Immigration Wars: Forging an American Solution (10 page)

Obviously, we need to improve our K–12 educational system in order to produce graduates who can satisfy the demands of a high-tech economy and compete with graduates from foreign countries. But until we do, there is no substitute for attracting and welcoming large numbers of students and professionals from foreign countries, if we are to have any hope of maintaining American prosperity and leadership in the world economy.

Fortunately, we have for many years attracted a vastly disproportionate share of the world’s greatest scientists, engineers, and entrepreneurs. Indeed, more than one-quarter of all U.S. scientists and engineers are foreign-born.
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Richard Florida, author of
The Rise of the Creative Class,
argues that our nation’s biggest competitive advantage in the world has been “its status over the last century as the world’s most open country.”
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That openness has fueled American leadership in the technology revolution. Microsoft founder Bill Gates has characterized the United States as an “I.Q. magnet.” He told a congressional committee in 2007, “For generations, America has prospered largely by attracting the world’s best and brightest to study, live and work in the United States.” Our nation’s “success at attracting
the greatest talent has helped us to become a global innovation leader, enriched our culture, and created economic opportunity for all Americans.”
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Indeed, more than one-third of U.S. Nobel Prize winners have been foreign-born, a proportion that increased to half between 1990 and 2001. In the Silicon Valley, half of all new companies were started by immigrants.
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Google, Intel, and eBay, among many others, all were built by immigrants.
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By 2000, more than half of the PhD-level engineers in the United States were foreign-born.
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Moreover, immigrants are growing ever more central to our knowledge-based economy. In 1999, American-born scientists were granted 90,000 patents, compared to 70,000 from scientists from all other countries. By 2009, more patents were granted to foreign-born scientists (96,000) than to Americans (93,000).
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The economic benefits from high-skilled immigration are enormous. As of 2005, engineering and technology firms started by immigrants in the United States produced $52 billion in annual sales and employed 450,000 workers.
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In a very real way, immigrants are the fuel of America’s economic engine.

Continued American leadership in technology is absolutely vital to future economic growth. In his recent book,
The New Geography of Jobs,
Enrico Moretti, an economics professor at
the University of California, Berkeley, finds that every high-tech job in a metropolitan area produces five service jobs in the local economy, compared to 1.6 service jobs created by every job in the traditional manufacturing sector.
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But if we continue our current misguided immigration policies, the supply of high-skilled foreign workers will dry up. Congress recognized this reality in the 1990s when it began to increase the number of H-1B visas for highly skilled foreigners to 115,000 in 1999 and 195,000 in 2001. But in the aftermath of 9/11, the increased numbers were not renewed.
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H-1B visas now are capped at 65,000 annually, with another 20,000 visas for foreign students earning advanced degrees from American universities.
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Those numbers are hopelessly inadequate to preserve America’s leadership role in technology.

Indeed, the quotas for highly skilled foreign workers are so low that in some recent years the slots often were filled within days.
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Nearly all of the H-1B visas are secured by workers who are sponsored by major companies,
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with the result that few highly skilled foreign workers are available to small firms or to start their own companies. Not only are the numbers too small, but the process is complex, with the effect that it often costs sponsoring
companies $40,000 to $50,000 in attorney fees to secure a visa for each highly skilled worker.
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The shortage of H-1B visas was worsened with the passage of the American Recovery and Reinvestment Act of 2009. Buried inside was a union-backed provision called the Employ American Workers Act, which restricted H-1B visas for any company that received federal recovery assistance. “Within days of the president signing it into law,” recounts Matthew J. Slaughter, professor and associate dean at the Tuck School of Business at Dartmouth College, “a number of U.S. banks reneged on job offers extended months earlier to foreign-born M.B.A. students.”
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The net result, says Slaughter: “Lost ideas. Lost jobs. Lost taxes.”

The problems only start with the initial work visas. Once here, even as they are building lives in America, highly skilled immigrants face severe numerical limits and lengthy waiting periods for green cards, the visas that provide permanent legal residency and lead to citizenship.
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As of 2007, one million skilled workers were waiting for as long as ten years for the 140,000 green cards available each year for skilled workers. Compounding the problem is that no single foreign country can account for more than 7 percent of the green cards, so that highly skilled immigrants
from India—who have started more U.S. companies than immigrants from the next four countries combined—are limited to the same 9,800 annual green cards as every other country. Workers on temporary visas cannot switch jobs or even get a promotion without starting the application process all over again, and their spouses often are forbidden to work. As a result, despite their critical importance to the economy, many highly skilled immigrants are returning home or going to other countries, taking their talent and capital with them.
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One American visa quota that often is not filled is for investors—and that is because the requirements, usually including an initial investment of $1 million, are so onerous that few can meet the criteria for one of the 10,000 visas available each year. But even if it were easier to attain such visas, that may not be the best way to promote immigrant-created American businesses. A 2007 study published by the Ewing Marion Kauffman Foundation reported that among American high-technology firms started by immigrants, only 1.6 percent were founded by foreigners who came here for the purpose of starting a business. More than half were created by foreigners who came to the United States to study, and 40 percent were started by immigrants who came here to work.
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Obviously, it is vital to open the pipeline for talented foreign
students and workers, not only for the skills they bring but also for the enormous entrepreneurial potential they provide.

