Epstein on Immigration Reform

Immigration Reform: Toward Free Trade in Labor
Richard A. Epstein
Advancing a Free Society
June 20, 2013

Most of the modern discussion on immigration policy is directed to the question of which aliens who enter into the United States should be allowed a path to citizenship and why.  In dealing with that topic, Gary Becker and Edward Lazear have powerfully argued that a market system is the best way to attract “people with skills and vision” into the United States. That program is correct as far as it goes. But in a sense it does not go far enough.  Immigration policy cannot concern itself only with the long and complex progression from entry to citizenship.  It must also deal with another reality of the modern integrated global economy, namely, the way in which the United States—and for that matter other nations—admit individuals on short-term work visas.

These visas are of immense importance especially at the higher echelons of the workforce, for nothing is more common today than for key employees in global firms to do short-term tours of duty in the United States, even when they have no intention to seek permanent residence or U.S. citizenship. In two important ways, these cases present far fewer problems than do foreign entrants into the United States in search of permanent status.  Often these business entrants come with substantial income and without families, and hence do not put the kinds of pressure on domestic social support systems than do entrants with large families and limited levels of support. In addition, since these workers do not aspire to citizenship, they will not obtain the right to vote, which adds an important political dimension to their entry into this country.

Given these two features, it is proper to think of these short-term visitors as labor inputs in voluntary markets with no systematic negative externalities. At this point, as I have argued here the proper treatment of their participation in these labor markets should follow the same approach that ideally applies to the movement of goods in international markets: free and open markets, which applies to entry and exit across national boundary lines.  The key principle of international trade in either goods or services is, or at least should be, that two or more sovereigns so organize their affairs that all transactions in goods and services follow the same competitive principles that govern a well-functioning domestic market.  Indeed one great advantage of the United States is that its constitutional jurisprudence by and large prohibits any state in the union from imposing barriers to entry and exit of either labor or goods that are not narrowly justified by the need to protect against such clear perils as contaminated goods. The competition that takes place, say, between Michigan and Tennessee in labor markets operates as a powerful force for deregulation in domestic markets, which in the end helped erode the strong pro-union structure in Michigan. When faced with competition from right-to-work states, Michigan recently felt compelled to pass a right-to-work law over fierce union opposition to prevent the further loss of business to low-cost labor states.  Note that under the federalist system, there is no quota on the number of workers that can move from state to state, and no requirement that they gain any certificate that proves that they are competent to work.

Richard A. Epstein