Strict caps on green cards for skilled foreigners keep US economic growth in check

With the Republican primaries underway, many of the presidential candidates have argued for the U.S. to curb the growing population of illegal immigrants, in a bid to capitalize on the growing popular anger over loose national borders.

But this controversy is preventing politicians from both sides of the political divide from reforming programs capping the number of foreign workers entering the country legally, many of whom could breathe life back into a stagnating economy.

In 2011, only one out of seven immigrants received a green card based on their employment. Instead, the vast majority of green cards were handed out to immediate relatives of Americans, who reside abroad, and to their families. The share of visas issued to foreign workers has rarely tipped over the 20% mark.

The current immigration system traditionally “prioritizes family reunification over the introduction of foreign workers,” according to Madeline Zavodny, a researcher at the American Enterprise Institute, a conservative think-tank.

So far, a strict 140,000 foreign workers are allowed into the country every year, a small sliver of the one million immigrants annually allowed into the US. This quota has barely budged since the early 2000s, showing the government has chosen to undertake immigration reform by means other than raising this cap.

One such reform overhauled the EB-5 green card program, which issued permanent residency in the U.S. to wealthy foreigners willing to invest large sums into impoverished areas riven with high unemployment. Such investors had to prove their investments had directly or indirectly lead to the hiring of ten or more U.S. workers.

The investor visas would foster economic growth, according to USCIS, the government agency responsible for overseeing immigration, but foreign investors couldn’t see the point of throwing money at American businesses they didn’t understand, and largely ignored the program.

But their presence was directly encouraged after the recession. In 2009, the government decided to increase the weight of construction workers to the job numbers requirement EB-5 investors must fulfill. As a result of the new ruling, about 8500 immigrants obtained an EB-5 visa in 2013 versus a meager 130 back in 2004, channeling millions of dollars into construction projects in metropolitan areas around the country.

Though she has her own doubts about the overall impact of investor visas, Zavodny thinks tinkering with the immigration system is necessary. She argued the U.S. should raise the caps for green cards for foreign workers who can plug the skills and education gap in the U.S. workforce.

Her analysis suggests encouraging the arrival of more foreign workers would reinvigorate the US economy, and oddly, the hiring of Americans.

Sari Kerr, an economist at the Wellesley Center for Women, painted a more nuanced picture. Though most economists think, “as a whole, skilled immigration is good for the economy”, she said, like free trade it would produce winners and losers.

Kerr found out skilled immigrants were introduced into the workforce often at the expense of the old guard, even as younger American workers were unaffected.

For example, if Microsoft hired a software engineer from abroad it might lead the company to lay off senior staff.

Nonetheless she felt enough economists agreed strict immigration caps were hindering the U.S. in tough economic times. GDP growth for the U.S. slowed from 3.9% last year to 1.5% over the last quarter.

Such is the demand for employment-based green cards every year the cap has been filled to the brim, meaning the waiting list for green cards in countries such as India can reach up to around 10 years.

Past immigration data indicates, however, within this overall cap of 140,000, specific quotas for professionals with advanced degrees and workers with extraordinary abilities have rarely been reached, the preferred choice for immigrants to the U.S.

Zavodny said employment-based visas for priority workers and workers with advanced degrees rarely hit their limits because country-caps were blocking pent-up demand from China and India.

The high bar to qualify as a priority worker deters talented and qualified foreign workers from applying for green cards. According to immigration regulations, a priority worker’s achievements “must have been publicly recognized, and resulted in a period of national or international acclaim.” But there are only so many award-winning professors and researchers to go around, she said.

As a low-hanging fruit, it seems that reforming the immigration system to only allow more high-skilled foreign workers would raise only a few hackles. Virtually all the Republican candidates argue they are for a two-tier system, in which those who want to come over to the US legally will benefit at the expense of those who came over the border illegally.

Marco Rubio, the Republican senator for Florida, in a press release back in 2013 wanted to introduce a bill that would “move to a more merit-based immigration system”.

But the tension over the levels of undocumented immigration is painting a broad brush on other groups of immigrants, making even piecemeal reform toxic to senators in Congress, said Zavodny.

For now, change looks unlikely, but when a new presidential administration is announced next year, politicians may have a rare chance to make immigration work for the country, and not tear it apart.