Freakonomics Radio - 582. Why Is Everyone Moving to Canada?

Episode Date: March 28, 2024

As the U.S. tries to fix its messy immigration system, our neighbor to the north is scooping up more talented newcomers every year. Are the Canadians stealing America’s bacon? (Part three of a three-part series.) SOURCES:Zeke Hernandez, professor at the Wharton School at the University of Pennsylvania.William Kerr, professor of business administration at Harvard Business School.David Leonhardt, senior writer at the New York Times.Sindhu Mahadevan, creator of This Immigrant Life newsletter.Marc Miller, Member of Parliament and Minister of Immigration, Refugees, and Citizenship of Canada.Mike Savage, Mayor of Halifax, Nova Scotia. RESOURCES:The Truth About Immigration: Why Successful Societies Welcome Newcomers, by Zeke Hernandez (2024, available for pre-order)."The Border Where Different Rules Apply," by Seth Freed Wessler (The New York Times Magazine, 2023)."Last Year, Canada Became My Home. Feeling Like a Canadian Will Take a Bit Longer," by Sindhu Mahadevan (CBC News, 2023)."Canadians Are Starting to Sour on Migration," (The Economist, 2023).The Gift of Global Talent: How Migration Shapes Business, Economy & Society, by William Kerr (2018). EXTRAS:“The True Story of America’s Supremely Messed-Up Immigration System,” series by Freakonomics Radio (2024)."Is the American Dream Really Dead?" by Freakonomics Radio (2017).

Hey there, it's Stephen Dubner. This is the third and final episode in a series we are calling The True Story of America's Supremely Messed Up Immigration System. One big question we've been asking is, how does immigration affect the economy? The answers we've heard are pretty compelling. Immigration creates this conveyor belt of investment. Immigrants tend to bring large benefits to the country that they come to. The truth is that the dream is real.

The American dream is a foundational part of our history. For generations, the U.S. has been powered by immigrants. In turn, those immigrants prosper, or at least their children do. There are some serious startup costs to being a first-generation American. But right now, immigration is a mess. The legal immigration system is outdated, complicated, overwhelmed. And illegal immigration has spiked over the past few years, which only further overwhelms the legal system. There's also this. Many of the smartest and most talented immigrants are getting thrown out of the country because there aren't enough permanent slots for them. Now, pretend for a minute we're not talking about a country, but instead a company. And if you saw that this

company, which happens to be the runaway leader in your industry, was struggling like this, you might try to find a way to capitalize, right? Well, it appears that our neighbor to the north is doing just that. We said to ourselves, why don't we ask about 10,000 of them to come to Canada to fill the gaps that we have? It filled up within a couple of hours. Canada has supercharged its immigration program, and the country is one of the fastest-growing advanced economies. Look at it this way. If you are one of those people who every four years says you are moving to Canada, if you're a candidate that doesn't win the presidency, well, it's never

been easier to follow through on your threat. And you will have a lot of company. Today on Freakonomics Radio, is Canada stealing America's bacon? This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner. Hey, how many Mark Millers do you think there are in the world? Tons. I mean, all from my generation. I wrote three Marks in my class when I was a kid. This Mark Miller is a member of Canada's parliament representing downtown Montreal. He also happens to be a childhood friend of Canadian Prime Minister Justin Trudeau.

And as of 2023, Miller is the country's Minister of Immigration, Refugees, and Citizenship. It's been a busy time. We have a lot of folks coming from India. We have a lot of people coming from Bangladesh. We have people that are coming from France. We have people coming from China, obviously the United States. Now, you may be thinking, a lot of people obviously coming to Canada from the United States? That's what I first thought. In raw

numbers, the U.S. is still far and away the number one destination for global immigrants. But in per capita terms, Canada has gone out way ahead of us. 14% of the U.S. population is foreign-born. That includes people who've come here legally and illegally. In Canada, nearly 25% of the population is foreign-born, and that share will rise. Mark Miller recently announced a new target of bringing half a million permanent residents into Canada each year. The U.S. brings in a million, but that's in a country of 330 million. So Canada's population just hit about 40 million. Congratulations.

