[Joint House and Senate Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 113-0047
 
       IMMIGRATION AND ITS CONTRIBUTION TO OUR ECONOMIC STRENGTH 
                                PART II 

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 8, 2013

                               __________

          Printed for the use of the Joint Economic Committee

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

81-373 PDF                       WASHINGTON : 2013 




                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES             SENATE
Kevin Brady, Texas, Chairman         Amy Klobuchar, Minnesota, Vice 
John Campbell, California                Chair
Sean P. Duffy, Wisconsin             Robert P. Casey, Jr., Pennsylvania
Justin Amash, Michigan               Mark R. Warner, Virginia
Erik Paulsen, Minnesota              Bernard Sanders, Vermont
Richard L. Hanna, New York           Christopher Murphy, Connecticut
Carolyn B. Maloney, New York         Martin Heinrich, New Mexico
Loretta Sanchez, California          Dan Coats, Indiana
Elijah E. Cummings, Maryland         Mike Lee, Utah
John Delaney, Maryland               Roger F. Wicker, Mississippi
                                     Pat Toomey, Pennsylvania

                 Robert P. O'Quinn, Executive Director
                 Niles Godes, Democratic Staff Director



                            C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Amy Klobuchar, Vice Chair, a U.S. Senator from Minnesota....     1
Hon. Kevin Brady, Chairman, a U.S. Representative from Texas.....     2

                               Witnesses

Dr. Madeline Zavodny, Professor of Economics, Agnes Scott 
  College, Decatur, GA...........................................     3
Dr. Steven A. Camarota, Director of Research for the Center for 
  Immigration Studies, Washington, DC............................     4

                       Submissions for the Record

Prepared statement of Chairman Brady.............................    22
Prepared statement of Dr. Madeline Zavodny.......................    23
Prepared statement of Dr. Steven A. Camarota.....................    29


       IMMIGRATION AND ITS CONTRIBUTION TO OUR ECONOMIC STRENGTH

                                PART II

                              ----------                              


                         WEDNESDAY, MAY 8, 2013

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:30 a.m. in Room 
216 of the Hart Senate Office Building, the Honorable Amy 
Klobuchar, Vice Chair, and the Honorable Kevin Brady, Chairman, 
presiding.
    Representatives present: Brady, Paulsen, Hanna, and 
Delaney.
    Senators present: Klobuchar and Coats.
    Staff present: Corey Astill, Ted Boll, Conor Carroll, Gail 
Cohen, Connie Foster, Niles Godes, Paige Hallen, Colleen Healy, 
J. D. Mateus, Robert O'Quinn, and Brian Phillips.

  OPENING STATEMENT OF HON. AMY KLOBUCHAR, VICE CHAIR, A U.S. 
                     SENATOR FROM MINNESOTA

    Vice Chair Klobuchar. Good afternoon, everyone. We are 
going to get started. I was telling the Chairman and both our 
witnesses that we have votes in the Senate starting at 2:00. So 
he is going to ably take over this hearing, and I hope to 
return, and I know we have a number of House Members who are 
going to be stopping by. But a lot of the Senate will be over 
in the Chamber voting on the Water Resources Development Act.
    I would like to thank both of our witnesses for being here. 
This is a continuation of our hearing from yesterday on 
Immigration and Its Contribution to Our Economic Strength. It 
was a very positive and well-attended hearing, and I thought it 
was important to examine some of the economic issues involved 
in comprehensive immigration reform, as the Senate is going to 
be looking at the bill that some of the Senators have put 
together on a bipartisan basis tomorrow in the Judiciary 
Committee on which I serve.
    In the first part of the hearing yesterday we heard from 
Grover Norquist and Dr. Adriana Kugler about how they believe 
immigration creates jobs and accelerates economic growth.
    They told this Committee that the skills of immigrants 
complement the skills of workers born in the United States 
leading to what they believe are productivity gains across the 
economy.
    Yesterday's discussion was a very good one, and we look 
forward to continuing it today.
    I would like to introduce today's distinguished panel and 
thank both of you for being here, before I turn it over to the 
Chairman.
    First of all, Dr. Madeline Zavodny is a Professor of 
Economics at Agnes Scott College, where she serves as Chair of 
the Economics Department. She is co-author of the book ``Beside 
the Golden Door: U.S. Immigration Reform in a New Era of 
Globalization.'' Dr. Zavodny has also been on the Economics 
Faculty at Occidental College and worked at the Federal Reserve 
Bank of Atlanta, and the Federal Reserve Bank of Dallas.
    Dr. Steven Camarota is our second witness. He is the 
Director of Research for the Center for Immigration Studies. 
Dr. Camarota's research focuses on the consequences of legal 
and illegal immigration, and has been featured by leading print 
and electronic news outlets. He served as lead researcher on a 
contract with the Census Bureau examining the quality of 
immigrant data in the American Community Survey.
    Thank both of you. Dr. Zavodny, if you would like to begin, 
but the Chairman I hope would say a few words first.

    OPENING STATEMENT OF HON. KEVIN BRADY, CHAIRMAN, A U.S. 
                   REPRESENTATIVE FROM TEXAS

    Chairman Brady. I will be very brief. Again, I appreciate 
Vice Chairman Klobuchar for identifying this important issue, 
and timely issue.
    I am convinced the priorities that America sets for 
immigration are too important to get wrong because of their 
impact on security and our economic future. I am convinced we 
need to firmly shut the backdoor of illegal immigration in 
order to keep open and fix the front door of legal immigration.
    Economically, with America's population not replenishing 
itself, attracting workers that fill in the gaps is absolutely 
essential if we want to remain the strongest economy in the 
world through the 21st Century.
    Right now, my view is that the Senate proposal appears 
heavy on family ties in citizenship rather than on skills and 
guest workers. That may be short-sighted. While we train more 
American workers for the jobs of today and tomorrow, who should 
we encourage to immigrate to the United States? And what are 
our priorities? What criteria should we use?
    And finally, this Committee is looking at what overall are 
the benefits and the costs of immigration reform over the long 
term. Which workers benefit the most? Those who are here today, 
or those immigrating? What is the overall impact on our economy 
going forward?
    Like you, Madam Vice Chair, I am very excited about the 
witnesses here today and I yield back.
    [The prepared statement of Chairman Brady appears in the 
Submissions for the Record on page 22.]
    Vice Chair Klobuchar. Dr. Zavodny, why don't you begin and 
I will be going off for the votes and hope to return. Thank 
you.

