The United States possesses a number of competitive assets in the global war for talent: most notably, its huge and flexible labor market and an abundance of leading-edge multinational corporations and world-class universities. However, the United States also faces growing competition in the global labor market from other countries within the Organization for Economic Cooperation and Development (OECD), as well as from the expanding economic opportunities available in the home countries of Indian and Chinese professionals who constitute a vital talent pool for U.S. high-tech companies. These trends underscore the need to revamp U.S. immigration policies to make them more responsive to the demands of an increasingly competitive global economy.
Yet the quota-based immigration system of the United States diminishes the country’s ability to sustain, let alone expand, inflows of high-skilled immigrants. The optimal remedy for this defect in U.S. immigration policy is to replace the H1-B visa program for highly skilled foreign professionals with a quality-selective regime along the lines of the point-based systems introduced in Australia, Canada, and New Zealand. The United Kingdom is moving in this direction, away from a work-permit regime to a multi-tiered system that would entitle high-skilled immigrants to work for any British employer or to set up their own businesses in the country. However, the political environment in the United States—where homeland security concerns remain acute five years after September 11th and the furor over undocumented immigration clouds the separate issue of skilled immigration—provides little cause for optimism that such a policy reform will soon materialize.
One question that recently received heightened attention from lawmakers is whether or not immigrants should be admitted to the United States less on the basis of family ties and more on the basis of the skills they can contribute to the U.S. economy. Although some of the practices associated with a point-based immigration system might benefit the U.S. economy, policymakers should be careful not to assume that such a system would be a panacea for the widespread dysfunction of U.S. immigration policies.
A crucial question in the current debate over immigration is what impact immigrants have on the wages of native-born workers. At first glance, it might seem that the simple economics of supply and demand provides the answer: immigrants increase the supply of labor; hence they should decrease the wages of native workers. However, the issue is more complicated than this for two reasons that have been largely overlooked. First, immigrants and natives tend to differ in their educational attainment, skill sets, and occupations, and they perform jobs that often are interdependent. As a result, immigrants do not compete with the majority of natives for the same jobs. Rather, they “complement” the native-born workforce—which increases the productivity, and therefore the wages, of natives. Second, the addition of new workers to the labor force stimulates investment as entrepreneurs seize the opportunity to organize these new workers in productive ways that generate profits. When these two factors are included in the analysis of immigration and wages, it becomes clear that immigration has a positive effect on the wages of most native-born workers. Read more...
In this IPC Policy Brief, author Rob Paral uses new census data to update his earlier IPC report (Playing Politics on Immigration: Congress Favors Image over Substance in Passing H.R. 4437) on the number of undocumented immigrants in U.S. congressional districts.
New data from the 2005 American Community Survey (ACS), released by the Census Bureau on August 15, 2006, underscore the extent to which immigration continues to fuel the expansion of the U.S. labor force.
Shortages of skilled labor constitute the foremost challenge confronting U.S. manufacturers who face growing competition from manufacturers in Asia, Eastern Europe, and elsewhere. Demand for professionals with university degrees is rising as manufacturing becomes increasingly high tech. But the U.S. educational system is not producing enough highly educated native-born manufacturing workers to meet this growing demand.
The migration of women to the United States is characterized by two contradictory trends. On the one hand, over the past 20 years women have comprised a growing share of new legal immigrants admitted into the country, a trend which mirrors the feminization of migration in Europe, Africa, and Latin America. On the other hand, women have constituted a declining share of the U.S. foreign-born population as a whole since 1970. Read more...