Immigration Reform Should Include Guest Worker Program And Taxes On Work Visas, Says Economist

By Annie Berman – Talk Radio News Service

At a Capitol Hill briefing held by the Cato Institute Friday, economic experts recommended factors that should be included in immigration reform including a guest worker program, taxes on work visas, and tighter internal enforcement and border security.

Peter Dixon, an economist from Australia who holds a Ph.D. from Harvard University, argued that illegal immigrants who hold low skill, poorly paid occupations are more likely to be unreliable workers than an employee who is a citizen of the U.S.

“The main reason for their productivity being low is their wages. Economic theory suggests that people will be employed up to the point where their wage is equal to their productivity,” Dixon said. “If wages were higher than their productivity, well then they will get fired. If wages are lower than their productivity, then you want more of them…They systematically earn lower wages than legal residents.”

Dixon explained that if the U.S. imposed tighter border security and tighter internal enforcement, it would cost twice as much for an illegal immigrant to cross the border. Therefore, a reduction in the labor force of low skilled, low wage workers would cause vacancies to open up at the top of the job market.

“Border crossing is a dangerous thing to do. You’ve got to give money to smugglers, it might not be successful, you might be sent back home…We’ve built the fence higher in a way that’s equivalent to potential illegals thinking in terms of it costing them an extra $5000 [for example] for a crossing,” Dixon said.

To counteract a reduction in the number of jobs available to citizens, Dixon suggested a guest worker and legalization program wherein employers may obtain visas that are taxed. The taxes from the visas would go to the government and an incentive for employers to higher immigrants that want to work in the U.S. would be created. With a guest worker program, there is the possibility that each guest worker would bring more productivity with them, the economist added.

Dixon explained that the U.S. standard of living will go up because because there would be more productivity, but without any drain on public expenditures due to only a small rise in population. Dixon also made clear that the guest worker program would not be a “path to citizenship”. Immigrants who choose to participate in the guest worker program would simply be guests, not automatic citizens, Dixon said.

“It has to be made completely clear that this is not a path to citizenship. This is a way in which the U.S. gets a job done. It’s like trade. You are importing labor to do a particular job and then go away again. So it’s not meant to be a path to citizenship.”