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27 Oct 2009, 11:59PM PT

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The Importance Of Skilled Immigrants To The American Economy


Closed: 27 Oct 2009, 11:59PM PT

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One of the most difficult concepts to grasp, at times, is the difference between a zero-sum game and a non-zero-sum game. This becomes especially evident when discussing skilled immigration in America. There are many who are quite against the idea of giving visas to skilled foreigners to come to the US, believing that these individuals "take away jobs" from Americans. The only problem is that this is not supported by the data. That's because jobs are not a zero-sum game. There is not a set number of jobs that cannot change. And skilled immigrants have a long history of not just coming to the US, but also in creating a significant number of new jobs.

The importance of skilled immigrants in driving new jobs has been known for years, but the trend has only accelerated over the past decade. That older study found that 25% of Silicon Valley companies were founded by immigrants. A more recent Duke study found that this number has spread throughout the US: of tech- or engineering-related companies founded across the US, over 25% were founded by immigrants. In Silicon Valley, the number is now 52.4%. These companies are creating tremendous new job opportunities, not taking them away. Growing jobs is quite important.

Furthermore, it's difficult to see how keeping skilled immigrant labor out of the country helps the US. Those same workers do not disappear. Instead, they join tech companies in their homeland, where they end up competing against US companies. Shouldn't we want the best and smartest individuals working for US companies and helping to create US jobs, rather than the alternative?

Many of the concerns about skilled labor immigration tend to focus on the controversial H-1b program, with most of the complaints pointing to various abuses with the program. But we shouldn't be throwing out a good idea (encouraging skilled labor to come build companies in the US) with the fact that the program itself has been abused at times. If there are abuses, let's fix the abuses, while looking at better ways to encourage immigration from those we want to help us building our economy.

The Innovation Movement is an effort by the Consumer Electronics Association to make more people aware of such issues, and to make sure that Congress actually takes these issues into account, rather than just focusing on the patriotic headline while ignoring the unpatriotic results.

In this Insight Community Conversation, we're looking for thoughtful and well-written discussions on skilled labor immigration, and how to best encourage it. These can be ideas on how to respond to critics of skilled immigration programs, how to improve our current programs (such as the H-1b), or even brand new ideas for how the US could best encourage skilled immigration and enabling the creation of more jobs in the high tech sector. The best results will be used as posts on the Innovation Movement website.

10 Insights


I believe this is a perfect "short-term; long-term" phenomena.

Lowering costs (true, even if it brings up thoughts of "exploitation") and having people who are desperate enough for a better life that they will take chances and create jobs, is obviously a good thing.

Taking advantage of it, and thereby having the "good life" as a consequence, leads us to complacency, and when the bubble of immigrant exploitation bursts????? I don't need to say more, you know what will happen; if only because we just went through that with the financial institutions.

Still, I think immigration and the assimilation of immigrants is a good thing.

Gene Cavanaugh (Marion Eugene Cavanaugh on the USPTO web site) specializes in small entity patenting (what the founding fathers intended in the US Constitution).
Chris DePuy
Wed Oct 14 3:28pm
The key is to produce things that have value greater than that expended.

If it takes an inflow of immigrants to one particular job or industry to accomplish this, then its good for that company or industry, but also for our country because valuable goods are being produced.
Gene Cavanaugh
Sat Oct 17 5:01pm
Absolutely true, and well-stated; but only in the short term. Once that crutch is gone (by a rising standard of living in the countries supplying this benefit) we will have Americans who are accustomed to sitting back and "letting someone else do it", and unable to fill the gap!
Gene Cavanaugh
Sat Oct 17 5:01pm
Absolutely true, and well-stated; but only in the short term. Once that crutch is gone (by a rising standard of living in the countries supplying this benefit) we will have Americans who are accustomed to sitting back and "letting someone else do it", and unable to fill the gap!

