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High-Value Immigrants as Engines of Growth

Friday, October 7, 2011

“We desperately need immigrants who want to come here to work, who have the skills our companies need to succeed. The American dream cannot survive if we keep telling the dreamers to go elsewhere.”

That was the message from New York City Mayor Michael Bloomberg during his September 28 keynote address at the American Competitiveness Conference. The gathering was sponsored by the U.S. Chamber of Commerce and the Partnership for a New American Economy. The latter, despite its rather humdrum name, is a nationwide bipartisan organization of mayors and business leaders who are touting the economic benefits of immigration reform. Its co-chairs include Bloomberg, as well as the mayors of Los Angeles, Philadelphia, San Antonio and Phoenix, and the CEOs of Microsoft, Walt Disney Co., News Corporation, Marriott International and Boeing. If there is anti-immigrant sentiment in the United States, it’s not coming from these folks.

Bloomberg notes the partisan divide on immigration, but argues that common ground exists amongst business leaders, Democrats and Republications, on the potential role of immigration as an engine of economic growth. The debate over the U.S. budget deficit has involved discussions about program cuts versus tax increases, but economic growth is the pain-free way to correct a fiscal imbalance. And immigration can play a key role in boosting the economy.

Bloomberg brings some refreshing specifics to the table in a debate that has grown stale with talk of “comprehensive immigration reform” and the “need to secure our borders,” but provides little in the way of maximizing the benefits of immigration. In his talk, Bloomberg listed four measures to leverage skilled immigrants and grow the U.S. economy:
  • Expand the number of green cards available to skilled workers.

    Only 15% of visas are allocated based on economic and labor market criteria. “It is sabotaging our own economy,” says Bloomberg, adding, “I’ve called it national suicide – and I think it really is.” More green cards for high-value workers would fill currently vacant positions with talented newcomers, and would have the added benefit of increasing local knowledge of foreign markets, key in developing exports. Learning the Chinese (or Indian, Russian or Brazilian) market is a lot easier when you have a guide to show the way.

  • Make it easier for foreign students, particularly those earning advanced degrees in technical fields, to remain in the U.S. upon graduation.

    Bloomberg goes whole hog here: “Let’s offer them green cards when they finish their degrees, and then we can get down to the real business of convincing them to stay because that’s not a foregone conclusion either.” The U.S. is competing with other nations for the world’s best and brightest, and the most obvious place to start is in our research universities where a number of foreign graduate students are already enrolled. “Turning these students out of the country is, to put it bluntly, about the dumbest thing that we could possibly do. Other countries are bending over backwards to attract these students – and we’re helping them to do it. We’ve become the laughing stock of the world with this policy. The fact is: there is no such thing as too many engineers, too many scientists, or too many technological innovators. We need all of them in this country.”

  • Attract entrepreneurs who want to come to the U.S. and start businesses.

    These businesses will employ Americans, and start-ups are demonstrated engines of job development. Engineering, computer, and technology companies have traditionally had high rates of foreign ownership, and these are sources of growth and high-paying employment. “America already has some of the most enterprising individuals on Earth, but entrepreneurs are like engineering Ph.D.’s and computer scientists: You just can’t have enough of them, particularly when we have an enormous number of people unemployed in this country.”

    For some, it seems counterintuitive to add more workers to the pool when there are already millions unemployed. But it really depends on the kind of person added. Entrepreneurs and the highly skilled are job creators, generating demand for goods and services in the economy, and hiring people at all levels of the economic ladder, reducing unemployment.

    In New York City there are 70,000 foreign-born entrepreneurs, representing nearly half of the NYC total. Moreover, foreign-born individuals constitute 36% of New York’s population, but 48% of the metropolis’s incorporated small businesses, as noted in Crain’s New York Small Business.

    Bloomberg proposes offering conditional visas to immigrants with capital to back their business ventures. If the company is able to create jobs for American workers, the entrepreneur would receive a green card.

  • Expand and streamline programs already in place.

    Specific measures in this area include ending the cap on H-1B visas, and de-coupling green-cards and country of origin.

    Currently, the number of H-1B visas issued is limited, regardless of employer demand. The process is also lengthy, cumbersome and unpredictable, and in many years, the H-1B numbers were exhausted almost immediately. Bloomberg advocates eliminating the H-1B cap, and making the application process easier to navigate, thereby allowing software, engineering, electronics, pharmaceutical and other companies greater access to highly talented foreign workers.

    An oddity of the U.S. immigration system is the rule that no country can receive more than seven percent of the total number of employment-based immigrant visas issued worldwide. In real terms, this means that the nationals of populous countries are at a great disadvantage. How many talented software engineers and pharmaceutical chemists could U.S. companies be employing if not for this quirky and unfair regulation? Notes Bloomberg, “These quotas mean that high-skill employees from China and India can face a wait of up to ten years for a green card – and during that time, they are prohibited from getting a promotion or taking a new job. No wonder why many return home. … That’s a loss not only for American companies that invest in them, but for our entire economy – because they return home to help our competitors, these other countries.” The obvious solution is to scrap the whole notion of nationality and country of origin in allocating employment-based visas.

It’s no accident that big-city mayors and the CEOs of a number of top U.S. companies are touting reform to the U.S. immigration system. They see the value for their cities and companies, and for the U.S. economy, in attracting high-value immigrants. This is not charity by any means, it is using human capital to generate U.S. growth, lessening the need for tax increases or program cuts. The changes advocated by Bloomberg and the Partnership for a New American Economy are pragmatic, forward-looking and sensible, and have a great potential upside. Moreover, by focusing on attracting and retaining high-value immigrants, these proposals side-step the hot button issue of “illegal” immigration, which is really a separate problem, requiring a different set of solutions.

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