Of Immigrants, Entrepreneurs and the Road to Serfdom – Part III
In part two, I spoke of the need to amend our approach to immigration. As France begins to self-destruct under the medieval tax policies of President Francois Hollande, Canada’s predominantly French speaking province of Quebec has an initiative in play to attract disgruntled French entrepreneurs. In his article on The Rude Baguette entitled: ”The Pigeon Movement – A Rallying Cry For French Startups”; Liam Boogar, wrote about the current problem in the French startup ecosystem. In stark contrast, current United States immigration policy has little to offer these entrepreneurial refugees with the unfortunate result that most will end up in Quebec, to the benefit of Canada’s economy … not ours.
The Quebec entrepreneur program is particularly attractive to French entrepreneurs and businesses given the absence of any significant language barrier. Add to that, the favorable contrast Canada’s generally “business friendly” government provides, in comparison to the direction the French government is moving, and you have a formula for success.
The U.S. Has to Do Better in Competing for Immigrant Entrepreneurs
With no significant French speaking population, we are at an obvious disadvantage to our northern neighbor in competing for the exodus of French entrepreneurs. However, our disadvantages extend well beyond language. We must come to grips with the fact that our inability to compete effectively for immigrant entrepreneurs is rooted in the failure of our immigration policies to meet the changing economic and technical needs of our country.
Other countries, such as Canada and Australia to name only two, have pro growth immigration policies designed to meet their human capital and economic needs. A research paper entitled: Immigration Policy and Entrepreneurship published by the Department of Economics at Macquerie University in New South Wales, Australia concluded:
That Australian immigration policy has helped engender business-generating environment should not result in complacency on the government’s part. Any economy including Australia’s depends on a continual development of businesses and the current worldwide economic slowdown has made the entrepreneurial acumen a much sought after quality. The policymakers therefore need to consider the policies that help remove any barriers that could delay or stop immigrants to start a business.”
A Political Issue or a Survival Issue
Events in France are shockingly similar to events playing out in our own country with respect to the debate over tax increases on the wealthiest Americans. I have chosen against turning this article into a partisan political statement on tax policies, fiscal cliffs or spending policies. However, I respectfully submit that a combination of tax reform, disciplined spending and immigration reform viewed through a prism focused on fueling the economic engine is not a partisan political view but a survivalist view. Partisan politics and sound policies to promote economic growth have diverged to such a degree that we may never see them converge again and neither party is blameless. Perhaps Mayor Bloomberg said it best: (start video at 26:44)
My objective in this series is to promote the means to generate sorely needed economic growth. The immigration issue is about the country’s economic survival. That said, let’s examine the StartUp Visa.
The StartUp Visa Defined
In February of 2010, the Startup Visa Act had its debut in the Senate, but died in the Judiciary Committee having never been brought to a vote. The StartUp Visa Act of 2011 was introduced in the Senate some fourteen months later. Also introduced in the House of Representatives as H.R. 1114 in March of 2011, the bill was referred to the House Judiciary Committee. The Judiciary Committee referred the bill to the Subcommittee on Immigration Policy and Enforcement where it has languished since June 1, 2011.
The thrust of this legislation is, in the words of Carolyn B. Maloney (D-NY):
extending the pool of eligible immigrants to include holders of H-1B visas and entrepreneurs living outside the United States with a market presence in the country.”
Delving into the language of the bill, it is immediately apparent that the proposed legislation created no new spots for immigrants. Instead, the bill maintained the current level of visas and drew from the pool of unused EB-5 visas. In case you are not familiar with the EB-5, it was designed to allow individuals with $1 million to invest ($500,000 if invested in a “Targeted Employment Area”) access to a green card. The investment must create or preserve at least ten jobs for U.S. Citizens, not including the investor’s immediate family. It should come as no surprise that less than half of the available EB-5 visas were utilized. These “unutilized” visas were to be made available to the StartUp Visa Act of 2011. It is probably no surprise that the StartUp Visa Act of 2011 went nowhere. Enter H.R. 5893, hereinafter referred to as the StartUp 2.0 Act.
In part four, we will go into an in-depth analysis of StartUp 2.0, offering observations on its real-world potential for attracting immigrant entrepreneurs. I will introduce you to some real-world situations and share the thoughts of supporters and detractors alike.