WHEN SECRETARY OF STATE Colin Powell and Mexican foreign minister Jorge Castaneda met in Washington on January 10, they resumed talks on a critical issue sidelined by September 11: immigration reform. It was bound to come back. For though the attacks raised security concerns that may make it harder now to reach a deal, they didn't repeal geography or demography or the realities of American labor markets, and the contradictions in U.S. border policy haven't gone away.

For more than two decades, foreign workers have been flooding into the United States, but public policy has failed to keep up with the country's increasing dependence on their labor. The result: a vast population of illegal immigrants (8 million and counting), endemic confusion at the Immigration and Naturalization Service, and chronic hypocrisy in Washington. Both political parties see that our immigration law is broken, but their prescriptions for fixing it have historically been so different that reform was hardly worth broaching.

Republicans have traditionally favored guest-worker programs, which import laborers as needed, then send them home when the job is finished, without providing for their families or retirement and without changing the ethnic composition of America. Democrats and union leaders, on the other hand, have advocated amnesty for illegal workers already in the country, an option that promises new recruits for unions and the Democratic party. Historically, each side saw the other's favored solution as anathema: Republicans viewed amnesty as an incentive for lawlessness, while Democrats equated guest-worker programs with exploitation of foreigners and unwelcome competition for the native-born. The breakthrough, which came in July 2001, was the idea of a package deal combining a guest-worker program with the gradual regularization of illegal migrants.

It was an idea born by accident: something the Bush team tripped over and then embraced in an effort to appeal to Latino voters. Early in his term, Bush reached out to Mexican president Vicente Fox, and the two men launched talks about easing tensions on the border. The White House came to the table with a conventional Republican guest-worker proposal, but Fox pressed relentlessly for amnesty, and by the time memos started leaking out of the negotiations, in mid-summer 2001, the two notions were linked, though exactly how was unclear.

Bush himself said nothing publicly about amnesty, preferring vague comments on the benefits of immigration and the importance of Mexico as an ally. Other administration officials were only a shade more specific. "We're proud of the fact that we offer opportunities for people to come to this country and to make a living," Secretary Powell declared, "some to go back, some to ultimately become American citizens. We want to regularize this." But without anything yet in writing, the immigration debate had been transformed.

The decision to champion a double-barreled approach was a brilliant political maneuver on Bush's part. Not only did he steal an issue--humane immigration reform--from the Democrats, but the package he hinted at triggered a tidal wave of enthusiasm among Latinos. Congressional Democrats scrambled to outdo the president with similar proposals of their own, and a little feast of bipartisan ethnic pandering ensued. By the end of the summer, it looked as if there might be a consensus in the offing, some kind of "grand bargain" that combined regularization of illegal workers with an increase in the number of temporary visas. If done right, this has the makings of a model policy. Still, the inchoate proposals that were floating around Washington last summer--and which will surely be revived now--need to be tempered and refined before they can be embodied in legislation.



MOST OF THE pieces of the solution are already on the table, suggested by the White House, Mexico, someone in Congress, or a Washington think tank. The problem is putting them together in a way that not only works but is true to our values.

Instead of political horsetrading as usual, we ought to start by agreeing on fundamental principles. The basis for a successful immigration policy--the key criterion for who we ought to let in and what we should encourage--should be work. The president hardly seemed to know how novel or important an idea he had stumbled on, but he got it exactly right when he proclaimed last summer: "If somebody is willing to [do] a job others in America aren't willing to do, we ought to welcome that person to the country."

The second basic tenet that ought to undergird reform: If a worker wants to remain in the United States and demonstrates his seriousness by taking steps to assimilate, the law should make it possible for him to stay. With these principles clear, it is a short step to the notion of "earned legalization," a new approach gaining credence in Congress that could get around the shortcomings of both amnesty and guest-worker programs.

Amnesty is the more politically sensitive of the two ideas, and rightly so. Public policy shouldn't reward lawbreakers or encourage wrongdoing. And we owe it to immigrants who have abided by the rules and entered the country legally to recognize their claims before we admit those who have taken the law in their own hands.

Still, surely there is a way to allow undocumented workers eventually to come in out of the shadows. Earned legalization would accomplish this without rewarding anyone for breaking the law. On the contrary, what it would reward is work and assimilation. To participate, one would already have to be working in the United States. And one couldn't advance up the ladder toward a permanent visa--or ultimately citizenship--without working for several more years and paying taxes.

One particularly promising proposal, floated by Demetrios Papademetriou of the Migration Policy Institute, is a point system. Migrants would get points not just for holding a job, but also for learning English, residing stably in one place, staying on the right side of the law, and participating in civic affairs--in short, for integrating into American life. Undocumented laborers earning their way to legality could be barred from receiving means-tested government benefits, and they could be required to pay a fine that no legal immigrant would be asked to pay.

But the guest-worker idea, too, needs to be refined if it is to be consistent with American principles. At present, the INS issues a grand total of 5,000 permanent visas a year to unskilled workers, despite the fact that the economy absorbs several hundred thousand, and many applicants currently wait more than a decade for an entry permit. (Imagine if government stupidity created a 10-year delay for importing a raw material needed by American manufacturers.) No wonder most unskilled workers come illegally--the system all but guarantees it. There is no other path for those without family here.

