By Bernard Wolfsdorf, Matthew Beatus, Robert Blanco and Joseph Barnett, Wolfsdorf Rosenthal LLP
Bernard Wolfsdorf, Matthew Beatus, Robert Blanco and Joseph Barnett discuss the potential corporate immigration challenges that will be faced by both businesses and lawyers under President Trump.
In the past year, there has been a noted increase in global anti-immigration rhetoric based on the fear of terrorist threats and claims that low-skilled immigrants compete for jobs with domestic workers and depress domestic wages. This view was punctuated during President Donald Trump’s first speech to the US Congress, during which he stated:
Protecting our workers also means reforming our system of legal immigration. The current, outdated system depresses wages for our poorest workers, and puts great pressure on taxpayers.
Switching away from this current system of lower-skilled immigration, and instead adopting a merit-based system, will have many benefits: it will save countless dollars, raise workers’ wages and help struggling families – including immigrant families – enter the middle class.
The president signaled there could be a fundamental change in how foreign nationals are selected to enter the US, namely, by prioritising individuals with high-level skills or increased educational levels over those with familial connections in America. Certainly, preferring that the “best and the brightest” be welcomed into the US is laudable on its face, but it appears that an additional goal of a “merit-based system” is to promote a restrictionist immigration agenda that seeks to keep those who are different (in race, religion, etc) from entering the country. Indeed, it is unclear what exactly changing to a “merit-based system” means in terms of the current system.
In his speech to Congress on 28 February 2017, President Trump characterised the US’s current immigration system as one “of lower-skilled immigration.” One might wonder to what “lower-skilled immigration” President Trump is referring. When looking at the US’s employment-based immigration scheme, nearly all visa categories are for individuals that would necessarily be classified as high-skilled, specialised and/or professional workers. Of all the employment-based non-immigrant visa categories that exist, only the H-2A visa (for agricultural workers) and H-2B visa (for seasonal, non-agricultural workers) may be considered low-skilled workers. H-2A and H-2B workers make up a tiny fraction of yearly immigration to the US, and the notion that such workers are taking American jobs is a well-debunked fallacy. In terms of immigrant visas or permanent residency status, with the exception of individuals of extraordinary ability, multinational managers/executives, individuals who are considered to be serving “the national interest” of the US, and high-net-worth investors, employment-based “green cards” are only obtained through the approval of highly scrutinised labour certification processes designed to ensure that the US labour market is protected, and that US wages are not depressed.
So what does President Trump mean when he says that the US should embrace a “merit-based system” over “lower-skilled immigration?” The only conclusion one may reach is that the President wants to see the US limit family and diversity visa-based immigration, as well as the country’s intake of refugees, asylum seekers and other vulnerable classes of individuals. If we accept that this would be the goal of a new “merit-based system” of immigration in the US, whether incidental or intended, then the central question remains: would such a system “save countless dollars, raise workers’ wages and help struggling families – including immigrant families – enter the middle class”? And even if it does, could such a system operate in a manner that reflects long-standing American policy values?
Contrary to President Trump’s assertion, it is actually very likely that a “merit-based system” could hurt the US economy and fail to improve workers’ wages. Moreover, given the potential inefficacy of such a system, countless dollars would be wasted simply through the cost of designing, implementing, and maintaining the new system alone. A merit-based system favours those with the highest levels of education and capability to contribute to the American economy. However, traditionally such systems are not able to guarantee that skills of foreign nationals are actually put to use. The classic example of this scenario has been a long-standing problem in the Canadian immigration system – the model that President Trump most likes to refer to as his goal for the US. While a standing job offer from a domestic employer is a potential factor in determining eligibility to immigrate to Canada, it is not necessarily a determining factor. If an applicant has a qualifying education, work experience, and other relevant background traits, her or she could still immigrate. Once in the country, such immigrants are left on their own to actually find employment. If individuals then cannot secure an employment position in their field, they are left with the choice of either remaining unemployed, or taking a job for which they are massively over-qualified. The classic image of this is the foreign-trained scientist or doctor who ends up becoming a taxi driver. In contrast, the current US immigration system, despite its other flaws and inefficiencies, nearly always guarantees that incoming employment-based immigrants have a standing job offer upon arrival. This ensures that the skills of capable immigrants are actually being put to their best use. Without guaranteed employment positions for these individuals, there would be increased labour-market competition for the best and brightest Americans. Moreover, such a system may also lead to labour shortages in low and middle-skill employment categories that immigrants currently fill at a higher rate than other US workers. Accordingly, it is quite possible a merit-based system favouring only “the best and brightest” foreign nationals could then actually end up severely hurting US workers and the US economy.
