Foreign Workers Boost Our Economy
Each year, the U.S. turns away many thousands of highly-skilled and educated foreign workers, many of them with advanced degrees, because of an arbitrary visa cap set back in 1990. With demand far exceeding the limited supply of only 85,000 H-1B visas allowed per year, we are missing out on a valuable opportunity to recruit the best and the brightest minds from all over the world.
Time and time again, studies show that these foreign workers provide a tremendous boost to the U.S. economy, and that easing H-1B visa restrictions would send our economy into overdrive by filling key labor shortages and increasing economic efficiency and growth.
Contrary to popular misconceptions, foreign workers do not reduce wages or take jobs from American workers – in fact, they actually create jobs, raise wages, and boost the national economy.
U.S. Turns Away Tens of Thousands of Highly-skilled Foreign Workers Every Year In April of 2013, the United States Citizenship and Immigration Services (USCIS) halted the H-1B filing process only four days after accepting over 124,000 petitions, because the yearly 85,000 H-1B visa cap had already been met. That means that for 2014, we turned away over 39,000 highly-skilled workers based on a random lottery, in addition to the many thousands who never even had a chance to apply because the cap was met so soon. It’s much the same every year with our current overly-restrictive policy on H-1B visas.
These foreign workers we turned away are frequently advanced degree holders and highly-educated professionals, and they could have helped us to reduce critical labor shortages in key industries requiring degrees in the sciences, technology, and healthcare. Many of these potential H-1B visa holders studied at American universities, including 51% of all engineering and 41% of all physical science doctorate earners. When this invaluable immigration talent is forced to leave our country, the private and public dollars we invested in their education and research are lost. Other, more immigration-friendly countries such as Canada are all-too happy to snap up these highly talented individuals.
One such brilliant foreign innovator is Sanjay G. Mavinkurve, a Harvard-educated computer engineer who helped create the original code for Facebook. Mr. Mavinkurve chooses not to live in the U.S., because while he holds a visa, our restrictive H-1B immigration policies will not allow his wife to hold a job. Not allowing a person of Mr. Mavinkurve’s skill and talent into the United States, along with his family is a profoundly gigantic error on the part of U.S. policymakers.
Every H-1B Worker Generates 5 New Jobs for Domestic Workers U.S. lawmakers must realize, that easing the unreasonable H-1B caps would lead to an explosive growth of over $14 billion in GDP and around $3.6 billion in tax revenue annually from H-1B workers. This would amount to around a high estimate of an additional $47 billion in tax revenue over a decade.
For every H-1B worker hired, an additional 5 jobs are generated for domestic workers, according to a 2008 report by the non-profit, non-partisan National Foundation for American Policy. H-1B workers actually create jobs for Americans! And these 5 new jobs are not all service industry jobs. It is estimated that two out of the five new jobs are created for professional workers such as attorneys and doctors. This makes sense, when you think about the fact that a large proportion of their wages earned will be spent right here in the U.S.
Not only do they create new jobs indirectly, but immigrants have also started one in four of all new venture capital-backed U.S. public companies over the past 15 years. This has generated over $500bil for the U.S. economy, according to the National Venture Capital Association, and these companies will often need to hire many domestic workers to succeed.
Simply put, foreign workers are hardworking revenue-generators, highly-skilled innovators, and big dollar-investing entrepreneurs who create new jobs and billions of dollars for the U.S. economy every year.
H1-B Workers Have a Positive Effect on Domestic Wages H-1B workers do not displace American jobs or reduce wages. This is a common fallacy that is contrary to the facts found in multiple studies and reports on the topic. In fact, research has shown that immigration actually increases the wages of native-born workers, and adds new jobs to the U.S. economy. One study clearly shows an association between an increase in H-1B STEM workers and an increase in domestic wages in 219 U.S. cities since 1990, increases not only for domestic STEM occupations but also all college-educated domestic workers. In fact, a mere 1% increase in foreign-born STEM workers has shown to increase the wages of college-educated domestic workers by an appreciable 4 to 6 percent.
H-1B workers fill critical gaps in the domestic labor pool for which American workers cannot be found, and they are required to be paid industry-standard wages and benefits. Additionally, many of these very talented H-1B workers will ultimately seek to become permanent residents and U.S. citizens, adding to our strength and diversity as a nation.
When you look at all the facts and put aside the protectionist rhetoric, it is clearly apparent that H-1B workers complement, rather than harm domestic workers.
H-1B Immigration Reform is Needed Now One idea proposed by leading economists to reform H-1B policy and ensure robust access to the desperately sought visas, is to implement a supply-and-demand based auction system. This would allow employers access to the permits based on demand-based prices, would create markets for permits in different categories, and would raise public revenues– all while allowing in these highly-talented foreign workers. It is estimated that this would raise revenues of upwards of $6 billion from the permits alone, and the talented workers would provide a tremendous boost to our economy.
We must align our current U.S. immigration policy with our longstanding tradition of being a magnet for innovative ideas and talented workers, a tradition of diversity that has made the United States a truly exceptional international world leader. Our diversity and acceptance of foreign talent and ideas has given us an exponential advantage over more homogenous, anti-immigrant nations. We must not fall prey to popular misconceptions and xenophobic rhetoric that will only cause our economy to stagnate, and for the best and the brightest minds of the world to look elsewhere for brighter shores.
How to Contact Us If you have questions about immigration and/or you need help in an immigration process, please contact The Law Firm of Shihab & Associates, Co., LPA for a consultation. Our law firm handles various matters including Green Cards and Permanent Residence, family immigration, asylum cases, immigrant visas, non-immigrant visas, employment visas and H-1B visas, investors-visa, PERM applications and many more.
1) “H1B Program’s Impact on Wages, Jobs, and the Economy”, American Immigration Council Web Site, http://www.immigrationpolicy.org/just-facts/h-1b-program%E2%80%99s-impact-wages-jobs-and-economy, April 2nd, 2014.
2) “The Economic Benefits of Immigration”, Diana Furchtgott-Roth, http://www.manhattan-institute.org/html/economic-benefits-immigration-5712.html, February 5th, 2013.
3) “Tech Recruiting Clashes with Immigration Rules”, Matt Richtel, The New York Times, http://www.nytimes.com/2009/04/12/business/12immig.html?_r=0, April 11th, 2009.