[Senate Hearing 109-117]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-117
 
  THE NEED FOR COMPREHENSIVE IMMIGRATION REFORM: SERVING OUR NATIONAL 
                                ECONOMY

=======================================================================

                                HEARING

                               before the

      SUBCOMMITTEE ON IMMIGRATION, BORDER SECURITY AND CITIZENSHIP

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 26, 2005

                               __________

                          Serial No. J-109-23

                               __________

         Printed for the use of the Committee on the Judiciary


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                       COMMITTEE ON THE JUDICIARY

                 ARLEN SPECTER, Pennsylvania, Chairman
ORRIN G. HATCH, Utah                 PATRICK J. LEAHY, Vermont
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
JON KYL, Arizona                     JOSEPH R. BIDEN, Jr., Delaware
MIKE DeWINE, Ohio                    HERBERT KOHL, Wisconsin
JEFF SESSIONS, Alabama               DIANNE FEINSTEIN, California
LINDSEY O. GRAHAM, South Carolina    RUSSELL D. FEINGOLD, Wisconsin
JOHN CORNYN, Texas                   CHARLES E. SCHUMER, New York
SAM BROWNBACK, Kansas                RICHARD J. DURBIN, Illinois
TOM COBURN, Oklahoma
                       David Brog, Staff Director
                     Michael O'Neill, Chief Counsel
      Bruce A. Cohen, Democratic Chief Counsel and Staff Director
                                 ------                                

      Subcommittee on Immigration, Border Security and Citizenship

                      JOHN CORNYN, Texas, Chairman
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
JON KYL, Arizona                     JOSEPH R. BIDEN, Jr., Delaware
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JEFF SESSIONS, Alabama               RUSSELL D. FEINGOLD, Wisconsin
SAM BROWNBACK, Kansas                CHARLES E. SCHUMER, New York
TOM COBURN, Oklahoma                 RICHARD J. DURBIN, Illinois
                    James Ho, Majority Chief Counsel
                   Jim Flug, Democratic Chief Counsel


                            C O N T E N T S

                              ----------                              

                         THURSDAY, MAY 26, 2005
                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Cornyn, Hon. John, a U.S. Senator from the State of Texas........     1
    prepared statement...........................................    29
Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts, prepared statement..............................    51
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................    64

                               WITNESSES

Donohue, Thomas J., President and Chief Executive Officer, U.S. 
  Chamber of Commerce, Washington, D.C...........................    13
Griswold, Daniel, Director, Center for Trade Policy Studies, Cato 
  Institute, Washington, D.C.....................................    15
Law, Steven J., Deputy Secretary of Labor, Department of Labor, 
  Washington, D.C................................................     4
Massey, Douglas S., Professor of Sociology and Public Affairs, 
  Princeton University, Princeton, New Jersey....................    17

                       SUBMISSIONS FOR THE RECORD

Donohue, Thomas J., President and Chief Executive Officer, U.S. 
  Chamber of Commerce, Washington, D.C., prepared statement......    32
Former Commissioners of the Immigration and Naturalization 
  Service, joint letter..........................................    44
Griswold, Daniel, Director, Center for Trade Policy Studies, Cato 
  Institute, Washington, D.C., prepared statement................    46
Law, Steven J., Deputy Secretary of Labor, Department of Labor, 
  Washington, D.C., prepared statement...........................    56
Massey, Douglas S., Professor of Sociology and Public Affairs, 
  Princeton University, Princeton, New Jersey, prepared statement    65
United States-Mexico Chamber of Commerce, Albert Zapanta, 
  President and Chief Executive Officer, Washington, D.C., letter    67


  THE NEED FOR COMPREHENSIVE IMMIGRATION REFORM: SERVING OUR NATIONAL 
                                ECONOMY

                              ----------                              


                         THURSDAY, MAY 26, 2005

                              United States Senate,
          Subcommittee on Immigration, Border Security and 
             Citizenship of the Committee on the Judiciary,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 2:49 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. John Cornyn, 
Chairman of the Subcommittee, presiding.
    Present: Senators Cornyn and Kyl.

OPENING STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM THE 
                         STATE OF TEXAS

    Chairman Cornyn. This hearing of the Senate Subcommittee on 
Immigration, Border Security and Citizenship will come to 
order. We appreciate your understanding as we finished the 
markup on the asbestos bill, and we were delayed slightly while 
we reorganized the chairs and got our thoughts together.
    I want to thank Senator Specter for scheduling today's 
hearing, as well as Senator Kennedy, my Ranking Member, for 
working with us to help make this hearing possible. This 
Subcommittee has held a number of significant immigration 
hearings this year, and I appreciate all of our colleagues--
Senator Kyl, whose Subcommittee sat with us in each of these 
hearings, and Senator Kennedy and Senator Feinstein, our 
Ranking Members--working with us to make them productive.
    Today, we continue our review of the immigration system. 
Our immigration and border security system is, I think the 
evidence is clear, badly broken. In a post-9/11 world, we 
simply do not have the luxury of accepting the status quo any 
longer. National security demands a comprehensive solution to 
our immigration system, and that means both stronger 
enforcement and reasonable reform of our immigration laws. We 
must solve this problem, and we must solve it now.
    First, we must recognize that in the past we simply have 
not devoted the funds, resources, and manpower to enforce our 
immigration laws and protect our borders. That must change, and 
that will change. As history amply demonstrates, reform without 
enforcement is doomed to failure. No discussion of 
comprehensive immigration reform is possible without a clear 
commitment to and a substantial and dramatic escalation of our 
efforts to enforce the law.
    That is why Senator Kyl and I have embarked on a series of 
hearings, as I mentioned, devoted exclusively to the topic of 
strengthening enforcement throughout our Nation's immigration 
system--at the border, between the ports of entry, and within 
the interior of our Nation. These enforcement hearings have 
shown that our border inspection and security system at the 
ports of entry is full of holes, our deployment of manpower and 
use of technology to secure the border between the ports of 
entry is deficient, and our deportation process is over-
litigated and under-equipped.
    So, it is clear we need stronger enforcement. But, it is 
also clear that enforcement alone will not get the job done, 
nor will our job be done by merely throwing money at the 
problem. Our laws must be reformed as well as enforced.
    Any reform proposal must serve both our national security 
and our national economy. It must be both capable of securing 
our country and compatible with the demands of a growing 
economy. Our current broken system provides badly needed 
sources of labor, but through illegal channels--posing a 
substantial and unacceptable risk to our national security. 
Yet, simply closing our borders to secure our Nation would only 
destroy our economy. Any comprehensive solution must address 
both our security needs as well as the needs of our national 
economy.
    Accordingly, just last week, we began a series of hearings 
examining the benefit that comprehensive immigration reform 
would provide. Noted experts testified that national security 
would be bolstered if we properly reformed our system. 
Specifically, they testified that any reform should be designed 
to allow the government to focus its efforts on those who mean 
to do us harm as opposed to expending those resources on people 
who merely want to work. Reform along these lines would allow 
law enforcement to target its limited resources where they 
belong on high priorities like smugglers, drug dealers, and 
terrorists.
    Today, we shift our focus to explore the importance of 
immigration reform to our national economy.
    Our current economic system provides the necessary sources 
of labor crucial to many areas of commerce, but as I said, 
through illegal channels. Commissioner Bonner has previously 
testified before this Subcommittee that the vast majority of 
those the Border Patrol apprehends are migrant workers simply 
coming here to work. He said ``...the Border Patrol is still 
dealing with a literal flood of people on a daily basis...most 
of whom are attempting to enter this country in order to 
work.''
    While the situation Commissioner Bonner faces at the 
borders represents a substantial and unacceptable risk to our 
national security, it also demonstrates why we cannot simply 
close our borders or round up and remove the approximately 10 
million people who live outside our law. We do not have the 
resources, we do not have the facilities, we do not have the 
ability to identify, locate, and apprehend 10 to 12 million 
undocumented workers. Securing our Nation's borders at the 
expense of weakening our economy by choking off or removing 
needed sources of labor is not an acceptable alternative.
    But, even if we were equipped to do so, our economy would 
suffer if we stripped millions of workers from our national 
workforce, just as it would suffer if we eliminated entire 
stocks of natural resources from our national inventory. On the 
other hand, our economy would be strengthened if all workers 
could simply come out of the shadows, register, pay taxes, and 
fully participate in our economy.
    It is my hope that today's hearing will help us to better 
understand the benefits that would accrue to our national 
economy should we properly reform our immigration system. Some 
have expressed concerns about the impact of reforming the 
immigration system on the American worker. Today's hearing will 
examine that question.
    To be sure, America is a welcoming Nation. The hard work 
and strength of our immigrants have made our Nation prosperous. 
And, many immigrants and sons and daughters of immigrants have 
joined the military to help safeguard the liberty of America, 
advance scientific discoveries, and otherwise lead our Nation 
at various times. Nevertheless, we must craft a fair and 
consistent system that reforms our Nation's immigration laws 
without harming the economic security of American citizens.
    I want to end by noting that a bipartisan group of former 
INS Commissioners wrote to me recently, calling for a 
comprehensive immigration solution that both protects our 
national security and serves our national economy. The desire 
of these dedicated public servants to see that the immigration 
system is enforced and reformed transcends political ideology 
and is formed by years in the trenches. We would do well to 
heed their call.
    Without objection, I will make that a part of the record at 
the end of my comments.
    I am confident that Americans, working together, will rise 
to this challenge and find a solution that serves the best 
interests of our country.
    [The prepared statement of Chairman Cornyn appears as a 
submission for the record.]
    Chairman Cornyn. With that, I will turn to Senator Kyl, who 
has worked so closely with me and I with him on this issue for, 
lo, these many months, and as border State Senators, I think we 
understand perhaps as well as anybody about not only the 
reasons why we need to address the security issue, but also the 
necessity of addressing equally the economic issues associated 
with this phenomenon. So, Senator Kyl, I will turn the floor 
over to you for any statement.
    Senator Kyl. Thank you. Mr. Chairman, because we want to 
hear from the witnesses--we have a very distinguished panel of 
witnesses, and I appreciate all of you being here today. Our 
good friend, Steve Law, is going to lead off. Therefore, I am 
simply going to apologize in advance for having to leave in 
about half an hour. But to the extent that I do not hear 
somebody, I will read your testimony and look forward to 
visiting with you in any event.
    So thank you, Mr. Chairman.
    Chairman Cornyn. We are pleased today to have Deputy 
Secretary of Labor Steven Law appear here. Deputy Secretary Law 
serves as the Chief Operating Officer of the Department of 
Labor, a 17,000-employee agency with an annual budget of more 
than $50 billion. Mr. Law was confirmed as the Deputy Secretary 
of Labor by the Senate in 2003.
    While at the Department of Labor, Mr. Law has worked to 
update overtime regulations, provide transparency reforms for 
labor unions to protect rank-and-file union workers, and 
develop initiatives on, among other things, immigration reform.
    We are pleased to have you here today, and we would be 
pleased to hear your statement, Mr. Law. I can only think, as I 
am introducing you, how we are going to add to your burdens by 
creating an asbestos trust fund. But, that is another subject 
for another--something Senator Kyl and I have been working on 
along with the entire Judiciary Committee.
    If you would please remember to turn your microphone on, 
and I ask that you initially limit your statement to about 5 
minutes, and then we would like to engage in a conversation 
with you. Thank you.

