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A Highly-Skilled Opportunity for Trump on Immigration

Political wrangling over the future of immigration policy has been leading national headlines over the past few weeks, and the debate shows no signs of subsiding. Congressional leadership is negotiating with the White House over legislation to address the legal status of unauthorized immigrants brought to the United States as children many years ago, while the President continues to demand funding to build a “wall” on the country’s southern border.

On January 20th, the federal government shut down when the Senate couldn’t muster the 60 votes necessary to keep the government funded, only to agree to a continuing resolution to reopen the government on the evening of January 22nd. And with the President slated to give his first State of the Union address on Tuesday, he’s sure to spend a chunk of his speech discussing America’s immigration situation.

But for supporters of free markets and competitive enterprise, one aspect of the immigration debate is often overlooked: the importance of welcoming skilled immigrants into the United States. Talented, educated, hard-working people from around the world want to come to the United States to live, work, and raise families—but America’s federal immigration laws greatly restrict the ability of skilled immigrants to come to the United States. The result? Slower economic growth, lower tax receipts, fewer inventions patented in the United States, and diminished opportunities—both economic and otherwise—for American employers, native-born citizens, and prospective immigrants.

As my former colleague Alex Nowrasteh wrote in a 2010 CEI Issue Analysis, “A Case for Open Immigration of Highly Skilled Foreign Workers,” highly skilled foreign workers tend to complement American workers, fostering technological and scientific development at U.S. companies. Indeed, many of the nation’s most successful businesses, such as Intel, Google, and eBay, were founded by immigrants. And patents filed by immigrant college graduates have been found to contribute significantly to U.S. economic growth.

Yet U.S. laws severely restrict the number of skilled foreigners who may enter the country, while imposing complex rules and costly fees on companies that do sponsor foreign. For example, firms that sponsor immigrants to come to the United States on an H-1B visa—the primary type of visa that skilled immigrants rely on to enter the country—must often pay a fee of $4,000 per worker. This figure doesn’t include legal costs related to immigration.

What about the fiscal effects of high-skill immigration? A comprehensive 2016 report by the National Academy of Sciences concluded that the net fiscal impact to federal, state, and local budgets over a 75-year period of an immigrant with a Bachelor’s Degree was $195,000 in 2012 dollars, and $452,000 for an immigrant with education beyond a Bachelor’s Degree. The net fiscal impact of these groups of well-educated only grows when the descendants of high-skilled immigrants are included, as the children of high-skilled immigrants are, like their parents, likely to contribute more to government budget receipts than they receive in government benefits.

Even a 2007 report by the Heritage Foundation, which controversially concluded that low-skill immigrants are net cost to U.S. taxpayers, admitted that “immigrants with a college degree become positive fiscal contributors from the outset; the taxes they pay will exceed the benefits their families receive.”

Despite the significant benefits of high-skill immigration, some politicians continue to push for legislation that would result in fewer high-skilled immigrants admitted in to the United States. For example, Sens. Tom Cotton (R-AR) and David Perdue (R-GA) are co-sponsors of the RAISE Act (S. 1720), a bill that purports to advance high-skill immigration while drastically reducing legal immigration overall. The RAISE Act would change the formula that determines how high-skill immigrants seeking to come the United States are prioritized. The number of employment-based green cards available for skilled immigrants (and their immediate family members) would remain unchanged.

However, because the bill would cut or eliminate several forms of immigration that don’t emphasize skills—such as family reunification and the diversity visa—it would effectively result in far fewer skilled foreigners immigrating to the United States. That’s because many immigrants who are admitted into the United States under visa categories that don’t emphasize skills are nevertheless college graduates. Thus, under the Cotton-Perdue approach, high-skilled immigration would very likely decrease, even if the proportion of immigrants who enter the United States with a college degree grows.

President Trump and his advisers have often called for the United States to adopt an immigration system modeled after Canada’s approach, which uses a points-based system that generally prefers skilled foreign workers over family-based immigrants. However, as Alex Nowrasteh, now of the Cato Institute, has pointed out, Canada lets in far more skilled immigrants as a percentage of its population than the United States currently does. He notes that the “number of skilled-worker immigrants to Canada was equal to 0.18 percent of that country’s population” in 2013. If the United States were to replicate Canada’s system, therefore, we’d issue about 600,000 employment-based green cards annually—yet under current law, we issue just 75,000 of these green cards every year.

If the president wants to make America great again, he should call for an expansion of high-skilled immigration to improve the competitiveness of U.S. companies, reduce federal deficits, and fuel American economic growth.