An adoptive approach to current residents could unlock unprecedented workforce potential.
By Vipul Tamhane
The United States is at a crossroads. With over 11 million undocumented residents already engaged in the USA’s economy, the question is not if they are here, but how the system can maximize their potential in building a stronger economic foundation. Rather than perpetuating the costly cycle of enforcement and deportation, the nation should be rethinking a third phase of immigration reform, an adoptive phase that mobilizes current residents as economic elevating contributors.
Today's economic reality on the ground in the United States is that the immigration enforcement system, consisting of ICE operations and deportation proceedings, costs taxpayers billions of dollars in efforts, albeit for little economic gain. Moreover, removing workers from farms, restaurants, construction sites, and healthcare diminishes an entire ecosystem of economic systems reliant on their labor and consumption.
Consider the math seriously; removing even a small percentage of unauthorized residents currently in the US will create significant labor shortages in agriculture, construction, hospitality, and eldercare. The removal of the labor force from agriculture will act as a tipping point for agricultural processes and trigger disruption within critical supply chains. The shock alone will be transmitted through supply chains and raise consumer prices, as America loses its competitiveness when it needs it most.
At this moment, the United States needs to initiate a Strategic Workforce Enhancement Framework with a multifactored model. An adoptive approach primarily recognizes that current residents, regardless of immigration status, are untapped human capital. Immigrants should not be viewed in terms of enforcement priorities but as potential Americans who can be activated to realize their contributions to America as talent, entrepreneurs, and economic citizens through an integrated strategic process.
All of this starts with a thorough documentation and assessment of skill sets. Instead of raids and deportations, immigration agencies would replace those paradigms with voluntary registration programs that bring immigrants "out of the shadows." The government would then have knowledge of who is here, what skills they have, and how those skills could economically contribute.
The documentation process would allow some kind of pathway for legal status, starting from, again, that status would derive from people economically contributing and integrating into the community. Workers who had put down roots, paid taxes (as many do via years of filing returns with Individual Taxpayer Identification Numbers), and contributed to society through social ties would have pathways to formalize their status and continue contributing.
There are severe skills gaps and labour shortages in many sectors. In healthcare and education, in skilled trades, and in technology. Many of the residents have credentials and/or work experience from their home countries that go unrecognized because of bureaucratic regulations (that the US often designs that limit their access) and status (they are not at fault for).
Adopting an approach would encompass programs for credential recognition, pathways to licensing, and skills-based integration. Rather than having foreign-trained engineers driving rideshares and physicians working in restaurants, the administration would facilitate fast-track programs that would enable the individuals to work at their competence level rather than being underemployed.
This will be particularly helpful for addressing the demographic challenge posed by an aging American workforce. The baby boomers are retiring, leaving the nation with the need to attract younger workers to support future Social Security and Medicare programs. Current residents, many being able to work, are an immediate solution to this demographic issue.
The economic multiplier of an adopting approach goes well beyond direct labor contributions. Once people have legal status, they tend to spend a significant amount of money. For example, they are more likely to start businesses, purchase homes, and pay for their education and that of their children. The increased economic activity created in this manner results in tax payments, additional job creation for American workers, and boosts the local economy.
Research consistently demonstrates that legalization programs yield net positive fiscal effects. Legalization provides equivalent documentation for taxpaying residents, who pay more taxes than they receive back in services, while the increased economic activity of a previously undocumented population creates jobs for native born Americans. The 1986 Immigration Reform and Control Act was one of the first milestones to show this demand-side dynamic, where beneficiaries showed drastically higher wages, increased education, and upward mobility in the economy after normalization.
An adoptive strategy for undocumented residents, through legalization or another inequitable and legal compromise, would yield much pent-up entrepreneurial potential that is often stymied by legal uncertainty, as evidenced by Murat Akdere's findings. Despite being a commonly held perception, undocumented residents do not start businesses at nearly the same level as documented residents, as it is not a lack of entrepreneurship or entrepreneurial inclinations; it is simply because undocumented status presents so much legal uncertainty that actually makes creating a business riskier and removes options to fund a business through traditional capital.
Once they obtain legal status, these entrepreneurs could access traditional banking and apply for business loans and expand their operations. The research shows that immigrants, lawful and undocumented, start businesses at a much greater rate than native born Americans, representing a huge potential for job creation and economic dynamism.
Effective implementation of the shift from enforcement to adoption requires very careful sequencing of policy initiatives and political pragmatism across local, state, and national levels. Starting legislative initiatives with workers employed in essential industries, healthcare, agriculture, and infrastructure would be beneficial in showing the economic dividends quickly, while continuing to build public support for legislative paths to normalize a multiyear successor program.
Incorporating technology could also simplify the process, such as with digital platforms for registration and evaluation of skills and tracking status, lowering costs for bureaucracies with government entities receiving unprecedented insight into immigration and workforce movements.
The Trump administration has an unprecedented opportunity to institute specific reforms in a relatively quick manner that will provide measurable economic dividends within this president's mandate. A consultative way to begin would be through industry-specific pilots in agriculture, construction, and health care, all of which are experiencing acute labor shortages that impact American consumers in real time through the increased cost of goods and services.
The administration is able to create an "Economic Contribution Visa" for existing residents in critical occupations, with status based on employment and taxes. This is a market-based solution based on economic pragmatism, aligned to conservative orthodoxy, and provides economic relief today. The Administration should expect to see measurable outcomes at the 18-240 month horizon, such as labor shortages being resolved, or at least significantly eased.
At the same time, as they look at reinstating EB-5 investor visa programs, there is an opportunity to amplify on the existing concept and create investor visas for smaller-scale entrepreneurs. It should be within the realm of possibility to have entrepreneurs who are already running their own small business qualify as "investors". If there could be a possible investment threshold of $50000 for established small business owners wanting to create jobs now, it could get Americans back to work very quickly and formalize successful informal businesses.
These focused reforms could become evidence of proof of concept for tamer broader integration policies demonstrating that strategic inclusion actually produces measurable economic returns while still regarding security and order as priorities.
America's immigration issue is not about changing the people who are here; it has to do with achieving their greatest capacity in the nation's shared prosperity, or shifting these individuals from burden to asset. An adoptive stance relates burdens viewed to burdens accepted, enforcement costs converted to investment opportunities, and demographic challenges related to comparative advantages.
The options are clear, i.e., the US can keep spending billions on a deportation process that hobbles the economy while failing to address root causes, or the government can invest in an adoptive paradigm that enhances the country’s labor force, plugs key labor and boat relocations, and allows America to move forward economically.
The residents are already here. The only question remains: can the decision makers have the strategic vision long enough to envision them in America's future as an economic asset, rather than a lifetime burden? America’s economic dexterity may depend on her choice.
Vipul Tamhane is a counter-terrorism expert and governance consultant
The views expressed are not necessarily those of The South Asian Times