    STATEMENT OF STEVEN J. LAW, DEPUTY SECRETARY OF LABOR, 
             DEPARTMENT OF LABOR, WASHINGTON, D.C.

    Mr. Law. Absolutely. I would like to offer an extensive 
statement into the record on the asbestos legislation, but I 
will not do that at this time.
    [Laughter.]
    Mr. Law. Mr. Chairman, Senator Kyl, thank you very much for 
this opportunity to testify on the role of immigrant labor in 
our 21st century economy. The Department of Labor has long 
played an important role in immigration policy. In fact, in the 
early 1900s, 85 percent of the Department's 2,000 employees 
worked in its Bureau of Immigration before it was transferred 
over to another department. The first two Secretaries of Labor 
were both immigrants, from Scotland and South Wales, 
respectively. Our current Secretary of Labor, Secretary Chao, 
is also an immigrant. And my own grandfather came from Norway 
to San Francisco in 1906. You may remember that was the same 
year as the great San Francisco earthquake, which only goes to 
show that we Norwegians have no sense of timing at all.
    Over the centuries, immigrants have helped the American 
economy prosper, literally helped build the country, fought its 
wars to defend our liberties, and enriched our culture in 
countless ways. And yet our attitude toward immigration has run 
hot and cold through the years, and that has been exacerbated 
by an immigration system that is increasingly torn between the 
needs of our economy and our security and between the rule of 
law and gritty realities.
    Last year, President Bush proposed dramatic reforms to that 
system to better control our borders, to ensure long-term 
economic growth, and to deal equitably and responsibly with the 
millions of undocumented workers who currently live in the 
shadows of American life.
    The President's proposal for a new temporary worker program 
recognizes that many sectors of our economy rely on foreign-
born workers to fill jobs where there simply are not willing 
U.S. workers available. The President's proposal also 
recognizes that the current system for bringing in temporary 
workers is complex and cumbersome, and we would streamline that 
process so that willing workers can be matched efficiently with 
employers while always putting American workers first. And, 
finally, the President's plan recognizes that America's vast 
underground labor economy needs to be brought into the daylight 
for the benefit of all. We would do this compassionately but 
without conferring amnesty, without creating an entitlement to 
citizenship, and without putting those who have ignored our 
laws in front of those who have obeyed them and waited 
patiently for their turn.
    Now, the focus of this hearing is the intersection of the 
economy and our need for foreign-born workers. Our labor market 
today is healthy and robust. The unemployment rate has dropped 
to 5.2 percent, which is below the monthly average of the last 
50 years. In April, the economy created 274,000 new jobs, and 
that is part of the 3.5 million jobs that have been added since 
June 2003. At the end of March, there were 3.6 million unfilled 
job openings in the United States.
    At the same time, a quiet revolution has been taking place 
in the composition of our workforce. Over the last 15 years, 
the number of foreign-born workers in America has swelled 50 
percent to a total of 21.4 million workers in 2004. And yet 
this rapid growth in the foreign-born labor force has not come 
at the expense of American workers. For example, just between 
2002 and 2004, just a 2-year gap, about 1.2 million foreign 
workers were added to our labor force, at the same time that 
the unemployment rate for American workers went from 5.7 
percent to 5.5 percent.
    In the future, demographic trends will make the steady 
influx of foreign-born workers not only sustainable but 
ultimately economically necessary. And yet today, the need for 
foreign-born workers is being felt acutely in many sectors of 
the U.S. economy, from construction and agriculture to health 
care and high-tech.
    At the Department of Labor, we watch for gaps between wage 
rates and employment levels. If wages are climbing much more 
rapidly than employment levels in particular occupations, this 
suggests a tightening labor market and a pent-up demand for 
more workers. For example, between 2002 and 2003, wages for 
pharmacists increased 44 times faster than employment. Wages 
for dispensing opticians grew more than 18 times faster than 
employment.
    Of course, these are just numbers on a page. The importance 
of foreign workers to our economy is presented to you every day 
through your constituents. The Department of Labor receives 
scores of letters from Members of Congress every year making 
requests about the status of visa petitions that are filed by 
employers who are in desperate need for workers to harvest 
crops, to cut trees, to provide rural health care, and to write 
software. In all these areas we find that very typically there 
is a connection between the jobs that need to be filled by 
foreign workers and supporting jobs that are currently filled 
by Americans.
    This intersection of immigration and the needs of our 
economy is a crucial issue for our Nation, and we look forward 
to working with this Subcommittee and Congress to achieve 
immigration reforms that respond to our economy's needs, that 
reflects America's character, and that guard our Nation's 
security.
    Thank you.
    Chairman Cornyn. Thank you for your statement, Mr. Law. We 
will proceed with a round of questions.
    First of all, I think, as I said in my opening statement, 
many people in America today are frustrated by our inability to 
control our borders. It is an issue that, from a national 
security perspective, after 9/11, has taken on a new sense of 
urgency and concern. The real national security deficit and the 
frustration that many people feel about the Federal 
Government's not living up to its responsibilities is something 
that, as I said, Senator Kyl and I address with Title I of our 
comprehensive immigration reform bill.
    At the same time, the Congressional Research Service has 
estimated as recently as last year that we have approximately 
10 million undocumented immigrants, people who have come in 
outside of the laws currently residing in the United States, 
approximately 6 million of those in the workforce, is the 
number Congressional Research Service uses. I have heard 
different estimates.
    What studies or reports has the Department of Labor 
undertaken to identify the types of jobs that immigrants 
currently perform, if any? Or what kinds of sectors of the U.S. 
economy will continue to need migrant labor in the future?
    Mr. Law. There are a variety of different external reports, 
not Department of Labor-specific reports but external reports, 
that have documented the extent of immigrant employment in 
various sectors of the economy. There is, just for example 
today--and this is purely anecdotal, but it is confirmed much 
more broadly--an article in the Washington Post that describes 
the influx of Hispanic workers, mostly foreign-born, in the 
construction industry just around this particular area. Again, 
that is an anecdotal answer, but it is replicated by numerous 
reports and studies around the country that the construction 
industry has become an area where immigrant labor is 
increasingly needed as the employment in the construction 
sector is now at an all-time high and continuing to increase 
every single month.
    In addition to that, immigrants have become increasingly 
important to the agricultural sector, particularly in rural 
areas where it is very difficult to get surge capacity 
employment from the domestic labor force so that there is 
increased reliance on migrant farm workers, which are largely 
foreign-born immigrants.
    In addition to that, there is an increasing need for 
typically immigrant labor in the health care sector, and 
lastly, also in the area of highly skilled workers, in 
particular the software industry, the computer hardware 
engineering industry. These are areas where there simply is a 
much greater need for additional workers than the current 
domestic labor supply can keep the pace with.
    Chairman Cornyn. Mr. Law, some Members of Congress have 
proposed--and I am thinking about, in particular, the ag jobs 
bill that was introduced earlier, or taken up even during the 
course of our debate about the supplemental appropriation bill 
earlier this year--that we deal with this on a sector-by-sector 
basis; in other words, that we deal just with the ag industry 
and farm workers.
    My own question about that is: Is there any good reason, 
from your perspective, why we would deal with this on an 
industry-specific basis as opposed to creating a system which 
would allow people to match willing workers with willing 
employers, once they have determined an American is not able to 
fill that job? Is there any good reason why we would limit the 
kinds of jobs that these people, once screened and once 
qualified, could perform in our economy?
    Mr. Law. Well, probably the best answer to that question is 
that today, as my previous answer suggested, immigrant workers, 
foreign-born workers, occupy a very, very broad array of 
occupations and sectors of the economy. A fix in one area 
obviously would not address the need for workers in significant 
other areas.
    There is undoubtedly an acute need for a steady and 
