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Stop Importing Poverty and Start Importing Innovation

Posted By Conn Carroll On April 1, 2008 @ 11:22 am In Security | Comments Disabled

Today is the first day the U.S. Citizenship and immigration Services excepts H-1B visa petitions for FY 2009. And if last year is any indication, it will also be the last. Congress authorized only 85,000 H-1Bs last year (65,000 for people with a bachelor degree or higher and 20,000 for those with a master’s or higher) and by early afternoon USCIS received over 150,000 applications. USCIS outright rejected all petitions received after close of business the next day.

H-1B visas are given to highly educated foreigners who are sponsored by American employers. As Dartmouth Tuck School of Business Matthew Slaughter writes in the Wall Street Journal [1]:

Skilled immigrants have long contributed to rising U.S. standards of living. They bring human capital, brimming with ideas for new technologies and new companies. They bring financial capital as well, with savings and resources to develop these new ideas. And they often bring connections to business opportunities abroad, stimulating exports and affiliate sales for multinational companies.

One of the most innovative and productive sectors of the U.S. economy, which accounts for more than half of the economy-wide productivity acceleration since 1995, is information technology. At the end of the 1990s, 24% of all IT firms in Silicon Valley had been founded by immigrants from China or India.

Congress can help grow innovation and job creation in the U.S. by reforming the H-1B visa program. Increasing the cap on H-1B visas creates new jobs for American workers, not just H-1B immigrants. A study [2] by the National Foundation for American Policy found that the average S&P 500 company creates five new domestic jobs for each highly skilled H-1B visa employee it hires. Raising the cap for a fixed number of years fixes this problem only temporarily and would require Congress to revisit the issue in the coming years. Instead, Congress should [3]:1) Return the cap to its previous amount of 195,000; 2) Make the cap flexible. Congress should ensure that the caps are based on the needs of the marketplace. If the caps are met, there should be an increase the next year. In addition, any unused visas from the previous fiscal year should be carried over to at least the next fiscal year.

Since the immigration reforms of the 1960s, the U.S. has imported poverty [4] through immigration policies that per­mitted and encouraged the entry and residence of millions of low-skill immigrants into the nation. Today’s immigrants differ greatly from historic immigrant populations. Prior to 1960, immigrants to the U.S. had education levels that were similar to those of the non-immigrant workforce and earned wages that were, on aver­age, higher than those of non-immigrant workers. Since the mid-1960s, however, the education levels of new immigrants have plunged relative to non-immigrants; consequently, the average wages of immigrants are now well below those of the non-immigrant population. Recent immigrants increasingly occupy the low end of the U.S. socio-economic spectrum. We must reverse this trend in immigration policy to stay competitive internationally.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/04/01/stop-importing-poverty-and-start-importiong-innovation/

URLs in this post:

[1] Wall Street Journal: http://online.wsj.com/article/SB120701430488579221.html?mod=opinion_main_commentaries

[2] study: http://www.nfap.com/pdf/080311h1b.pdf

[3] Instead, Congress should: http://www.heritage.org/Research/Labor/wm1875.cfm

[4] imported poverty: http://www.heritage.org/Research/Immigration/SR9.cfm

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