The U.S. Immigration Debate – An Analysis

In a nation of immigrants, the debate surrounding immigration reform continues to surface.  The book Taking Sides presents two opposing views from testimony made before the U.S. Senate in 2006.  Each makes the case for or against the economic impact on the United States.  Both find flaws in the studies of the other, and both suggest legal reforms.  Both attempt to discern the answer to the question of immigration as an economic benefit to the host country.

Answering ‘yes’ is Dan Siciliano, research fellow with the Immigration Policy Center at Stanford.  Siciliano argues that there is high demand for low skilled labor but current laws are set against recruitment of this specified source of labor, exacerbating the illegal immigration problem.  Siciliano looks to positives, including a growing business labor pool, expanded cultural diversity, increased labor wages, and growth impact on GDP.  He argues that the U.S. workforce is becoming more skill-based and upwardly mobile, forming larger gaps in low and unskilled labor sectors that must be filled.  He also points out faulty differences between static and dynamic economic models used by opponents.

Answering ‘no’ is Barry R. Chiswick, member of the German Institute for the Study of Labor.  Chiswick is against both legal and illegal immigration. Chiswick focuses on the impact of high skill versus low skill workers on wages.  He also attempts to debunk the myth of the need for low-skill immigrants.  Chiswick argues that if you remove unskilled supply, people will pay more for domestic workers and speed up work to make up the difference in higher wage impact.  He attacks the use of regression analysis by opponents.  Further, he recommends the creation of a market and skills based visa program, stiffer enforcement of current laws, border enforcement, a foolproof national ID, and alterations in current law (specifically the kinship policy).  Finally, we should look to improve the conditions of source countries to slow immigration desires.

Siciliano appears to be arguing from an international political economic perspective, while Chiswick appears to come from a realism perspective.  Siciliano believes that there is an interconnection between the U.S. economy and immigrants of various other nations, all feeding the labor supply to the betterment of the U.S. economy.  Overtones of dependency theory are evident if you consider source countries as exporters of raw human labor. Chiswick is, on the other hand, unilateral.  He puts the U.S. economic, security, and domestic issues ahead of international concerns.  Chiswick’s argument displays obvious shades of realism.

While both Siciliano and Chiswick make interesting points, I do not agree with either of them.  I have unique experience observing the immigration problem on a smaller scale while living in the Cayman Islands.  I watched as Caymanians spoke out in fear of policies that place favoritism on expatriate labor (especially in the financial sector).  They lament over losing out to expatriates who, in their view, are ‘taking over the island’ and denying them the bigger, better jobs.  While most agree that locals should be given priority in the hiring process, many Caymanians simply do not have the skills or education to compete with foreign workers in executive positions.  The financial sector constitutes at least one-half of their economy.  Thus, the Cayman Islands government must walk a thin line between promoting the interests of their citizenry versus maintaining the stability and caliber of their financial and banking infrastructure.
Fortunately, for the U.S., our skilled labor pool is still competitive with room to allow additional legal skilled immigrants into the mix.  Moreover, the perception of legal immigrants is much different in the U.S.  Only illegal immigration is viewed unfavorably.  As a result, both Siciliano and Chiswick miss the mark by combining illegal and legal immigration. Few perceive legal immigrants as a negative.  Rather many view legal immigrants as contributing culture, skills, knowledge, tax revenues and more.  The process has been a boon to the U.S. economy for over a century.  It is also too convenient for Siciliano to generalize that immigration (of either kind) fills lower skill labor gaps due to growth in U.S. skilled labor.  It assumes everyone in the U.S. is moving up.  To the contrary, school dropout rates remain high.  Illiterate rates also remain high. College education remains financially out of reach for many. Based on these deficiencies, the U.S. should still have plenty of lower skill laborers without the need to resort to illegal labor.
In my opinion, the focus should be squarely on illegal immigration.  It is not necessary.  Chiswick gets it right with suggesting merit-based or points-based immigration visas and strict enforcement of existing laws.  While perception issues remain towards all immigrants to the Cayman Islands, these methods are mitigating the issue fairly and effectively.  Market-based permits would work well in the U.S., creating substantial new revenue for the government.  They are so effective in the Cayman Islands that they are used in lieu of an income tax.

Speaking of taxation, illegal immigrants do not contribute tax funds for public services provided by the government.  This is also a major problem with the health care industry.  Hospital emergency rooms treat illegal immigrants, with the cost absorbed by legal citizens who pay premiums.  Other costs include supporting the work force, raids and bureaucracies that deal with the illegal problem on an ongoing basis.  Combined, these take a toll on the economy. 

Perhaps the more appropriate way to frame the question would be to focus on the benefit or detriment of illegal immigration only.  Further, illegal immigration should be eliminated through implementation of market-based visas, the enforcement of immigration laws and investment in and promotion of all levels of domestic labor.  Then a better, more accurate assessment can be made of the overall benefit of legal immigration on a host country.