IDEAS IN ACTION WITH JIM GLASSMAN
IMMIGRATION
AN INTERVIEW WITH PIA ORRENIUS
JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. Give me your tired, your poor, and while you're at it your PhDs. That's hardly America's traditional stance on immigration but in today's highly competitive global economy, some say that the United States needs to change its immigration policies to attract more highly skilled and educated immigrants. Would your grandparents have been admitted under such a system? I know mine wouldn't. Joining us today is Pia Orrenius; she is a labor economist with the Dallas Federal Reserve, a fellow at the Tower Center for Political Studies at Southern Methodist University. Her new book, Beside the Golden Door, offers a bold proposal to reform America's immigration system. The topic this week: would changing America's immigration policies change the very character of America. This is Ideas in Action. 
ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.
JIM GLASSMAN:
Pia let me ask you, in your book, Beside the Golden Door, you say the United States has an inefficient system of immigration. What do you mean by that?
PIA ORRENIUS:
Well it's inefficient in several ways. But let me first start by saying, you know, we have this disproportionate focus on our immigration system as if --particularly on illegal immigration as if it were the only problem with our current immigration system. But what we focus on in the book is really the legal part of the immigration system and we argue it's not functioning either. Inefficiency is one piece of that --it's how we bring people in is very inefficient. But it's also who we bring in --it's how --selective we are or --you know we're not very selective about the immigrants we bring in. 
JIM GLASSMAN:
One determining factor in bringing in immigrants under the current system is whether they're related to someone who's already here in the United States. Would you like to change that?
PIA ORRENIUS:
Well that's right Jim. So under the current system we give out about 1.1 million green cards or legal permanent residencies per year and of those 85 percent go to family members of U.S. citizens or green card holders and also to humanitarian immigrants. But only 15 percent go to employment based immigrants and furthermore, of the 15 percent half of those are for workers and half are for dependents. So take the 1.1 million, only 7 percent are going to employment based immigrants. 
JIM GLASSMAN:
And your contention is that is not a very wise policy in an age in which we've got a global economy and we're tremendously competitive. We should be trying to attract really the best workers from around the world?
PIA ORRENIUS:
Yes we should definitely have a --more of a focus on attracting high skilled immigrants and we should devote a higher share of our green card program and of our immigration system should go to bringing in high skilled and employment based immigrants. 
JIM GLASSMAN:
So, how do we do that?
PIA ORRENIUS:
You can do it several ways but we argue that certainly one way you should not be bringing in immigrants is under a quota system where you're creating huge queues.  So another thing we do is whereas we have relatively few green cards for employment based immigrants we have a lot of what we call non-immigrant visas or temporary visas for high skilled workers like the H1B program for example. The problem is what we've done is we've increased the number of visas in the H1B program but meanwhile we haven't increased the number of green cards that those people can get if they want to stay on in the U.S. So we're losing --we're bleeding these high skilled professionals that in fact end up returning when they can't get green cards. 
JIM GLASSMAN:
So let's go into it a little bit more deeply. H1B visas; those go to technology people? Or what?
PIA ORRENIUS:
They do --most of them yeah. A large share of them go to the IT sector, software programmers for example, but there's lots of other specialty occupations. They're all skilled professionals.  And so it's an important program where we bring in some of our most talented immigrants.
JIM GLASSMAN:
And how many of those are there? 
PIA ORRENIUS:
So there's total about 85 thousand per year.
JIM GLASSMAN:
That --really they're not here for very long. They can't get a green card means that they are --they have long-term status in the United States.
PIA ORRENIUS:
They can only stay 6 years under the current H1B program and then they can apply for permanent residency and hopefully, you know, eventually they would get it. The problem is that we also on top of the quotas on the green card program we also have country quotas, which limit immigration from certain nations because just of the --virtually of their size. So Chinese and Indian immigrants who come from large countries and tend to apply for green cards through --you know after going through the H1B program are stuck in queues that are as long as 5 to 10 years. 
JIM GLASSMAN:
When you say queues, you mean somebody applies and then you're on a list and you don't get admitted for 5 or 10 years?
PIA ORRENIUS:
You're admitted, you're in the United States but you don't get your permanent residency for as long as 10 years. So you're in the line --you're uncertain about your future, you don't know where to commit; here or back home, your spouse can't work while you're waiting. I mean there are --that's really the source --one source of the great inefficiency of our current immigration system.  
JIM GLASSMAN:
What about --some people say, 'you know we've got extremely high unemployment right now in the United States, why should we be admitting immigrants? Don't they crowd out American workers?'
