America Needs High-Skilled Foreign Workers

If companies can't hire foreign techies in the U.S., they'll flee to where they can.

A leaked presidential memo and several Republican bills suggest the GOP is taking aim at high-skilled visa holders, especially those with H-1Bs. President Donald Trump's memo ordered the eventual elimination of all regulations "not in the national interest" that allow foreign nationals to work in the United States. That likely means scaling back the program that allows foreign students at American universities to work on their student visas for three years after graduating—a crucial grace period that allows them to find permanent jobs. It would also step up "site visits" by government inspectors to make sure companies are not illegally replacing American workers with cheaper foreign labor.

The Republican bills go even further. One, co-sponsored by Texas Sen. Ted Cruz and Alabama Sen. Jeff Sessions (now attorney general), would basically end the H-1B program by requiring all applicants to have Ph.D.s or 10 years of work experience, and to be paid no less than $110,000, up from the current $60,000, annually. Then there's Arkansas Sen. Tom Cotton, who wants to limit H-1B hires to companies willing to pay them "in the top 1, top 5, top 10 percent of local wages."

The intention here is obvious: to price, regulate, and harass foreign workers out of the labor market.

This is a stunning reversal for a party that only four years ago insisted that its quarrel wasn't with immigration as such—just the illegal variety. Back then, the Republican center of gravity was closer to Arizona Sen. Jeff Flake, who wanted to raise the cap on annual H-1B visas from 65,000 and lift the 20,000-person ceiling for foreign science, technology, engineering, and math (STEM) students graduating from American universities. The GOP's presidential nominee in 2012, Mitt Romney, said we should "staple green cards" to the diplomas of foreign students graduating with advanced degrees.

This made sense. Without foreigners, the modern information technology revolution would scarcely be imaginable. They are responsible for founding half of all high-tech startups today valued at $1 billion or more, according to a 2016 study by the National Foundation for American Policy. Yet they're subject to immigration laws written in 1990, when the internet didn't even exist.

Now, instead of crafting immigration policy suitable for the 21st century, Republicans are harkening back to 1929, when America embarked on its first serious immigration clampdown.

Since that sort of great leap backward can't occur in an intellectual vacuum, Sen. Cotton and the others have taken to accusing foreign techies of stealing American jobs and undercutting American wages. If this were true, however, there would be legions of natives with advanced science degrees stuck in unemployment lines and a downward wage spiral. Is that the case?

Far from it. A 2012 study by the Partnership for the New American Economy, Mike Bloomberg's outfit, found that STEM workers rarely have trouble getting work. When the national unemployment rate was hovering around 8 percent, Americans with advanced STEM degrees were experiencing unemployment closer to 3 percent. In certain specialized professions such as computer network architecture, it was down near 1 percent—meaning, in effect, that anyone who wanted work could have it. Typically, STEM jobs go unfilled for several weeks longer than non-STEM jobs, suggesting a tight market for talent in those fields.

And wages? A 2013 Brookings Institute study found that H-1Bs are paid almost $5,000 more than natives with bachelor's degrees in the same occupation. Obviously, companies wouldn't do that if these workers didn't have specialized skills that boost overall productivity. This in turn bumps up Americans' wages. Indeed, Brookings discovered, in 2009–2011, when the nominal wages of natives essentially flatlined in non-H-1B occupations, they grew by 1.3 percent a year in the H-1B-heavy computer industry.

America is set to generate over a million more STEM jobs than it has qualified workers by 2024, according to the American Action Forum. If companies can't hire foreign techies in the U.S., they'll flee to where they can.

As Steve Jobs once explained to then–President Barack Obama: Apple employs 700,000 factory workers in China because it can't find 30,000 engineers here at home. In other words, Trump's policies will almost certainly create jobs—just not in the United States.