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August 30, 2012 |  4 comments |  Print  Your Opinion  

Edward Alden

Immigration Policy Needs Penalties and Incentives

Edward Alden: Increased internal and external border enforcement as well as economic crisis has decreased the population of unauthorized immigrants in both Europe and the US. Policies should provide incentives to encourage legal migration rather than just disincentives against illegal migration. Guest worker programs are a good place to start.

It is certainly too soon to say that the problem of illegal migration has been resolved in the United States and Europe. But over the past decade, it has been reduced from a major challenge to governmental authority to a manageable problem, largely as a consequence of weakening economies and expanded enforcement measures. The challenge for the near future will be to maintain that control as economies recover, and to do so in a fashion that is more in keeping with the values and economic interests of Europe and the United States.

The numbers are quite striking. In the United States, the population of unauthorized migrants rose dramatically from 1990, when it was just over 3 million, to roughly 12 million in 2007, according to the Pew Hispanic Center. Since then it has fallen and leveled out at roughly 11 million, and the number of people attempting illegally to cross the land border with Mexico is now the lowest in more than four decades. In Europe, the numbers have fluctuated more, but the total population of irregular migrants has declined on average steadily since 2002, according to the Migration Policy Institute. The total EU population of irregular migrants is thought to be between 2 and 4 million.

There is no perfect understanding of why the numbers have fallen in recent years. Economics clearly tell much of the story. The recession and weak growth of the past five years have made both the United States and Europe less attractive destinations for migrants who are motivated primarily by work opportunities. Enforcement has certainly made a difference as well. In the United States, the number of Border Patrol agents has doubled since 2005, workplace verification rules are spreading, and a number of states are cracking down on illegal migrants. Deportations are at record levels. And the numbers attempting to enter illegally are now so small that the U.S. government has the resources to do more than just return them back across the border to Mexico to try again. Many now face criminal penalties or are removed to remote locations.

Matthew Carr's fine new book, Fortress Europe, details similar developments in Europe over the past decade, in which the free movement of labor within the continent has been accompanied by increasingly aggressive measures to seal the external border.

What are the policy lessons to be learned from this period of declining illegal migration? As Carr points out, building on a solid consensus of academic research, illegal migration is a perfectly rational response by those, mostly from poorer countries, seeking to better their lives. And that permits a rational policy response on the part of governments that continues to make illegal migration unattractive even when economic recovery finally takes hold. Most of efforts to date, however, have been focused only on disincentives - border barriers, deportations and other measures to discourage illegal migration. These will and should continue, along with increased efforts to require employers to verify the immigration status of new workers. Tougher workplace controls and penalties must be put in place, including a private right of action that would allow companies to sue competitors that hold down costs by employing unauthorized migrants.

What has been missing is a set of incentives to encourage, in reasonable numbers, legal migration. In the United States, that means overhauling a rigid system in which family preferences are the primary means of migration into one that is more flexible and responsive to economic demand. Ironically, the only part of the current immigration system that actually responds to the economy is the illegal part.

In both the United States and Europe, it is time to experiment again with larger guest worker programs. These programs acquired a bad name in the United States in the 1960s, largely due to the low wages and poor working conditions for guest workers, while in Europe they became a conduit for permanent irregular migration. But the tools now exist to control guest worker programs more effectively. Secure identification schemes and more sophisticated border management databases are making it easier for countries to monitor both the arrival and departure of temporary workers. Close cooperation between sending and receiving countries - as in the Canadian program for seasonal agricultural workers from Mexico - can help ensure that guest workers return home as required. Social security and other payroll taxes should be refunded to temporary workers when they return home to encourage voluntary return; a more radical approach would require additional withholding of wages to be paid only upon return.

And to discourage over-reliance on migrant workers, governments should do away with cumbersome "labor attestation" schemes that require employers to verify that they have tried to hire native workers. Instead, a tax or other additional levy should be required on every foreign worker, creating a strong incentive for hiring natives but permitting employers to look abroad when they cannot find the domestic workforce they need.

Illegal migration will never be abolished; the desire to migrate to richer countries will always exceed the willingness of those countries to absorb new migrants. But the progress over the past decade shows that a reasonable level of control is possible for governments. A stronger mix of penalties and incentives should be used to build on the control that has been achieved.