PIA ORRENIUS:
Well, Jim you make a great point. We should have a flexible immigration system where the economy grows, more visas are available. When the economy contracts, fewer visas are available. And also when you have an employment based immigration system that --that piece of it is almost self-correcting. The reason that we haven't had a decline in --during the recession in the number of green cards that we give out is because so many of our green cards are family based. That immigration continues as if there weren't a recession.  So you could have a much more efficient system if you had a system of granting visas that was dependent more on the business cycle and labor demand. 
JIM GLASSMAN:
When the economy picks up there's --people contend that you're bringing in more immigrants, and you gee know there are Americans who would like these jobs. 
PIA ORRENIUS:
There's a large literature on the wage and employment effects of immigration and on the high skilled end really the --there's very little evidence that there's crowding out of high skilled American workers and that's --
JIM GLASSMAN:
Because we just don't have enough?
PIA ORRENIUS:
Well in certain sectors we don't have enough. --Or demand really grows faster than supply in certain sectors. And then in certain sectors really Americans are not --don't tend to choose certain professional degrees, say in math --math and science for example where we bring in a lot of immigrants from Asia to fill those types of positions for example. The benefits of high skilled immigration are really --not only that they don't tend to have --or the literature tends to show that they don't have negative wage and employment impacts on natives but it also shows that they're highly entrepreneurial and innovative and so they tend to patent at a higher rate so scientific discoveries are correlated with immigration, high skilled immigration, and patenting and self employment. 
JIM GLASSMAN:
We have in the past brought in lots of immigrants who have been highly skilled and --certainly acquired skills when they were in the United States and have done quite well. What's really changed here?
PIA ORRENIUS:
Well what's changed is that we've accommodated some of that inflow with temporary visas but congress has not been willing to accommodate them with permanent visas. So we really haven't had a change in the number of permanent visas or green cards going to high skilled immigrants in 20 years. So we're arguing that it's time for a change. And it's also time for the change in the proportion --what you do with the number of green cards is a policy issue certainly but what you can do --an economic issue is that proportion as well of green cards in terms of funneling a higher share to employment based immigrants. And they could be high skilled or low skilled but even we can benefit from low skilled employment based immigration as well as high skilled employment based immigration. 
JIM GLASSMAN:
Is there a demonstrable economic effect to bringing in more high skilled immigrants? I mean can you say, you know if we brought in--
PIA ORRENIUS:
Oh absolutely--
JIM GLASSMAN:
--An extra 200 thousand immigrants we'd boost GDP by so much or we'd boost employment by so much--
PIA ORRENIUS:
Well it's hard to say exactly-- to give you the exact number but the debate over high skilled immigration I think among economists there's very little disagreement that high skilled immigration is just a win win for the nation.
JIM GLASSMAN:
And who are our competitors here? I mean, what countries are highly skilled immigrants going to? You know-- is China attracting immigrants as well as exporting people? 
PIA ORRENIUS: 
Well what we've been seeing two different trends. So one trend is a higher-- much higher share of high skilled immigrants from Asia and India for example, or from India and China are going back to their home countries after finishing their education here or perhaps after working for a time in the United States. So we have higher return migration among high skilled immigrants. And that's good for the world but we also have more competition for high skilled immigrants in Europe and so they're doing more along the lines of what we were doing 20 years ago in terms of designing visa programs to bring in high skilled immigrants. They're also seeing the benefits of it so that's more of a competitor for us now. And also we used to bring in all the graduate students to the United States because we had the programs, the educational programs, in English and so they would tend to come to the U.S. to study and then they would tend to stay and so it was a great boon for the United States' economy to be able to tap that labor that was coming here, you know, to study initially. Well now graduate programs across the world are being offered in English so you can study in English in western Europe or even in Asia and then you can certainly-- you know that's another area where we're sort of losing out a little bit.
JIM GLASSMAN:
And what is it specifically that you would like to change? You're saying right now that what, I don't know, 80 thousand immigrants are coming in on employment based visas is that the figure?
PIA ORRENIUS:
Yeah. That's-- the H1B program is about 85 thousand a year. But what we suggest is really making-- making the immigration system more efficient and also making it more selective so what we argue is that you can have more visas go to employment based immigrants and you can also-- and the way that you allocate these visas is through auctions. So you have employers come to auctions and they actually bid for permits to higher foreign workers and they buy these permits on the auction, the government runs the auction. They buy the permits and then they designate the worker that they want to bring in on their permit and then the government, you know, sort of does a background check on that worker and brings them in and then they-- that's how you have the employer-employee match under this new system. And the nice thing about it is because it's auction it's demand based which means that it's going to increase immigration in good years when the economy is growing and it's going to decrease immigration in bad years when the economy's not doing as well. 
