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Greg Siskind on Immigration Law and Policy

THE BRAIN FLUSH

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As in flushed away. Harvard Professor Vivek Wadwa has released a very interesting report in which he interviewed 1200 skilled and professional workers who left the United States to return to their home countries. And what emerges is a picture of talent workers who came to the US for education and training who then are finding better opportunities in their home countries. More than half of those returning home are planning on starting businesses. Why should we care? From the Atlanta Business Chronicle:

Research from an earlier Kauffman Foundation study showed that
immigrants historically have provided one of America's greatest
competitive advantages. Between 1990 and 2007, the proportion of
immigrants in the U.S. labor force increased from 9.3 percent to 15.7
percent, and a large and growing proportion of immigrants bring high
levels of education and skill to the United States. Immigrants have
contributed disproportionately in the most dynamic part of the U.S.
economy -- the high-tech sector -- and immigrant inventors contributed to
more than 25 percent of U.S. global patent applications.
Immigrant-founded companies based in the United States employed 450,000
workers and generated $52 billion in revenue in 2006.



"While some have tried to associate the increase in foreign workers
over recent years with the economic problems that have plagued the
country, this data verifies the opposite effect," Wadhwa said in the
release. "If the U.S. government and the business community could find
better ways to offer good jobs in tandem with less restrictive visa
policies for talented immigrants, the U.S. might be able to recapture
many of these immigrants and their potential to help grow the U.S.
economy."

Those who push policies of trying to drive skilled and professional workers out of the country are helping worsen both our short term economic picture and the long term prospects for the US remaining the world's top economy. American jobs are NOT protected by protectionism.






You can download the report here.

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Comments

  1. Well's Avatar
    Will it ever change? Can I even DREAM of getting my greencard? Can I confidently buy a house with my savings? Can I start my business?

    JIM CROW LAWS ALL OVER AGAIN!

    Taxation without representation!
  2. john's Avatar
    I just set up a company here.still not confident of putting money into it. this company initially should provide about three american jobs. But I am on EAD and restrictionis's agenda still going on (even after Obama take over) , I am not that optimist anymore. Those democrats who thinks they can ignore minorities proabbly will learn in the next election again.
    They introduced a clause in the bill to discourage hiring h1b's for banks. Now banks decided to cut the jobs in US. the bill also says when the company brings the outsourced income, they will be taxed at 36%. If US is going this fast down, none will bring the money back. we are talking of the multi billion dollar assets. they have no attraction to bring that asset to US anyway.
    So unless congress and the president open their hearts and accept these forign labor force (EB's and H1bs) as a tool to economic recovery,future is too far.Dont listen to those union lobbysts. they will bring you down.
  3. Another voice's Avatar
    This is a great argument but not an easy sell to a democratic congress that has loyalties to the unions...to them protectionism is like their saint!!!
  4. Anonymous's Avatar

    Greg,
    Its an interesting article indeed and Prof. Wadhwa has been a great supporter of skilled immigrants. But from the past experience, I think few angry phone calls from anti-immigrants carry much much weight over studies condcuted by researchers. Making me think if the policy makers even care about these things anymore.

  5. Anonymous's Avatar

    btw, the atlanta business chronicle's number, I mean URL , is not valid.
  6. Greg Siskind's Avatar
    Sorry for the bad link. It's been fixed.
  7. AD's Avatar
    I suspect not a whole lot of people care about immigration policy issues and those that do are outnumbered by those opposed to immigration. I am saying this because ultimately the country is still a democracy. And if enough people cared about immigration issues, we'd see a new political party emerge to provide an outlet for those views. Immigration is too narrow an issue to base a political party on, but still the overall point stands that the lack of new political parties means people are generally satisfied about the direction where the country is headed - and that includes immigration policy.
  8. George Chell's Avatar
    There are two issues here. First is innovation. The previous study I had posted clearly showed that we are not making much headway in technology during the past ten years. We ranked fortieth. If indeed there are enough qualified Americans as the antis claim, why are we No. 40 ever since 9/11 when a restrictionist visa regime was put in place?

    The second issue is not just outsourcing (which can be temporary or permanent), there is the more critical issue of foreign direct investment which is attracted not just by low wages but also skills. In the 1980s and 1990s Australia and UK had a very restrictionist regime and in the 1980s a restrictionist threat (called Simpson-Mazolli) was hanging over the US. On the other hand, Singapore and Hong Kong opened up to skilled immigration around 1981 and as a result, there has been a large surge in foreign investment into these countries and a sharp decline in unemployment. Meanwhile, the British and Australian unemployment rose as jobs began leaving their shores in form of foreign investment. The UK and Aussie unemployment did not go down until the country became more open to skilled immigrants in the late 1990s as investment began to flow back in. US faced a big inflow of investment in the 1990s during the less restrictionist regime and higher unemployment and stagnation during the lost decade of 2000-2010 after the 9/11 restrictions.

