Of Immigrants, Entrepreneurs and the Road to Serfdom – Part II

America’s Brain Drain

In part one, I alluded to the reluctance of the Senate to bring the STEM Jobs Act to a vote and it is certainly unlikely that the Senate will consider H.R. 6429 until the soap opera that is the “fiscal cliff” has played out. This is unfortunate. Both sides of the aisle have expressed at least some level of support for the bill and that suggests (I know I am being optimistic here) the possibility of sufficient common ground to bring it to passage. Does anyone on “the hill” see the irony? This proposed legislation sits gathering dust even though it has the potential to contribute significantly to solving two of the most critical problems facing our country: unemployment and insufficient tax revenues.

Obama’s “All or Nothing” Position

The White House produced the following statement:

does not support narrowly tailored proposals that do not meet the President’s long-term objectives with respect to comprehensive immigration reform.”

This “my way or the highway” approach to government has proven to be less than effective as the present impasse on resolving our “fiscal cliff” issues demonstrates.

Neither the current administration nor the loyal opposition seems willing to put the nation’s best interests ahead of political machinations.

If Not Now…When?

A frequently heard “grass roots” or colloquial argument suggests, the STEM Jobs Act of 2012 may have merit, but not now! Too many Americans are out of work. This shortsighted camp believes that such legislation makes sense only after we have reduced our unemployment rate. This argument is patently false. The STEM Jobs Act requires employers to submit job openings to the appropriate state workforce agency and further requires the agency to post them on its official website making the information more accessible to American job seekers. Other provisions in the bill are aimed at transparency and employer accountability.

In contrast, those favoring the legislation, recognize the opportunities to reduce national unemployment rates are enhanced by retaining the “best and brightest” (excuse the cliché) minds rather than forcing their skills, ideas and entrepreneurial spirit to leave the United States for foreign shores.

Rep.Tim Griffin’s video speaks to this:

The rational mind must believe that allowing this talent to slip away and possibly even compete with us is sheer folly. According to a study entitled: “Immigrant Small Business Owners: A Significant and Growing Part of the Economy” sponsored by the Fiscal Policy Institute, 30 percent of the growth in small businesses between 1990 and 2010 was attributable to immigrants. In that period, small businesses increased from 3.1 million to 4.9 million. As Brad Feld points out in the Wall Street Journal article he co-authored with Paul Kedrosky entitled “Start-up Visas Can Jump-Start the Economy“, the immigrant’s role in the technology sector of our economy is even more pronounced.

“Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley.”

The United States Is Not the Only Game in Town

Americans are no longer able to boast that the United States is the world’s largest immigrant society. Immigrants comprise just 13 percent of our population. In sharp contrast, fully 20 percent of Canada’s population is immigrants and Australia boasts a population in which more than 25 percent are immigrants. Canada and Australia have astute immigration policies welcoming those with the skills in greatest demand, skills they cannot find in sufficient quantity internally.

Congress needs to wake up and smell the coffee. The US dollar will only get you $0.98 in Canadian currency and the US dollar is worth a paltry $0.95 in Australia! I don’t want to sound unpatriotic, nothing could be further from reality, but we must recognize the need for change. We are not “all that and a bag of chips” in terms of economic power. As things stand now, our country is in the unenviable position of providing foreigners with an excellent education, then forcing them to leave, carrying a wealth of knowledge that benefits the very countries with which we compete in the global market.

As Americans, we tend to believe that we, as individuals, are far better off financially than those in other countries around the globe. The chart below suggests otherwise. Australia ranks number one in median wealth (net worth), Canada occupies eighth place and the United States is ranked at seventeenth! I don’t believe the average guy on the street is aware of this. If he were, we might have different representation in Washington. Come to think of it, maybe that is exactly why this fact is not generally known. If you are a numbers geek, the source for the chart below is this report from Credit Suisse.

If this does not make a compelling case for rethinking our immigration laws, stay tuned, there are other disturbing facts to come as we continue to explore immigration, entrepreneurship and the road to serfdom.

 

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  • joewallin

    I am pretty sure when Steve Jobs met with President Obama he told him–fix the high tech worker immigration problem–just that part. And Obama said–No, we need a comprehensive solution. Which is really, really unfortunate.

    • http://www.venturestab.com/ Jerome Gentolia

      With the Congress’ gridlock, a comprehensive solution is very hard to attain. I believe implementing small changes that both parties agree on is a more efficient approach. Let’s fix what we can fix now and streamline everything later. Otherwise, we will see more mass exodus of US trained STEM workers and entrepreneurs.

      • joewallin

        I agree. I think that was Steve Case’s position too.

  • http://wac6.com/ William Carleton

    Jerome, your argument makes sense to me. We’re shooting ourselves in the foot by not fixing immigration policy. I totally get that the data suggests more immigrant friendly laws, more new businesses, more new jobs for everyone. But there is also a part of me that thinks the President has a point about wanting to fix immigration policy holistically. It’s probably a political reality and it may be a principled position as well. Hopefully this all happens in 2013?

    • http://www.venturestab.com/ Jerome Gentolia

      Yes, hopefully we see this happen this year.

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