In his latest Bloomberg Businessweek column, Charles Kenny discusses the importance of internal migration to economic development.
The appetite for immigration reform in the United States is stronger than it’s been in years. There appears to be some degree of bipartisan consensus around issues like border security, employer verification, the path to citizenship for unauthorized, and the need for more—though its not clear how much more—high-skilled immigration. Additional immigration would come from more work-based visas, such as the H1-B, and more green cards for foreigners who earn STEM degrees from American universities.
Adam Ozimek sees a better way. He suggests moving away from the somewhat restrictive reliance on work-based visas to a more flexible system of region-based visas that would target the economic and social benefits of immigration to the areas that want them most:
Instead of tying a worker to a particular employer, this would tie a visa to a particular labor market, and allocate immigration to where it is most economically efficient. Such a program would allow a city to petition for regional visas (a region would be cities or states) instead of an individual employer…
There are two main benefits of this policy. First, it would greatly reduce a firm’s ability to keep visa holders’ wages below their marginal product. Instead of being tied to one firm, a worker would be free to work for whoever will hire them within a particular region, and therefore have their labor bid up by competing employers…
The second main benefit of this is it allows local areas to determine how much extra immigration they want. The low level of immigration relative to efficient levels illustrates that the national median voter views immigrants at current margins as being primarily competitive rather than complimentary, and fears that immigrants are bidding down their wages and perhaps even bidding up their house prices. But the existence of sanctuary cities shows that the median voter in some areas wants more immigrants. Regional visas should be popular in these areas, and in particular in places that are suffering from population declines. Voters are less likely to be concerned with crowding out when immigrants are filling vacant homes, and the myth that less workers means better pay should be abundantly clear in cities like Detroit. Statements from the Republican Governor of Michigan, who calls himself the most pro-immigrant governor in the country, make it clear that in some areas of the country more immigration would be greatly appreciated.
Canada’s provincial-nominee program is the best model for the U.S. Under this system, 13 provincial entities sponsor a total of 75,000 worker-based permanent residencies a year, and the federal government in Ottawa offers 55,000. Each province can pick whomever it wants for whatever reason — in effect, to use its quota, which is based on population, to write its own immigration policy…
The government in Ottawa can’t question either the provinces’ criteria or their methods of recruitment. Its role is limited to conducting a security, criminal and health check on foreigners picked by the provinces, which has cut processing time for permanent residency to one or two years — compared with a decade or more in the U.S.
Richard Kurland, a lawyer who is considered Canada’s top immigration expert, notes that provinces use the program for diverse goals such as enhancing existing cultural or ethnic ties with other countries. Not surprisingly, the most popular reason is economic: to augment the local labor market.
The program gives British Columbia the same flexibility to sponsor, say, bricklayers as it gives Ontario to sponsor computer programmers. It doesn’t treat the entire Canadian economy as monolithic and pretend that distant federal bureaucrats can effectively cater to local job markets.
A legislative agreement on border security, employer verification, and a path to citizenship for unauthorized immigrants would undoubtedly represent a significant achievement. But fixing the current system won’t be enough. American economic prospects also hinge on finding new ways to welcome more of the people who would move here permanently if given the chance. By giving the places that want more immigrants the power to attract them, a more federalist approach could capture the economic benefits of additional immigration while incurring fewer of the political costs.