  STATEMENT OF DR. MADELINE ZAVODNY, PROFESSOR OF ECONOMICS, 
                AGNES SCOTT COLLEGE, DECATUR, GA

    Dr. Zavodny. Thank you, Chairman Brady and Vice Chair 
Klobuchar, and members of the Committee:
    Thank you for having me here today. I am very happy to be 
here with you to discuss the economics of immigration. A 
growing economy attracts immigrants, and in turn immigrants 
make the economy grow.
    Immigrants contribute to the economy as workers, as 
consumers, and as taxpayers. Immigrants fill vital niches in 
the labor market. They go where the jobs are. They contribute 
to innovation and business creation. They revitalize declining 
areas, and they slow the aging of the American workforce.
    Immigration increases the size of the labor force, which 
makes our economy bigger and GDP bigger. Foreign-born workers 
comprise about 16 percent of the workforce right now, and 
immigrants accounted for about one-half of labor force growth 
since the mid-1990s. So they are important to the economy.
    Conventional estimates of immigrants' contributions to the 
U.S.-natives' national income, or Gross Domestic Product, GDP, 
are actually relatively small. They are typically about 0.5 
percent of U.S. GDP annually. Most of the income gains from 
immigration actually accrue to the immigrants themselves in 
terms of their wages. However, such calculations miss a number 
of the economic gains from immigration, including its effects 
on innovation and business creation.
    One of the most important economic contributions immigrants 
make is to innovation, which raises productivity growth. There 
is compelling evidence that high-skill immigrants play an 
important role in innovation.
    For example, research by Jennifer Hunt shows that highly 
educated immigrants earn patents at more than twice the rate of 
highly educated natives. Another important economic 
contribution immigrants make is that they create businesses at 
higher rates than do U.S. natives.
    This contribution is most notable in the high-tech sector 
where immigrants were key founders in a quarter of U.S. high-
tech start-ups in recent years, and half of high- tech startups 
in Silicon Valley.
    Low-skilled immigrants' economic contributions are harder 
to see than those of high-skilled immigrants, but low-skilled 
immigrants do contribute to our economy. They fill dirty, 
dangerous, and dull jobs that many U.S.-born workers are 
reluctant to take. Low-skilled immigration reduces the prices 
of goods and services that these immigrants produce, which 
helps all Americans as consumers.
    Another important economic contribution of immigrants is 
that they tend to go where the jobs are. This mobility is 
important because it allows growth to continue in booming areas 
without increasing further wage pressures there, while reducing 
unemployment or declines in wages in areas that are growing 
more slowly.
    One of the most hotly disputed questions in economics is 
whether other immigration adversely affects competing U.S. 
workers. Basic economic theory predicts that immigrant inflows 
reduce earnings and employment among competing U.S. workers. 
However, a growing body of economic research indicates this is 
not necessarily the case, particularly for workers who have at 
least completed high school.
    For example, my research for the American Enterprise 
Institute and the Partnership for a New American Economic 
concludes that immigration overall does not have an adverse 
effect on employment among U.S. natives, and highly educated 
immigrants, especially those who work in STEM fields, actually 
have a positive effect on natives' employment.
    I think there is more consensus among economists about 
immigrants' fiscal impact. Much as is true for natives, the 
fiscal impact of more educated immigrants is positive; while 
the fiscal impact of less educated immigrants, especially those 
who have not completed high school, is negative.
    The fiscal impact of current immigrants is pretty small at 
the federal level, but state and local governments in areas 
with large populations of low-skilled immigrants experienced a 
sizeable negative fiscal impact.
    I will now turn to a few quick points about immigration 
policy reform. From an economic standpoint, immigration policy 
should prioritize those immigrants who are most likely to make 
the biggest economic contribution. This suggests that 
immigration policy should put considerable emphasis on 
immigrant skills. The most highly educated immigrants make the 
greatest economic and fiscal contributions. More generally, 
putting greater priority on immigrants who have a job offer 
from a U.S. employer when they are admitted to the country 
would boost the economic and fiscal impacts of immigration 
relative to current policy. In order to boost immigration's 
economic impact, immigrant inflows should be more closely tied 
to the business cycle. The economy would fare better if more 
immigrants enter when the economy is booming and fewer when it 
is weak. In addition, market forces should play a greater role 
in determining which immigrants are admitted, as well as when 
they are admitted. Thank you for your attention, and I look 
forward to your questions.
    [The prepared statement of Dr. Madeline Zavodny appears in 
the Submissions for the Record on page 23.]
    Chairman Brady [presiding]. Thank you.
    Dr. Camarota.

