Immigration is a difficult balancing act

In 1895, fed up with rampant corruption and a flagging economy, the people of New York City swept into office the first Republican government in many decades. This brought with it a changeover in many city departments, including the appointment of new police commissioners.

Upon taking charge of the city, one of the particularly energetic new commissioners' first actions was to enforce a long-ignored and widely unpopular law prohibiting the sale of alcohol on Sundays.

To fully appreciate just how quixotic this action was, we must remember that the 1890s were a time of 12-hour workdays and six-day workweeks. Sundays were often the only day of leisure for many of the city's workers, and the prospect of facing that day dry was just unthinkable.

Needless to say, the move was unpopular, but the law was enforced all the same. The reason? The police commissioner summed it up best when he said:

"No man is above the law and no man is below it: nor do we ask any man's permission when we ask him to obey it. … Obedience of the law is demanded; not asked as a favor."

The police commissioner proved a polarizing but ultimately popular figure. Nationally he earned more respect than scorn for trying to enforce the unenforceable, and by driving his men to do so as politely and compassionately as possible. He eventually moved on to bigger and better things, and within six short years would become President Theodore Roosevelt.

Roosevelt's stance, that if folks disagree with a law they should lobby to have it changed but not disobey it, carries with it some application to our own times, particularly to the polarizing issue of immigration.

A not inconsiderable percentage of our country so vehemently disagrees with our laws around immigration that in some cases they actually advocate nonenforcement of the law, or encourage local law enforcement not to cooperate with federal authorities. This is a dangerous point of view that risks weakening the rule of law.

What is becoming equally troublesome, though, is that the controversy surrounding government efforts to combat illegal immigration has muddied the waters and in some instances created a backlash or fear against legal immigration as well. A concerning number of voices are now advocating less immigration overall, illegal and legal, an argument that is dangerous not just societally, but economically as well.

Navigating these two viewpoints is not an easy course, and we must be careful not to conflate the problems surrounding illegal immigration with those surrounding legal immigration. Immigration laws are to be crafted as a balancing act between encouraging enough legal immigration to keep an economy running at full speed, and discouraging illegal immigration enough to protect national security and maintain the rule of law. That has obviously fallen out of balance in recent years and is in major need of an update.

Earlier this month, President Trump endorsed the first proposed overhaul to our immigration system since the contentious 2016 election. The Reforming American Immigration for a Strong Economy (RAISE) Act would change our immigration laws into a merit-based system, where personal qualifications such as education and job prospects would be the most important criteria to gaining access to the country. Additionally, the act would also reduce the number of immigrants entering the country each year by as much as half.

The move to a merit-based system, akin to models in use in Australia and Canada, is laudable. However, the proposed framework of that system, along with a reduction in the flow of overall immigration, ignores some important economic realities here in the United States. The RAISE Act as proposed needs some major tweaks to avoid leaving us with a weaker economy instead of a stronger one.

First and foremost, the U.S. economy needs more legal immigration, not less. Although we're currently in the eighth year of economic expansion after the Great Recession, we have been expanding at a slower-than-normal pace,  somewhere around 2 percent per year controlling for inflation. That's well below the historical average of the past few decades, and also well below the long-term goal set by the president of 3 percent.

In economics, there are only two ways to increase a country's potential pace of growth. You can make workers more productive, or you can increase the number of workers. The Trump administration has already proposed ways to make workers more productive by reducing regulation and reforming our tax code.

However, the RAISE Act threatens to offset those proposals by decreasing the amount of workers flowing into the economy. Reducing the flow of legal immigration, particularly at a time when our workforce is aging, would ultimately act as a speed limit on the pace of long-term economic growth. This would make it virtually impossible to come anywhere near the president's 3 percent growth target, no matter how productive workers can become.

In addition to reducing the number of workers in our economy, the mix of those workers could be threatened depending on how the merit-based system is structured. The "skills gap" is not a myth. The RAISE Act would do a great job of bringing more Ph.D. computer programmers to the United States, but we need plumbers too.

That's not to mention all of the unskilled labor needed to power the U.S. economy currently provided by immigrants, many of whom are here illegally. Discouraging legal entry for these low-skill workers would encourage more to come here illegally, further exacerbating some of our current problems.

If we don't like the laws of this country, and there is plenty in our immigration laws not to like, then we should be fighting to change those laws, not fighting efforts to enforce them. Enough folks on both sides of the aisle want our legal immigration system updated to get this done without compromising our economy or the rule of law.

To truly transform our immigration system in a manner that keeps us safe and grows our economy, we should be looking at ways to accommodate more legal immigration, not less. The RAISE Act is a welcome start to the conversation, but only that. A start.

Dan White is a director at Moody's Analytics in West Chester and an adjunct professor of economics at Villanova University. daniel.white@moodys.com @DanWhiteEcon