The Fundamental Flaws of Immigration Reform

By Shannon O'Neil
Special to's Think Tank Town
Friday, June 1, 2007; 12:00 AM

Even with Congress on its Memorial Day break, heated debates over the proposed immigration reform continue, raising hopes and confirming fears. At the recent symposium hosted by the Council on Foreign Relations, "Dynamics of Immigration and Integration in the Western Hemisphere," one panelist described the bill as getting it about "70 percent right."

Yet this rather favorable calculation concentrates on short-term policy changes, such as the legalization of roughly 12 million undocumented workers, the creation of a new guest worker program, and an increase in visas for highly skilled workers. It underestimates the importance of two long term structural issues. The first is the seemingly mundane but crucial role of the immigration bureaucracy. The second is the seismic demographic shift occurring in the United States, as well as in the principal migrant sending countries. Any reform that does not consider both the institutional infrastructure governing immigration and the bigger picture of shifting labor supply and demand ultimately will fail to improve our system.

Amid the impassioned policy debates, almost no attention is paid to the United States Citizenship and Immigration Services agency, or USCIS. Yet as the entity responsible for processing all applications, it underpins the entire legal immigration system. The inefficiency of this system is well-known, from its continued reliance on paper files, to its nearly four million person family-based backlog and processing times that in some cases reach 23 years. The new immigration reform would put greater pressure on its already strained capacity, adding the new Y and Z visa categories to its mandate. Despite the proposed increases in funding, the ability of the USCIS to absorb 12 million new applicants is highly doubtful. A comprehensive restructuring -- including new technology, processing centers, and staff -- is essential. While notably absent from immigration debates, the effectiveness of the USCIS will largely define the success or failure of future immigration policy.

Another vital but disregarded issue is demographic change. The vast increase in illegal workers in the United States reflects not just the "push" of developing country poverty, but as importantly the "pull" of high labor demand by the U.S. economy. Over the last fifteen years the United States added twenty million new immigrants while maintaining historically low unemployment rates and growing faster than most other developed countries.

This labor demand will only increase in the coming decades. The baby boomers, whose 80 million members represent the largest generation in America's history, are nearing retirement. Over the next few decades they will leave the workforce, opening up current positions while also creating new jobs, particularly in the health care and related service industries. The next generation, Generation X, has 15 million fewer members. As a result, the United States will need more migrants in order to sustain our economic growth. Yet the current immigration bill will not provide a legal path to fill this certain future demand.

As our society changes, so too do those societies sending the most migrants to the United States. Nowhere is this more apparent than in Mexico. Over the last decade Mexico has provided nearly a third of all migrants and over half of undocumented workers to the United States. Yet the demographic factors feeding this Northern migration are rapidly changing. With births nearly equal to U.S. rates, Mexico is now an aging society. While nearly one million Mexicans entered the workforce each year during the last decade, in the next two decades this number will halve to 500,000. This means a reduced supply of new workers for the domestic labor market, as well as a smaller base of potential migrants going forward.

This demographic shift in Mexico, also occurring to a lesser extent in Central America, will fundamentally alter the nature of migration flows. Migration from these Latin American countries will continue, but the high tide is receding. This shift will affect not just the origin of future migrants, but also their entry path. Future migration will increasingly come from other countries and through other ports of entry, lessening pressures on our Southern border. In fact right now, less than half of undocumented workers sneak over the border -- a reality largely forgotten in current discussions of immigration and national security.

The current bill will address the presence of millions of undocumented workers -- no small feat. Yet without consideration of these underlying structural issues, the fundamental goals of immigration reform will remain elusive. The USCIS will be unable to process the requisite number of visas in a timely and orderly manner, leading to confusion, frustration and continued illegality. The ability to meet labor demands in the face of demographic changes will be limited, exacerbated by a guest worker program without any path to permanent residence and a point system that likely will not take into account actual labor needs.

Immigration debates need to encompass these crucial issues. More attention to functioning bureaucracies and less attention to walls will better address current policy failures. Rather than once-and-for-all ultimatums, we should recognize what we don't and can't know -- namely the future needs of a growing and incredibly dynamic U.S. labor market.

We have an opportunity to create a new, modern immigration system that will continue to be, as it historically has been, an engine for America's growth and prosperity. Yet to do this we need to move beyond temporary problems, however important they may be, to address the underlying structure of the system, enabling a flexible and secure labor supply for our future in the global economy.

Shannon O'Neil is a Fellow for Latin American Studies at the Council on Foreign Relations.

© 2007 The Washington Post Company