Yeah, we're getting there. So you're California now. Yeah, basically, without the vineyards. Well, maybe a couple. The British Columbia might disagree. So 40 million, you know, factor that into roughly just under 500,000, which are the levels that I announced a few weeks ago. So it is not an insignificant

portion of the population. If there are 500 on a permanent path, how many are coming in on a temporary? Numbers vary, but that could be upwards of a million, whether it's students, whether it's specialized temporary foreign workers, there is a pathway within there for people to become part of the eligible pool that we have for permanent residency. I have to say, you sound not sanguine necessarily, but calm about this program. To me, the idea of taking in half a million immigrants a year in a country of only 40 million, that is just massive. So it strikes me that you all a country, have embarked on a massive immigration experiment. Does it feel massive to you, or are you just responding to a market where you say, we need more immigrants for labor and population and so on?

I think more of the latter than the former. There is no doubt that we have made a conscious decision to be an open country and a country that needs to grow. The reality is we don't have much of a choice. One of the things that keeps me up at night in sort of a nerdy way is the demographic curve that is really bloated in the 50, 60, 70-year-old category. And it's something that we need to fix now or else we'll be in serious trouble for all the broad social services that we provide as a country. That can't be filled domestically through baby booms alone. It has to be filled through immigration.

They face demographic challenges that require them to use immigration to grow the country into the future. That is Bill Kerr. He is an economist at Harvard Business School who studies immigration. And that's going to be important for everything from budget deficits to the vibrancy of the Canadian infrastructure and business environment. I think Canada is positioning itself as a place for talent. How would you describe the key differences between the current U.S. and Canadian immigration systems? First, Canada has more migration, about three to four times the rate of U.S. migration.

It is more tilted towards employment or economic reasons. So the U.S., we think about 25% is a fair number for the overall amount of immigration that's related to employment use cases or economic use cases. Canada, that number is about 60%, so a little bit more than double. And the Canadian system as a whole favors more of a points-based structure built around an individual, whereas the U.S. favors an employer-based system, which principally relies on U.S. firms to pick out the migrants that they would like to employ. Bill Kerr knows a lot of this firsthand. He sits on the board of a company called Mob Squad. Mob Squad is a talent consulting agency in Canada. We principally work with U.S. companies that are seeking access to top talent. That talent is foreign nationals that are employed in Canada

by Mob Squad. The fact is, this kind of competition for highly skilled immigrants is happening in a lot of places. And a lot of those same places are trying, like Canada, to manage their aging populations, many European countries, as well as Japan and China. In all these places, birth rates have been falling substantially. Bill Kerr says there are three good options to deal with this situation. Number one, technological progress. You can automate the heck out of everything. Try to make the remaining workforce ever more productive. It's not surprising that some of the heaviest investments in technology and robotics are coming from Japan and China and Germany,

where they're facing significantly older populations and workforces. The second option is to get more people into the labor market. And this includes extending the retirement ages that you've seen recently in France and some of the protests there. In some countries where women haven't been as welcomed into the workplace, there's efforts to increase female labor force participation. And then there is the third option. The third is using immigration to try to grow the system, grow the economy. This sounds much simpler than it is, using immigration to grow the economy. Because immigrants aren't a commodity that you can just buy more of when

you need them. This brings us back to Canada and Mark Miller. The challenge I face as the Minister of Immigration and our government generally is to look at things that move in generational cycles as opposed to electoral cycles. And the thinking behind that can be quite different. There's lots of things that we do for expedient purposes just to get reelected. This is about sustaining Canada as we understand it today and the health services, social services that our older generation expect, those that have built Canada, that is not doable without people coming in from abroad. If I take the long view and I look at how the U.S. economy grew over the past couple hundred years, immigration was almost infinitely important. It's really hard to overstate it. I mean, it was plainly a country

of immigrants. But also, the economic data show that the children of immigrants in the U.S. have done unbelievably well for themselves and for their communities and for the country. So, would you say that Canada is essentially copying the American playbook, or is it not as simple as that? I'd say it's not entirely as simple as that. If I said that Canada was copying the United States, my dad, who taught Canadian history for 45 years at McGill University, would disown me. So you could throw all the stats at me as you want, and I'll have to refute it.

But he would disown you on philosophical grounds. No, no. I mean, oh, good God, he'd throw data at me as well. I mean, there would be footnotes and it'd be in 10-point font. What data would your father throw at you to say, no, no, no, no, no, this is not like the American project? You know, America's generally had a melting pot theory of immigration, and Canada prides itself on the value of our differences and the diversity. There have been different drivers that have motivated people to move to Canada as opposed to moving to the United States. For example, during the Irish famine,

because there was a tax put on boats coming into near Carver, people went to Montreal. So there's all sorts of historical specificities that define us, whether you're talking about our history of being loyalists to the crown or others. There are similarities, there are differences, but largely both countries have been driven by vast waves of immigration. One big difference between Canada and the U.S. is the politics around immigration. In the U.S., immigration has become extremely divisive.

