The Economic Value of Immigration
Often times when discussing the economic value of immigration, people consider the impact of having immigrants accept low wages for jobs “ordinary” Americans wish not to do.
But what about the dream jobs we all wish for? I’m not talking about professional basketball player and former Milwaukee Buck Yi Jianlian (nor Australian Andrew Bogut). I’m talking about CEOs of growing and profitable companies. CEOs of technology companies.
According to Vivek Wadhwa‘s research…
In over 25 percent of tech companies founded in the United States from 1995 to 2005, the chief executive or lead technologist was foreign-born. In 2005, these companies generated $52 billion in revenue and employed 450,000 workers. In some industries, such as semiconductors, the numbers were much higher—immigrants founded 35 percent of start-ups. In Silicon Valley, the percentage of immigrant-founded start-ups had increased to 52 percent.
When we looked into the backgrounds of these immigrant founders, we found that they tended to be highly educated—96 percent held bachelor’s degrees and 74 percent held a graduate or postgraduate degree. And 75 percent of these degrees were in fields related to science, technology, engineering, and mathematics.
The vast majority of these company founders didn’t come to the United States as entrepreneurs—52 percent came to study, 40 percent came to work, and 6 percent came for family reasons. Only 1.6 percent came to start companies in America. They found that the United States provided a fertile environment for entrepreneurship. Even though these founders didn’t come to the United States with the intent, they typically started their companies around 13 years after arriving in the country.
Most students and skilled temporary workers who come to the United States want to stay, as is evident from the backlog for permanent resident visas. Yet we’re leaving these potential immigrants little choice but to return home. “The New Immigrant Survey,” by Guillermina Jasso of New York University and other leading academics, found that approximately one in five new legal immigrants and about one in three employment principals either plan to leave the United States or are uncertain about remaining. These surveys were done in 2003, before the backlog increased so dramatically.
Clearly if the United States is to stay competitive we must continue to work to make it easier for immigrants to enter the country, get an education, and stay.
It’s as easy as ensuring that you’re a pleasant passer-by on the street and as difficult as ensuring immigrants can get loans as easily as locals to start businesses in Milwaukee.
Making more permanent resident visas available, especially for those here already under H1B temporary work visas, is essential to continuing to fuel the US economy.
Regardless whether John McCain or Barack Obama end up in the White House, they need to ensure that more visas are available for immigrants to get here, and to stay.
Immigrants are merely creating jobs for themselves, they’re creating jobs for you and your neighbors.
Hat tip to Richard Florida for exposing Vivek’s work.