Immigration permit auction touted as reform that would aid economy

America's decades-old immigration system should be replaced with an auction of work permits, says a UC Davis economist who is attracting attention on Capitol Hill.

His market-based reform, which is being unveiled Tuesday, would have U.S. companies compete in a quarterly electronic auction to buy permits to hire foreign workers.

In essence, U.S. firms' willingness to pay for work-based visas would become more important than family connections and fixed quotas in determining who gets to move to the United States.

"This would be quite a new system," said Giovanni Peri, a professor who studies labor economics, explaining how it would replace today's first-come, first-served waiting list and random lottery that dictate who gets work visas.

Each auctioned permit would be tied to a temporary visa. Visa-holders would be free to move from one job to another, making it harder for hiring companies to exploit them. Those who remain employed could later apply for permanent residency.

Work permit bids would start at a minimum $7,000 for high-skilled workers and $1,000 for lower-skilled seasonal jobs. Higher demand for workers could push employers' bid prices higher, compelling Congress to make more visas available.

Revenue from the auction would be channeled to the federal government and to state and local agencies that provide public education and other services to immigrant families.

"Giovanni has a very ambitious proposal
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that would fundamentally reshape the immigration system," said Michael Greenstone, director of The Hamilton Project and an economist at the Massachusetts Institute of Technology.

Greenstone's group commissioned Peri to create the three-phase immigration overhaul. The project is affiliated with the Brookings Institution, a nonpartisan think tank, and named after Alexander Hamilton, the nation's first secretary of the Treasury.

"All it's doing is taking this very opaque, lawyer-heavy approach to who gets employment visas and (replacing it with) a very transparent approach," Greenstone said.

Gone would be the long and arbitrary waits that for some would-be immigrants can last a decade. The auction would also make inviting a foreign worker more costly to employers than hiring an available local worker, undercutting concerns that low-paid immigrants are taking American jobs.

The new approach is informed by Peri's economic research, which has found that immigration rarely hurts and often helps native-born workers in the United States by raising overall productivity.

"Immigration creates a large economic surplus for the American economy," Peri said. "Immigrants move from their country and become much more productive in the U.S., generating more income and wealth."

Peri puts his plan into a divisive national debate over illegal immigration and job competition that many economists believe is divorced from economic realities. Shifting to a labor-driven system would make the need for immigrants more apparent, he said.

"It would certainly generate more awareness and clarity on the economic value of immigrants and immigration," Peri said.

After a pilot program for temporary work visas, Peri would expand the auction model to most of the immigration system and restrict family-based immigration to immediate relatives.

That would shift American immigration away from the family focus that has guided policy since 1965. However, Peri believes the expansion of auctioned work permits would open doors for many Latin American immigrants for whom extended family connections is the only legal immigration option today.

Peri said his funders wanted him to create a proposal that "had a real chance of being implemented, accounting for the possible roadblocks and criticisms."

No country has tried such an auction before, he said. Canada and Australia have a points-based system that favors high-skilled immigrants, but the government, not the labor market, determines the rankings.

The professor presented his 30-page proposal Tuesday morning at a forum attended by a White House domestic policy adviser and a bipartisan group of political and business leaders.

Peri said the new system would help solve the problem of unmet business demand for low-skilled labor that drives illegal immigration, but lawmakers would still need to do something about the roughly 11.5 million undocumented immigrants already here.

Peri said he supports "a demanding but reasonable" path to legal residency for those illegal immigrants coupled with better workplace verification to stop future flows.

His proposals, if implemented, would not affect the admission of refugees and other humanitarian cases, which is a small part of the current immigration system. It would, however, eliminate the random lottery that delivers green cards to people from countries with lower rates of immigration to the United States.

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Education Trumps Immigration among Top-Tier Issues for Latino Voters, New Poll Finds

Education ranks behind only the economy and jobs as the most important consideration among likely Latino voters in five battleground states, according to a survey released today by the American Federation for Children (AFC) and the Hispanic Council for Reform and Educational Options (HCREO).

The poll results revealed that improving K-12 education--and not issues related to immigration--is the second-most important issue in the minds of Latino respondents, and education ranks in a near-statistical tie as the second most important issue among all likely voters.

Voters in five states--Arizona, Florida, New Mexico, New Jersey, and Nevada--were surveyed by the Democratic-leaning polling firm Beck Research on a host of education and other issues that will prove critical to deciding the 2012 presidential election. A majority (58 percent) of Latinos surveyed expressed a desire to hear more from both presidential campaigns on how the candidates will improve education, and large proportions of respondents also voiced strong support for a host of private school choice initiatives, including vouchers, scholarship tax credit programs, education savings accounts, and special needs scholarship programs.

"The support for making education a fundamental part of the campaign discourse over the next six months is remarkably strong across demographic, geographic, and ideological lines," said Kevin P. Chavous, a senior advisor to the American Federation for Children. "The message to the candidates is clear: expanding educational options for parents, and education reform generally, should be a priority in 2012. It not only makes good political sense, but it's the right thing to do, too."

A total of 85 percent of voters and 91 percent of Latinos think vouchers and scholarship tax credit programs should be available in some form, while majorities of likely voters and Latinos also support specific school choice proposals as well. Support is especially high for special needs scholarship programs, which are favored by 74 percent of voters and an astounding 80 percent of Latino voters.

Latino respondents particularly supported arguments in favor of school choice because of the immediate help it provides to children from low-income families, and their positive effect on graduation rates, academic achievement, and parental satisfaction.

"No voting bloc is more important to this election than Latinos, and it's clear that education is among the most important issues," said Julio Fuentes, president and CEO of HCREO. "Latino families want their children to have a chance to prosper, and that opportunity best exists through access to a quality education."

In a campaign season dominated by talk of the economy, more than half (53 percent) of Latino voters also cited education as central to improving our country's economic situation.

The Beck Research survey interviewed a total of 1,050 likely November voters, including an oversample of 300 Latinos. The poll's margin of error is +/- 3.6 percent.

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