February 27, 2007
By Tim Kane, Ph.D.
As they think anew about
legislation to reform immigration, Members of Congress should
seriously consider the operational details of a temporary worker
program. The structure of such a program is crucial to both its
political acceptability and its economic feasibility. The real
danger is that Congress will enact a temporary worker program
that passes the political test but fails the economic one.
Any legislation aiming to reform
immigration should adhere to policy principles of national
sovereignty, national security, rule of law, and patriotic
assimilation, as well as economic efficiency. Yet none of the
various bills offered thus far would create a workable temporary
worker program. Even bills that are reported as different tend to
share a similar emphasis on central control. A better idea is
Three Possible Designs.
There are three basic ways to design a migrant worker program:
The first option of unrestricted
access is effectively the status quo: a black market for
unauthorized labor without policing and prosecution. Simply
legalizing the unrestricted flow of labor into the U.S. poses
problems in other areas of high concern, such as national
security. It also strikes many as problematic, so Congress is
unlikely to pass it.
The second option is a system of
total government control of the labor market in which migrant
workers would be assigned licenses for narrowly defined jobs,
skill-certified by government bureaucrats, guaranteed
occupation-specific wages, and assigned to employers. The
Senate took this approach in 2006.
The Senate bill (S. 2611, 109th
Congress) would have created a large new bureaucracy in the U.S.
Department of Labor to assign migrant workers to U.S. employers.
The system would impose thousands of exclusive occupational
categories and pay scales, introducing a massive wage-control
scheme into the private sector. Needless to say, this would be a
bad idea, not the least because it would be wickedly disruptive to
the labor market.
Centrally planned markets assume
that a third party (the government) has perfect information about
supply and demand down to the last detail. Even if the government
could have the perfect knowledge required to match supply with
demand in every case, using that knowledge would require a massive
bureaucracy of forms, files, and approvals-all mistake-prone,
corruptible, and expensive.
How Sponsorship Would Work.
A third way is to give U.S. firms control and responsibility under
a system of sponsorship that would put the onus on U.S.
employers-not the government-to select, identify, and pay for
A central plank in a sponsorship
option is to require firms to identify who their workers are and
monitor where they reside. Beyond setting general numerical caps
and ensuring compliance with employment laws, the government would
be limited to authorizing the sponsored worker (who would have to
pass security and health checks) and maintaining a biometric
database of the identity and status of migrants, similar to
the US-VISIT program. Criminals could be efficiently blocked from
entering or reentering the U.S., including immigrants who try to
flout the new law and maintain an undocumented status. The market
should be utilized where it is the most effective (sorting supply
and demand of labor), and the government should be utilized for its
core functions (safety and security).
However, putting the onus on
employers for temporary workers will work only if employers
face serious penalties for not complying. For every migrant worker,
employers should be required to post a default bond that would be
reimbursed only when the migrant returns home lawfully. The best,
easiest, and fairest bond price would be set by a market, not by
the government. The government would periodically auction worker
bonds, and the winning bidders would receive the right to hire
Critics are quick to say that
tracking all foreign workers is too complex for the government to
handle, yet the free market has already produced much more
complex systems that track millions more people through the payroll
tax system and track individual transactions on hundreds of
millions of personal credit cards down to the penny every
Some Elements of a
Sponsorship-Driven Temporary Worker Program. Under the
issues would still need to be resolved, but the core labor-market
engine powering the guest worker immigration system should be based
on free-market principles. Sponsorship is not just the best
foundation for a guest worker program. It is the only option that
will operate smoothly, fairly, and flexibly to serve U.S.
policy goals and the U.S. economy.
Tim Kane, Ph.D., is
Director of the Center for International Trade and Economics at The
The core labor-market engine powering the guest worker immigrationsystem should be based on free-market principles. Sponsorship isthe only option that will operate smoothly, fairly, and flexibly toserve U.S. policy goals and the U.S. economy by harnessing thepower of the market to finance, manage, and enforce a temporaryworker program.
Tim Kane, Ph.D.
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