Immigration

Trump's Immigration Plan Is Half-Right, Half-Wrong

Admitting newcomers based on their skills is smart; cutting their numbers in half is a mistake.

An immigrant. He started Intel. We need more like him.

Photographer: Anne Knudsen/Getty Images

President Donald Trump just endorsed a plan to change the way the U.S. immigration system operates. Half of the plan is very good. The other half is bad and counterproductive.

The plan, known as the Reforming American Immigration for Strong Employment (RAISE) Act, was developed by Republican senators Tom Cotton of Arkansas and David Perdue of Georgia. It would do two things. First, it would introduce a merit-based system that would admit immigrants according to their education level, language skills and professional qualifications, similar to what Canada and Australia use. Second, it would cut the total amount of legal immigration in half, reducing immigration based on family reunification to immediate family members only, and ending the lottery system for green-card permanent residence permits.

The first half of this plan -- the merit-based system -- is a very good idea. I’ve long advocated for exactly this shift in the way the U.S. screens immigrants.

High-skilled immigration is important for several reasons. First, although low-skilled immigrants -- manual laborers, blue-collar workers and the like -- create a small but noticeable amount of wage and job competition for native-born Americans, skilled immigrants do the opposite. According to a recent National Academy of Sciences report, which took input from both immigration boosters and detractors, skilled immigrants actually raise the wages of their high-skilled U.S. peers. This probably happens because knowledge industries rely crucially on new ideas -- the more smart people we have creating new ideas, the more other smart people can take those ideas and use them for other applications.

Also, the NAS report found that although low-skilled immigrants don’t have much of an impact on government finances, high-skilled immigrants create a strong positive fiscal boost. The aging U.S. population needs high-earning young people to pay for old people’s pensions and retirements, to fund the public services they depend on, and to buy their houses and stocks. Skilled immigrants are the way to pay for native-born Americans to have a comfortable retirement.

Finally, skilled immigrants are a bit quicker to integrate into American culture. That means they will enjoy rapid mobility, and won’t become a permanent outsider class.

So high-skilled immigrants are pure gravy for a country like the U.S. Canada has been enjoying great success with its points-based immigration program -- the RAISE Act would, in this way, represent the adoption of best practice from the U.S.'s neighbor to the north.

But the RAISE Act also has a dark side -- the deep cuts to the total number of legal immigrants allowed into the country every year. This will partially defeat the purpose of the points-based system the act would create. It makes no sense to shift to a skills-based immigration system, but then limit the number of skilled workers who are allowed in.

Fewer immigrants means less support for the aging native-born U.S. population. It means a greater strain on Social Security and Medicare. It means pensions for city workers and police and firefighters going bankrupt. And it means stagnation of housing prices, because of reduced demand from young high-earning workers. In other words, slashing immigration would hurt the very native-born people that Trump’s immigration advisers, like Stephen Miller, claim to want to protect.

Miller, and the RAISE Act’s sponsors, probably believe that slashing legal immigration will mostly keep out low-skilled laborers. But they’re wrong. They’ve missed the big shift in U.S. immigration patterns that has happened over the past decade. Low-education workers have almost completely stopped coming into the country, so that more and more of the immigration the U.S. now gets consists of people with degrees:

Give Us Your Educated

Number of foreign-born U.S. residents by education level

Source: Pew Research Center

This means that slashing overall immigration numbers will simply reduce the total number of high-skilled immigrants coming to boost the U.S. economy. It’s counterproductive and pointless to increase the percentage of skilled immigrants while reducing the overall number.

This ill-advised move is probably to assuage the anxieties of those Americans who believe that immigrants are displacing them and destroying their native culture. Trump advisers have expressed this fear in the past. But overall, Americans are becoming more positive and welcoming in their attitude toward immigrants. Most of the country doesn’t share Miller’s trepidation:

Fewer Hard Feelings

Percent of Americans saying immigration should be decreased.

Source: Gallup

So the RAISE Act is half-wise reasonable policy, half-counterproductive fear-based mistake. The plan should be changed by simply dropping the second part and keeping the first. Prudent Republicans, such as Jeb Bush, have suggested doing exactly that. The U.S. would benefit greatly from a shift to skills-based immigration, but the overall number of people coming in shouldn’t be reduced.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Noah Smith at nsmith150@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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