    However, on one thing, I will strongly disagree with Professor Wadhawa. As long as these returning immigrants or immigrants going to third countries such as Canada or Singapore are employed by subsidiaries of US corporations in those countries, these corporations do not have major competition problems. However, consequences to US as a nation are very severe and anyone claiming that an immigrant out of the country means a job for Americans or highe wages for Americans like even a few so-called economist claim are on delusion or on narcotics. The jobs transferred through outflow of foreign investment is unlikely to come back. An Indian or Chinese transferred to Singapore pays taxes in Singapore or in their home countries. It is a loss to the US government as a time when we cannot afford to loose any more tax revenues. It also puts a big hole in social security collections at a time of aging population and yes, it probably increases unmeployment in the US.
  9. George Chell's Avatar
    And one more thing..these immigrants leaving also means more houses in the market and more downward pressure on prices.
  10. John Snell's Avatar
    Yeah but it's just 1203 immigrants that left, and this is peanuts. On the other hand, today Obama created a whopping 60 jobs!!!
  11. Legal and no longer waiting's Avatar
    "Yeah but it's just 1203 immigrants that left, and this is peanuts."

    Obviously, this is just a sample drawn for the research purposes.
  12. Rory from getyourgreencardstatus.com's Avatar
    This makes for great debate especially within the current context of the economy. What the law is supposed to increase is Foreign Direct Investment, as mentioned by George, and hopefully stimulating the economy. But as you can see by the views posted here it is not quite that simple. Interesting times ahead.
  13. George Chell's Avatar
    "This makes for great debate especially within the current context of the economy. What the law is supposed to increase is Foreign Direct Investment, as mentioned by George, and hopefully stimulating the economy. But as you can see by the views posted here it is not quite that simple. Interesting times ahead."

    In the 1983 recovery, employment began to increase as soon as the economy turned around. In the 1992 recovery, it was essentially job loss followed by a jobless recovery. The reason was simple. It had already become a global economy and jobs were moving abroad. So in 1992 as the US was loosing jobs, Singapore was essentially gaining them. In the 2002 recovery, job market did not improve until November 2003. Again, jobs were being moved abroad, especially after the congress refused to leave the H1B quota at 115,000. I have no reason to believe this time it would be any different. Unemployment would stay high at 8.3% average next year as jobs move abroad. It would start improving only in the latter part of 2010. Since 2000, IBM has reduced its US work force by nearly 3% while elsewhere there have been gains of as much as 4%. The same situation with HP, Dell and Texas Instruments.

    This academic year due to the crisis, they are expecting US enrollment at US universities to have fallen for the first time in more than a genreation. Meanwhile foreign enrollment has jumped nearly 10% the biggest increases since 9/11. Economy would be creating jobs at a fast clip as the Class of 2012 graduates. There will be a shortage of US graduates. Mark my words, the corporations will ask for quota increase. The antis will fight it saying that we should train more Americans. Very interesting, they are nowhere to be found these days advocating for American students unable to attend college or fighting against sharp budget cuts. Shows what their ulterior motives really are doesn't it? I definitely did not see Mark Kirkorian or Dan Stein protesting university budget cuts in front of the state legislature in Topeka or Sacramento!
  14. George Chell's Avatar
    Microsoft may create 3,000 R&D jobs..but where? Canada, Australia or Singapore..that question left unanswered...

    http://money.cnn.com/2009/03/03/technology/microsoft_jobs.reut/index.htm?postversion=2009030316
  15. john's Avatar
    I am a great supporter of barac obama. But I am very concerned about the current situation.
    you cannot run a country just by building roads. creating 60 construction jobs is not enough. He really needs to look into the actual issues and give more confidence to financial firms. Regulation is one thing but completely ignoring them is another thing. latter will bring catastrophe. US dollars from the banks are gone. He needs to do everything to raise the wall street. This is a capitalist system and you cannot ovrnight destroy it. It is suicidal. He should have come up with a package for small firms. attract forign businesses using carrot and stick. i dont care if he add an import tax on products. Those manufacturing jobs needs to come back. along with that, he needs to create a positive immigration environment where people can to US and contribute. With the current approach, that "We are in recession we have no jobs" will drive everyone out and that will include profit seeking american firms as well. Thats suicidal.
    I have a feeling his agenda is being controlled by the union lobbysts. Oh God. there is no break for us.
  16. George Chell's Avatar
    "He should have come up with a package for small firms. attract forign businesses using carrot and stick. i dont care if he add an import tax on products."

    In economist jargon it is called tariff jumping. I think they need to give special tax breaks to foreign corporations that create jobs in the US. They need to allow foreign banks to take over sick US banks such as Bank of America and fire the entire incompetent Charlotte management. They need to get foreign car makers to take over sick firms like GM and Chrysler.


    "Those manufacturing jobs needs to come back. along with that, he needs to create a positive immigration environment where people can to US and contribute."

