Two Cheers for the New Republican Proposal on "STEM" Immigration

Update: On November 30, the House passed HR 6429. It is not expected to be considered by the Senate. Republicans in the US House of Representatives have proposed a step toward immigration reform. The bill would change who can receive an annual block of 55,000 US permanent resident visas. Currently those visas go to people from countries with relatively low rates of immigration to the US via a lottery system. The new bill would close that program and reallocate the visas toward people earning doctorates in science, technology, engineering, and math (STEM). Lamar Smith and his colleagues deserve two cheers for this bill.

1. The bill recognizes that immigration is critical to the US economy. Right now, just 15% of US permanent resident visas are employment-based. That’s the lowest fraction of any major Western economy, as Pia Orrenius and Madeleine Zavodny have pointed out. Smith’s bill would push that up to 20%. That’s still low, but it’s a start.
2. The bill includes an overdue change in the treatment of the overseas spouses and children of US permanent residents. When those spouses and children apply for their own resident visas, they currently must wait in line at home, separated from their well-established husband, wife, or parent in the US—sometimes for years. I’ve argued that this requirement can be cruel when the home country has recently experienced a major natural disaster. But it doesn’t make much sense for any country. The new bill will reportedly allow those spouses and children to spend some of that wait-time together, in the US, without changing their place in line. That’s good sense.

Both of these changes are triple wins for migrants, for the US and for the countries they come from. When the U.S. doesn’t admit skilled migrants, many of them don’t stay home and cry, they go to the US’s competitors in the global competition for talent. My research showed that about 30% of high-skill Indian computer programmers denied a work visa to the US ended up in other countries outside India like Canada, Germany, and China. When the US does admit skilled migrants, that can greatly encourage people from developing countries to invest in skill acquisition. My research has shown that this has been a consequence of Australia’s skill-focused immigration system. And Harvard’s Bill Kerr has shown that skilled migrants foster development by channeling new technologies to the countries they come from. So why do I withhold the third cheer? Because this bill is a zero-sum shift away from lower-skill migrants toward high-skill migrants. (The visas eliminated by this bill, from the ‘Diversity Visa’ lottery, only require a high-school education or equivalent.) This embodies the unexamined assumption that high-skill migrants are “desirable” and admitting them alone is “business-friendly”. But both low-skill and high-skill migrants are “desirable” to the economy. Most Americans don’t need to look back far in their own families to find an immigrant with very little education. My great-grandfather came from Austria-Hungary with only a few years of schooling, no English, and no money, and became an entrepreneur and land developer. Major American industries, particularly farming and ranching, are heavily dependent on low-skill labor now as they’ve always been. And low-skill workers complement high-skill workers. For example, Patricia Cortés of Boston University has shown that low-skill immigrants make skilled U.S. women more productive by caring for their children, and raise the living standards of most Americans by keeping basic services affordable. The lower-skill migrants who come in through the Diversity Visa lottery also help alleviate poverty back home, as Teferi Mergo of U.C. Berkeley has shown in Ethiopia. This bill is supposed to be about helping the economy. But there is no strong economic case for a zero-sum shift away from low-skill workers. The U.S. economy needs both high-skill and low-skill immigrants today, as it always has. A three-cheers reform would balance the creation of visas for low-skill and high-skill workers:

• A similar bill proposed by Senators Schumer and Coons would create new STEM visas without killing other types of visas. This is a much better path. The benefits of STEM immigrants are clear, but low-skill workers also power the economy.
• Orrenius and Zavodny propose a more far-reaching and business-friendly reform: much greater focus on work visas over family visas, a mix of high-skill and low-skill, and an auction system to direct work visas to the companies that will use them most productively.

The global economic benefits of greater economic employment-based migration are vast, much greater than any further liberalization of international trade or investment. But opening up possibilities for STEM workers at the expense of others with fewer skills reduces the potential benefit to the US economy. The best way forward for the economy is creating legal channels for employers of both high-skill and low-skill workers to keep adding value and fueling the recovery.