The purchasers of visas would in general be those with the greatest economic potential. The proportion of immigrants with high skills or motivation would rise. A guess is that the government would take in $12 billion annually in visa revenues, which could be used for generalized tax relief, providing native-born Americans some tangible evidence of the gems from immigration. Many immigrants who now spend a long time waiting and $10,000 or more on immigration lawyers could get in sooner, with far less hassle and at no greater expense.

Perhaps a politically necessary use of visa funds would be to provide financial support for governments in areas with large immigrant influxes, possibly to reduce the burden on local taxpayers. If necessary for passage, some funds could also be used for increased enforcement of immigration laws, accepting the proposition that laws, even misguided ones, should be enforced. Such a visa approach might win the support of liberals and free-market conservatives wanting more immigration, as well as cultural conservatives wanting to ‘crack down” on illegal aliens. We would end up with more highly productive immigrants and a lesser perception of a “burden” on native-born Americans.