4 proposals to improve our immigration system

The economics are clear: Businesses, employees benefit greatly from America’s global reputation as the best place on earth to make dreams come true.

Which reforms would best move the nation forward?

Some public policy issues are “lock them in a room” issues. Despite all the political posturing and raucous rhetoric, if you put a few Republicans and a few Democrats in a room and locked the door, they could probably hammer out a decent compromise before too long.

Immigration is not one of those issues. Not any more.

Since the failure of a bipartisan “Gang of Eight” immigration compromise in 2013, Congress has become more partisan. And Republicans have become more skeptical of immigration, as exemplified by President Donald Trump, whose most memorable 2016 campaign promise was to build a wall between Mexico and the United States.

Lock party leaders in a room to discuss immigration today, and they might take hammers to each other.

But whatever the politics of immigration in 2020, the economics are clear: American businesses and workers overall benefit greatly from America’s global reputation as the best place on earth to make dreams come true.

Maybe that dream is a safer and more prosperous life for you and your family. Maybe that dream is to build a fantastic company. Either way, that flood of determination and talent has long been the deep magic of American economic exceptionalism.

For instance: A new research paper, “Immigration, Innovation, and Growth,” looks at immigration over the past three decades and finds big gains in U.S. counties that received lots of immigrants. Local companies filed more patents, and there was more job creation and higher wages than elsewhere.

But you don’t have to dig into wonky research papers and understand their sophisticated techniques to understand the huge impact of immigrants on our everyday lives. Just look at your smartphone.

Immigrants drive high-tech

Immigrants have been key to America’s world-leading digital economy. No immigrants, no Silicon Valley as we know it.

In the country’s – and the world’s – most important tech hub, 64% of engineers are foreign-born. Indeed, more than half of U.S. startup “unicorns” have at least one immigrant co-founder. And immigrants overall account for nearly half of the U.S. workforce with a science or engineering doctorate, including 60% of workers in computer and mathematical sciences.

Immigration from Asia is particularly important. Researchers Sari Pekkala Kerr and William Kerr found that Chinese and Indian ethnic inventors accounted for 22% of U.S. patents in 2018 versus less than 3% in 1975.

We should encourage as many highskilled immigrants as possible to come here and stay. It would make China quite cross if more of its artificial intelligence experts decided never to go back home.

Of course, immigrants of all skill levels contribute to the American project. But higher-skill immigrants are especially valuable. So it is particularly worrisome that immigration restrictionism on the right seems to have expanded its complaint from undocumented immigration to low-skill immigration and now to some of the most talented newcomers.

President Trump’s decision to freeze new work visas, including those used by many tech workers and their families, is an exercise in economic self-harm. The move is supposed to protect the jobs of those already here in a time of economic crisis.

Restrictions have backfired

But there is no evidence to support this theory. In fact, just the opposite. Two similar efforts, during the 1930s and 1960s, to boost jobs and wages for domestic workers by sending home Mexican workers failed miserably.

Actually, now is the worst time to clamp down on immigration. Although Trump is promising to again “build the greatest economy in the world,” it really wasn’t doing much better than during the Obama years, despite deep tax cuts and more spending.

Most economists, whether on Wall Street or in Washington, say the United States is stuck at no better than 2% annual growth going forward. And the pandemic might well make that worse if politicians use it as an excuse to further close America to immigration and trade.

If that is what Washington politicians want to do, maybe we should lock them in a room and throw away the key.

James Pethokoukis, a columnist and policy analyst, is the Dewitt Wallace Fellow at the American Enterprise Institute, where he writes and edits the AEIdeas blog. Follow him on Twitter: @JimPethokoukis