All posts by Stuart Anderson

Stuart Anderson is the author of the book Immigration (Greenwood, 2010) and a researcher on trade and immigration issues. From August 2001 to January 2003, Stuart served as Executive Associate Commissioner for Policy and Planning and Counselor to the Commissioner at the Immigration and Naturalization Service. Before that he spent four and a half years on Capitol Hill on the Senate Immigration Subcommittee, first for Senator Spencer Abraham and then as Staff Director of the subcommittee for Senator Sam Brownback. Stuart has published articles in the Wall Street Journal, New York Times, and other publications. The views expressed in this blog are not intended to support specific pieces of legislation or candidates.
Immigration Blog

Understanding the Wait Times for Indians and Chinese in the EB-2 Category

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The wait times for employment-based immigrants are of enormous significance to those personally affected by the green card backlog. In the employment-based second preference, or EB-2 category, those waiting are invariably from India or China.

Why Do Indians and Chinese Wait Longer?

The long waits for employment-based green cards are caused by two primary factors: 1) the 140,000 annual quota is too low and 2) the per country limit, which restricts the number of green cards available to skilled immigrants from one country to 7 percent of the total. Due to the per country limit, skilled foreign nationals from India and China, who make up most of the applicants, wait years longer than nationals of other countries.

In the EB-2 Category, There is No Wait for Europeans and Others

U.S. Citizenship and Immigration Services states, “You may be eligible for an employment-based, second preference [EB-2] visa if you are a member of the professions holding an advanced degree or its equivalent, or a foreign national who has exceptional ability.” Since there is normally a spilling down of unused immigrant visas from the EB-1 category, there are usually about 50,000 immigrant visas available each year under EB-2.

It is quite surprising to most people who hear about it but in the EB-2 category, for the past number of years, individuals sponsored from countries other than India and China have experienced no wait for their green cards, other than processing times. In contrast, many Indian and Chinese have been forced to wait 6 yeas or more for their green cards.

Backlog only for Indians and Chinese in EB-2

The demand for Indian and Chinese highly skilled researchers and professionals, combined with the relatively low quotas and per country limits, has created a backlog in the EB-2 category. However, the backlog has been made up entirely of Indian and Chinese nationals. Earlier this year, it appeared the backlog of Indians and Chinese in the EB-2 category, including dependents, could be as large as 90,000. However, it is likely that number has been decreasing (with some speed) in recent months.

Factors Helping Indians and Chinese in EB-2

It appears the number of green cards available to Indians and Chinese in the EB-2 category has increased in recent years, possibly due to slack demand among individuals from other countries. (A provision in U.S. immigration law allows the per country limit to be, in essence, ignored, if immigrant visas in a category would otherwise go unused.) In the January 2012 Visa Bulletin, the State Department has announced it is inviting applicants with priority dates as of January 1, 2009 to complete the final stage of the green card process. (Priority dates are based on the filing of applications or labor certification.)

This represents rapid movement forward for Indian and Chinese skilled immigrants. Only a year ago, in the January 2011 Visa Bulletin, the eligible priority dates for Indians and Chinese in the EB-2 category were May/June 2006, meaning the priority dates have jumped forward three years in the space of one calendar year.

Eliminating the Per Country Limit Would Help More

It is unknown at this time whether the improvement in the situation for Indians and Chinese in the EB-2 category is only a temporary phenomenon. In any case, because of the per country limit, Indians and Chinese are at a disadvantage if a sufficient individuals from other parts of the world apply for green cards in the EB-2 category. The only thing that will change that situation in the future is legislation that eliminates the per country limit for employment-based immigrants. Such legislation has been held up, at least temporarily, by Senator Charles Grassley (R-IA). Passing H.R. 3012 in the U.S. Senate would move employment-based immigration to a “first come, first serve” system, without regard to an individual’s country of origin.

Immigration Blog

America Lacks An Immigrant Entrepreneur Visa

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It would surprise many people that there really is no good way for a foreign national from India or elsewhere to gain permanent residence (a green card) by starting a new company. In fact, it is difficult to even gain a temporary visa as the founder of a new business.

EB-5 Is Not a True Immigrant Entrepreneur Visa

The closest America has today to an immigrant entrepreneur visa is the EB-5 (employment-based fifth preference) immigrant investor visa. The immigrant investor visa became part of the Immigration and Nationality Act in 1990. To receive such a visa, which awards permanent residence (a green card), an individual must invest either $1 million or $500,000 (if in a Regional Center) and create at least 10 jobs. “Approximately 90 to 95 percent of individual Form I-526 petitions filed each year are filed by Alien Investors who are investing in Regional Center-affiliated commercial enterprises,” according to U.S. Citizenship and Immigration Services. While it is clear attracting capital to the United States is positive, EB-5 primarily helps existing projects, rather than facilitates or rewards startup activity.