    Most manufacturing jobs created in the US are by foreign firms. US firms have been moving jobs abroad. Something we all need to understand. Between 1994 and 2000 a host of foreign firms including SAP from Germany moved jobs to the US at a time of less restrictive US immigration policy and at a time when no foreigner was allowed to work in Germany. As a result, US unemployment rate reached 3.6% while German unemployment increased to nearly 10%, peaking at 12% in 2004.
  17. Waiting forever for Green Card 's Avatar
    The US spends a lot of time and energy to train students from different countries. Then when they get into jobs, the US spends a lot of money and time to train them for the jobs that they do. Losing this investment of time and money by denying them hassle-free immigration will result in a reverse brain drain for the US. That will be good for their parent country since they do not have to invest any resources in getting this skilled manpower. And as the article indicates these trained, returning immigrants help improve the quality of life back home by creating jobs.

    If US really wants to stop immigration, then first they need to stop letting foreign students in US universities and replace them with US students. This may cause a lot of problems as the number of courses and the amount of research performed may drop, pushing up tuition and ultimately affect the technological base of the US. The alternative for the US is to fill Engineering and Medical schools with US talent that is willing to work cheap.

  18. George Chell's Avatar
    "If US really wants to stop immigration, then first they need to stop letting foreign students in US universities and replace them with US students. This may cause a lot of problems as the number of courses and the amount of research performed may drop, pushing up tuition and ultimately affect the technological base of the US. The alternative for the US is to fill Engineering and Medical schools with US talent that is willing to work cheap."

    The alternate is to fix the Fannie Mae and Freddie Mac mess and stop the ill-conceived budget cuts that train Americans. Obviously Grassley is not interested in this. Foreign students get in through competition. They have better GPAs than Americans. They need better qualified Americans than we have right now. Get me an American who can say that 25 times 25 is 625 without using a calculator. These Americans are either first generation, naturalized or not Americans at all. That is clearly reflected in the lack of progress in technology within the US during the past ten years after the number of foreign workers were reduced replaced by Americans. The issue is quality, not cheap labor. Four years ago a Professor at the University of Colorado predicted that US will no longer dominate technology in the future...

    http://www.colorado.edu/news/releases/2004/384.html

    and the chickens are coming home to roost!

    http://www.nytimes.com/2009/02/25/technology/25innovate.html?ref=technology

    That is why my question to antis is that if we have a lot of qualified Americans, why are we falling behind after we restricted work visas and why is Singapore gaining?

  19. honest's Avatar
    From the above comments, it reminds me that my dream of getting a green card will not easily come true.

    Recently from the other online forum, someone asks a question "Is there any solution for someone to get a green card if they have come to US for about 8-9 years?" The question is raised because someone find difficulty to find employers sponsored the working visa /green card as well as the visa availability because of the quota. I think this question is also the question for most of the people who have been international students for 8-10 years with advanced agree especially in science, health, medical, engineering, maths and technology.

    Also, from the other online forum, it states that there is one section in the bill "H.R. 264" talking about "granting the green card to people who have stayed in US for 5 years or above"

    From that question and the bill, personally I have an immediate intuition feeling about if SUPPOSE granting green card to people who have stayed in US for 5 years or above, there will be a lot of international students benefit from this bill without the need of employers' sponsorship for green card. This may reduce H-1B visa frauds and no more either time-or money- consuming to employers. Also, the employees will find more flexible and less complicated procedure to get the employment without tied up by employers. SUPPOSE that is the case, I do think the present employers'sponsorship immigration law should be changed (such as cancellation of H-1B visa and to establish the long term residency to get a green card), otherwise, such situation will not happen.

    Also, I do believe any immigrants should bring either cash or knowledge or both to immigrate.

    Therefore,from my intuition feelings, I immediately think if every of this type of immigrants pay non-refundable immigration entry fee(US$10,000-US$30,000)to the country plus the separate immigration documents filing charges via immigration attorneys, the economic crisis will be reduced in some extents because there is inflow of money to the country. And after they immigrate, all kinds of taxes should be imposed. They are entirely financially independent without getting any social security benefits from the country even though they are unemployed once they immigrate. And if they are unemployed, they will set up company to create jobs.

    Not only do these type of green card holders bring cash and knowledge to the country but also invite their relatives/friends visit to US and these will increase the sales in flight tickets,restaurants, hotels and retail business. Therefore, it indirectly creates more jobs by promoting tourism. It indirectly reduce economic recession because these new immigrants pay the non-refundable immigration fee to the country, pay all kinds of taxes after immigration, put extra cash in banks & buying houses (after immigration) and increase the profits of retail business by buying goods (after immigration)as well as promote tourism.

    Overall, these type of green card holders should be financially independent once they immigrate and to be responsible individuals and the economic recession will be recovered easily.

    However, this is only my personal opinion/dream and it will not come true anyway!!!!!!!

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