The cost of immigration – the proposed RAISE Act
In Part One of my discussion of immigration, I wrote about the cost of illegal immigration. I will now expand the discussion to immigration in general and discuss the RAISE Act, one of two current major legislative proposals to control immigration and reduce the cost to American taxpayers.
Prior to the 1965 Immigration and Nationality Act, between 1924 and 1965, this nation admitted fewer than 200,000 immigrants a year. The 1965 act removed many of the barriers to immigration, and the number of those coming to this country skyrocketed. Since 1990, with few exceptions, roughly a million people a year have immigrated to the United States. Mexico, China and India, in that order, are the leading countries of origin in recent years.
As noted in Part 1 of this series, this nation has every right, and even obligation, to limit immigrants to those who contribute to the betterment of America.
Currently there are 12.8 million low-skill immigrants (high school degree or less) in America, and approximately 400,000 more enter each year. These immigrants result in a net fiscal loss to our government of $150 billion annually. This is the amount of benefits paid minus total taxes received.
This is the cost each and every year, and it is increasing. The National Academy of Sciences estimates that over a 75-year projection, the net cost of the current low-skilled immigrants and their immediate descendants will be $1.9 trillion.
The proposed RAISE Act is an attempt to control and even reduce the fiscal cost resulting from low-skilled immigrants in a number of ways. The RAISE Act will eliminate chain migration, which is allowing the extended family of an immigrant to follow; cut the annual number of green cards in half; eliminate the diversity visa lottery; and eliminate the low-skilled worker allotment. It will also place a maximum, or cap, on the future flow of refugees and asylum seekers.
Eliminating the chain migration provision is a very important control measure. Currently, if an immigrant enters the country and his or her spouse becomes a citizen, they can petition the INS to allow their parents, adult children, siblings and in-laws to enter the country. The group they petition to allow in can then bring their minor children. Once they become citizens, the cycle starts over with more in-laws and parents and siblings. One immigrant can literally result in dozens of entrants.
The RAISE Act would allow each immigrant to bring only nuclear family.
The RAISE Act promises to cut legal immigration in half and replace ineffective immigration criteria that have allowed mass Third World immigration with a much more rational points system that evaluates the ability of a potential immigrant to contribute to the American economy and to assimilate in our English-speaking nation.
The previously cited cost of low-skilled immigrants of $1.9 trillion over a 75-year period would be cut by at least $1 trillion by the RAISE Act, according to some estimates. Additional savings would be achieved by limiting illegal immigration.
The RAISE Act, of course, has its opponents. Some argue that it will reduce the GDP. Others argue that there will not be enough low-skilled workers to fill available low-skilled jobs. Still others argue that low-skilled immigrants make it more possible for American workers to climb the economic ladder. And finally, some argue that reducing the number of immigrants will hurt the high-tech industry.
Reducing a large number of low-skill workers has questionable impact on GDP. Assuming they are employed, and it is a big assumption, they do contribute to the GDP. The contribution, however, is numerically small and is consumed almost entirely (98 percent) by the immigrant, so virtually none is net-positive contribution to the fiscal budget. In fact, most, even if employed, because of the redistributive nature of our tax system, are net negative to the fiscal budget. They are a part of the GDP, but a very small slice of the pie. Reducing low-skilled workers will not adversely impact our nation’s wealth.
As far as there not being enough low-skilled workers to fill available jobs, there are Americans in the low-skilled category. It is entirely possible that making work a requirement for financial support would make some of these available, but more to the point, migrant work cards could replace some immigrant visas. A migrant is a person who is in this country temporarily for work and then leaves. They are distinctly not entitled to bring families and receive benefits.
It is entirely possible that low-end wage scales may undergo some adjustment if large numbers of immigrant low-skilled workers are not available. That might have the effect of drawing more U.S. citizens back into the labor pool. Paying a bit more for some services may be offset by lower taxes. What the net result would be is very speculative at this point.
As far as the impact of fewer visas on the tech industry, that has been an ongoing discussion for many years. No one is talking about changing the H-1B visa program, which has been a big source of tech personnel for decades. If fewer low-skilled immigrant visas are granted and the focus is shifted to high-skilled immigrants, this certainly would not hurt the high-tech industry and may well help it.
The RAISE Act, the revised version of which was introduced in August, being designated as Senate Bill 1720, has been referred to the Senate Committee on the Judiciary. No action on the bill is anticipated this year.