What the Senate Immigration Bill Got Right

The Senate’s passage of its immigration reform bill is a meaningful victory for free markets. Free markets ought to extend beyond borders. As has been seen clearly by economists since Adam Smith, exchange in both goods, services, and ideas make the world a richer and freer place.

Legalization: The bill would legalize the statuses of roughly 11 million immigrants here illegally, so long as they arrived before last year and were not a felon. Protecting the rights of immigrants to live and work freely also protects Americans’ rights to associate, contract, and trade with those immigrants. A first principle of U.S. immigration policy is that it should not violate the rights of U.S. citizens.

Those who recommend that we “just enforce the law,” as it is currently written, rarely understand the implications of that suggestion for Americans. Not only would tens of thousands of business owners dependent on these immigrants be bankrupted due to labor shortages, not only would thousands of employers be subject to massive fines or imprisonment, but millions of U.S. citizens would also be imprisoned under current law—for “harboring” them or for “aiding” them through charity or other means. These statutes, which entail long prison sentences, would clearly cover U.S. citizen families and friends of immigrants here illegally.

Violating the rights of U.S. citizens to engage in commerce with these immigrants ultimately has negative economic effects.  For example, a team of economists led by Steven Zahniser and Thomas Hertz at the Economic Research Service estimated for the Department of Agriculture the effect of losing 5.8 million unauthorized immigrants. “In the long run,” they concluded, “overall gross national product accruing to the U.S.-born and to foreign-born, permanent residents would fall by about 1 percent, compared with the base forecast.”

In other words, removing these workers would be like losing $150 billion—and that’s just from losing half of everyone here illegally. Conversely, legalizing the statuses of these immigrants will result in huge economic gains. Legalization increases the productivity of immigrants by creating an incentive to gain new skills and learn English. In 2012, Berkeley econ professor Raúl Hinojosa-Ojeda found that GDP would likely rise by $1.5 trillion over ten years.

More legal immigration: For those worried that this bill prefers illegal over legal immigrants, the bill greatly expands legal immigration options for would-be legal immigrants as well. It creates up to 250,000 new “merit-based” visas per year (probably only 150,000 over the next decade). MBVs would make people with special skills or connections to the United States eligible for permanent residency. Initially, these visas would be used to clear backlogs for current employment-based (EB) immigrants.

Moreover, exemptions from the EB quotas for the most-highly skilled immigrants and the children of green card holders will almost guarantee 220,000 more visas annually. It also creates new visas for investors and entrepreneurs for the first time. Temporary immigration will bring hundreds of thousands more per year. This general influx in immigration will create jobs and wealth for Americans. Economists are in universal agreement. Immigration increases Americans’ standard of living overall.

The White House Council of Economic Advisers found in 2007 that annual wage gains from immigration are between $30 and $80 billion. Economist Giovanni Peri found in 2007 that wages for workers with at least a high school degree grew by 2 percent due to immigration between 1990 and 2004.

Perhaps as importantly, immigration reform will refocus Americans’ attention toward legal immigration again. Rather than daily debates about what to do with those already here illegally, we can debate why we should exclude newcomers in the future. This change in focus will likely continue to move America toward a more open and welcoming society.