Cockeyed U.S. immigration priorities

Widespread support for low-skilled illegals so where is the support for high-skilled legals?

I had the pleasure of hosting an event last week for Vivek Wadhwa to discuss his important and troubling new book, The Immigrant Exodus. Wadhwa, an entrepreneur turned scholar, has done more than anyone else to call attention to the critical role that immigrants played in the rise of Silicon Valley and the vibrant tech economy that is rightly such a source of pride for many Americans. And his warning that we are now in danger of killing the goose that laid the golden egg needs to be widely read and addressed with urgency in Washington.

The importance of immigrant scientists, engineers, and entrepreneurs to the U.S. economy is now generally accepted, but much of what we know today is the result of pioneering survey work done first by AnnaLee Saxenian of the University of California, and later by larger teams assembled by Wadhwa, Saxenian, and other scholars. In a seminal 1999 study, Saxenian found that immigrants, particularly Indians and Chinese, comprised roughly one-third of the total scientific and engineering workforce of Silicon Valley. A 2007 survey by Wadhwa and others discovered that from 1995 to 2005, more than half of all Silicon Valley startups had at least one foreign-born founder; across the country the figure was just over one-quarter. These were astonishing findings given that just 13 percent of the U.S. population is foreign-born.

In theory, immigrant entrepreneurship should be growing even stronger. Wadhwa’s work has suggested that, on average, an immigrant who launches a company does so roughly 13 years after moving to the United States – a period of time long enough to build the skills and contacts necessary for entrepreneurial success. In the late 1990s, there had been a big surge in skilled immigration due to a temporary increase in the cap for H-1B visas. In theory, that should have resulted in an explosion in new immigrant founded companies over the past several years.

Instead, their latest survey – Then and Now: America’s New Immigrant Entrepreneurs — shows a drop in the number of immigrant-found companies in Silicon Valley, from 52.4 percent from 1995 to 2005 to 43.9 percent from 2006 to 2012.

What is going on? Some of it certainly reflects the growing opportunities for Indian and Chinese students and immigrants who wish to return home. The explosive growth in China and the opening of the Indian economy, especially in high technology sectors, has created possibilities for engineers and entrepreneurs that were unthinkable fifteen or twenty years ago.

But much of the wound is self-inflicted, created by quotas and other restrictions that have made it increasingly difficult for talented immigrants to remain in the United States. How much harder is it? Vivek writes that when he moved to the United States in 1980 after graduating from the University of Canberra in Australia, he immediately found work as an entry-level programmer at Xerox and had his green card in eighteen months, allowing him to pursue better jobs. Today, he notes, if he had come on an H-1B visa, he would have been stuck in his entry-level job for as much as a decade waiting for his green card, and his wife would have been unable to work for the duration.

He writes in the book about one young Indian immigrant, Anand Chhatpar, who graduated at the top of his class in computer engineering in Mumbai and entered the University of Wisconsin-Madison in 2001. By his junior year he had launched a company, and was named by Business Week as one of the “top 5 young entrepreneurs” in the country. In 2008 he and his new wife jointly created Fame Express, which grossed about $1 million in two years building Facebook applications. But in September 2010 – still without permanent status in the United States — they had to return to India to apply for EB-1 temporary visas, reserved for skilled workers. Despite having companies and employees back in the United States, they were denied. Today, they are trying to run their companies from Bangalore.

Some of Wadhwa’s recommendations for clearing away these immigration hurdles are familiar – increasing green card quotas for skilled immigrants, eliminating the current cap that only permits 7 percent of green cards each year for any one country (huge ones like India and China included), and allowing spouses of H-1B holders to work. These remedies generally enjoy bipartisan support, but in the funhouse mirror politics of Washington, they still can’t get through Congress. Just before the congressional recess, Judiciary Committee chairman Lamar Smith proposed an increase in green cards for skilled workers, but tied it to elimination of the diversity visa, which is supported by many Democrats. No serious effort was made to cut a deal, resulting in just one more symbolic vote.

But Wadhwa has some novel approaches as well. Instead of “stapling a green card” to the passports of foreign students who graduate with science and engineering degrees from American universities (which he fears would create “diploma mills”) he would extend the Optional Practical Training program to allow students to remain and work in the United States for up to four years. Those who are successful would then be able to apply for a green card on the merits. And he supports changes to the H-1B program that would allow visa holders to switch jobs and advance their careers without risking their immigrant status. In all likelihood, this would raise wages as companies vie to retain talented workers, addressing the legitimate concerns of some American tech workers that H-1B holders comprise a kind of captive, low-wage workforce.

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Illegal immigrants to Australia to be diverted to New Guinean island

Immigration Minister Chris Bowen has moved a resolution in Parliament to officially designate Manus Island in Papua New Guinea as a processing centre for asylum seekers.

Mr Bowen declared PNG as a regional processing country under the Migration Act this morning.  He says Manus Island will eventually be able to accept 600 asylum seekers and should be ready to take the first group within weeks.

The Government is already sending asylum seekers to Nauru, with 30 men - 17 from Afghanistan and 13 from Sri Lanka - being the latest group to arrive.

Mr Bowen says Labor's offshore processing policy is starting to work.  "It has been very clear to me for some time that we're in a battle of the truth with people smugglers - people smugglers out there saying 'don't worry about it, even if you get sent to Nauru it'll only be for a short time'," he said.

"And I think the people who've arrived in Australia have learned that that's not the case and several of them have taken the decision to return back to their country of origin."
Audio: Bowen signs off on Manus Island (AM)

Mr Bowen said he was not trying to exaggerate the number of people who had returned home, with hundreds still arriving in Australian waters each week.

"I'm not overstating the number who've returned home but I am pointing to that as something we haven't seen before in very significant numbers," he said.

"Of course we continue to talk to people about their options, but the fact that we've taken two relatively significant groups of people home to their homeland is, I think, a significant development.  "It just points to the fact that they believe they've been misled by the people smugglers and that's clearly what's going on."

Mr Bowen says the Government is continuing talks over its proposed Malaysia deal despite the Opposition saying it has long-term issues with it.  "We believe in it and the expert panel recommends it," he said.

"The Opposition's fanciful position is that all they need to do is introduce temporary protection visas and somehow get some magical agreement with Indonesia or not to turn boats around.

"Either get an agreement with them which they're not going to get or turn boats around to Indonesia without their agreement.

"The difference between the Malaysia agreement and turning boats around to Indonesia is that we have Malaysia's agreement to do it and it's safe, unlike turning boats around on the high seas."

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