Highly-skilled foreign-born workers contribute more to the economy than they take away and unless the American government enacts immigration reform, the U.S. “risks falling behind in the global race for talent,” according to the 2010 Federal Reserve Bank of Dallas annual report, released Wednesday.
What’s needed most, the report says, is an approach that draws in high-skilled workers from abroad. The authors argue there is a waiting line of approximately1 million skilled-workers for “employment-based” green cards from the U.S. government. That’s because the number of permanent resident visas issued by the federal government hasn’t changed since 1996.
“The disproportionate focus on illegal immigration is missing the picture that the legal system of immigration is broken as well,” Federal Reserve senior economist Pia Orrenius states. “The cost of ignoring problems with the legal immigration of high-skilled workers in some respects is higher than the costs of illegal immigration.”
Attached to the report was an essay authored by Orrenius and Agnes Scott College economics professor Madeline Zavodny, “From Brawn to Brains.” They argue that reform is needed to boost the legal immigration of highly-educated workers to the U.S.
Pointing to economic and census data, the authors say that skilled immigrants boost economic productivity andentrepreneurship. In highly technical fields, immigrants tend to supplement U.S.-born workers by moving into expanding fields in which “native labor supply cannot keep up,” the authors’ Federal Reserve essay states. In 2005, 90 percent of manufacturers surveyed by the National Association of Manufacturers (NAM) reported “moderate to severe” shortages of skilled production workers, while 65 percent indicated “moderate to severe” shortages of scientists and engineers.
So many have given up on waiting or know the hassle and won’t try, which represents a major loss of skill for the US.
A few facts about immigrant entrepreneurs:
• Foreign nationals residing in the United States were named as inventors or co-inventors in 25.6% of international patent applications filed in the U.S. in 2008.
• 25.7 percent of biotechnology firms in Massachusetts—and similar quantities around the country–have an immigrant founder.
• Less than 1% of foreign-born entrepreneurs surveyed came from extremely rich or extremely poor backgrounds.
• Immigrant labor force participation is consistently higher than native-born, and immigrant workers make up a larger share of the U.S. labor force (12.4%) than they do the U.S. population (11.5%).
As Alan Greenspan has pointed out, 70% of immigrants arrive in prime working age. That means we haven’t spent a penny on their education, yet they are transplanted into our workforce and will contribute $500 billion toward our social security system over the next 20 years.
That said, current immigrant policies leave many immigrant entrepreneurs unfamiliar with government resources and regulations, lack of access to technical assistance and networking opportunities and lack of family support in the United States.