Sponsored Immigration: giving citizens a financial incentive to support immigration reform

Summary

Increasing immigration rates would benefit both US citizens and immigrants alike. However, many native citizens believe immigrants impose more costs than benefits, by increasing crime, consuming welfare services, and changing the culture. So they naturally oppose increasing immigration rates. Sponsored immigration incents citizens to support increased immigration by a) giving them a personal choice in who they allow to immigrate b)a direct financial stake in the immigrant's long-term success.

Why increase immigration?

Humanitarian Reasons

In June 1939, the German ocean liner St. Louis and its 937 passengers, almost all Jewish, were turned away from the port of Miami, forcing the ship to return to Europe. More than a quarter subsequently died in the Holocaust. (1)

Such deaths due to immigration restrictions continue into the present. According to the International Organization for Migration (IOM) "With 3,771 deaths, 2015 was the deadliest year on record for migrants and refugees crossing the Mediterranean trying to reach Europe, reports IOM in a year-end summary. By comparison 3,279 deaths were recorded in the Mediterranean in 2014. " (2)

Economic Reasons

Although lost lives are the most poignant, immigration restrictions also cost money to immigrants and natives alike. University of Wisconsin's John Keenan estimated that completely opening global borders would increase the average developing country worker's salary from $8,903 to $19,272 — more than double.(3) Harvard economist Lant Pritchett estimates that open borders would increase world GDP by $65 trillion. (4)

Why Do People Oppose Immigration?

Given all the humanitarian and economic reasons for supporting increased immigration, why are so many people hostile to increasing immigration?

Many people believe that immigrants:

• Outcompete natives for jobs.
• Consume more in social services (welfare, public schools) than they contribute in taxes.
• Commit more crime than natives.
• Vote themselves more welfare.
• Bring conservative religious values to the US (hostility to women, gays, atheists).
• Harm the environment (by creating increased demand for water, land, and other resources).
• Launch terrorist attacks.

In brief, the citizens of host countries think that immigrants impose more costs on natives than are offset by compensating benefits. Therefore, they're naturally reluctant to increase the number of immigrants.

Although most economists strongly disagree this that assessment, and believe that increased immigration results in many more benefits than costs, they haven't made much headway in persuading the public to believe them. This is because many of the benefits are indirect, and not readily visible to average voter. They take the form of increased innovation (many immigrants go on to develop new scientific, engineering, and medical advances), increased entrepreneurship (many of the top fastest growing companies were founded by immigrants), and better, less expensive access to skilled workers (many of the best and brightest from other countries come to the US and become doctors, lawyers, engineers, and other highly skilled professionals).

To counter this bias against immigrants, this proposal attempts to incentivize US voters to support much higher rates of immigration, by creating an immigration program that provides clear, direct benefits to every adult citizen in the U.S.

How sponsored immigration works

• Give every existing citizen over the age of 18 the right to sponsor one immigrant of their choosing.
• The immigrant must purchase a $1 million lifetime insurance policy, which pays out to the extant that the immigrant commits any crime or makes use of any welfare services.
• The immigrant must pay an entry fee of 10% of the median household income in the U.S. For example, if the median household income is $50 K, then the immigrant must pay an entry fee of $5 K. Half this amount ($2.5 K) goes to the sponsoring citizen, and half ($2.5 K) goes into a pool to provide integration services to arriving immigrants.
• The immigrant and their children must pay 10% of their income each year as an immigration tax. Half of the tax revenue goes to the sponsoring citizen (or their estate), and half goes into the integration pool.

• The sponsoring citizen can sell and/or delegate their sponsorship rights to someone else.
• Immigrants can become citizens themselves when they meet all of the following criteria:
  a) their income exceeds at the median household income for at least three consecutive years
  b) they pass a test of English proficiency
  c) they pass a test of US cultural literacy
• Someone can sponsor another immigrant once their previously sponsored immigrant has become a citizen.

How natives and immigrants alike will benefit from sponsored immigration

• Every citizen would receive a lump sum payment of $2.5 K plus the rights to a lifetime stream of 5% of the immigrant's annual income (and their children). A very direct and visible benefit of supporting immigration reform.
• Since existing citizens receive a portion of the immigrant's lifetime revenue stream, they have a strong incentive to select immigrants who will be the most productive and peaceful. Imagine how much money could be earned by a sponsor if one of their sponsored immigrants proves to be the next Steve Jobs.
• The immigration tax and insurance policy would help alleviate the burden that new immigrants might place on existing social services.
• Since each citizen can only sponsor another immigrant once the first immigrant has become a citizen, sponsors have strong incentive to help their sponsored immigrant to integrate and become a citizen.
• The rate of immigration can only grow to the extant that previous immigrants achieve at least the median income in the US, have integrated into US culture (as measured by their English skills, and cultural literacy knowledge, and become citizens themselves.
• Citizens have control over who gets invited to the US, not some distant and uncaring bureaucracy. However, if some citizens don't want to be bothered to do the selection themselves, they can also sell their sponsorship rights to someone else. Or, if they so choose, not invite anyone at all.
• Citizens have strong incentives to increase the immigrant's productivity (since the more the immigrant makes, the greater the existing citizen's revenue stream).

• Immigrants have a strong incentive to become citizens themselves, since they would then be able sponsor immigrants of their own.
• Immigrants would benefit by being able to escape from terrible policies in their home country.
• Immigrants would be able to make more money, which they could send back to their home country.
• Immigrants would not be able to vote themselves additional welfare benefits, or change the policies of the US until they were proven to be as productive as the existing median citizen.
• High risk immigrants would pay a higher insurance premium.
• Immigrants would not be discriminated against based on their education level, country of origin, religion, age, occupation, or language. Only their ability to pay the entry fee, insurance costs, and their ability to persuade someone to sponsor them.

As the proposal above has never been tried before that I'm aware of, there will not doubt be bugs and unintended consequences. Please feel free to offer questions, comments, suggestions. However, I think this incentive program, or something like it, provides a pathway to a much richer, more free, and safer world.

1. The U.S. Government Turned Away Thousands of Jewish Refugees, Fearing That They Were Nazi Spies By Daniel A. Gross
2. IOM Counts 3,771 Migrant Fatalities in Mediterranean in 2015 by Daniel Esdras, et al.
3. Want a global economic boom? Open the borders by Dylan Matthews
4. The Cliff at the Border by Lant Pritchett