A Radical Proposal for Immigration Reform by David Montgomery

On Monday June 26 the Supreme Court announced its decision on President Trump’s executive order on travel from certain countries. That event has made me decide to describe more completely my own thinking on immigration. I have two firm opinions: First, President Trump’s temporary travel plan is a fully justified action designed to make it more difficult for potential terrorists to enter the country. Second, I am convinced that we should allow any immigrant who can demonstrate good moral character and willingness to work to enter and reside in the USA.

To reopen our country to the kind of immigration that brought most of our ancestors here, it will be necessary to abolish all statutory immigration quotas. But it will also be necessary to vet thoroughly every individual who wishes to emigrate to the United States to determine that they satisfy the test for character and willingness to work. I would apply the same test to all immigrants who have not yet become citizens, welcome those who pass whether they entered legally or illegally and deport immediately all felons, gang members, and those exploiting the welfare system.

Aside from establishing procedures that could be used to vet all potential new residents, a travel ban directed at potential terrorists is beside the point of how we should treat law-abiding potential entrants and those already here who have committed no crime other than crossing the border or remaining in the United States illegally. These immigrants have not come from countries that harbor terrorists. They are for the most part individuals and families of Hispanic descent who have crossed our southern border. The real debate about immigration deals with these immigrants from Latin America, and I believe that having them here in the United States is a very good thing.

Our American culture and faith have been greatly enriched by our Latin American brothers and sisters. The culture of the Southwestern United States, our literature and music, and most of all our Christian faith would be much poorer without them. Not to mention the lives and families of descendants of Northern European immigrants who met and married someone from Latin America.

As a Roman Catholic, I am reminded of our common heritage because Our Lady of Guadalupe is revered as the patron saint of the United States as well as the rest of the Americas. Indeed, the entire North American church would be declining in numbers if it were not for immigrants from the rest of the Americas. While attendance of those born in the USA is declining in the Roman Catholic Church, our numbers are growing because of immigrants from Latin America. And, as a Catholic I regret to admit, Evangelical churches are doing even better, as they provide community and welcome as well as an energetic presentation of the Gospel.

Not only do Latin American immigrants fill our churches, they obey our laws. A study by the very conservative Cato Institute finds that relative to their population, there are far fewer immigrants in prison than native-born Americans. This is true of both legal and illegal immigrants. Refining the data, there are fewer Hispanic immigrants in prison relative to their population, whether they are here legally or illegally, than native-born Black Americans or any other ethnic group except Whites and Asians. Asians have the lowest ratio of prisoners to population, and even Hispanic illegal immigrants have a lower ratio of prisoners to population than do all ethnic groups together. Across the board, prison is more associated with being native-born than being an immigrant, possibly because immigrants have not grown up under the corrupting influence of the American welfare system.

There are also practical reasons for advocating removal of quantitative limits on immigration.

On balance, immigrants make a net positive contribution to the US economy. That is obvious for highly-educated Asian immigrants, but it is also found to be true for Hispanic immigration. A study by the politically neutral consulting firm IHS Global Insight finds that Hispanic immigrants will create through their work more value than they receive in wages and government transfers. Increased immigration of Hispanics is forecasted to lead to higher employment and income for the non-immigrant population. That is, those of us born in the USA are better off financially with immigration than without. And that is pretty amazing, considering how hard the liberal welfare state makes it for an unskilled worker to retain his or her self-respect and avoid the Scylla of crime and Charybdis of welfare.

There is also an important economic problem in pay and employment conditions for illegal immigrants. Callous employers can offer lower pay to undocumented employees who are frightened of rising onto ICE’s radar. This is a reason for supporting amnesty as a matter of simple justice. It is also a reason some might oppose amnesty to keep a source of cheaper labor available. Unfortunately, this problem cannot be cured just by legitimizing the status if illegal workers.

The demand for undocumented labor is in many ways a product of our counterproductive minimum wage laws and high labor taxes, which make employment of less-skilled but useful workers unprofitable for many businesses. But once the workers who are now paid below minimum wage achieve legal status, they will be “protected” by minimum wage laws and many will lose their jobs.