Skilled migration involves not only a flow of expertise, but also cultural and societal expectations and traditions that may clash with the American way of life. It is not enough to judge a skilled migrant on his talents, but also whether or not he is willing to adapt to being an American, with freedom of speech, freedom of association, freedom of religion, and the equality of everyone under the law.

Firstly, this has to be a non-partisan initiative. Without all parties involved in the immigration process, you will inevitably get sore feelings and accusations of bias in migrant selection.

Secondly, the problem of illegal immigration has to be comprehensively dealt with. "Jumping queue" is not only unfair, it also impedes the actual flow of skilled migrants who are willing to go through the legal process. It generates ill feelings between those here legally and those who are not, and discourages people from the legal migration path.

Thirdly, the process of legal immigration has to be streamlined. Currently, there are too many roadblocks and too much red tape in the way; for example, a company must prove that there is no American who is qualified for a particular job before hiring migrants. While background checks are required, there should be a re-look at the process.

It is also worthwhile to note that the practice of 'anchor babies', migrants sucking off the public teat through welfare payments, and wielding dual-citizenship (hence transferring money out from the USA to their native land) are all issues that cloud the migration of skilled personnel to America, and should be discussed and resolved.

Producer of cross-industry conferences and training events based on market and business intelligence in the South and South East Asian region.

This is a big argument all the time. I am always hearing about people wanting to move to one of our countries but others against it. I think alot of people have forgotten why they are here. Their relatives were allowed to come. Their relatives who came, alot of times, had bad accents, were poor and needed jobs. Some even were criminals. Yet time and again we conveniently forgot because, as people, we got in and now want to protect our prize from everyone else. We also forget that moving money makes the economy better and that is the most important part of this.

Importing labor and Importing Employers.

There are two groups of people wanting to move to another country. One group has nothing and wants to come and make a name for themselves from the ground up. We try to refuse these people because "they will take our jobs by underselling us." (Competition is good btw.) Due to minimum wages and other considerations, these people aren't such a big threat. You will get the same pay as they do, except you are local and probably easier to deal with because you are already culturally acclimated. These people fill jobs nobody wants or nobody is qualified for and available to hire. For instance: the guy who runs a hog barn but can not find anybody who wants to work their except the convict and the two lazy guys who only applied to say they did and get their payout from the gov't.

The second class is the important one. These people want to come and start new lives from the foundation up. They will build companies and hire people. Ground up people maybe but current citizens. Once the company is in place they will begin moving money around and make our economy better. Some of these people are quite intelligent. Some are wealthy to an extent. Some have skills that make good startups.

My question then is this. Obviously there are more than one type of people wanting to come. We need to find out who is who and focus on the second group. This shouldnt stop the first because we should make amendments to allow the second more easily. We need the first to prevent companies, like hog barns, from going under from lack of labor. This way new money comes in, if only 40% of the companies succeed who cares. They spent money building it, they earned the chance by being willing to try.


P.S. I got the number 40% from a government thing on this subject I recently seen on tv.

Canadian. Installer. Technician. Enlisting(Navy). 25.
Ben Nesbitt
Sat Oct 17 12:06am
I see others commenting on labor in place losing their jobs to incoming labor. People in the losing job position complain. I would too. Its a hard line to walk because sometimes it is necessary, maybe the incoming guy was better at the job. Maybe the company is falling apart and cannot support the current staff, and I do not mean an attempt to increase the stock price but a legitimate problem. Other cases are possible as well.

/ / / / THE IMPORTANT PART / / / /

People losing their jobs sucks for them and their families but preventing a company from succeeding purely on the principle that people who have their jobs deserve them is stupid. You DO NOT deserve a job. You EARN the PRIVILEGE of having it. You do this by working hard and providing a VALUABLE RESOURCE. If you don't then you are released or replaced. Sometimes companies do this out of greed, which is wrong because you have earned the position but they would rather cheap out and pass a lower quality to the consumers for the same price.

GM used the idea of people deserving their jobs and nearly went bankrupt. You don't deserve 70 bucks an hour, platinum plated retirement package, full benefits etc. It is nice but you do not deserve anything. You do not even deserve to be treated nice.

