I'm very tech-friendly.

Photographer: Justin Sullivan/Getty Images

Give Green Cards to Tech Graduates? Yes, But Take Care

Paula Dwyer writes editorials on economics, finance and politics for Bloomberg View. She was London bureau chief for Businessweek and Washington economics editor for the New York Times, and is a co-author of “Take on the Street: How to Fight for Your Financial Future.”
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Hillary Clinton has a long checklist of proposals intended to show voters, millennials especially, her tech-friendliness. But one suggestion has caused dissension: Her support for stapling a green card to the diplomas of foreign students who earn advanced degrees in science, technology, engineering and math in the U.S.

This idea for making it easy for skilled immigrants to stay in the U.S. isn't new, and it has had some bipartisan support. President Barack Obama suggested the stapled green card in his first term, as did Mitt Romney in his 2012 presidential campaign. Silicon Valley executives have long advocated it to address what they claim is a shortage of qualified high-tech workers. One U.S. senator, Republican Jeff Flake of Arizona, has even sponsored the Staple Act.

But as Clinton is finding out, the politics is not so simple in an election year focused on anger -- expressed not only by Donald Trump and his supporters, but also by many in the Bernie Sanders camp -- over the lack of good-paying American jobs.      

Like Obama, Clinton says it makes no sense for the U.S. to invest in the education of some of the world's smartest people, only to send them back to India, China and other countries to start companies and compete against the U.S.

But critics of the influx of foreign students to the U.S. warn that, without safeguards, the policy would turn U.S. colleges into green-card factories that crowd out American students, drive down salaries and discourage U.S.-born students from STEM careers. This is not just a Trump applause line. The labor-backed Economic Policy Institute doesn't believe a tech-worker shortage even exists.

If Clinton is elected and pursues the idea, she'll need to spell out clearer definitions and limits. Otherwise, the policy could distort the U.S. higher-education system and the labor market. That's a lot of unintended consequences.

An automatic green card would grant foreign STEM grads permanent U.S. residence and work visas without having to win the H-1B lottery -- or be attached to a sponsoring employer. It would be a powerful magnet. Already, the U.S. is host to nearly a million college students from abroad, up 10 percent in one year. That's just under 5 percent of the college population, and represents the highest growth rate in 35 years.

Some kind of cap -- possibly pegged to the economic cycle and private-sector demand for specific skills -- on the number of stapled green cards seems reasonable. Without it, universities could grow more and more dependent on the foreign influx because they can charge higher tuition and fees to compensate for state budget cuts. It's not unreasonable to think that the lure of a green card could tilt the admissions scales even more in favor of foreigners, to the disadvantage of domestic applicants.

Anti-immigration groups and some lawmakers claim this is happening now. They say -- and Trump has often repeated -- that the wages of STEM workers are stagnant because of an oversupply of graduates. They say half of Americans with STEM degrees aren't working in those fields. They conclude that foreigners willing to work on the cheap must be elbowing them out.

But the studies rely on a cramped U.S. Census definition of the STEM labor market, which doesn't include high-school teachers, most academics and corporate managers. 

The National Science Foundation, using a broader definition, found only a tiny number, about 5 percent, of engineering, computing and math graduates working outside their fields involuntarily as of 2010. Other research shows that immigrants expand the economy by spending what they have earned, stimulating investment and job creation, and that they create jobs through their own startups. Overall, immigrants have had a positive effect on the employment and incomes of most U.S.-born workers.

The problem with this whole discussion is that it looks backward. Many studies -- for and against allowing more STEM immigration -- rely on stale data. Some research includes numbers skewed by the 2007-2009 recession and the slow recovery, when real wages stagnated or slipped in almost all occupations (although STEM wages managed to rise a bit).

More recent data shows that unemployment among STEM grads is very low and that wages are rising faster than for other occupations. The U.S. Census Bureau, which tracks wage growth, in 2012 said the lifetime earnings of workers with undergraduate STEM degrees were higher than average. Last year, the agency said the mean wage was $87,570, versus $45,700 for employees in other fields.

Despite what Trump says, high-tech companies seem to be having trouble filling jobs: Listings for such workers are posted for twice the median number of days as those for non-STEM jobs. As the economy becomes more digitized, its reliance on high-tech workers will grow -- in manufacturing settings as well. The economy will also require more STEM workers with foreign-language skills.

In the near future, it will be a lot harder to claim there is no shortage of qualified STEM workers in the U.S. The number of American students in these fields is growing at less than 1 percent a year; by 2018, about 250,000 advanced-degree STEM jobs  won't be filled even if every new American graduate in science, technology, engineering and math finds a job.

But this doesn't mean that the gap will always exist or that the U.S. should favor foreign students in these fields permanently. The key is to design a stapled-green-card policy that, as much as possible, matches the STEM labor market's supply and demand but also comes with built-in surge protectors.

    1. This report was published by The Partnership for a New American Economy, one of whose co-chairs is Michael R. Bloomberg, the majority owner of Bloomberg LP.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Paula Dwyer at pdwyer11@bloomberg.net

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net