Citizenship for Sale?

by Patricia Houlihan
Published: June 7, 2008

Immigration

Image by iStock

What if the United States began charging $50,000 a person for the legal right to immigrate? Nobel laureate Gary Becker, who came up with the idea, acknowledges it may be considered “repugnant” now. But he also says it could stanch the flood of illegal immigration, draw more skilled workers here, and even raise revenue for the country.

Becker’s not trying to eject illegal workers; in fact, he said, they could pay to stay. The idea is to upend the existing black market that exacts a much higher price for illegal immigrants — some who pay with their lives.

 

Becker, University Professor of Economics and of Sociology, has the support of colleagues Kevin Murphy, George J. Stigler Distinguished Service Professor of Economics, and Robert Topel, Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics, who examined Becker’s proposal at a roundtable discussion convened by Chicago Booth Magazine. The big question? How to set the price.

Immigrating to the United States illegally already comes with a cost. “We already price it in this crazy way, saying, ‘We’ll put you on a bus and send you back if we catch you.’Or ‘Terrible things might happen to you on the way here. You might die,’” Murphy said. “But we don’t mind those prices because nobody has to collect them.”

Becker agreed. “People will say it’s repugnant to sell citizenship, that it’s contrary to the traditions of the United States. My answer is that we have tremendous restrictions now. The price to come legally for low-skilled workers is infinite. We say to them, ‘You can’t come.’

“We’re proposing another option: You can pay, and then you’re as good as anybody else. That opens up opportunities to everybody, including the unskilled person from Mexico who says, ‘I want to come to the United States. It may be expensive for me, but my children can take advantage of it.’”

For those who can only get low-paid jobs, Becker advocates creating a loan program, letting immigrants make a down payment, then borrow privately — “along the lines of student loans. There would be some role of government because there would have to be some enforcement provision,” he added.

One point to consider in putting a price tag on citizenship is that the country must be able to absorb the number of people who would come at that price. But it would take time to see the consequences, since some kind of loan system would have to be developed and people would have to save up the resources to pay, Becker said.

“If you think too many people would come, set a high price to start — $50,000,” he suggested. Topel predicted that at $50,000, “we would be heavily subscribed. Most of Hong Kong would be here in a hurry.”

Whatever the price, it would have to be uniform, Becker said. “It would become too complicated and too much a political price-setting system if you tried to determine who’ll pay more, who’ll pay less.”

The Cost of Paying to Stay

If implemented, the plan would have to address the problem of making illegal immigrants legal, and that means requiring them to pay to stay. “They’d pay or go home,” Becker said. “If we start sending some people home, we won’t have to send too many.” But, as a proponent of immigration, he also worries about coming up with a way to make citizenship affordable for someone who earns $8 an hour, or $20,000 a year. “A price of $100,000 is five years’ income, and they’re not going to be able to pay that very easily,” Becker said.

Any price would have to be fair not just on the basis of whether an immigrant earns low or high wages, but whether he’s here or across the border, waiting to immigrate. It makes sense to start with a high price for those who aren’t in the United States, but not for those who are already here, Murphy cautioned. “If you don’t get many takers, you can lower it,” he said. “But if you set the internal cost high, you’re going to start sending lots of people home, and that’s going to turn into a disaster.”

Becker suggested setting both prices low and raising them over time. But Topel pointed out, “If you set the internal prices very low, you’ll encourage people who would otherwise pay to come in [illegally] and get the low price.” Becker suggested it would be a uniform price, but it might not be the same over time. And the revenue it generated would certainly be welcome — and, perhaps, change public opinion about immigration. “Suppose two million people pay $50,000,” he said. “People would say, ‘We’re getting $100 billion from immigrants? That’s not bad.’”

A high price tag could easily send some illegal immigrants underground, Murphy warned. “It would be very hard to say to everybody we catch in Pilsen [Chicago’s primarily Latino neighborhood], ‘$100,000 or you go home.’ We might as well say, ‘You’re going home.’ And we may be willing to send a few to get everybody else to comply, but we’ll never have shuttle buses running.”

Perhaps not, Becker said, “but we’d be more willing to send people back if there’s a reasonable alternative and they’re just unwilling to pay it. Maybe $20,000 is possible over time. People take out mortgages of several times their income.”

