Becoming American: Why Immigration Is Good for Our Nation's Future (32 page)

As the rules stand, tens of thousands of international students who attend U.S. universities cannot compete for jobs here. Robert Guest, an editor at the
Economist
, wrote a piece for the
Wall Street Journal
in which he compared sending away international students to “Saudi Arabia setting fire to its oil wells.” New York mayor Michael Bloomberg (who won election as a Republican) calls the practice “national suicide.”

Currently the United States annually awards only eighty-five thousand H-1B visas for highly skilled workers, despite a dearth of U.S.-born workers who can fill these types of jobs.

In addition to paying skilled foreign-born professionals the same wages as comparable American workers, government data show U.S. employers have been required to pay over $3 billion in mandatory government fees since 2000. In other words, despite the higher costs required to hire foreign workers, companies are willing to pay for the talent. The data call into question critics’ assertions that H-1B visa holders are hired to save money. Data from U.S. Citizenship and Immigration Services (USCIS) obtained by the National Foundation for American Policy (NFAP) show that, from fiscal year 2000 to fiscal year 2011, employers paid over $2.3 billion to the federal government in H-1B training fees (generally $1,500 per individual). Additionally, a $500 antifraud tax/fee on each H-1B and L-1 visa has cost employers more than $700 million. Including visa adjudication levies, premium processing fees, and costs associated with dependent family members, the total amount employers paid to the federal government to hire H-1B visa holders since 2000 approaches $4 billion. Employers must also typically pay legal fees of $1,800 to $2,500 per H-1B temporary visa, as well as staff time. Sponsoring an individual for a green card (permanent residence) can be as high as $35,000.

Ironically, U.S. policy governing immigration has remained unchanged for nearly half a century despite the fact that immigrants are the ones fueling the U.S. economy. We needn’t place artificial limits on the contributions that immigrants are able and willing to provide. While U.S. policy is geared to the economic realities of the past, it is woefully inadequate at encompassing the landscape of the future. The world moves around us, and we remain stuck in place.

In
The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent
, Vivek Wadhwa also recognizes the precarious position the United States is in due to its archaic immigration policy because immigrants can now choose to return home or never come at all. Wadhwa warns of a decline in immigrant entrepreneurship in the United States, which has traditionally fueled the U.S. economy. His research has shown that the United States can save itself by incentivizing immigrants to stay with policy changes.
¹

Also in agreement, Thomas Friedman wrote in the
New York Times
in 2009 an open letter to America,

Dear America,

Please remember how you got to be the wealthiest country in history. It wasn’t through protectionism or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world, and then stir and repeat, stir and repeat, stir and repeat, stir and repeat. We don’t want to come out of this crisis with just inflation, a mountain of debt and more shovel-ready jobs. We want to—we have to—come out of it with a new Intel, Google, Microsoft and Apple.

It is important to note that we don’t just want another Intel, Google, Microsoft and Apple, but rather we need to be equipped to quickly respond to the next big thing, the development of nanotechnology and biotechnology clusters. Those companies are still important, but the real innovation will come from outside the establishment to create the new jobs and economies of the future.

We need to create an entrepreneurial environment that brings together different groups of people to promote innovation. MIT, Stanford, Yale, and Harvard are among some schools that have been able to create such an environment. They have created a culture that builds and rewards entrepreneurial vision and emphasizes a team approach that brings together people of different backgrounds and skills. Let’s take a closer look at MIT. The university steadily creates and enhances entrepreneurial-launching structures, such as the $100K Competition and the Deshpande Center for Technological Innovation. The results of such an entrepreneurial environment have been astounding. Data from a 2009 study suggest that MIT alumni alone have founded 25,800 firms, employing about 3.3 million employees and generating about $2 trillion in annual revenue. Between two hundred and four hundred companies are started each year by MIT staff and alumni. If these companies formed a nation, they would have ranked as the world’s eleventh-largest economy. Most strikingly, the institute takes an entrepreneurial approach to entrepreneurship itself. Now, though, there are also excellent foreign universities that train and encourage the development of new industries from Fudan, India’s school of Science and Technology, and Iran’s Sharif University.

However, as the United States becomes less hospitable, formally and perhaps informally, those bright, motivated individuals are being courted by other immigrant-friendly countries, such as Canada, Singapore, New Zealand, and Israel, not to mention their own native countries. In the global race for the next generation of startups, the United States has a privileged position, but that status as a preferred destination is in danger of being diminished as collateral damage in a debate with other protagonists, motivations, and constituencies. We can only hope that some good sense comes into play alongside the fear, stereotypes, and lack of solid data currently characterizing the problem.

