Would Immigration Reform Raise American Wages?

The merit-based green card system would be designed to raise American wages. But policy experts say past immigration reform actions have failed to do so.

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President Donald Trump is supporting an immigration reform bill by Republican Senators Tom Cotton of Arkansas and David Perdue of Georgia that would create a merit-based green card system that would essentially replace H-1B, the skilled foreign worker and other existing visa systems.

The Reforming American Immigration for Strong Employment (RAISE) Act was quickly condemned by a range of groups like civil rights advocates because it would reduce legal immigration by 50 percent, targeting vulnerable groups, to the Association of Public and Land-grant Universities (APLU), which described the bill as applying “economically self-defeating practice.”

Craig Lindwarm, the director of congressional and governmental affairs for APLU, said the immigration reform bill, in not giving foreign graduates of American universities the chance to contribute to the U.S. economy after graduation, “completely misses the target,” according to Inside Higher Ed.

According to Cotton’s press release and a National Public Radio report, the bill -- if it becomes law -- would make the following changes:

  • Green cards would be capped at 600,000 the first year, and level off to 500,000
  • Permanent residency admission to refugees would be capped at 50,000 per year
  • Eliminate the diversity visa lottery, which grants 50,000 visas per year

RAISE would also eliminate preferences to adult, non-spousal relatives of immigrants already in the U.S. Young children and spouses of existing green card holders would still get preferential treatment for securing residency permits, however.

Do Wages Increase After Immigration Reform?

President Trump said the immigration reform bill would “reduce poverty, increase wages and save taxpayers billions and billions of dollars.”

Alex Nowrasteh, an immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity, noted that Congress implemented immigration reform to raise American wages in 1882, 1924 and in 1964 -- failing each time.

“The RAISE Act was named after its intent to raise the wages of native-born American workers by reducing the supply of lower-skilled immigrants. However, that has not been the effect of immigration restriction in American history,” he wrote in opining on why the RAISE Act won’t work.

He cited the 1964 cancellation of the Bracero program, a worker visa program that allowed Mexican workers to migrate to American farms, as similar to RAISE. His comments based on previous research by three economists, the cancellation of the program did little to raise wages.

“The farmers did not adapt to the decline in legal migrants by raising wages. Instead, they mechanized and planted less labor-intensive crops,” wrote Nowrasteh.

A Merit-Based System for Immigration Reform

Perdue noted that the draft legislation, and it’s skills-based point system, are based on the immigration best practices of Canada and Australia.

According to The UK Register, employment-based visas:

  • Prioritize those with a master’s degree, then a graduate degree
  • Give extra weight will be given to those with strong English language skills
  • Apply the most points to applicants aged 26 to 31

For example, “STEM graduates with a PhD that was earned in the U.S. are the most preferred type of immigrant, it seems, earning 13 points for their level of education,” wrote Iain Thomson, reporting from San Francisco.

Other factors, like having a job and how much the salary is earn more points, as does investing in a business or winning a Nobel Prize, Olympic medal or qualifying sporting competition.

Republican Senator Lindsey Graham of South Carolina tweeted that he does not support the bill because it would negatively affect his state’s economy as its top two industries depend on a workforce largely made up of immigrants:

Andrea Fox is Editor of Gov1.com and Senior Editor at Lexipol. She is based in Massachusetts.

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