You earn everything you get, although sometimes you get less than you have earned.

Choose wisely.

H-1B has issues. It needs work. It seems to contribute to people getting less than they earn. People should get what they have earned. If they don't, they will see what they get and either aim to earn only that or attempt to force a revolution, a change. Revolution is good for them, bad for employers. Treat your labor as a precious resource.
David Swan
Mon Nov 15 12:38am
I would kind of agree with your comment with regards to the split in immigrant background. This questions is one of economics and as such it is a numbers game. The simple fact is that more supply of labour drives down wages. Given that the US has to compete in the world based in intellectual capital the demand for low skilled labour will fall (especially as more and more processes are automated). In this sense the US needs more of the second group than the first. The working class could do without the competition for jobs.

I truly believe there is a way to solve the "immigration problem", stop the long term consequences of artificially cheap labor, and still be "fair and balanced" with the ROW (rest of the world). I also believe it won't be implemented, but that is a different thread.

Simply make it easy for immigrants to sue for wage disparity. That would level the playing field for Americans, while not unduly discouraging desirable immigrants. Of course, it would also accelerate the trend toward jobs fleeing overseas, since trying to enforce American minimum wage standards overseas would both be an infringing on foreign sovereignty and impossible; but that, also, is another thread.


Gene Cavanaugh (Marion Eugene Cavanaugh on the USPTO web site) specializes in small entity patenting (what the founding fathers intended in the US Constitution).
Ben Nesbitt
Fri Oct 16 11:29pm
This has some merit but I believe would cause the problem of cheap and inexperienced labor suing to have the same pay as more expensive and experienced labor. Those in positions then of experience would quit trying because they wouldn't need to. Being better wouldn't gain anything, you wouldn't get paid more, someone would just sue to level it out again. This would lower quality across the board. People would still want to move here because suddenly you make it easy to gain higher paying jobs without much effort. Lawyers typically have a percentage of gain type business model for the plaintiff side. The overall cause if this occurs is very bad if you consider the loss of quality in areas like medical, construction, R&D, and electronics.

This article does nothing other than recite, yet again, what high-tech companies and their lobbyists want the rest of us to believe. It is full of half-truths and outright lies.

1. Immigrants with H-1B visas do not take jobs away from Americans.

This is plain false. I know, because I lost my job to a guy fresh off the boat from China whom I helped train. Industry-funded studies that supposedly prove this are flawed. They cite statistics that show, for example, that there is little unemployment among software engineers. They don't consider that engineers who have been laid off may have taken other jobs to survive, like the Nobel Prize contributing scientist who, at age 57, was driving a bus for $10 an hour. The study(Saxenian,1999) that showed that 21% of Silicon Valley firms were started by immigrants also showed that rates of entrepreneurship among immigrants were lower than among Americans. So if more Americans were allowed to enter the field, this finding suggests that more, not fewer, new startups would result.  

2. If we don't import more H-1B engineers, we will not take advantage of the "best and smartest" engineers.

H-1Bs are not the best and smartest. There are already categories in immigration law to admit those. H-1Bs are the cheapest. The program has been used to bring in cheap labor and push out older engineers, sometimes as young as 40.

This insight topic does not even admit the possibility that the immigration laws have been abused and American workers have lost their jobs because of it. The author assumes that the H-1B program is a good thing and asks for suggestions on how to respond to critics of skilled immigration programs.

So here's my idea: Abolish the H-1B program. Allow American students to major in computer engineering with the expectation that they will get good jobs when they graduate. As for shortages of engineers, don't worry. There will be no shortages. College-educated Americans are crying out for good careers. Let the Consumer Electronics Association join me in promoting engineering education instead of importing our skilled workers from other countries.

Allan Masri is currently a free-lance programmer living in Florida. He spent 15 years in Silicon Valley working for firms like Apple, Netscape, AOL, and Palm.
Ben Nesbitt
Fri Oct 16 11:48pm
Adding grants to augment this idea, increasing the ability for current citizens to get the required training, focusing on demonstrated ability, need and desire, would accelerate the outcome of this idea.

