New Report Shows Current U.S. Immigration Policy Hurts Our Economy

Today the Immigration Policy Center, a Washington D.C.-based think tank published a eye-opening report on how our failed immigration policy is adversely impacting our economy and global competitiveness.  I have been writing in previous blogs about my observations and personal experience on this topic, but here is some real empirical and unbiased data on how critical the situation is.  The full report is available here.

Among the key findings are that while the world has changed, our approach to immigration has not.  For example, changing demographics in the U.S. has created a demand in lesser skilled jobs in the construction hospitality industry but current quotas allow for only 5,000 visas annually for these workers.  The report concludes, "The inflexible and insufficient number of green cards available for these types of jobs is at the heart of the unauthorized immigration problem."  Similarly, for skilled workers, including advanced degree graduates of our institutions of higher learning and research, the confusing and conflicting maze of laws and regulations have meant that less than 10% of foreign students from India and China (ie our competition) are planning to stay in the U.S. and look for work after graduation.  More sobering than that is the idea that many of our chief global economic competitors are offering enticements to immigrate rather than creating barriers:

Some immigrant‐sending countries are implementing policies to persuade their own best and brightest to remain in the country while also attracting those from other nations.  In 2009, immigrants from India and China comprised 22% of Legal Permanent Residents (LPRs) who entered the U.S. through the employment‐based system.  But in the last 15 years, China has successfully encouraged more than 4,000 Chinese researchers to return to China. In January 2009, China launched the One‐Thousand‐Talents Program to attract Chinese and other “high caliber” researchers to China. India has developed similar programs to attract highly skilled scientists and researchers.  Even Japan, which has been resistant to immigration in the past, has announced plans to increase the number of foreign‐born students to 300,000 by 2020. They also plan to simplify the immigration process, hire more English‐language teachers, and help foreign students find jobs within the country.

Foreign entrepreneurs are also finding our antiquated immigration laws a barrier for their businesses.  A recent study from the Kaufman Foundation cited in the IPC report interviewed nearly 300 highly skilled and educated returnees to China and India and found that our immigration policies were part of the reason.  Recently a much publicized case illustrated this point.  A Israeli citizen and Stanford business school graduate who created CruiseWise.com, hired nine U.S. employees and then was denied a visa.  After the story broke and amid a flood of criticism, immigration reversed their position, but one has to wonder how many other entrepreneurs have been driven away by unwelcoming policies and overly restrictive adjudication.  It is worth noting that historically over one-half of the start up companies in Silicon Valley were created by immigrants, including Google, Intel, Yahoo and eBay!

The IPC report also makes another good point about the U.S. aging demographics.  As baby boomers retire and take their skills with them, immigrants will be able to fill the void and keep our social security system solvent into the future.  Citing a 2007 study from the Peterson Institute of International Economics, the report finds that "the skill levels of U.S. workers are stagnating relative to the rest of the world. As a result, “when American baby boomers retire, they will take as many skills with them as their children will bring into the U.S. workforce.”  In order to overcome these challenges, the United States will not only have to implement new educational policies to produce more high‐skilled Americans, but also “reform its high‐skilled immigration policies and procedures not only to welcome the best and the brightest but also to make it easier for them to stay.”

Much more could be said about the report: the role immigrants play in revitalizing some of our bleakest urban areas, the disproportionate amount of patents issued to innovative immigrants, immigrant homebuyers helping to end the housing crisis, etc. However, I have to get home and get ready for the Republican Presidential debate so I can hear about which candidate is promising to build the highest wall around fortress America and who will be the toughest on immigration.  That is if they even can talk past Herman Cain's rumored indiscretions.  Talk about Nero playing the violin as Rome burned.