By the editors of Bloomberg View
Donald Trump’s latest harsh immigration orders leave little doubt about how he and his administration view outsiders who have come to the U.S. illegally. His views on high-skilled, legal immigrants are more complicated. He’s vowed to punish companies that bend the rules to replace American workers with cheaper foreigners, but he’s also said he welcomes talented innovators to America’s shores. In fact, he can and should find a way to do both.
The H-1B visa program that’s used to bring high-skilled temporary workers to the U.S. has suffered from fraud and abuse, as Trump has said. Too many of the visas go to software services companies that underpay their foreign workers. In several widely publicized cases, U.S. tech workers have been forced to train their own replacements. Even those who haven’t lost their jobs have faced wage pressures because of the low-cost competition.
A draft executive order reportedly under consideration seeks to scale back H-1B visas and other programs for foreign workers. Though broadly worded, the order threatens to undo some recent reforms — including extending the time students graduating from U.S. universities are allowed to work in the country — and requires tighter scrutiny of businesses using the visas. Officials would be directed to investigate “the size of the Marsbahis foreign-born population” in the U.S. and its impact on “the wages and employment of U.S. workers.”
Congress is looking at other reforms that are more targeted, and therefore more promising. Some would require companies bringing in skilled foreign workers to boost minimum salaries from $60,000 annually to $100,000 or more. One proposal would change the system for assigning H-1Bs from a lottery — which the biggest tech consulting companies flood with applications — to an auction; that way companies willing to pay top dollar would get first crack at the visas. Another would set aside a percentage of visas for small businesses.
Such changes won’t be free of unwanted side effects. Firms that might have brought foreigners to work in the U.S. might choose to have the work done abroad instead. If talented young people are kept out of the U.S. in favor of high-priced stars, the rules could also hurt efficiency and innovation. And if companies hesitate to hire foreign students on temporary visas after graduation, fewer of them would be attracted to U.S. universities.
These costs may be worth paying, however, if the changes restore faith in the H-1B system — and if the administration widens the pipeline for foreign talent in other ways. It remains overwhelmingly in America’s economic interest to attract highly skilled workers from around the world — “the best and the brightest,” as Trump’s draft order says. Such immigrants fill the economy’s growing need for graduates trained in science, technology, engineering and math, and they boost innovation and entrepreneurship. A majority of billion-dollar U.S. startups include at least one immigrant among their founders. A 2011 study co-sponsored by the Partnership for a New American Economy (co-chaired by Michael R. Bloomberg) found that each immigrant with an advanced STEM degree from a U.S. university helped create another 2.62 jobs.
Keeping this talent flowing will require changes beyond those that lawmakers are now considering. As Trump himself has noted, it makes little sense for the U.S. to educate foreign students and then send the smartest home; those in STEM fields should instead be allowed to apply for permanent residency while still in school. Proposals, frozen by the Trump administration, to establish a “startup visa” for entrepreneurs should be revived. Existing caps on both H-1B visas and employment-based green cards should be raised, and also made more responsive to business cycles. And ideally, individual states should be given a greater say in what kinds of workers they need and when, as Canadian provinces have.
To make room for more of the most able immigrants, the number of green cards doled out to extended family members will probably need to be reduced. But the goal should be to rationalize the flow of immigrants into the U.S., not to choke it off.
(c) 2017, Bloomberg View
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