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Illegal Immigration: Will Congress Finally Solve It?

by Daniel Griswold

Daniel Griswold is director of the Cato Institute's Center for Trade Policy Studies.

Added to cato.org on May 25, 2007

This article appeared in the Orlando Sentinel on May 22, 2007.

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The new Democratic Congress last week began debating an immigration-reform bill aimed at curbing illegal immigration. If Democratic leaders can work with President Bush and their Republican counterparts to enact comprehensive immigration reform, one of the most vexing issues facing our country could be solved.

Few people on either side of the immigration debate are happy with the status quo. Today an estimated 12 million foreign-born people live in the United States without authorization, with the number growing by half a million each year.

Those immigrants fill an important and growing gap in the U.S. labor market. The U.S. economy continues to create hundreds of thousands of jobs each year for lower-skilled workers in such sectors as cleaning, food preparation, landscaping and retail.

Daniel Griswold is director of the Cato Institute's Center for Trade Policy Studies.

At the same time, the pool of Americans who have traditionally filled such jobs continues to shrink as native-born workers become, on average, older and better educated. Yet our immigration system offers no legal channel for peaceful, hardworking if low-skilled workers to enter the country to fill those jobs.

Large-scale illegal immigration will end only when America's immigration system offers a legal alternative. When given the choice of paying a smuggler $2,000, risking robbery and death in the desert, and living a shadowy existence in the underground U.S. economy, unable to leave and return freely to visit home, or entering the United States through a port of entry with legal documents, enjoying the full responsibility and protection of the law, and the freedom to visit home without fear of being denied re-entry, the large majority of potential entrants will chose the legal path.

We know from experience that legal immigration, if allowed, will crowd out illegal immigration. In the 1950s, the Bracero program allowed Mexican workers to enter the country temporarily, typically to work on farms in the Southwest. Early in that decade, illegal immigration was widespread because the program offered an insufficient number of visas to meet the labor demands of a growing U.S. economy. Instead of merely redoubling efforts to enforce a flawed law, Congress dramatically increased the number of visas to accommodate demand.

The result: Apprehensions of illegal entrants at the border soon dropped by more than 95 percent.

If the goal is to curb illegal immigration, any temporary worker program must offer a sufficient number of visas to meet the legitimate demands of a growing U.S. labor market. The fact that 400,000 to 500,000 foreign-born workers join the U.S. labor force illegally each year indicates the general magnitude of how much demand exceeds the supply of available, legal workers. A temporary-worker program should offer at least that number of visas to allow the revealed demand of American employers to be met legally.

To be effective, an expanded visa program must also be flexible enough to respond to labor-market signals. Union leaders are pressuring Democrats to require that temporary workers be paid "prevailing wages" -- that is, artificially high, union-level wages rather than market wages.

That would be a recipe for failure, since many of the jobs filled by immigrant workers are low-skilled, low-wage jobs that would simply not exist in the legal economy if union-level wages were mandated. Adding cumbersome labor rules will only perpetuate the underground labor market that has been created by the current system.

Demands for restrictive wage rules are based on false fears that increased legal immigration will drive down the wages and working conditions for a broad swath of American workers. But only a small and declining share of the American work force competes against immigrant workers.

According to "The New Americans," the authoritative 1997 National Research Council study of immigration, the only two groups of Americans who face downward wage pressure from immigration are other recent immigrants and native-born Americans without a high-school diploma.

The wage impact on American workers is small. "The weight of the empirical evidence suggests that the impact of immigration on the wages of competing native-born workers is small-possibly reducing them by only 1 or 2 percent," the NRC study concluded.

More recent studies confirm the small impact of low-skilled immigration on competing American workers.

If Congress fails to reform America's immigration laws in a way that reflects the reality of our market economy, the problem of illegal immigration will only grow worse.

Without comprehensive immigration reform, Congress and the administration will waste billions of dollars more trying to enforce an unenforceable law.