Better Immigration Policies Would Help U.S. Tech Companies

Another American commentator effectively states a Canadian advantage:

Donald Trump recently declared that $60 billion in new tariffs against China would help U.S. technology companies preserve their intellectual property. Trade experts doubt compelling Americans to pay more for products imported from China will solve any problems. However, if the Trump administration wants to help U.S. tech companies, the solution isn’t to impose tariffs on Chinese imports but to enact better immigration policies.

For a U.S. technology company – and, really, almost any company today – the most important input is human capital. When companies make decisions on where to invest resources, the ability to hire a sufficient number of qualified workers in that location is paramount.

Restrictive immigration policies encourage U.S. companies to place more resources – and people – in foreign countries. Moreover, many U.S. companies contract out information technology and other services to focus on their core line of business. Burdensome policies, such as the Trump administration’s new third-party placement requirements, encourage more of those services to be delivered from outside the United States.

“Today, 81 percent of the full-time graduate students at U.S. universities in electrical engineering and 79 percent in computer science are international students,” according to a National Foundation for American Policy analysis. In other words, when U.S. companies recruit on college campuses they hire U.S. students, of course, but also find the vast majority of the graduate students in many key technical fields are foreign nationals who cannot work in America unless U.S. immigration rules are reasonable.

H-1B status is typically the only way a high-skilled foreign national or international student graduating from a U.S. university can work long-term in the United States. The wait for employment-based green cards often stretches to years, making them impractical to use for hiring most people. That means despite its limitations, H-1B visas are the key way U.S. companies employ high-skilled foreigners. Companies can transfer certain employees to the U.S. but they must have worked abroad for at least a year and gaining approvals even for those types of visas has become more difficult.

The first week of April is when employers file for H-1Bs – even though the start date for the professionals will not be until October, the beginning of the next fiscal year. This will be the 16thconsecutive year the supply of H-1Bs runs out, both the 65,000-annual limit and the additional 20,000 reserved for international students from U.S. graduate schools.

The reason H-1B visas run out each year is simple: The small annual limit of 65,000 (for an economy with over 160 million workers) was set back in 1990. Since then the World Wide Web, social media, smartphones, 3-D printing, and advances in biotech and other fields have fueled the demand for high-skilled technical labor. Most H-1B visa holders have earned a master’s degree or higher.

Trump administration officials have said America should shift to a “merit-based” immigration system but that is code for eliminating most family-sponsored immigration categories and reducing legal immigration, not admitting more high-skilled foreign nationals. In fact, since many family-sponsored individuals possess high levels of education, preventing them from immigrating to the United States would result in the admission of fewer highly educated immigrants.

When asked, immigration attorneys cannot name any policies the Trump administration has established or proposed to make it easier for high-skilled foreign nationals to work in or immigrate to the United States – and can talk for hours about all the new measures that have made life more difficult for immigrants and employers.

If the Trump administration wanted to make U.S. high tech companies more competitive in global markets, then here are the immigration policies it should enact:

First, on the legislative front, the administration should support H.R. 392, which eliminates the per-country limit that contributes to high-skilled immigrants from India waiting potentially decades to receive permanent residence. Congress should also raise the annual limit on employment-based green cards and add exemptions for individual with degrees in science, technology, engineering and math (STEM) and the dependents of employer-sponsored immigrants. The annual limit on H-1B visas should be raised substantially to reflect the demand for high-skilled labor in today’s modern economy.

Second, the administration should stop trying to repeal the worthwhile regulation that allows many spouses of H-1B visa holders to work in the United States. This 2015 regulation helps retain skilled workers and provides greater dignity to spouses, many of whom are well-educated women born in India. Immigration officials should also halt plans to eliminate or make unduly burdensome the ability of international students to work after graduation for 12 months on Optional Practical Training (OPT) or an additional 24 months for individuals in a STEM field. Another problematic administration policy is its plan to rescind a regulation that allows international entrepreneurs to remain in the U.S. after starting new job-creating businesses.

Third, the Trump administration should cease what attorneys and businesses view as an assault on the ability of companies to employ high-skilled foreign nationals in the United States. Over the past year, these measures have included immigration adjudicators demanding employers comply with many more Requests for Evidence and denying more H-1B applications; the administration telling adjudicators not to “defer to prior determinations,” including approvals or findings of facts, when renewing  an H-1B or other high-skilled visa (making denials more likely); the administration’s travel bans against individuals from Muslim-majority countries; and the effort by U.S. Citizenship and Immigration Services to battle against a common business practice whereby companies focus on core competencies and contract out other functions, sometimes resulting in workers performing some work on customer sites. (For a more complete list of administration actions look here and here.)

Already we can see a negative impact from administration policies. “The number of international students from India enrolled in graduate level programs in computer science and engineering declined by 21%, or 18,590 fewer graduate students, from 2016 to 2017,” a recent analysis of government data found. One plausible explanation for this drop is that highly educated foreign nationals no longer see America as the best place to build a career. And remember, unlike when a factory closes, U.S. companies don’t issue press releases every time they place more work in offices overseas in response to the U.S. government’s restrictions on immigration.

Observers believe administration policies directed against high-skilled foreign-born professionals and the companies that employ them are driven by a half-dozen or more appointees who share a common worldview. They have worked much of their careers to reduce the number of immigrants coming into the United States, regardless of skill level. Moreover, they possess little understanding of how labor markets function, particularly in today’s global economy, or simply ignore these realities.

There is not a fixed number of jobs in the United States. When immigrants fill jobs, they create more jobs through their consumer spending, investments and entrepreneurship. Their availability as workers can encourage additional investments.

If companies are not allowed to hire (or transfer) high-skilled foreign nationals in America, then these companies will hire and keep them outside the United States, taking many jobs and innovations with them to other countries. Pretending companies do not possess other options in the face of government restrictions is misguided.

For the good of the country, to set things on the right track on high-skilled immigration, there is a simple solution for Trump administration officials: Just do the opposite of everything they’ve done since taking office.

via Better Immigration Policies Would Help U.S. Tech Companies

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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