A National Immigration Auction, Part I: A Very Bad Idea

By Stanley Renshon and Stanley Renshon on September 16, 2010

The latest conventional wisdom about reforming America's immigration policies takes the form of touting "skill-based immigration." An extreme example in point is a New York Times op-ed this week entitled "Foreign Stimulus." In their proposal, the authors Pia Orrenius and Madeline Zavody argue that our current immigration system be replaced with a national auction for both skilled and unskilled labor.

As every reader knows, the current system is heavily weighted in favor of the principle of family reunification. As the authors note, "The United States issues about 1.1 million green cards a year and allocates roughly 85 percent to family members of American citizens or legal residents, people seeking humanitarian refuge and 'diversity immigrants,' who come from countries with low rates of immigration to the United States." They don't say it, but the current policy skews the immigration stream into the United States in favor of those groups with the largest and fasting-growing numbers, and that means in practice those groups from Central and South America and Mexico. And many of these persons are not highly skilled or educated.

What the authors do say is that, "No other major Western economy gives such a low priority to employment-based immigration, and for good reason: these immigrants are the most skilled and least likely to be a burden on taxpayers." It's true that other desirable destinations for immigrants – Canada, Great Britain, the EU, Australia, and New Zealand, for instance – all do more to allow immigrants with more education and higher level skills into their counties. And it is true that such immigrants, on balance, are least likely to be a burden on taxpayers. But such policies are not cost-free, and in immigration policy as in life it is better to look (and study) before you leap.

While the authors say we should put "Greater emphasis on work-based immigration as part of a coherent immigration process," their proposal belies their caution. They propose that, "Provisional work-based visas, sponsored by employers and valid as long as the holder has a job, should replace green cards as the primary path to legal immigration." (emphasis added) The two key words here are replace and provisional.

"Replace" means just that to the authors. They would essentially do away with the present system and substitute a system in which, "the government should hold regular auctions where companies can bid for permits to bring in foreign workers. Employers would bid highest for the most-valued workers, creating a selection mechanism that wouldn't rely on the judgment of bureaucrats or the paperwork skills of immigration lawyers." The last two words in this sentence are meant to appeal to those who might fantasize about following Shakespeare's advice on the subject in his play Henry VI, but it is naïve to think that turning over immigration decisions over to large corporate interests will negate lawyers' impact or be an improvement.

The authors' suggested cure for what ails our immigration system is a yearly national auction in which "companies would bid for permits to bring in foreign workers." There would be two such auctions each year, one for high-skilled immigrants, the other for low-skilled immigrants.

This idea is a recipe for a national logistical nightmare. Think for a moment about what it would take in terms of processing and reviewing applications for just 1,000 individual workers and then consider how that would work with multiple millions applying for at least a million potential auction slots, or more. No disrespect intended, but it's hard to imagine that either government or the thousands of business that might compete are up to the administrative responsibility.

Within each category of high- or low-skilled immigrants, who would decide who would be admitted? Companies who won the bidding. And how would they "win"? By offering more money.

The authors think this is a great ideal to fill federal coffers, but it in effect stacks the deck in favor of larger corporate interests and their particular business needs. On the lower end of the skill spectrum, one wonders which business will be able or interested in bidding for their next immigrant employees. Larger restaurant chains or national building developers may get into the bidding, but that new restaurant up the street from you probably won't.

This difficulty is only the tip of the proverbial iceberg. This proposal touts the benefits of what the authors propose while ignoring the fairly obvious and predictable negative consequences.

When those are considered, this proposal turns out to be a very bad idea indeed.

Next: Why a National Immigration Auction Won’t Work, Part II: Illegal Immigration