Economist calls for complete reform of US immigration system

An economist has advised the United States government to increase immigration quotas in order to revive the economy.


Charles Kenny, a fellow at the Center for Global Development and the New America Foundation, says that the US needs more unskilled migrants to work in agriculture and other sectors. It also needs more skilled immigrants to work in high tech industries. It should also encourage foreign investors to immigrate to the US and encourage students who graduate from US universities to stay in the country.


However, he states that current US policies on immigration are unwelcoming and are hampering economic recovery. Policies designed to counter illegal immigration pursued by several US states have already damaged the agricultural sector by scaring away lowly-paid illegal immigrants who worked in the fields. Limits on the numbers of H-1B visas are adversely affecting industry, particularly the high-tech sector. At the same time, the US is making it difficult for students graduating from US universities to stay in the country.


Writing in Business Week magazine, Mr Kenny says that research performed by Carl Lin of Rutgers University showed that when the number of H-1B visas available was doubled in 1998, this had an immediate positive effect on the share price of high-tech industries. The high-tech sector typically accounts for about 80% of H-1B visas that are granted. There is a cap on the number of H-1B visas that can be granted in any one year. 85,000 H-1B visas are granted each year.. Every year, the processing of H-1B visas begins at the beginning of the financial year on 1st April. This year, the cap was reached after only two months in early June.


Mr Kenny notes that 20% of nurses taking the licensure exam in US hospitals are now foreign born. Nurses from the Philippines earn, on average, 4% more than US-born nurses because, it seems, they are better nurses.


Mr Kenny says that, until the global credit crunch in 2008, the US had a fertility rate of 2.1 births per woman. The rate has now fallen below 2 which means that the US population is now not only ageing but also shrinking. It is therefore economically vital that more immigration occurs, he argues. He states that, by 2030, almost 70% of Hispanic immigrants to the US will own their own home. This is vital, he argues because, if this didn't happen, as the US population falls, there will be reduced demand for housing and the price of property will collapse yet further. At the same time, there would not be enough unskilled labour to cater for the ageing population's health needs.
Meanwhile, Mr Kenny says, countries around the world including the Singapore, Australia and Canada are taking steps to encourage bright young graduates and entrepreneurs to make a life there. Indian and Chinese students are also choosing to return to their native countries after graduation.


Mr Kenny recommends several steps for US leaders to take which would revive the economy and ensure that there are sufficient workers in the US to care for the elderly and to service industry's needs:


• The cap on the number of H-1B visas that can be granted to citizens of any one country should be removed. At present, no more than 7% of the total of H-1B visas can be granted to citizens of one country. This means that only about 10,000 H-1B visas can be granted to Chinese or Indian citizens in any year when many times more than that apply.
• The cap of 85,000 on the number of H-1B visas that can be granted in any year should be greatly raised.
• The EB-5 visa program for entrepreneurs should be reformed. At present, when applying, applicants must pledge that they will create 10 jobs and invest $500,000. However, if the jobs are not created in exactly the way predicted, Mr Kenny states, the EB-5 holder is liable to be deported. The process is too rigid, he states, and this is why only 13,719 people applied between 2000 and 2010 and of these, only 3,127 were granted a US residence permit or green card.
• Pass the Schumer-Lee Bill which would grant residency to anyone who buys a house for $500,000 or more.
• Grant green cards to all foreign graduates of US universities as soon as they graduate.
• Pass the DREAM Act which would provide a path to citizenship for many illegal immigrants who came to the US as children, providing that they have not committed any serious crimes and they have graduated from college or served in the military
• Raise the number of green cards distributed in the green card lottery, which allows residents of certain countries to apply for a green card
• Raise the number of H2 unskilled work visas issued each year
• Grant green cards to all 1,000,000 workers who have temporary visas and who are waiting for permanent resident status.


Mr Kenny says that the need for reform is urgent. He says that the US's leaders can no longer afford to delay.

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