THE BLOG

Will Immigration Reform Work for the U.S. Economy?

06/27/2013 04:22 pm ET | Updated Aug 27, 2013

The debate over comprehensive immigration reform has the potential to be one of the defining moral moments of our time. In the ongoing struggle over what kind of country we want to be, immigration reform gives us the chance to show our humanity, commit to values of inclusion and justice, and honor the dreams and aspirations that immigrants bring to our shores.

But immigration policy is also economic policy, and here the case for reform is just as strong. If we care about future growth in America, our goal must be to provide a path to citizenship for the 11 million undocumented immigrants currently in the United States, as well as for future immigrants. If we get it right, a new report from the Congressional Budget office shows that everyone who lives and works in America will see significant economic gains; even conservativeeconomists are weighing in to support reform.

That's because newly legalized workers will see their wages increase by 15 percent and their poverty rates decline. They will be able to invest in education and training, and apply for better jobs where those skills are actually valued. Employers will benefit from having a more productive and better educated workforce, and won't have to compete against unscrupulous firms that exploit undocumented workers. And since newly legalized immigrants will also be consumers and homeowners and taxpayers and entrepreneurs, the economyas a whole will see an increase in GDP and tax revenues; reduced deficits; greater social security solvency; and as many as 900,000 additional jobs.

So what will it take to realize this potential? Legislation is always imperfect, and the Senate bill that was just passed is no exception, to put it mildly. But in the coming weeks, there will be intensive debate in Congress that could profoundly reshape the bill and destroy its promise. Here are three elements of the Senate bill that we believe will determine whether immigration reform works for the U.S. economy.

Road to Citizenship

The cornerstone of the Senate bill is that it creates a path to citizenship for undocumented immigrants. More than any other element of the bill, this path must be defended and retained in the final version that comes out of Congress -- with an unwavering focus on the realities of work in the low-wage labor market. The proposed path to citizenship is already long and difficult. If additional barriers are added, many applicants won't be able to adjust their status and will stay trapped in the informal economy, undermining the core premise of immigration reform.

For example, a key requirement on the path to citizenship is that workers are able to demonstrate regular employment. For those who work for big companies with automated payroll systems, that shouldn't be a problem. But for domestic workers, day laborers, taxi drivers, home health aides, dishwashers, agricultural workers and many others, it is often difficult to get records from employers, or even to identify who the employer is. In a 2008 survey, 74 percent of undocumented workers did not receive a paystub from their employer. Immigrant workers have high rates of labor force participation and contribute enormously to our economy; we must ensure that they can use a range of documents to prove their employment history.

Another requirement on the path to citizenship is that workers demonstrate that their family income is above the federal poverty line. This is already a steep requirement, given that restaurants, nail salons, retailers, warehouse contractors and other low-wage employers often pay so little that workers fall below the poverty line. There is no room here to raise the income requirement any higher. By our estimate, as many as a quarter of newly-legalized workers will have jobs that pay poverty wages.

Finally, there will likely be a slew of proposals from the House of Representatives whose only conceivable purpose is to punish the undocumented. Especially pernicious examples include barring workers and their families from receiving the Earned Income Tax Credit and from accessing subsidized health care, even after they become citizens. For low-wage immigrant workers, the current costs of applying to adjust their status (which can easily add up to thousands of dollars in filing fees and penalties, let alone hiring a lawyer) alreadystretch the limits of what's possible on an $8.00 an hour job. How much more can we ask people to bear?

Worker Protections

One of the Senate bill's strengths is its worker protections, which are a vital ingredient to the success of immigration reform. If there is one lesson from our failed immigration policy, it is that workers who don't have the ability to assert their rights in the workplace experience chronic exploitation at the hands of unscrupulous employers. Undocumented workers are much more likely to be paid less than the minimum wage and to be retaliated against when they speak up about poor working conditions.

For that reason, we must defend a range of worker protections in the coming weeks. The Senate bill bolsters legal remedies for immigrant workers who have been wrongfully terminated for exercising their rights on the job. The bill also protects whistleblowers from retaliation and workplace abuse by making them eligible for U-visas (designated for victims of certain crimes) and shielding them from deportation. Other provisions will protect workers from exploitation by foreign labor recruiters, and boost anti-discrimination protections under immigration law.

Finally, advocates on both sides of the debate have voiced concern about the E-Verify program, which requires employers to use a government database to verify the immigration status of new hires, or face stiff penalties up to $25,000. But the system is riddled with errors, disproportionately affecting women and immigrants due to name inconsistencies that stem from marriage, divorce, and culturally defined name-use practices. The mandate will also pose a significant challenge in industries where the employers are private households (such as the elderly or people with disabilities who hire home care workers), because they do not have human resource departments to set up and use E-Verify. Given these concerns, the final bill must retain current provisions that give workers due process when they're erroneously disqualified from employment.

Future Immigrants

In the long run, the success of immigration reform will be determined by how America decides to treat its future immigrants. Will we repeat the mistakes of the past thirty years that ended up excluding millions from the formal economy (for example, by allocating only 5,000 green cards a year for less-skilled immigrants)? Or will we finally create a framework that integrates future immigrants into our economy and gives them full citizenship in the workplace?

The good news is that the Senate bill has the beginnings of such a framework. Most importantly, it creates a new nonagricultural visa (the W-visa) that, depending on economic conditions and labor shortages, allows less-skilled workers to work in the United States for three-year stretches and then apply for a green card. The new visa avoids many of the pitfalls of temporary visa programs: workers aren't tied to one employer, have the same legal rights and remedies as US-born workers, and can bring their family with them while working under the program. In our minds, this new visa is a cornerstone of future U.S. immigration policy and must be protected during negotiations, ideally growing over time and eventually replacing the highly exploitative H-2B guest worker program that is currently the main entry path for low-wage workers.

Finally, policymakers have to stay focused on the actual needs of our economy. Intense lobbying from the high-tech sector has resulted in a disproportionate focus on visas for high-skilled workers. For example, the current Senate bill targets 50 percent of future green cards for high-skilled workers and 50 percent for less-skilled workers. But this allocation does not match projected job growth, where low-wage jobs such as home healthaides are among the fastest growing (because of the ageing of our population) and experiencing labor shortages. As immigration reform is implemented, we will need flexibility to calibrate visas to labor market needs.

***

As the spotlight shifts to the House of Representatives, other important elements of immigration policy will be debated. But from the standpoint of economic impact, it is vital that immigration reform achieve three goals: provide a road to citizenship for those who are currently undocumented; establish robust worker protections in the workplace; and create a path to permanent status for future immigrants. Otherwise, we will simply recreate and exacerbate the failures of our current system, consigning millions to an underground life of exploitation, wage theft, workplace injuries, and retaliation.

Pablo Alvarado, director of the National Day Laborer Organizing Network, has wisely said that immigration policy is a battle between courage and fear. America must choose the path of courage, with a just and humane immigration policy that protects workers, strengthens our economy, and helps our nation reach its fullest potential.

Annette Bernhardt is policy co-director of the National Employment Law Project and a fellow at the Roosevelt Institute. Haeyoung Yoon is senior staff attorney of the National Employment Law Project.