predictable supply of foreign-born workers in the agricultural 
sector, but simply dealing with that problem alone will not 
deal with the equally acute and deeply felt need for immigrant 
and foreign-born workers in the high-tech sector, for example, 
or in health care or in construction.
    And so very clearly the benefit, I guess I would say, of a 
comprehensive approach is that all of the different economic 
needs we have would be addressed by a comprehensive approach, 
and in addition to that fact, we would also be reaching all of 
the workers who currently live and work here who are 
undocumented who are in this broad array of different 
industries and occupations.
    Chairman Cornyn. What kind of assurances could be provided 
to assure the American people that any immigration reform that 
would allow immigrants to work here on a temporary basis would 
not be displacing American workers? How would you see that we 
would best address that?
    Mr. Law. Absolutely. That is a very important question, and 
one of the central principles of the President's approach which 
he announced last year was that American workers need to come 
first. We need to protect their rights to get access to jobs 
that are available above all else.
    We administer a number of worker visa programs, and a key 
feature of several of them is a labor market test which 
requires us and employers to go through reasonable, verifiable 
efforts to test the market to see whether there are available 
and willing American workers. We would expect that such a 
feature would be part of whatever ultimate temporary worker 
program were designed and implemented by Congress. And that is 
something that we would want to ensure, which is that employers 
working together with the Government put American workers first 
and make sure that we are not giving jobs away to foreign-born 
workers that an American is available to fill.
    Chairman Cornyn. Thank you very much.
    Senator Kyl?
    Senator Kyl. Thank you. Mr. Chairman, I had noted to 
Secretary Law that his name is a good intro for one of the 
things that we are trying to accomplish here, and I know he 
will agree with the statement. The Department, I am sure, 
agrees with Senator Cornyn and I that the key here is for us to 
develop a system in which everybody can work within the rule of 
law. Would that be a fair summary principle?
    Mr. Law. I think that is a very important principle, yes.
    Senator Kyl. Clearly, we have employer needs for workers in 
our country, but I think all of us would agree that they need 
to be satisfied within a legal framework.
    Among the principles that you testified to were that the 
undocumented workers who are here today but for whom some legal 
status is urged, nevertheless should not gain an advantage over 
those who have followed the rules. Let me just flesh that out 
just a little bit.
    That would not preclude in your view, would it, allowing 
people who are illegal immigrants today from participating 
right alongside legal immigrants in a new temporary worker 
program? In other words, if we create a new temporary worker 
program for people to be here temporarily, both people who are 
coming from another country and these people who came here 
illegally today would be able to participate in such a program?
    Mr. Law. Yes, that is correct.
    Senator Kyl. That would be consistent with the principle.
    Mr. Law. Right.
    Senator Kyl. I gather an example of something that would 
not be consistent with that principle would be, however, to 
allow those illegal immigrants to gain legal permanent 
residency while someone who is seeking to do so legally from 
their home country--well, obviously, would be doing it in a 
totally different way, the way it is currently done.
    Mr. Law. Right. In fact, that was one feature that has been 
somewhat criticized and regretted about the 1986 Immigration 
Reform and Control Act, which did exactly as you said, and one 
of the principles that has been enunciated in this temporary 
worker program is that this should not be an occasion for 
someone who is here illegally to get in front of the line of 
people who have waited outside patiently and obeyed our laws.
    Senator Kyl. Right. Now, I don't know if you have read some 
of the other testimony, but I read Tom Donohue's testimony, and 
as always, he has got a lot of good meat in his statement. On 
page 8 he said something that I really want to emphasize here 
and get your reaction to it. He said, ``Some ask whether the 
high level of employment means''--and this is of people who are 
not documented--``that employers are violating the law. No, it 
does not.'' ``Necessarily,'' I guess I would add. ``It should 
be emphasized that employers are required to, and do, verify 
that each employee is eligible to work in the United States, 
but by law employees get to choose which documents from [DHS'] 
approved list (set out on the `I-9)' . . . '' And he goes on to 
say, ``These documents look valid on their face and many times 
they are in fact legitimate documents belonging to relatives or 
friends who are authorized . . . '' and so on. ``By law, the 
employer must accept these documents.''
    And, of course, that goes on to illustrate why this is very 
difficult for employers, because employers cannot go behind the 
documents and say, ``Well, you don't look right to me, I am 
going to demand something else of you.'' They will get hit with 
EEOC complaints in that event.
    So we have put a real tough burden on the employers not to 
hire illegal immigrants but, by the way, not to ask too many 
questions, and we have given them the documents they can choose 
from, which everybody knows can be and in many cases are 
counterfeited.
    Would it be the Department's view that critical to the 
success of a new program of comprehensive immigration reform 
would be a system for hiring that is simple, relatively 
inexpensive, easy for employers to use, and would have absolute 
verification requirements that would, if enforced and if 
applied properly, ensure that no more would illegal immigrants 
be hired?
    Mr. Law. Certainly employers are put between a rock and a 
hard place in the current system. Many of them do have very 
compelling needs for foreign-born workers to fill jobs for 
which there are simply no willing Americans available. And the 
current system is cumbersome. The current system, in many cases 
we are trying to make it simpler. But the current labor market 
tests in some cases are very, very complicated. And so I think 
any effort to simplify and clarify what the employers' 
responsibilities are and to ensure that those requirements 
actually do what they are intended to do I think would make the 
program work better and, therefore, encourage both employers 
and those who are undocumented to participate in it.
    Senator Kyl. The bottom line is that everybody working 
within the rule of law is better for society. The employers are 
protected and know that they have legal employees. The legal 
employees know that they have protections. And society at large 
knows that both the employers and the Government are sticking 
with the rule of law, which we really need in a society if we 
are going to have trust in the Government and trust in the rule 
of law. You would agree with that?
    Mr. Law. As you pointed out at the outset, that is my last 
name, Senator.
    [Laughter.]
    Senator Kyl. Thank you.
    Chairman Cornyn. Mr. Law, in your statement, you talk about 
the need for foreign workers and how that relates to the aging 
of current American workers. Could you expand on that a little 
bit so we could understand that better? Why aren't there enough 
younger Americans coming along to fill those jobs being vacated 
by those of us as we get older and reach retirement age?
    Mr. Law. Well, in large measure, this is a long-term 
demographic trend that is having an impact on a wide variety of 
issues in our country, including the Social Security debate, 
which we have been talking about in other settings. But as I 
think all of us know, the baby-boom generation, of which I am 
the tail end, is moving within range of retirement, and this is 
a very, very large cohort of people. In fact, the number of 
people who will be entering into the retirement years in the 
next few years is 50 percent larger than the same group that 
went through 10 years past. So it is a very, very large group 
of people who will be heading into retirement and leaving the 
productive workforce.
    Meanwhile, the generation of people who are coming behind 
them, those who are, say, between 16 and 25 years old, has 
remained essentially flat over the last several years. And so 
what we are seeing is a large number of people who will be 
outside the workforce, a somewhat smaller group of people who 
will be in their productive years in the years ahead, and that 
will create substantial pressure, is, in fact, already creating 
substantial pressure on labor markets. And it goes to the issue 
that I mentioned a little bit earlier where we look at what is 
happening to wage rates in key professions and comparing it to 
the employment levels. If wage rates are climbing dramatically 
in particular professions vis-a-vis how many new jobs are being 
filled, that suggests some pent-up demand for laborers.
    One of the examples I did not get a chance to talk about 
was computer hardware engineers. We have heard a great deal, 
for example, about the dotcom bust, and so a lot of people 