In addition, Congress and agency regulations have not made it easy for potential immigrant investor visa holders. This is one reason the EB-5 category has never come close to utilizing fully the 10,000 allocation of immigrant visas available under the statute.

American Tradition Favors Establishing an Entrepreneur Visa

While there is no reason to eliminate the immigrant investor visa category – and, in fact, there is a strong case to be made for streamlining its requirements to making it more accessible to potential investors – it goes against America’s tradition to reward cash investments but not entrepreneurial talent in U.S. immigration law. For a long time, the United States favored talent and hard work over cash. An entire genre of literature, the Horatio Alger stories, featured rags to riches heroes. The stories of many of today’s immigrants who become successful entrepreneurs illustrate that talent is a better indicator of success than a healthy bank balance.

Bills in Congress

A number of bills in Congress have been introduced that would establish an immigrant entrepreneur visa. The Startup Act (S. 1965), introduced by Senators Jerry Moran (R-KS) and Mark Warner (D-VA), would create a new green card category for entrepreneurs, focusing on highly-skilled foreign nationals with an existing tie to the United States. The bill “creates a new visa for up to 75,000 immigrant entrepreneurs who hold an H-1B visa or have completed graduate level work in a STEM [science, technology, engineering and math] field, and who during the 1-year period after the new visa is issued register at least one new business entity which employs at least two full-time, non-family member employees, and invests or raises capital investments of at least $100,000,” according to a summary of the legislation provided by the bill’s authors. “If these requirements are satisfied, the entrepreneur would have three additional years to remain in the U.S. and operate his or her business. During the three-year period, the entrepreneur must employ at least five, full-time, non-family members for the business entity. At the end of the three years, a recipient may apply to remove the conditional status.”

The Startup Visa Act of 2011 (S. 565), introduced by Senators John Kerry (D-MA) and Richard Lugar (R-IN), would make an immigrant visa available to a foreign national who raises at least $100,000 from a “qualified venture capitalist, a qualified super angel investor, or a qualified government entity” and creates five full time jobs in the United States (other than for a spouse, son or daughter), raises $500,000 in capital investment, or has an unexpired H-1B visa or a graduate degree in a STEM field from a U.S. university and attracts $20,000 in investment from a qualified investor and creates at least three jobs and generates revenue, or raises capital of, $100,000 within two years.

Legislation by Rep. Zoe Lofgren (D-CA), H.R. 2161 (The IDEA Act) contains similar provisions on establishing an immigrant entrepreneur visa to those contained in S. 565 and S. 1965. However, it also contains a section that eschews capital requirements and enables a foreign-born entrepreneur to receive an immigrant visa if he or she creates 10 or more full-time U.S. jobs within two years, without regard to the amount of outside capital raised.

It is unclear whether Congress will act on any of these bills. Legislative measures that place less emphasis on the amount of capital a foreign national invests or raises fit best within the American tradition of entrepreneurship. It also conforms to today’s reality of how businesses get started. Giving foreign nationals who start new companies deserve an opportunity to follow through on their dreams and, in the process, create jobs and wealth in America.

Immigration Blog

Understanding the Potentially Decades-Long Waits for Indian Professionals in the Most Common Employment-Based Green Card Category

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Today, hundreds of thousands of highly skilled foreign nationals, particularly Indians, are languishing in immigration backlogs, waiting years for the chance to obtain permanent residence (also known as a green card). The lack of employment-based green cards harms the competitiveness of U.S. employers and exacts a large personal toll on those who must wait.

Understanding the Indian Green Card Backlog

The long waits for employment-based green cards are caused by two primary factors. First, the 140,000 annual quota is too low to accommodate the number of skilled foreign nationals able to be absorbed successfully in an economy the size of America’s. The 140,000 annual limit includes both the principal and dependent family members. For example, in 2009, dependents utilized more than half of the slots for employment-based visas – 76,935 of 140,903.

In addition to the 140,000 overall annual limit on employment-based green cards, there is also a per country limit, which has a disparate impact on immigrants from countries with a large population of highly educated professionals, particularly India and China. The Immigration and Nationality Act, in Section 202(a), details the per country limit: “[T]he total number of immigrant visas made available to natives of any single foreign state . . . may not exceed 7 percent . . . of the total number of such visas made available under such subsections in that fiscal year.” That would limit employment-based immigrants from one country to approximately 10,000 a year (out of the 140,000 quota), although another provision permits nationals of a country to exceed this ceiling if additional employment-based visas are available. Still, in general, in the most common employment-based category, fewer than 3,000 Indians per year can immigrate.

The Indian Backlog in the Employment-Based Third Preference (EB-3)

The reason Indian nationals will continue to wait a long time for employment-based green cards in the employment-based third preference (EB-3), the most common employment category, is the demand for their labor combined with the per country limit has created a large Indian backlog.