Getting Started

Getting politicians to buy in to Becker’s proposal — at any price — seems like a tall order, they agreed. “I don’t know who would be more opposed to it, the Democrats or the Republicans,” Becker admitted.

To launch the program, Murphy suggested starting with illegal immigrants: “People who get caught — or turn themselves in — would pay $20,000.” But Becker said such parameters might encourage others to sneak in and pay the in-country price. “You could start at $20,000 and sweep out a lot of the illegal immigrants, then raise the price over time. Illegal immigrants wouldn’t have an incentive to stay because the price would be going up,” he said.

“So we’re going to start right away, go to people in Pilsen, and say, ‘$20,000 and you’re in’?” Murphy asked. Becker replied, “They’ll all say, ‘Where do we sign up?’” People recognize the value of citizenship, Murphy said, and Becker’s proposed system acknowledges the value of immigration. “This system says, ‘We want you here.’ It’s not a fine or punishment for being here.”

The plan certainly would increase the number of such high-skilled immigrants as doctors and engineers, they agreed — many of whose immigration costs would likely be picked up by employers, who may require their employees to reimburse the firm. “You’d get more skilled people because the price would be lower than it is now,” Topel said. The current H1B program, for instance, lets U.S. firms temporarily hire foreign guest workers for specialized jobs, but fewer than 100,000 visas are issued each year. Other professionals gain entry the way Becker’s brother-in-law did. “He came from Germany under my wife’s quota, and it took 11 years for his green card to come up,” Becker said. “That’s highly restrictive. I think this system would allow more immigrants — a different mix, who would make a significant contribution to the labor force.”

Low-Skilled, but Ambitious

Even when they are low-skilled, immigrants have qualities that make them desirable, Murphy said. “There are many jobs that require people not necessarily to have a lot of skill, but a lot of ambition, ingenuity, and dedication. What tends to happen within a highly educated country is that people who are less educated usually lack some of those qualities, so it’s not surprising that you see immigrants filling those roles, whether it’s entrepreneurial roles in retail businesses or the construction industry. They’re go-getters; at the same time, they don’t have formal training and they’re not educated,” he said. “But what’s your alternative? Somebody who’s highly educated but doesn’t need the education for the job, or somebody who probably isn’t as motivated or dedicated.”

As Topel pointed out, opposition to immigration “comes from the notion that people get something for nothing, or something other people pay for.” Much of the public discussion on the topic centers around low-skilled immigrants who are visible in the labor force with such jobs as restaurant workers; their presence causes some to say they negatively affect the labor force. Topel said statistics don’t back up the claim. “You hear a lot of people say wages for less-skilled citizens are driven down, but the evidence for that is, at best, ambiguous and, at worst, nonexistent,” he said. “If there’s any wage effect, it seems to be on the immigrants themselves. When a lot of immigrants come into an area — or the country overall — it mainly reduces the wages of other immigrants with similar characteristics, or the group who came before them.”

Murphy echoed the point. “The match between low-skilled immigrants and low-skilled natives isn’t that close. They don’t necessarily compete as head-to-head as you might think.” Still, the belief persists that immigrants represent unfair competition. “In the African American community, there is a lot of hostility to immigration,” Becker said. “They’re one of the groups most strongly opposed to it.” Topel said that’s because immigrants have had “a lot of intergenerational mobility, and the African American community has not had as much of that.”

Since immigrants who prosper boost the U.S. economy, Topel said Becker’s proposed system represents an investment in the next generation. “There’s evidence that assimilation occurs fairly rapidly after a person comes into the country, and much more so by the next generation. If you go to the neighborhood where I grew up — it was a cops-and-secretaries neighborhood — there are nothing but Mercedes Benzes and Porsches in the driveways, and the for-sale signs are in Chinese,” he said. “If you look at the wage distribution in the United States, Chinese — especially Chinese who were born here—are well above the average. And you can see the evidence just driving around Southern California, where I grew up.”

Despite the fact that Becker’s proposal would ban those who are barred now — terrorists and criminals — the idea of putting a price tag on citizenship might unnerve some Americans, Murphy acknowledged. “Part of what scares people is they don’t know who would come if you priced it. The mix would change. There’s a fear of the unknown, of being overrun by people they’re not familiar with.”

“Overrun by people who can afford to pay $50,000?” Topel countered.

Becker acknowledged the point. “It’s a new proposal, but once people become more familiar with it, it won’t seem so radical.”

Last Updated 5/14/09