New Immigration Rules Will Help the U.S. Economy

General Regulation Issues - The American Consumer Institute

While campaigning for the White House, then-candidate Joe Biden promised to “modernize America’s immigration system” because he recognized the country was not “taking advantage of America’s ability to attract the best and brightest workers in the world.” While Biden’s broader immigration agenda has largely stalled in Congress, a recent announcement has made good on his promise to reform temporary work visas for certain in-demand occupations.

Earlier in January, the Biden administration announced changes to Optional Practical Training (OPT)  and the O-1A visa that will provide “clarity for pathways for international STEM scholars, students, researchers, and experts to contribute to innovation and job creation efforts across America.”

While businesses and consumers should welcome the administration’s reforms to OPT and the O-1A visa to enhance innovation and alleviate a tech-worker shortage, this is only one step in creating an immigration system that works for the American economy. Moreover, there is also concern that any future administration could eliminate the new rules.

For the approximately one million international students in the United States, OPT offers graduates from all majors the opportunity to work for up to twelve months in their field of study. Once the twelve months are up, graduates from STEM programs are eligible for a further twenty-four-month work authorization, allowing them to stay in the United States for up to three years so long as they remain working in their field of study.

The O-1A visa is a nonimmigrant work visa for individuals “who possess extraordinary ability in the sciences, arts, education, business, or athletics.” The O-1A visa is valid for up to three years but can be extended “in increments of up to 1 year.” To be eligible for an O-1A visa, the foreign worker must be sponsored by an American company. Unlike the H-1B visa, there is no quota for O-1A visas, meaning the government can issue an unlimited number of visas. The Department of State reported that 15,415 O Visas were issued in 2020.

While the full scope of the new rule is yet to be announced by the Department of State and Department of Homeland Security, the White House proclaimed that 22 new fields of study would be eligible for a three-year OPT authorization as well as expanding the types of evidence that will qualify a foreign worker for an O-1A visa. Additionally, foreign workers who otherwise qualify for an O-1A visa will be able to self-petition, removing the requirement that an employer sponsors them.

In making these changes, the administration hopes to allow “international STEM talent to continue to make meaningful contributions to America’s scholarly, research and development, and innovation communities.”

The new rule provides the administration with a potent weapon to address declining innovation in the American economy. In 2020, the nonpartisan Congressional Budget Office (CBO) warned that “long before the coronavirus pandemic affected the economy, entrepreneurship had significantly diminished over the past four decades.” Specifically, the CBO pointed out “the annual rate at which new firms were created decreased from about 10 percent of all businesses in 1982 to about 8 percent in 2018.” Declining innovation is particularly harmful to consumers because they lose out to future products and services and a stagnant economy.

The CBO noted that a remedy for this was for Congress to provide “employment-based visas to foreign-born students in STEM fields, allowing them to stay in the United States after graduation.” Clearly, the expansion of OPT and looser restrictions on the O-1A visa could help offset the recent declines in innovation.

The new rules also recognize the reality that foreign workers are driving the tech start-up industry, providing American consumers with a range of new products and services that would have been unimaginable a few years ago. Stanford University recently found that while immigrants only make up 16% of inventors, they have been responsible for “30% of aggregate U.S. innovation since 1976.” Over the past few decades, foreign tech workers have provided American consumers access to a range of technologies from affordable electric cars, tech services, and on-demand streaming services.

The new rules will also help mitigate the shortage of tech-sector workers that industry experts have described as “crippling.” The American Action Forum has estimated that by 2024, the United States will be short about 1 million STEM workers, hampering innovation and economic growth and America’s global leadership in technology. In addition, a recent study by Open Doors found that approximately 54% of 914,095 international students in the United States were in STEM majors, providing the country with an invaluable source of potential workers who could help plug the gap and alleviate the tech worker shortage. While the recent announcement regarding OPT and O-1A visas is welcome news to the American economy and international students alike, more needs to be done legislatively to ensure these hugely positive developments are not undone by a future administration that positions itself with nationalistic elements of the American electorate. Only then can the momentous gains offered by the new rules truly benefit the American economy.

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