Wall Street Journal (Opinion)
By Matthew J. Slaughter
March 25, 2014
The
first of next month is a big day for the U.S., and not because it's
April Fools' Day. April 1 is when the U.S. Citizenship and Immigration
Services begins accepting
new H-1B visa petitions for 2015.
An H-1B visa visa allows a company to create a new job for a highly-educated
foreigner in the U.S. for at least three years. The H-1B program, which
accounts for nearly all
of America's skilled immigration, imposes an annual cap of 85,000 new
visas: 65,000 with at least a bachelor's degree and 20,000 with at least
a master's degree.
In
many recent years, demand for H-1B visas has far exceeded supply. In
2013, the government received roughly 124,000 applications in just four
days—and then stopped accepting
petitions on April 5. The government has closed the visa window
suddenly before, as recently as 2008. All current forecasts suggest
strong visa demand again this year thanks to dynamism in high-innovation
sectors and continued economic recovery.
The
U.S.'s skilled immigration policy hurts American workers, companies and
the economy. As Gordon Hanson and I documented in our 2013 report for
Compete America, a coalition
of companies, universities and research institutions, immigrants have
long been a key part of America's talent pool, helping drive the
innovation that creates jobs and higher standards of living. Their most
significant contributions have been in science, technology,
engineering and mathematics (STEM). Foreign-born individuals make up
about 20% of today's U.S. STEM workers with bachelor's degrees and 40%
of those with advanced degrees. These shares have been rising for
decades.
The
effects of their contribution ripple through the economy. One quarter
of U.S. high-technology firms established since 1995 have had at least
one foreign-born founder.
These new companies today employ 450,000 people and generate more than
$50 billion in sales. Immigrants or their children founded 40% of
today's Fortune FT.T +1.37% 500 companies, including firms behind seven
of the 10 most valuable global brands.
Talented
immigrant STEM workers do not crowd out American-born STEM talent.
Companies that cannot hire talented immigrants in America often don't
hire anyone at all. Or
these companies may hire—but overseas. In 2007, Microsoft MSFT +0.44%
opened a research center in Vancouver, in part to "allow the company to
continue to recruit and retain highly skilled people affected by the
immigration issues in the U.S.," according to
the company's announcement. In May, the startup Blueseed announced it
would skirt U.S. immigration restrictions by building a barge in
international waters 12 nautical miles off the coast of San Francisco.
There the company could accommodate international
entrepreneurs.
There
is a real, tangible cost to the U.S. economy of allocating far fewer
skilled-immigrant visas than companies need. Most immediately, the cost
is forgone jobs created
in the companies and beyond. More broadly, the cost is forgone ideas,
innovation and connections to the world.
The
immediate job-loss cost is much larger than subtracting the 85,000
visas allowed from the number of H-1B petitions filed. First, more
petitions would certainly be
filed were it not for the limited window: Companies need new talent
year-round. Then there are the lost jobs from the additional hiring of
Americans that talented immigrants spur. Bill Gates testified to
Congress in 2008 that for every immigrant hired at technology
companies, an average of five additional employees are added as well.
Research last year by economist Theo Eicher estimated each new Microsoft
job adds eight jobs in supplier companies.
Restrictive
skilled-immigration policy costs U.S. jobs every single day. How many?
Start with an estimated 100,000 jobs lost directly this year from H-1B visa applications
that were either not filed or not approved beyond the current cap of
85,000. Then add 400,000, a ballpark estimate from research of
additional jobs not created at immigrant-hiring companies and at these
companies' suppliers.
That's
500,000 jobs lost thanks to too-restrictive U.S. immigration policy.
Spread across 50 five-day workweeks, this translates into 2,000 U.S.
jobs not created a day.
That is a new job lost about every 43 seconds, around the clock, every
single day that America is open for business.
In
2013, the U.S. economy created 2.37 million new payroll jobs. This
tally could have been more than 21% higher had U.S. immigration
restrictions not existed. Wise reform
could bring a welcome end to the damage restrictive immigration policy
inflicts on the country's own economic vitality.
Mr.
Slaughter, professor and associate dean at the Tuck School of Business
at Dartmouth, served as a member of the Council of Economic Advisers
from 2005-07.
For more information, go to: www.beverlyhillsimmigrationlaw.com
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