This is mostly because of the rise in illegal immigration, which has led to real chaos. And that chaos is hard to address when the legal immigration system is also messy and complicated. In Canada, meanwhile, generally, the consensus is quite positive. There is no major party that feels immigration is a bad thing. but I don't like lecturing other countries because I've never spent that much time in their shoes. Canada's southern border is the United States. The United States' southern border is one where the migration flows are a lot more challenging than the ones you see. You don't have thousands of Minnesotans strolling across your border to claim jobs, for instance. Two funny accents fighting each other.

But, you know, we have an ocean to the left of us, an ocean to the right, a nuclear superpower to the south, and a block of ice to the north. So geographically, it's difficult to reach Canada. Canada, I don't think they'll take offense to this, but I kind of describe it as an immigrant engineering country. That's the economist Bill Kerr, meaning that they have the

political capacity, they have the state involvement here to say, we're going to try out a few things, and we're going to look at data over the next few years, check the pulse of the country, and then we're going to make a few more changes. Whereas the U.S. tends to be more, we're going to battle about this for 20 years, 30 years. We're going to make one very significant change. And when that change happens, there's going to be a lot that's going to go into that moment. It almost sounds like you're talking about an industry where there's a big incumbent firm and there's a startup firm. It's a fair characterization.

Here's the thing about big incumbent firms. For all their leverage, they also tend to get bloated and outdated. One good example is our H-1B visa program. The H-1B is issued to highly skilled, highly educated employees, people who work in tech and finance and other specialized professions. Only 85,000 H-1Bs are issued every year. This year, roughly 750,000 people went for those 85,000 slots. The winners are not chosen by the kind of points-based system that Canada uses.

They're chosen by lottery. And even if you win the lottery, you may have to leave the country if you lose your job since the H-1B visa is tied to your employer. Canada looked at this American situation and saw an opportunity. Mark Miller again. We did what we've called an H-1B scoop, largely with digital nomads that had H-1Bs. We said to ourselves, why don't we have a program where we ask about 10,000 of them to come to Canada to fill the gaps that we have. It's a program that filled up within a couple of hours.

So these are immigrants to the U.S. who were on an H-1B visa but didn't have a path toward permanent residency in the U.S., and then you actually call it a scoop program. I assume that means you're scooping them up from us, yes? That's intentional? Yeah, whoever wanted to come and apply, we had a program to do that that we didn't have before in any obvious way. This connects back to Bill Kerr from Harvard. Remember, he has a side hustle, the Canadian talent consulting agency called Mob Squad. They specialize in what is called nearshoring. The majority of use cases for Mob Squad are where somebody has been working with a U.S. company

for two, three years, say in New York City. They have tried repeatedly to get an H-1B and have failed every time. They are at that point that they're going to have to leave the country. We provide a way for them to be in Canada, set up permanent roots in Canada, buy a home, put their kids in school, and they can continue to work with the U.S. firm that they were with before. What are the characteristics that typically make Canada more viable for that kind of candidate? Well, the first thing is proximity. If you are in a New York City high-growth startup company and we move you to Toronto or Halifax, you're very close, same time zones. The second is that we particularly use a program called the Global Talent Stream Initiative.

This is for people that have very specialized and demonstrated skills. And that system can have the person be in Canada and working in under four weeks. So that sounds to my layperson's ears like Canada has gotten quite good at skimming a certain kind of talent worker from the U.S. under certain circumstances. Is that a good characterization or a mischaracterization? I think it's a fair characterization.

I think Canada and other countries see this exceptional talent that is being spurned out of the U.S. system and says, man, we want some of that. Why don't you come here? There has been a recent study that's looked at startup founders and venture capital-backed founders. And Canada has certainly drawn a disproportionate share of individuals from the U.S. that couldn't get access to stay in the country. So, yeah, this all sounds like Canada is beating America at its own game. But that comes with its own problems. Canadian cost of living is bonkers.

That's coming up after the break. I'm Stephen Dubner. This is Freakonomics Radio. And I do hope you will recommend this show to your friends and family. That is the single best way to support the podcasts you love. Thanks in advance. We'll be right back. In many countries, including the United States, immigration is seen as a problem to be solved. In Canada, it's different.

