Some private gains are created by shifting costs onto others. The Accord prices those costs at the source: carbon, methane, speculation, systemic financial risk, pavement destruction, public-health harms, aquifer depletion, interchange extraction, and labor-market undercutting.
The current US immigration framework imposes uncompensated externalities in four directions and addresses none of them as a priced economic system.
Domestic low-wage workers absorb labor-market undercutting. When employers can hire immigrant workers below the prevailing wage, the local wage floor erodes for everyone in that occupation. The harm is concentrated in industries that use immigrant labor most intensively (agriculture, construction, hospitality, food service, certain healthcare segments) and falls on the domestic workers in those same industries.
Hosting localities absorb accommodation costs. Every immigrant family arriving in a community uses local schools, local healthcare, local housing capacity, and local infrastructure. The federal framework today provides no systematic accommodation-cost transfer to the hosting locality; the immigrant household pays state and local taxes over time, but the upfront accommodation cost-curve isn't matched by upfront federal funding.
Origin communities lose productive talent. Migration is a real option for the migrant; it's also a permanent loss of human capital for the origin community. The standard pattern is that origin economies that develop become less migration-source — but the development capital that produces that result has to come from somewhere.
Asylum and humanitarian obligations are politically contentious because their cost is unpriced. When asylum coverage is nominally generous but underfunded, the system fails everyone: claimants face inadequate process, communities absorb the cost, and the architecture's legitimacy erodes.
The Parity Wedge is a graduated labor-market-access charge. The employer pays the domestic-equivalent prevailing wage; the immigrant takes home a wage that converges toward parity over time. The difference — the Wedge — is drawn from the immigrant's wage, collected federally at payroll, and routed entirely to domestic hosting communities.
The Wedge is calibrated to start at 100% of the parity gap in Year 1 and decline to a 10% floor in Year 9 as the worker integrates into the labor force and pays standard payroll tax and income tax. The 9-year glide path reflects the empirical pattern of immigrant earnings convergence with native-born peers — most of the convergence happens in the first decade.
Volume is set by employer demand. The architecture replaces top-down visa quotas (which today produce both shortages and surpluses depending on industry) with a market mechanism: employers willing to pay the parity wage can hire; employers who aren't can't. The system self-balances at the rate domestic labor-market conditions can absorb.
Apportionment is COMPASS-weighted: heavier toward low-capacity / hollowed-out tracts that most need internal capacity (healthcare access, broadband, housing supply, civic infrastructure), lighter toward high-capacity cities with established immigrant-receiving infrastructure. Communities qualify both as employers' hosting locations and as places hosting refugees or asylum seekers — refugee-hosting communities qualify even before residents are employed. Refugee + asylum-seeker healthcare is covered by Distributed Healthcare (the federal universal floor), not by a hypothecated wedge slice.
No fixed federal percentages are published. NSB and Treasury set the apportionment weights against the COMPASS shortage-indicator suite — the rule-making travels with measured local need, not with political negotiation.
Employers of immigrant workers, with the rate scaled to the parity gap. Industries that today use immigrant labor most intensively (agriculture, construction, hospitality, food service, certain healthcare segments) face the largest aggregate Wedge — but the per-worker rate is also highest in those industries because the parity gap is widest where immigrant wages are most depressed relative to domestic equivalents.
The architectural intent is that employers internalize the labor-market externality their hiring decisions impose. An employer hiring at parity wages pays no Wedge. An employer hiring below parity pays the gap. The mechanism aligns incentives toward fair-wage hiring without imposing top-down wage controls.
Domestic low-wage workers benefit from the floor effect: when employers must pay the domestic-equivalent prevailing wage, the local floor stops eroding. The Wedge is the architectural response to the long-running political fight about whether immigration suppresses domestic wages — by structurally pricing the suppression effect, the architecture removes the suppression rather than denying it exists.
Domestic hosting communities receive the entire wedge, COMPASS-weighted. Low-capacity / hollowed-out tracts — the rural and small-town America most often described as "left behind" — receive the heaviest per-immigrant allocation, because that is where marginal capacity-building dollars travel furthest. High-capacity established cities, with deep existing immigrant-receiving infrastructure, receive a lighter per-immigrant allocation. The cost-curve mismatch (immediate accommodation costs, gradual integration revenue) is solved at the federal level. Communities can plan school capacity, healthcare capacity, and housing-supply expansion against an explicit federal funding stream tied to the immigrant population they're hosting.
Refugee and asylum-seeker hosting communities qualify even before the hosted residents are employed. Their healthcare comes from Distributed Healthcare (the universal floor); the wedge funds the community-side capacity (housing, schools, integration support, civic infrastructure).
Pending canonical scoring.
Wedge revenue scales with employer demand. At full deployment with current immigration patterns and parity-wage assumptions, the Wedge produces tens of billions per year in routed revenue — all routed to domestic hosting communities under COMPASS-weighted apportionment. The architecture is fiscally net-positive because the integrated immigrant population pays payroll tax and income tax on full earnings (not the Wedge-discounted earnings) — a 20-year-old immigrant contributes approximately +$316,800 in net fiscal surplus over their working life under the architecture's modeling.
