Immigration: More labor, less family

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According to the latest OECD Migration Outlook, America received 1,107,000 permanent immigrants in 2008. About 73% of them came for family re-unification, which often means they are unskilled. About 15% came as refugees, and only 7% were labour migrants, meaning they came for work. There were also 340,700 temporary migrants who came on student visas. So much family and refugee migration makes sense for humanitarian reasons, but does it make sense economically? The American economy would benefit from more skilled workers, so why do they make up such a small fraction of migrant flows?

Most OECD countries take more family than labour migrants. But in America labour migrants make-up an exceptionally small share. In Australia and Britain, labour migrants make up more than a quarter of annual flows. The low fraction of labour migrants in America is due to the few work visas available. Most labour migrants must have an American employer sponsor them. Most skilled workers initially come as temporary migrants under an H1-B visa. The H1-B is also how many foreign students stay and work after finishing their studies. After a few years, if your employer sponsors you, this can be converted into permanent residency. There are only 65,000 available H1-B visas each year, plus another 20,000 for advanced degree holders (that totals about one tenth the number of visas granted for family reunification).

It may seem counter-productive to want more labour migrants when unemployment is high, but immigrantion can actually be a source of job creation. Research from the Kauffman Foundation has found that more than half of all Silicon Valley start-ups had at least one foreign-born founder. Jennifer Hunt, an economist, has found that immigrants, who come as either students or on a H1-B, are more likely than natives to file a patent and commercialise their innovation. But you need an employer sponsor for an H1-B. So you when you migrate on this visa it’s hard, at least initially, to be self employed. While there’s evidence that this an exceptionally entrepreneurial population, America limits its numbers and designs visas to discourage entrepreneurship.

The question for immigration policy reform should be how America can attract immigrants who will contribute most to economic growth. There are good reasons for the absolute number of family and humanitarian migrants. It is important to keep in mind that low-skill migrants also make a significant contribution the American economy (and also tend to be entrepreneurial). But it seems odd that America makes it so hard for skilled migrants to come for work. Expanding the number of H1-Bs would be a good start. But it should also consider policies, already in place in Britain and Australia, which allow skilled migrants and students to come and work in America based on their skills and achievements.

http://www.economist.com/blogs/freeexchange/2011/05/immigration_0?fsrc=scn/fb/wl/bl/morelabourlessfamily

[rika60607 215]

This statement is dubious. I have seen very convincing articles explaining why America needs more cheap unskilled labor (no more skilled immigrants please )

As it is, American education largely isn't good. As long as there is an influx of educated immigrants, that's a problem which is likely to perpetuate.

Immigrant skilled labor tends to be underpaid, which in turns lowers average salary for a US citizen with the same degree. With the rising tuition costs, that's a problem too.

While it is true that skilled immigrants are likely to contribute to start-ups and such... they lack initial capital. Hence start ups often include immigrants but are rarely purely immigrant initiative.

I'd say US does not need immigration unless it is the kind that will help to resolve the problems rather than to alleviate the problems.

As for the family immigration, what's a million souls every year... US family immigration rules are comparatively restrictive as it is.

The American economy would benefit from more skilled workers, so why do they make up such a small fraction of migrant flows?

[Saddle Bronc 124]

According to the latest OECD Migration Outlook, America received 1,107,000 permanent immigrants in 2008. About 73% of them came for family re-unification, which often means they are unskilled. About 15% came as refugees, and only 7% were labour migrants, meaning they came for work. There were also 340,700 temporary migrants who came on student visas. So much family and refugee migration makes sense for humanitarian reasons, but does it make sense economically? The American economy would benefit from more skilled workers, so why do they make up such a small fraction of migrant flows?