The federal government is competing to attract the most productive and industrious immigrants they can. They are looking for people like this. My name is Sindhu Mahadevan. I work for a medical device startup. We heard from Sindhu a bit in last week's episode. In 2012, she moved from India to the U.S. for graduate school. She got a master's in molecular and cell biology. She worked a few jobs in her field and was hoping to stay in the U.S. She applied twice for the H-1B lottery. Remember, there are only 85,000 visas per year, with this year's applicant pool reaching 750,000. She didn't get one. Eventually, the time ran out on her work authorization. Her husband, who had also immigrated to the U.S., had a job lined up,

so at least Sindhu would be able to stay in the country, but she would be considered a dependent, which meant she didn't have work authorization. So they moved to Canada. I was aware of Canada's merit-based system because a couple of people I knew had immigrated to Canada. One of them had immigrated because of job loss. In the U.S., on H-1B, when you lose your job, you have 60 days to find a new job and apply for another H-1B. It's called H-1B transfer. It's a misnomer. It's actually a fresh H-1B. That was not possible for him, and he just left for Canada. So I was aware of the Canadian system. I did my research. Canada doesn't issue visas by lottery like the U.S. does. And for permanent residents,

they use a points-based system. Here's the economist Bill Kerr again on which factors will get points for a given applicant. They range from level of education. You get a certain amount of points for having a bachelor's degree and then more for master's degree or a doctorate. They can relate to being able to speak French. Canada is a bilingual country. They can connect to a person's age, some of their demographic traits. Countries tend to favor younger immigrants because they're going to be in the workforce longer, going to pay more taxes. And there are features like if you have a job offer from a Canadian company or have previously worked in Canada, those can get you some points. Sindhu Mahadevan's points added up. In 2021, she and her husband entered Canada as permanent residents. She already had a job lined up at a medical technology firm in Toronto.

Then it was time to find a place to live. Canadian cost of living is bonkers, particularly with housing prices and things like that. So compare for me your cost of living and standard of living. The last place that I was living in was Illinois, the Naperville area, generally. Toronto would be much more expensive. How do you feel generally about the Canadian immigration system thus far? It has changed a lot in the time that I applied and now. There are some things Canada does really well, and there are some things that it's increasingly doing badly. And I think we're having this conversation at an interesting time because Canada is at a tipping point in immigration. This does seem to be the case, this tipping point.

Consider a recent headline from The Economist. Canadians are starting to sour on migration. A poll found that more than half of Canadians say they want fewer immigrants. That's up from around 35% just a few months earlier. The political consensus on Canadian immigration seems to be in retreat. And what does immigration minister Mark Miller think about this? Yeah, those polls are interesting, and I'm not going to question them. We do need to be smart about how we're doing things.

The consensus in Canada that immigration is something that is good is under challenge, and I would say in some ways under threat. We very much, as a country, still need immigration. If you bring in half a million people a year, talk about the capital investment needed to make services like education, housing, healthcare, etc. available to half a million new people while just trying to keep up as already? I think we're caught in a vortex where we don't have the luxury to turn off taps. And if we are to reduce them, we are struggling to quantify what the actual impact would be. If we were to

reduce massively, we know that this would be a net decrease to the economy impact would be. If we were to reduce massively, we know that this would be a net decrease to the economy, the GDP. And we have about a million positions that are open in Canada. And that challenge to match supply and demand is still one that is real. The reality of Canada, like in the United States, is we're a federation. I can only do so much as the federal government. I only have so many levers. And the provinces and territories have their challenges in actually accommodating people, like you said, to the education system, to the health system, and to housing. I think mayors across the country would say that what keeps most of us awake is housing and homelessness, particularly homelessness and seeing people on the streets of our cities. That is Mike Savage. He's the mayor of Halifax, the capital and largest city in Nova Scotia.

Nova Scotia is one of Canada's 13 provinces and territories. It is on the far east end of the country, bordering the Atlantic Ocean. And what's been going on in Halifax? From probably 2016, we were about 415,000 people, and now we're over 500,000 people. We've been one of the fastest-growing cities in Canada. Seventy percent of that was immigration. Savage became mayor in 2012, before the big immigrant surge, at least the recent surge. Halifax is a port city, and like many port cities, it was a hub of immigration back in the late 19th and early 20th centuries. They would come through Pier 21.