assume there are no opportunities left in the high-tech 
industry. Well, anyone who is from that industry will tell you 
that the opposite is, in fact, true. We have heard about the 
dotcom bust, and yet despite that and despite the fact that 
that particular occupation of computer hardware engineer has 
been steadily filled with foreign-born workers through the H1-B 
visa program, and also despite the fact that these are 
traditionally very, very highly compensated positions, the 
wages of computer hardware programmers increased nearly 2 times 
faster than employment levels for that particular occupation 
between 2003 and 2004.
    So we see a lot of examples all across the economy of 
greater need for workers in these particular occupations than 
the domestic labor supply can provide, and as you pointed out 
at the outset of your question, that will only get more 
substantial as the baby-boom generation retires, and the next 
generation, which is much smaller, will be there to fill those 
jobs.
    Chairman Cornyn. I have found out during the time that I 
have spent focusing on immigration issues that one reason that 
our law appears to be so badly fragmented and not comprehensive 
in any real sense of the term is because it is controversial. 
So, people tend to favor rifle-shot solutions perhaps that do 
not get a lot of attention, but yet relieve a little bit of the 
problem here or there--for example, caps on H1-B workers and 
the like.
    But, I wonder what your perspective would be on whether the 
caps that we have on legal immigration or perhaps the 
administrative burdens on legal immigration and legally working 
in the United States, do those provide an incentive for some 
people to simply avoid a legal way of coming into the country 
or working here because the burdens are just too high, the caps 
are too low?
    Mr. Law. Well, certainly if you look at the past history of 
our capped temporary work visa programs, in the past these visa 
program caps were not always met. Today, increasingly, they are 
being met and frequently being met very early in the program 
year. And so as a result of that, those programs become 
impossible to use for large numbers of employers who are 
concerned about using them.
    The Senate recently passed an amendment offered by Senator 
Mikulski to at least reserve some of the H2-B visas for the 
latter part of the year, where some seasonal workers in her 
State and in other States are needed for various food-
processing tasks and that sort of thing.
    So there is a lot of pressure on the current system with 
its current restrictions and caps and requirements, and I think 
that all argues for the kind of comprehensive approach that the 
President has talked about and that is being talked about here, 
where we deal with all of these different pressures on the 
system and different concerns, such as the ones that Senator 
Kyl talked about earlier and you talked about earlier, which is 
also ensuring the rule of law while at the same time meeting 
the economic needs that our country has.
    Chairman Cornyn. It struck me as ironic that, as we have 
heard during the course of our hearings, the Border Patrol 
detains about 1.1 million people a year. These are relatively 
uneducated, low-skill workers who are coming across in that 
way. Of course, we are also told that they probably detain one 
out of every four or so. And, of course, they detain them, many 
of them, most of them, and then release them on their own 
recognizance pending a hearing on deportation for which most of 
them do not show up.
    Mr. Law. Right.
    Chairman Cornyn. But, my point is we have put caps on some 
of the best educated and the best trained people, and yet we 
have virtually uncontrolled illegal immigration for unskilled 
workers. That seems backwards to me.
    Mr. Law. Well, certainly one of the issues that has been 
raised that needs to be looked at is just the role of high-
skilled immigration in this country, and people have 
increasingly been talking about that. There has been some 
recent analysis done about the tremendous contribution that 
high-skilled foreign-born workers make to our economy, to our 
standard of living, and the degree to which they really 
contribute to our economy's competitiveness and vitality.
    So, once again, I think it argues for looking at the entire 
picture, what each temporary worker or foreign-born worker 
contributes to the economy, as well as these other issues that 
you have raised earlier in this hearing.
    Chairman Cornyn. Well, one last point in that same vein. 
Senator Lugar, Senator Alexander, Senator Coleman, and I have 
begun to have a series of roundtables on the decrease in the 
number of foreign students who come and study in the United 
States due to heightened security procedures and scrutiny given 
to these foreign students, many of whom, because of the 
difficulty of getting into the United States to study, are 
going to study in Europe. Unfortunate, from my standpoint, not 
only do we lose some of the brain power that might ultimately 
inure to the benefit of the United States, a lot of the public 
diplomacy that occurs when foreign students come to the United 
States and study and then return to their home countries is 
lost.
    Mr. Law. Right.
    Chairman Cornyn. Because, it seems to me that there is 
probably no better person to communicate the positive 
attributes about our country than a student who comes from 
another country, who studies here, and then returns to their 
home country, and then is able to their fellow countrymen what 
America is really like as opposed to what they read in the 
newspapers, in some newspapers, and watch on some TV screens.
    Thank you very much.
    Mr. Law. Thank you, Senator.
    Senator Kyl. Mr. Chairman, unfortunately, I am going to 
have to go, but just again, relating to the Department of 
Labor's desire to serve both employer and employee here with a 
sensible system, and Tom Donohue's observation in his 
testimony, I was reminded of that old saying that was kind of 
the cynical humor of the Soviet Union era when the workers 
would say, ``Well, the government pretends to pay us and we 
pretend to work.''
    It was a cynical reflection on the fact that there was no 
rule of law there. The government was breaking the law and 
everybody knew it, and so the workers felt no obligation to try 
any harder than the government.
    We have a Government that sets out a standard that 
everybody knows does not work. The employers are required to 
comply with it. They and certainly the employees who are hired 
illegally know that it is all a sham. And yet we allow it to 
continue. The employers do not want it to continue that way. 
The Government certainly should not want it to continue that 
way. The employees would obviously like to be legal.
    We have got to get a handle on this and create a system 
where people in the future will have respect for the system, 
the rule of law, and will say now we have got something where 
people can legally be employed in a relatively easy way by 
employers who want to comply with the law and are now doing so, 
and the Government that cares about enforcing the law. If we 
can get to that point, I think Senator Cornyn and I will have 
succeeded. But since you are always available, I am not going 
to take any more time to question you. I will just talk to you 
later. Thank you.
    Mr. Law. Absolutely. I would be glad to do so, Senator. 
Thanks.
    Chairman Cornyn. Thank you very much. We will now go to our 
second panel. Thank you for being with us.
    Mr. Law. Thank you very much, Senator. Glad to be here.
    [The prepared statement of Mr. Law appears as a submission 
for the record.]
    Chairman Cornyn. While our panel is taking their seat, let 
me just say that we have a very distinguished second panel in 
addition today.
    Our first witness is Thomas J. Donohue, the President and 
CEO of the United States Chamber of Commerce. Mr. Donohue leads 
the world's largest business federation representing 3 million 
companies, State and local chambers, and American Chambers of 
Commerce abroad. Mr. Donohue brings important perspectives on a 
variety of issues being considered by Congress including 
intellectual property issues, corporate governance, and today's 
topic, immigration reform. Thank you for being here with us 
today.
    Joining Mr. Donohue on our second panel is Dan Griswold. 
Mr. Griswold is Director of the Cato Institute's Center for 
Trade Policy Studies, and has authored or co-authored studies 
on, among other subjects, globalization, the World Trade 
Organization, trade and manufacturing, immigration and trade in 
democracy. Mr. Griswold has been published extensively and has 
appeared in numerous TV and radio news and talk shows. Welcome, 
Mr. Griswold, to the Committee.
    Finally, I would like to welcome Douglas S. Massey. Dr. 
Massey is Professor of Sociology and Public Affairs at 
Princeton University's Woodrow Wilson School of Public and 
International Affairs. Dr. Massey is also published extensively 
on Mexican immigration, including co-authoring Beyond Smoke and 
Mirrors, which discusses U.S. immigration and the economic 
integration of migrant workers. Thank you as well, Dr. Massey, 
for being with us.
    We are privileged to have such a distinguished panel of 
witnesses to bring a broad base of practical experience to 
these issues, and we would be pleased at this point to hear 
your statements.
    Mr. Donohue.

 STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF EXECUTIVE 
      OFFICER, U.S. CHAMBER OF COMMERCE, WASHINGTON, D.C.

    Mr. Donohue. Senator, thank you very much, and thank you 
for inviting me here to speak on this critical issue. It is 
important to the well-being of our country immigration reform.
    I last testified on this subject before Congress on 
September the 7th, 2001. At that time you will recall our 
Nation was moving towards major reform. John Sweeney and I had 
testified together with some common thoughts.
    President Bush and President Vicente Fox appeared also to 
be heading towards a mutual set of agreements.
    Just four days later after we testified the tragedy of 
September 11th occurred, and the Nation, understandably, 
focused all of its attention on security. Immigration reform 
fell by the wayside.
    But nearly four years later the need for immigration reform 
is greater than ever. Our immigration system is broken and will 
stay broken until we fix it.
    Allow me, Senator, to add just a personal note before I 
carry on with my testimony. I travel around the country talking 
about immigration, and its importance to this Nation, and I am 
somewhat turned off by the very often vicious reaction of 
sensible people to the need to add immigrants to our workforce. 
I always ask how many American Indians are in the room. There 
are not too many. I remind the others that they are all them, 
those people. That is where we came from. But at the same time 
I am not worried about the result because this long discussion 
about this complicated subject is going to still be going on 
when the problem becomes so severe that the Congress, the 
States and our fellow citizens are going to deal with it.
    If you look at all the people that are unemployed in the 
United States now, there are about 1.6 million of them that are 
ready, willing and able to go to work. If you look at all of 
the immigrants that are undocumented and here working, and the 
Pew study said, what, 10.3 million? That suggests if we send 
them home or we do not make them employable, we have got a 
national crisis now. If you listen to Steve Law's comments 
about what happens in the coming years in retirements, we have 
an even more serious crisis.
    So I think we are dealing with two issues here, basically 
the need to fix the system, and second, the reality that no 
matter how prejudiced or emotional or understandably angry our 
fellow citizens are, they are going to be ready to solve it 
long before they are going to change their attitudes.
    Let me suggest that there are three things we can do to 
change this system. First is some type of targeted earned 
adjustment to take care of the status of undocumented workers 
who are here, many of them paying taxes, and certainly working 
in a lot of our very important industries. Some like to use the 
word ``amnesty.'' I do not. We support legislation that would 
provide a step-by-step process in which an undocumented worker 
could qualify for permanent legal status.
    I know that some people, as I said, are uncomfortable with 
providing these workers with legal status, but the alternative 
solutions are not only indefensible, they are not workable. We 
are not going to adopt a massive deportation program, and if we 
did, we could not make it work. Our economy would grind to a 
halt if we tried to round up and deport the estimated 10 plus 
million undocumented workers, and maintaining the status quo is 
equally wrong. A shadow society of undocumented workers and a 
booming fraudulent document industry--which by the way, gets 
more effective every year because the technology is better--
protects criminals and terrorists and it makes it easy for 
people to exploit undocumented workers.
    Creating a pathway for earned legal status in this country 
would rightfully recognize those upon whom our economy depends 
and would enable our law enforcement officials to do their job 
more effectively.
    I second think that immigration reform should allow 
employers to hire foreign workers under a temporary worker 
system. By the way, these would not all be low-end jobs. Our 
problems on the higher end are moving in a negative way faster 
than on the lower end. A temporary worker program is absolutely 
essential for us to address these needs of an expanding 
economy, a declining working age population, a lower birth rate 
and an impending retirement of much of the workforce. By the 
way, we have done this five or six times since the founding of 
our country with major thrusts of immigration. We might want to 
try it again. It has produced some pretty good people.
    My written testimony gives you all the demographic data, 
but rather than go into that, I would like to just report one 
line from a workforce expert who says the ``most inescapable 
challenge facing the American workforce in the coming 20 
years'', the next 20 years, ``we will not have enough people to 
fill'' the jobs.
    When we did our outsource study we got a result that said 
by 2010--that is 5 years from now--that we would have between 6 
and 10 million jobs in this country with no one to fill them. 
That is why I have a sense we will move forward.
    I do not want to bleed on your time anymore. I would simply 
say that we need skilled and unskilled, moderately skilled 
workers. You look at the numbers on housing starts, at an all-
time high. Who do you think are building these houses? You look 
at what is going on in our expanded agricultural business in 
your own State, with massive exports of agriculture products 
and coming to a better--who do you think is working these 
industries? A sizeable chunk of our economy requires these 
immigrants, and we need their help.
    Finally, we recognize that stronger enforcement of our 
immigration and border security laws are important, and people 
have to have a law that has credibility in it, and we have seen 
all the reports about violence and people dying unnecessarily. 
We certainly do not want to have that happen. I do remember a 
lot of Irish people that got on boats and came here through 
terrible storms, and a lot of them died. They were not only 
leaving a famine. They were coming to a great time of 
opportunity, and this country has not got the facility to lock 
those borders.
    Senator, let me just say we need more workers. We need 
enhanced security. We need a document system we can trust, and 
obviously many details have to be worked out. The Chamber is a 
leader in the Essential Worker Coalition. We are going to work 
very hard on that. We are going to work with you and your 
colleagues, but let us try and get something done before 
reality overtakes us, and it is breathing hard down our necks.
    Thank you very much.
    [The prepared statement of Mr. Donohue appears as a 
submission for the record.]
    Chairman Cornyn. Thank you very much, Mr. Donohue, for your 
statement.
    Mr. Griswold, we would be glad to hear yours.

STATEMENT OF DANIEL GRISWOLD, DIRECTOR, CENTER FOR TRADE POLICY 
         STUDIES, THE CATO INSTITUTE, WASHINGTON, D.C.

    Mr. Griswold. Senator Cornyn, thank you very much for 
inviting the Cato Institute to speak today on immigration and 
the U.S. economy.
    Our research at Cato has consistently shown that immigrants 
plan an important part in the success of our free enterprise 
economy. Immigrants work willingly to fill important segments 
of the labor market. They gravitate to occupations where the 
supply of workers tends to fall short of demand, typically 
among higher-skilled workers and lower-skilled occupations. 
That hour-glass shape of the immigrant labor pool compliments 
the native-born workforce, where most workers fall into the 
middle range in terms of skills and education. As a result, 
immigrants do not compete directly with the vast majority of 
American workers.
    Lower-skilled immigrants benefit the U.S. economy by 
filling jobs for which the large majority of Americans are 
simply over qualified. Important sectors of the U.S. economy, 
hotels and motels, restaurants, agriculture, construction, 
light manufacturing, health care, retailing and other services 
depend on low-skilled immigrant workers to remain competitive.
    Even in our high-tech economy demand for less skilled labor 
will continue to grow in the years ahead. According to the 
Department of Labor, the largest absolute growth in jobs during 
the next decade will be concentrated in categories that require 
only short-term on-the-job training. Of the 20 job categories 
with the largest expected growth in employment between 2002 and 
2012, 14 of them require only short-term training. These 
occupations include retail sales, food preparation, grounds 
keeping, janitors, waiters and waitresses. The net employment 
growth in those categories alone is expected to be 4.9 million.
    Meanwhile, the pool of American workers willing and happy 
to fill such jobs continues to shrink. We are getting older as 
a Nation and we are getting better educated. I am also one of 
those aging baby-boomers. Between 1982 and 2012, according to 
the Bureau of Labor Statistics, the median age of workers in 
the U.S. labor force will increase from 34.6 to 41.6 years. 
That is the highest level ever in American history, and the 
pool of workers between 16 and 24, the share is dropping by a 
third. At the same time workers in the U.S. labor force are 
more educated than ever. In the past four decades the share of 
adults 25 and older who have not completed high school has 
plunged from more than half in 1964 to less than 15 percent 
today, and if you look at adult native men in the workforce, it 
is below 10 percent and dropping.
    Immigrants provide a ready and willing source of labor to 
fill that growing gap between demand and supply on the lower 
rungs of the ladder. Yet here is the rub. Our current 
immigration system offers no legal channel for peaceful, hard-
working immigrants from Mexico and other countries to come into 
the United States and fill these jobs that the vast majority of 
Americans do not want. The result is large-scale illegal 
immigration. Our current dysfunctional immigration system is 
colliding with reality, demographic and economic, and as usual, 
reality is prevailing.
    Since 1986 the U.S. Government has dramatically increased 
spending on border enforcement. For the first time in our 
history we have imposed fines on companies that knowingly hire 
undocumented workers. Yet the number of illegal immigrants 
continues to grow by several hundred thousand a year to an 
estimated 10 million today.
    The only realistic answer is comprehensive immigration 
reform. Such reform should grant temporary but also renewable 
visas that would allow foreign-born workers to fill those jobs 
where labor is most needed. Such visas should allow multiple 
reentries for as long as the visa is valid, complete mobility 
between employers and sectors, and full protection of U.S. law.
    Comprehensive reform should also legalize the millions of 
workers who are currently in the United States without 
documentation. Many of these workers have lived and worked in 
the United States for several years. They are valuable 
participants in their workplace and their communities. They 
should be allowed and encouraged to come forward and be 
legalized and documented.
    Legalization does not mean amnesty. Newly legalized workers 
can be assessed a fine. They should be required to get in line 
with everybody else to apply for permanent status. Whatever way 
we achieve legalization, it would be far preferable to the 
status quo of millions of people living in a social and 
economic twilight zone outside the rule and protection of law.
    Reform is not about opening the door to millions of 
additional foreign workers. It is about legalizing the millions 
already here and the hundreds of thousands who are coming in 
each year already.
    According to research, legalization would raise their 
wages, benefits and working conditions by giving them more 
bargaining power in the marketplace. They could more easily 
change jobs to improve their pay and working conditions. They 
would be more likely to qualify for health insurance and to 
invest in their job and language skills. They could put their 
savings in the bank. Legalization would replace an underground 
supply of illegal workers with a safe, orderly and documented 
population of legal workers.
    In conclusion, we need to recognize reality, adopt 
comprehensive reform, and fix America's flawed immigration 
system so that it conforms to the realities and the ideals of a 
free society.
    Thank you.
    [The prepared statement of Mr. Griswold appears as a 
submission for the record.]
    Chairman Cornyn. Thank you very much, Mr. Griswold.
    Dr. Massey, we would be glad to hear from you.

  STATEMENT OF DOUGLAS S. MASSEY, PROFESSOR OF SOCIOLOGY AND 
  PUBLIC AFFAIRS, PRINCETON UNIVERSITY, PRINCETON, NEW JERSEY