The backlog of Indians in the employment-based third preference could be as large as 210,000. One can estimate the backlog of Indians in the EB-3 category from available data. Earlier in 2010, the U.S. Department of State listed 49,850 Indians on the waiting list in the third preference category with a priority date prior to January 1, 2007. Priority dates normally coincide with the filing of a petition or of labor certification, an early stage in the employment-based green card process. However, that 49,850 figure does not include all the cases at various stages in the process at U.S. Citizenship and Immigration Services with a priority date prior to January 1, 2007. Rounding that figure upwards would get to at least 60,000 (and it could be higher).

To reach another 150,000 Indians for fiscal years 2007 through 2011 requires only about 15,000 individual Indian professionals sponsored for green cards each year for 5 years, with each averaging one dependent, another 15,000, for a total of 30,000 a year for 5 years or 150,000. To illustrate why an estimate of at least 15,000 Indians sponsored for green cards annually in EB-3 is reasonable, consider that 61,739 new H-1B petitions (for initial employment) were approved for Indians in FY 2008, and 33,961 Indians were approved for new H-1B petitions in FY 2009. A large proportion of H-1B visa holders are sponsored for green cards. In addition, employers frequently sponsor for green cards skilled foreign nationals already inside the country in another temporary status, such as L-1 (for intracompany transferees). Attorneys estimate 20 percent of those waiting for employment-based green cards are in a status other than H-1B.

Backlog is Large and Few Are Removed From Backlog Each Year

With no change to current law, an Indian-born professional sponsored today could wait decades for an employment-based green card. Due to the per country limit, generally no more than 2,800 Indians can receive permanent residence in the EB-3 category each year. Indians averaged fewer than 3,000 green cards annually in that category in 2009 and 2010, according to U.S. Citizenship and Immigration Services.

If, as discussed above, the potential backlog in the EB-3 category is 210,000 for Indians (principals and dependents) and 3,000 or fewer Indians can receive permanent residence in the category each year, then that means the theoretical wait for Indian professionals sponsored today in EB-3 is 70 years.

Nobody Will Wait 70 Years for a Green Card

In practice, no one can wait 70 years for a green card. That holds important implications for whether highly skilled foreign nationals from India will be able to stay long-term in the United States without changes to the law. Foreign nationals would have concerns that children included as part of the immigration petition would “age out” and not be allowed to become permanent residents. Moreover, generally speaking, spouses are not able to work. The numbers provide an illustration of how long the waits for permanent residence could be absent action by Congress. Eliminating the per country limit for employment-based green cards and raising the quotas for skilled immigrants will have a significant impact on reducing the time Indians wait for green cards.

Immigration Blog

New Survey: Indian Graduate Student Enrollment in U.S. Not Growing, While Enrollment from China Grows Rapidly

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An overlooked development is that Indian student enrollment at U.S. graduate schools has not been growing over the past four years. At the same time, Chinese student enrollment has been skyrocketing. This is the conclusion of the latest survey of U.S. graduate school programs by the Council of Graduate Schools. (Find the survey here.)

Nathan Bell, director of research and policy analysis at the Council of Graduate Schools, authored the report. Bell found, “Offers of admission to prospective graduate students from China increased 21% in 2011 following a 15% gain in 2010 and a 17% gain in 2009; this is the sixth consecutive year of double-digit growth. Offers of admission to prospective graduate students from the Middle East & Turkey increased 16% in 2011 following a 10% gain in 2010 and a 14% gain in 2009. Offers of admission to prospective graduate students from India rose 2% in 2011, the first increase to occur for students from India since 2007. This year’s 2% increase follows a 5% decline in 2010 and a 14% drop in 2009. Offers of admission to prospective graduate students from South Korea fell 2% in 2011, marking the fifth consecutive year of declines. The most recent declines for South Korea were a 7% decrease in 2010 and a 14% drop in 2009.”

Indian Student Graduate Admission Falling

However, the 2 percent rise in first-time graduate enrollment in the U.S. by Indian students from 2010 to 2011 India masked a longer-term trend. From 2007 to 2008, Indian student enrollment fell by 2 percent. From 2008 to 2009, first-time graduate enrollment from India fell again by 16 percent. Then, from 2009 to 2010, Indian student first-time graduate enrollment declined by 3 percent. Finally, from 2010 to 2011, it increased by 3 percent.

Change in Indian Student First-Time Graduate Enrollment in U.S.