When it comes to the issue of immigration in the United States, there are a myriad of complexities swirling around each point within the debate. But, most often, the underlying, unspoken sentiment seems to be: Do we have enough? Enough resources to accommodate all those around the world who would want to partake of the American Dream? Enough goodwill toward those who are often culturally, and sometimes religiously, quite different than the “typical” American? Enough domestic stability to withstand the inevitable shockwaves caused by the influx of foreign sensibilities? Or, do we instead think that enough is enough?

In another federal program known as EB-5, wealthy foreigners can in effect buy U.S. immigration visas for themselves and their families by investing at least $500,000 in certain development projects. Participants can get a temporary visa by investing $500,000 to $1 million in a federally approved business. If the business creates or preserves at least ten jobs in two years, the investor and his immediate family are eligible for permanent residency in the United States.

In the past two decades, much of the EB-5 investment has gone into commercial real estate projects, like luxury hotels, ski resorts, and even gas stations. Lately, however, enterprising brokers have seen a golden opportunity to match cash-starved charter schools with cash-flush foreigners in investment deals that benefit both. In the first nine months of 2012, the government approved three thousand petitions from foreigners seeking to participate in the program—nearly twice as many as were approved all last year, according to the Department of Homeland Security.

The public debate concerning many of our national issues might be different if our policies were explicitly aimed at boosting talent and competitiveness. Instead of being afraid of competing for finite resources, we should recognize that talent expands the sum of economic rewards. We need not have the view that immigration takes something from the native born, but rather recognize that, with creative thinking and sound policies, we can actually boost employment and make the American Dream big enough to encompass all who want to partake.

A case in point is the global race to any of the previously mentioned clusters. A cluster would create jobs and bring prestige to the area that hosts it. So while there currently exists no overarching economic policy with regard to immigration, we also need to take note that a key driver in the demand for international migrants over the next twenty years will be the slowing growth, and then decline, of the labor force. The United States is expected to have its labor force aging out somewhere around the year 2020. Compare this to developing countries, where about 31 percent of the population is below the age of fourteen, with a forecast to add nearly one billion workers to the world’s labor force by 2025.
²

Comparison of Percentage of Permanent Residency Visas Dedicated to Workers and Their Dependents

Austrialian Government, Department of Immigration and Border Protection,
www.immi.gov.au
/; Citizenship and Immigration Canada, “Fact and Figures,”
www.cic.gc.ca/english/resources/statistics/menu-fact.asp
; U.S. Department of Homeland Security,
http://www.dhs.gov
/.

In Canada there is no annual limit on the number of work permits issued; Canadian companies in labor-tight industries eagerly use the Temporary Foreign Worker Program to recruit foreign talent. Attracting information technology workers has been deemed a priority in Canada, and special immigration provisions for IT workers have been implemented to facilitate their entry into the Canadian workforce.

There is a fundamental difference between the thinking behind temporary foreign workers in the United States and in Canada. A Canadian temporary work permit is seen as the first step to becoming a permanent resident and then a Canadian citizen, whereas American H1-B holders are aware that their stay in the United States is only temporary.

Canada now has one of the highest intakes of immigrants in the world, with a per capita rate double that of the U.S. rate, even after taking into account the flow of illegal migrants from Mexico and Central America.
³

Recently, Canadian immigration minister Jason Kenney announced that the federal government is also considering legislating away its massive backlog of immigration applications and allowing provinces to cherry-pick from one big pool of would-be newcomers in a bid to transform Canada’s immigration system into one that’s driven by the economy. In a speech to business leaders at an Economic Club of Canada luncheon, Kenney promised “transformational change” to immigration that emphasizes the need for skilled newcomers who can fill gaps in the country’s labor market. He suggested the pre-2008 backlog of nearly one million applications is bogging down the system and hindering reforms. He outlined several pilot projects and strategies the government is considering to eliminate it. “People with flexible human capital, high levels of language proficiency and a prearranged job are set for success so that will be an important guidepost as we move toward transformational change,” he said

Noting New Zealand “legislated an end” to its backlog in 2003 by creating a pool from which all applicants could be selected based on specific criteria as opposed to time spent in the queue, Canada is looking at a similar option. Meanwhile, a new pilot project, Kenney said, is now in place to give provinces the opportunity to “mine the backlog” for newcomers who meet local labor force needs.

The Canadian federal government has already struck deals with British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, Newfoundland, Labrador, and the Northwest Territories to sort through the backlogs. Officials predict this will allow Canada to welcome an additional three thousand to four thousand newcomers this year through the provincial nominee program, which gives the provinces and territories a greater say in immigrant selection.

Furthermore, high-level consultations have begun between government officials and employers across the country to discuss ways of creating a more active immigration system in which employers play a greater role in recruiting people from abroad. Kenney said the government is looking at obtaining consent from applicants in the backlog, so they might be considered directly by Canadian employers who are looking for particular skilled workers. This would mean giving employers direct access to the backlog database so, for example, hospitals in Manitoba can find foreign doctors and nurses who have said they would like to settle in the region.