Is a 'Merit-Based' Immigration System a Good Idea?

The policy could pose challenges to economic prosperity and potentially lead to greater restriction.

President Trump’s proposal to shift towards a “merit-based” immigration system would upend an approach that has existed for half a century.

Since the 1960s, the United States’ immigration system has largely based entry on family ties, giving preference to those with relatives who are citizens. But in his first address to a joint session of Congress in February, Donald Trump proposed moving away from that policy, focusing instead on an immigration system that would prioritize high-skilled immigrants.

Trump and his advisors have argued that the current levels of immigration harm American workers by lowering wages and preventing assimilation. A merit-based system, restrictionist advocates believe, would help lower immigration rates and ensure that the immigrants who do come are high-skilled workers who never need public assistance. “The current, outdated system depresses wages for our poorest workers, and puts great pressure on taxpayers,” Trump said in his speech to Congress.

While the president has yet to offer details, a merit-based system would pose its own challenges to economic prosperity. Critics believe that  a merit-based system that prioritizes high-skilled workers could hurt the economy by harming industries that rely on low-skill immigrant labor, and that fears that immigrants are not assimilating or are overly reliant on the social safety net are overblown.

The first example of the U.S. establishing qualifications for new immigrants was in 1917, when the government imposed a literacy test on those seeking to enter the country. In the 1960s, Congress lifted restrictions that heavily curtailed immigration from non-European nations, and reshaped the immigration system toward prioritizing admission of close relatives of immigrants already living in the United States. The overwhelming majority of immigrants are now admitted through that family-preference system, which significantly changed the ethnic composition of U.S. immigrant population by admitting more Latin American and Asian immigrants.

In 2015, for example, of the more than one million legal permanent residents admitted, “44 percent were immediate relatives of U.S. citizens, [and] 20 percent entered through a family-sponsored preference,” according to the Migration Policy Institute, a nonpartisan think tank. Only 14 percent of those admitted came through a job-based preference. The “merit-based” immigration system, in theory, would increase the latter figure, as it would prioritize those who are highly educated and therefore considered more employable.

Such a policy would likely limit the supply of low-skilled workers, and might allow the administration to filter which immigrants it chooses to admit. And a merit-based immigration system could also help realize a longtime conservative policy goal—a reduction in the number of immigrants admitted overall.

Some Republican lawmakers have already pushed for legislation that would limit legal immigration. Last month, Republican Senators Tom Cotton and David Perdue introduced legislation that would cut the number of immigrants legally admitted to the United States in half. It would do so in part by limiting the number of family members immigrants can sponsor for citizenship, a policy long sought by immigration restrictionist groups.

Dan Stein, the president of the Federation for American Immigration Reform, which supports curtailing immigration, said a merit-based approach could reduce the flow of immigrants coming into the United States. “The merit-system is also a surrogate for moving away from a system that the country doesn’t really get to control and regulate how many come in every year and who they are because of chain migration, the family-preference system,” Stein said, adding that a points system would be one part of the whole.

Nevertheless, assessing “merit” is difficult. A system that deliberately excluded low-skilled workers might raise labor costs in industries that rely on those workers, increasing prices for consumers but boosting wages for workers.

Supporters of a merit-based system point to Canada and Australia as models. The two countries assess who is eligible to enter the country by using a point system based on factors like education and employment history—the more points, the greater the likelihood of entry. Trump, for his part, has regularly cited Canada and Australia as models for the United States to follow.

“Everyone thinks the points bring the brilliant people,” said Tamar Jacoby, the president of ImmigrationWorks USA, a national organization that advocates for the legalization of undocumented immigrants. “The fact is that even the countries that started with a system like that, invented the system like that, Canada and Australia, have over the past 20-25 years moved away from a strictly diploma-based and skill-based system.”

