Eakinomics: The White House Immigration Reform

Immigration reform is long overdue. While border security and illegal immigration regularly steal the headlines, the statistical reality is that the native-born population in the United States has a fertility rate that is too low (and still declining) to keep the population stable, much less grow. Put differently, in the absence of any immigration the U.S. population and economy will shrink, limiting the ability of the nation to defend itself and project our values around the globe. The flip side of this reality is that choosing the rules for granting visas to immigrants is tantamount to choosing the growth rate and composition of the labor force. Given that, it is desirable to move the immigration system away from a nearly exclusive focus on family unification and humanitarian objectives and toward one that rewards those providing the attributes that the labor market values.

Yesterday, President Trump proposed a reform of precisely this type. According to the Washington Post, “Trump said in his Rose Garden remarks that the plan would not change the number of green cards allocated each year but would prioritize high-skilled workers over those with family already in the country. It would allow applicants to rack up eligibility based on factors such as age, ability to speak English, job offers and educational background.”

The proposal has been widely described as a non-starter because it does not address the Deferred Action for Childhood Arrivals (DACA) population. But putting that omission aside, the proposal is an important step to shift to a system that focuses nearly 60 percent of visas on economic merit, and the administration deserves credit for recognizing the right kind of reform. Having said that, from a labor market perspective the proposal is incomplete because of the near-exclusive focus on education as the metric for measuring “high-skilled” immigration.

Unfortunately, education and skill are not the same thing. My online dictionary says that skill is “the ability, coming from one’s knowledge, practice, aptitude, etc., to do something well.” There are lots of highly educated people who do not match that definition of skill (most work at think tanks). And there are tremendously skilled individuals in the U.S. labor market who are not highly educated. A more complete proposal would have a route for those who do not have fancy degrees to demonstrate their economic worth. The U.S. labor market requires all sorts of combinations of education, training, and aptitude; the immigration reform should be able to deliver them. (In one small way, the administration acknowledges this by allowing immigrants that work in a critical industry. This presumably allows some to waive the skill requirements.)

Hopefully this announcement marks the beginning of serious debate and further proposals for immigration reform. The current system is broken, and it is time to adopt a new framework for the 21^st century.