Curbing legal immigration hurts the economy

Curbing legal immigration hurts the economy
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During the 2016 Presidential campaign, then-candidate Trump frequently repeated a promise to achieve four percent GDP growth. This is an ambitious goal, so one would expect the Trump administration to increase its odds of success by implementing economic policies universally designed to stoke GDP. While many of the president’s stances on the regulatory regime facing business can be seen as promoting economic gains, his stance on legal immigration could both inhibit short-term growth and jeopardize America’s status as an innovation hub in the long term.

A recent PricewaterhouseCoopers study found that 77 percent of CEOs say their growth is threatened by a lack of availability of key skills. That response aligns with other research, including an Adecco prediction that we will be short 2.4 million STEM workers by next year and a WSJ finding that employers are spending more time training workers than they were a year ago.

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With talent gaps this significant, the obvious solution is to tap into existing pools of trained, skilled workers, in other words, to bring foreign workers to U.S. companies. Indeed, foreign workers already hold one in five STEM jobs in the United States.

 

But Trump administration policies seek to limit legal immigration from several countries and make it more difficult to secure H-1B visas (those for high-skilled employees) across the board. These actions have already proven detrimental: 21 percent of U.S. companies are relocating work overseas because of difficult immigration laws at home. If the goal is to grow the economy, why make it harder for American companies to secure labor?

The benefits of facilitating immigration, however, go beyond filling roles at existing U.S. companies. Throughout our nation’s history, immigrants have been a powerful economic force in part because of the businesses they establish. Today, immigrant-founded companies account for 18 percent of those in the Fortune 500; these businesses alone generate $1.7 trillion in annual revenue and employment for more than 3.6 million people worldwide. In the United States overall, one in 10 workers is employed by an immigrant-owned business.

The importance of embracing foreign-born innovators grows even clearer when we consider the sector most lauded in the present-day economy: technology. Fifty two percent of companies founded in Silicon Valley between 1995 and 2005 were founded by immigrants. These companies include household names like Google, PayPal, Yahoo, and eBay. Imagining the U.S. economy — not to mention everyday life — in 2017 without these companies is difficult; they have transformed the way we live, work, and think.

This lesson hasn’t been lost on Canada, Mexico, or China, all of which have recognized in Trump’s policies an opportunity to recruit tech innovators and workers who might no longer be welcome in the United States. Assuming current immigration policies hold steady, this could have a tremendously negative impact on U.S. competitiveness. At present, 36 percent of graduate degrees in STEM fields go to foreign nationals. Today, one of the only options for these graduates to stay in the country is by securing an H-1B visa. As those visas become harder to get, foreign-born students have little choice but to go elsewhere to work and innovate. When the world’s best and brightest are already willing to travel internationally to study and work, it is not difficult to imagine a scenario in which they travel, work, and found transformative companies in places other than the United States.

Quite frankly, we cannot afford to let this happen. According to a National Academies of Sciences, Engineering, and Medicine report from 2016, immigration’s overall impact was a contribution of $50 billion per year to our economy, between 1990 and 2010.

Despite all this, our immigration system remains broken and difficult to navigate. To stay competitive globally, we must demand reform. We need to make it easier to tap into the global talent pool so companies can more quickly achieve their goals. We need immigration processes that don’t require excessive time and administrative effort.

We need to foster a welcoming environment for the world’s best minds and brightest innovators to ensure the United States remains a hub for innovation. Immigrants have been a vital part of the U.S. economy since the country’s founding; but today, we are at risk of depleting this essential source of prosperity because of shortsighted immigration policies at the federal level.

Dick Burke is the president and chief executive officer of Envoy Global, a global immigration technology services provider. Envoy's immigration management platform makes it easy for companies to hire and manage an international workforce by combining legal representation with its proprietary technology.