 STATEMENT OF DR. STEVEN A. CAMAROTA, DIRECTOR OF RESEARCH FOR 
       THE CENTER FOR IMMIGRATION STUDIES, WASHINGTON, DC

    Dr. Camarota. Well I would like to thank the Committee for 
inviting me here to discuss obviously this very important 
topic.
    When considering the economics of immigration, there are 
three related but distinct issues that should not be confused 
but often are:
    First, there is the impact on the aggregate size of the 
U.S. economy.
    Second, there is the fiscal impact--taxes paid versus 
services used.
    Third, there is the impact on wages and the employment 
opportunities available to natives.
    I will touch on all three of these topics briefly in my 
testimony. First, there is no question that immigration makes 
the U.S. economy larger. More people means a bigger GDP, a 
bigger Gross Domestic Product. However, bigger is not 
necessarily richer. Pakistan has a larger economy than Ireland, 
but it is not richer. It has a larger economy simply because it 
has more people.
    To benefit natives, immigration would have to increase the 
per capita GDP of natives. As the Nation's leading immigration 
economist George Borjas at Harvard points out in a recent 
paper, 98 percent of the increase in GDP immigrants create goes 
to the immigrants themselves in the form of wages and benefits. 
There is no body of research indicating that immigration 
substantially increases the per capita GDP of the native-born, 
or existing population. As I will discuss later, the available 
evidence indicates that for the native-born population 
immigration is primarily redistributive, increasing the income 
of some while reducing the income of others.
    Now the second important issue to think about in 
immigration is their fiscal impact. Taxes paid by immigrants--
that is, minus the costs they create. There is general 
agreement that less-educated, lower income immigrants are a net 
fiscal drain, while more educated immigrants are a net fiscal 
benefit, paying more in taxes than they use in services.
    Just to give you one example, the National Research Council 
estimated that the net lifetime fiscal drain of an immigrant 
without a high school education is -$89,000; for an immigrant 
with only a high school education, it was -$31,000, and that 
excludes any costs for their children, just the original 
immigrant.
    However, the National Research Council also found that 
educated immigrants were a net fiscal benefit. Now the recent 
Heritage Foundation study that has gained so much attention 
finds exactly the same thing. Because three-fourths of illegal 
immigrants have no education beyond high school, allowing them 
to stay does create large fiscal costs even though most of 
those individuals work. The fiscal drain less educated 
immigrants, or less educated natives for that matter, create is 
not because they don't work. But in the modern American 
economy, less educated people earn modest wages. As a result, 
they make modest tax contributions and typically they use a 
good deal in public services--means' tested in particular. 
Allowing less educated immigrants into the country unavoidably 
creates large net fiscal costs.
    Now the final, third issue, surrounding the economics of 
immigration is probably the more contentious, which is its 
impact on employment and wages of the native-born. Basic theory 
does predict that immigration should create small gains for 
natives, but to do so it must redistribute an awful lot of 
income from those in competition with immigrants to those not 
in competition with immigrants, or to businesses that use 
immigrant labor. The size of the net gain will be tiny relative 
to the size of the economy and the size of the redistribution. 
If we look at immigrants, and given their share of the labor 
force, it looks like immigration redistributes about $400 
billion.
    The losers tend to be the least educated and the poorest 
Americans who face the most competition from immigrants. The 
winners are business owners who employ immigrants, and those 
native-born workers not in competition with immigrants. So for 
example, about half of the maids in the United States are 
immigrants, but only 6 percent of the lawyers are immigrants. 
So lawyers don't face much job competition. There should be 
very little adverse impact. But for the 850,000 U.S.-born 
maids, there should be a significant downward pressure from 
increasing the supply of workers.
    Let me conclude by saying again that, first, immigrants 
make the economy larger. There is simply no question. But not 
significantly richer. Second, the fiscal impact is entirely 
dependent on the education levels of the immigrants. Third, 
there is a redistributive nature of immigration. The question I 
guess for this Committee is: Is it fair to reduce the wages of 
the young and less educated who face the most competition, 
while more educated and affluent Americans can see their wages 
and income increase? And that I think is really one of the key 
questions for the country to decide.
    [The prepared statement of Dr. Steven A. Camarota appears 
in the Submissions for the Record on page 29.]
    Chairman Brady. Thank you, both.
    Beginning with the longer term problem, America's 
population is not replenishing itself over the long term. We 
will have gaps in the jobs that need to be filled if we are to 
compete and win against China, Europe, Brazil, other 
competitors as they go forward.
    Dr. Zavodny, you made the point that immigration policy 
should prioritize the type of immigrants who are most likely to 
make the biggest economic contribution. You pointed to those 
who have a job offer. That ebbs and flows with the budget 
cycle, and it is market-driven rather than government-driven.
    I know we have only seen the Senate proposal so far in 
broad outlines. Does their proposal meet those priorities?
    Dr. Zavodny. That's a good question.
    Chairman Brady. And I don't mean overall, but looking at 
the visa, the guest worker, sort of the focus on skills.
    Dr. Zavodny. I think that the Gang of Eight bill, or Bessie 
Mae, is a vast improvement over current policy in that it 
reduces some flows of family-based immigrants. It dramatically 
increases the number of green cards available on the basis of 
employment, particularly to very highly skilled workers who 
will no longer count against the cap. Dependents won't count 
against the cap. It increases the number of H-1B visas, and 
that is a good thing.
    On the other hand, it creates lots of new rules for the H-
1B program that might reduce employer willingness to use that 
program, and that might be of concern.
    So I think it is better than current policy. Is it ideal? 
Perhaps not.
    Chairman Brady. Current policy is a bar set awfully low, 
considering both the high-skilled end which we've been at 
110,000 visas before were filled as well.
    Dr. Zavodny. Right.
    Chairman Brady. On the lesser skilled, 20,000 a year 
stairstepped over to 75,000 doesn't seem market driven. Neither 
does the ag numbers, necessarily, although we probably have a 
better handle on that.
    Dr. Camarota, same question. What should our priorities be 
in looking at the--in addition to training more American 
workers, what should our priorities be?
    Dr. Camarota. Well let me start with your original first 
part, too, about the impact of immigration on sort of the aging 
of American society.
    There's a lot of research on this question, and the short 
answer is: It doesn't make much difference. Let me give you a 
statistic to help you understand why immigration does not 
really slow the aging.
    If you look at the total fertility rate in the United 
States, which is one of the ways that you try to have a more 
youthful population--how many children are born per woman--it 
is 2 children per woman in 2011. If you take out all the 
immigrants and recalculate it using the American Community 
Survey, you get 1.9 children. So you get about a .1 increase. 
The immigrants have more children, somewhat, and they do pull 
it up, but not much.
    Over the next 40 years, a million or a million-and-a-half 
immigrants a year might offset the aging of the U.S. population 
by 10 or 15 percent. There are some mathematical reasons which 
I won't go into why, but if you think about the underlying 
fertility number it helps you understand why immigration does 
not fundamentally change the age structure in the United States 
unless you were to contemplate like 5, 10 million immigrants a 
year, and then accelerate that year after year.
    Now on the larger question of what we should do, remember 
this bill accelerates family immigration for 10 years. There 
are 4.5 million people who this bill contemplates admitting in 
the first 10 years that are currently under family-based 
immigration. That is, without regard to their education and 
their skills.
    At least for the first 10 years, it looks like this bill 
doubles immigration, legal immigration, about a million a year 
to 2 million a year. But the increases, it is not clear whether 
the balance will be more skilled. It is possible the new flow 
of immigrants will be about similar to the flow we have now.
    After 10 years--and who knows what is going to happen after 
10 years--that might change. But for the first 10 years, this 
does not increase the flow of skill because it accelerates 
family immigration so much.
    Chairman Brady. Got it. Can I ask this, as I finish up. 
There is general agreement that immigrants with necessary 
skills that fill gaps in our workforce are helpful, very 
helpful to the economy.
    Have any studies been done of what were the impacts of the 
mid-1980s, the last major immigration reform, where 2.5 million 
roughly, 3 million undocumented were legalized? What was their 
impact? Do we have any studies on their impact on innovation? 
On patent holding? You know, I mean all the very positive 
effects of immigrant creativity and innovation and hard work? 
What do we know about what happened then? Because we have a bit 
of a comparison today only with a larger number.
    Dr. Zavodny. So in brief, 1986 IRCA legalized 2.7 million 
immigrants who had relatively low skill levels. They were 
predominantly from Mexico. Very few of them had finished high 
school. And so we wouldn't expect to see a burst of innovation 
from that population. And I don't think you would expect to see 
a burst of innovation from legalizing most of the 11-plus-
million unauthorized here in the U.S.
    Where you are going to get those big innovation gains, and 
the business creation is the high-skilled.
    Chairman Brady. Got it. That makes sense.
    Dr. Camarota.
    Dr. Camarota. Yes. Very briefly, the research shows that 
they benefitted from the legalization. Their wages may 
immediately have gone up about 5 percent. But since two-thirds, 
three-fourths did not have a high school education, they were 
not a source of a lot of business startups, and so forth. They 
did do better--unfortunately, when we look at them, they do 
have very high poverty rates today, but maybe they would be 
even higher still if they stayed illegal; very high use of 
welfare. More than half of those households headed by those 
immigrants access one of the major welfare programs, as far as 
we can tell. So very high rates of welfare use.
    But it probably did make their lives better, even if maybe 
it didn't make the lives of American taxpayers better.
    Chairman Brady. Thank you very much.
    Representative Delaney.
    Representative Delaney. Thank you, Mr. Chairman, and thank 
you to our two speakers here today for their remarks.
    I have two questions. One is a more general question, but I 
