Trump only hurts America by stifling high-skilled immigration

In the State of the Union Address in February, President Trump proclaimed that “Legal immigrants enrich our nation and strengthen our society in countless ways. I want people to come into our country in the largest numbers ever.”

His words were based on the reality that high-skilled immigration to the United States has been, for a long time, a fundamental driver of wealth and job creation. Yet as our new research shows, the administration needs to get out of its own way for this to take place.

{mosads}Politicians of all stripes are always looking for ways to grow the economy, strengthen the labor market and increase the United States’ competitive advantage on the world stage. As the annual H1-B visa application process kicks off in the coming days, we should remember that it can enable just that type of economic boost.

The H-1B visa program, created by Congress in 1990, has played a fundamental role in driving innovation and business growth in the United States for almost 30 years. The work-focused visa allows U.S. companies to hire high-skilled, foreign-born workers, predominantly in the IT and tech industries.

Research shows that for every temporary high-skilled foreign worker hired by a U.S. firm, 5 to 7.5 new domestic jobs are created in that firm’s industry, and a 1-percent increase in foreign STEM workers leads to a 7- to 8-percent increase in native workers’ wages.

A second program, for F-1 student visas, also helps attract the best and brightest global talent to the United States. In 2018, 1,094,792 international students studied at U.S. colleges and universities, representing roughly 1 in 20 college students. They contributed $39 billion to and supported more than 455,000 jobs in the U.S. economy during the 2017–2018 academic year. 

International students make up 81 percent of full-time U.S. grad students in electrical engineering and 79 percent in computer science. 

A 2010 study found that every percentage-point increase in college graduate immigrants as a share of the U.S. population correlates with a 9- to 18-percent uptick in patents per capita — a tremendous, innovation-fueling outcome. 

But despite the obvious benefits and apparently widespread support for more high-skilled immigration, a notable barrier remains: The Trump administration is sending mixed signals to foreign workers and students. 

There has been a dramatic increase in denials for H1-B visas, with approval rates falling from 87 percent in 2016 to 59 percent in 2017. Increased scrutiny for H1-B applications, in the form of “requests for evidence” (RFEs), jumped from 17.3 percent to 68.9 percent between 2017’s first and fourth quarters. 

This appears to be having a negative effect on the number of high-skilled workers applying. U.S. Citizenship and Immigration Services (USCIS) received 190,098 H-1B visa applications in fiscal year 2018, a 4-percent drop from 2017 when 199,000 applications were filed. That is also a sharp decline from the peak in 2016 when the government received 236,000 applications. 

As for F1 visas, the number of new international students attending American colleges and universities in the 2017-18 academic year dropped for the second straight year, to about 271,000. That’s down from about 291,000 in the 2016-17 academic year and 301,000 in 2015-16.

Immigration policy experts and college administrators attribute the decline to the administration’s drive to restrict immigration and an overall sense of a U.S. political climate that is hostile to immigrants and foreigners.

Policymakers should instead look to the immigration advances of America’s neighbors north of the border. In recent years, Canada has been liberalizing its high-skilled immigration visa system. Its 172,500 annual skilled-work visas are more than double the number issued in the United States, at a rate per capita that is almost 18 times higher than that of the United States. 

In order to avoid stifling the great innovations and financial investment enjoyed by the United States thanks to high-skill immigration, policymakers should raise the cap allocation of 65,000 to 115,000 under a system that would more closely align supply with demand.

The upper-limit cap — which includes those with master’s degrees — should be upped from 85,000 to 195,000, where it was from 2001 to 2003 under the American Competitiveness in the 21st Century Act (AC21). 

These reforms would ensure that the United States continues to be the global leader for international talent, business growth and entrepreneurial innovation.

Daniel Griswold is a senior research fellow with the Mercatus Center at George Mason University and co-director of its Trade and Immigration Project. Follow him on Twitter: @DanielGriswold. Jack Salmon, a Mercatus research assistant, contributed to the piece. They are coauthors of the new study: “Attracting Global Talent to Ensure America Is First in Innovation.”