Thus there is a real danger of unemployment among new and formerly illegal Hispanic immigrants, caused by minimum wage laws and high labor taxes. With increased legal immigration, there are likely to be more workers unable to find the legal jobs, even though they could have found work as illegal immigrants being paid what their employers could afford. But it is unjust to banish those who aspire to a better life because our own perverse policies prevent them from getting work. So the immigration question brings front and center the failure of the liberal approach to the working poor.

It cannot be right to offer legal immigrants a choice between crime and welfare in order to survive. The failed policies of minimum wages that make it impossible for the less skilled to find work and welfare programs that pay unmarried women to have children would threaten the ability of many immigrants to support and keep their families together. Thus welfare reform and abolition of unreasonable minimum wage laws must accompany abolition of immigration quotas if newly legal immigrants are to continue to find work. I believe this is possible.

President Trump’s election proved that American working families have seen how the progressives abandoned them, and those working families in turn rejected the candidate who would continue that liberal condescension. Illegal immigrants now living in the US are likewise victims of the liberal welfare state, not the seekers of welfare that they are so often painted. I have been fortunate to avoid crossing paths with any of the Hispanic gang members, drug dealers and other felons whom we must find, arrest, and remove permanently from our society. Every illegal immigrant I have met wants to work hard, earn his or her own way, and be part of American society. They reject both crime and welfare as ways of life. What more could a conservative want, or a hard-working non-immigrant family not recognize as a kindred spirit?

So we not only to repeal and replace all immigration laws, we need to repeal and replace the Great Society programs that drive the unskilled and semi-skilled into crime or dependence on government — both of which enhance the power of the state.

Neither is easy. For the good of the country, we should welcome all but the potential terrorists and those who have been criminals or unwilling to work in their home countries. In charity, we need to replace entitlements with incentives to work and income supplements that provide a decent living to those, and only those, who work and earn as much as they can.

There has been an idea of how to do this for a long time — a broader form of the Earned Income Credit knows as the negative income tax.

The idea behind the negative income tax is that it is not enough to allow all families below some income level to pay no taxes. Under proposed tax reforms, this zero-bracket income for an average family would rise to at least $24,000 per year. With a negative income tax, working families with incomes below this or some other chosen benchmark would receive a refundable tax rebate equal to some percentage of their actual earnings. For example, there could be a payment of 10% of every dollar of earnings up to $24,000, resulting in a total income of $26,400. Earnings between $24,000 and, say $36,000 would incur zero tax liability. Earnings above that upper limit would be subject to the standard progressive tax brackets. This system creates no disincentive for work at any level of income, and the rebate percentage and bracket levels can be set to provide a living after-tax income for those willing to work and earn their share.

The change is worth making. What we can achieve is an increasingly Christian country, greater freedom and self-respect for those now prevented from working by minimum wages and welfare or victimized in the underground economy, stronger families, and over time likely less crime and drug use in groups weaned from welfare.

How much hope is there? I would like to see President Trump propose combining repeal of all quantitative immigration limits in the 1917 and 1964 Immigration Acts at the same time that he establishes secure borders and extreme vetting. At the same time, I want the President to propose elimination of all means-tested entitlements and substitute a negative income tax for all those able to work. And “able to work” must include most unmarried mothers and working age males who are exploiting the easily availability of disability payments and opioids created by his predecessor. This could also make the expanded negative income tax budget-neutral.

This program should appeal to the progressives who condemn what they perceive to be President Trump’s attitude toward immigrants, or else reveal their hypocrisy in giving lip service to open borders while really wanting to maintain the welfare programs that keep certain minorities dependent on their largesse and therefore willing to vote to keep them in power.

But the most important message is one from President Trump to his base and crossover voters. He needs to convince those conservative working class families that immigrants (with the obvious exceptions of Islamic terrorists and Russian, Asian and Hispanic gang members) share their interests, values and faith and are looked down on by the same elites. I would like him to convince his base and formerly Democrat supporters that immigrants do them no harm, and that the harm comes from those who perpetuate the welfare state and the minorities that live off welfare and crime rather than honest, individual effort. Then, I think there is hope for a country that welcomes those who are prepared to work hard and join American society.

David Montgomery was formerly Senior Vice President of NERA Economic Consulting. He also served as assistant director of the US Congressional Budget Office and deputy assistant secretary for policy in the US Department of Energy. He taught economics at the California Institute of Technology and Stanford University and was a senior fellow at Resources for the Future.