The Broken System of Immigration

By:Kim DeCoste and Jan Mazotti Issue: Collaborative Leadership Section: Goverment

Undermining Our Economy, Slowing Our Recovery and Hurting America

IMMIGRATION.

Ok, now take a deep breath and keep reading.

Few topics inspire as much spirited debate as the topic of immigration reform and how to approach it. Most agree the system in place is not working, but consensus has yet to be found about how it can be approached and, ultimately, what successful immigration reform might look like. Enter Michael Bloomberg, Rupert Murdoch, and other notable business and political leaders.

Immigration is one of those words that evoke great emotion in most people. It can automatically make you think of the long traditions of the building of the United States to the rhetoric-driven yelling matches about illegal immigrant workers crossing the southern borders of the country in the dead of night.

While discussion on both ends of the spectrum exists, it is the competitive 21st century global economy that is the foundation for the immigration discussion of the Partnership for a New American Economy (the Partnership). The Partnership recognizes that immigration is not a Republican or Democratic issue—but an economic one. “CEOs and mayors see immigration very clearly. To keep America innovating we have to keep competing for the best and the brightest. Immigration is central to the discussion on the economy and the creation of new jobs,” said John Feinblatt, the Mayor’s Chief Policy Advisor.

Led by a bipartisan who’s who board of CEOs from Microsoft, Marriott, Boeing, Disney, and News Corporation, to influential Mayors from New York, Phoenix, Los Angeles, San Antonio, and Philadelphia, this group of committed leaders is pushing hard for immigration reform in this country. These leader’s direct companies that are extremely influential, and combined, employ nearly 600,000 people and generate approximately $210 billion in annual sales. The mayors represent some of the country’s largest cities—with a combined population of over 16 million residents.

Achieving consensus on what to do about immigration will be difficult since conservatives and liberals alike are living in the “sound-byte” of the moment creating a disconnect between reality and make believe. And, with the shift in Congress things may become even more heated. New York City Mayor Michael Bloomberg candidly argues that not addressing this issue now is “national suicide.”

So, instead of waiting for the Washington, D.C. elite to address the issue, the Partnership for a New American Economy is making the economic case for sensible immigration reform now. “We have given up on D.C. We are going to cities and employers to ask for help in building a legislative package that we will take to Washington,” said Kathryn Wylde, President & CEO of the Partnership for New York City, the city’s leading business organization. Feinblatt echoed Wylde’s thoughts and said success would be measured by this influential group through legislative outcomes. “We have to get both ends of Pennsylvania Avenue to act now. When you don’t see them acting, you see frustrated people.” And, says Wylde, “With the current political shift, it makes working from the ground up more important than ever because Congress may experience more gridlock and be more polarized.”

So act they are. Together, this unlikely collaborative of businessmen and politicians are hitting the streets and testifying in front of Congress presenting a fact-based assessment of the importance of immigration on the economy and the reform principles that they believe are necessary to make the topic a national priority, oftentimes shattering long-held myths about the subject.

With an economic downturn and high unemployment, many argue that sending immigrants back to their countries is the answer—end of story. The Partnership would argue it differently saying that this down economy should motivate us to want to solve this problem now. It is not old established companies that create jobs; it is young companies that drive the engine of our economy. Feinblatt explained that the way you keep the economy moving and expand new job creation is through private sector innovation. It is a fact that immigrants tend to be innovators and tend to have a tremendous work ethic. It is a fact that immigrants are often young and are twice as likely as others to start new businesses. Immigrants have been founders of some of the most successful companies in this country in many of the most dynamic sectors. And, says Bloomberg, “from 1980 to 2005, nearly all net job creation in the United States occurred in companies that were less than five years old.”

When asked how such an unlikely coalition of executives and politicians were able to come together, Feinblatt said, “Mayors and businessmen know that cities with the largest number of immigrant workers have had the largest, best economic growth and the best recovery.” Bloomberg recently said in Congressional testimony, “Our broken system of immigration is undermining our economy, slowing our recovery and hurting millions of Americans.”

Rhetoric aside, there are many myths about immigration in the United States.

Myth #1: Immigrants Depress Wages and Cause Unemployment.

Fact:

Immigration has been found to lead to higher wages for the majority of U.S.-born workers. In fact, a 2010 study by the Federal Reserve Bank of San Francisco found that from 1990 to 2007, immigration was associated with an increase of about $5,100 in annual income for the average U.S. worker. That same study found no evidence that immigrants hurt employment rates for U.S.-born workers.[1] When arguing that immigrants are the root cause of unemployment, it is important to consider that America needs low-skilled workers as the workforce ages and/or becomes more educated. Media sound-bytes around this myth often drift to the negative view of immigrant agricultural workers. Here are the facts. Roughly 80 percent of seasonal agriculture workers are immigrants. However, it is important to note that according to the U.S. Department of Agriculture for every on-farm job (many done by immigrants), they are supporting 3 additional jobs in better paying sectors like manufacturing and transportation.