will start with the specific question to Dr. Camarota.
    Your analysis seemed to be, when you talked about who 
benefits from immigration and you compared the benefits that 
accrue to the immigrants versus the benefits that accrue to the 
non-immigrant population, it seemed to be somewhat of a static 
generational analysis in that you are looking at a snapshot in 
time.
    For example, you said more than 50 percent--I couldn't 
remember if you said housekeepers or people who work in hotels 
were immigrants but only 7 percent were attorneys--when you 
make this a more intergenerational analysis and you look at the 
effect of immigrants on the society across more than the 
immigrant population, but including their children, how does 
that change the way you think about how benefits accrue to 
immigration?
    Because it is hard, it seems to me, to think about this in 
the tight timeframe of a single generation, and that you need 
more of an intergenerational analysis in terms of thinking 
about where benefits accrue. I'll give you a minute or so to 
answer that, and then I will go to my second question.
    Dr. Camarota. It is a great question. Obviously no one 
knows how the children of today's immigrants are going to do. 
All we can kind of do is look at the past and say.
    When we look at that, we find that the children whose 
parents were relatively educated, those kids have done pretty 
well.
    But about 31 percent of all children born to immigrants 
today are born to a mother who has not graduated high school. 
Those kids, as far as we can tell, are really going to 
struggle. And that does describe a large fraction of the 
illegal population.
    So if we look at second- and third-generation of people as 
far as we can tell whose parents did not have a lot of 
education, a lot of those folks struggle. Some don't. But----
    Representative Delaney. Do they struggle more or less than 
non-immigrant populations solving for the same fact set?
    Dr. Camarota. Yes, I was going to say that they are better 
off clearly than their parents in terms of high school 
completion and general income. But they lag grossly behind the 
general native-born population.
    Representative Delaney. I think, Doctor, you wanted to 
comment on that, real quickly? It seemed like you wanted to.
    Dr. Zavodny. I would disagree. I think the evidence shows 
quite clearly that the second generation of the children of 
immigrants tend to do not only better than their parents, but 
better than the children of similarly poorly off natives.
    Representative Delaney. Which was my point. Which is, I 
think, to think about the relative benefits that accrue we 
should not think about it in the snapshot of the current 
generation. I am sure the data does--or I am assuming the data 
you are putting forth, Doctor, that it accrues more to the 
immigrants than it does to the general population, that that 
changes when you do an intergenerational analysis, which is how 
I think we have to think about this.
    My second question is--and this is a more broad, conceptual 
question. We have all heard the data, that half of the Fortune 
500 was founded by immigrants or children of immigrants. I 
think, Doctor, you spoke about what is happening in the 
technology industry, and the statistic that always strikes me 
is that something like 70 or 80 percent of venture-capital 
backed companies in technology that become public companies are 
founded by immigrants. It is a staggering, overwhelming 
statistic.
    And one of the things, it seems to me, that has been a 
great, obviously, virtue to this country is that across time 
the overwhelming majority of the world's population have wanted 
to come here. So if we have 7 billion people, I don't know, 5 
or 6 billion of them wake up every day and would love to come 
to the United States if they could, that is a benefit that is 
hard to measure.
    We can measure a whole variety of things, even in the 
immigration analysis. You know, the data is important. I have 
always said, ``Unless you're God, bring data.'' And the data is 
really good on a lot of the immigration stuff. But this factor 
to me seems hard to measure, which is the intangible benefit to 
this country to be singular in terms of the destination that 
everyone wants to go to.
    How relevant is that, in your judgment? Because it seems to 
me if we don't act on immigration soon in the context of a 
global and technology-enabled world, in the context of lots and 
lots of cities prospering around the world that could become 
magnets for the top people in the world, how do you worry about 
damaging that asset as it relates to our competitiveness as a 
country and our economic prosperity?
    Dr. Zavodny. So I think it's already happening; that we see 
that high-tech entrepreneurs and skilled workers are going to 
Canada. They're going to England. They're going to India. 
They're going to China. Or staying in those countries instead 
of coming to the United States because our immigration policy 
is such an absolute mess.
    And so we are forfeiting lots of gains that will matter 
tremendously not only today but in the future.
    Dr. Camarota. When we look at the total immigrant 
population, as you are probably aware, as far as we can tell 
the entrepreneurship rates are about the same: 12 percent of 
natives are self-employed; 12 percent of immigrants. But there 
is huge variation in the immigrant population; 26 percent of 
Korean immigrants have a business, but there are other 
immigrant groups where it is about 3 or 4 percent.
    So overall it does not look like immigration is a 
particular source of entrepreneurship as a group. However, 
highly skilled immigrants and immigrants from some sending 
regions do seem to have very high rates; it is just offset by 
the lower-skilled in the other regions. So it is about the 
same.
    It is not a unique characteristic of immigrants, but nor is 
it lacking among immigrants.
    Representative Delaney. Thank you.
    Chairman Brady. Thank you.
    Representative Hanna.
    Representative Hanna. Thank you. Thank you both for being 
here.
    I have been reading both of your testimonies. There is a 
very common, clear theme. That is, that--to me, and argue if 
I'm mistaken--but that there is high value added to a society 
that immigrants move to in order to higher their education. I 
don't know if it's direct or not, but from a -$89,000 with 
below-a-high-school education, to a $105,000-plus with someone 
with much higher, a Masters or a Doctorate, to the point where, 
Ms. Zavodny, you said that we should give citizenship or visas 
to virtually everyone who has a job offer in this country 
because there's so much value added there.
    And you suggest also that it should be tied to the business 
cycle; that we should adjust immigration based on our own 
demand. And I want to ask you about--and the Chairman mentioned 
also our policy of having people come in who have family ties, 
and basing immigration somewhat on that. I mean, it is clearly 
true that people with higher educations also have family ties. 
We can fill that need.
    Can you, either one or both, give me some idea of what a 
policy would look like that was both fair and reasonable to 
people who want to come here, and this country's need over time 
that somehow is dynamic because of our business cycle, what an 
efficient bill that served this country would look like?
    Dr. Camarota. Well, you know, I mean the labor market is 
still not doing very well, as we know. We have a jobs' deficit 
of about 9 or 10 million right now, if we got back to the 
employment rates of the past.
    In the next decade we will need, just for natural 
population growth, about 9 or 10 million more jobs. That is 
about 20 million. This bill contemplates about 15 million new 
workers--20 million overall, but about 15 million new workers.
    So what I would say is, the next decade better be the 
greatest jobs bonanza in American history or we are going to 
see a continuation of a decline in work. And that is very 
troubling, especially among the young. So we have to think long 
and hard about that.
    If you want what I think is more sensible it would be to 
look at what the Jordan Commission suggested in the 1990s. 
Barbara Jordan headed a commission in the 1990s that basically 
said we should try to curtail family-based immigration and put 
more emphasis on skills.
    Representative Hanna. Could I interrupt you, quickly? You 
mention in your paper that I read with great interest that all 
of the employment gains have gone to immigrant workers. This is 
extremely puzzling since the native-born workers account for 
about two-thirds of the growth in working age population. Yet 
you offer no kind of--you offer a question, but not an answer.
    Dr. Camarota. Yes, it is striking. It is, as I said, the 
idea that all--what you're referring to is this idea that it 
looks like there are about 5 million more immigrants working 
than there were in 2000, and the number of natives working is 
down by about 1 million. So it looks like what net gain there 
was in employment all went to the immigrants. That is certainly 
very consistent with the possibility that immigrants displace 
natives in the labor market.
    But by itself, it isn't proof that that happened. What it 
does show is that you can have large-scale immigration.
    Remember, the last 13 years, the latest Census data show, 
16 million new immigrants settled in the United States. And we 
have had very little job growth.
    So large-scale immigration does not necessarily coincide 
with large-scale job growth. And we just have a system that 
runs on auto-pilot. Maybe that is one of the biggest messages 
to take on that. Maybe we need to constantly be recalibrating 
it based on that.
    Representative Hanna. Dr. Zavodny.
    Dr. Zavodny. I think as an economy, as policymakers you 
have to make a choice, and we as a country have to make a 
choice about how we are going to admit people, since we are not 
going to have open borders.
    And so fundamentally it comes down to a choice between 
family ties or employment. And if the priority is economic 
growth, and these days it really does need to be, then there 
needs to be greater emphasis on the employment side at least 
for now instead of on the family ties. Because we know that 
immigrants who come in under family ties have lower skill 
levels, lower employment rates, lower tax contributions, than 
those who are coming in on the basis of having a job offer.
    So it is not that everyone who gets a job offer should be 
admitted. It is that to be able to come in maybe you should 
have a job offer.
    Representative Hanna. Thank you. I yield back.
    Chairman Brady. Representative Paulsen.
    Representative Paulsen. Thank you, Mr. Chairman.
    Dr. Zavodny, I was just going to note that at the end of 
your testimony, just to follow up on this, you mentioned and 
talked about short-term migration instead of permanent 
residency. And you said, creating a program that allows 
immigrants who remain employed in the U.S. for a certain period 
while on a temporary visa to opt to adjust to permanent 
residence would be better than granting permanent residence to 
many immigrants from the outset.
    Can you just maybe expand a little bit more about that? I 
mean, what would some of the benefits be just from an economic 
standpoint of looking at the issue in that context?
    Dr. Zavodny. So the concern is that if people come, and in 
particular if they are not admitted because they already have a 
job offer from a U.S. employer, how valuable are they going to 
be in the U.S. labor market in terms of will they have the 
skills that employers need? Will there be a good match between 
