There is probably no issue which has been the victim of more disinformation and a lack of factual reflection than America’s need for immigrant talent at all levels. What I am seeking to do in this brief white paper is to set the record straight. There is no political or partisan agenda here, simply a hard look at the issue from an economic and community development perspective.
I am approaching the issue related only to legal immigrants and refugees and policies related to their presence in the United States now and in the future. Everywhere Market Street goes to work with businesses and organizations to try and create an enhanced economic future, the number one issue is the quality and availability of the workforce.
Let’s start with some basic facts. Please understand that almost all of these data points have multiple sources, and I have noted at least one in every case. Market Street is not presenting original research in this report. I am glad to provide direct links to all the resource documents if asked.
- The Census Bureau tells us there are about 34.2 million working age immigrants (ages 25-64) in the country. The Kaufman Foundation reports that they are TWICE as likely as the native born population to start a new business. As of March 2016, the National Foundation for American Policy brief shows that foreign born entrepreneurs are estimated to be behind 51 percent of our country’s billion dollar startups.
- The Partnership for a New American Economy (made up of more than 500 Mayors and business leaders from both parties and independents) reported in 2016 that there are just under 3 million immigrants who are self-employed. California leads the way with 785,000. Florida and Texas follow with 338,000 and 336,000. More than half the states have over 10,000 foreign born entrepreneurs. Georgia has 75,000, Virginia 67,000, and North Carolina 50,000. In 2014, that meant $1.5 billion to the Georgia economy and $1.8 billion in Virginia. Florida was over $5.1 billion and Texas $7.9 billion.
- The Kiplinger Letter reported in May 2018 that the American workforce is aging rapidly with 20 percent of the entire population expected to be over 65 by 2030 - 50,000 are turning 65 each day. Compounding those numbers is a huge drop in the labor force participation rate. That number has dropped from 67.1 percent in 2000 to 62.8 percent in 2016. The Bureau of Labor Statistics projects that it will fall further to 61 percent by 2026.
- H-2B Visas have been a tool for foreign guest workers for decades. The law caps the number of these visas at 66,000 divided between summer and winter. The Congress gave the Administration permission to issue an additional 69,000 visas this summer. As reported by the Wall Street Journal and others, The Department of Homeland Security Administration agreed to issue only 15,000 more. These workers are vital to both seasonal agriculture and service industries.
- HB-1 Visas are issued for highly skilled workers. It is capped at 85,000 workers per year and has been exhausted in the first week each year since 2014. In 2015, there were 233,000 applications in the first seven days. The National Foundation for American Policy reports that the number of denials of H-1B visas increased 41 percent in the fourth quarter from the previous quarter in this fiscal year.
- Refugees represent another source of workers for America. In 2016, the annual rate of accepting approved and vetted refugees (normally a two year process) was 110,000 annually. The current Administration reduced the number by Executive Order to 45,000 in 2018. The State Department and the Migration Policy Institute reported in May that only 13,501 refugees were admitted in the first seven and a half months of this fiscal year and that the backlog of applications and security checks is at an all-time high.
- Last month the Labor Department reported that for the first time since record keeping began in 2000 the number of job openings in the U.S. exceeded the number of job seekers. There was a 400,000 person difference in the two data points. The U.S. is facing a historically tight labor market, but a greater share of workers than 18 years ago say they are stuck in part-time jobs. While wages have been slowly rising, up 2.8 percent from a year ago, that percentage is still short of the 3.9 percent rise in 2008-2009 and is barely keeping up with inflation. The Wall Street Journal reported on June 6 that as of April, business services (from accountants to clerical workers) led the way with 1.3 million openings followed by hotels at 844,000 and food service at 735,000 openings.
- The Business Roundtable (made up of top level CEOs) recently delivered a jointly signed letter to the head of Homeland Security expressing its “serious concern” over the Administration’s immigration changes. The letter stated that “arbitrary and inconsistent” guidelines have created new and unnecessary hurdles for skilled foreigners working in the U.S. The increase in HB-1 visa petition denials related to renewals was highlighted. The CEOs stated that “companies do not know whether a work visa petition that was approved last month will be approved when the company submits an identical application to extend the employee’s status.” They also expressed particular concern that the immigration service was expected to revoke work eligibility for the spouses of HB-1 visa holders. Additionally, since many spouses also have highly sought after skill sets and have built careers here in the U.S., as the Wall Street Journal noted on August 14, if their work authorization is revoked, they will both take their skills elsewhere in the world.
- One final point on the facts. In September, Citicorp and Oxford University issued a report that stated that two thirds of the U.S. GDP expansion since 2011 was “directly attributable to migration.” Immigrants have founded 40 percent of the Fortune 500 even though they make up only 14 percent of the population. Immigrants are also twice as likely to create a patented invention or win a Nobel Prize.
In 2006, the U.S. Senate passed The Comprehensive Immigration Act with a bi-partisan vote of 62-36. The House never took up the bill. Again in 2013, after months of meetings by the “Gang of Eight” headed by Senators McCain, Menendez, and Rubio, the Senate passed a far more comprehensive bill by a 68 -32 vote on June 27, 2013. This bill included increased border security, increased screening for green card applicants, a mandatory workforce verification program, a new visa program for lower skilled workers, moving the entire system toward work skills not family based, and finally a 13 year pathway for illegal immigrants to work toward citizenship or be forced to leave. The support for the bill included the U.S. Chamber of Commerce and all the major labor unions. Almost immediately, House Speaker John Boehner said that the Republican House would not take up the bill. They never did, nor did they pass any alternative legislation.
In late 2016, Mike Randle, publisher of Southern Business and Development Magazine, wrote a thoughtful piece titled “The Future of Our Workforce.” Randle outlined that the demographic changes and reality of the labor force participation rate in painting a bleak picture for the U.S. to compete long term, noting that only about 70,000 people a month are joining the workforce. Randle pointed out, using a report from Forbes, that Mexico and China can “backfill labor” much more easily that the US can. He stated “Again, the only way to grow the workforce in dramatic fashion is to grow legal permanent immigrant resident’s population.” We are clearly seeing his prediction come true as so many jobs remain unfilled month after month.
It has now been over five years since anything has even been seriously considered to fix a clearly broken system. The distance between the two points of view is wider than ever, and several important players, particularly Senator John McCain, are no longer on the scene.
How long can this badly needed policy change be ignored? When will the Congress step up and do its job? How much more proof is needed to show that we must do something for the American economy to continue to grow?
No other issue threatens the American economy like this one. It is of grave importance to the health and welfare of our nation.
I am approaching the issue related only to legal immigrants and refugees and policies related to their presence in the United States now and in the future. Everywhere Market Street goes to work with businesses and organizations to try and create an enhanced economic future, the number one issue is the quality and availability of the workforce.
Let’s start with some basic facts. Please understand that almost all of these data points have multiple sources, and I have noted at least one in every case. Market Street is not presenting original research in this report. I am glad to provide direct links to all the resource documents if asked.
- The Census Bureau tells us there are about 34.2 million working age immigrants (ages 25-64) in the country. The Kaufman Foundation reports that they are TWICE as likely as the native born population to start a new business. As of March 2016, the National Foundation for American Policy brief shows that foreign born entrepreneurs are estimated to be behind 51 percent of our country’s billion dollar startups.
- The Partnership for a New American Economy (made up of more than 500 Mayors and business leaders from both parties and independents) reported in 2016 that there are just under 3 million immigrants who are self-employed. California leads the way with 785,000. Florida and Texas follow with 338,000 and 336,000. More than half the states have over 10,000 foreign born entrepreneurs. Georgia has 75,000, Virginia 67,000, and North Carolina 50,000. In 2014, that meant $1.5 billion to the Georgia economy and $1.8 billion in Virginia. Florida was over $5.1 billion and Texas $7.9 billion.
- The Kiplinger Letter reported in May 2018 that the American workforce is aging rapidly with 20 percent of the entire population expected to be over 65 by 2030 - 50,000 are turning 65 each day. Compounding those numbers is a huge drop in the labor force participation rate. That number has dropped from 67.1 percent in 2000 to 62.8 percent in 2016. The Bureau of Labor Statistics projects that it will fall further to 61 percent by 2026.
- H-2B Visas have been a tool for foreign guest workers for decades. The law caps the number of these visas at 66,000 divided between summer and winter. The Congress gave the Administration permission to issue an additional 69,000 visas this summer. As reported by the Wall Street Journal and others, The Department of Homeland Security Administration agreed to issue only 15,000 more. These workers are vital to both seasonal agriculture and service industries.
