The Protect And Grow American Jobs Act Is A Misnomer

The Protect and Grow American Jobs Act is a Misnomer. It will Cost Americans’ Jobs and Chill the U.S. Economy

The Protect and Grow American Jobs Act has emerged from the House Judiciary Committee and could mean big changes to the H-1B program and employment-based immigration overall. Rep. Darrel Issa has claimed the billed creates a reform that will, “minimize the abuses”. However, it’s unclear that the bill will do this. What it will do is drastically limit U.S. employer’s ability hire the high-skilled talent they want and need.

The H-1B visa is a merit-based employment U.S. visa which allows U.S. companies to hire degreed professionals in specialty occupations such as medicine, engineering, compute science and finance. The basic elements are that they require university degrees and pay the prevailing wage for the position for the country and state that the jobs is located. Many tech firms see that H-1B as critical to ease the shortage of employees with skills in science, technology, engineering and mathematics or STEM.

The Protect and Grow American Jobs Act would greatly disadvantage Indian consulting firms that recruit and hire workers to fill jobs in U.S. companies and are highly dependent on the H-1B visa. The bill would seek to draw the line between disadvantaging outsourcing firms and inhibiting the production of American tech giants such as Facebook, Microsoft, IBM and Qualcomm who also depend on the H-1B visa to fill critical positions. It would do this by raising the rate at which firms are considered H-1B dependent from 15 to 20%. The bill creates an us vs them division in the tech industry based upon who can get the governments arbitrarily decided limit of visa instead of allowing the market to drive how many visas U.S. companies need to keep jobs in America.

What legislators seem to be missing is how beneficial the H-1B visa is to the economy. U.S. born employees obtain jobs in companies that hire H-1B visas at a rate of almost two jobs for each H-1B visa. If the visas are not issued, American jobs would disappear. Historically, the H-1B visa has been a stepping stone for many talented immigrant entrepreneurs who found startups, and reform is needed so the program can continue to be an engine for U.S. economic growth in the future. 25% of venture-backed companies that became publicly traded between 1990 and 2005 had at least one immigration founder according to a National, Venture Capital Association report.

Immigrants have started more than half (44 or 97) of America’s startup companies valued at one billion dollars or more. 20 of the 87 billion-dollar U.S. startup companies – and almost half of the companies with an immigration founder – had a founder who first came to America as an international student and later was employed as a merit-based H-1B foreign visa. Brink Lindsey, of the CATO Institute, advocates for a change in immigration that creates a space for high-skilled immigrants. He says:

“Immigrants area major catalyst of U.S. entrepreneurship and innovation … Current immigration laws make it difficult for such highly talented individuals to live and work in our country. Out of roughly one million permanent resident visas (Green Cards) awarded each year, only about 70,000 go to individuals based on their work skills or economy value.”

Not only does the H-1B visa allow U.S. technology companies to hire the talent they so critically need, it is a gateway to allowing innovators and the founders of billion-dollar corporations into our society. Immigrants are twice as likely to become entrepreneurs as native-born Americans. Immigrant entrepreneurs have begun and lead some of the worlds most successful and innovative companies.

American universities are the envy of the world and often breed the next generation of successful entrepreneurs. However, without the assistance of the H-1B visa, there is not clear path to keep foreign talented educated in the U.S. in the U.S. after graduation.

From Alexander Graham Bell to Google cofounder Sergey Bring, Immigrants have had a long history of starting successful businesses in the U.S. Immigrant founded business and businesses utilizing foreign talent via the H-1B visa contribute billions of dollars to the economy each year.

The Protect and Grow American Jobs act is a misnomer. Immigration creates jobs and stimulates the economy. Restricting immigration inhibits job creation, innovation, and economic growth. Immigrant founded engineering and technology firms employed approximately 560,000 workers and generated $63 billion in sales in 2012 according to Strangler and Wiens. If the current administration really wants to protect and grow American jobs they will make way for innovation, immigration and diversification of the workplace.