If Employment Guide Immigration Policy, Repealing International Entrepreneur Visa Makes No Sense

This article appeared on Forbes​.com on May 25, 2018.
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The Trump Administration’s decision Friday to rescind the rule that grants visas to the international entrepreneurs—which President Obama originally created in 2015—may be consistent with other actions the president has taken regarding immigration, but it is much more difficult to justify from the perspective of working Americans.

Since the beginning of his presidential campaign President Trump has coached his opposition to most immigration in the context that it hurts the economic prospects of working class Americans. For the unskilled immigrants who make up the majority of our illegal immigration this may very well be true, although the economic evidence is far from settled and rough consensus seems to be that their impact on the wages and employment of domestic‐​born unskilled workers is slight, if at all. Low‐​skilled immigrants tend to avoid communities with low wages and high unemployment—sensibly—and seek out employment in communities with robust economies, a strategy that minimizes their impact on U.S.workers.

However, skilled workers—and only they are the only ones who are supposed to be eligible for this visa—are generally complements to unskilled workers: that is, the more of them there are in the country, the more jobs—and the higher are wages—for the unskilled workers. Skilled workers—those with advanced degrees, or who have special expertise in a STEM field, or who have extensive experience in high‐​growth fields—are much more likely to start businesses and create jobs than other people.

More generally, immigrants as a whole tend to be more entrepreneurial: a part of that likely comes from the fact that people who migrate to America tend to have a modicum of initiative and ambition, two key ingredients beginning a new business.

In short, it is hard to see the result of this rule rescission creating new jobs for U.S. citizens. If this action is subject to the same stringent cost‐​benefit analysis as other rule actions taken by federal government it is difficult to see how it would pass muster.

One potentially valid objection to the International Entrepreneur rule would be if there was evidence of substantial abuse, or that it is being used to admit people who clearly don’t meet the spirit of the rule. For instance, the EB-1 Visa—commonly referred to as the “Einstein visa”—is ostensibly reserved for people with extraordinary abilities but far too often seems to go to people who fall short of having any extraordinary talent. Likewise, a good portion of H-1B visas go to foreign tech companies, an outcome many people on both side of the immigration debate find undesirable.

Most people agree that our current immigration system could stand to be improved via legislation: Attempting to do so would give us a chance to debate who we permit into the country as well as how many people we allow in and how we might amend the myriad paths currently available to enter the country. These are, of course, highly contentious issues, which is one reason why repeated attempts at doing such legislation have foundered over the last dozen years.

But if we can agree that the health of the domestic economy and the employment of unskilled native workersdeserve some priority in any reform, it would be hard to argue for permitting fewer immigrants who truly demonstrate special skills or talents.

Ike Brannon

Ike Brannon is a visiting fellow at the Cato Institute and president of Capital Policy Analytics, a consulting firm in Washington DC.