Peregrine

The Role of Low-Skill Visas in Immigration Reform

Monday, October 6, 2014
Image credit: 
Kuzma, Shutterstock

The phrase immigration reform means different things to different people, largely because such a reform can span many aspects of American life.  Border security, employment law, legal status of the undocumented, visa tracking, sector-specific economic policies, and more are potential components of immigration reform. 

The notion of reforming the work visas is probably the most underappreciated opportunity for immigration reform.  A strong, economically oriented reform of the core visa system has the potential to raise productivity, enhance entrepreneurship, and improve the pace of economic growth.  Some economic policy aspects of reform are featured in the public debate: notably, H1-B visas and the role of high-skilled immigration.

Less attention, however, is paid to the role of immigrants with low skills.  (Caveat: markets determine the value of skills, so years of education, degrees, and other indicators are only proxies for the highly-valued and less-valued skills.)  Those who care about border security, however, should care about a sensible program of low-skilled work visas for both temporary workers and permanent immigrants.  Functioning visa systems would relieve the border pressure generated by the desire to have access to the US market and thus reduce illegal immigration and security threats.

Those interested in the global preeminence of US agriculture should care about low-skill visas.  Agriculture worker visa reform has been a key element of broad-based reform for a number of years.  The economic modeling firm REMI estimates that the agriculture worker (H2-A visas) reforms in the Senate-passed legislation would raise jobs and output in the United States during the next thirty years.  The effects are modest but clearly preferable to increased reliance on imported fruits and vegetables.

More generally, those concerned with the lackluster US economic recovery and increasingly disappointing long-term growth prospects should care about low-skill visas (as well as the remainder of pro-growth immigration reform).  In part due to lower-skilled individuals, researchers have documented that immigrants serve as complements—not  competitive substitutes—for native-born workers.   Put differently, immigrants are only one part of the job ladder that characterizes a worker’s life cycle and permits other workers to advance and earn more.  In part for this reason, REMI estimates that the Senate’s new W1 visa provision for low-skill workers will raise GDP by as much as 0.15 percent. The W1 visa would be portable between employers, renewable after three years, and adjustable based on the business cycle and occupational unemployment rates.

Immigration reform is an economic policy opportunity that extends across the spectrum of the labor market and should include visa reforms for lower-skilled workers.