Canada’s system, Jacoby notes, had trouble properly assessing immigrants’ qualifications. For example, would a degree from another country be recognized in the country an individual is trying to migrate to and if so, would they be a fit for the jobs that need to be filled? Over time, Canada began shifting toward an approach that specifically caters to particular industries’ needs, Jacoby added.

In the United States, there’s a need for both high-skilled immigrants and low-skilled immigrants across industries, a need for tech workers in Silicon Valley and a need for laborers in the agriculture industry. But while the administration has not released a plan for what its merit-based immigration system would look like, Trump has implied that he would prioritize high-skilled workers.

“It is a basic principle that those seeking to enter a country ought to be able to support themselves financially. Yet, in America, we do not enforce this rule, straining the very public resources that our poorest citizens rely upon,” Trump said in his address last week. “Switching away from this current system of lower-skilled immigration, and instead adopting a merit-based system, we will have so many more benefits.”

George Borjas, a professor of economics and social policy at Harvard’s John F. Kennedy School of Government who studies immigration issues and has made the case for stricter immigration policies, argues that high-skilled immigrants have the potential to contribute more to the U.S. economy.

“The argument for high skilled as opposed to low skilled is two fold,” he said. “One is the perception that if you’re going to think of which kind of immigrant has the bigger potential to push outward the frontier of knowledge in this country, it would be high-skilled immigrants; two, they’re also economically beneficial in the sense that high-skilled immigrants are much more likely than low-skilled immigrants to pay higher taxes and to receive fewer services.” This, he added, is true from a purely economic perspective, but neglects to acknowledge what kind of country the United States wants to be in regard to immigration: one focused on economic outcomes or one based on values.

Michael Fix, the president of the Migration Policy Institute, argues that there’s a place for high-skilled and low-skilled immigrants, adding that over time immigrants do quite well in the economy. For example, the first generation and their children will indeed generate fiscal costs at the state and local level, but that changes with the second generation. “If you look at the second generation and higher and their children—as adults then [as] children of immigrants—[they] pay higher taxes and use fewer benefits than other natives and than other immigrants,” Fix said.

Despite talk of a merit-based system, the administration is sending mixed signals on where it stands in regard to admitting high-skilled immigrants. Earlier this month, the U.S. Citizenship and Immigration Services announced that, starting on April 3, it would temporarily suspend premium processing for H-1B visas.

“This suspension may last up to 6 months,” the agency said. Companies can use these visas to hire foreign workers to temporarily fill positions in the United States. Among the criteria to qualify for an H1-B visa is a college degree “or its equivalent.” The U.S. caps the number of visas that can be issued each fiscal year at 65,000.

In other words, while the president is calling for a merit-based system, his administration is suspending a program that permits entry for high-skilled immigrants. To be sure, Trump has also not laid out what his merit-based immigration system would look like, so it’s unclear whether that system would emphasize a college degree or other types of qualifications.

“Right now the main focus is on addressing illegal immigration, but reforming our broken immigration system is something the President has been engaging members of Congress on for weeks,” White House spokesperson Michael Short wrote in an email, adding that “the legislative agenda thus far has been dominated by repealing and replacing ObamaCare, tax reform and the budget.”

Earlier this week, the president met with Cotton and Perdue. Cotton told MSNBC’s Morning Joe in an interview that Trump said “he wants to move in the direction of, for instance, Canada and Australia, and focused on more of what he calls a merit-based system.” He added: “Our legislation is the first step in that.”

House Judiciary Committee Chairman Bob Goodlatte has also expressed an interest in a skills-oriented approach to immigration. In February, Goodlatte cited Canada and Australia as examples for the U.S. to follow. An aide with the House Judiciary Committee would not comment beyond saying that Goodlatte was in talks with the Trump administration “about how we can improve our nation's immigration laws.”

Trump is not the first U.S. president to propose a merit-based system. President George W. Bush’s included one as part of his 2007 comprehensive immigration reform bill, but that proposal died in the Senate. Whether in Congress or the White House, grand ambitions for immigration policy often end up facing greater obstacles than anticipated.