JIM GLASSMAN:
But you'd still have a-- some kind of a quota or limit on the number--
PIA ORRENIUS:
You have to have-- yes, any immigration system you're going to have to come up with a limit and that's really the trickiest part of the plan is how do you come up with the limit. The nice thing about running employment based immigration on an auction is that at least the government will have the information about labor demand-- they can observe how many employers come to the auction and they'll know what demand is and then they can sort of figure out what would be a fair or can sort of-- try-- they can figure out how to keep the immigration inflow going sort of at a constant rate taking into account how fast the economy is growing--
JIM GLASSMAN:
But do you have kind of a ballpark number? I mean, would you like to see 200 thousand or 300 thousand skilled immigrants come in under something like an H1B visa program that had a permanent residency at the back end?
PIA ORRENIUS:
Right. So they would-- so under this system the immigrants would come in on provisional visas and then they would eventually get a green card at the end. So-- well in terms of a number I mean we sat down and we figured out how many under all the alphabet soup of visa programs, how many workers are actually coming into the U.S. every year and if you add them all together I think we came up with a number of about 850 thousand. So people might be surprised by that because normally you just look at the H1B program and say, 'oh there's only 65 thousand.' Well there's actually, you know, all these other programs that bring in workers. Between the high skilled, the seasonal, and the low skilled worker programs and illegal immigration you get a number of about 850 thousand. So if you wanted to accommodate all of those workers under an auction you'd have to auction those visas off. And what we say is about maybe 350 thousand initially would be high skilled and then you-- the government could slowly increase that number, you know, to change the composition to make it more high skilled relative to low skilled and seasonal. 
JIM GLASSMAN:
You know, I really like this idea of an auction. I mean under the current system do employers actually pay the government anything for the permits?
PIA ORRENIUS:
Well we don't have permits under the current system they just get that they applied for the visa for the worker they want to bring in. So there is a visa fee and in fact it was just increased under a recent legislation that passed. The Border Security Bill had an increase in the H1B visa fees for certain firms.
JIM GLASSMAN:
How much is it?
PIA ORRENIUS:
--But they did-- well that's a good question. It depends on how many H1B visa workers you have working for you. 
JIM GLASSMAN:
But--
PIA ORRENIUS:
--But it's several thousands. 
JIM GLASSMAN:
Right but what--
PIA ORRENIUS:
And then you have to add on the cost of the immigration lawyer. Which-- they usually charge for an H1B visa I think about five thousand dollars. 
JIM GLASSMAN:
But you could imagine under a system like this that some employers-- are really wanting a highly skilled worker that they absolutely need to fill the slot-- they could be, I don't know, bidding, I don't know, 20 or 30 thousand dollars for a worker.
PIA ORRENIUS:
They could. They could but under the way we designed the auction you just-- whatever the lowest bid is that gets filled everyone fills that price. So nobody will be paying you know I can't imagine they would be paying 20 or 30 thousand for-- everyone pays the same price and we imagine that it would come out to be maybe ten thousand dollars for a permit for a high skilled worker for five years. An important provision of the plan is that the worker's mobile so he should be able to move from employer to employer as long as the empl-- the other employer has a permit. So what happens to an employer who paid for the permit and loses their high skilled worker is they can sell the permit to another employer or they can hire another foreign worker. So it's a flexible system also internally in the sense that workers and employers can switch. 
JIM GLASSMAN:
So it's not like you're an indentured servant. 
PIA ORRENIUS:
No that's very important because if you don't have that mobility then the government has to spend a lot of resources monitoring the match and making sure that workers are getting paid the appropriate wage and working in safe working conditions and so forth. But when you have mobility it's sort of-- it's almost corr-- it's almost a mark-- self-correcting mechanism where if the worker is being mistreated he can go and work in another firm.
JIM GLASSMAN:
Let's talk about low skilled immigrants. How-- what is the impact of a low skilled immigrant on the economy. 
PIA ORRENIUS:
Well low skilled immigrants is a much trickier topic than high skilled immigrants. The reason really is they're still beneficial to the economy, certainly they contribute a lot to particular industries and especially now that sort of the U.S. native population is becoming more and more educated over time and so immigrants-- low skilled immigrants in particular are filling naturally-- jobs that we are vacating naturally as natives.