them and employers?
    And so there is no way for a bureaucrat to tell this. There 
is no way for a point system really to tell this. It is up to 
the employer to know whether or not an immigrant looks like he 
or she is going to be a good match.
    So when you grant permanent residents the right to live 
here forever in essence unless you commit a felony, from the 
outset without knowing how well someone is going to adapt here 
and how much they are going to contribute as a citizen, as a 
taxpayer to the economy and so on, perhaps the U.S.--the U.S. 
is unusually generous in how much permanent residents it gives. 
We are an enormous outlier worldwide in terms of the generosity 
of our immigration policy.
    It is something to be proud of. But on the other hand, it 
is not prioritizing economic growth.
    Representative Paulsen. My understanding--and I don't know 
if I missed this at the beginning when the Chairman was asking 
questions--but Canada is testing a pilot program right now that 
would make available immediate permanent residency to anyone 
who gets sponsored by a Canadian venture capital firm, or an 
angel investor. And it would seem that their target market 
there is obviously IT specialists in STEM fields. Maybe those 
in the United States that have only a limited amount of time to 
stay here on a temporary work visa.
    But can you give your thoughts on that program, if a 
similar program could work in the U.S.? Again, that is 
permanent residency right away.
    Dr. Zavodny. So I think there are some groups to whom you 
would want to give permanent residency right away, and that 
would be those with extraordinary ability. Say Ph.D. holders, 
STEM graduates of U.S. colleges and universities, workers like 
that.
    But to grant it almost across the board to a million, over 
a million people a year is unbelievably generous.
    Representative Paulsen. And do you have a sense? Is there 
any brain drain going on right now within the United States, 
either among natives or immigrants just because of our policies 
here, or the attraction that might exist in some of these 
programs with other countries?
    Dr. Zavodny. I think Vivek Wadhwa is the biggest expert on 
this, and what his research shows is that we are seeing a brain 
drain of people who come here and leave, both immigrants and 
some U.S. natives, going in particular to China and India which 
have experienced booming economic growth and significant 
opportunities, particularly in the high-tech sector, and that 
our immigration policy is certainly not helping us here; it is 
hindering us.
    Representative Paulsen. Thank you, Mr. Chairman. I yield 
back.
    Chairman Brady. Thank you. Since we have you here, I would 
like to do a lightening round, three-minute questions for the 
Members who would like to ask them. What I appreciate is that, 
although this is a very highly charged issue, I appreciate that 
we are going about it in a very thoughtful, constructive, 
respectful way. I think that is the way this issue ought to be 
discussed in Washington.
    To follow up with Representative Paulsen's question, we 
have honest differences about the issues of granting short-term 
migration, some type of legal status, whether it is a guest 
worker or longer term versus citizenship. And there are 
different views.
    From an economic standpoint, is there a demonstrably higher 
economic benefit for citizenship granted immediately to a group 
of people?
    Conversely, is there a markedly lower economic benefit that 
results from either a legal status through a guest worker 
program, or another type of card?
    Your insights there?
    Dr. Camarota. Let me say this about guest worker programs, 
because they look attractive, right? You get the person when 
you need it, and supposedly they leave when you don't, and you 
won't have to maybe pay for so much. You won't make them 
eligible for welfare and other programs. It looks attractive.
    But I would point out that every industrial society that 
has tried to do it, it never works at least in this sense: 
whether it's Pakistanis in Britain, North Africans in France, 
Turks in Germany, or America's old Bacerra Program, it always 
resulted in long-term permanent settlement.
    So if we are going to sell it to the public as a guest 
worker program, knowing that a large fraction are going to want 
to stay permanently, will over-stay their visas, there will be 
pressure to do that, maybe we should just not have it as a 
guest worker program even though there were those attractive 
reasons to do it. Because people are not ``things.'' Right? 
They're not just ingots of steel, and factors of production. A 
very large fraction are going to want to stay, and we know that 
right now. We do. And so maybe we should take that into account 
first.
    Chairman Brady. Well I'm not sure that's the case. If you 
look at Australia and New Zealand, the Middle East, that rely 
on guest workers who do not have a skilled work force in the 
native side of it.
    But be that as it may, Dr. Zavodny, economically is there 
evidence on short-term guest worker versus citizenship, for 
example, that we ought to be aware of?
    Dr. Zavodny. I think the most important thing to be aware 
of is that our current guest worker programs, particularly on 
the low-skill side, are not working very well.
    Chairman Brady. They are unworkable.
    Dr. Zavodny. There is so much red tape. Employers do not 
want to go through them. It is much easier to go to your local 
day labor site, or the street corner, and just grab guys or 
gals off of it to work for you for the day under the table. And 
this is unworkable in the long run. It violates the rule of law 
to have this going on and to have such a big, unauthorized 
population.
    So I think it is better to try to channel that legally 
through a temporary worker program. But as Dr. Camarota points 
out, you have to think very carefully because there is nothing 
as permanent as a temporary guest worker.
    Chairman Brady. Is there economic evidence differentiating 
legal status versus citizenship that you're aware of?
    Dr. Zavodny. So I think Dr. Kugler talked a little bit 
about this yesterday, and Dr. Camarota referenced it briefly, 
the evidence indicates that there are small income gains--I 
would say 6 to 13 percent--when people are able to legalize 
their status, as happened after IRCA.
    There's also, it looks like, a small income gain from 
acquiring U.S. citizenship. But it may just be that people who 
have the most to gain from becoming a citizen ``say they want 
to work for the U.S. Government'' are the ones who take the 
test.
    Chairman Brady. Thank you, very much.
    Madam Vice Chair, we were just starting a second round and 
I would yield to you.
    Vice Chair Klobuchar [presiding]. Well thank you very much, 
Mr. Chairman. Thank you. The votes are done. Very exciting.
    I thought I would ask a follow-up on something that we 
discussed yesterday with Mr. Norquist, and that was the 
Republican economist and former CBO Director Douglas Holtz-
Eakin testified before the Judiciary Committee in the Senate 
that immigration reform would reduce the deficit by $2.7 
trillion over 10 years. That is mostly because of the 
productivity of workers. It is because there are workers now 
who are working but not paying taxes, and they would have to 
pay taxes. And it is also just the general innovation economy 
that has come from the immigration in the past.
    Can you talk about how you think this could affect the 
federal budget, Dr. Zavodny?
    Dr. Zavodny. So there are dynamic gains from a bill like 
the Gang of Eight's bill, and there are some dynamic gains that 
would occur just from the legalization portion, although those 
are smaller than the gains that would occur from what will 
happen on the high-skill side if a bill like the Gang of 
Eight's bill passes.
    So in terms of the fiscal effect, there will be revenue 
gains particularly in the 10-year window that the CBO uses for 
scoring. Because the way that the current bill is set up is 
that unauthorized immigrants would be in a registered 
provisional status for 10 years, and then able to naturalize 
after 3 more years. So 13 years out.
    So that is part of why the fiscal gains look positive.
    Vice Chair Klobuchar. Okay. And then I had a second 
question on the I-Squared bill that Senator Hatch and I 
introduced with Senator Coons and Rubio, and as you know it 
would increase the cap on the H-1B visas and make it easier for 
people who get degrees in science, engineering, and technology, 
and math to stay.
    Most of the provisions were included in the Gang of Eight 
bill. Senator Hatch and I have an important amendment that we 
are going to be putting up that he is leading, and I'm the 
Democratic lead on, to actually take some of the money and put 
a little extra fee on the visas, and have that go directly to 
STEM education for American students.
    That was in our original bill that did not get included. 
Could you talk about how these skills are important, both with 
immigrants and native-born kids to learn these skills and 
contribute to our economy?
    Dr. Zavodny. Sure. It is incredibly important. My research 
shows that the biggest gains for natives in terms of their 
employment when immigrants come are from immigrants who are 
highly educated and working in STEM.
    So if you want the biggest bang for the buck on admitting 
immigrants, you want those to be highly skilled immigrants, 
highly educated, who work in STEM. But it is very important 
that we also train the U.S.-born population in STEM. I see this 
every day with my students, that their math skills are not what 
they should be.
    And I would also point out, it is really sad that one of 
the pieces of advice I give my foreign-born students is: Marry 
a U.S. citizen so you can stay. And that is sad. They should be 
able to stay. They are wonderful women who are going to make a 
huge contribution to the U.S. economy.
    Vice Chair Klobuchar. I also heard from a daily reporter 
for one of our university papers, just a college kid who 
interviewed me about this, and she said that a number of the 
students would tell her off the record that they want to stay, 
but they could not even say that on the record because of the 
dual-intent issue. When they are students, they cannot act like 
they want to stay. And that was a pretty shocking thing to 
hear.
    I am out of time. Dr. Camarota, I will just get your 
written answers to those two questions, if that is okay, 
because there are other members who have been here. So I 
appreciate you being here. Thank you.
    [The information referred to was not available at the time 
of publication.]
    Chairman Brady. Representative Hanna.
    Representative Hanna. There is a common assumption somehow 
that immigrant workers--let me back up--both of you would 
suggest somehow that there is almost unlimited elasticity to 
the high end, but limited demand at the lower end educationally 
and in terms of the type of work, the nature of the work.
    I live in a highly agricultural community. We depend on 
migrant workers a lot. Dairy isn't part of the H-2A program. 
That has always been a problem. Dairy needs long-term help.
    You mentioned that it isn't true, Dr. Camarota, that the 
work that is available is work that Americans don't want. You 
mentioned 472 civilian type jobs. And then you move on to say 
there are only 6--I mean, that does not confirm anything, as I 
understand it.
    I wonder if you could, without an opinion from me about it, 
I wonder if you could elaborate.
    Dr. Camarota. Sure. What you are pointing to is this idea, 
