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News from EPI Ray Marshall critiques proposal for immigration auctions in new EPI report

For Immediate Release: Friday, November 2, 2012
Contact: Phoebe Silag or Donte Donald, 202-775-8810

Ray Marshall critiques proposal for immigration auctions in new EPI report

In a new report, EPI Research Associate and former Secretary of Labor Ray Marshall analyzes a proposal for an immigration auction system that Giovanni Peri outlined in a recent paper for the Brookings Institution. In Migration and domestic labor markets: Auctions and employer demand versus public policy, Marshall finds that while Peri provides useful suggestions for immigration policy, his auction proposal would not adequately serve the public, protect foreign or domestic workers, or successfully streamline the U.S. immigration system.

Peri proposed “market-based auctions” that would “allocate employment-based permits to employers and visas to immigrants that have the greatest propensity to contribute to economic activity and thus to generate the largest benefits for the U.S. economy” in the paper Rationalizing U.S. Immigration Policy: Reforms for Simplicity, Fairness, and Economic Growth.

In Migration and domestic labor markets, Marshall finds:

  • An auction system would serve employers’ interests but not necessarily the public interest.
  • Market competition and the limited mobility workers would have “between permit holding employers” would not adequately protect foreign or domestic workers.
  • Auctions would not streamline the system as Peri claims. Peri leaves to a gridlocked Congress the responsibility to make ad hoc decisions on the number of auctions and other key issues. And an auction system does not produce adequate data to enable immigration officials to effectively administer economic migration.

“We do not know how well Peri’s auction system would work because such a system has never been tried, and he does not provide many specifics,” Marshall writes in the report. “Even so, the obvious problems with his auction proposal make it an inferior choice to a sensible alternative: a high-value-added, policy-driven system reinforced by an independent Commission on Foreign Workers; smart regulations; and perhaps a points-based system, used in most immigration nations but which Peri rejects.”

The U.S. currently uses an employer-driven process to adjust the flow of migrant workers to the needs of the economy. Nearly all other countries, including Canada, Australia and the United Kingdom, have rejected processes driven by employers in favor of policy-driven systems, which weight employer demand heavily but also take into account the interests of workers and the general public.