While the U.S. economy continues to struggle, measures that could help alleviate unemployment and spur economic growth have remained buried in complex immigration reform bills. The possibility of using immigrants to boost the economy has been overshadowed by more controversial issues such as border security and undocumented immigrants living within the U.S. These issues are no more or less important than accelerating our economic recovery, but as President Obama put it during a recent speech in Las Vegas, “[m]aking progress doesn’t require us to settle every debate or difference we have.” So, is Obama on the right path with his Comprehensive Immigration Reform Plan?First let’s look at the current state of U.S. immigration laws and policies. There’s no denying the positive impact of immigrants on the U.S. economy. Many of the Fortune 500 companies in the U.S. were founded and run by immigrants and employ millions in the U.S. and worldwide. Although these founders most likely entered the U.S. on employment-based or student visas, U.S. immigration laws continue to strangle these important visas, especially the employment-based skilled worker categories. In delving into this particular category of visas, we may answer whether this administration is headed in the right direction to solve the problems of immigration.The employment-based skilled/professional workers category has three types of visas that are the most in demand: 1) H1-B Professional Worker; 2) L-1 Intra-company Transferee; and 3) E Treaty Trader/Investor.
H1-B visas
H1-B visas allow foreign national professionals to work in the U.S. for a petitioning U.S. employer. However, despite the high demand for H1-B visas every year, (foreign nationals now make up more than 60% of the Ph.D.s in computer science and engineering at U.S. colleges) there is an unreasonably low annual cap of 65,000 visas and a cap of 20,000 for professionals who have a master’s degree or higher from a U.S. university. This cap has been reached every year well before demand has been met, leaving U.S. companies struggling to fill approximately 3.7 million job openings. Many of these openings are in science and technology-related fields which statistics show companies are not able to fill with Americans.It’s obvious that raising the number of H1-B visas issued or establishing a flexible system to meet demand when demand is high would help boost the U.S. economy by filling these job openings, allowing companies to expand, and in-turn creating more jobs. The newly proposed Immigration Innovation Act of 2013 recognizes the critical need for change in the H-1B regulation and has proposed increasing the H-1B visa numbers to 115,000 visas annually and uncapping the U.S. advanced degree exemptions. This is a good start.
L-1 Visas
A different problem is strangling the L-1 visa usage. Although L-1 visas are not capped, they are often difficult to obtain because the eligibility criteria for the L-1 visa is subjective and limiting, as well as receiving higher scrutiny due to its increased usage as an “alternative” to H-1B. L-1 visas allow temporary stay for those seeking to enter the U.S. to provide service as an executive/manager specialized skilled worker for a branch/subsidiary of the same employer or one of its qualifying organizations. What exactly qualifies, as “executive/managerial” or “specialized skill” is not clear. Getting a more concrete yet broader definition of “executive managerial” and “specialized skill” may help qualify more workers for L-1 visas and help alleviate some of the demand for H1-B visas, and may also remove employers’ incentives to misuse L-1 visas when H1-B visas run out. As the demand for L-1 visas rises, these visa applications have been increasingly scrutinized and rejected, causing business interruptions and financial loss until the visa issues are resolved. Applicants from countries such as India, which have a high number of H-1B and L-1 visa applicants, have been especially affected by this heightened scrutiny and the increasing rejection rate.If the U.S. wants to keep attracting highly skilled workers it will not only have to address these issues, but also a need to deal with a critical issue that looms ahead for current H1-B and L-1 visa holders: Currently, there is no guarantee or a quick path to lawful permanent residence for those skilled professional workers entering under H-1B, L-1, or E status. An estimated 500,000 H-1B visa holders are currently waiting in line for a green card – or about one million, if you include family members. Considering the government issues only 140,000 employment-based preference visas annually, the waiting time for green cards are often 3 to 5 years from start of the process. In comparison with other countries the number of employment based visas issued by the U.S. is extremely low, Australia, with a population 14 times smaller than that of the United States, issues approximately 126,000 visas for skilled workers alone.
E Treaty Trader/Investor visas
Another manifestation of the choke hold the current immigration policy has on economic progress is the problems associated with E Treaty Trader/Investor visas. E-2 visas permit nationals of specific countries to enter and work in the U.S. based on an investment he or she (or their employer) have made and will be controlling. The problem with E-2 visas, besides the fact it excludes nationals from major countries like China, India and Brazil, is that it requires that the invested funds be the immigrant’s own or capital from investors from abroad (majority ownership must be held by nationals from the same country as the E-2 applicant), and not that of interested investors in the U.S. There is no provision for foreign national entrepreneurs who want to start-up a business using local funds. The door remains closed for the majority of foreign nationals looking to create start-up companies, or small businesses in the U.S. Shutting out potential start-up companies, especially those associated with high growth, technology-oriented companies could be detrimental to the technological and economic edge America has been fighting to keep. Where do these future business leaders take their ideas? Anywhere but here.
As a result, foreign investors and entrepreneurs have been taking their jobs and money elsewhere. What the U.S. immigration laws currently fail to recognize is that the E Treaty Trader/Investor visa has outgrown its use. It is time to modernize and include a “start-up” business option as part of the E-2 visa comparable to those already provided by countries like Canada, the United Kingdom, Singapore, and Chile. These would give prospective entrepreneurs, who might not otherwise qualify for any other types of visas in the U.S., a way to establish and operate their businesses here in the U.S.It’s time for U.S. Immigration Laws to step into the 21st Century and make immigration to the U.S. a viable option, instead of an impossible dream: Offering, E-2 visa status to investors and entrepreneurs, regardless of the source of funds, and creating a path to lawful permanent residence through this category, would serve as an effective solution and create more small businesses in the U.S. and in turn more jobs, as well as keeping these entrepreneurs from taking their ideas and businesses elsewhere.
The Path Forward
So, is the current administration on the path to fixing these glaring issues in immigration and its effects on the U.S. economy? The answer appears to be, yes. Both Obama and Congress finally seem to recognize the need to better harness the foreign national talents that are working or being educated in the U.S. and are making the move to bring the U.S. Legal Immigration System into the 21t Century. If the U.S. continues to educate and train foreign nationals, why not let them create new businesses and develop their ideas, for the betterment of the U.S. economyThe politicians also need to dispel the fear that foreign workers will take jobs from Americans. Brookings Institute has published reports with findings that show immigrants and U.S. born workers generally do not compete for the same jobs. Instead, many immigrants complement the work of U.S. employees and increase their productivity.It is abundantly clear that the U.S. Immigration Laws need to welcome immigrants with open arms, instead of strangling their progress, or else it will soon stop attracting the kind of talent it needs to remain a major economic powerhouse. Skilled workers see the potential of other countries with growing economies and welcoming immigration policies offering them the same opportunities as America. Waiting in line for America is quickly becoming an unappealing, and impractical option.What Obama is proposing with his Comprehensive Immigration Reform plan, though very broad, is heading in the right direction and seems to be on the right side of the immigration fence.