look, in fact just about every job you care to name in America, 
the majority of workers are U.S.-born, whether it is 
construction labor, whether it is nannies, maids, busboys, in 
some cases, you know, three-fourths of janitors or something 
like that are U.S.-born. And so that may not comport.
    But you have to remember that in the cities it is different 
than in the countryside. And it is very different in downstate 
New York than in upstate New York. So that is part of what 
you're seeing there.
    But what that does tell us is the idea that there are jobs 
Americans don't do of course is foolish and silly. So two-
thirds of people who work in meat and poultry processing are 
U.S.-born. So obviously that is a job Americans do, and it does 
not make sense.
    The other question that this sort of relates to is the 
precipitous decline in wages in that sector. Meat and poultry 
processing, while still majority-U.S.-born, real wages have 
declined 45 percent in that sector since 1980. Those same 
employers then come before this Congress and say, gosh, we 
can't find anybody to cut up dead animals, because it is nasty 
work, we all agree.
    But maybe because they pay half what they used to. One of 
the things I would make the case is, since Americans do most of 
this work, and we have all these unskilled Americans who are 
now not working sort of at a record level, let's try to get 
them back into the labor market.
    Bringing in new immigrant workers would benefit the 
immigrants, and some of those workers are probably very good 
workers, but this huge growth in nonwork among our young and 
less educated has huge sociological implications.
    Just briefly, if you don't work when you're young, the 
chance that you will work as you get older goes way down, and 
you make less, and that is especially true for those who do not 
go to college, which is about half of our kids.
    Representative Hanna. Thank you. I yield back.
    Vice Chair Klobuchar. We have Representative Delaney.
    Representative Delaney. I just think this notion of 
thinking about that the country has too many young and poorly 
educated people, and they can't compete for decent jobs with 
good standards of living, I'm just still not sure how relevant 
that is to the immigration debate. Because that is a problem in 
and of itself, a structural problem that needs very specific 
solutions.
    And I am not sure how immigration is the most effective way 
to deal with that problem. But my question is more about 
wondering whether we are still thinking about the immigration 
debate in a backward-looking way as opposed to a forward-
looking way. Because I think when we think about the singular 
advantage that this country has in terms of attracting talented 
people to come here and create businesses, which all the 
statistics we've seen about what immigrants have done, I worry 
deeply actually that one of the great things that has happened 
in the world is the rest of the world has become much more like 
the United States.
    The United States has historically been a country, I think 
the hundred largest urban areas in this country are the hundred 
largest cities in this country, were two-thirds of our economy. 
So it is very different in the rest of the world.
    I think in China 20 percent of their population, or 20 
percent of their economy was in a city in 1980, and now it is 
60 percent. And what that implies is the growth of all these 
urban global cities. And I think there are 500 global cities 
that comprise 70 percent of the global economy. And that is 
very different than what it was 20 or 30 years ago, and 
therefore our competition is very different.
    It just seems to me we come to the immigration debate with 
a somewhat outdated notion that we have lots and lots of time 
to fix this. And when we get around to fixing this, people will 
still want to come here with the same kind of supply and demand 
imbalance that has always existed.
    And I just wonder, do you think that we are calculating 
that into our analysis of this sufficiently? I will start with 
you, Dr. Zavodny.
    Dr. Zavodny. I think you are absolutely right, that it is 
impossible for any of us to anticipate what will happen in the 
future and what the future needs of employers of the U.S. 
economy are going to be, and the world is becoming increasingly 
globalized and more and more competitive every single day. And 
the United States needs to be ready.
    We should be glad the rest of the world is becoming more 
like us----
    Representative Delaney. Absolutely.
    Dr. Zavodny [continuing]. But on the other hand, it means 
we need to keep going and progressing. We need to improve our 
educational systems, and we need to fix immigration policy 
right now.
    But I think it would be very hard for the government to 
pick and choose exactly or a commission to pick and choose who 
to admit, and who is best going to contribute to the economy 
going forward. That is very, very hard to know when you set up 
a point system, or something like that.
    Dr. Camarota. Well so far we have never had that trouble, 
you know, when the economy is down, of attracting people. In 
the last four years, 2008-2012, a net decline in jobs, 
significantly, 5 million green cards were given out. We still 
apprehended well over, in total, about 2 million people at our 
border, well over a million more people came on temporary long-
term visas.
    As far as we can tell, the desire to come to the United 
States remains vast. It could always change, but it seems 
likely, given wage differentials and other freedoms in the 
United States, the quality of our public services, that that is 
going to persist for a very long time indeed.
    Vice Chair Klobuchar. Senator Coats.
    Senator Coats. Well, Madam Chairman, thank you. I am 
obviously very late and delinquent in getting here in time. I 
do want you to know I read both your testimonies. I appreciate 
very much the contributions that you have made to our thinking 
on how to go forward with this, and particularly the 
differentiation between the less skilled and the more skilled.
    Obviously we don't want to be a country that simply gives a 
test and the highest ranking on the test results are the ones 
we admit. On the other hand, you make, I think, compelling 
cases for a better understanding of where our needs are and how 
we address those needs.
    Clearly the technical skills, the skills that many of our 
businesses now are asking for that require levels of education 
and levels of training that in the past were not as necessary 
are important, that we adjust our quotas appropriately. On the 
other hand, I think there still is room in this country--there 
certainly is in my State--for people starting at a lower rung 
of the ladder and having the opportunity through that start to 
move up, particularly following generations.
    The story of America is immigrants coming and working below 
their skills but with a goal of opening the door for their 
children in following generations to gain the education, and 
gain the skills necessary to make measurable contributions to 
America.
    So I am wondering, I guess my only question to you is could 
each of you reflect on what I have said? And I apologize if you 
have already discussed that, but particularly that sort of two-
tier thought process concerning what we need to grow our 
economy, where we want to be open to the level of immigration 
that brings people at the lower skills level, but gives them 
that opportunity to move forward.
    Let me just give you one example. We do a lot of processing 
in our State. And that is not a desired business for many 
people. And my employers there have said it is almost 
impossible--even though we have unemployment problems--almost 
impossible to hire Americans to do some of these jobs. And yet, 
people that come from other countries are better able to handle 
the truly difficult work of some of the processing that takes 
place. And without them, they are in a quandary.
    So that is just one example. But I hear that from a number 
of people, and I wonder if either one of you could comment on 
that.
    Dr. Zavodny. So my inlaws live in Greencastle, Indiana, so 
I see that there absolutely, a lot of processing jobs. And so I 
think that the way to think about employers and the economy's 
need for low-skilled immigrants, it exists I believe, and the 
best way to maximize the economic contributions of low-skill 
immigrants I think is to primarily admit them when they have a 
job offer from a U.S. employer, instead of on the basis of 
family ties.
    And then, returning to an earlier question, to give them 
sort of a provisional pathway toward getting to remain here 
permanently; that they can come if they have a job offer, and 
perhaps we have a certain number of those job offers that can 
be made every year in aggregate; and then, if they stay here, 
pay taxes, contribute, after a certain number of years then 
they can apply for permanent residence and get it and bring in 
their family members and so on.
    And so I think that would be a way to maximize the economic 
contribution, while also allowing employers to hire the workers 
that they need.
    Dr. Camarota. Well I would say, as you probably know we 
have a record number of people not working who are less 
educated, right now. If you look at people who have no 
education beyond high school and are 18 to 65, we have about 27 
million American citizens not working--5, 6 million more than 
we had just a few years ago.
    Real wages for those workers are down 10 to 22 percent in 
inflation-adjusted terms, and I don't know if you were here 
before but we talked about meat and poultry processing where 
real wages are down 45 percent since 1980. And relative to more 
educated workers, they are down even more.
    In other words, the relative wage decline is even more 
dramatic. If you have a super abundance of less-educated 
people, and if you find real wage decline decade after decade, 
it is very hard to say that we have a shortage.
    What it looks more like is employers are just used to 
paying much lower than they used to. They like that, and they 
would like to have Congress keep the flow coming, whether it is 
guest workers, or have a relaxed immigration system. But I 
would say that if we don't get the less-educated, all these 
young people who do not go on to college who are not working 
right now, back into the labor market, the consequences of that 
moving forward will be enormous. Because we know that if you do 
not work when you are young, say between 16 and 24, and you do 
not go on to college, the chance of you working later in life 
is much less. You earn less. You just do not learn the skills 
necessary to function in the labor market.
    And that sociological phenomenon is very troubling.
    Senator Coats. Thank you, Madam Chairman. I am over my time 
already. Thank you.
    Vice Chair Klobuchar. Well thank you very much, Senator. 
Thank you to our witnesses today. This has been a very good 
discussion, a bifurcated two-day hearing, and we have been 
really pleased with how it's gone and the number of people who 
have come. We really appreciate your testimony, and we look 
forward to working with our colleagues in the House, as well as 
in the Senate, on both sides of the aisle as we move forward 
with this very important issue of immigration.
    I don't know if you wanted to add anything, Mr. Chairman?
    Chairman Brady. No, thank you.
    Vice Chair Klobuchar. All right, well thank you very much 
and the hearing is adjourned.
    (Whereupon, at 2:55 p.m., Wednesday, May 8, 2013, the 
hearing was adjourned.)
                       SUBMISSIONS FOR THE RECORD