Pier 21 is Canada's Ellis Island. We don't have the Statue of Liberty, but we now have a statue of the wonderful Ruth Goldblum, who helped to create Pier 21. Pier 21 is where immigrants came to Canada between 1921 and the 1970s. Lots of immigrants from Europe and Asia-Africa came to Canada through Pier 21. The historic peak of Canadian immigration was way back in 1913, with 400,000 new residents arriving that year. But Canada, like the U.S. around the same time, changed its mind on immigration. Too many Eastern Europeans for their taste, too many Catholics and Jews. They passed a new immigration act designed to, quote, prevent the arrival of many of the nondescript of Europe, as one immigration official put it at the time. The annual number fell from 400,000 to below 20,000. After World War II, Canada did take in

about 100,000 Jewish refugees, many of them coming through Pier 21 in Halifax. Today, most immigrants to Canada arrive by air, and Pier 21 is just a museum. But Mayor Savage wants new immigrants in Halifax. We all want growth, and I do want growth. I absolutely want growth. But there's more to it. More to it, meaning how a city like Halifax covers the costs of all those new residents. As we learned in our previous episode, immigrants to the U.S. contribute heavily to the economy, but it's a delayed contribution, often not until the second or third generation. In the beginning, there are big expenses like the cost of schooling, especially since immigrants tend to have more kids. And there are other

costs. The cities and states in the U.S. that receive a lot of immigrants don't feel they get the federal support they need. In Canada, there's a similar problem. There's a tremendous amount of money that's come into the province of Nova Scotia and other provinces from immigration. But the cost of housing those folks is borne by cities in large part. When people move to Halifax or Toronto or Moncton, they expect that there's water when they need it. They expect transit. They expect parks for their kids.

And so growth is good, but the cost of that growth has to be more fairly shared. We need a revenue-sharing formula that's a little bit more fair than the one that we have now. And the immigration surge in Canada has put a lot of pressure on housing prices. This affects immigrants and natives. We have encampments in the city. We have people who are couch surfing. We have a list of those people who are registered as homeless. And we have a number of people who are living on the streets that were working to find some alternatives.

Housing is an issue. There's no question. Well, it's definitely a problem, and I think there's no shying away from that fact. Mark Miller, again, the Canadian Immigration Minister. In Canada, the federal government, in whatever form it's been, whether it's our government or the other party

that's been running the shop, has not invested in housing for about 40 years. Miller, like Prime Minister Trudeau, is a member of the Liberal Party. This is a problem that's been 40 years in the making. You cannot attribute that to immigration numbers. I think it's wrong to ever think that immigrants cause a housing crisis. And that, again, is the economist Bill Kerr. Almost always, the housing crisis was there before,

and immigrants are coming into that, and they're adding additional demand to that. Housing prices jumping up is largely the result of free debt well over a decade, and the affordability that everyone's feeling now is the corresponding increase in interest rates that we've all felt across the Americas. A housing crisis would oftentimes have root causes

in the types of regulations that are constraining building access and permits. Can we do better? Are there market failures in areas? Absolutely. It's multifold. It's complex. What we do know is that the federal government is not invested in housing and needs to. Another part of the equation we tend not to look at is the importance of people coming in from abroad to actually fill the positions to build the houses that we need to get done. The construction industry is facing a massive flush out of people of a certain age, and the intake is just insufficient.

We ask people to come here based on their qualifications. Often they come here and there's a bit of a market failure in matching the skills with the actual job that they then do. People get here and they may not have the qualifications or be accredited to the bar in the case of a lawyer or the medical college or be accredited to the College of Welders. And is that a fraud? Is it a gaming the system

or is it just difference in standards? No, it's just, we look for the skillset internationally. The placement aspect of this and the aftercare in Canada is still limited. It doesn't sound like the Canadian government per se does a lot to match immigrants with jobs, correct? I'd say largely in the past. This is something I think we're moving to rectify with programs that are a little better tuned to the actual demands in Canada. So I'm guessing that if you don't have a kind of federal jobs

matching program, that there's also not a federal housing matching program of any sort for new immigrants. Is that correct as well? I don't think anyone in Canada would expect the federal government to be priding houses for people that come here. You would probably create more strife than you would even attempt to resolve. One recent worthwhile Canadian initiative has been a ban on foreign nationals, especially investors and speculators, buying up residential properties. Some places in the U.S. have tried something similar. Florida, for instance, recently passed a bill forbidding the foreign purchase of residential properties and

agricultural land. This bill singled out Chinese buyers in particular. In Canada, the government has also invested more than $80 billion in new construction, but some economists say this isn't nearly enough. Three scholars from the Canadian Labor Economics Forum recently issued a study arguing that Canada simply doesn't have enough housing to accommodate the aggressive immigration target and that the upward pressure on housing prices will outweigh the overall benefits of immigration. This is reflected in the disappointment we heard earlier from the recent immigrant Sindhu Mahadevan. What Canada is doing not well is that it is not preparing well enough for the influx of these large numbers of immigration. Housing, affordable housing is a very real problem

