All posts by Alex Nowrasteh

Alex Nowrasteh is immigration policy analyst at the Cato Institute. See also: Cato Institute page listing Nowrasteh's work Page about Alex Nowrasteh on Open Borders All blog posts by Alex Nowrasteh

Selling Work Visas: Auctions or a Tariff?

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The post was originally published at the Cato@Liberty blog here and is reproduced with permission from the author.

Yesterday Professor Giovanni Peri presented an immigration reform plan that would auction work visas to employers. As I wrote yesterday, Peri’s plan would diminish the misallocation of current visas but not do much to increase the quantity of work visas. Since the real problem with America’s immigration system is a lack of work visas and green cards, Peri’s plan seeks to solve a rather miniscule problem by comparison.

Proponents of selling visas either support auctioning a limited number of visas to the highest bidders or establishing a tariff that sets prices but allows the quantity to adjust. An immigration tariff is far superior to an auction of numerically limited work visas. You can read my proposal in more detail here or listen to me explain it here. ADDED BY OPEN BORDERS: For a background on immigration tariffs, see here.

Here are three reasons why an immigration tariff is better than an auction: Continue reading Selling Work Visas: Auctions or a Tariff? →

Selling work visas

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The post was originally published at the Cato@Liberty blog here and is reproduced with permission from the author.

Professor Giovanni Peri today made an interesting proposal to auction work visas to the highest bidding employer. His reform is similar to an auction proposal made by Gary Becker, but more specific. His idea is innovative and deals with transitioning from the current maze of quotas, visa categories, and other barriers to a more open system that better allocates visas to the highest bidders.

The one problem with Peri’s proposal is that it does not meaningfully increase the number of work visas. The limited number of work visas, not the distribution, is the main problem with America’s immigration system. Instead, he calls for reallocating visas from families to the employment based category. He then wants American employers to bid for the limited quantity of work visas issued quarterly. A government commission would adjust the quantity and immigrants would be free to move between employers who purchase visas.

Economists like Becker and Peri are rightly concerned with how societies allocate scarce resources to different uses, but the scarcity of work visas is an artificial one created by the government, not one that results from a scarcity of the factors of production or other inputs. This is why there should be no numerical limits on the quantity of work visas issued even if they are priced. Charging for work visas is a substantial improvement over the current system, as I say here, here, here, and here. Most of the welfare gains come from allowing the quantity of visas to adjust to the price, not the other way around. An efficient visa selling process will operate more like a tariff than an auction. ADDED BY OPEN BORDERS: For a background on immigration tariffs, see here.

For normal goods and services, a rising price incentivizes consumers to limit their consumption and producers to increase production. A government commission tasked with adjusting visa quantities would face political rather than market incentives and not increase visas in response to rising prices. Unless the incentives are carefully aligned, the result would probably be a more arbitrary and numerically limited immigration system.

Another problem with Peri’s proposal is that it only allows employers to bid for work visas. Continue reading Selling work visas →

Unlawful Presence Waivers Are Not Amnesty

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The post was originally published at the Cato@Liberty blog here and is reproduced with permission from the author.

Under current law unauthorized immigrant spouses or children of U.S. citizens can gain lawful permanent residency (LPR) status if they return to their home country to apply at a U.S. consulate or embassy. The Catch-22 is that unauthorized immigrants who have lived here are barred from returning for up to ten years once they leave the U.S. The immigrant has to apply for an unlawful presence waiver to remove the bar, a process that could take up to 28 months, including appeals, separating the immigrant from his U.S. family in the mean time. Consequently, many unauthorized immigrants who could regularize their status do not take this opportunity.

The government is now asking for comments on a proposed rule change that would close part of that administrative Catch-22. Under the proposed rule an unauthorized immigrant could apply for and adjudicate the waiver before departing for interviews in consulates abroad, shortening the separation time between the immigrant and his family. Half of waivers are approved in seven days at the American consulate in Ciudad Juarez, Mexico. The other half can take years.

The waiver removes the bar on returning if the immigrant can show that “being separated from their U.S. citizen spouse or parent would cause that U.S. citizen relative extreme hardship.” Extreme hardship only applies to the migrant’s U.S. citizen spouse or parent, not to the immigrant himself or his U.S.-citizen children. Extreme hardship is determined by USCIS bureaucrats where relevant factors include the intensity of family ties, health, age, financial impact, and country conditions. Financial problems and the normal hardship of familial separations are not, by themselves, sufficient reasons to grant a waiver.

Even with those strict legal requirements, thousands of people could have their immigration status legalized. Continue reading Unlawful Presence Waivers Are Not Amnesty →

Economic Judgment on Arizona’s Immigration Law

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This is a cross-posting, with permission from the author, of an article that originally appeared in the Huffington Post here.

On April 25, the U.S. Supreme Court will hear oral arguments over the constitutionality of Arizona’s controversial immigration law. But jurisprudence aside, the economic verdict is already in: The law has damaged Arizona’s economy.

Arizona’s immigration law burdens businesses with regulation and penalizes workers. It has driven tens of thousands of laborers, consumers and entrepreneurs from the state, turning its bad economy even worse.

At its heart, Arizona’s immigration policy is an unfunded mandate that raises the cost of hiring workers and expanding production. Neither is good policy in even the best of economies, which we are far from experiencing currently.

The worst example: E-Verify. It’s an electronic verification system that employers are supposed to use to check the legal work status of all new employees. Besides failing to detect unauthorized immigrants 54 percent of the time — thus flunking its core function — E-Verify falsely identifies legal workers as illegal about one percent of the time. Continue reading Economic Judgment on Arizona’s Immigration Law →