2007 to 2008  -2%

2008 to 2009  -16%

2009 to 2010  -3%

2010 to 2011  +3%

 

Chinese Student Graduate Admission Rising

At the same time Indian student enrollment at U.S. graduate schools has been falling (or at least growing little in 2010 to 2011), Chinese student enrollment has increased significantly. From 2007 to 2008, Chinese graduate student enrollment in the United States rose by 14 percent. From 2008 to 2009, first-time graduate enrollment from China increased by 16 percent. From 2009 to 2010, Chinese student first-time graduate enrollment rose by 20 percent. And for 2010 to 2011 it rose again, by 21 percent.

Change in Chinese Student First-Time Graduate Enrollment in U.S.

2007 to 2008  +14%

2008 to 2009  +16%

2009 to 2010  +20%

2010 to 2011  +21%

 

Conclusion

This survey of major U.S. graduate school program does not include responses from all programs. However, it is useful as a way to evaluate trends, particularly in technical fields. The survey notes, “The majority (63%) of all international graduate students at U.S. institutions are enrolled in one of three broad fields: engineering, physical & earth sciences (which includes mathematics and computer science), and business. Life sciences and social sciences & psychology also account for large numbers of international graduate students at U.S. institutions.”

The survey does not offer an opinion as to why Chinese student first-time enrollment at U.S. graduate schools has increased at the same time that Indian student enrollment has declined. It will take further examination to know if the reason is additional recruitment efforts by U.S. universities in China, economic trends in India and China, U.S. immigration policies, or other factors. Whatever the reason, a continuation of this trend could potentially have a major impact on future immigration patterns among employment-based immigrants to the United States.

Immigration Blog

Indian Entrepreneurs Fit into an American Tradition

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America is a nation of immigrants. But it is historically has been a nation of entrepreneurs. Because of geography and U.S. immigration laws it was not possible for Indian immigrants to play a large role as entrepreneurs in the U.S. economy. However, the rise of Indian business people in America, especially since 1990, fits into a long tradition in America.

Early History of Immigrant Entrepreneurs in America

American history is fueled by the story of entrepreneurs. “The history of the United States lies in entrepreneurial ambition,” notes the Babson Entrepreneur Experience Lab. “The first colonies established in the New World sought to take advantage of new access to raw materials, agricultural lands and trade routes. More importantly, immigration to America offered the chance to escape class and persecution and to create opportunities for oneself; it was seen as the ‘land of opportunity.’ In particular, economic growth and entrepreneurial opportunities were found in owning land, various mercantile activities and exploration.”

Entrepreneurs Introducing New Methods and Technologies

Individual entrepreneurs, both native-born and foreign-born, have influenced how Americans communicate from the time of the telegraph up to the modern-day advent of mobile phones. In 1844, Samuel Morse won a federal grant to demonstrate the feasibility of the telegraph, though initially it could only transmit about 1,000 feet. When the federal government showed little interest in expanding the capability of the technology, Morse licensed private companies that within 6 years had built a “comprehensive network between major commercial centers.” According to Gerald Gunderson, author of An Entrepreneurial History of the United States, “Merchants extended their operations over a much wider area as the delays and uncertainty of working in distant markets fell. The telegraph took Americans a long way toward creating a national market by eliminating much of the disadvantage of distance.”

Entrepreneurs have also helped introduce new methods of operating businesses that later became common practice. Andrew Carnegie, an immigrant from Scotland, is famous for producing steel. “Carnegie’s challenge in 1870 was to develop an organization that improved efficiency as rapidly as possible,” explained Gunderson. “This turned not so much on inventing technology to produce steel, as on building an organization whose instinctive, primary focus was to reduce costs. Some of Carnegie’s innovations are so widely employed today they have become standard topics in management textbooks. One was the development of profit centers.”

Indian Entrepreneurs Emerge in America Post-1965

Between 1820 and 1959, only 13,363 Indians immigrated to America. This was due to the long distances but also because of immigration legislation passed in 1924 that severely limited immigration from eastern European, Asian, and African countries.

The 1965 Act eliminated the national origins quotas, opening the door to the immigration of Indians, Chinese and many others. The rise of Indian students in the United States helped lead to more family and employment-based immigrants and, as a result, that helped lead to more immigrant entrepreneurs.

A study I did for the National Venture Capital Association in 2006 examined publicly traded companies that had received venture capital. (See study here.) The study found, India, with 32 companies (22 percent), ranked first as the country of origin for immigrant-founded venture-backed public companies, followed by Israel with 17 companies (12 percent), and Taiwan with 16 companies (11 percent). Canada, France, the United Kingdom, Germany, Australia, China, Iran, and two dozen other countries were also among the countries of origin of the immigrant entrepreneurs on the list.

A study just released by the National Foundation for American Policy examining the top privately-held venture-funded companies. It also found India was the leading source country for immigrant entrepreneurs. (See study here.) Today’s Indian entrepreneurs are fitting into an American tradition of influencing society through entrepreneurship that goes back hundreds of years in our country’s history.