(Editor’s note: President Donald Trump gave his first address to a joint session of Congress on Feb. 28. The speech featured policy ideas that appealed to Republicans, and others that sounded more Democratic. We asked scholars to react to the substance of the speech and evaluate its tone for hints of bipartisanship.)
President Trump called for a “merit-based system” for immigration, which would represent a major change in U.S. immigration policy.
This could, for example, boost innovation. But, at the same time, it would require significant adjustments by U.S. companies, while raising the costs of services in many parts of the U.S. Importantly, it is unlikely that this policy would “save countless dollars, raise workers’ wages and help working families,” as President Trump claimed.
In short, a merit-based immigration system, like that in place in Canada and Australia, assigns applicants points based on their status in each of several categories, typically emphasizing an immigrant’s language fluency, educational attainment, age and whether employment has been secured prior to arrival. As a result, the system tends to select young immigrants ready to perform skilled work.
The benefits of a merit-based immigration system derive from welcoming a steady stream of the best and brightest from around the world, something the U.S. has done for most of its history through the H-1B visa and other programs.
It should be noted that recent immigration has already been tilted toward those with skills, so such a system wouldn’t necessarily provide companies with more able workers.
In fact, the primary effect of the introduction of a merit-based system would be to severely restrict low-skilled immigration, hurting companies in the agricultural or manufacturing sectors that are more reliant on such workers. One of the most consistent findings within the immigration literature is that companies are quick to replace low-skill workers with capital by replacing them with machines when conditions change. The wages of a few remaining workers would rise but most would likely lose out.
While a merit-based system would impose some coherence on U.S. immigration policy, which today is quite piecemeal and inefficient, it would severely restrict low-skill immigration. This is unlikely to increase Americans’ economic prospects, and in fact would probably reduce them.