As America seeks to speed up economic growth, immigration reform should be part of its growth agenda.
It's welcome news that President Obama announced his support for reform on Tuesday in Las Vegas. Over the past two years, he has issued a series of executive orders overriding existing law, instead of putting his weight behind new legislation.
Obama's speech followed the lead of a bipartisan group of senators, including Chuck Schumer, D-N.Y., Michael Bennet, D-Colo., John McCain, R-Ariz., and Marco Rubio, R-Fla.
Their proposal, announced Monday, includes a path to legal status for many of America's 11 million unauthorized immigrants. Immigrants who haven't committed serious crimes and who pay back taxes, as well as a fine, would be eligible for work permits. Eventually, they could get citizenship.
For some who have worked here for years, taxes could be a high hurdle. Final legislative language should cap the amount of taxes owed and allow the opportunity to pay over a longer period.
Under the proposal, immigrants on work permits would not qualify for federal public benefits, such as food stamps, free school lunch programs and health insurance subsidies. The agreement would strengthen enforcement measures, at the border and in the workplace, and make it easier for new immigrants to enter the country legally.
Those who pull up their roots and come here are highly motivated and have a strong record of entrepreneurship. Immigrants have been founders of many start-ups that have grown to be billion-dollar giants, such as PayPal and Yahoo. More than one-third of U.S. Nobel Prize winners in medicine and physiology between 1901 and 2012 were foreign-born.
Many newcomers have skills different from native-born Americans and complement the skills of the U.S. labor force. Among native-born Americans, 91 percent have a high school diploma or higher, whereas 62 percent of noncitizens do. Immigrants make the economy more efficient by reducing bottlenecks caused by labor shortages in the high- and low-skill areas, and creating jobs for native-born Americans.
Although immigrants no doubt will displace some low-skilled workers, primarily other immigrants, negative effects on such workers are much smaller than positive effects for everyone else. Professor Giovanni Peri of the University of California-Davis concludes that immigration raised wages of native-born Americans by six-tenths of a percent from 1990 to 2006. Senior Economist Pia Orrenius of the Federal Reserve Bank of Dallas finds a slight increase in wages for professionals and a slight decline for manual workers from immigration of less than 1 percent.
In short, the economy gains with more winners than losers. And this also makes it possible for winners to compensate those who lose from immigration -- and still come out ahead.
Immigrants have a strong work ethic. In 2012, 67 percent of foreign-born noncitizens participated in the labor force, compared with 63 percent of native-born Americans.
As part of a larger strategy to encourage economic growth, America needs to issue more visas and admit more immigrants legally. This would raise more tax revenue and confer a net benefit on the economy.
Arlene Holen of the Technology Policy Institute has estimated that if there had been no constraints on green card and H-1B temporary work visas, then from 2003 to 2007 an additional 182,000 foreign graduates would have earned $14 billion in 2008, and they would have paid $2.7 billion to $3.6 billion in taxes.
Immigrants come to America because they see opportunity, gaps in our economy that they have the skills to fill. America's goal should be a policy that enables them to come legally, and fosters economic growth. President Obama should work with Congress to change existing law.