Immigration: The Solution, Not the Problem

From Atlanta to Adelaide, citizens of the major industrial democracies of the world are worried about immigration and the alleged detrimental impact that it is having on economies and cultures. In our country, there are cries for “immigration reform,” laws reducing the flows of migrants from other lands.

As we point out in our forthcoming book sponsored by the Independent Institute, concerns about immigrants are not new: Benjamin Franklin worried about German migrants over two centuries ago, and Alexander Hamilton (an immigrant himself) complained that “the United States have already felt the evils of incorporating a large number of foreigners . . . ” By the mid-nineteenth century, some nativists formed a political party whose main objective was to thwart immigration of allegedly inferior and religiously incompatible (specifically, Catholic) migrants to our shores. Near the beginning of this century, leading American intellectuals and political figures had similar derogatory comments about arrivals from Eastern and Southern Europe. Woodrow Wilson even suggested that “the countries of the south of Europe were disburdening themselves of the more sordid and hapless elements of their population.”

So it goes today. Harvard economist George Borjas claims today’s immigrants are less skilled than those of a generation ago. Journalist and anti-immigrant writer Peter Brimelow worries about race: “supporters of current immigration policy should . . . explain . . . what makes them think multiracial societies work.” These critics (both immigrants themselves) seem to want to reduce or end the volume of migration into our nation.

Yet our reading of the empirical evidence suggests a different picture:

• Today, as throughout history, immigrants respond quite strongly to economic stimuli in their migration decisions, going to those areas where their economic contribution is likely to be great.
• Immigrants both today and historically 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 American history, particularly during the era of America’s emergence as a modern industrial nation (1840 to 1920).
• 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.
• On balance, the evidence suggests that in the long run immigration raises national income and output, and contributes to maintaining a dynamic, growing society.

Accordingly, we see attempts to reduce the flows of immigrants to this country as fundamentally misguided. We should continue the policies of liberalizing immigrant flows that began in the mid-1960s. 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. But America should reaffirm its historic commitment to welcoming less fortunate persons from other lands.

Given the anti-immigrant mood of much of the population, immigration restrictions will probably not be removed overnight. But they should at least be based on market principles, designed to maximize the contribution received from new arrivals. Nobel laureate Gary Becker had a great idea: sell visas in the open market. We propose that the U.S. sell 5,000 visas every business day via a market such as NASDAQ or the Chicago Board of Trade. This would increase total immigrant flows. Sale of visas to felons or other undesireables could be prohibited. Some “free” visas could be given for humanitarian purposes in addition to those sold in markets in order to maintain our commitment to helping the less fortunate.

The purchasers of visas would in general be those with the greatest economic potential. Banks might make visa loans similar to guaranteed student loans. The proportion of immigrants with high skills or motivation would rise. A guess is that the government would take in at least $12 billion annually in visa revenues, which could be used for generalized tax relief, providing native born Americans some tangible evidence of the gains 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.

A less desirable but perhaps politically necessary use of visa funds would be to provide financial support for governments in areas with large immigrant influxes, hopefully 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 immigration, and a lesser perception of “burden” on native born Americans.