The compromise immigration legislation that the Bush administration and Senate have hammered out represents an historic shift in emphasis that could transform immigration in the U.S. by moving us to a skills-based entry system. Such a change could make immigration a bigger benefit for our economy while also ameliorating some problems with the rest of the legislation, specifically its plan to grant amnesty to many of those already here illegally. But the devil will be in the details that not only the Senate, but also the House of Representatives, still have to work out and agree to.

America’s legal immigration system is largely based on family relations, which means that you can get into this country based on whom you know, rather than what you know. About two-thirds of legal immigrants come here because they have some relative who has already been granted legal status. Although our immigration system also grants visas to some based on their skills, such visas tend to be limited to high-tech sectors and make up a small part of our overall legal immigration.

Proponents of our family-based system argue that it encourages “family values” and promotes family reunification. But in fact, many immigrants choose to separate themselves from their families in their home countries and come here specifically because they know that if they can achieve legal permanent status in the United States, they’ll establish a “chain” of relatives who are also eligible to come. As each member of that chain then establishes legal residence, the list of those eligible to immigrate becomes ever larger. That’s why after 40 years of family reunification policy, our backlog of family-based visa applications is so enormous.

Other countries that are also immigrant magnets, like Australia, have moved to systems based on economic merit, with startlingly different results. Australia—whose immigration policy used to be based principally on family relations, like ours—understood, starting in the mid-1980s, that it needed a different way to identify and grant legal status to workers who would answer the country’s economic needs. It adopted a system that identified the jobs most in demand—not just high-tech jobs, but also many skilled blue-collar jobs—and rewarded workers with experience in those fields and overall skills, like language proficiency, that would help them assimilate both economically and culturally. Before, 70 percent of Australia’s immigration had been based on family relations, but today, seven in 10 legal immigrants qualify because of the skills that they have.

The result has been swifter economic assimilation. One recent study found that within five years, the typical immigrant earns as much as the average native-born Australian. By contrast, in the United States, studies show a wide gap between the earnings of immigrants and those of native-born workers—a gap that is growing larger over time, as our immigrant population increasingly lacks the education and skills to make it in our specialized economy.

Shifting to a skills-based system has made Australia a powerful player in the worldwide scramble for talent, prompting its former immigration minister to boast that the country is “beating the U.S.” and other industrialized countries in recruiting efforts. Australia has even cut deals with some Eastern European countries to welcome their skilled blue-collar workers. Those workers could never get into the United States, though they would easily find jobs here, unless they came illegally or had some family member already here to sponsor them.

If the U.S. genuinely instituted such a system, it could allay fears about another component of the proposed immigration reform, a path to legal status for the estimated 11 million illegals already here. There are two objections to amnesty: first, that it rewards people who broke the law, and second, that past amnesties only encouraged further immigration because once those already here were granted residency, their relatives became eligible for legal entry.

Proponents of amnesty are trying to overcome the first objection by pointing out that under the proposed legislation, undocumented aliens may establish residency only if they pay some $6,500 in fees and fines and return to their home countries to obtain proper documentation. Supporters of the legislation also propose that we boost our border security to minimize further illegal immigration and that we impose tougher penalties on employers who use illegals, moves that are clearly essential. Given that no immigration legislation will ever pass without some compromise on the issue of those already here, that’s probably as good a deal as we can hope for.

At the same time, changing to a genuine skills-based system would alleviate the second problem. Although many of those already here would be legalized, only their spouses and minor children would be allowed to immigrate—which would cut the family chain, rather than add links to it as past amnesties have. Thus, the compromise legislation makes some short-term concessions in the hope of a policy shift with long-term benefits.

The proposed legislation, however, may also founder on proposals to establish guest worker programs, and here more negotiation and compromise will be necessary. The bill establishes a program of between 400,000 and 600,000 legal guest workers per year, mostly serving our farms. Proponents say that the program would alleviate low-wage worker shortages, while opponents argue that guest worker programs have never succeeded in the past, either here or in Europe, and that they eventually establish a permanent force of guest workers who never leave.

But there is a larger problem with guest worker programs: by providing employers with cheap labor, they discourage investments in productivity and mechanization that would eventually make the workers unnecessary. In other developed countries where illegals are not so plentiful, farmers have employed more mechanization than in the United States. Even here, when President Kennedy eliminated a guest worker program for tomato pickers in the 1960s, California growers adopted a mechanized system that allowed them to pick more tomatoes with 5,000 skilled workers than 40,000 illegals had been able to pick by hand.

That’s why a further compromise is needed on guest workers. A sensible plan would create a guest worker program that has a diminishing number of slots every year and that essentially phases out after 10 years. Such a plan would allow farmers to deal with any worker shortfalls, but also give them notice that they need to prepare for a future in which cheap temporary workers are not plentiful.

Because emotions are running so high on both sides of the political aisle over immigration legislation, there’s likely to be lots of heated debate and perhaps more compromise. But although both liberals and conservatives are going to focus on the hot-button issue of amnesty, the real linchpin of the legislation is a shift to a skills-based immigration system. If we do that sensibly and thoroughly and don’t allow amendments to undermine or weaken it, we may finally have a chance to create an immigration policy that works.


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