Regarding high-skilled immigrant workers, data from the National Foundation for American Policy shows that for every H1B visa in a company, on average, 5 additional jobs are created. Think of the most common brands in U.S. business—Yahoo!, eBay, Google, and Intel, all were founded by immigrants, who in fact, are twice as likely as those born in the U.S. to start new businesses. In fact,

immigrant-founded companies have created over 450,000 new jobs in just under a decade with estimated annual sales nearing $52 billion.

And, almost 25 percent of U.S. Patents come from non-citizen immigrants. What’s more, countries are competing to attract entrepreneurs and highly-skilled workers. Chile, for example, is offering AMERICAN entrepreneurs $40,000 and a one-year visa to come there and create innovative, entrepreneurial entities.

Myth #2: Immigrants Don’t Contribute Fully to the Economy or Pay Taxes.

Fact:

New immigrants mean economic growth because they spend on goods and services. In fact, studies from the Fiscal Policy Institute indicate that from 1990 to 2006, cities with the biggest increase in immigrant workers were the cities with the fastest economic growth.

Besides contributing to city-based stability and growth, immigrants pay billions of dollars in federal, state and local taxes—and not just the legal ones. Between half and three-quarters of illegal immigrants pay federal and state income tax and have contributed approximately $240 billion to the Social Security fund—a perk that they will never receive. And, because of this contribution of illegal immigrants, Social Security’s Chief Actuary has estimated that the fund has at least six more years of solvency.

Myth #3: Immigrants Cost the Government More than They Contribute.

Fact:

Not true. The National Research Council found that legal and illegal immigrants pay almost $1,800 more in taxes than they receive in benefits. And, a recent RAND study found that only 1.25 percent of government healthcare spending is used to treat illegal immigrants.

Myth #4: Ridding the Country of Illegal Immigrants is the Answer.

Fact:

Today there are approximately 11.1 million undocumented immigrants scattered across the U.S. First to mind for many, is the Latin immigrant running through the desert in the dark of night or those folks working in a field picking tomatoes. But, what is important to note is that of those 11.1 million illegals—40 percent of them are here on expired visas. The Border Patrol is addressing the issue, and in 2009 deported almost 400,000 illegal immigrants.

What’s more, mass deportation of 11 million illegal immigrants will cost billions and will cause short to intermediate-term harm to the economy, and many of the most trusted names in research agree. The Center for American Progress estimates that if a mass deportation happened today, that it would cost nearly $57 billion annually—or just over $900 in new federal taxing and spending for every U.S. man, woman, and child. According to the Cato Institute, deporting just 30 percent of illegal immigrants would cost nearly $80 billion. Or another way to look at it, mass deportation would cost the economy nearly $2.6 trillion over the next 10 years, according to the Center for American Progress.

To combat the myths with a focus on economic fact, the Partnership is pushing for an issue-based, interconnected immigration reform conversation and legislative package that includes key principles for an overall reform package. Securing our borders, by preventing illegal immigration through tougher enforcement and better use of technology, and developing a simple and secure system for employers to verify employment eligibility and hold them accountable if they are not compliant, or abuse visa programs, are two principles lauded by the Partnership. “Most employers feel that by failing to develop a market-driven approach to immigration we’ve created our own problems. That simply has to change,” said Wylde.

Increasing opportunities for immigrants to enter the United States workforce—and for foreign students to stay in the United States to work—so that we can attract and keep the best, the brightest and the hardest-working, who will strengthen our economy and creating a streamlined process by which employers can get the seasonal and permanent employees they need, when Americans aren't filling vacant jobs; are additional principles of the Partnerships platform. Feinblatt commented, “We believe in high fences with wide gates.” Bloomberg asserts that we make it much too difficult for foreign workers and students to come and stay here. This drives companies to move jobs elsewhere. And our current visa process is “torturous” such that “no one wants to endure it,” he said to the U.S. House Judiciary Committee.

The whole matter of “brain drain,” where we allow students to enter the country to be educated here in our system but do not allow them to stay, quite literally, takes the knowledge we give them and urges them to return to their home country and directly compete with us. Bloomberg said, “That just makes no sense whatsoever.”

"America is desperately in need of improving our country’s human capital,” said Rupert Murdoch, an Australian-born immigrant and Chairman, CEO, and Founder of News Corporation. He further argued that the U.S must, “bring an end to the arbitrary immigration and visa quotas that make it impossible to fill the labor and skills needs of our country.” Regardless of the public perception of jobs, the truth is that

there are many high-skilled jobs that are unfilled right now because we cannot find the workers for them.

 

Murdoch stressed, “In higher education, America needs to keep her door open to those who come here to get an advanced degree and then allow them to join the ranks of our most productive scientists, entrepreneurs, innovators, and educators. We need to make it easier for them to stay, so they can make their contributions to America.” On the opposite end of the spectrum, there are many low-wage jobs that according to Bloomberg, American workers will not fill “such as fruit pickers, groundskeepers and custodians.” And, if your personal argument is that immigrants are taking jobs that Americans don’t want, U.S. Department of Commerce analysis shows that even before the current recession, only four occupations—plaster/stucco masons, agricultural graders and sorters, personal appearance workers, and tailors—are filled by a majority of immigrants and they account for only one percent of the total U.S. workforce.[2] "We need to have the best, the brightest, and the hardest working,” said Feinblatt.