Edward Alden is the Bernard L. Schwartz senior fellow at the Council on Foreign Relations. He was the project director for the CFR Independent Task Force on U.S. Immigration Policy, and is the author of The Closing of the American Border: Terrorism, Immigration and Security Since 9/11.

This article is published as part of the "Border Policies: Lessons for Improvement" theme week.

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Unregistered User

August 30, 2012

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Thank you for a great article.

I like your innovative suggestions, especially the one about "Tougher workplace controls and penalties must be put in place, including a private right of action that would allow companies to sue competitors that hold down costs by employing unauthorized migrants." That's a great

"market-economy"-approach and better than relying only on governement bureaucracy to identify illegal employment.

Also: "A more radical approach would require additional withholding of wages to be paid only upon return." But I wonder whether that is feasible, since guest workers need enough money to pay for rent, food etc during their time of employment. I believe only a very small percentage of wages could be withhold and then they would not be big enough to be an incentive to leave on time, but it might help a bit. Let's hope the buraucracy surrounding this is not getting to expensive.
 
Marco  Funk

August 30, 2012

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I agree that a more flexible immigration approach should be adopted in the US and Europe in order to allow migratory flows to better correspond with economic demand. However, I don't necessarily think that guest worker programs are the universal answer.

The famous German "Gastarbeiter" program of the 1960s that lured thousands of Turks to Germany created a parallel society that still exists, now well into the third generation. Guest worker programs are by definition temporary, and therefore kill any motivation for the guest to integrate into the host society or for the host society to reach out to the migrant. This may not necessarily be a problem if the overall number of guest workers is small and the time they are in the host country is short. However, if the number of non-integrated temporary workers becomes too high, their acceptance in the host country will decline. Likewise, if the amount of time they spend in the host country is too great, social problems will arise due to the lack of contact with friends, family and an environment they feel accepted in.

In my opinion, temporary work schemes should only exist for highly seasonal sectors of the economy (mostly agricultural). For most other sectors, immigration policy should encourage permanent settlement. That way, there is a real incentive for social integration, and migrants who stay also contribute to the demand side of the economy, thus helping the host country's economy grow. In order to be responsive to economic fluctuations, immigration policy for permanent migrants should focus on matching job opportunities in the host country with qualified workers willing to migrate. Government immigration agencies could function as job centers for migrants, serving as a liaison between employers and migrants.
 
Tabatha  Robinson

September 3, 2012

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Sebastian,

You mention "I believe only a very small percentage of wages could be withhold and then they would not be big enough to be an incentive to leave on time, but it might help a bit." Can you think of any alternatives to withholding wages? What about the payroll tax and social security refunds Edward mentions in the article?

The recommendations from this theme week will be drafted into a memo and sent out to decision makers, so your feedback is appreciated!

Thanks,
Tabatha
 
Unregistered User

September 4, 2012

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Thank you for the comments, which are very thoughtful. Marco Funk accurately points out the central dilemma of any guest worker program. Successful migration policy has multiple goals, but two of the key ones are filling needs in the labor market and encouraging the successful integration of migrants into their new society. Guest worker programs are good at doing the first, but terrible at doing the second. While I believe that larger guest worker programs are a necessary part of reducing illegal immigration, they are not a panacea for exactly this reason. I agree with him that seasonal work (not just agricultural but tourism-related industries as well) are the most logical sectors to expand guest worker programs. In the United States, which I know better, there should also be additional opportunities for permanent migration by low-skilled workers without family sponsors -- if need be by restricting family-based migration. The current annual quota for such individuals is just 5,000 per year.

On the question of wage withholding raised by Sebastian Muller, the most obvious candidate is Social Security or other retirement contributions. In the United States, many illegal immigrants are already making these contributions because they are working in otherwise legitimate jobs, but on fraudulent Social Security numbers. Those funds are collected by the government, but never returned to the workers. In a legal guest worker scheme, such funds could continue to be collected by the government, but repaid to the worker when he/she returns home. If need be, an even larger withholding could be required, but again with the money automatically returned on repatriation. The bureaucracy involved in this should be fairly minimal.
 

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