The Year-1-to-Year-9 glide path means individual Wedge payments decline as workers integrate. Aggregate Wedge revenue is determined by the inflow rate (new arrivals × Year-1 rate) plus the integrating population (existing arrivals × declining rate). Steady-state arithmetic depends on the inflow rate, which depends on employer demand.
See tax ladder · fiscal scoring
- Below-prevailing-wage hiring
- Employers must pay domestic-equivalent prevailing wage. The Wedge fires on the difference. There is no economic advantage to paying below parity — the employer's labor cost is the parity wage either way.
- Visa-quota arbitrage
- Volume set by employer demand, not by top-down quota. Employers willing to pay the parity wage can hire; the architecture self-balances at the volume domestic conditions absorb.
- Cost externalization to localities
- Entire wedge routes to domestic hosting communities, matching federal funding to local accommodation cost-curve. Communities don't bear immediate costs they only recover over decades.
- Capacity-shortfall in left-behind places
- COMPASS-weighted apportionment leans toward low-capacity / hollowed-out tracts that most need internal-capacity increases — schools, broadband, healthcare access, civic infrastructure — turning the wedge into a rebuild stream for rural and small-town America rather than a top-up for cities that already have the infrastructure.
- Refugee + asylum healthcare gap
- Refugee and asylum-seeker healthcare is covered by Distributed Healthcare (the universal floor), so the political fight over hypothecating wedge revenue for humanitarian coverage disappears. The wedge funds community-side capacity; the universal floor funds individual care.
The Wedge's design replaces structural failure modes of today's immigration architecture.
- Workforce Augmentation (Engine 4)
- Houses the broader immigration architecture and the Wedge mechanism. Detail at /calculator/wedge.
- FedCard
- Collection rail for the Wedge AND the disbursement rail for hosting-locality accommodation funds. Same universal-account infrastructure.
- payroll tax
- Integrated immigrant workers pay payroll tax on full earnings on the same comprehensive base as native-born workers. The Wedge is on the parity gap; payroll tax is on the wage.
- Skills Wallet
- Naturalization triggers Skills Wallet accrual on the same footing as native-born workers (per /skills-wallet). The architecture treats long-resident workers and naturalized citizens identically.
- COMPASS shortage-indicator suite
- Drives the per-tract apportionment weights. Tracts with the largest measured shortages on healthcare access, broadband, housing supply, and civic capacity receive the heaviest per-immigrant wedge allocation. NSB publishes the indicators; Treasury translates the weights into transfer schedules.
- Family-formation policy
- UCA, Baby Bonds, childcare mandate apply to all children present in the US, regardless of parents' immigration status. Family policy is universal at the child level.
The Parity Wedge sits in the Workforce Augmentation engine as well as Engine 1 (which scores the Wedge revenue). It interacts with the broader workforce architecture — Skills Wallet for native-born and naturalized workers, immigrant integration via the language and credentialing infrastructure, and the family-formation policy stack (Universal Child Allowance, Baby Bonds, family policy).
The Parity Wedge invites two attacks from opposite ends of the political spectrum. From the restrictionist side: employer-demand-set volume removes any cap on inflow, leading to unbounded immigration that overwhelms local communities regardless of routing. From the open-borders side: pricing the externality is treating migrants as a tax base to be extracted from, when they should be welcomed without conditions.
A more sophisticated objection: the Year-9 floor at 10% becomes a permanent two-tier wage structure. Even after integration, employers prefer naturalized-immigrant labor at 90% of parity over native-born labor at 100%. The architecture institutionalizes the wage gap it claims to close.
Volume control: employer demand is bounded by the parity-wage requirement. Employers paying domestic-equivalent prevailing wage have less price advantage from immigrant hiring than today's framework provides; the volume that can be absorbed economically is the volume domestic labor-market conditions sustain. The architecture is more bounded than today's framework, not less.
Worker dignity: the Wedge is paid by the employer, not deducted from the worker's wage. The worker receives the parity wage. The architecture does not treat the worker as a tax base; it treats the externality the hiring imposes as a priced fact.
Year-9 floor concern is real and architecturally addressed through the Skills Wallet + Workforce Augmentation pairing. Once an immigrant worker has accrued Skills Wallet (post-naturalization) on the same footing as native-born workers, employer hiring decisions no longer distinguish on the parity-gap dimension. The 10% Year-9 floor reflects a residual integration-cost that diminishes with continued tenure; it is not a permanent two-tier wage structure.
Honesty about gaps. The Accord's credibility comes partly from explicit acknowledgment of what is not yet specified. The items below are flagged for v10.2 specification or for outside expert review.
- COMPASS-weighted apportionment: the exact weight function (which COMPASS indicators load most heavily, how absolute vs. relative thresholds combine, how the rule-making handles rapid migration shifts) is set by NSB / Treasury and adjusted on a published schedule. The principle is fixed — heavier toward low-capacity / hollowed-out tracts, lighter toward high-capacity established cities — but the specific weights are not published as fixed percentages.
- Worker-aged-20–35 prioritization mechanism: the +$316,800-net-fiscal-surplus calculation depends on the age priority. Whether priority is enforced through Wedge-rate variation, visa-class structure, or other mechanism is pending specification.