in Canada. There are folks with regular well-paying jobs who are not able to afford rent in a sensible amount of their paycheck. Healthcare is a problem. Every time somebody moves to Canada, I tell them to start looking for a family doctor right away because it is hard to get one. There's also the issue of credentialing. If you are in a profession that requires you to get a license, that can take considerable time and expense. I used to have a neighbor who was a medical doctor in his country of origin. And he came here and he couldn't practice. And Canada has a shortage of doctors. That's unconscionable. So when you look at those problems,

which, you know, every country has problems and the U.S. has plenty of problems, but when you talk about the difficulties that already exist in credentialing, in affordable housing, in access to health care, and maybe other social goods. With Canada set to take in half a million people a year for the foreseeable future, I'm curious how you see this playing out. It sounds as though if the current trends continue, there could be some pretty significant problems, perhaps

including backlash against immigrants? That is something that I have been really, really concerned about as an immigrant myself. Right now, all of the surveys seem to point towards a backlash against immigration, but it hasn't quite gone to the level of a backlash against immigrants. The idea of the American dream is obviously a famous concept. There are those who argue that it's been significantly damaged or changed the last few decades, or at least much harder to achieve. What comes to mind when I ask you to define the Canadian dream? The thing I really think is admirable about Canada is that it's very hard to define what being a Canadian is. Some people seem to perceive that negatively. I think that's

a good thing. When something is that hard to define, it means it's more capacious. Anybody can fit into that definition. One way in which Canada is very different and I feel very comfortable with is that it's very accepting of multilingualism because even before the massive influx of immigrants, it was bilingual. India is extremely comfortable with multilingualism because although it's a relatively homogenous country, there are a lot of languages spoken. In the US, I've always found it very strange that only one language is spoken and I sort of got used to speaking only English when I was outside of home. And now I think I'm drifting more back into speaking the different languages that I speak, even outside of home. As far as the American dream idea, I think America has occupied the global imagination for so long and so well that it's just great branding.

You know, it's just great branding. Do you have a good slogan for Canada? Is it like the new America, but better? We are not America. That's the slogan? We are not America? With a smiley face, maybe? With a slight smiley face. You may recall in part two of this series, the story I told about how a Freakonomics reader came up with a new six-word motto for the United States. Our worst critics prefer to stay.

Coming up after the break, does an honest critique of America lead to the conclusion that we ought to be a little more Canadian? I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Zeke Hernandez is someone we've been hearing from throughout this series. He is a management professor at the Wharton School at the University of Pennsylvania. I study how movement affects businesses and the economy, particularly the movement of people. Hernandez immigrated to the U.S. from Uruguay. He is the author of a forthcoming book called The Truth About Immigration, Why Successful Societies Welcome Newcomers.

In our last episode, we got Hernandez's assessment of the U.S. immigration system. Our immigration system is not designed for a modern economy. We have a patchwork of programs and visa types that is really outdated, And so we don't accept enough talented people. Only 14% of green cards annually are given for employment-based purposes, and two-thirds are given for family-based purposes. So we have a system that actually isn't designed to benefit from the world's best and brightest. The U.S. is still getting a lot of that supply of really talented people through education. We just do a really bad job of keeping them. To what degree do you think Canada is successfully becoming a target destination for highly educated immigrants?

They're doing it very well by that measure. Of course, Canada is a smaller country. Canada admits half a million, which is 1.3% of its population. It has a system that is much more geared towards skills and employment. And so their share of skilled people is much higher than ours. We pick and choose. This is something we've been quite proud of. That again is Mark Miller, Canada's Minister of Immigration, Refugees, and Citizenship. Other countries have made a conscious effort to come and study it, and I always feel really flattered when other countries come and look at our program and tell us how amazing we are.

But should it be the principal goal of any country's immigration system to optimize for the most productive workers? Or is there something to be said for a system that puts a priority on families like the U.S. system? The New York Times Magazine recently published an investigative piece on the hundreds of migrant children traveling alone who've been detained by the Coast Guard as they try to illegally enter the U.S. from Caribbean countries. One of the children in the piece was a 10-year-old boy from Haiti who's trying to get to his mother. She was in Canada applying for asylum. David Leonhardt is a Times journalist who has written extensively about immigration. We heard from him earlier in this series as well. I asked Leonhardt what he made of this story of the 10-year-old

boy trying to reunite with his mom and whether employment-based immigration is part of the problem. I think any immigration policy should have as a key goal keeping families intact and reuniting families if they've been separated. But I think we also have to be somewhat rigorous at defining families as nuclear families and saying, yes, if a 10-year-old child is separated from her mother and father, you really want to reunite them. But once you get beyond that, I think having a system that prioritizes the contributions that someone can make economically to a country, as Canada does, may well make more sense than making decisions based on whether you have another adult relative already in the country if you're an adult. I also asked Zeke Hernandez for his take.

