Green-card blues
A backlash against foreign workers dims business hopes for immigration
reform
Oct 28th 2010 | Washington, dc
BAD as relations are between business and the Democrats, immigration was
supposed to be an exception. On that topic the two have long had a marriage
of convenience, with business backing comprehensive reform in order to
obtain more skilled foreign workers.
That, at least, was what was meant to happen. In March Chuck Schumer, a
Democratic senator, and Lindsey Graham, a Republican, proposed a multi-
faceted reform that would toughen border controls and create a path to
citizenship for illegal immigrants while granting two longstanding goals of
business: automatic green cards (that is, permanent residence) for students
who earned advanced degrees in science, technology, engineering or maths in
America, and an elimination of country quotas on green cards. The quotas
bear no relationship to demand, leaving backlogs of eight to ten years for
applicants from China and India. Barack Obama immediately announced his
support.
But the proposal never became a bill, much less law. Mr Graham developed
cold feet and withdrew his support; he was concerned that the Democrats were
moving too quickly, as the economic misery that has turned Americans
against foreign trade spread to dislike of foreign workers. Last year
Congress made it harder for banks that had received money from the Troubled
Asset Relief Programme to hire workers on H-1B visas, the most popular type
for skilled foreign workers. In January the Citizenship and Immigration
Service barred the use of H-1Bs for workers based on a client’s premises
instead of their own company’s, a move aimed at outsourcing companies, many
of them based in India.
In August even Mr Schumer, needing to look tough on outsourcing, pushed
through a bill sharply raising H-1B fees on firms that depend heavily on the
visas. Perhaps the most naked election-year hostility to foreigners
appeared during the debate in September over a Democratic bill in the Senate
that would have rewarded companies for firing foreign-based workers and
replacing them with Americans. Charles Grassley, a Republican senator,
responded with a proposal to prohibit any company that had laid off
Americans from hiring visa workers at all. The bill did not win enough votes
to break a filibuster.
Tightened restrictions, political aggravation and economic conditions seem
to be having an effect. In 2009 the number of employment-based green cards
and H-1B visas was the lowest in years (see chart). It took an unusually
long time for the quota of H-1Bs for the fiscal year that ended on September
30th to be used up. Several Indian outsourcing companies have made a point
of boosting local hiring at American facilities.
This is partly the result of the recession, which has hurt demand for all
types of workers. But in a recent report the Hamilton Project, a moderately
liberal research group, notes that the number of foreign workers in America
has been declining for some time. This might reflect America’s diminished
appeal to the world’s most sought-after workers, as well as brightening
prospects in their own countries. A survey for the pro-immigration Kauffman
Foundation in 2007 found that only a tiny proportion of foreign students
planned to stay in the United States. This almost certainly extracts an
economic toll, since immigrants are more likely than others to start
businesses or file patents.
America’s immigration policies have long put a higher priority on family
reunification than on employment. Legal immigrants to the country are more
likely to have failed to finish high school than either native-born
Americans or immigrants to other English-speaking countries. Immigrants to
Canada are far more likely to have a college degree.
Legislators from both parties have at various times advanced proposals that
would smooth the way for skilled migrants, but they have usually foundered
on the more intractable problem of dealing with illegal immigration. “These
two issues can and should be separate,” says Michael Greenstone of the
Hamilton Project. “We are giving up economic growth by putting the two
issues together.”
Democratic Hispanic legislators oppose separating them for fear of losing
business support for comprehensive reform. In principle, then, a Republican
takeover of the House might increase the likelihood of a stand-alone bill on
skilled immigration. That, however, is not the Republicans’ priority.
Lamar Smith, the Republican who would probably become chairman of the House
judiciary committee, is more focused on deporting illegal immigrants and
strengthening the border.
Still, it would be premature to write off the odds of immigration reform. If
Mr Obama is to accomplish anything in the next Congress, he needs to find
common ground with Republicans on something. Business-friendly immigration
reform might just qualify.