Trump Trots Out Canada's Obsolete Immigration Policy For America

Merit-based immigration is economically obtuse


It was the mother of all presidential bait-and-switches.

Gage Skidmore via Foter

The advance billing before President Trump's address to Congress last night was that he was going to pivot on immigration and call for a bipartisan reform bill that offered a path to full blown citizenship for Dreamers (undocumented aliens who were brought to the US as minors) and legalization for undocumented non-Dreamers in exchange for his enforcement crackdown.

Instead, what Trump offered were the same old bromides to: stir up xenophobia ("the vast majority of individuals convicted of terrorism and terrorism-related offenses since 9/11 came here from outside the country"); demonize immigrants as criminals by displaying families of Americans killed by illegals; spread falsehoods about immigrants as welfare queens ("our immigration system costs American taxpayers billions of dollars a year"); and insinuate that immigrants took American jobs ("what would you say to the American family that loses their jobs" due to undocumented workers).

These claims are completely or almost completely false: Immigrants don't strain the welfare state; they are less crime-prone than natives and gateway cities like El Paso that have a heavy undocumented presence have among the lowest crime rates in the country; and they boost American wages and jobs. Oh and Americans have better odds of being struck by lightning than being killed in a terrorist attack by a foreigner.

None of that of course deterred Trump from doubling down on his plans to build his silly wall; ejecting all undocumented from the country, not just bad hombres; impose a Muslim ban and – his favorite—extreme vetting. The only new – or rather, quasi-new—idea in Trump's otherwise tired and trite immigration agenda was calling for a merit-based immigration system along the lines of Canada (and Australia).

Trump simply tossed out one sentence without offering any details so it is hard to know exactly what he has in mind. But presumably it is something along the lines of Canada's point-based system that both deemphasizes family-based immigration and low-skilled immigration – and emphasizes specialized skills. In other words, Canada awards young techies and STEM graduates more points—and farmhands and older people fewer points, making it easier for the former to reach the minimum threshold required for admission and harder for the latter. It is a sort of industrial policy approach to immigration that privileges some sectors over others (something that, unfortunately, George Bush's ill-fated reform proposal also succumbed to). Given that Trump's Attorney General Jeff Sessions (along with Tom Cotton, his heir-apparent in the Senate) is an implacable foe of all immigration and wants even the H-1B program for foreign techies scrapped, this may count as progress.

Nevertheless, this kind of credential fetish is becoming obsolete even in Canada where it has produced serious distortions at multiple levels.

For starters, at the macro level, it has bred a mismatch between the skills that the economy needs at any given time and the ones that Ontario's central planners anoint. Indeed, at one point, far more foreign techies were being admitted than high-tech companies could employ, generating a whole army of under-employed people with advanced degrees. (I once hired a cab in Toronto with a Russian driver with a PhD in Physics.) At the same time, jobs were going a begging in the farming and construction sectors.

But at a micro level, it generates different problems for different provinces. So, for instance, while Ontario, where the high-tech sector resides, experienced an over-supply of foreigners and over-crowding, remoter areas like Saskatchewan and Newfoundland with more agrarian needs experienced worker shortages and under-population.

This is one reason why Canada is rapidly moving away from its centralized approach and empowering its provinces to effectively write their own immigration policies based on their own economic needs through the Provincial Nominee Program, that I wrote about previously. Under this program, every province gets a quota to sponsor foreigners from wherever they please and for whatever reason they please, including deepening ethnic ties with a region. The federal government's role is limited to conducting security and background checks on the nominees. Many provinces are using this program to poach America's H-1Bs stuck in the green card labyrinth. Canada expects to admit more than 51,000 foreigners through this program in 2017 – a 6.7 percent increase over last year.

One of the huge upsides of this program is that it is not stuck in a crude and economically meaningless distinction between high-skilled and low-skilled immigrants. Indeed, provinces have developed much more finely hewn categories that reflect the complexity of the economy. So, whereas welders are regarded as "unskilled" workers under the American system and therefore not entitled to admission, many Canadian provinces regard welding as a skilled trade and welcome them.

If Trump is looking to Canada for inspiration for immigration reform, all of these are excellent reasons to emulate its PNP program rather than its point system. But there would be a yuuuuge additional advantage of the PNP approach for America, namely, stanching the flow of future undocumented workers.

America shares a border with Mexico and this makes it an attractive destination for low-skilled Mexicans. That hard-working people from a friendly neighbor want to offer their services to American households and businesses would be considered a great blessing in a rational world. But however you view it, so long as there is a massive wage gap between the two countries, these folks will flock to U.S. shores. America's only real choice is to allow them in legally or illegally. (Enforcement and walls can help at the margins but the wage gap is the dominant factor determining flows.)

One option would be create a usable guest worker program – such as the Red Card Solution that Helen Krieble, a conservative, has proposed—with Mexico (and other Latin American countries). Another option would be a PNP-style state-based visa program. Texas' hospitality industry, Wisconsin's dairy industry, California's agricultural industry are all hurting from a tight labor market. And the state governmenets would be far more sympathetic to the needs of their industries than distant bureaucrats browbeaten by a populist president.

Otherwise, long after Trump has gone, we'll be debating a future amnesty for another generation of undocumented regardless of what the president does with the current: leave it alone, deport it, or offer it amnesty. And the Great Wall of Trump will stands as a symbol of the glaring failure of a president who talked smack but solved nothing.