How Legal Immigration Reform Could Be the Key to Bringing Jobs Back to America Under the Trump Administration.
Donald Trump campaigned on creating jobs for Americans and bringing companies back to America. He also campaigned against illegal immigration.
The first goal is tough to accomplish in a global economy where other countries can pay far less for manufacturing than what it costs in the US. A pivot from illegal immigration to legal immigration reform may be the key to bringing US companies back to America.
The area where the US is poised for further growth is in the technology industry. The US is a leader in this area because of the hard to emulate culture in Silicon Valley that fosters a combination of creative ideas and financing in an environment that bolsters innovation.
The US government has hamstrung growth in the technology industry because it limits the number of foreign national professionals who can obtain an H-1B work visa to an arbitrary and woefully limited 65,000 visas per year. An additional 20,000 H-1B work visas are available for foreign nationals who hold advanced degrees from US universities. There are exceptions for professionals working in academia, some nonprofits, and citizens of a few counties.
However, the limitation on visas leaves important jobs unfilled in the US forcing them to be performed outside of the United States. With about 233,000 H-1B petitions filed between April 1 and 5 in 2016, the entire allotment for the fiscal year beginning the following October was expended six months before the start date of the jobs.
An additional problem is, although the US leads the world in innovation with dominant companies like Apple, Microsoft and Google, it lags far behind in science and math education according to the Organization for Economic Cooperation and Development (OECD). OECD uses the Program for International Student Assessment or PISA to rate nations’ math and science training. Out of 1000 points, the US was scored 481 in math and 497 in science.
By comparison, Singapore topped mathematics with a score of 573, Hong Kong lead science with a score of 555, and Peru closed both categories by scoring 368 in math and 373 in science.
Despite low scores for primary education, many foreign STEM students seek university level education in the United States. The US News & World Report ranks US universities as the top 5 universities in the world and US schools hold eight of the top 10 positions. However, many of these degreed and highly qualified professionals are forced to return to their native country after graduating.
Kunal Balal, founder of Snapdeal, the Indian equivalent of Amazon.com, wanted to stay and work in the US after completing his MBA at the University of Pennsylvania in 2007. However, being unable to obtain a visa, he returned to India to start his company, which is now worth 6.5 billion dollars.
The H-1B visa cap is short sighted as that there aren’t enough qualified Americans to adequately perform the jobs. Further, when these jobs go unfilled and need to be moved overseas, with them go support positions such as executives, managers, marketers, and sales personnel. Many Americans express concern that immigration programs like the H-1B visa will allow foreign workers to take jobs from American employees.
However, the H-1B program requires that a beneficiary have at least a US bachelor’s degree or equivalent. Only 32% of the general, civilian US population has a bachelor’s degree or higher. Many industries, but particularly STEM industries, rely on talent with bachelor’s and advanced degrees to operate their businesses, and there are just not enough qualified US citizens to fill the rapidly growing tech industry jobs.
A study by Madeline Zavodny of Agnes Scott College found that, “immigrants with advanced degrees boost employment for US natives.” In fact, 262 jobs for domestic workers were created for every 100 which went to foreign born workers with advanced US STEM degrees. 100 immigrants with advanced degrees in any field create 44 jobs among US natives regardless of whether the degree is US or a foreign equivalent.
Improving the immigration process is not difficult. Congress can raise the H-1B numeric cap as it did in 1999 and 2001 or just eliminate it all together. Congress can also make tweaks to other visas such as the EB-2 and EB-3 labor certification green cards that would do wonders to assist our technology companies in recruiting worldwide talent and growing US operations. These permanent visas have arbitrary priority dates.
Because of arbitrary quotas, these dates can be backlogged for years. For example, advanced degree professionals from India with cases filed on November 1, 2007 and bachelor’s degree holders with cases filed on March 8, 2005 are still waiting on their green cards.
These visas have very particular and precise requirements in place to protect American workers. Employers are required to advertise in five methods over an extended period of time to determine if any Americans are willing or able to take the job. The company is prohibited from hiring the foreign national if an American with the skills advertised is willing to take the job. But the quotas and backlogs in the process makes it harder for US companies to hire top talent to its US operations.
If a Trump administration simply removes the quotas and priority date element of the visa, US companies can keep the best employees in the world at its US operations and support numerous other positions for American workers.
As President, Donald Trump will have executive authority to take action in immigration. President Obama has introduced but not yet implemented an executive order that would grant foreign nationals work authorizations if they meet one of two tiers of investment criteria.
- The first is to own 15% of a startup founded in the US within the last 3 years. This business must illustrate substantial growth by either receiving at least $345,000 in investment capital or receiving $100,000 in grants or awards from federal or state government sources. The second option is to maintain 10% ownership in a US business while raising at least $500,000 in capital from investors.
- Alternately, the business can generate $500,000 in revenue with 20% growth or prove it has created 10 full-time jobs in the last 5 years. Foreign nationals are more likely than US citizens to open companies. In fact, Kauffman Foundation research found that immigrants are more than twice as likely as native-born Americans to start a business and almost a third of new entrepreneurs are immigrants.
Immigration reform is not a partisan issue. Presidents Reagan and Bush advocated for and passed amnesty laws legalizing millions. Conversely, although they both supported immigration, Presidents Clinton and Obama expanded deportation to highs previously not seen before their respective administrations.
The key is that Trump and congress are from the same party which should remove obstruction from making simple regulatory change to credit a free market system with adequate protection to the American worker while assisting US companies to keep their facilities and high end jobs in America.