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3 Reasons an Obama Executive Order on Immigration Would Backfire

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3 Reasons an Obama Executive Order on Immigration Would Backfire

August 22, 2014

This article originally appeared in MarketWatch.

President Obama is reportedly about to go it alone on immigration reform and issue an executive order that would grant millions of undocumented workers a possible fast track path to citizenship.  Dissatisfied with a series of congressional bills to increase legal immigration that command bipartisan support, he has been holding out for a comprehensive bill that has far less support.

A broad executive order would cause immense problems for workers supposedly benefitting by the grant of legal status.  To begin with, legal challenges to the executive order would work their way through the courts, casting a cloud of doubt on individuals’ legal status.  And such an executive order is sure to be challenged.  

Second, even if the Obama executive order survives court challenge—an uncertain prospect--an executive order does not have the comprehensive and permanent power of a law.  A new president taking office in January 2017 could write an executive order rescinding the Obama executive order and possibly taking even punitive actions as well. Individuals protected by a law have a permanent protection, even should a future Congress write a different law; individuals protected by an executive order have little certainty beyond the next Inauguration Day.

Third, individuals who benefit in their immigration status as a result of an executive order will incur the envy of those would-be immigrants who do not share the benefit and the enmity of millions of Americans who worked their way through the more challenging legal process.

President Obama has a vision of what he wants for immigration reform, but his vision is not widely, much less universally shared. A true legislative leader would take as much progress as politically available and move onto the next issue.  A legislative leader President Obama is not. Instead he appears to be pursuing an executive order bypassing Congress altogether.

That is a shame.  An executive order shortchanges millions of would-be immigrants, presuming to offer them a home but in practice leaving them with little changed. President Obama, with a stroke of a pen, would condemn these to further legal limbo with the false hope that an executive order is as good as a law. 

And a law is possible. Both Republicans and Democrats want to increase the number of legal work visas, and Obama should sign such legislation. 

Economic growth and employment in America could be improved by bringing in additional workers from abroad.  Employment is not a fixed pie to be divided, with more for some meaning less for others. Greater immigration would allow the economy to operate more efficiently, creating more jobs for native-born Americans as well as immigrants.

That is why Obama should sign legislation facilitating the process of obtaining high- and low-skill legal workers in the United States. 

We are turning away qualified workers at a time when we are concerned about economic growth and international competitiveness. Getting a visa to come here and work should not be a bureaucratic nightmare.  But it is.

U.S. businesses founded by immigrants employed approximately 560,000 workers and generated $63 billion in sales during 2012. Immigrants have a higher propensity to start businesses than native-born Americans. For example, 44 percent of high-tech Silicon Valley businesses had at least one immigrant founder.  

Many immigrants have different skills from the native-born population, and complement the skills of the U.S. labor force, as documented by London School of Economics professor Gianmarco Ottaviano and University of California (Davis) professor Giovanni Peri. 

Statistically, the average skills of native-born American workers are distributed in a bell-shaped curve. Many Americans have high school diplomas and some college education, but relatively few adults lack high school diplomas and even fewer have Ph.D.s in math and science. In contrast, immigrants’ skills are distributed in a U-shaped curve, with disproportionate shares of adults without high school diplomas who seek manual work and others with Ph.D.s in math and science. 

A percentage point increase in immigrant scientists and engineers raises the number of patents per capita by as much as 18 percent, concluded Rutgers University professor Jennifer Hunt and Princeton University professor Marjolaine Gauthier-Loiselle. Immigrants make the economy more efficient by reducing bottlenecks caused by labor shortages, both in the high-skill and low-skill areas, and expanding employment opportunities for native-born Americans.

Immigrants are about 16 percent of the labor force, yet 24 percent of those who are foreign born and over 25 years old have not completed high school, compared to 5 percent of the native-born labor force. Fifty-six percent of all engineering doctoral degrees, 51 percent of computer science doctoral degrees, and 44 percent of physics doctoral degrees were awarded to foreign-born students. However, since they have a smaller share of high school diplomas and B.A.s, which is where native-born workers tend to be concentrated, they do not compete directly with most native-born workers.

According to a May 2014 working paper by Giovanni Peri and Kevin Shih, University of California Davis, and Chad Sparber, Colgate University, more STEM immigrants would raise the wages of native workers. Increasing the share of foreign STEM workers as a portion of a city’s total employment by one percentage point would increase the wages of native, college-educated workers by 7-8 percentage points. Even non-college-educated native workers would get a raise, though only by about 3-4 percentage points.

Among professionals, foreign-born workers are employed in computer and mathematical occupations at a higher rate than native-born workers, 3.9 percent versus 2.5 percent. Native-born workers are more than twice as likely to be employed in legal occupations as immigrants, 1.4 percent compared with 0.5 percent. Workers born in America are slightly less likely to work in education, training, and library occupations than foreign-born workers, 3.2 percent versus 3.4 percent. 

In service-oriented fields, 7.7 percent of immigrants work in food service, compared with 5.3 percent of native-born workers. Only 3 percent of native-born Americans are employed in building, grounds keeping, and maintenance, but 8.6 percent of immigrants are.

America’s goal should be an immigration policy that fosters economic growth. That requires finding a way to allow people who want to work here to come legally. Since most immigrants’ skills are complements to the skills of native-born Americans, this would increase the efficiency of our economy and create jobs for native-born Americans. With our economy in a slow process of recovery, we should be giving more work visas to high- and low-skill workers who can help move our economy forward. 

An executive order is not the answer, not for would-be immigrants, not for employers, not for America. It is time that President Obama worked with Congress rather than vilifying it.  At least on immigration reform, Congress is ready to act to help America grow. Sadly, President Obama is not.


Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, directs Economics21 at the Manhattan Institute. You can follow her on Twitter here.

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