How America Loses a Job Every 43 Seconds
March 31, 2014 --
Tomorrow is a big day for the United States. No, not because of the nutty hijinks of April Fools' Day. April 1 is the first day that U.S. Citizenship and Immigration Services, a federal agency, begins accepting new H-1B visa petitions for 2015. An H-1B visa allows a company to create a new job for a highly-educated foreigner in the U.S. for at least three years. The H-1B program accounts for nearly all of America's skilled immigration.
But the H-1B program imposes an annual cap of 85,000 new visas: 65,000 with at least a bachelor's degree and 20,000 with at least a master's degree. Does this cap matter? Let us count the ways. In many years before the financial crisis and after, demand far exceeded this supply. In 2007 more than 150,000 H-1B applications for fiscal year 2008 visas were filed the first day allowed; no more petitions were accepted after the next day. In 2008 and again last year, high demand for visas led the application window to close after just four days.
For years, here at Tuck many of our best and brightest foreign-born MBA students have had to anxiously navigate these shoals of U.S. immigration policy to be able to apply their education here in America—working, boosting GDP, and paying taxes all here. All current forecasts are that today in early 2014, demand for fiscal 2015 H-1B visas will again be strong—thanks to forces including ongoing dynamism in high-innovation sectors such as information technology and biotechnology and also continued economic recovery in America and abroad as well.
Overly restrictive U.S. immigration policy hurts American workers, companies, and the economy. As Gordon Hanson and Matt Slaughter documented in their 2013 report for Compete America (a coalition of companies, universities, and research institutions) immigrants have long been a key part of America's talent pool, helping drive the innovation that creates jobs and higher standards of living.
There is a real, tangible cost to the U.S. economy of allocating far fewer skilled-immigrant visas than companies need. Most immediately, the cost is foregone jobs created in the companies and beyond. More broadly, the cost is foregone ideas, innovation, and connections to the world.
How many jobs is America today losing because of its immigration restrictions? As Matt Slaughter argued last week in his op-ed column kindly run in The Wall Street Journal, about one job every 43 seconds every single day that America is open for business. Click here to read this op-ed column (subscription required), or click here to watch his CNBC interview about it. And despite its sobering message, Happy April Fools’ Day tomorrow.
Articles © 2014 Matthew Slaughter and Matthew Rees. All rights reserved.
Publication © 2014 Trustees of Dartmouth College. All rights reserved.