Black markets, like the market for illegal immigrant labor, can be fixed by liberalization and taxation.  This is standard economic theory, with a proven track record in practice.  Except as applied to immigration, market liberalization is not new, strange or experimental, but rather represents the long-standing, accepted prescription for ending black market pathology.

In the case of migrant workers, liberalization means on-demand entry for background-checked migrants seeking to work in the US.  Taxation means that the US charges a visa fee in return for entry.  'Market-based' means that the price of the visa is set by supply-demand conditions, not administratively.  These are the conceptual pillars of the system, which are the same as for any market.  

Market-based Visas versus the Current System

Market-based visas (MBVs) differ from current US visa practice.  Today, background checks and visa issuance are typically handled together.  The US government deems the applicant to be both eligible to enter the US and approved to work at the same time.  By contrast, in an MBV system, the two are handled separately.  An applicant who has passed a background check is eligible to purchase a work visa.  But only an eligible applicant with a valid work visa has the right to work in the US.  This allows the visa to be handled as a commercial product, something which can be bought or sold.  This feature in turn enables on-demand entry into the US.

Characteristics of a Market-Based Visa System

How would market-based visas work in practice?  

A number of technological solutions are plausible, and part of next steps in the development of the concept involve a clearer elucidation of potential approaches.

It is possible, however, to list a few of the characteristics of desirable solutions, as these will inform potential technology choices.

Defeating the black market in migrant labor involves creating an ability for migrants to purchase visas on-demand and enter the US on short notice.  Therefore, visas must always be available on-demand in indefinite quantities at a known price in the US, Mexico, or other Central American countries.  This suggests either a website or an app solution, with the visa reduced essentially to a validating code, like a seat reservation on, say, Southwest Airlines.

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If visas are to be acquired online, this suggests identity will also migrate online--as it does, for example, with credit card purchases from vendors like Amazon.  If that is the case, then identifiers beyond paper documentation are likely necessary, and that in turn implies biometrics like photographs, fingerprints and voice identification, to name just a few possibilities.  The Dream Act already calls for such measures.

Migrants must have access to such technology in their home markets to interact with the visa system, suggesting that smartphones may ultimately prove the preferred tool. 

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Smartphones also work well on the opposite side of the equation.  As modern smartphones either have or will shortly have technology like facial recognition, fingerprint access and voice recognition capability, they can be used in principle to definitively establish a migrant's identity and visa status in real time by employers, law enforcement and other authorized users.

At some point, such a system would likely also have two other components: health insurance and a bank account.  Thus, when the eligible migrant purchases a visa, he will also have to acquire a health insurance account and a bank account.  

A smartphone-based system would allow a hospital to definitively identify both the migrant and his health account for billing purposes.

A bank account is not strictly necessary, but if the purpose of the visa system is to eliminate the black market, then migration to electronic payments will be desirable.  Further, information from bank accounts will let the visa issuing authority determine the success or weakness of the system and make adjustments accordingly. 

As a result, practical considerations will tend to make the visa system look and feel like an e-commerce site, a variant of Expedia, Amazon or iTunes, which can be used with defined access rights by employers, hospitals, schools and law enforcement, and of course, by the migrant himself.  The system would be built plausibly around smartphones and biometrics, with the US government providing the ultimate guarantee of identify and visa status, and commercial entities employing this information to handle the day-to-day matters in the migrant's life.  

This would allow the US migrant market to be transformed from one of the most opaque to one of the most transparent labor markets in the world.  As the saying goes, "There's an app for that."

The role of the government in such an approach revolves primarily around establishing standards of applicant eligibility, systems communication and security protocols, and determining who can enter, modify, view or download information on any given migrant.  The government would also act as the ultimate repository for the migrant's identity and visa status for official purposes, just as it does today.

The Visa Issuing Authority

Currently, visas are issued manually.  In the proposed system, background checks essentially remain in today's form (augmented with biometrics), but visa issuance is automated.  Given the large volumes of visas to be issued in a presumed program, a specific capacity would have to be established and overseen for this purpose.