Importantly, the proposed “merit-based system” would also directly contradict the goals of the Immigration Act of 1952, which put family reunification and country-of-origin diversity at the heart of US immigration policy. The Immigration and Nationality Act (INA) has embodied the policy of family reunification by specifying numerical limits for five family-based categories that include immediate relatives of US citizens and other family-based categories that vary according to individual characteristics such as the legal status of the petitioning US-based relative, and the age, family relationship, and marital status of the prospective immigrant. Notably, approximately two-thirds of all family-based admissions are comprised of spouses, minor children and parents (collectively referred to as “immediate relatives”) of US citizens.
President Trump is certainly not the first or the last individual to attribute a decline in wages of US workers to increased immigration by foreign workers. In fact, two Republican senators have introduced a bill, the Reforming American Immigration for Strong Enforcement (or RAISE Act) to reduce the number of worldwide family-sponsored immigrants to a maximum of 88,000 for each fiscal year. By contrast, current immigration policy grants permanent resident status to approximately 231,000 immigrants through family-sponsored categories. Moreover, the RAISE Act would eliminate preferences for the extended and adult family members of US residents, including adult parents of US citizens, adult siblings of US citizens, unmarried adult children of US citizens, married adult children of US citizens, and unmarried adult children of legal permanent residents. One of the senator’s factsheets on the RAISE Act indicates that the influx of
low-skilled labor has been a major factor in the downward pressure on the wages of working Americans, with the wages of recent immigrants hardest hit. Wages for Americans with only high school diplomas have declined by 2 percent since the late 1970s, and for those who didn’t finish high school, they have declined by nearly 20 percent. This collapse in wages threatens to create a near permanent underclass for whom the American Dream is always just out of reach.”
These senators never mind, of course, any of the other potential factors that contributed to depressed wages, such as globalisation, automation, deregulation, increased healthcare costs and changes in labor market policies and business practices. Only the increase of low-skilled immigrants is to blame for the current economic decline of Americans who fail to invest in their own future or care enough to get an advanced education necessary to participate in today’s workforce. Interestingly, the RAISE Act seems to negate the traditionally conservative tenets of a hard work ethic, respectability, and self-sufficiency.
Rather than scapegoating immigrants for decades of economic policies which have squeezed the lower and middle classes of America, our country needs smart, compassionate and effective immigration reform that promotes America’s interest by bringing the best and brightest, uniting families, providing skilled and lesser-skilled workers, and welcoming refugees and asylum seekers in a system based on due process and fairness.
There are still many questions as to what the future of the US immigration system will look like. President Trump has voiced his goal of striving for a “merit-based system” without any further information about what that would entail. While we can look to examples of other countries that use merit-based systems, whatever system the US will ultimately implement is sure to be unique in some way. While such a system is sure to have many drawbacks, as described above, there may also be some benefits to certain groups of US workers and immigrants alike. For instance, highly qualified immigrants from countries such as China, India and Mexico, who have experienced massive visa backlogs in past years, may see their ability to immigrate to the US speed up rapidly. The current system of country quotas and categories arbitrarily prioritises certain immigrants at the expense of others, often simply because of their country of birth.
Moreover, low-skilled labour shortages could potentially increase wages for relevant US workers, though one must wonder whether potential increases in wages are justified if industry-wide labour shortages ultimately increase consumer prices, thereby nullifying the effect of the wage increase in the first place. One thing that does seem certain is that a shift to a primarily “merit-based system” would substantially increase the difficulty of all non-employment-based immigration, and especially most family-based immigration processes. However, any restrictive immigration system, regardless of the specifics, has the ability to stifle the global flow of human talent and investment capital that benefit the country.
Additional challenges are likely to materialise with an increase in the enforcement of US immigration laws. Although deportations reached 2 million under the Obama administration, President Trump has promised to increase this number. Indeed, some of his very first executive orders as president focused on immigration enforcement encompassing sweeping restrictions later limited by the courts. We expect to see immigration laws strictly enforced, both for serious criminal and non-criminal violations alike. These policies will not only affect currently undocumented foreign nationals but also future immigrants hoping to relocate to the US Certain industries that rely on foreign labour will certainly feel the effect of these policies more than others. Given the uncertain political climate at work in the US, it is difficult to make any other predictions with confidence.
In the meantime, the road ahead is uncertain for US employers and others invested in employing high-quality foreign national talent in the US While any substantial changes to the US’s current employment-based immigration system will require the enactment of new regulations through the passage of laws by Congress, President Trump has already ordered relevant Executive agencies to increase scrutiny on current visa applications. Despite the vocal resistance from the US business community, which has been clamoring for increased ability and ease to attract and retain foreign national talent, the current administration seems to be promoting a heavily restrictionist agenda. While the US remains one of the best nations for business investment and operations, we expect to see increased difficulties when it comes to corporate immigration matters in the years to come.