Dodging the Guest-Worker Bullet - WSJ.com

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July 5, 2007

COMMENTARY

Dodging the Guest-Worker Bullet
By GORDON H. HANSON
July 5, 2007; Page A15

The Senate's bid to reform U.S. immigration policy ended last week, notwith a whimper but with a bang. After defections on both sides of thepolitical aisle, the grand bargain collapsed. The bitterness of the debate andthe political heat the bill's sponsors endured suggest there is little hope
Congress will reconsider comprehensive changes in immigration any timesoon.
Despite the many indications that America's immigration system is broken,
we should be grateful the Senate effort failed. The nation is better off
without the proposed overhaul.
The plan's main defect was not -- as House Republicans claimed -- anamnesty for illegal immigrants. The U.S. has long had an implicit contract
with those able to get into the country, be it by securing a green card or
slipping across the border: If you work hard and keep out of trouble, youwill be allowed to stay in America. For the most part, immigrants haveembraced the opportunity. Relative to similarly skilled native-born adults,
illegal immigrants are more likely to have a job and less likely to engage incrime.
There are good reasons for their commitment to work. Illegal immigrants
make due without a social safety net, and if they are convicted of a felony,they are deported immediately after their incarceration. Legalizing theunauthorized population would have simply rewarded immigrants for living
up to their end of the deal.

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Nor was the problem -- as some Democrats would have it -- the reallocation of green cards from family
members of U.S. residents to skilled workers. Currently, the government awards two-thirds of green
cards to immigrants who are sponsored by a family member in America and only one-sixth to foreign
workers sponsored by a U.S. employer. The strong bias toward family reunification lacks any economic
justification. Giving skill greater weight in immigrant admissions was perhaps the most sensible featureof the Senate's approach. The proposed point system for ranking potential immigrants was vague and did
not appear to recognize an individual's actual employment prospects, but it was a step in the rightdirection.
No, the real drawback of the Senate's plan was that it sought to replace a dynamic and reasonably
efficient market for low-skilled workers with a Byzantine guest-worker program. The U.S. economy
absorbs around 300,000 new illegal laborers each year. These workers build houses, harvest crops, man

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assembly lines, clean homes and care for children, accounting for nearly 30% of U.S. labor with less thana high school education. Under the numbers Congress was contemplating, the new work visas would
have satisfied only two to three years of demand for new illegal labor. After that, employers would have
had to make due without extra low-skilled help, an insane prospect given the abundance of willing andavailable workers next door in Mexico.
Adding to the complication, politicians seemed intent on making it as costly as possible to hire temporary
immigrants. The bill would have required employers to demonstrate no American would take the job
being offered, limited visas to two years, and fixed the number of guest workers without regard to U.S.
economic conditions.
The one element of the Senate's plan that is likely to survive is greater spending on enforcement at theMexican border, which would continue a two-decades long increase in the U.S. Border Patrol'soperations. Tightening the border might be justifiable on national security grounds, but an economicrationale is harder to find.
No credible research says illegal immigration imposes large economic costs on America. Even theestimates produced by the Center for Immigration Studies -- a think tank that is strongly anti-immigration-- puts the net annual cost of illegal immigration at less than one-tenth of a percent of GDP. This meansthat if the additional cost of reducing illegal immigration to zero were greater than $13 billion, theeconomic return on the extra enforcement would be negative.
Some members of Congress want to spend far more than this amount, though few believe even large
sums would enable the Border Patrol to halt illegal entry altogether. Apparently, the worst we can expectfrom this round of immigration reform is some wasteful new spending.
Sensible reform would require Congress to demonstrate it understands how the market for low-skilledlabor operates. Unless employers find it easy to hire legal immigrant workers and immigrants can easily
move between employers, jobs for low-skilled foreigners will remain outside the law.
Building a political coalition to support reform would also mean reassigning the fiscal burden ofimmigration. States and cities foot the bill for educating the children of immigrants and providing healthcare to immigrant families, while the federal government receives the income and social security taxes
that many illegal immigrants pay. Part of the grassroots opposition to immigration is a reaction to thisinequity.
Finally, the Department of Homeland Security would have to show it can handle immigration on a muchlarger scale. The fear that DHS is incapable of monitoring the comings and goings of guest workers wasone factor that inspired House Republicans to revolt on immigration. The agency is trying to improve
how it manages the nation's borders, but it still lacks credibility with the American public.
After months of hyperbole over the consequences of illegal immigration, little has changed for thecountry's 12 million unauthorized residents. The day after the Senate bill died, Congress was consumed
with a predictable rash of finger pointing, as politicians tried to deflect blame for failing to deliver aworkable reform plan. Meanwhile, in Atlanta, Houston, Las Vegas, and many other cities, illegal
immigrants woke up, said goodbye to their kids, and went off to work. The outcome could have beenmuch worse.
Mr. Hanson is the director of the Center on Pacific Economies at the University of California, SanDiego.
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