I prefer a model that's more balanced. I think family-based immigration, it's really important. You know, for social reasons, family staying together, how are you going to be happy and integrate into the country if you can't live with the people you love? But actually, I think the separation between family and economic migrants is artificial. And here's why. A lot of, quote, family-based migrants are also contributing to the economy. This is a bit philosophical, but it's also based on the evidence.

It's kind of ironic to me that a lot of people who for years pointed at the Soviet central planning system and laughed at how inefficient it was and use that to be so proud of our market system in the US are totally fine with a centrally planned system for managing talent. I think that the whole hallmark of not just a capitalist society, but actually a functioning society on the non-economic side is

to, for the most part, let people be free. If you, Zeke, were participating in some kind of legislative or policy program, you would, I assume, feel competitive. You would feel that Canada is starting to scoop up or peel off some of the high-skilled immigrants who've already come here. What would you do about that? It's true that there is a bit of a geopolitical competition for talent, right? It would be naive not to admit that. But I don't think that the biggest threat is external. I think our biggest threat is internal in terms of our decrepit system and also our caustic politics. And so the first thing I would do is we have to have, and I know this is going to sound really naive, but we need to frame immigration as a positive thing, as a net positive. I would increase the number

of immigrants we allow in. I would rebalance it so it's not so skewed toward family-based migration, although I don't think we should reduce family-based migration. We just need to increase employment-based migration a lot. I would make it much easier for international students to get work permits in the U.S. And I would also build more flexibility into the system. When you think about comprehensive reform, it's going to have multiple aspects to it. That, again, is Bill Kerr, the Harvard Business School economist. One is going to be a strengthening of the southern border and security there. It will have part of it that is about particular programs like DACA and what's their future

going to look like. And then there's a large group of undocumented immigrants and how would they be regularized or brought into the mainstream workforce and economy and going forward. There's also likely to be questions about family-based versus employment-based migration at the macro level. We don't do a very good job of using the visas that are allocated to the program for the best economic purposes. We use a lottery to select across applicants in most years. And that means that the person who's entering that's a computer programmer, mid-tier,

is given the same potential weight as someone who's at the very cutting edge of artificial intelligence or cyber research. We haven't prioritized in any way across those applicants. And I would try to bring more of that kind of rigor, signals that we know about these applicants into that selection process. Would you say that overall your policy recommendations are more compatible with the current Democratic Party or Republican Party? I think they are probably leaning a little bit more Democratic Party, but some policies put forward by President Trump are not very different from some of the

things that I've advocated here. Historically, this was not on employment-based migration closely aligned to parties because Republicans have long been thought of as a party of business, and this is a business-related visa. Democrats have traditionally in recent decades been more of the pro-immigration party and that aligns here. It has become increasingly a topic of polarization across the parties that especially for the employment-based, economic-based migration, it historically wasn't. Do you see anyone trying to turn down the temperature on that? At present, I see few people really wanting to talk deeply about it. It's a very difficult situation already. And it's a place where there have been more, I think, political

stunts undertaken rather than efforts to enact reforms. It doesn't seem something that under our current political environment, you're going to see action on over the next year or two years. Do you feel that the U.S. immigration system as it currently stands should be more directed toward employment-based immigration? You mentioned that I'm an economist. I think the question about family-based migration versus economic versus the allotment for refugees. Those are more political questions. Those are values that are being brought into that question. The U.S. has never had what I consider to be a user-friendly immigration system. But what was always at the other end was a big opportunity. And I think the big challenge,

and it's been developing over 10 years and you can feel it in the air right now, is the world has got a lot less certainty about what the U.S. will offer if you make it through this system. Whoever wins every four years, which is going to be knife-edge, could have significant impacts for what comes next.

