Since the earliest days of this election cycle, the 2016 presidential candidates have been sparring about immigrants and immigration reform. Both Democrats and Republicans agree that the country’s immigration policies are among the most important issues the next administration will need to tackle (and hopefully with the support of Congress). Yet, as enormous and all-encompassing as our country’s immigration problems are, only a narrow portion of them have been discussed by the candidates. An even narrower set of these issues have been substantively discussed. And when it comes to high-skilled immigration policy, a pillar of America’s global economic competitiveness, the only issue that’s received significant airtime has been the few cases of H-1B program abuse, which have prompted candidates (as well as members of Congress) to call for suspending or even overturning the entire program. While these cases of misuse warrant examination of the program’s susceptibility to abuse, concerns over the bad behavior of a few actors should not negate the true importance of foreign talent in this country. Further, they distract from another critical necessity in our immigration system: a visa program that promotes job creation by welcoming foreign entrepreneurs to the U.S.
The H-1B visa was originally created by Congress in 1990 to address shortages in the American workforce by authorizing high-skilled and educated foreigners to work for U.S. companies. Thus, many H-1B workers are in technical and STEM fields, where there is a significant demand for skilled workers. By one estimate, there are over 607,708 computing jobs open nationwide today, yet last year only 42,969 computer science graduates entered the workforce. H-1B workers have helped fill this gap, powering major technology companies including Microsoft, Google, and Oracle, as well as thousands of smaller companies and startups that may just employ a single H-1B worker.
Immigrant workers at all skill levels make a positive economic impact in their local communities and in turn, a positive impact on the U.S. economy, as research (here, here, and here, for instance) has repeatedly demonstrated. Additional research that specifically analyzes the impact of H-1B workers has shown similarly positive effects, such as one finding that for every 100 immigrants with advanced degrees in STEM fields, an additional eighty-six jobs are created among U.S. natives.
Yet, recent cases of H-1B abuse — those discussed angrily on the campaign trail — highlight some very real issues with the program. In recent years, companies including Disney, Toys ‘R’ Us, and Sun California Edison have laid off hundreds of American employees and directly replaced them with H-1B workers, many of whom worked for major IT contractors. In some instances, those that were laid off had to train their replacements, adding insult to injury and also suggesting the new workers’skills weren’t so specialized after all. The New York Times reported many jobs that American workers lost directly to H-1B visa-holders have been in accounting and back-office administration — jobs that don’t face shortages of qualified American workers.
These companies are now either under investigation or facing lawsuits for violations of H-1B rules which require that hiring foreign workers will not “adversely affect the working conditions of U.S. workers similarly employed,” such as job loss. These cases have also motivated members of Congress to take action,although their consequential proposals would do little to prevent further abuse. For example, Senators Jeff Sessions (R-AL) and Bill Nelson (D-FL) have drafted legislation that would drastically reduce the number of H-1B visas from the current 65,000 to 50,000. Such a reduction is a misguided reaction and would only unduly punish the thousands of companies, especially smaller startups, already competing for a limited number of visas. Last year, a record-breaking 233,000 foreign workers applied for these visas. And those who scored one of the 65,000 did so only by chance, as the system is based on a lottery.
These particular cases of abuse misrepresent the original purpose of the H-1B visa. And in garnering heightened attention on the campaign trail and in the media, these cases threaten to diminish the true importance of foreign high-skilled workers. Voters, candidates, and policymakers alike should instead support opportunities to improve both the H-1B visa program and other visa programs that ultimately promote job creation here in the U.S.
One approach to supporting job creation through immigration is by focusing on immigrant entrepreneurs. A recent study found that more than half of American startups valued at more than $1 billion (often referred to as “unicorns”) were founded by immigrants. This finding builds on earlier research about the rate of immigrant entrepreneurship, which is significantly higher than the entrepreneurship rates among U.S.-born citizens. Not only are immigrants more likely to start their own companies than Americans born in the U.S., we know now that they’re also more likely to build high-growth, high-value companies. Far from taking American jobs, successful immigrant entrepreneurs create new jobs here in the U.S.
Nonetheless, immigrants have very limited visa options as self-employed entrepreneurs. On the H-1B visa, for instance, workers must be sponsored by their employer (making it nearly impossible to sponsor themselves). Further, small, early-stage startups compete for H-1B visas alongside major corporations and outsourcing companies, which collectively flood the system with thousands of applications. 13 outsourcing companies took nearly a third of all of all H-1B visas in 2014, significantly diminishing the chances a small startup with just a single or a handful of applications would win in the lottery. Thus, not only are visas for foreign entrepreneurs effectively non existent, but for startups in dire need of talent to sustain operations and scale, hiring foreign talent is also incredibly competitive.
Immigrants sometimes find alternative ways to remain in the U.S. as they build their companies, though not without great uncertainty and obstacles along the way. The founder of AppDynamics originally came to the U.S. on an H-1B visa, but couldn’t leave his visa sponsor to start his own company until he was several years into the green card process. The founder of Instagram nearly left the U.S. before starting the social media app because of H-1B troubles.
Instead of advocating for policies that would further inhibit the ability of immigrant entrepreneurs to come to the U.S., presidential candidates should be promoting policy proposals to support these entrepreneurs who have the potential to build new companies and create jobs. Before the possibility of immigration reform was categorically shut down by Republican Congressional leadership last fall, legislators were considering a bill that would create a startup visa to allow foreign entrepreneurs with traction to immigrate to the U.S. to scale their companies. Canada, Chile, New Zealand, and other countries have all created similar startup visas to attract promising entrepreneurs while the U.S. is losing out.
By most measures, the U.S. still remains the world’s best incubator. The U.S. boasts the greatest access to funding, the highest quality educational opportunities, and short of its immigration policy, the most favorable regulatory environment for new businesses to succeed. But we can do better. It’s time we start asking presidential candidates how they intend to enable some of the world’s most persevering, talented, and innovative minds to build and scale new companies in the world’s most entrepreneurial nation.