Establishing a path to legal status for the undocumented currently living in the United States with requirements such as registering with the federal government, learning English, paying taxes and following all laws is a must for the Partnership. But to do this, they argue, the U.S. must strengthen federal, state, local, and employer-sponsored programs that offer English language civics, and educational classes. “Bringing immigrants out of the shadow economy would add to our tax base,” said Murdoch. According to one study, a path to legalization would contribute an estimated $1.5 trillion to GDP over 10 years.

Considering the facts, maybe we can look at the immigrant innovator to inspire us. We hear the phrase “nation of immigrants” but many people become “Americanized” by choice or by pressure and are far from their immigrant heritage. Language ties fade. Culture is muted in the melting pot. Eventually the second or third generation forgets where their predecessors came from and the magic of being an American wears away. On the day a new citizen says the Pledge of Allegiance for the first time, the pride and sense of newness is palpable. From that day forward, the new immigrant citizen has a chance not only to “live” the American dream, but also to “create” that dream for him or herself.

Maybe it’s a shop or a restaurant. Maybe it’s a textile company or an artist’s studio. Perhaps it’s a musician or a language teacher or a computer programmer or a doctor – but whatever that new citizen sets forth to do, they will accomplish their goals with motivation and dedication. Too often others stand by the sidelines begrudging well-earned success and bemoaning “lost opportunity” when in fact they should admire the success and follow the example if what they see is something they also want for themselves. Immigrants can remind us of our potential.

Immigrant business leaders in many communities are gathering strength both in number and in spirit to direct the community debate. We see specialized Chambers of Commerce. We see business, education and leadership groups for like-minded immigrants to convene. They are still part of the American story; even if they sometimes tell the story in another language at home.

In the spirit of ICOSA we must collaborate and lead our communities and our legislators forward together to tackle the enormity of the immigration challenge. We must also look around for inspiration and look across the borders and over the seas to the competition. The world has flattened. It really is a global economy. We can and we will find the right balance but we cannot continue the polarizing emotional rhetoric that so often surrounds the immigration debate. We cannot afford the time we are squandering by not solving these problems. So, secure the borders, by all means. Build the “walls.” Build them as high as is needed, but make sure the gates are wide and that there is a reasonable process for immigrants to walk through them.

Since the beginning of this country, leaders and citizens have worried about the impact of immigrants on the vitality and security of the country. Founding father, Ben Franklin criticized German immigrants and called them “Palatine Boors.” Later, Americans worried about the influx of the Irish. Then it was the Europeans. Asians too, have seen their fair share of exclusion over the last century. And today, it is a focus on Latin cultures that is under the spotlight with a loud call to update and modernize the archaic immigration laws and requirements of this country.

Whether it’s New York City or Ponca City—the immigration debate will rage on until we can have a civil debate that leads to thoughtful reform, and The Partnership for a New American Economy is leading the discussion. “The top issue in this country is ultimately, jobs, jobs, jobs—and that’s what this debate is about. We must embrace opportunities for job creation. I can guarantee that many high-tech companies are getting their expertise from foreign-born workers,” said Feinblatt. He went on, “The facts speak for themselves. We are committed to making sure this is not an issue argued at the extremes, but that it is one that is argued from dollars and cents.” “The ultimate goal is to get an immigration and visa policy for this country that is driven by labor market needs, and that once implemented, includes an effective end to illegal immigration,” said Wylde.

No matter what your beliefs, it is important to remember that immigrants make major contributions to our economy and are good for our global competitiveness. Bloomberg says, "We have to fix our broken immigration system. I believe this is an issue where Democrats, Republicans, and Independents can find common ground. Our economy has changed; our immigration policy needs to change with it.”

 

To learn more about the Partnership for a New American Economy visit www.RenewOurEconomy.org
Kim DeCoste is the Director of Career Services for Colorado Technical University and President of DeCoste & Associates, LLC. She can be reached at: kdecoste@colroadotech.edu or 303.362.2948.
[1] Giovanni Peri, “The Effect of Immigrants on U.S. Employment and Productivity” FRBSF Economic Letter August 30, 2010, available at http://www.frbsf.org/publications/economics/letter/2010/el2010-26.html.
[2] “Jobs Americans Won’t Do? A Detailed Look at Immigrant Employment by Occupation” Center for Immigration Studies Memorandum. Steven Camarota, Karen Jensenius. August 2009 http://www.cis.org/illegalimmigration-employment.

 

Partnership For A NEW AMERICAN ECONOMY
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Steven A. Ballmer, CEO, Microsoft Corporation; Michael R. Bloomberg, Mayor, New York City; Julián Castro, Mayor, San Antonio; Phil Gordon, Mayor, Phoenix; Bob Iger, Chairman & CEO, Walt Disney Co.; Bill Marriott, Jr., Chairman & CEO, Marriott International; Jim McNerney, Chairman, CEO & President, Boeing; Rupert Murdoch, Chairman, CEO & Founder, News Corporation; Michael Nutter, Mayor, Philadelphia; Antonio Villaraigosa, Mayor, Los Angeles
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