Most OECD countries take more family than labour migrants. But in America labour migrants make-up an exceptionally small share. In Australia and Britain, labour migrants make up more than a quarter of annual flows. The low fraction of labour migrants in America is due to the few work visas available. Most labour migrants must have an American employer sponsor them. Most skilled workers initially come as temporary migrants under an H1-B visa. The H1-B is also how many foreign students stay and work after finishing their studies. After a few years, if your employer sponsors you, this can be converted into permanent residency. There are only 65,000 available H1-B visas each year, plus another 20,000 for advanced degree holders (that totals about one tenth the number of visas granted for family reunification).

It may seem counter-productive to want more labour migrants when unemployment is high, but immigrantion can actually be a source of job creation. Research from the Kauffman Foundation has found that more than half of all Silicon Valley start-ups had at least one foreign-born founder. Jennifer Hunt, an economist, has found that immigrants, who come as either students or on a H1-B, are more likely than natives to file a patent and commercialise their innovation. But you need an employer sponsor for an H1-B. So you when you migrate on this visa it’s hard, at least initially, to be self employed. While there’s evidence that this an exceptionally entrepreneurial population, America limits its numbers and designs visas to discourage entrepreneurship.

The question for immigration policy reform should be how America can attract immigrants who will contribute most to economic growth. There are good reasons for the absolute number of family and humanitarian migrants. It is important to keep in mind that low-skill migrants also make a significant contribution the American economy (and also tend to be entrepreneurial). But it seems odd that America makes it so hard for skilled migrants to come for work. Expanding the number of H1-Bs would be a good start. But it should also consider policies, already in place in Britain and Australia, which allow skilled migrants and students to come and work in America based on their skills and achievements.

http://www.economist.com/blogs/freeexchange/2011/05/immigration_0?fsrc=scn/fb/wl/bl/morelabourlessfamily

On H1-b's, the quota on them was foisted in 1989--no coincidence, after Canada-US Free Trade Pact (with no training given to CO's or Immigration officials about immigration-ramifications--transmogrified to NAFTA in 1993 defects-intact) on the premise that single Canadians would be adequate to supply the skills required which had been filled by H1-b's before.

[Darnell 8,478]

Ya, I always wondered why the H1-B was still available, since that Special Special Deal on Canadians was formed, seemed an easier thing for migratory labor.

[I AM NOT THAT GUY 5,715]

OECD? Isn't that the World Tax Organization?

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OECD? Isn't that the World Tax Organization?

Are you stupid?

[I AM NOT THAT GUY 5,715]

Are you stupid?

No.

[Saddle Bronc 124]

Ya, I always wondered why the H1-B was still available, since that Special Special Deal on Canadians was formed, seemed an easier thing for migratory labor.

A tidbit: guess which country ranks third (yours ranks second, India ranks first) in H1-b's. If you guessed our northern neighbour, go to the head of the class.

Due to several factors, many Canucks switch from TN-1 to H1-b after entering US:

• Immigrant intent allowed for H1-b (but not allowed for POE/PFI-issued TN-1's)
• H1-b had longer max duration (prior to 2008, when TN-1 was upped to 3 years) of 3 years (against 1 for TN-1), helpful especially post 9-11 (until 2008) when US driving-licence expiry was tied to visa expiry
• getting a spousal H-4 is more straightforward than getting a spousal TD (analous to H-4, but instead of H1-b primary is TN-1), whether at Consulate (if non-USC non-Canadian spouse) or POE/PFI (if Canadian non-USC spouse)

(as one who actually was on TN-1--but never on H1-b--1994 to 1999, last two years of it due to misfiling of labour-cert by chop**** attorney)

Edited June 1, 2011 by Saddle Bronc

[Saddle Bronc 124]

Are you stupid?

Read before you ask

[Mr. Big Dog 10,747]

No.

Actually, yes. Look, I understand that you have a problem with cracking down on tax evasion but the OECD's involvement in coordinating that effort which consists mostly of bi-lateral agreements doesn't make the OECD a world tax organization. At least not outside of the truly paranoid corners of society.

Read before you ask

Rather, think before you post. Just sayin'...

[Darnell 8,478]

SaddleBronc - thanks so much for the detail ! I really appreciate it !