JIM GLASSMAN:
Such as?
PIA ORRENIUS:
Well such as any low skilled job such as you know whether it's domestic work in the household or whether its agricultural work or construction industry, hospitality industry, those are industries where a lot of low skilled immigrants are employed. The problem is that there's a fiscal impact, of course, because of the redistributive system we have in the United States and in all advanced economies where we sort of distribute income from relatively wealthy families to relatively-- to less fortunate families the same applies for immigrants. So this wealth transfer implies that more low skilled immigrants are a tax burden on net on U.S. natives and other U.S. taxpayers. So that's-- that's really the balance with low skilled immigration is you have to be careful-- you bring them in because there's certainly a lot of benefit to bringing them in but you have to watch the fiscal side and you have to see how are you going to control sort of manage the tax burden. 
JIM GLASSMAN:
And you make the point that in fact that il-- illegal immigrants they're sometimes a greater economic benefit because illegal immigrants are often afraid to tax-- or to use social services that you talk about. So they are kind of less expensive at least for a state government. 
PIA ORRENIUS:
Well that's ironic isn't it because people are so upset about illegal immigration but at the end of the day they're you know-- it's kind of getting a-- cheap labor-- low skilled labor on the cheap because they're not qualified for so many of the public programs that for example low skilled U.S. born workers are qualified for. So in that sense yes they are cheaper. However we have to be careful I mean it's not good to have undocumented workers, it's not good to have people here that you know don't have identification and can't get help if they need it and you know for any number of reasons, Jim. So you know that problem has to be addressed as well but it is ironic as you point out that the fiscal impact of illegal immigration is lower than that of you know a legal immigrant with the same level of education. 
JIM GLASSMAN:
But your main point about lower skilled immigrants is that while they contribute to the economy in a positive way, they have a negative fiscal impact because-- and it's mainly because of states right? I mean is it sort of they're beneficial to the federal government because they're paying taxes-- paying payroll taxes, which is very helpful--
PIA ORRENIUS:
--Absolutely. 
JIM GLASSMAN:
For social security and Medicare--
PIA ORRENIUS:
--Absolutely.   
JIM GLASSMAN:
But they're also using services at the state level so they-- they may be a net minus.
PIA ORRENIUS:
They do and it's not like it's welfare programs either I mean it tends-- it tends to be just schooling and healthcare. Really schooling and healthcare so sort of natural services that we all use but you know again there's-- there's a bill to be paid when it comes to schools and healthcare as well and so it's sort of-- you know the research shows conclusively you know they're not-- it's particularly illegal immigrants are not using welfare programs-- they're not eligible for them. 
JIM GLASSMAN:
So what should we do about illegal immigrants?
PIA ORRENIUS:
Well what we talk about in the book is basically the same auction system you can have for low skilled labor and just have a legal means to bring in low skilled labor particularly from our neighbor countries like Mexico where we tend to get a lot of low skilled immigrants. So that's one way--
JIM GLASSMAN:
--Again employer based?
PIA ORRENIUS:
Yes employer based. Yeah instead of the current system. It would be employer based. 
JIM GLASSMAN:
And what about illegal immigrants who are here currently?
PIA ORRENIUS:
Illegal immigrants who are here currently really--
JIM GLASSMAN:
About 11 million right?
PIA ORRENIUS:
 Yes we think there's about 11 million and really they have to be accommodated-- under a new system of immigration laws we have to start fresh and they have to obviously be given legal status.
JIM GLASSMAN:
Something along the lines of what President Bush had proposed in his second term and that congress-- there was a lot of support in congress-- 
PIA ORRENIUS:
There were a lot of bills-- all sort of did the same thing or did similar things. In terms of having them come-- having undocumented immigrants come forward, paying back taxes if they hadn't been paying taxes, paying maybe a fine, and then getting a visa or some temporary permit and then eventually transitioning to permanent residence down the line. 
JIM GLASSMAN:
Has the political climate though gotten worse as far as accommodating illegal immigrants in a-- with a system like what you're talking about. 
PIA ORRENIUS:
It sure seems like it. It sure seems like it. 
JIM GLASSMAN:
Is that just the result of the economy?
PIA ORRENIUS:
I'm not sure Jim. I'm not a politician I'm just an economist. So I can't understand the sentiment, really. I think as Americans we've been relying on-- or we've been permitting let's say undocumented immigration to go on for three decades-- and two decades real-- no well three decades on a mass level and so it's been a permissive environment for illegal immigration in so to turn around suddenly and say you know, 'we never really wanted you here.' It's a little bit disingenuous. We've been permitting this, we've been tolerating this and we haven't been doing any enforcement except for at the border. So another thing we talk about in the book is that if you really-- under a new system you make illegal immigrants legal obviously the other thing that you do is you prevent further unauthorized immigration by using interior enforcement which is so much more effective than border enforcement.
JIM GLASSMAN:
Interior enforcement meaning carrying an identification card? 
PIA ORRENIUS:
Yes and having employers verify the employees' legal status when they come to work. 
JIM GLASSMAN:
Let me move to another social issue. We touched on this earlier. Right now you say that most immigrants are coming in because of their relations with family members who are already here and under your system that would change. Now wouldn't that cause some kind of social disruption? You know the fact that gee you know, 'I can't get my brother here to the United States.' Or--
PIA ORRENIUS:
It's true--
JIM GLASSMAN:
--My child.
PIA ORRENIUS:
It's true yeah. Right, Jim, you're right. We are-- we do talk about in the book saying some of the family categories that we have in the United States don't exist in other countries and some of them are probably you know superfluous they could be--
JIM GLASSMAN:
And what are those because I think most of our viewers don't know.
PIA ORRENIUS:
So obviously immediate relatives in the sense of spouses, and minor children should always come in and we talk about in the book they should always come in whether they're citizens' spouses and minor children or spouses and minor children of green card holders. So they should definitely be ale to come in under the new system as well but under the current system we also allow parents and siblings so sisters and brothers and parents. Really we couldn't find other countries that have that type of system and so-- and we also sort of thought about unless it's a refugee or an asylum seeker, it doesn't make a lot of sense for the government to sort of pile on more immigration benefits on immigrants that already have gotten that benefit so to say sort of, 'you get the privilege of coming to the United States and we appreciate you coming,' but then also to say, 'well not only do you get to come but your parents and you know your sisters or brothers and their children and their parents,' so it gets-- not that it really works exactly that way because of the quotas that we have now those categories are pretty much-- you know they run out of visas every year so sort of this idea of chain migration is limited by the quotas that we have in the family based system. But I think under a new transparent system you would get rid of those categories that are so backed up anyway. So you have millions of people right now approved for green cards in family based queues, they don't even know that they're waiting-- they're going to be waiting for decades, particularly if they're from Mexico for example. Under a new transparent system you wouldn't have-- you wouldn't be sticking people in queues like that. 
JIM GLASSMAN: Let me ask you a final question. The title of your book comes from Emma Lazarus' poem, I Lift My Lamp Beside the Golden Door, that's the phrase that you use. But in fact that poem is-- has some preceding sentences that are-- that I just want to read to you-- actually I can memorize them-- I memorized them as a child in fact, "Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these homeless, tempest-tost to me."
PIA ORRENIUS:
That's good.
JIM GLASSMAN:
Now that's kind of a different kind of a welcome or a different kind of attitude toward immigrants than I think Americans have today. Send-- we want the wretched refuse of your teeming shores. Do we really want that today?
PIA ORRENIUS:
Well, you're kind of putting me on the spot. 
JIM GLASSMAN:
I mean, do you think--
PIA ORRENIUS:
Yes well--
JIM GLASSMAN:
I'm not asking you to make a value judgment just say you know do you think that attitudes have changed? First of all did we really want the wretched refuse of our teeming shores-- of their teeming shores as Emma Lazarus said? And do we today? Has something changed?
PIA ORRENIUS:
Well I think what has-- yes I think-- you know again the economy has changed and sort of the social environments, the government has changed. And so there's a lot of ways in which we impact each other and it matters who we live next to that maybe 100 years ago was less important. But let me say this, if you have a well functioning immigration system that benefits immigrants and treats them well in a transparent fashion, they have a system they can rely on, they know what to expect and then also a system that benefits natives and that we change the skill mix of immigrants and so we bring in more high skilled which is going to pay off for the country in the long run but still you know allow there to be a path as well for low skilled immigrants, you can just have a balanced transparent and flexible immigration system that's going to make everybody better off. I truly believe that. And it's not going to be the unconditional give me your wretched people and the poor and so forth it's going to be give me a nice balance so that we can all get along and live happily ever after. 
JIM GLASSMAN:
Thank you Pia Orrenius. Before we go I want to remind viewers that you can catch Ideas in Action whenever and wherever you choose. To watch complete shows just go to our website ideasinactiontv.com or download a podcast from the iTunes store. That's it for this week's Ideas in Action, I'm Jim Glassman, we'll see you next time. 
ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.
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