Let's get real on the immigration problem
Lacking any new proposals that make sense, the best action might be inaction.
By Justin Fox, FORTUNE editor-at-large

NEW YORK (FORTUNE) - For somebody who isn't sure what to think about the immigration battle being waged these days in Congress, Jagdish Bhagwati's column in Tuesday's Wall Street Journal was strangely reassuring.

The famed Columbia economist is a certified expert on the matter. He's working on a book tentatively titled "Immigration: Getting U.S. Policy Right." And yet, in the end, he couldn't come up with anything more definitive to say than "why not leave things be?"

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It's seems pretty evident -- to me, at least -- that the hardline, Tom Tancredo-approved immigration bill passed by the House in December is extremist and unrealistic. We simply aren't going to send 10 or 11 million "illegals," most of them hard-working people who abide by all laws but the ones involving immigration, back home. Especially since, for many of these folks, this is home.

At the same time, the wink-and-a-nod (at least once you've gotten past the border) approach to illegal immigration that passes for national policy at the moment isn't right either. When you have a law that millions of people flout, it inevitably leads some of them to flout other laws.

And declaring every 20 years that all is forgiven, everybody who is here can stay, but after this we're going to really get strict -- the gist of the 1986 immigration reform and the current efforts of Senate moderates -- seems almost a deliberate insult to the millions of people around the world waiting for the chance to immigrate legally to the U.S.

The historical parallel that immediately springs to mind here is Prohibition. In that case, the nation finally decided that outlawing alcohol had made us a nation of outlaws, and we were better off without the law. Abolishing all immigration restrictions is surely out of the question -- a United States with open borders would be swamped -- but it's not as if Prohibition was replaced with a complete absence of alcohol regulation. There are restrictions on who can buy alcohol and who can sell it -- and, in recent years, stiff penalties for those who misuse it by driving under the influence.

An immigration-policy equivalent might involve greatly expanding quotas for legal immigration while cracking down harder on those who circumvent them. There is no serious economic argument to be made against immigration: Even Harvard's George Borjas, the most vocal academic critic of current immigration policy, allows that the arrival of immigrants brings economic gains for the average American.

His complaint is that the current immigration flow is so skewed toward those with few skills that it reduces wages for low-skilled Americans and delivers fewer economic benefits than the arrival of college graduates would. The Cuban-born Borjas wants the United States to act more like Australia, Canada and New Zealand, all of which have immigration policies that favor the well-educated.

Instead, U.S. quotas for skill- and employment-related immigration are currently so small that "we are under a standstill in allowing introduction of the best and brightest minds," says Angelo Paparelli, an immigration lawyer with offices in New York and Irvine, Calif.

Since last August there have been -- with a couple of small exceptions -- no H1B visas available for skilled workers. And there won't be any new ones issued until October. "I represent a large number of multinational companies," Paparelli says, "and the attitude behind the scenes is, 'If America won't let the H1Bs in, we'll go and create the jobs elsewhere.'"

It seems so obvious what we should do -- let in more "good" immigrants and fewer "bad" ones. Except for a couple of things. One is that many economists don't share Borjas' view that current immigration patterns are a problem.

UC Berkeley's David Card, a noted labor economist, argued in a paper last year that there's scant evidence that immigrants have hurt job prospects for low-skilled Americans, and ample evidence that immigrants' children move rapidly up the education and skill ladder.

Another is that, unlike Australia, Canada and New Zealand, the U.S. happens to share a 2,000-mile border with a country that is home to millions of poor, ill-educated people desperate for a better life. Sure, we could put more resources into patrolling that border, and maybe we should.

But it's hard to see how we could ever make it completely uncrossable, or why we'd want to. Which brings us back to Jagdish Bhagwati's "why not leave things be?" Sure, it's a copout. But have you got a better idea? Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.