How the immigration policy stalemate is hurting businesses and the economy

The implications of Arizona v. United States, and the pressure and frustrations the immigration system brings to companies

Check out our Cheat Sheet on this story for a quick guide to the key points of the immigration imbroglio.

On June 25, the Supreme Court ruling in Arizona v. United States decisively reaffirmed the federal government’s right to control immigration policy and enforcement. Among other things, the high court precluded states from making it a criminal act for undocumented workers to seek employment or work in the state.

Preemption Affirmed

The 5-3 Supreme Court decision in Arizona v. United States struck down three of four contested provisions of Arizona’s 2010 immigration law, known as SB 1070, that sought to pressure illegal immigrants into returning to their homelands. Among the sections the court said federal law preempted was one making it a crime for an unauthorized worker to apply for work or be employed in the state. The federal government argued the provision “upsets the balance struck by the Immigration Reform and Control Act of 1986 (IRCA)” and is “pre-empted as an obstacle to the federal plan of regulation and control.”

Writing for the majority, Justice Anthony Kennedy agreed. He explained that IRCA already requires aliens to register with the federal government and to carry proof of status, mandates that employers verify prospective employees’ employment authorization status and imposes sanctions on employers who hire unauthorized workers. But IRCA does not impose criminal penalties on employees. Although the Arizona provision and IRCA share a common goal of deterring unlawful employment, the state law has a conflicting method of enforcement, he concluded.

Enhanced Enforcement

While some states have begun putting the pressure on employers to verify immigration status, the Obama administration has been pursuing a similar tack. It has replaced the Bush administration's focus on workplace raids by Immigration and Customs Enforcement (ICE) agents followed by mass deportations of illegal workers with ICE paperwork audits followed by fines on employers.

Although the Obama administration has actually increased the number of illegal aliens deported to a record 396,906 in fiscal year 2011, it says it’s concentrating on finding and removing those with criminal records. In June, the president announced an amnesty policy allowing illegal aliens under age 30 whose parents brought them into the U.S. as children to stay in this country and work if they have lived here for at least five years and have clean criminal records.

Hiring Handcuff

For many employers, the most galling aspect of U.S. immigration policy is the handcuffs it places on companies seeking to hire or transfer workers from abroad.

The H-1B visa quota illustrates the problem. Employers sponsor job candidates qualified for specialized occupations such as architecture, engineering, medicine and mathematics for H-1B visas, which are valid for three years and renewable for another three years. H-1B visa caps fall into two categories—20,000 a year for foreign students who have received a master’s degree at a U.S. university, and 65,000 for other people with the required training. 

Call for Action

A growing chorus of voices from the business community is making the argument that caps and other roadblocks to visa approvals are bad for the economy, and immigration reform is a business issue that Congress urgently needs to address. 

“With projections of a talent shortage growing to 225,000 STEM (science, technology, engineering and math) workers by 2018, USCIS’s recent increase in challenges issued to employers who apply for permission to hire foreign skilled workers illustrates what many in the business community feel to be a misapplication of efforts to protect American workers,” Hanagan says. “Until we have sufficient STEM professionals in the local market, U.S. companies will need to rely on foreign graduates from U.S. schools to meet the demand.”

Fixing the Immigration System: Q & A with John Feinblatt

In May, The Partnership for a New American Economy, a group comprising 400 mayors and business leaders, released a 42-page report titled “Not Coming to America: Why the U.S. is Falling Behind in the Global Race for Talent,” documenting the case for removing immigration restrictions that keep businesses from hiring workers from abroad.

The central argument of the report is that U.S. immigration policy should focus on meeting the country’s economic needs for both skilled and unskilled workers, and it explores how other countries differ from the U.S. in their immigration priorities. According to the report, the U.S. admits only 15 percent of immigrants based on employment needs—and family members take about half of those visas, so the real number is closer to 7 percent. By contrast, South Korea, Switzerland and Spain all issue around 80 percent of their visas for economic reasons, while Italy, Germany and the U.K. issue around 60 percent.

Senior Editor

Mary Swanton

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