But current American immigration policy runs completely contrary to that crucial need. The eight-hundred-pound gorilla in immigration policy is “family reunification.” A sizable majority of visas—nearly two-thirds—are allocated every year for that purpose, with work-based visas and political asylum sharing the remainder.
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Family reunification does not extend only to parents and minor children but to aunts, uncles, cousins, and adult children, who in turn then become entitled to bring in other relatives in a never-ending spiral referred to as “chain migration.” Unlike work-based immigrants, who by definition contribute to the economy, many family-based immigrants do not enter the workforce and are net consumers of social services. Yet, for the most benevolent of reasons, family reunification has become the main driver of immigration policy, with the highly adverse effect of crowding out opportunities for working immigrants who would make a tremendous contribution to American prosperity.

“No other major developed economy gives such a low priority to work-based immigration,” observe economists Pia M. Orrenius and Madeline Zavodny, who report that the United States allocates the smallest share of permanent-resident visas to work-based
immigrants.
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The
Economist
observes that “for more than a decade America has been choking off its supply of foreign talent, like a scuba diver squeezing his own breathing tube.”
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As a result, countries that once looked longingly at America’s economic stature now are taking advantage of its immigration policy follies. At the same time as the share of American visas for economic reasons actually fell from 18 to 13 percent of all visas between 1991 and 2011, it soared in Canada from 18 percent to 67 percent. Indeed, even though it has only one-tenth the population of the United States, Canada issues more employment-based visas than we do.
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Even traditionally insular China and Japan are liberalizing immigration rules for highly skilled professionals.
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Foreign entrepreneurs can obtain a visa in Chile in a few weeks, which has led to the creation of five hundred new companies started by immigrants from thirty-seven countries in only two years. “Many of those who flock to Chilecon Valley, as it has been dubbed, would rather have gone to America, but couldn’t face a decade of immigration humiliation,” reports the
Economist
.
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That conclusion does not overstate the obstacles our nation places in the path of would-be business creators. Not only are the number of work and business visas limited, but the process of waiting for green cards is long—often taking ten years—and
unpredictable. Writing in the
Wall Street Journal,
Alexandra Starr recounts the story of Argentinian entrepreneur Pablo Ambram, who spent three months at a business incubator in San Diego developing a company called Agent Piggy, which uses technology to teach children about financial management. But the process of obtaining a visa was so expensive, uncertain, and time-consuming that he took the business to Chile, where he has raised more than $300,000 and hired four employees.
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It is tragic that workers and entrepreneurs trained in the United States would have little choice but to take their skills, ideas, and capital elsewhere, but that is exactly the result of an immigration policy that squelches opportunities for the best and the brightest to become productive Americans.

Nor is it just people from other countries who are leaving to pursue opportunities outside the United States. So also are highly skilled young adults who were born or raised here by immigrants. The
New York Times
reported on the alarming phenomenon of children of American immigrants emigrating to their parents’ countries and elsewhere to pursue increased economic opportunities. One immigrant from Taiwan remarked to his son, “I worked so hard to bring you to America and now you want to go back to China?”
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But as more high-tech firms open facilities abroad—and
as more countries ease their visa requirements—our nation will lose many of its best and brightest to our economic competitors. Producing engineers and scientists for China is hardly in America’s interest.

Meanwhile, American companies such as Microsoft are opening facilities outside the United States where they are more able to hire or import adequate numbers of skilled workers.
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At the same time as many Americans complain about companies that “outsource” their labor needs, our immigration policies are driving away companies by making it impossible for them to meet their need for talent inside our borders—at tremendous cost in the loss of highly paid jobs, tax revenues, and economic growth and dynamism.

In terms of attracting foreign talent, America’s greatest traditional competitive edge has been its colleges and universities. Giving highly promising foreign students a top-rate postsecondary education—and then keeping many of them here—has been a winning combination that no other country has been able to match. Between one-half and three-quarters of the world’s top colleges and universities are in the United States. Those schools in turn create a talent pipeline into American businesses. A 2004 study found that nearly two-thirds of foreign students receiving
doctoral degrees in the United States were still here two years after graduation.
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But America is quickly losing its advantage due to the combination of U.S. immigration restrictions and competition from foreign countries that are catching on to the benefits of attracting foreign students. The number of foreign students studying in the United States fell sharply after 9/11. By 2004, the number of Chinese students in American graduate schools had fallen by 45 percent, and the number of students from the Middle East plunged by half.
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Foreign enrollment began to increase again only in 2006. Meanwhile, foreign student enrollment has been rising at double-digit rates in Europe, Australia, and Canada.
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Moreover, many of the students cannot obtain work visas after they graduate. Every year, American universities train more than a half million international students, but many are forced to return home or go to other countries because of immigration restrictions.
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The perverse by-product of our muddled immigration policy is that while we are failing to capture the enormous investment our schools have made in these students, other countries are reaping the benefit. Robert Zubrin, president of Pioneer Astronautics, argues that “the idea that by excluding immigrant talent from the U.S. work force we can prevent it from competing
with Americans is risible. Rather, by excluding skilled or educated foreigners, we guarantee that they will compete with American workers and businesses from other countries.”
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Foreign students studying in the United States provide another important benefit as well, for they often embrace Western values and are far less hostile toward America than those who have never spent significant time here. A 2006 survey found that foreigners who traveled here were nearly twice as likely to have a positive image of the United States than those who had not.
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Thus even students who return to their native countries after studying here often benefit the United States from positions of influence by serving as moderating, pro-Western influences. Indeed, a large number of world leaders were trained in American universities and maintain lasting ties that are essential to American diplomacy and interests. Such ties are especially valuable in the Middle East and other Muslim countries that incubate enmity toward our nation.