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Weekly Economic Commentary | September 27, 2024

Importing Innovators

Programs to accept talented immigrants are in acute need of reform.

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By Carl Tannenbaum

Discussions of immigration in the United States have focused primarily on flows of migrants across the Southern border.  The newcomers are largely unskilled, and they are seeking to gain a toehold on the lower rungs of the labor force ladder.

Developing a comprehensive immigration policy will also require consideration of prospective entrants with high skill levels. Programs to allow foreigners to apply their talents in the United States are in acute need of reform.

Opening a second front in the immigration debate.

 

Nonresidents with high levels of education can be granted permission to work in the U.S. under an H-1B visa.  Applicants generally have to have at least a bachelor’s degree in a scientific domain to qualify.  Candidates must be sponsored by employers, and the roles they take cannot be seen to hinder opportunities for domestic workers.

For that latter reason, the U.S. Congress has maintained a strict limit on the annual issuance of H-1B visas. The current cap of 85,000 each year has been in place since 2006.  By contrast, the number of foreign students studying at American universities as more than doubled during that time. Demand for H-1B visas has consistently exceeded supply. 

 

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There are a number of prospective benefits to expanding the availability of H-1B visas.  Areas covered by the program are central to the development of technology that is critical to industrial leadership and productivity growth.  Global companies will be more likely to maintain and expand operations in the United States if talent is available.  And from the pool of H-1B recipients may come a handful of innovators who can lead the economy to the next level.

The program has its critics, however, and there are facets that require careful review.  Firms involved with outsourcing American jobs have been accused of using the H-1B program to facilitate offshoring of work.  Holders do not have a clear path to permanent residency, which limits their professional mobility.  Standards for demonstrating that visa holders will not displace U.S. workers  need to be reinforced.

If bright foreigners are unable to work in the United States, they will take their talents elsewhere and provide competition for American workers and firms.  It may be better to keep them closer to home.

 

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