    Mr. Massey. Mr. Chairman, since 1982 I have co-directed a 
large research project studying Mexican migration to the United 
States with my colleague Jorge Durand at the University of 
Chicago.
    The Mexico Migration Project, which is funded by NICHD and 
the Hewlett Foundation, offers the most comprehensive and 
reliable source of data available on documented and 
undocumented migration from Mexico. The project won a merit 
award from the National Institutes of Health, and based partly 
on its success, Jorge and I have been elected to the National 
Academy of Sciences.
    Two decades of intensive research using these data reveal a 
fundamental contradiction at the heart of U.S. relations with 
Mexico. On the one hand, we have joined with that country to 
create an integrated North American market characterized by 
relatively free, cross-border movements of capital, goods, 
services and information. As a result, since 1986 total trade 
with Mexico has increased by a factor of 8. On the other hand, 
we have also sought to block the cross-border movement of 
workers. The United States criminalized undocumented hiring in 
1986, and over the next 15 years tripled the size of the Border 
Patrol while increasing its budget tenfold.
    The escalation of border enforcement was not connected to 
any change in the rate of undocumented migration from Mexico. 
Rather, U.S. policymakers appeared somehow to have hoped to 
finesse a contradiction, integrating all markets in North 
America except one, that for labor. This contradictory stance 
has led to continued migration under terms that are harmful to 
the United States, disadvantageous for Mexico, injurious to 
American workers, and inhumane to the migrants themselves.
    Rather than increasing the likelihood of apprehension, the 
militarization of the Mexico-U.S. border has reduced it to a 
40-year low. Before 1975 the odds of getting caught on any 
given attempt at entry were about 33 percent. Today they are 
around 10 percent, and this is because militarization channels 
migrants to more remote sectors where the chance of getting 
caught is actually smaller. In these relatively unguarded 
sectors, however, the risk of death is greater. Mortality among 
migrants has tripled, bringing about the needless death of 300 
to 400 persons per year.
    Although U.S. efforts to increase the costs and risks of 
border crossing did not discourage undocumented migrants from 
coming, they had the perverse effect of deterring them from 
going home. Once in the United States migrants are reluctant to 
face again the gauntlet at the border, so they stay put and 
they send for their family members. The end results has been an 
unprecedented increase in the size and growth rate of the 
undocumented population. The hardening of the border in San 
Diego and El Paso also pushed migrants away from traditional 
destinations towards new receiving areas.
    In the end, during the 1990s, what had been a circular flow 
of able-bodied workers into three States became a settled 
population of families across all 50 States, significantly 
increasing the cost of migration to U.S. taxpayers. The 
economic costs were likewise exacerbated by the criminalization 
of undocumented hiring in 1986, which was an effort to 
eliminate the magnet of U.S. jobs. This action, however, only 
encouraged U.S. employers to shift from direct hiring to labor 
subcontracting. Rather than dealing directly with migrants, 
employers began increasingly to work through intermediaries to 
escape the burdens of paperwork and the risks of prosecution. 
In return, subcontractors pocketed a portion of the wage bill 
that formerly went to migrants, thereby lowering their wages.
    Unfortunately, the ultimate effect was not to eliminated 
undocumented hiring, but to undermine wages and working 
conditions in the United States, not so much for undocumented 
migrants who had always earned meager wages, but for authorized 
workers who formerly had been able to improve their earnings 
over time. In the new regime everyone had to work through a 
subcontractor regardless of legal status, and the advantaged 
bargaining position once enjoyed by citizens and legal resident 
aliens was nullified.
    At this point all we have to show for two decades of 
contradictory policies towards Mexico is a negligible deterrent 
effect, a growing pile of corpses, record low probabilities of 
apprehension at the border, falling rates of return migration, 
accelerating undocumented population growth, and downward 
pressure on wages and working conditions in the United States. 
These outcomes are not simply my opinion, but scientific facts 
that can be reproduced by anyone else, using the data that is 
publicly available from the Mexican Migration Project on the 
Web.
    The situation is thus ripe for reform. Rather than 
undertaking repressive actions to block migratory flows that 
are a natural consequence of Mexico's economic transformation 
and its growing integration with the United States, a more 
salutary approach would be to bring flows above board and 
manage them in ways that are beneficial to both nations.
    The steps that I believe that are needed to accomplish this 
reform include, but are not limited to: (1) the creation of a 
temporary visa program that gives migrants rights in the United 
States and allows them to exercise their natural inclination to 
return home; (2) expand the quota for legal immigration from 
Mexico, a country with $1 trillion economy and 105 million 
people to whom we are bound by history, geography and a well-
functioning trade agreement, and yet it has the same quota as 
Botswana and Nepal; (3) offering amnesty to children of 
undocumented migrants who entered as minors and have stayed out 
of trouble--these children who came here as minors are guilty 
of no sin other than obeying their parents and they should be 
offered immediate amnesty; (4) finally, establishing an earned 
legalization program for those who entered the United States in 
unauthorized status as adults.
    These actions, along with others I could enumerate, go a 
long way to resolving the current mess. They would enable the 
United States to maximize the benefits and minimize the costs 
of a migration that will likely occur in any event. The 
approach of management, rather than repression, will better 
protect American workers and allow Mexico to develop more 
quickly to the point where forces now promoting large-scale 
migration ultimately disappear. The legislation submitted to 
Congress by Senators Kennedy and McCain moves the agenda of 
immigration reform substantially in this direction, and for 
this reason I support it.
    [The prepared statement of Mr. Massey appears as a 
submission for the record.]
    Chairman Cornyn. Thank you very much, Dr. Massey.
    Let me start, if I may, with you, and you paint a rather 
grim picture of the consequences of our policy since 1986. You 
have given us some ideas about how it is we might address some 
of those. How would your proposed reforms deal with the threat 
of international terrorism where people who want to come here 
and hurt us can use the same means that people who want to 
merely come here and work currently use in order to come into 
our country and then simply melt into the landscape? How would 
the proposals that you suggest help us deal with that 
challenge?
    Mr. Massey. Well, in two ways. First, when you have got 10 
to 12 million people in undocumented status who are afraid of 
the law, that provides a big sea for terrorists to swim in 
without being detected. The way to detect terrorists who are 
out to harm Americans and their interests, is to bring all 
these people above board and document them. Then the 
undocumented will stand out and can be more easily identified 
and apprehended.
    Second, I think the evidence shows that our militarization 
of the border with Mexico has not bought us any additional 
security. None of the terrorists came through that border. And 
why would a terrorist attempt to come through the Mexico-U.S. 
border, which is heavily policed, when they can waltz across 
the Canadian-U.S. border without being bothered. So I think 
what we need to do if we want to enhance our security is not 
try unilateral police actions at the border, but engage in 
cooperative law enforcement activities with our two close 
neighbors in North America, and get the Mexicans and Canadians 
to work with us in deterring people even before they get to 
Mexico or Canada.
    Chairman Cornyn. We have had previous witnesses, Dr. 
Massey, who said that the two things that Mexico could do to 
help the most in terms of international terrorism and the 
threat of danger to American citizens would be to, No. 1, to 
protect their southern border, and No. 2, to deal more 
effectively with OTMs, as we have heard the phrase, other-than-
Mexicans who transit through that country, through their 
airports or across their roads to come into the United States. 
Do you agree with that?
    Mr. Massey. Yes. A model here is what the European Union is 
doing with Poland. They are providing the Polish Government 
with technical assistance to enforce its eastern border from 
other countries in the former Soviet Union, and in return, they 
have admitted Poland into the European Union. It is not 
complete labor mobility yet, but they have a very generous 
temporary visa program to allow Polish workers in, and it seems 
to have been relatively successful.
    I will note that the southern border of Mexico is much 
shorter than the Mexico-U.S. border, which is about 2,000 
miles, and if we were to work with Mexico and provide technical 
assistance in patrolling that border, I think it would be much 
to our benefit.
    Chairman Cornyn. Mr. Donohue, let me ask you about what 
Congress could expect, Congress should expect from American 
employers that you represent, that the Chamber represents, if 
we provide the means for employers to determine the status of 
prospective employees? Should we be able to expect that they 
will avail themselves of that ability to determine whether the 
person they are looking at as a prospective employee is in fact 
authorized to work in the United States?
    Mr. Donohue. I assume, Senator, you would like a very 
candid response to that, so I will give you one.
    Chairman Cornyn. I would expect nothing less from you.
    Mr. Donohue. First of all, a great majority of American 
companies want to abide by the law, not only because they may 
be caught and pay a penalty of some sort, but because they are 
Americans. There are some people in any organization, whether 
it is Government or church or associations or companies, who 
will not play by the law, so you can write that percentage off.
    But there is a fundamental reality when you stop and think 
that some 92 percent of the adults who came in who are 
undocumented workers, are all employed in this country. When 
you add their families to it, you know, it is even a greater 
number, and they are available to work.
    Now, if you go back to Texas and you decide to run a small 
company, a small manufacturing company, a small printing 
company, a small hotel, and you cannot find workers, you are 
going to keep your business going. The better question would 
be, if we make it possible for these companies to get the 
workers they need to keep providing the service to their 
customers and therefore stay in business and keep their people 
employed, the rest of the people employed, they will respond to 
that aggressively.
    I am asked all the time when I am in Europe, ``How come the 
United States economy is so strong, 3.68 percent, 4 percent 
last quarter of last year, and we cannot get off a dime?'' I 
say, ``It is very simple. We have got 20 million small 
companies in our country, and they are honorable, thoughtful 
people. They just do not pay too much attention to 
Government.''
    Government is running behind this issue. The only way to 
get in front of it is to deal with the challenge and the 
problem, and that is we do not have enough workers, and we like 
