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Immigration as Economic Renewal

Wednesday, December 14, 2011

New research shows that immigrants create jobs for U.S. natives.

The Supreme Court’s announcement Monday that it will review SB 1070, Arizona’s Support Our Law Enforcement and Safe Neighborhoods Act, is welcome news. A ruling that clearly defines federal and state roles in immigration policy could put the brakes on the tsunami of state-level immigration legislation experienced in recent years and, with luck, spur the federal government into action.

While states have been busy enacting numerous pro- and anti-immigration policies, the immigration debate at the federal level has been deadlocked for years. The federal government’s failure to make substantive changes to immigration policy has resulted in frustration not only on the part of state legislatures but also U.S. employers.

Current immigration policy makes it needlessly difficult for employers to bring in and keep the foreign workers they need. This reduces the number of jobs for both potential immigrants and U.S. natives. New research scheduled to be released on Thursday by the American Enterprise Institute and the Partnership for a New American Economy shows that immigrants create jobs for U.S. natives. Highly skilled immigrants—those with advanced degrees from U.S. universities who work in technical fields—and temporary foreign workers appear to have a particularly positive impact. For example, the results indicate that an additional 183 jobs are created for natives for every additional 100 workers approved for H-1B visas.

Without immigration policy reform, the United States will continue to lose immigrants who would start businesses, create jobs, and boost economic growth.

Policymakers have largely ignored immigration policy’s potential to contribute to the economic recovery. But immigration policy affects economic growth, and increased immigration can lead to more jobs for U.S natives. Previous research has shown that immigrants boost invention and innovation, and they are more likely to start a business than U.S. natives. This new research adds job creation to the list of immigration’s economic benefits.

Instead of encouraging immigration, particularly by highly skilled workers and others sought after by U.S. employers, current immigration policy throws up roadblocks. For example, demand has exceeded the supply of H-1B visas for skilled temporary foreign workers every year since 2004. Limits on the number of permanent resident visas that can be awarded on the basis of employment have created a queue of more than 1 million people waiting years for green cards. And those from the most populous nations—China and India—will likely have to wait decades because of an annual cap on the number of green cards that can be awarded to people from one country.

It is little wonder that skilled immigrants are increasingly leaving the United States to return home or go to other countries with more welcoming immigration policies. Without immigration policy reform, the United States will continue to lose immigrants who would start businesses, create jobs, and boost economic growth.

Results indicate that an additional 183 jobs are created for natives for every additional 100 workers approved for H-1B visas.

There are a number of steps the United States could take to turn around its immigration policy that would help employment and economic growth. It can increase the caps on temporary foreign workers and employment-based green cards. It can eliminate the country cap on green cards. It can simplify and streamline the onerous process for bringing in relatively unskilled temporary foreign workers via the H-2A and H-2B programs. All of these are relatively simple fixes that would cost taxpayers nothing.

The debate over SB 1070 crystallizes the problem with the debate over immigration policy. The discussion has gotten hung up over what do about unauthorized immigration, and as a result misses the bigger picture: the United States needs to reform its legal immigration system to give greater priority to those workers who contribute most to the economy.

Madeline Zavodny is a professor of economics at Agnes Scott College in Decatur, Georgia.

FURTHER READING: Nathan Smith asks “What If Justice Demands Open Borders?” Nick Schulz contributes “The End of Stagnation and the Coming Innovation Boom” and “Yes, There Is Such Thing As A Free Lunch: It's Called Immigration.” Rohan Poojara says “The U.S. Shouldn't Wait to Fix Immigration for Skilled Workers” and “Stop Bickering Over Illegals, Focus on Legal Immigration Reform.”

Image by Rob Green | Bergman Group

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