Saturday, March 2, 2024

Auctioning Work Permits: A Market-Based Approach to Immigration Reform

WASHINGTON — An immigration system that is complicated and filled with outdated policies needs fixing, the general consensus says; but there is still no consensus on how.

“A patchwork of harsh laws in various states cannot result in anything resembling a coherent or effective immigration policy,” said Cecilia Muñoz, director of the Domestic Policy Council at the White House, during a forum organized by the Brookings Institution’s Hamilton Project.

UC Davis Economist Giovanni Peri presenting his new proposal to immigration reform.

Giovanni Peri, professor of economics at University of California, Davis, might have a solution.

At the forum, attended by academia, as well as the advocacy and business sectors, Peri presented a proposal with a market-based approach that would auction off work visas to employers.


Currently, there’s a high demand for educated workers who contribute to innovation and entrepreneurship, but the current visa system has arbitrary quotas, inefficient allocation and no clear path to a permanent visa, critics say.

Former Treasury Secretary and Hamilton Project Advisory Council member Robert E. Rubin welcomes the crowd at The Hamilton Project event “U.S. Immigration Policy: The Border Between Reform and the Economy.” (Photo/ Paul Morigi/Hamilton Project)

“It’s an administrative nightmare,” said Marschall Smith, senior vice president of Legal Affairs and General Counsel for the 3M company, whose products include safety equipment, oral care devices, industrial adhesives and office supplies such as the well-known Post-it notes.

Smith says his company is being forced to send jobs overseas. “We simply can’t get the people we need to do the work,” he said.

There’s also a high demand for less-educated workers who fill high-demand jobs — such as the farming and service industries — and lower the price of services. But strict quotas and requirements have resulted in immigration outside the legal system.

Jorge Suarez, director of human resources at Ocean Mist Farms, a Castroville, Calif. vegetable grower, said his company employs about 1,200 to 1,300 employees year-round. He described the current system as cumbersome, frustrating and time consuming.

“We need a system that allows us to bring these workers,” he said. “We need workers who are highly skilled as well. Different skills, but skills nonetheless.”


3M Senior Vice President Legal Affairs and General Counsel Marschall Smith and Ocean Mist Farms Director of Human Resources Jorge Suarez discuss the details of Giovanni Peri’s new proposal at The Hamilton Project event “U.S. Immigration Policy: The Border Between Reform and the Economy.” (Photo/ Paul Morigi/Hamilton Project)

Peri said his proposal allocates the already-existing working visas through an electronic auction where employers can purchase work permits to hire foreign workers.

The initial phase would distribute temporary work visas only. If successful, the auction process would then extend to include all employment visas, including some that lead to permanent residency, during the second phase.

The last phase would re-balance labor-sponsored visas and family-based visas to emphasize immediate family and attract extended family with employment-based visas.

This plan would allow Congress to use price signals to adjust the number of available permits, and if this worked, enforcement would be mainly done though work-place technology, Perry said. It would also create an incentive to hire American workers, he says, because there would be a high cost attached to bringing in immigrants.

Edward Schumacher-Matos, journalism professor and ombudsman for National Public Radio, called the proposal an “intriguing idea” that he hoped could break the political logjam over immigration policy.

But there are obstacles to overcome before reform happens. Schumacher-Matos put it like this: “The problem with immigration policy is not economics, it’s politics.”


Silver Lake Co-Founder Glenn Hutchins and National Council of La Raza President and CEO Janet Murguía discuss many of the broader issues surrounding today’s immigration reform debate at The Hamilton Project event “U.S. Immigration Policy: The Border Between Reform and the Economy.”

“The first obstacle lies in the Republican party, and this is not to be partisan,” said Schumacher-Matos. “The business community is not driving the Republican party when it comes to immigration, the tea party and the populists are controlling that.”

He said there’s a “deep fear” among the Republicans in Congress that immigrants vote Democrat, which interferes with bipartisanship on this issue.

The journalist told VOXXI that the Republican party needs to reach out to Latinos as opposed to marginalize them by being so fierce on this issue of illegal immigration.

But he doesn’t foresee any engagement by Republicans on comprehensive immigration reform for five to ten years: until after the recession, after the electoral power of the millennial generation and the Latinos is felt more, and when undocumented immigrants are accepted by “the communities that aren’t used to them.”

Then, “the Democrats, the humanitarian left and the unions that have been strongly committed to family unification” might frown upon an auction system, he said, which would also need to be overcome.

Peri’s said his vision is to extend some of the simplicity and fairness of his work visa proposal to the entire immigration system.


What’s missing for Congress to move on this issue is leadership and bipartisanship, said Janet Murguía, president and CEO of National Council of La Raza, a Latino civil rights and advocacy organization.

“Neither party should be proud of what they are doing right now,” she said. “It’s been discouraging that more people haven’t done more on both sides of the aisle.”

Murguía said that she appreciated Sen. Marco Rubio (R-Fla.) trying to reshape the immigration conversation within his party.

Senior Fellow at the Council on Foreign Relations Edward Alden, former U.S. Senator Chuck Hagel (R-NE), and UNITE HERE President John Wilhelm discuss many of the broader issues surrounding today’s immigration reform debate at The Hamilton Project event “U.S. Immigration Policy: The Border Between Reform and the Economy.”

In her remarks, Cecilia Muñoz listed some of the efforts on the president’s part to move forward on this issue, including meetings at the White House with members of both parties and both chambers and with members of the business and faith community, law enforcement and immigrant advocates.

“I think there is a disconnect between Washington and the real world out there,” said Jorge Suarez from Ocean Mist Farms. “We all just need to sit down and talk about this.”

Chuck Hagel, a former U.S. Republican senator from Nebraska, said he thinks America has been off balance since 9/11. Society doesn’t trust its institutions and its leaders because citizens feel they are not relevant to their concerns. It would help for legislators to “go back to the drawing room,” he said, and discuss what worked and what didn’t the last time comprehensive reform was seriously considered in 2006.

Union leader John Wilhelm believes immigration reform can be a reality in the next few years.

After the 2012 elections, the increasing importance of the immigrant community – including their families– from a political point of view will be more obvious, he said, and more legislators will recognize it and accept it.

“I think younger American recognizes that we live in a global society and it makes absolutely no sense to have unfettered movement of capital and restricted movement of people,” said Wilhelm, president of UNITE HERE, a union that represents workers in the hotel, gaming, food service, manufacturing, textile, distribution, laundry, and airport industries.

“The business community is going to be forced to do what is in its economic interest, and… the political system is going to be forced to accept the demographic reality.”

This article originally appeared on VOXXI.