to tell everybody there are all sorts of American workers. The 
unions tell me all the time, there are all kinds of American 
workers ready. Just pay them enough money. There is not enough 
money in the world to pay people that do not exist. The 
demographics of this society should be a required study before 
members of the Congress, members of the Senate, the 
administration and the press, decide to take this issue apart. 
If you were not born 21 years ago, you are not here today ready 
to go to work.
    Chairman Cornyn. You indicate in your written testimony 
that the application process for some of our visas, for 
example, the H2-B process, is too bureaucratic, too burdensome, 
that it causes many employers simply to avoid that process in 
the first place. What sort of impediments do you see to the way 
that our immigration system is currently being administered 
that make it unworkable to the average American employer, if 
there is such a thing?
    Mr. Donohue. Well, first of all, if you go back to Texas 
and find a guy who is building small homes or adding rooms to 
homes or doing refurbishments and all that sort of thing, and 
he hired wallboard guys on Tuesday, Thursday and Saturday, and 
he gets a plumber to come in some other days, and he has a tile 
guy coming in, first of all, he is running the whole company 
out of his left breast pocket. All his tools and everything are 
in his pickup truck. He knows who to hire. He hires the people 
that work hard, do not steal his stuff, he can trust to come 
into homes, and the word is out in the industry, they know who 
is going to produce. I am not sure they are much into doing the 
paperwork required to figure out this visa business. Have you 
ever looked at it?
    Chairman Cornyn. I have not tried to hire anybody, no.
    Mr. Donohue. My son is a builder, our middle son, you know, 
middle sons are cool. My son is a builder in Colorado. He is my 
resident expert on this subject and I regularly consult with 
him on the difficulties of running a small business. His 
brother, the lawyer, has advised him that if he takes care to 
deal with the IRS and the Colorado IRS, he is 95 percent of the 
way there.
    Chairman Cornyn. I take it that you mean that American 
employers need workers, and presumably if we were able to 
create a legal framework for immigrant labor to work in this 
country in a way that was less bureaucratic, less burdensome on 
the employer, less paperwork, that it would be--and we were 
able to provide a means for that employer to determine whether 
this prospective employee could legally work here--would it be 
reasonable for Congress to expect that that would be a program 
that could be, at least in theory, implemented and usable?
    Mr. Donohue. Of course it would. If we make the system 
simpler, the paperwork simpler. You heard Dr. Massey tell you 
we have added of people, a bureaucracy of high significance, 
and we have gone from a third interdiction to 10 percent, and 
obviously we are making progress.
    But the issue that is fundamental here is, first of all, 
any company of size, any company that has a personnel 
department, a human resources department, any company that has 
sufficient size to be held responsible, is going to jump at 
that opportunity, and by the way, they do not only need low-end 
workers. We are in a major crisis on high-end workers. They all 
used to like to study here and then get an H1-B visa. They are 
going home to India and China to make their fortune. We have 
got an up end. But do not let us kid ourselves about the 20 
million really small companies that are in certain kinds of 
businesses in this country that use temporary workers, that use 
seasonal workers, that use workers that have skills that are 
needed only part of the time. What we need is a system that is 
going to encourage them to be as reasonable as we can, but I am 
not going to sit here and tell you that this Government has any 
facility to stop entrepreneurs of great energy and courage and 
ambition from getting the wallboard put up on Tuesday.
    Chairman Cornyn. Mr. Griswold, one of the frustrations that 
I hear expressed by people who are concerned about our 
inability to control the influx of illegal immigrants across 
our borders relates specifically to the cost imposed on two 
particular sectors of local communities by the Federal 
Government. For example, in the health care field, Federal law 
mandates that anyone who shows up at an emergency room in a 
hospital, regardless of their legal status, regardless of their 
ability to pay, must be seen and must be treated. We can all 
understand from a human compassion standpoint why that is 
important; however, it does impose a substantial financial 
burden on local communities.
    The other example relates to public education. From my own 
standpoint, it is better if people are going to be here that 
they be educated and be productive rather than the converse. 
Nevertheless, we see that in places around the country where 
the immigrant population is exploding that the burden put on 
local schools and on local taxpayers is increasing mightily, 
and there is frustration associated with that. Could you 
comment on how you believe that Congress could and should 
address those two issues?
    Mr. Griswold. And I think these are legitimate concerns 
that need to be taken seriously. The National Academy of 
Science just did a very thorough of immigration in about 1997, 
and they came to the conclusion that the typical immigrant and 
their descendants paid more in taxes than they take from the 
Government. So immigrants over their lifetime and their 
children--the big payoff is their children, who tend to be 
overachievers. So immigration is not an overall burden on 
taxpayers, but low-skilled immigrants of course do incur more 
costs, they pay fewer taxes. And the costs tend to be focused 
on the State and local level where these sorts of services are 
delivered. They are great for the Federal Government, the 
Social Security system, that sort of thing. They pay in and do 
not collect.
    One, I think we need to look at reforms within those 
sectors, and I am not about to offer any advice on reforming 
health care of education, but those need to be tampered with. 
We have got systems there that--
    Chairman Cornyn. Feel free if you have any ideas.
    [Laughter.]
    Mr. Griswold. My colleagues at Cato have lots of advice, 
Cato.org.
    [Laughter.]
    Mr. Griswold. But I think one thing Congress could do is 
some kind of revenue sharing. The Federal Government tends to 
make a lot of money off of immigrants, whereas the costs are 
concentrated in the short term at the State and local level, 
some kind of cost sharing in terms of offsetting that.
    You know, frankly, these problems are not an immigrant 
problem, they have to do with low-income people, and they cause 
these sorts of burdens wherever they are, whether they are 
immigrants or not, and the ultimate answer is to help people 
get educated, get the skills they need to raise their income 
and their productivity, and be less of a burden to taxpayers.
    Chairman Cornyn. I appreciate your answer. I would just 
tell you that the Federal Government's track record in this 
area is abysmal. Coming from a border State where the costs of 
health care are borne by local communities--25 percent of the 
population in Texas is uninsured, and a large number of those 
are undocumented immigrants. So, the challenges are real and I 
hear what you are saying. It remains a big problem.
    Let me ask you, Professor Massey, we have heard from time 
to time a discussion of circularity of immigration patterns, 
and you have noted that by enhancing border security, assuming 
you would agree that that is what we have done, we have 
probably compounded the problem and forced people to stay in 
the United States who could be expected to return at least on a 
periodic basis to their country of origin. Could you address 
that and how you believe we could best respond to that 
phenomenon?
    Mr. Massey. That dovetails with your last question about 
the social costs of immigration. Of course there are inevitably 
some costs because you are not just bringing in labor, you are 
bringing in people. The problem is when it is underground there 
is nobody to pay and it usually falls heavily on State and 
especially local governments.
    The advantage of bringing it above board is that you can 
tax people and you can charge them a fee. We know the migrants 
are willing to pay now an average of $1,200 to get smuggled 
into the United States. So the Federal Government can undercut 
the coyotes and charge them $600. Over several hundred thousand 
people creates millions of dollars in revenue that you can use 
to create an insurance pool to pay for the services provided to 
temporary migrants when they get injured or sick and end up in 
an emergency room. And they will not be uninsured and the 
burden will not fall on the local hospitals.
    Second thing is, yes, by militarizing the border, the 
paradoxical effect is we really did not have very much of an 
effect in the inflow, but we had a huge effect on the outflow, 
and dramatically decreased the rate of return migration. So if 
you keep the inflow the same and you decrease the outflow, 
demographically only one outcome is possible, you are going to 
get a big population increase, and that is what has happened.
    But as people stay longer, what had been a flow of single 
men, as people stay longer, as the men stay longer, they 
naturally get lonesome and send for their family, and so it has 
also transformed it from a population of male workers into a 
settled population of families. That drives up the social and 
economic costs. You pay more for education.
    So by legalizing the people that are already here, and 
especially the children who really are an ongoing human tragedy 
in the United States, but legalizing those, putting their 
revenues into the tax pool, bringing it all above board, I 
think you will provide greater revenues for educating the 
second generation, and by creating a temporary worker program 
and demilitarizing the border a bit, you actually get higher 
rates of return migration so fewer people are going to settle 
here, and more people will go home.
    By militarizing the border we actually frustrate the desire 
of most Mexicans to return to Mexico and people who would 
otherwise work here a couple seasons and go back, repatriate 
their money, self-finance the construction of their house or 
start a business in Mexico, they end up here and then their 
kids come here, and then once your kid is here, you know, you 
start to build roots on this side of the border and it becomes 
a much more costly enterprise.
    So I think if we just try to manage it more rationally and 
reasonably, Mexico would be better off, we would be better off, 
the American workers would be better off, and the State and 
local governments would be better off.
    Chairman Cornyn. You mentioned people of course returning 
back to Mexico after working here, assuming they could under 
some legal framework. It always struck me as being in the best 
interest both of the United States and of, for example, Mexico, 
not to have Mexico's workforce permanently leave that country 
and hollow it out in terms of the labor they need in order to 
develop their economy and provide opportunity there.
    But it also struck me as being in our best interest, even 
if we need a temporary workforce, or one that can go back and 
forth across the border, to encourage workers to return to 
their country of origin with the savings and the skills that 
they acquire in the United States to help develop their own 
country. This is one of the reasons I believe in trade 
agreements like NAFTA and CAFTA, which is coming up, as one 
gentleman told me in Guatemala recently, he said, ``We want to 
export goods and services, not people.'' What I understood him 
to say is we would love to be able to create jobs and work in 
our home countries and export those goods and sell those 
elsewhere, rather than export our human capital and make 
