Let's Keep Skilled Immigrants in the U.S.

In order to stay on top of the rapidly changing global economy, the U.S. needs to make it easier for foreign talent to stay in the country

Here's a story about an immigrant realizing the American Dream—well, almost. In 1996, Denis Kholodar won first prize in a national engineering contest in Russia and came to the U.S. to complete a PhD in aerospace engineering. His professor and adviser at Duke University, Earl Dowell, who describes Kholodar as one of the brightest students he has ever worked with, took him under his wing. Together, they pioneered new techniques in aerodynamic modeling to reduce wing flutter in jet aircraft.

After earning his PhD, Kholodar landed a fellowship with the U.S. Air Force. For eight years, he didn't leave the U.S. out of fear of not being able to re-enter—he says re-entry background checks on Russian scientists can take as long as six months. Though Kholodar wanted to remain in the U.S. and make it his home, he had to leave when his visa expired last year. His trajectory illustrates one of the problems being overlooked in the immigration debate—the U.S.is losing out on the formidable contributions of legal, skilled immigrants.

Executives of companies like Boeing (BA) and Lockheed Martin (LMT) often raise the alarm about their aging workforce and the shortage of engineers (see BusinessWeek.com, 7/10/06, "Engineering Gap? Fact and Fiction"). Yet Kholodar says both companies wouldn't interview him when he applied for a job because he wasn't a permanent resident. (Both declined to comment.) Kholodar points out that hiring a nonresident requires extensive paperwork. And the U.S. Air Force couldn't hire him because he wasn't a citizen.

Global Edge

The easiest path Kholodar saw to citizenship was to marry an American, but he couldn't bring himself to wed someone he didn't love. So he looked outside the U.S., and Canadian jet manufacturer Bombardier readily snapped him up. Professor Dowell, who just won a prize known as the Nobel of the aerospace industry from the American Institute of Aeronautics & Astronautics for his research, says America's loss ended up being Canada's gain.

In a previous column, I wrote about research completed by my students that shows skilled immigrants give the U.S. a greater global edge (see BusinessWeek.com, 1/3/07, "Open Doors Wider for Skilled Immigrants"). They contribute to the economy, create jobs, and lead innovation. Immigrants are fueling the creation of high-tech businesses across our nation and creating a wealth of intellectual property.

Our research received extensive media coverage because it was one of the first studies to quantify the contribution of legal, skilled immigrants at the national level. Most commentators agreed that bringing in the best and brightest from all over the world is good for the U.S.

Laying Roots

Unfortunately, some commentators used our research as fodder to recommend lifting the caps on a work-visa category called the H-1B. They missed the point. Our research didn't advocate lifting the H-1B caps—it highlighted the benefits of a workforce that's entrepreneurial and well educated in math and science, common qualities in skilled immigrants who start engineering and technology companies (see BusinessWeek.com, 2/6/07, "The Impact of Immigrant Entrepreneurs").

What I have said repeatedly is that we want to attract the world's best and brightest and bring them to stay permanently. H-1Bs are temporary work visas with a six-year time limit and that impose many restrictions. H-1B holders can only work for their sponsoring employers—they can't start new businesses. Their spouses aren't even allowed to work or obtain Social Security numbers—which are usually needed for things like drivers licenses and bank accounts. Thus, it's pretty hard to lay deep roots.

Our research showed that the percentage of foreign nationals contributing to U.S. international patent applications—the ones that give us a global edge—increased 331% in eight years. This is a welcome contribution to U.S. intellectual property. The problem is that many of the engineers and scientists filing these patents, like Kholodar, may have to leave the country—and take their knowledge and experience with them. In 2006, one in four U.S. international patent applications had foreign national authors or co-authors. The increases correspond to the increasing numbers of foreign students here on visas that expire shortly after graduation and H-1B-holding workers in the U.S.

Peculiar Quotas

Immigration data show another brewing problem. The current wait time for skilled immigrants from India and China to be granted permanent residence stands at nearly six years. In other words, U.S. Citizenship & Immigration Services is backlogged, currently processing applications for those who applied for permanent residence in 2001. Additionally, there's a yearly limit of around 140,000 employment-based permanent-resident visas for skilled workers. And to further complicate things, no more than 7% of the visas are allowed to be allocated to immigrants from any one country.

Immigration attorney Murali Bashyam of lawfirm Bashyam & Spiro explains that the per-country limitation serves to avoid monopolization of visa numbers by applicants from any one country. Under current law, no more than 9,800 permanent resident visas can be issued to employment-based immigrants (including their spouses and children) from any single country.

However, he says this policy bears no relation to demand: Countries with large populations or a large number of emigrants have the same quota as countries with small populations or low emigration rates. We allow as many skilled immigrants from Russia and India as we do from Iceland and Senegal.

So, we're now setting the stage to force those we've educated in our universities and trained in our corporations to return home or go to other countries where they could become our competitors. This is despite the fact that we still need their skills, and that most of them desperately want to stay.

Powerful Incentive

Economist and 1992 Nobel laureate Gary Becker says "it is simply foolish for the U.S. to keep out the skilled immigrants we badly need". He prescribes increasing annual quotas for highly skilled professionals by many multiples, with no per-country limits. He advocates the elimination of the H-1B program so that all such visas become permanent. Becker believes current limits place the many skilled applicants from India and China at an unfair disadvantage, while the U.S. gains nothing from the policy.

Robert Litan, vice-president of research and policy at the Kauffman Foundation, suggests we grant automatic citizenship to students who complete degrees in mathematics, engineering, and science from qualified institutions of higher learning. These are precisely the individuals we should be seeking to attract and retain, and the promise of citizenship upon satisfactory completion of their studies would be a powerful incentive for many to come, he says.

I believe the U.S. needs to be very selective in who it admits and should screen immigration applicants very carefully. But I agree with both Becker and Litan—let's attract the best from our competition and get them here to stay permanently.