On number 2, Allan is right in a sense. H-1B people are quite often cheaper. They are not necessarily less intelligent however. They may be in some cases, average in others and some might even actually be better. The problem lies in proper qualification, this is obviously lacking. A more developed, stricter method of qualification will slow the incoming job market. Eliminating what can potentially be a method to import needed skilled labor is a bad idea. Especially since the government employs some of these, they will just make loopholes to allow it that will degrade the system as a whole. Yes it needs further refinement. Yes it needs better control. Close the problem spots instead of eliminating its flow or other areas will spring leaks.

Allan, my bro is a programmer. I feel your pain. Your field has some brilliant minds. Job security is important to me. I am Canadian but the idea translates to both countries. We should help those already in place, and those who already live here to step up to replace any slack before taking in immigrants to fill these positions. The exception is exceptional applicants. Sometimes someone from somewhere else really is that good. This shouldn't be a method to get cheap labor, instead it should be a method to import serious skill when it is lacking. Perhaps a higher minimum wage for H-1B workers. Unlike lawsuits, a mandatory minimum that only applies to immigrants offers native citizens the edge of working cheaper than the outside labor. The idea needs work but internal labor should be considered valuable.
Allan Masri
Sat Oct 17 8:19am
OK, Ben, since you are a Canadian you are probably not familiar with American immigration laws. The problem is not that the H-1B program has loopholes. The problem is that the program itself is a loophole. It already contains provisions like the ones you suggest, namely that H-1B workers be paid the prevailing wage. But employers have dozens of ways to get around this, such as giving a job description that doesn't fit the actual job. The program resembles indentured servitude in that the workers cannot quit unless they leave the country, nor can they change employers, since they will thereby lose "time served" in working toward permanent residency status, which usually takes seven years, but is sometimes extended by the employers, who purposely miss deadlines for filing and employ other legal tricks. During those seven years of servitude, the employee does not need to be promoted or given a raise, nor does he/she have any leverage to ask for bonuses or stock options. Anyone interested in the intricacies of the H-1B program should consult Norm Matloff's web page, http://heather.cs.ucdavis.edu/h1b.html.

The H-1B is not intended for "exceptional" performers. There are other immigrant programs for those people.

Rather than tinker with the program, which will give its abusers and their lobbyists opportunities to replace the loopholes that already exist with others, the whole H-1B program should be abolished. Companies should be required to prove that they need an immigrant before they can simply import one. They should also be required to set up training programs where unemployed residents can develop new skills. They should also be required to show that they have tried to open branches in depressed areas (like Flint Michigan) before they can open them in China and India. Engineering companies can make a profit without screwing their employees. The current laws make it too easy for them to take the low road.

Since the earliest days and humblest beginnings of the great American economic experiment, immigration has played a major role in the USA's rise to global economic power and dominance.

Attracted by America's open, innovative economy, personal freedoms, and political stability, wave upon wave of immigrants have moved to the land of opportunity.

There is a strong historical case that America's economic dominance is closely related to how the USA has welcomed immigrants and has economically empowered people regardless of their culture, beliefs or personal background.   This idea is based on the likelihood that new and diverse backgrounds and ideas are more likely to spawn new and innovative solutions.  However the high value of immigration is also borne out by research such as the skilled immigration study cited above by A. Saxenian that concluded:

... the task for policymakers remains to maintain open boundaries so that regions like Silicon Valley continue to both build and benefit from their growing ties to the Asian economy.

More recently an analysis by the Peterson Institute for International Economics suggested how America's increasingly restrictive immigration policies are actually detrimental to the national interest:

An increasingly vicious combination of long-term trends in the form of retiring baby boomers and stagnating US educational attainment, combined with increasingly restrictive laws on high-skilled immigration increasingly undermines the US position. This will seriously jeopardize long-term economic growth opportunities, especially for US high-tech sectors.

As the the Innovation movement notes above, a key point in this globalized world is that we are not playing a zero sum game.   Efficient systems and production rely on using those best suited to working hard and tackling the challenges faced by modern business.  History makes it clear that strong partnerships evolve over time with people from many countries and backgrounds. Not only do international workers bring skills and innovation to the American table, they create international relationships - both business and personal - that help bring international understanding and stability to the entire globe.   The question is not "how can we make jobs only for Americans", rather it is how can we all work together to get the jobs done in the best way possible using all the human resources at our disposal.     

The stakes have never been higher, and economic clear thinkers know that Americans do best when we partner with the skilled, innovative, and hard working immigrants who are themselves seeking the promise and prosperity of a land filled with opportunities for everyone.



Publisher of travel, history, and news at several regional and national websites and blogs including "Technology Report". Annual Technology conference coverage includes Consumer Electronics Show in Las Vegas and Search Engine Strategies San Jose.

I have had the opportunity to work with several immigrants lately (mostly Spanish and Chinese), and while people are the same the world over, some good, some bad, the quality of the immigrants I am privileged to work with is very high.

At the same time, since they give back FAR more than they take, they are inadvertently  contributing to a general feeling of "entitlement" for the "me generation", and this, while GREAT in the short term, is TERRIBLE in the long term!

We need more laws to (somehow) level the playing field - the only thing that makes sense is to mandate a better deal for immigrants, but human greed makes that not an option.

Not sure what we can do, other than junk another generation.

Gene Cavanaugh (Marion Eugene Cavanaugh on the USPTO web site) specializes in small entity patenting (what the founding fathers intended in the US Constitution).

Since I work for Floor64, I am not eligible for the award, but this is an important topic, and I wanted to contribute as well.

The issue of skilled worker immigration is certainly a hot topic within the technology sector.  There are a few key points that are important for anyone to understand to make sure that the discussion stays on point and is not derailed by tangents.

  1. Skilled immigration programs and illegal immigration are entirely different issues.  All too often, skilled immigration programs get included in wider discussions on immigration itself, and that distorts the picture.
  2. Skilled immigrants do not "take" jobs.  This is a myth put forth by those who ended up losing jobs.  Their mistake is that they think that were owed their original job.  If someone else can do their job better, then it makes perfect sense to hire the other person.  It's competition and it's what helped make America strong.  It's no different than claiming that direct phone dialing "took" jobs from operators.  Progress creates many new jobs.
  3. Jobs are not a zero-sum game.  Many people assume that if an immigrant comes to the US, it means one less job for an American.  This is simply not true.  A productive worker helps create new jobs.
  4. It is uncomfortable for those caught in the shuffle.  This is a key point that often gets lost in the debate.  For those who end up having to switch jobs, it is an uncomfortable transition, and they will often lash out and falsely blame immigrants.  Any policy that includes helping bring in more skilled immigrants needs to be cognizant of this, and should also include help finding additional jobs or skills training for those caught in the transition.

With those four things in mind, it is possible to create a program that helps the overall economy, while recognizing the difficulty for those who face personal turmoil due to a changing workforce.  However, for those who insist that "foreigners took my job," it needs to be asked: would you be better off if those same foreigners built a company overseas that forced your entire company to shut down?  Isn't it better to have the jobs in America, where productivity and success can and will create new jobs?

As for the H1-b program, it is clearly flawed and abused widely.  However, its purpose -- helping skilled foreign workers get jobs in America is undeniably a good thing.  The focus should be on stomping out the abuses.  The law requires that H1-b's are paid the equivalent wage of others with that same job.  This is often ignored or avoided.  Cracking down on abuse, while also focusing on ways to make the H1-b program better and more efficient can only help the American economy.

All in all, America is a nation of immigrants.  Throughout history, we've welcomed immigrants from all over to our shores, and many of the biggest economic successes in our history were built through skilled immigrants coming to America.  It would be a shame if we stopped that now, and slowed down American innovation, while aiding it abroad.

