Dump the H-1B visa. Link immigration reform to what a global economy actually needs—workers who can come and go

The US should try to be the gateway to the best and brightest across the globe.
The US should try to be the gateway to the best and brightest across the globe.
Image: AP Photo / Aijaz Rahi
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Immigration reform appears imminent in US President Barack Obama’s second term. Many have tried before and failed, although few ever attempted a true and total overhaul of a very broken system. Now, amid growing and bipartisan political momentum, what if the laws governing foreigners’ rights to live and work on U.S. shores could be rewritten? Who would get to stay? How tight should borders be? Which countries and industries should benefit? Quartz asked lawyers, advocates, and business leaders what sound policy in America would look like.

Following the US  presidential election, there has been a renewed focus on one immigration challenge facing our country—how  to reform our laws in a way that addresses the problem of millions of undocumented workers, as well as the related issues of border security and immigration controls.  We have missed opportunities to achieve this reform over the past two administrations, and both political parties have now acknowledged it to be a priority that can no longer be deferred.  Pundits, business groups, unions and Capitol Hill are actively engaged in seeking bipartisan consensus on this key issue.

There is, however, another significant need to reform our immigration laws, one that has garnered far less attention and headlines. The nature of international business and global mobility has transformed radically in the last two decades, yet US business immigration law has not had a true overhaul since 1990. Since that time, there have been tweaks to individual business immigration categories, such as adding visas for H-1B candidates with advanced degrees, but Congress has failed to take a broader view of how our overall business immigration affects our competitive posture in a global landscape that has been radically transformed.

Even worse, what discussion there has been of business immigration law—on the Hill and elsewhere—tends to view it as a zero-sum game. Many have accepted an artificial viewpoint that entry of more employment-based immigrants—no matter how highly skilled—is a betrayal of our citizen workers.  This overly simplistic stance has frustrated the needs of the business community and, at times, reduced the enrollment of top foreign talent in US universities.

In reality, economic evidence suggests that, on average, immigrants raise the incomes and living standards of of Americans.  Highly-educated immigrants, in particular, are pivotal contributors to US innovation and new company formation and success.  A recent study by the Hamilton Project, for example, highlights the following statistics:

  • Immigrants were key founders of 39% of the engineering and information-technology companies started in California between 1995 and 2005, and of more than 25% of the engineering and IT companies founded nationwide during that same 10-year period;
  • In 2005, these companies produced $52 billion in sales and employed 450,000 workers nationwide;
  • One estimate notes that patent activity by high-skilled immigrants in the 1990s increased US GDP per capita by 1.4% to 2.4%, equal to $481 to $825 per person.

Other countries have evaluated the impact of “the best and the brightest” internationally and redesigned their immigration policies to encourage higher-skilled immigrants.  The UK’s recent conversion to a points-based system is an example of this change.  Australia, Canada, and New Zealand similarly use points-based systems to screen potential immigrants.  In these systems, points are awarded to potential immigrants with a positive work history, advanced degrees, skills in high-demand areas, and other factors such as age or language ability.  These governments are seeking to capture the “best and the brightest” to enrich their economy and culture.

This leads those of us who are part of the business community to consider—should we encourage Congress to start viewing the immigrant workforce in the highly skilled areas as a competitive advantage?  In an era where the global economy is unquestionably interdependent, should we free our companies to recruit and train international talent?  And in doing so, can we take into account the usual business formulation, which is this: What’s our return on investment in doing so?  If our answer is affirmative, then we need to form business coalitions and lead the effort on refreshing the views of our legislators and the public.

The framework below sets out a series of recommendations designed to address the reality of a growth-oriented business community.

  • Create a pool of nonimmigrant visas for high-level business managers who join US companies to manage projects or divisions that are developing new jobs.

