Two Cheers for Pete Buttigieg's Proposal for "Place-Based Visas" for Immigrant Workers

The idea has some flaws, but would be a major improvement over the status quo. It also has much in common with a proposal for state-issued visas promoted by two Republican members of Congress in 2017.

Pete Buttigieg (Jeremy Hogan/Polaris/Newscom). ( (Jeremy Hogan/Polaris/Newscom))

South Bend, Indiana Mayor and Democratic presidential candidate Pete Buttigieg recently put forward a proposal for "placed based visas" for immigrant workers, based in large part on a similar idea advanced by economists Adam Ozimek, Keenan  Fikri, and John Lettieri (Buttigieg refers to them as "community renewal visas"). Matthew Yglesias of Vox has a helpful summary of the plan, and some of its potential advantages:

Many struggling American communities are, among other things, losing people. Meanwhile, many millions more people would like to move to the United States of America than the country is prepared to allow in.

Three economists have called for leveraging the latter into a solution for the former, allowing both communities and immigrants to opt into a special program that would allow communities experiencing population loss to issue temporary visas to skilled foreigners that would allow them to live and work in places that want more workers.

The economists, John Lettieri, Kenan Fikri, and Adam Ozimek, call them "heartland visas" or "place-based visas" in their original policy proposal for the Economic Innovation Group think tank. The idea has spread: South Bend, Indiana, mayor and presidential candidate Pete Buttigieg's larger plan for rural America included them under the name Community Renewal Visas, and the US Conference of Mayors endorsed the concept in a resolution passed on a bipartisan basis earlier this summer….

Part of the tragedy of the situation is that in global terms, Akron is one of the very best places in the whole world to live. Declining Midwestern cities tend to have bad weather, but so do thriving Northeastern ones. And while the city's median household income of $36,000 is on the low side for the United States, it compares favorably to what you'd find in Poland, Hungary, Greece, Croatia, or Chile — to say nothing of India, Bangladesh, or Vietnam.

Lots of people, in other words, might jump at the chance to move to Akron if they were given the opportunity. And we know from the lottery for H1-B visas that American companies would like to import many more foreign-born workers with technical skills than they are currently allowed to hire.

Instead of giving work permits to skilled workers that tie them to a specific company, as the US does now, a new category of visas would tie them to a specific place.

A certain number of place-based visas would be allocated to a city — Akron, say — that wants to opt into the program. And then foreigners with skills who want to take a chance on Akron can apply for an Akron Visa. If you live in the specified city for a certain period of time — Buttigieg's implementation sets it at three years — you can convert to a regular green card. The lure of the permanent green card, among other things, is supposed to create a strong incentive to comply with the terms of the program.

The theory is that the presence of a pool of skilled workers in a given city would be a lure for companies to start investing there to hire them. This in turn would have a series of related benefits…

A reasonably large share of Akron visa holders would end up moving elsewhere after their initial three-year stint, especially at first. But it's also the case that people have a tendency to stick around a place once they've put some roots down there. And once an immigrant community is established somewhere, its very existence becomes a draw for other people with similar cultural roots.

Place-based visas would be a significant improvement over the current system of H-1B visas that tie immigrant workers to a specific employer.  They would enable workers to switch jobs (so long as they stayed in the same locality). That is good for both economic efficiency (enabling workers to go where they are likely to be more productive) and for avoiding mistreatment of workers by employers. In the H-1B system, workers who leave an abusive employer risk deportation. I also agree with many of the other points Yglesias makes in favor of this proposal.

The main shortcoming of the idea is that, by confining eligible workers to a single community, it severely limits their options. That's a flaw from the standpoint of both liberty and efficiency. In some smaller communities, they might even be limited to just one or a small handful of employers (depending on how many local businesses employ workers with their particular skills). Another limitation of Buttigieg's version of the plan is that it would be restricted to "counties that have lost prime-working-age population over the last 10 years, and smaller cities that are struggling to keep pace economically with larger cities." Other communities should also be allowed to participate.

These are the main reason why the plan deserves only two cheers, instead of three. On the other hand, the prospect of getting a green card within 3 years significantly mitigates these problems, as it makes the location restriction temporary and gives employers some incentive to avoid abusive behavior (lest the most productive workers leave as soon as their three year term is up).

The Buttigieg proposal for place-based visas has much in common with a proposal for state-based visas offered by Republican members of Congress Senator Ron Johnson and Rep. Ken Buck in 2017, which I analyzed here. The big advantage of the Johnson-Buck proposal over Buttigieg's is that a state-based visa gives immigrants far more options than one confined to a single city. On the other hand, their plan—unlike Buttigieg's—would not grant a green card after  three years. So the locational constraint would continue indefinitely. The Johnson-Buck plan provides for three year visas, which can be extended at the option of the state government in question.

There is, potentially, some conflict between giving immigrants a choice and promoting development of depressed communities, as many would prefer to move to areas with more vibrant economies, if given  the option. But immigrants have diverse preferences, and many might well be willing to move to less successful areas, so long as there are jobs available, and the cost of living is relatively low compared to the big cities of the East and West Coast. Even today, a good many immigrants do in fact move to less-affluent parts of the United States, as shown by such examples as the fact that immigrant doctors service many poor rural areas.

Many of the points I made in my assessment of the Johnson-Buck proposal apply to this one, as well:

For the last century or more, immigration policy has been dominated by the federal government. That's an inversion of what most of the Founding Fathers expected. James Madison and Thomas Jefferson, among many others, objected to the Alien Acts of 1798 in large part because the original meaning of the Constitution did not give Congress any general power to restrict immigration, but rather largely left the issue to the states.

We are unlikely to fully restore the original meaning of the Constitution. But [the Johnson-Buck proposal would move us some degree in that direction]….

If the bill passes, the guest workers admitted by the states would be among the biggest beneficiaries. Many thousands would get freedom and economic opportunity, and escape having to languish in poverty and oppression….  But American citizens also stand to gain, because immigrant workers make major contributions to the American economy. By channeling immigrants into legal employment, this program could also diminish deportations, which come at a high cost to taxpayers….

As with political decentralization on other issues, it could also help mitigate the poisonous partisan conflict created by federal control, where a single, one-size-fits all approach is imposed the entire country. Regional visa programs have worked well in Canada and Australia, two diverse federal democracies with histories and political traditions similar to our own….

Ultimately, decentralization of immigration policy to the state level is not as good as the even more complete decentralization that would occur if these decisions were made by individual workers and employers. Among other things, the latter are in an even better position to judge relevant economic needs than state officials are. But a state-based worker visa program would still be a major improvement over the status quo.

It is worth noting that Jason Kenney, the new United Conservative Party premier of Alberta (Canada's most conservative province) has recently proposed a plan somewhat similar to Buttigieg's in an attempt to attract immigrant workers to rural parts of his province, which currently suffer from declining population.

The above analysis assumes that the Buttigieg plan or the Johnson-Buck proposal would expand the total number of immigrants allowed in the US, without diminishing numbers admitted under other categories. The proposals are in fact currently structured that way. If they are altered to cut immigrant admissions elsewhere, that greatly reduces the good they might do (though it might still be net beneficial if community or state-based visas replace H-1B visas).

My post on the Johnson-Buck plan  describes some of the political obstacles it faces, many of which would also apply to the Buttigieg proposal. Those obstacles likely help account for its failure to get much traction in Congress. But the endorsement of  similar ideas by prominent liberal Democrats might increase the chance of building a bipartisan coalition over time.

It may well be too much to hope for. But perhaps at some point in the future, we could get a bipartisan proposal that combines the best features of both plans, while mitigating their respective downsides.