ourselves poorer and less able to support ourselves.
    Mr. Donohue, you had a comment?
    Mr. Donohue. First of all, I associate myself with your 
analysis there, except for one thing. We are going to need a 
very significant permanent workforce. If you look across the 
border in Mexico and look at the extraordinary number of 
workers below 27, and you look across the border into the 
United States and see an aging workforce, this thing fits 
together in an extraordinary way.
    It is hard for some people to swallow. We certainly need a 
temporary workforce that is seasonal, but this country needs 
permanent workers all up and down the daisy chain because we 
are running out of them and it is very hard for the unions to 
stomach, it is very hard for people to look at this and say, 
you know, why did this happen? We have done this again and 
again and again in our country, which has given us the greatest 
gene pool in the history of the world, and it is important for 
everybody to understand we do not have a choice.
    Chairman Cornyn. One of the concerns that many have 
expressed about a system which would allow any worker to come 
here and qualify to work in a temporary worker program and then 
have a path permanent residency and perhaps citizenship, that 
that would create a virtual magnet for illegal immigration. 
Many point to the amnesty provisions of 1986 as an inducement 
to illegal immigration. People thought that if they get here, 
if they wait long enough, ultimately the Government would wave 
its magic wand and they would receive an amnesty and, thus, 
their illegal activity was rewarded. I would like to hear your 
comment.
    Mr. Donohue. I am not at all suggesting an open border. I 
mean, to say that anybody who wants to come here from anywhere 
in the world can come here tomorrow is not a practical or 
thoughtful solution. I think we need a clearer understanding of 
what kind of workers we need and how many we need, and we 
should start with the ones that are here and working and 
established roots and figure out a way under the various bills 
that are being discussed here to resolve that problem.
    Going forward, I think the idea on a temporary basis, as 
Dr. Massey indicated, of having a revolving system where people 
could come here seasonally and go home makes sense. The real 
challenge we have is to get from the idea to the practice, but 
we have to get there with a full understanding that we need a 
serious number of permanent workers and an ever-changing number 
of temporary workers. It is very, very hard for government 
writers of legislation and rules to deal with that, but we are 
going to have to find a way to do it.
    I am with those people that say we should not open up the 
borders and let every--you know, there are 1.3 billion people 
in China. I don't think we want to see 300 million of them show 
up here tomorrow. And there are ways we can do that. But in the 
Americas, where we are trying to--where we have one economy and 
we are trying now--we should at least try and do some of the 
things they were able to do in Europe.
    I think that there is a need for a dose of truth and then a 
way to sit down and try and figure out how to make this happen. 
And we will do anything we can to help you. The demand for 
people is going to be greater than the demand for energy.
    Chairman Cornyn. Mr. Griswold?
    Mr. Griswold. Senator, could I just add that there were two 
mistakes made, I think, in the 1986 amnesty legalization. One 
was that it was an amnesty: You have been here before 1982, 
here is your green card. And they did jump ahead of the line. 
That sent the wrong signal. The other mistake was we did 
nothing about the flow coming in. There was no liberalization 
to allow people to come in legally.
    I don't think there is any Mexican worker--certainly the 
vast majority of them--who wouldn't prefer to come in legally 
to illegally. If you would give them this legal channel to come 
in, they will come in legally, and they will respond to demand. 
It is very expensive for a Mexican worker to come to the United 
States and be unemployed. Their lifetime savings disappear very 
rapidly trying to live here in the United States. So they tend 
to respond to demand. We are not going to get 10 million 
Mexicans coming in. They come in because they know there is a 
job. Often you have communities where the word gets out that 
there are jobs in Dalton, Georgia, or Laredo, Texas, or 
wherever, and they go there.
    So I don't think we need to fear that massive numbers are 
going to come in. We don't need to fear that they come in 
illegally if we have a legal way for them to come in. There is 
one historical precedent that I think we can learn from. We had 
the bracero program in the 1950s, and there are some lessons we 
can learn from that, too. That was a guest worker program. 
Workers were tied too closely to the employer. That gave the 
employer too much leverage. There was some abuse there. But we 
had illegal immigration in the early 1950s. The Eisenhower 
administration, in cooperation with Congress, significantly 
increased the number of visas available, and illegal 
immigration dropped dramatically because they could come in 
legally. And I think we can learn from that.
    Chairman Cornyn. On a related point, you mentioned this 
during your opening statement, Mr. Griswold. I know some of my 
colleagues, as a matter of fact, maybe all of my colleagues, 
are concerned that the immigrant labor pool will drive down the 
wages of people who are legally here in the country and 
working. Can you explain? I believe you say the immigrant labor 
pool is shaped like an hourglass and complements the native-
born workforce rather than directly competes against it. Could 
you expand on that for a moment?
    Mr. Griswold. Yes, immigrants disproportionately tend to be 
concentrated on the higher end--you know, think a college 
physics professor--and on the lower end--a construction worker, 
a hotel worker; whereas, the American workforce skill spectrum 
tends to be bulging in the middle. And so, therefore, 
immigrants don't compete directly with the vast majority of 
Americans. In fact, the same National Academy of Sciences study 
I mentioned found there were only two groups that had downward 
pressure on their wages from immigration. One was other recent 
immigrants, which makes sense. They are similar to immigrants 
coming in. And the other were Americans without a high school 
degree.
    Now, if you are an adult in the U.S. workforce trying to 
get by in life, you are getting it from all sides if you do not 
have a high school degree--changing technology, an information 
economy. The answer is not to choke off the influx of 
immigration. It is to give those people the skills they need to 
be productive members of the workforce.
    Again, one thing we learned from history, when we had a 
large influx of immigrants 100 years ago, during the great 
migration, that also put downward pressure on lower-skilled 
wages. What that helped to start was the high school movement. 
It, in effect, raises the premium of having a high school 
degree, gives American kids one more reason to stay in school 
and get a high school degree. That is what we should be 
emphasizing.
    Chairman Cornyn. Dr. Massey, I think--well, I think it was 
Mr. Griswold, maybe I will ask him first, and then ask you to 
comment on this. You have referred a couple of times to 
mobility between labor sectors, and this is important to me 
because we have heard some proposals that deal just with, let's 
say, the ag industry. You mentioned the bracero program and one 
of the abuses being that it tied the workers too closely to the 
employers in a particular sector. Could you explain a little 
bit more about what you mean?
    Mr. Griswold. Yes, and I think you are on to something 
there, Senator. If a visa is tied to a particular employer, it 
gives that employer a lot of leverage. If that worker does not 
like their working conditions, they may face deportation. They 
lose their right to work if they do not work for that 
particular company.
    The best worker protection, I believe, is the ability to go 
across the street or out of State and get another job. You 
don't like the conditions, you don't like the pay, you find 
another job someplace, and that makes employers compete for 
labor. That is the best protection. So, one, I think for the 
individual worker, it is best to have mobility; but, second, 
for the U.S. economy. I don't want bureaucrats here in 
Washington deciding, you know, we need 100,000 workers for this 
sector, we need 200,000 workers for this sector. I think if we 
let workers come in responding to demand, as the economy 
changes and evolves, I would like those workers to have the 
freedom to move to other sectors. Maybe agriculture will not 
need as many workers as we think, but light manufacturing or 
the tourism industry will need more. So I think flexibility is 
the key, both for the individual worker and the U.S. economy.
    Chairman Cornyn. Professor Massey, do you have a different 
view, or the same?
    Mr. Massey. No, I agree completely. We have a mechanism for 
allocating people to jobs, and they are called labor markets. 
And if you believe that markets work, then you should set up a 
labor market so that it very efficiently allocates people to 
places they are needed. And you do not need a bureaucratic 
intermediary doing studies to figure out where the jobs are 
because that will take too long, it sucks up a lot of resources 
in between, it is inefficient. By the time you get the approval 
for the labor visa, conditions have probably changed, anyway.
    If you believe in markets, then you set up the markets and 
let them work. And you would do this by giving the migrants the 
visa and let them go to wherever the demand takes them. And 
they would not come here if there were no jobs. As Dan pointed 
out, it is very expensive to come to the United States. And 
they cannot stay very long unless they have a job. So it is 
more or less self-regulating.
    Chairman Cornyn. Mr. Donohue, I know you believe in 
markets. Do you have a different view, or the same?
    Mr. Donohue. Not at all. I share those views, but I would 
point out one in addition. Under the current system, employers 
spend a good deal of time trying to recruit workers, 
particularly those with legitimate visas, and, therefore, 
expect some period of time that the worker would stay with 
them. And we have to figure that out. I mean, if that leads to 
abuse, then that ought to be changed. But Dr. Massey just 
indicated, if the visa goes to you, sir, and you can go on the 
free market and find your work, then no one has a claim on you 
of any type.
    So if we could get from here to there, count me in.
    Chairman Cornyn. Well, very good. Thank you all for being 
here. We could continue this conversation, and no doubt will, 
for some time in the future.
    I know that we have a number of statements from some of our 
colleagues, those of Senator Kennedy and Senator Leahy, which 
will be made part of the record, without objection.
    We also have a letter from the United States-Mexico Chamber 
of Commerce that is supporting the efforts to deal with 
comprehensive immigration reform as others are. The letter will 
also be made part of the record, without objection.
    Thank you very much for your participation. We look forward 
to continuing to work with you and to seek your advice. There 
are a lot of different ideas pending even in the Senate, and 
everyone in the Senate is going to be contributing to this 
process. But on behalf of the Subcommittee, I would like to 
thank all of the witnesses.
    We will leave the record open until 5:00 p.m. next 
Thursday, June the 2nd, for members to submit any additional 
documents into the record or to ask questions in writing of any 
of the panelists.
    With that, our hearing is adjourned.
    [Whereupon, at 4:21 p.m., the Subcommittee was adjourned.]
    [Submissions for the record follow.]

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