Positive New Steps to Reform High‐​Skilled Immigration

Two bills to positively reform the highly skilled immigration system were recently introduced in the Senate. The STAR Act, introduced by John Cornyn (R-TX), would eliminate the diversity lottery and redirect those green cards toward foreign graduates of American universities in the science, technology, engineering, and mathematics fields (STEM). The SMART Act, introduced by Lamar Alexander (R-TN) and Chris Coons (D-DE), is better because it would create a new temporary visa for STEM graduates without eliminating any other green card categories.

These bills are a welcome first step in immigration reform, and should not be derailed by fallacious arguments.

The most persistent argument against expanding immigration is that immigrants take American jobs. This view is based on the false notion that there is a fixed number of jobs to be divided among Americans. More realistically, Immigrants increase the productive potential of Americans, expanding the number of total jobs available. For example, American engineering firms that hire more foreign engineers also have to hire more accountants, assistants, managers, and can supply engineering services at more competitive prices to more clients — benefiting American firms and consumers.

Foreign skilled workers are mostly complements to Americans, not competitors. American skilled workers have distinct advantages over foreign workers, namely managerial ability, communication skills (because of language), and knowledge of firms and the U.S. market. Immigrants work where communication is less important, pushing Americans into managerial positions where those skills are more valuable. This division of labor increases production.

The next erroneous argument is that highly skilled immigrants and foreign workers lower American wages. Firms hold off raises when the economy is bad, so if the anti-immigration argument was true we would expect to see more green card applications during poor economic times. But the opposite is true.

Firms apply for more employment based green cards and temporary high skilled work visas when the economy is thriving. That’s because firms demand more foreign workers when they are expanding, not when they are seeking to lower American wages.

The next argument is that the highly skilled immigration and work visa system is unregulated, leading to fraud and abuse. On the contrary, regulations and oversight have increased dramatically over the last decade. Worksite inspections, ICE investigations, database reviews, and increased fees complicate the efforts of the most honest and diligent applicants. Regulations that impede visa holders switching jobs increase the potential for employer abuse because if a worker quits a bad employer, he can endanger his immigration status. Deregulation would diminish abuse.

Indian applicants for some employment based green cards can take five years to a decade to be processed. Chinese applicants in a similar situation have to wait between five and seven years before being processed. Temporary skilled work visa applications are filling up their yearly quotas despite all of the new regulations and fees. Somehow, despite all of the regulations, fees, and annoyances piled on these systems in recent years, applicants and employers are still filling the quotas.

There are bad arguments for increasing legal immigration, the most common being that the U.S. needs highly skilled immigrants to compete. Foreign workers employed overseas are not bad for the U.S. economy and they don’t make us “less competitive.” Americans reap some of the benefits of foreign skilled workers in other countries already thanks to trade. The difference is that those workers would produce much more, innovate more, and start more firms in the U.S. than in their home countries.

America’s institutional advantages like the rule of law, stable property rights, and contract enforcement allow people — Americans and immigrants — to reach their productive potentials. Increasing legal immigration, in this case for the highly skilled, allows some more people to use their skills in one of the most productive places in the world — the U.S. For that reason, and not protectionism, immigration is good for the U.S. and the world.

Institutions in rapidly developing foreign nations like India and China, the source of many highly skilled immigrants, still can’t hold a candle to America’s relatively free market. The two bills just introduced to the Senate make some small but welcome improvements to reducing the protectionism of our immigration system. Making American capitalist institutions as open and accessible to immigrants as they are to Americans should be the long term goal of any immigration reform proposals.