And that's a place where I think Canada is trying to come in and be the exact opposite. I went back to Mark Miller, our Canadian government friend, with one last query. So, Mark, let's say that I've heard you speak about the virtues of Canada and the Canadian immigration scenario, and I'm buying what you're selling. I'm like, you know, Mark, yeah, I live in New York City. We've got our problems. The US, like every country has some problems. And so I want to apply to Canada. I want to be one of your half million next year. First of all, would I be a good candidate doing what I do coming from where

I come from or no? I'd have to look at your skill set, Stephen. See what you bring to the game. All right. I've got eighth grade French, but my English is decent. Am I the kind of knowledge worker that might contribute and might find a slot there or no? I mean, you'd have to look at the streams that we offer. You have a bit of an academic background. There might be a university that would want you. I don't think you'd be good in the fields, but. So it's a maybe it sounds like. It could be, it's a maybe. You could be nominated by a province to come in

if they thought you could contribute. So here's what I really want to know. Forget about me. It's the median person coming from somewhere far away, coming with some skillset that's considered essential to the Canadian future. What can I expect to find in Canada? And what I really want to know is how will it compare to life in the U.S.?

Because the U.S. has been proud for many decades of a motto, the American dream. And increasingly, the American dream is thought to be nowhere near as dynamic as it used to be. So when you're selling, what's the Canadian dream is thought to be nowhere near as dynamic as it used to be. So when you're selling, what's the Canadian dream? Draw that picture for me. Yeah, we think, and I believe the Canadian dream is alive and well. It has a lot of the challenges that the United States is facing. Reality can be quite tough. One of the main features that people from abroad look at is the healthcare system, which is universal. We're moving towards universal dental benefits, high quality education and employability.

Canada doesn't necessarily on average generate the same high wages as you'll find in certain parts of the United States, but it is a place where you can have a great future, raise kids, affordable daycare, much more affordable education, even much more affordable higher education. So people are quite happy. Is it the vibe that you get in Midtown or Manhattan? I can't tell you that, but I can tell you that there are some really cool cities and our sports teams aren't bad either. Can we talk about the weather for a minute? It's terrible right now. It is very cold at times and people will distinguish between a dry cold and a wet cold. This is a debate of,

it can get quite heated. What side of the debate are you on? I definitely can feel it in my bones when it's a wet cold. You know, the coldest I've ever been in my life was just a few years ago in Montreal. I had actually come from Alaska. It wasn't bad in Alaska. And then something about it in Montreal, I don't know whether it was dry or wet, but it was, I thought I was just going to literally freeze and become paralyzed on the street. I thought I was going to freeze in place like a cartoon block of ice and fall over and crack into a million pieces. Is that a common experience? Yeah, I mean, that was probably January or February. Yeah, it can happen.

Do you have any plans to address that issue? Federal government's all over it. It's on top of it. We'll fix it tomorrow. It's easy to joke. I live in New York City, which is right where I want to be. I'm here thanks to the courage and luck of my grandparents' generation. So what's the best way to think about everyone else who's already in the U.S. and doesn't know what to make of our current immigration mess? What's the best way to think about the many millions of people who aren't here but would like to be? Those are big questions.

I hope you think we've provided some answers over these past few episodes. I'm always happy to hear your feedback, whether praiseworthy or critical. Remember, our worst critics prefer to stay. Our email is radio at Freakonomics.com. Coming up next time on the show, we speak with Fareed Zakaria, who is, for my money, one of the smartest and most humane observers of global politics and society. We are living through possibly the most revolutionary period in human history. We talk about the origins of the left-right divide in politics. We talk China and Russia, of course.

Also, the Middle East mess and the failed promise of the Arab Spring and the upcoming U.S. presidential election. The polls right now suggest Trump. The elections right now suggest Trump. The elections right now suggest Biden. We also talk about what it means to have moral courage in this fragile moment. History is complicated. Sometimes the bad guys win. Fareed Zakaria on his new book, Age of Revolutions.

That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app or at Freakonomics.com, where we also publish transcripts and show notes. This immigration series was produced by Alina Kullman and Zach Lipinski. They both did a great job helping us get our minds around this sprawling topic.

Our staff also includes Augusta Chapman, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, Julie Canfor, Lierich Baudich, Morgan Levy, Neil Carruth, Rebecca Lee Douglas, and Sarah Lilly. Our theme song is Mr. Fortune by the Hitchhikers, whose lead singer was an immigrant to Canada from Jamaica. All the rest of our music is composed by Luis Guerra, who lives in Los Angeles, which, as we all know, is a country unto itself. As always, thanks for listening.

I want you to be the most authentic you, however you actually are. Okay, well then I should leave right now because I'm rather introverted. The Freakonomics Radio Network. The hidden side of everything. Stitcher.