The problem with guest-worker programs is that they are almost invariably exploitative. Mired in bureaucracy, they tend to be plagued with patronage and corruption. Traditionally, foreign laborers have been licensed to work only for the employer who sponsors them--an invitation to abuse and mistreatment. Substandard wages, inhumane working conditions, and employee blacklisting are routine, and--because the unregulated labor market almost always works better--the programs inevitably engender a parallel, underground labor exchange.

Perhaps worst of all, because of the requirement that guest workers eventually go home, they have no shot at membership in the American body politic. Germany's infamous gastarbeiter program shows what can go wrong. For decades, Germany admitted unskilled foreigners exclusively as temporary guest workers with virtually no hope, even if they ended up staying, that either they or their children would become German citizens. Do we too want a permanent caste of noncitizen foreign laborers? Can we sustain a nation divided between bona fide members and toiling, underprivileged nonmembers? The question answers itself. But that's where we're headed--our huge undocumented population has even fewer rights than Germany's imported Turkish labor force--and a new guest-worker program would only make things worse.

How to avoid these pitfalls? First, any sound program must be market-driven. The number of visas available at the outset should match the number of workers the black market is now bringing in illegally--many more than anyone in Washington has been thinking of, in the range of 300,000 a year. Requests for entry might initially outstrip that figure, but the law of supply and demand would soon kick in. Already when unemployment rises in the United States, word gets back to Mexico and fewer new migrants make the trip. Even the most eager foreign worker would rather be unemployed at home than in the United States, where the winter is cold, life is expensive, and the comforts of family are often a distant memory.

Counterintuitive as it may seem, creating a true market would also be the best way to protect the labor rights of immigrants. Unlike in the past, the government should not match migrants with employers, and workers should not be required to stay with a single sponsoring boss, but rather should be issued work permits they can take with them from job to job, enabling them to bargain for wages and working conditions like other laborers. Democrats will complain that this means unfair competition for American workers. But in fact, legal migrants who can bargain for market-rate pay will be far less likely than those here illegally to undercut the wages of the native-born. Besides, in labor markets as in all other kinds, it does a nation no good in the long run to protect uncompetitive domestic inputs.

But the most important feature of any new work-visa program is that it be open-ended. People who have entered the country as temporary workers should be eligible to become permanent residents and eventually citizens. Immigrant workers rarely come with the expectation of staying permanently. Most want to make some money and go home. But over time, particularly if they raise children in this country, they often find themselves anchored here.

Today's Latino migrants are even more likely to come and go than previous waves: The overwhelming majority work in the United States for a while, then return home, then eventually make the trip north again, retracing their steps many times over the course of their lives. From Mexico's point of view, this is a good thing, since workers who return home bring their new skills and savvy with them. But ultimately this country's interest is different: Surely we would rather encourage a more stable work force, one made up of families rather than single men, and one that sees the value, as longer-term migrants do, of learning English, upgrading their work skills, and investing in education. We can't force anyone to stay and wouldn't want to, but a guest-worker regime that doesn't permit participants to get on a ladder to citizenship only guarantees the kind of churning, permanent underclass we should hope above all to avoid.



AT THE end of the day, then, the two arms of an earned-legalization reform should converge. Temporary laborers who decided they wanted to stay should be able to make their way through the same earned stages, using the same point system, as illegal immigrants working toward legalization. INS policy could be radically streamlined, much to the relief of both U.S. business and aspiring newcomers. Not only would the same basic rules apply to new migrants and workers already here illegally, but similar rules might apply to skilled and unskilled workers. So too with the question of which nationalities should benefit: A deal with Mexico would be a good first step, but it should lead to across-the-board reform. Eventually, one set of basic rules and regulations should apply to everyone, and all foreigners who want to stay should be expected to follow a similar path--the path of stable work leading to assimilation.

This would be a radical overhaul by any standard, and there is much to be done to make it a reality--both in our negotiations with Mexico and in Congress. The challenge is to assemble the elements in a way that advances our values, none more important than the American ideal of inclusion. "That's the key to immigration in America," argues Frank Sharry, executive director of the National Immigration Forum. "That's the reason it works. We admit people legally on a path to full participation--to citizenship and integration."

Paradoxical as it seems, immigration reform that regularized the status of millions of productive workers would also be one of the best ways to secure our borders. As things now stand, our unrealistic laws have created a vast shadow realm: a secret, exploitative economy, but also a criminal underworld, peopled by smugglers and forgers and unscrupulous attorneys, that makes a mockery of the law and only invites further wrongdoing.

Cracking down on illegal immigration cannot eliminate this parallel universe, since we need the workers; getting tough would only drive it further underground. Why not try instead to bring this continuing migration into the sunlight, recognizing millions of laborers who contribute to America while reducing the opportunities for criminality? Then the INS could stop chasing busboys and farmhands and get on with the job we really need it to do: intercepting the terrorists and other bona fide criminals who seek to violate our borders and do us harm.


Tamar Jacoby is a senior fellow at the Manhattan Institute. She is the editor of a forthcoming volume of essays entitled "Reinventing the Melting Pot: How Assimilation Can Work for the New Immigrants."