Immigration Reform's 'Path to Prosperity'

“Immigration makes us stronger. It keeps us vibrant. It keeps us hungry. It keeps us prosperous… And if we want to keep attracting the best and the brightest that the world has to offer, then we need to do a better job of welcoming them.”—President Barack Obama, remarks at a White House Naturalization ceremony March 25, 2013

It appears the immigration reform legislation being considered by the Senate’s so-called “Gang of Eight” would extend the welcome mat by increasing the number of visas for high-skilled foreign workers allowed into the United States and granting permanent legal (“green card”) status to foreign students who earn graduate degrees from U.S. universities in the STEM fields (science, technology, engineering and math). While much of the congressional immigration reform debate is focused on a ‘path to citizenship’ for illegal immigrants, call this initiative the “path to prosperity.” There are a number of reasons why it should attract broad support.

Current U.S. immigration practices prevent U.S. companies and entrepreneurs from gaining access to talented, high skilled employees. Last month, the chief executives of more than 100 high tech companies wrote asking President Obama and congressional leadership to change this. According to former Michigan governor John Engler, now president of the Business Roundtable, and ITIC head Dean Garfield: “Tens of thousands of engineering jobs go unfilled, the companies say, because there is not enough skilled labor among Americans nor enough visas to hire people from abroad.”

A further incentive for increasing the number of high skill immigrant visas to the United States is the benefit that can come from the economic links the immigrant community maintains with their country of origin. For example, Indian Americans are one of the fastest growing minorities in the United States and in addition to coming here for higher education, they increasingly have come to start companies and invest. The evidence that Indian immigrants and Indian businesses boost the U.S. economy is clear. Since 2006, Indian nationals have founded 33 percent of all engineering and technology companies founded by immigrants in the United States, which accounts for about a quarter of all companies launched. Indian companies support more than 250,000 jobs for locals in the United States. In addition, Indian companies have invested more than $4.9 billion and employ more than 27,000 Americans.

Moreover, if one looks beyond the U.S. borders at the many innovative solutions being created for a growing global market—in energy, transportation, healthcare, etc.—it is clear the United States should encourage similar innovative and entrepreneurial activity domestically. Roughly 40 percent of Fortune 500 companies were started by first or second generation Americans. One recent study found that in 2011, 76 percent of patents from U.S. universities had at least one foreign-born inventor. The fact the many immigrants come to the United States to innovate, resulting in coveted patents, helps keep the United States on the cutting edge of global business. But as Vivek Wadhwa has found, today immigrant entrepreneurship has stalled. His book, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, should be a must read for congressional immigration reformers.

A significant part of this “immigrant exodus” is self-inflicted. While the United States is home to the lion’s share of universities with excellence in science and technology, too few U.S. citizens graduate from these programs to meet the needs of U.S. businesses and industry. According to the Congressional Research Service, in 2009 about one third of students in STEM advanced degree programs were in the United States on a temporary visa. They would be prime candidates to fill these unmet needs, but as Congressman Ed Royce (R California) has pointed out, “In our current system, we welcome foreign students to the U.S., provide them the world’s best education, and then send them home so that they can compete against us. This makes no sense.”

If U.S. policymakers continue to act as if they believe that quotas unrelated to demand are a good way to operate, then other countries will continue to take the excess talent that we turn away. Australia employs a skills matching system, granting entrance to high-skilled immigrants able to fill open positions in their job market. Chile and Canada offer “start-up” visas to workers who come to start businesses. A study by the Kauffman Foundation estimates that “start-up” visas offered to foreign-born U.S. entrepreneurs would add roughly 1.6 million jobs to the U.S. economy in 10 years’ time. Prime Minister Cameron recently traveled to India with a specific message: the UK was revising its immigration policies in order to attract the world’s best and brightest minds. It used to be that the United States was the coveted place to emigrate. That time has passed.

The United States is in a global competition for the best talent, and our outdated immigration policies are interfering with our ability to prosper. As President Obama said in his last State of the Union, “Real reform means fixing the legal immigration system to cut waiting periods and attract the highly skilled entrepreneurs and engineers that will help create jobs and grow our economy.” It appears the Senate’s “Gang of Eight” would agree. Thoughtful and bold high-skill immigration reform is needed now.

Ambassador Karl F. Inderfurth is senior adviser and Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Scott Miller is senior adviser and Scholl Chair in International Business at CSIS. Persis Khambatta, Clare Richardson-Barlow, and Camille Danvers also contributed.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2013 by the Center for Strategic and International Studies. All rights reserved.

Scott Miller
Senior Mentor (Non-resident), Executive Education

Karl F. Inderfurth