Pro-amnesty Republicans are pushing a letter Thursday signed by “more than 100 influential conservative economists” that endorses “broad-based immigration reform.” It has been tweeted out by Sen. Jeff Flake, R-Ariz., and Sen. Marco Rubio’s chief of staff, Cesar Conda.
Problem is, nothing in the letter says anything about the S. 744 immigration bill that Flake and Rubio are working with Sen. Chuck Schumer, D-N.Y., to pass in the Senate. And there are some very good reasons why. S. 744 is chock-full of terrible liberal economic policies that no conservative economist would ever want to sign a letter endorsing. Just to name a few:
1. Wage controls for entire industries: Section 2232 of S. 744 creates a guest worker program, which, by itself, is not objectionable to all free-market economists. However, S. 744 does not leave the wages paid to guest workers up to the workers and their employers. Instead S. 744 sets wages for entire sectors of the agriculture sector. So, “graders and sorters” are to be paid exactly $9.37 for fiscal 2014. Agricultural equipment operators are to be paid $11.30. If you harvest crops on a farm, you get $9.17. But if you work on a ranch, you get $10.82. There is no free-market justification for any of these wage controls.
2. The Bureau of Immigration and Labor Market Research: S.744 also creates a brand new government bureaucracy called the Bureau of Immigration and Labor Market Research. This bureau will be charged with setting wages in future years for the job categories listed above, and setting the number of visas granted through the program. If you believe government bureaucrats are good at anticipating market needs and properly setting wages and labor supplies, then this bureau makes a lot of sense. If you are a free-market economist, it goes against everything you believe in.
3. The tax on employing Americans: S. 744 does not exist in a policy vacuum. Obamacare is still the law of the land, and pro-amnesty Republicans have shown no interest in demanding its repeal as a price for amnesty. Instead, pro-amnesty Republicans have tried to get around this problem by denying guest workers and currently illegal immigrants access to Obamacare. However, as Phil Klein has noted, this creates some perverse incentives for employers:
Under the health care law businesses with more than 50 employees who don’t offer health insurance (or who offer inadequate coverage) could be subject to fines of up to $3,000 per worker if at least one worker obtains coverage through a government-run exchange.
This means that when the two pieces of legislation are combined, for at least the next decade, employers could avoid Obamacare fines by hiring newly legalized immigrants (who are not yet citizens) instead of U.S. citizens.
Effectively, employers would be subject to a substantial tax on hiring American citizens that they would not be subject to if they were to hire newly legalized immigrants who have not yet obtained citizenship.
How many of the conservative economists who signed the pro-immigration reform letter above really approve of how S. 744 effectively creates a $3,000-per-worker tax on employing Americans?
A conservative immigration reform bill built on free-market principles would undoubtedly have a “positive impact on population growth, labor force growth, housing, and other markets will lead to more rapid economic growth.” But S. 744 is not that bill.