A new visa category of this sort would allow US employers to hire lateral managers from the international community to grow their current operations.  Managers recruited to join a division with plans to grow the top line of revenues and/or head count could qualify for a provisional two-year visa, with extensions available in two-year increments for up to a six-year maximum.  A minimum growth of at least 10% in the division’s revenues and/or jobs would be needed to secure an extension.  Prevailing wage requirements could be managed in the same way as the highly skilled H-1B and E-3 visas.  The visa submission would require a business plan documenting the proposed growth plan.  A parallel immigrant category could be launched after four years, based on evaluation by Congress of the viability of extensions—i.e., how much growth in fact occurred.

  • Launch a nonimmigrant visa category for specialty occupation professionals  in the science, technology, engineering and mathematics (STEM) disciplines. This visa would stimulate attraction of top talent in these critical areas—science, technology, engineering and mathematics.  Rather than imposing an artificial quota, the category should be subject to congressional evaluation after the first three years, to assess if the caliber of visa holder is in fact enriching our nation’s capabilities in these areas.  Prevailing wage requirements should similarly be monitored in this category.  An immigrant category could similarly be developed, based on a pool carved out from the diversity visa annual lottery, a program offering green cards to 55,000 applicants from countries with a low usage of US immigrant quotas. This would be along the lines of the STEM Jobs Act, which reallocates up to 55,000 green cards a year to the top foreign graduates of US universities with doctorates in science, technology, engineering, or math.  Any remaining green cards are then made available to foreign graduates with master’s degrees in STEM fields.
  • Create a pilot points-based program to augment or replace the H-1B and L-1B visa categories. The H-1B quota of 65,000 (with an additional 20,000 for holders of advanced degrees) is not tied to any economic formulation.  It is a quota dating back to the 1990 Act and the usage has been dominated by IT workers, leaving employers of highly-skilled professional in other categories with an artificial challenge of lengthy delays for hiring talent.  The L-1B intracompany specialist category has been unduly restricted to address one concern—placement of “generic” workers at customer sites (i.e. sourcing).  A points-based program to replace or augment these dated categories could attract individuals with significant professional experience (including intracompany or industry-specific experience), higher salary levels, and exceptional achievements (with a lower threshold of proof than the current O-1 for persons of extraordinary ability, which was a category originally designed for artists, entertainers and athletes, not business persons).
  • Maintain categories for intracompany executives and managers, extraordinary ability aliens, outstanding researchers and investors. These visa categories—whether nonimmigrant or immigrant—focus on exceptional expertise or key innovation or entrepreneurial contributions.  These should be maintained and streamlined, to make the process for application seamless.

The objective of these refined categories would be to enrich our US-based businesses with top talent from abroad.  They would augment categories that to a large extent have grown stale, such as the H-1B or L-1B, while measuring to top line growth or high-level talent metrics.   And if Congress simplified the remaining system, which is unduly cluttered, leaning more towards a points-based reform, the system would impose less costs of time and resources on our agencies.

Other reforms would follow from this type of realignment.  Congressional oversight could be more focused on changing economic demands, and consideration of whether per-country quotas merit adjustment as the global economy shifts toward emerging markets should be a part of the Hill’s review.  Compliance verification systems like e-Verify—the government’s automated system for employers to verify the eligibility of workers in the United States—could become mandatory, with business certifications of visa compliance a norm within the system.  And top-compliance marks—class A certifications—could yield benefits such as pre-approved corporate petitions, with visa reviews focused only on individual candidate eligibility.

National policies need to respond to the realities of a globalized society, particularly when our country can lead economic redevelopment.  As we contemplate comprehensive immigration reform, at a minimum, the synergistic relationship between immigration and economic growth must be taken into account.  Free trade agreements and ongoing attempts by the United States to achieve an increasingly free flow of capital, goods and services are insufficient if impediments to the movement of people stifle their potential benefits.  Even a modest immigration liberalization can stimulate economic growth.  Congress and the administration will only have the ability to measure this impact if they capitalize on reform to open our businesses to top international talent.

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This is part of Quartz’s ongoing look at immigration reform. Previous pieces on this subject: