Why Silicon Valley needs immigration reform

Tech joins agriculture and hospitality sectors in push for action

 

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By Russ Britt, MarketWatch

LOS ANGELES (MarketWatch) — For many companies, immigration reform has been a no-brainer for a long time.

It’s not just chip makers that need engineers and math whizzes they say they can’t find in the U.S. or farmers who need workers to pluck the oranges no one here wants to pick. It’s a number of industries and, some argue, the economy in general that needs a revamping of immigration rules so the U.S. can compete with the rest of the world.
Ultimately, reformists say, the U.S. is missing out on a chance to offset the jobs that have been exported overseas for years via factory migration.

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Obama unveils immigration blueprint

President Obama unveils his own framework for a bill before an audience at a Las Vegas high school.

President Barack Obama on Tuesday urged Congress to use new bipartisan momentum behind immigration reform to quickly pass legislation. For the first time in many years, Republicans and Democrats seem ready to tackle the problem together, Obama noted. Read: Senate unveils plan to overhaul immigration system.
The U.S. could keep graduate students here to create new jobs, new companies and, in some cases, new industries, said John Feinblatt, chairman of the Partnership for a New American Economy.
“We’ve got to face the fact that other countries are rolling out the red carpet for workers, and we’re not,” Feinblatt said. Laws limiting the number of skilled employees allowed to work in the U.S. hamper the ability of some companies to grow, particularly in technology, and the nation misses out on a considerable ripple effect in wealth, according to Feinblatt.
The Partnership for a New American Economy is a bipartisan group of mayors and business leaders from all sectors of the economy. The organization, whose members include Microsoft Corp. (NASDAQ:MSFT) Chief Executive Steven Ballmer, Boeing Co. (NYSE:BA) Chairman and CEO Jim McNerney and News Corp. (NASDAQ:NWS) Chairman and CEO Rupert Murdoch, has studied the issue together with the conservative American Enterprise Institute.
News Corp. is the parent of MarketWatch, publisher of this report.

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One of their key findings is that for every foreign-born student with an advanced degree allowed to work in the U.S., there are 2.62 more jobs created. But that kind of growth is hampered by what some call an arbitrary limit on H1-B visas of 65,000 a year. H1-B is a nonimmigrant visa that allows companies to employ foreign workers in speciality occupations.
“We need to have an immigration system that looks like today’s economy,” Feinblatt said.
In the technology, hospitality, farming and construction sectors, there are no debates on the viability of immigration reform and zero discussion on whether the estimated 11.1 million undocumented aliens now in the U.S. should be given green cards. For some companies, they need as much help as they can get and they aren’t picky about workers’ origin.
Chip-making giant Intel Corp. (NASDAQ:INTC) finds itself trying to grab as many H1-B visas as it can get during the application window in April, but its luck can vary from year to year, according to Lisa Malloy, spokeswoman for the company’s government relations office.
“Sometimes they’re gone in a week and sometimes they’re gone in several months,” she said. Malloy noted that Intel tries to hire U.S. citizens but has found a “skills gap” between those educated here and those who get their schooling abroad. Roughly 6% of the company’s work force in the U.S. are foreign graduates who are here on visas.
Intel is hoping Congress and President Obama can account for companies’ ever-changing needs when and if they pass some sort of immigration reform. “We think the [65,000] cap is an arbitrary cap. We think there should be escalators in there,” Malloy said. These escalators would allow companies to import more workers when the need is greater.
Intel also seeks to have per-country caps removed since much of the talent it wants comes from countries such as India and China, according to Malloy. Current restrictions can force a sought-after engineer to wait several years before being allowed to work in the U.S.
Feinblatt, who also serves as an advisor to New York Mayor Michael Bloomberg, pointed out that what emigration the U.S. does allow is usually not for economic purposes, and by missing that element, it’s falling behind a number of industrialized nations.
In a study published in May, the Partnership for a New American Economy determined that the U.S. grants 7% of its permanent visas based on economic need, while the proportion is far greater in other countries.
South Korea leads in that department with 81% of visas going for workers, followed closely by Switzerland at 80%, then Spain at 79%. Germany and the U.K. each dole out nearly 60% of their visas for economic purposes. And Canada is increasingly plucking away the foreign talent the U.S. doesn’t take, with 25% of its visas now dedicated for economic needs.

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Immigration debate gears up

Leading senators have agreed on a framework for imimgration legislation, but it's unclear whether they have enough influence to push a bill through the Senate or the GOP-led House.

Another study published in October from the Kauffman Foundation, an organization that supports entrepreneurship, says that of 1,882 engineering and technology companies founded in the U.S. between 2006 and 2012, 24.3% had at least one founder who was foreign born.
“Still, at a time when the U.S. economy needs it most, our immigration policies are stifling innovation,” wrote Laszlo Bock, Google Inc.’s (NASDAQ:GOOG) senior vice president for people operations, on the Internet-search behemoth’s public policy blog on Tuesday. “The 2013 cap for the H-1B visas that allow foreign high-skilled talent to work temporarily in the U.S. was exhausted by June 2012, preventing tech companies from recruiting some of the world’s brightest minds.”
Immigration is again in the forefront of public debate as Republican lawmakers have indicated a willingness to revisit the issue after GOP presidential candidate Mitt Romney failed to unseat Obama in November’s election, due partly to a large Latino vote in favor of the president. The sticking point is expected to be whether amnesty should be granted to foreigners already living in the U.S.
Republicans are warming to the idea of possibly granting legal status to a certain number of undocumented workers, but Obama and others are also looking to overhaul the way a number of other immigration issues are handled. If successful, it would be the first such across-the-board revamping since 1965.
Technology is not the only industry that feels stifled by current immigration policies. Farmers in California are having trouble getting their crops to market because they can’t get enough foreign-born workers to do the jobs U.S. citizens refuse to do. In many cases, growers hire only temporary crews to help with the harvest and those jobs are considered undesirable for locals, said Paul Wenger, president of the California Farm Bureau. They need to hire guest workers on a temporary basis, but current rules restrict such movement back and forth from Mexico, he said.
Farmers will try to hire on their own but may find themselves out of luck if Immigration and Customs Enforcement agents decide to conduct raids — which does happen on occasion.
“We were hearing reports of crews just disappearing,” Wenger said. “You work all year for that harvest and you’ve got one shot at it.”
Similar issues confront the hospitality industry, according to Shawn McBurney, senior vice president of government affairs for the American Hotel & Lodging Association. Hotel owners face the same issue as farmers; a number of the jobs they offer are unattractive to U.S. citizens and so immigrants are usually hired. A more robust guest-worker program would help resort owners that operate only during certain seasons.
McBurney remembers one Virginia resort that had planned a wine festival in 2005, but the cap for guest-worker visas already had been reached.
“They had to cancel the festival,” he said.
Also, the immigration department’s I-9 process that employers are supposed to use to verify eligibility for employment doesn’t accomplish the task at hand, McBurney said. For one, employers aren’t allowed to investigate eligibility for employment once a prospective worker has provided suitable identification, such as a driver’s license. And if they end up hiring an illegal immigrant, they could be penalized, he said.
“The I-9 process can be tricky and isn’t bullet-proof,” he said.