Michael Masnick is the founder and CEO of Floor 64, Inc., and the editor of the Techdirt blog. He frequently writes and speaks on various topics related to innovation.

A major flaw in many discussions of the immigration problem is that they deal with a subset of the overall problem, and as such, cannot really do it justice, much less resolve it, in whole or in part. The title of this discussion is an example of a such partial approach.

The issue of a skilled immigrant is not the same as that of an immigrant operating under H1-b.  The issue of what happens to such an immigrant who remains illegally in the country after her/her visa expires is another.  What do to about the children of illegal immigrants who nevertheless attend college in this country (often at public expense), excel in their studies, and yet are prohibited from completing a 4-year degree, is still another, and so on.

What no one in the administration or congress seems wiling to do is to address the entire immigration situation.  That means revisiting the basic system, which currently favors Northern Europeans. It means addressing persons who are here illegally (whether because they entered illegally or because they overstayed a visa) and those who want to come legally. It includes those who only want to come for seasonal work every year and be allowed to return.  It means looking at millions of young, healthy immigrants who earn money that can't report and coupling that with the fact that there are fewer and fewer healthy citizens to support social security.

It means beginning by realizing that this country will never be able to create a solution if it is unwilling to create a system of national ID cards.  They exist in Canada and throughout the European Union and democracy hasn't visibly suffered as a result.  

Once a means is established to identify who is here, then anyone who has been here and has had children in the public school system can be assessed for for share of the national burden, whatever that may be interpreted to mean.  Then, fair policies should be created to determine what sorts of quotas should be extended based on skills that are needed or on the ability and willingness to invest money to create companies and hire American workers or because there are possibly surgeons and medical doctors willing to agree  to work in rural areas in the U.S. for 10 years or more in exchange for permanent residency residency -- persons with knowledge or financial assets or professional skills that do not directly complete with the excessive numbers of persons now unemployed in this country.  That is  the basis for the complete discussion of immigration that should precede attempting to resolve subsets of the discussion.

Steve Bergman has Been a management consultant in telecom, technology,and strategic planning for more than 30 years. He is multicultural and fluent in Spanish.

Perhaps the most famous tech worker to immigrate to the United States was Albert Einstein. And if you look at the Manhattan project, you'll soon realize that skilled tech-sector immigrants helped end World War II. Maybe that's what we need -- a list of America's most inspirational immigrants. The governor of California is an immigrant. Barack Obama's father was an immigrant...

The list goes on and on. In fact, America was founded by immigrants! The pilgrims who settled in Jamestown and Plymouth Rock arrived from England, and ultimately (over the next 400 years) created a slew of jobs! With enough examples, it becomes clear that the problem is just a lack of understanding.

It's important to recognize that these are difficult economic times. But for that very reason, America needs to take advantage of an influx of skilled labor that could help the economy grow. The stimulus legislation passed earlier this year included many thoughtful new policies. Perhaps the struggling world economy also offers a chance to urge new reforms to our immigration policies.

Obviously the word "immigration" has become a hot-button for political debates. It might help to come up with a better label for this issue. ("International technology development program"?) It's important to emphasize that it's skilled immigration that's being discussed. That distinction could eliminate many of the knee-jerk reactions that have blocked immigration reform.

If there's low public support for skilled labor immigration, the solution is outreach and education. Share with your neighbors if you've heard an inspiring story about a skill-labor immigrant, or if you know of a company in need of workers. Make your Congressmen aware of the issue, and ask friends in your community to do the same. But most importantly: talk about the issue. If people can change their minds, then the change in the world will follow.

David Cassel is a professional technology journalist and an amateur history buff
Jim Laws
Wed Aug 25 11:52pm
Today's Americans were once immigrants so stopping immigration might not be very helpful as it brings skilled labor.
Ben Fuller
Mon Dec 6 7:37am
I couldn't agree more with your insight. The simple fact is that the US economy needs to compete on skill and skill is a resource, so why not let skill in from other countries (which hasn't been paid for in terms of education and training costs).