   Prepared Statement of Hon. Kevin Brady, Chairman, Joint Economic 
                               Committee
    I want to thank Vice Chair Klobuchar for choosing this important 
hearing topic that will be explored in a Joint Economic Committee 
hearing today and tomorrow.
    Given the growth gap which America is experiencing--in which the 
current historically weak economic recovery translates into 100,000 
fewer new jobs per month and workers realizing only a mere fraction of 
the increase in real disposable income during an average recovery --it 
is important that the Joint Economic Committee carefully and 
objectively examine the economic and fiscal effects of our current 
immigration system and proposed reforms.
    If we wish to remain the world's largest economy through the 21st 
century, the economic objective of any immigration reform must be to 
maximize potential economic benefits for the nation while minimizing 
costs to hardworking American taxpayers.
    My belief is that we must close the back door of illegal 
immigration so that we can keep open the front door of legal 
immigration. My frustration through the years of this politically 
charged debate is that Congress and the White House have failed to 
agree on a most basic question: What kind of workforce does America 
need to remain the strongest economy in the world, and what steps do we 
need to take to ensure we have that 21st century workforce?
    There's little doubt the front door of legal immigration is--by all 
measurable standards--broken. Talented individuals with advanced 
education, unique skills, and wealth that could be invested here to 
create new, high-paying jobs for American workers have been excluded or 
have waited years--even decades--09 to immigrate legally. And the 
current visa program for low-skilled workers is essentially unworkable.
    Recognizing that other committees have jurisdiction over 
immigration reform issues such as border security, employer 
verification, and paths to legal status, the Joint Economic Committee 
will concentrate on its principal function, which is to provide 
Congress with analysis and advice on economic issues.
    To that end, from our witnesses, I am seeking answers to these 
questions:

      What kind of workforce does America need to remain the 
strongest economy in the world, and what steps do we need to take to 
ensure we have a 21st century workforce?
      In addition to developing more trained American workers, 
who should we encourage to immigrate to the United States and what 
should be our priorities? What criteria should we use to evaluate 
potential immigrants?
      Are immigrants entering the United States under our 
current immigrant system a net economic benefit or a net cost to the 
U.S. economy in the long term? What are the benefits and the costs?
      What changes would you make to our current immigration 
system to maximize the net economic benefits to the U.S. economy, the 
federal treasury, and the treasuries of state and local governments? 
How does the bill currently before the Senate Judiciary Committee 
affect economic growth in the short and long term, including its 
effects on wages, real GDP per capita, job prospects for Americans, and 
our long-term global competitiveness?
      As America continues to struggle with historically high 
budget deficits, are the immigrants entering the United States under 
our current immigration system a net fiscal benefit or a net fiscal 
cost to the federal taxpayers and to state and local taxpayers in the 
long term? How do the taxes that immigrants pay compare with the 
taxpayer-funded benefits that they receive? And what is the impact of 
the immigration reform proposal currently before the Senate?
      Finally, what can we learn from the immigration systems 
in our global competitors such as Australia, Canada, and New Zealand 
that admit large numbers of immigrants relative to the size of their 
native-born population?

    Just as we need pro-growth tax reform, a rebalancing of burdensome 
regulations, a sound dollar and a federal government credibly 
addressing its long term entitlement challenges, America needs a 
trained, mobile and flexible workforce that meets the needs of a 21st 
century economy.
    I welcome our witnesses and look forward to their insight as we 
explore the economic effects of immigration reform.

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