- HB-1 Visas are issued for highly skilled workers. It is capped at 85,000 workers per year and has been exhausted in the first week each year since 2014. In 2015, there were 233,000 applications in the first seven days. The National Foundation for American Policy reports that the number of denials of H-1B visas increased 41 percent in the fourth quarter from the previous quarter in this fiscal year.
- Refugees represent another source of workers for America. In 2016, the annual rate of accepting approved and vetted refugees (normally a two year process) was 110,000 annually. The current Administration reduced the number by Executive Order to 45,000 in 2018. The State Department and the Migration Policy Institute reported in May that only 13,501 refugees were admitted in the first seven and a half months of this fiscal year and that the backlog of applications and security checks is at an all-time high.
- Last month the Labor Department reported that for the first time since record keeping began in 2000 the number of job openings in the U.S. exceeded the number of job seekers. There was a 400,000 person difference in the two data points. The U.S. is facing a historically tight labor market, but a greater share of workers than 18 years ago say they are stuck in part-time jobs. While wages have been slowly rising, up 2.8 percent from a year ago, that percentage is still short of the 3.9 percent rise in 2008-2009 and is barely keeping up with inflation. The Wall Street Journal reported on June 6 that as of April, business services (from accountants to clerical workers) led the way with 1.3 million openings followed by hotels at 844,000 and food service at 735,000 openings.
- The Business Roundtable (made up of top level CEOs) recently delivered a jointly signed letter to the head of Homeland Security expressing its “serious concern” over the Administration’s immigration changes. The letter stated that “arbitrary and inconsistent” guidelines have created new and unnecessary hurdles for skilled foreigners working in the U.S. The increase in HB-1 visa petition denials related to renewals was highlighted. The CEOs stated that “companies do not know whether a work visa petition that was approved last month will be approved when the company submits an identical application to extend the employee’s status.” They also expressed particular concern that the immigration service was expected to revoke work eligibility for the spouses of HB-1 visa holders. Additionally, since many spouses also have highly sought after skill sets and have built careers here in the U.S., as the Wall Street Journal noted on August 14, if their work authorization is revoked, they will both take their skills elsewhere in the world.
- One final point on the facts. In September, Citicorp and Oxford University issued a report that stated that two thirds of the U.S. GDP expansion since 2011 was “directly attributable to migration.” Immigrants have founded 40 percent of the Fortune 500 even though they make up only 14 percent of the population. Immigrants are also twice as likely to create a patented invention or win a Nobel Prize.
In 2006, the U.S. Senate passed The Comprehensive Immigration Act with a bi-partisan vote of 62-36. The House never took up the bill. Again in 2013, after months of meetings by the “Gang of Eight” headed by Senators McCain, Menendez, and Rubio, the Senate passed a far more comprehensive bill by a 68 -32 vote on June 27, 2013. This bill included increased border security, increased screening for green card applicants, a mandatory workforce verification program, a new visa program for lower skilled workers, moving the entire system toward work skills not family based, and finally a 13 year pathway for illegal immigrants to work toward citizenship or be forced to leave. The support for the bill included the U.S. Chamber of Commerce and all the major labor unions. Almost immediately, House Speaker John Boehner said that the Republican House would not take up the bill. They never did, nor did they pass any alternative legislation.
In late 2016, Mike Randle, publisher of Southern Business and Development Magazine, wrote a thoughtful piece titled “The Future of Our Workforce.” Randle outlined that the demographic changes and reality of the labor force participation rate in painting a bleak picture for the U.S. to compete long term, noting that only about 70,000 people a month are joining the workforce. Randle pointed out, using a report from Forbes, that Mexico and China can “backfill labor” much more easily that the US can. He stated “Again, the only way to grow the workforce in dramatic fashion is to grow legal permanent immigrant resident’s population.” We are clearly seeing his prediction come true as so many jobs remain unfilled month after month.
It has now been over five years since anything has even been seriously considered to fix a clearly broken system. The distance between the two points of view is wider than ever, and several important players, particularly Senator John McCain, are no longer on the scene.
How long can this badly needed policy change be ignored? When will the Congress step up and do its job? How much more proof is needed to show that we must do something for the American economy to continue to grow?
No other issue threatens the American economy like this one. It is of grave importance to the health and welfare of our nation.
