Banning Foreign Workers Is Bad Policy and Bad Politics, at a Bad Time

Following yesterday's news that a "hire American" provision added to the stimulus bill is forcing investment banks to rescind job offers made to highly qualified immigrant workers, some banks have indicated that they want to return the stimulus money, as the strings attached are actually very bad for the bottom line.  Also today, the Dean and Assistant Dean of Dartmouth's Tuck School of Business explain why it's a terrible time to reject skilled workers: 

1. "Supporters say the law will help U.S.-born workers and stimulate our economy, but this is just wrong. The economy is not of fixed size, in which more foreign-born workers necessarily mean fewer U.S. workers. Productive foreign-born workers can help create more jobs here. Keeping them out damages us."

2. "Over 400 firms now face a sharply curtailed talent pool, precisely when they need visionary talent to rebuild amidst the world's most severe economic crisis in decades. Without the best talent, ultimately they'll create fewer jobs."

3. "There is also indirect, unforeseen damage that's beginning to appear in higher education.  If foreign-born students cannot legally work here after earning their degrees, fewer will enroll."

The bottom line is, foreign workers are needed if the U.S. is to remain competitive in a global, 21st century economy.  Data from the National Science Foundation reveal that in 2005, the foreign student population earned approximately 34.7% of the doctorate degrees in the sciences and approximately 63.1% of the doctorate degrees in engineering.  In 2005, foreign students on temporary resident visas earned 30.8% of the doctorates in the sciences, and 58.6% of the doctorates in engineering.  Not to mention, according to the Department of Labor and Congressional Research Service, the U.S. benefits from the intellectual property developed by foreign high skilled workers because their talent remains in the U.S. for the most part: Approximately 56% of foreign doctorate degree earners on temporary visas remain in the United States, with many eventually becoming citizens.  Adjustments from temporary visas to permanent status increased by 68% from 347,416 in 2003 to 583,921 in 2004. And it's estimated that by 2010, more than 50% of all employment-based workers would adjust from temporary to permanent status.  

But that won't happen if these employees continue to feel like second-class workers and citizens, constantly discriminated against for being foreign-born.

In addition to foreign workers' contributions to higher education, skilled immigrants have long contributed to American jobs and standards of living because they bring ideas for new technologies and new companies.  And importantly, they bring connections to business opportunities abroad, stimulating exports and affiliate sales for multinational companies.  A perfect example is Alice Su

Su grew up internationally between China, Hong Kong, Belgium, and worked in Japan. She did her undergraduate work in finance and electrical engineering at Wharton. She worked for four years at consulting firm Bain & Co. and the International Finance Corp. (the World Bank's private-sector investment arm) in Hong Kong, before coming back to Wharton for her M.B.A. in 2007.  But we don't want her knowledge and know-how helping OUR companies figure out how to improve OUR economy.  No thank you. Please, let's not think outside the box here.

Many in the scientific community maintain that in order to compete with countries that are rapidly expanding their scientific and technological capabilities, the country needs to bring to the United States those whose skills will benefit society and will enable us to compete. The underlying problem of foreign students in graduate science and engineering programs is not necessarily that there are too many foreign-born students, but that there are not enough native-born students pursuing scientific and technical disciplines. 

The Real Problem With Foreign Workers is that the current immigration system is broken, for them as well.  We should be focusing on how to fix the current flawed immigration laws that can sometimes hurt and hold back skilled workers when they work for U.S. firms, rather than focusing on putting up walls to keep out the best and brightest for the sake of demagoguery. 

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