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Report: Are U.S. immigration policies hurting business?

Photo by yuan2003/Flickr (Creative Commons)

Compared with the United States, several other countries are doing more to attract skilled and entrepreneurial immigrants, according to a new report, and their economies benefit from it.

The report, issues by a bipartisan business and policy-oriented group called Partnership for a New American Economy, contrasts U.S. policies with those used in other countries to attract and retain foreign entrepreneurs, skilled workers and students. The data highlighted resonates in light of recent news of demographic shifts in the U.S., where the population is aging as immigration slows.

By 2018, the report predicts, there will be a shortage of skilled workers. From the report:

The US faces the following economic realities if it does not reform its immigration laws to keep up with its competitors:

SHORTAGE OF WORKERS IN INNOVATION INDUSTRIES: Jobs in science, technology, engineering, and math (“STEM” fields) are increasing three times faster than jobs in the rest of the economy, but American students are not entering these innovative fields in sufficient numbers. As a result, by 2018, we face a projected shortfall of 230,000 qualified advanced-degree STEM workers.

SHORTAGE OF YOUNG WORKERS: The US population is aging, baby boomers are retiring en masse, and the growth in the US labor force has slowed to historic lows of less than 1 percent. We cannot continue to produce the GDP growth the nation has come to expect without dramatic increases in productivity or welcoming more working age immigrants.

A STALLED ECONOMY: The US has faced years of stunted economic growth. History shows that new businesses are the biggest drivers of job creation, yet the most recent US Census data show that the number of business startups has hit a record low.

Other countries, including European countries with aging populations, have dealt with their labor needs in different ways, the report points out. This has included prioritizing economic goals, designing fast-track visa programs for advanced degree holders, tailoring visas to the labor needs of specific regions, creating visas designed to retain foreign graduates, and competing for investors and entrepreneurs with special visa programs, among other things.

That's not to say the U.S. hasn't been trying in its own way. Up to 10,000 green cards per year may be awarded to foreign entrepreneurs willing to invest at least $500,000 in a commercial enterprise and create U.S. jobs, for example. And a legislative proposal has been moving through the Senate that aims to make it easier for foreign graduate students to stay in the U.S. after they complete their studies and launch startup businesses.

Still, the U.S. lags behind other developed nations in the percentage of work-based visas offered, according to the report. Just in terms of startup visas, for example, countries such as the United Kingdom, Ireland, Singapore, New Zealand and Chile already offer them to prospective foreign entrepreneurs, most with relatively low minimum investment.

The report offers several case studies of immigrants who benefited from more lenient work-based immigration policies in other countries. From one of them:

Ajmal Awan, a Pakistan-native trained in engineering, has taken his skills to a variety of countries. In 2000, he and his wife, a doctor, moved to Dubai so he could work at a tele- communications firm. But their visa there was so temporary, they would’ve had to leave within a month if Ajmal ever lost his position. “It always felt more like a transitional thing,” Ajmal says of Dubai, “and I needed to think about my future and my kids.”

So in 2006, he began applying to move elsewhere. Despite the fact he was then working for an American firm in Dubai, he quickly looked to Australia, a place where his MBA and his wife’s advanced medical training would be helpful in the points-based immigration test the country uses to assess potential immigrants.

Because he was older than 35, however, his migration agent advised him his points score would be too low to easily immigrate. So to make himself more attractive, Awan applied directly to Victoria, a state in southern Australia, which had a regional need for engineers. Victoria agreed to sponsor him in September 2007, and with that points boost, the Awan family was awarded permanent residency in January 2008 — a month before they even relocated to the country.

That generous policy — which contrasts sharply with the temporary, high-skilled, H1B visa in the United States — offered a permanence that immediately resonated with Awan.

The report recommends strategies for the U.S. to stay competitive in the future, such as: providing visas for U.S.-educated foreign graduates in science, technology, engineering and math fields; awarding green cards based on economic needs; attracting foreign entrepreneurs with visas; making it easier for firms to hire highly educated foreign workers; allowing "seasonal and labor-intensive industries" access to foreign workers when U.S. workers can't be found to fill jobs; and allowing local governments to do their own recruiting based on regional needs.

The entire report can be downloaded here.