In theory, issuing visas could look almost exactly like an airline reservation system; indeed, one could repurpose an existing reservation system to do just this.  Notwithstanding, such a body would need a small staff to monitor and optimize the system.  This function is essentially similar to the Federal Reserve Bank's Federal Open Market Committee, which acts to set interest rates to target certain inflation and employment goals.  In the case of an MBV system, the committee would set visa volumes to meet certain visa price, employment, and wage goals.  The Federal Reserve and Treasury have perhaps the best skill set for such a function, but it could ultimately be housed in a variety of departments, including DHS, State, Commerce or Agriculture, the latter being the current issuing body for the H-2 visa class.

Some Ancillary Benefits

A smartphone-based system would be mediated by 'the cloud', servers operating between the respective smartphone and Homeland Security's proprietary computers.  

This could consolidated into a kind of independent database which would be compatible with -- and possibly mirrored into -- official government databases, but existing independently of US agencies.

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For example, if identity is reduced to an app, then Mexican authorities could use the same system to monitor illegal aliens in their own country.  Were an undocumented Honduran, say, detained in Mexico, this could also make him ineligible for a US visa.  This would assist Mexico in controlling its own southern border, and by extension, the US southern border.  Mexico would require only smartphones and the app to begin to build their own database, which in theory, would be visible in real time to US Homeland Security.  This is equally true of Guatemala, Honduras and El Salvador, for example.

Similarly, such an approach could be useful in the fight against terrorism.  A US soldier operating in, say, Afghanistan, could use the app on his phone to enter a Taliban fighter into the database which, depending on access and authorizations, could theoretically be visible in real time to security personnel at JFK Airport in New York.

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There are a number of different approaches which could be used in a market-based visa system.  On the whole, however, a preferred solution is likely to incorporate the use of smartphones and biometrics.

MBVs are conceptually part of the H-2 guest worker visa class (call it the H-2M visa).  About 250,000 H-2A and H-2B guest worker visas were issued in 2017, against an undocumented worker population of roughly 8 million, excluding 3 million dependents.  The H-2M program could theoretically displace the incumbent H-2A and H-2B program.  More likely, those programs would remain in place and the H-2M progam would simply augment current volumes during a pilot phase.

Visas Volumes

While H-2M visas could be issued in any volume, covering the entire undocumented market related to the southwest border makes the most sense.  US employers have historically sourced such migrant labor legally when they could, and turned to the black market for the remainder.  If the number of visas is insufficient, then essentially the current system will endure, but perhaps at a slightly less acute level.  For example, if one million visas were offered, these would most likely be snatched up at the longest offered term by long-time undocumented US residents paying quite high prices, say, $6,000 - $9,000 for a one year visa. 

This would be a quick way to raise up to $9 billion for the US government and would provide healthcare coverage for a million migrants.  But that is about it.  The black market would not go away, the border is likely to remain largely unaffected, and the predation in Mexico would remain.  Sanctuary cities would not disappear, although some pressures might be eased.  

On the other hand, if enough visas were issued to cover the working migrants of Mexico, Guatemala, El Salvador and Honduras, then

  • Migrants would have no incentive to come over the border illegally. The southwest border of the US would be secured without a wall.
  • All currently undocumented Mexicans and Central Americans and near term entrants into the US migrant labor market would be documented, but essentially without changing the Hispanic migrant population which would have been present otherwise
  • Employers would comply with the system, if they see they can source their full labor needs (subject to the visa price) using the H-2M progam
  • Criminal aliens would find obtaining work to be exceedingly difficult with full visa coverage
  • Sanctuary cities would disappear.  If migrants without a criminal history can work at will in the US, there is no one to protect from deportation.  Staying in the US is merely a matter of money, and if a given migrant lacks the funds, another migrant from Mexico will take his place.  
  • The full time population of migrants in the US would likely fall by 1.0-1.5 million, although the seasonal headcount peak might rise.  
  • The US would earn perhaps $4,000 for every visa year equivalent.  
  • All migrants would have health insurance coverage.  As part of the visa fee, all migrants would have to sign up for basic medical coverage.  By extending visas to all Mexican and Central American migrants, all would have health coverage when they need it.
  • Full cost savings would be available.  With full coverage, border incursions could fall as low as 100 / day, a number sufficiently small to allow a strategy based on detection and speed rather than relying on massive, fixed barriers.

All the visas issued during the pilot phase of the H-2M program would be short term, no more than one year, and with an average tenor around three months.  If the visa terms require modification or the program proves unsuccessful, the initiative can be modified or wound down in short order without disturbing any other visa program.  No lasting risk arises from covering the entire market.

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