The Impact of the Quota-Based Immigration System on the U.S.

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Patricia Tanona
International Economics
Final Term Paper

The United States’ quota based immigration system weakens the country’s ability to sustain its position in the increasingly competitive global economy. Although the United States has a substantial flexible labor market, huge international corporations and some of the best universities in the world, it faces great competition in the global labor market. With the increasing economic opportunities available in industrialized countries and the continually expanding economies of India and China the US needs to update its immigration policies to remain strong globally. Immigration in the United States has been an assortment of changing policies in an attempt to accommodate the endless people seeking temporary or permanent residence in the U.S. Below is a summary highlighting these policy changes. 1819-The Steerage Act of 1819 established the official collection of immigrant data and was the first Federal law to distinguish permanent immigrants from alien visitors not intending to stay in the United States. 1855-The Passenger Act of 1855 required that there be separate reporting of the number of permanent and temporary entrants. 1864-The Act to Encourage Immigration Law was passed. It is also known as the Contract Labor Law. It required employees to reimburse their employers for transportation costs. The workers were indentured and received no pay during their repayment period. 1868-The National Labor Union (NLU) successfully repealed government support for the Contract Labor Law but private employers still were allowed to use indentured labor. 1885 Indentured Servitude was outlawed when the Alien Contract Act of 1885 was passed to prohibit the importation of aliens under contract for the performance of labor or services of any kind. 1907-The Immigration Act of 1907 required aliens to declare intention of permanent or temporary stay in the United States and officially classified arriving aliens as immigrants and non-immigrants. 1917-The 1917 Immigration Act imposed a head tax on immigrants and excluded immigrants over 16 who could not read at least 40 words in any language. California farmers complained of labor shortages, and persuaded the US Department of Labor to suspend the head tax and the literacy test for temporary Mexican farm workers. 1932-The Immigration Act was amended to set actual timelines for the length of time the alien could work in the US and set the precedent that is still used for temporary visas such as H-1B. It also gave employers immense power over workers because termination of employment was a prelude to deportation. 1942-Farmers appealed to the US government for Mexican workers to produce food for the war. Their argument worked in 1917 and it worked again in 1942. 1944-Florida sugar cane farmers obtained permission to hire Caribbean workers to cut sugar cane on non-immigrant temporary visas. 1952-The Immigration and Nationality Act of 1952 established the H-1 program, which allowed the US Attorney General after consultation with appropriate agencies, to import needed foreign workers. The Alien Contract Act of 1885 law and all it's amendments were repealed. The McCarran-Walter Act was passed. This law reversed the prohibition against contract laborers into the U.S. and expanded the classes of eligible non-immigrants that were exempted from the immigration quotas. It authorized the admission of temporary workers during labor shortages. This law set a precedent for the admission of skill-based temporary workers and was later used as a model for H-1B. Foreign workers were required to go back to their home countries if they lost their job, or if the visa expired. The H-1 program was mandated to be temporary. 1961-The J-1 visa was implemented in 1961 by the Fulbright-Hays Act to promote educational and cultural exchange. There is no basic minimum qualification for the J-1 so it is generally regarded as faster and easy to obtain....
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