On Aug 31 2009 by William A. Stock

America’s Shrinking Immigration Advantage

Employers who rely on foreign nationals to provide needed expertise in their workforce – from technical programmers to biochemists to wind turbine engineers – should take notice of three troubling trends which are becoming clearer as the discussion about employment-based immigration reform gets drowned out by the ongoing debate about comprehensive immigration reform.

The first trend is captured in this blog post by Vivek Wadhwa, a professor at Duke University who has studied high-tech entrepreneurship extensively.  Current backlogs in the employment-based immigration categories trap foreign workers in the original job for which they were sponsored, meaning their companies cannot promote them to positions where their experience and skills can best be used.  Nor can the workers take the initiative to start their own companies – while a small company may be able to sponsor one of its owners as an H-1B, a green card is much less likely in that situation.  Wadhwa points out that eliminating the green card backlog (a major part of which consists of cases trapped by bureaucratic delays that should have been approved in past years’ quotas, which do not carry over from year to year) would free an enormous amount of human capital to innovate and create the next generation of companies that will drive economic growth in the US.

More troubling, a combination of the green card quotas (which tie foreign nationals to one specific job) and rules for terminated H-1B workers (described in detail here) are driving away the most talented foreign graduates of our universities.  Recent surveys and profiles of foreign nationals in the US – particularly Indian engineers in Silicon Valley – have highlighted an increase in the number of H-1B who are opting to return home, either from necessity or because the Indian economy now offers them opportunities to start or manage companies  that the US can’t match because of their visa situation.   While opponents of high-tech immigration love to argue that H-1B visas allow tech workers to come to the US and learn skills that they can use back home, the fact is that most tech workers would prefer to use those skills in the US – and that immigrants are a key part of the Silicon Valley start-up community (given how many start-ups have at least one immigrant founder).

The most troubling trend, however, will not be immediate in its impact.  For the first time in five years, US graduate programs reported a drop in the number of international applications to their programs and the number of accepted applicants who chose to come to their programs.  These students are the best and brightest from their countries, and when they choose to go to other countries rather than the US, we lose out not only on the tuition dollars they would have spent (at rates higher than out-of-state students pay), but also on their talents for companies in the US.

While these trends are troubling, they are not irreversible.  What it will take, however, is a rational reform of our employment-based immigration system to recognize the contributions these immigrants make, and the national interest in providing a welcome mat to them.