End Caps on Skilled Labor

This week, we’ve learned that that the White House is gearing up for a major fall immigration initiative. Simultaneously, we hear rumors brewing about the GOP working on an equally momentous immigration bill of its own. While the details on both are still a bit fuzzy, there’s no getting around the fact that any comprehensive immigration reform has the ability to greatly affect the economy on the whole and American consumers. And, while much of the debate centers around amnesty proposals and a path to citizenship, the aspects of immigration policy that have the greatest potential to benefit our economy are seldom getting attention.

H1-B visas, a temporary visa allowing foreign workers to spend time in the United States to perform some “specialty occupation,” are a rarely discussed, yet essential element of our immigration policy. The visas predominately allow highly skilled workers to spend time in the U.S., working on teams of the best and brightest in major fields from chemistry to medicine to technology. 

The H1-B visa program has had a positive fiscal impact over its relatively short lifespan. According to a James A. Baker III institute study, visa workers contribute significantly more in taxes than they use in public services during their stay in the States. The same study highlights gains that American’s see from these sorts of visas; an estimated between $38-$75 billion annually, as well as lower prices for goods.

The result of the influx of highly skilled immigrants is clear: more, better and faster innovation from American companies. A recent Harvard Business School study study shows that as H1-B visas issued goes up, so do the number of patents filed—and vice-versa. There’s further evidence that, as a result of these immigrants, native researchers, scientists, and technologists raise their level of productivity—creating a more fertile patent and innovation landscape on the whole.

Earlier this month, CareerBuilder and EMSI released an interactive data graphic that illustrates the vital role of the technology sector in U.S. major metros.  Recently we’ve learned that the tech sector and those Silicon Valley startups are as central to our economy as was once automotive and steel. That boom (from 1995-2005) was due in no small part to an influx of highly-specialized immigrants. Just over 25-percent of high-tech startups were founded by immigrants with a specialty visa.

These visas, and the innovators they represent, are vital to the continuing recovery of our economy. Without them and the more than one-quarter of tech businesses they represent, the U.S. would not have the necessary labor to properly produce in the technology sector and would likely fall behind India and other tech-heavy nations in terms of innovation and growth. With U.S. schools failing to churn out enough STEM-qualified (Science, Technology, Engineering, and Math) labor, we need to find a way to fulfill the labor demand in the short run. An increased focus on STEM education here in the States has long been a focus of our educational system, but until we see results, it would be wise to do everything we can to keep these jobs a part of our economy.

Currently the visa program is capped by congress at just 65,000 and wrought with hurdles and hoops through which employers must jump. Indeed, during the current administration, these visas have become even more cumbersome to receive; especially in those sectors of our economy that could arguably need brilliant minds the most.

As the Administration and the GOP consider their plans to introduce immigration reform, it would do them well to concentrate on highly-skilled immigration as a major part of their efforts. Raising or removing the cap on H1-B visas would preserve American jobs, attract capital investment, raise tax revenue, and create a fecund environment for innovation in the U.S. as we battle economic pressures from the world.

Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research

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