Category Archives: Immigration Blog

Immigration Blog

Borderless Economics and the Indian Diaspora

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A new book by Robert Guest, business editor for The Economist, focuses on Indian and Chinese immigrants and their connections to India and China. The book is called Borderless Economics.

Personal Connections

The author begins his discussion of Indian immigrants by relating a conversation with Vish Mishra, a venture capitalist.  Mishra related that personal introductions were “absolutely critical” in his line of work. According to Mishra, “If you cold-call, you start from nowhere, it’s laborious and tedious. If you know someone, you can move faster. The advantage of any network is you get to see things you might not otherwise see.”

Guest points to a Kauffman Foundation study that “returning Indian entrepreneurs maintain at least monthly contact with family and friends in America, and 66 percent are in contact at least that often with former colleagues.” The subjects most discussed are customers, markets, technical information and financing.

The Diaspora Helps India

Guest argues against the idea of a “brain drain” hurting home countries. “Nonresident Indians bring ideas and investment back,” writes Guest. “But arguably the biggest favor the diaspora has done for India was to persuade it to open up to the world in the first place. They were not the only force – four decades of stagnation alerted India’s leaders to the possibility that something was wrong with their economic model. But the diaspora was highly influential.”

In the book, Palaniappan Chidambaram, a former finance minister in India, is quoted crediting the emigration of Indians for changing policies inside India: “First, the phenomenal success achieved by Indians abroad by practicing free enterprise meant that if Indians were allowed to function in an open market, they could replicate some of that success here [in India]. Secondly, by 1991 sons and daughters of political leaders and senior civil servants were all going abroad and studying abroad and living and working abroad. I think they played a great part in influencing the thinking of their parents.”

Networks of Innovation

An entire chapter of the book is devoted to how the connections between Indians abroad and those back in India help create innovations. “When ethnic Indians in different countries talk to each other, ideas bounce across borders,” writes Guest. “There is another benefit to the constant nattering that goes on within ethnic networks. As good ideas are passed around, they evolve. Insights are taken apart and recombined in millions of individual brains. Then they are fed back into the network. After a while, new ideas emerge.”

The subtitle of the book is “Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism.” The “Indian Fridges” referred to in the book comes from the efforts of Indians to build an inexpensive refrigerator that poor people could afford. He describes how Godrej & Boyce Manufacturing, based in Mumbai, developed a refrigerator that costs $69. “The engineering miracle was conceived through a marriage of ideas generated by Indians in India and by Indians overseas,” notes Guest.

Patriotism

While much of the book is devoted to the reality of economics and the benefits of mutual exchange, at one point the author moves away from finance to the patriotism at the core of a naturalization ceremony in America. He describes his initial uneasiness watching a citizenship ceremony in Miami and the boisterous rendition of ‘God Bless the USA” playing at the ceremony’s end. “Where we come from, memories of patriotism warping into something terrible remain vivid,” writes Guest. “But as I look around the hall full of cheering, hugging new Cuban, Venezuelan, Haitian and Russian Americans, I am suddenly swept away by the crowd’s happy frenzy. To my surprise, I feel a tear rolling down my cheek.”

Immigration Blog

How Well Do Immigrants to America Assimilate?

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Do immigrants assimilate or stay forever apart from American society? This question affects nearly all immigration issues, including family and employment-based immigration, both of which concern many Indian immigrants. A lack of consensus on the issue of assimilation has prevented action on broader immigration reform. In addressing the question of immigrants and assimilation it is useful to look at three areas: wage growth, education and English language acquisition.

Historical Concerns About Assimilation

Concerns about the assimilation of immigrants have been a key part of the debate over immigration for much of our nation’s history. Discussing the restrictions on immigration imposed by Congress in the 1920s, historian Oscar Handlin wrote, “The objections to further immigration from Italy and Poland reflected the objectors’ unfavorable observations of the Italians and the Poles they saw about them. The arguments that Greeks and Slovaks could not become good Americans rested on the premise that the Greeks and Slovaks in the United States had not become good Americans.”

Wage Growth

Jeffery S. Passel, senior research associate, Pew Hispanic Center, has developed techniques to differentiate between legal and illegal immigrants in Census data and to track changes based on years in the country. Passel’s research on immigrant wage growth and other issues demonstrates how important it can be to determine legal status when examining data on assimilation.

Census data show legal immigrants experience significant wage gains over time, even surpassing the average family income of natives, in the case of naturalized citizens. But illegal immigrants do not show that type of income gain based on years in the United States. “Average family income for both legal immigrants and refugees in the U.S. for more that 10 years is only 2 to 3 percent below that of natives,” writes Passel. “For longer term naturalized citizen families, average family income is 23 percent higher than native income.” But the average income level of an illegal immigrant family remains well below the average native family (about 35 percent below) even among illegal immigrants in the country 10 years or longer.

Research that did not distinguish between legal and illegal immigrants still found significant wage growth among immigrants. Economists Harriet Duleep and Mark Regets found that after a decade in the United States the earnings gap between new immigrants and natives largely disappears, with immigrant wage growth faster than native (6.7 percent vs. 4.4 percent).

Education

A similar story on legal immigrants can be seen in the Pew Hispanic Center’s analysis of Census data on education and immigrants. Overall, 32 percent of legal immigrants have obtained a bachelor’s degree or higher, compared to 30 percent of natives and 15 percent of illegal immigrants.

What about those who did not finish high school (ages 18-24)? Among illegal immigrants, 49 percent did not graduate high school, compared to 21 percent of legal immigrants and 11 percent of natives. Even among illegal immigrants who completed high school, less than half went on to attend college.

In contrast, among immigrants and natives who have completed high school, more legal immigrants have gone on to attend a college than natives – 73 percent of legal immigrants vs. 70 percent of natives – according to Passel’s research.

Education levels for legal immigrants improve across generations, just as they have historically for Americans. “Turning to the data, educational assimilation appears alive and well,” according to Pia Orrenius, senior economist, Federal Reserve Bank of Dallas. “High school dropout rates for immigrants improve across generations, dropping from 27 percent in the first generation to below the native average of 8.9 percent in the third generation.”

English Language

Do immigrants and their children learn English? Do they want to learn English? It’s possible many Americans believe the answer is “no.” The data suggest otherwise.

In the report The New Americans, produced by the National Research Council, only 3 percent of immigrants in the country 30 years or more reported not speaking English well in the 1990 Census. This illustrates that assimilation takes place. But also how important it is to make judgments on data that are longitudinal, since newly arriving immigrants can skew the totals.

The story is quite positive with the children of immigrants. According to a Pew Hispanic Center survey, 88 percent of second generation children from Latino immigrant families and 94 percent from the third generation said they spoke English very well.

Contrary to concerns Spanish-speaking immigrants will pass along to their children and grandchildren a proclivity to speak Spanish over English, research shows the opposite is true. A study by Frank Bean and Ruben Rumbaut (both University of California, Irvine) and Douglas Massey (Princeton University) found “Although the generational life expectancy of Spanish is greater among Mexicans in Southern California than other groups, its demise is all but assured by the third generation.”

Bean, Rumbaut and Massey concluded, “Based on an analysis of language loss over the generations, the study concludes that English has never been seriously threatened as the dominant language in America, nor is it under threat today.”

Conclusion

The conclusion one draws from the data is that today’s immigrants are indeed assimilating. As a group, they are gainfully employed and experience wage growth over time, education levels rise, and acquisition of the English language increases, particularly in the second generation. This does not mean all immigrants assimilate. But it does mean that, overall, the American “melting pot” continues to work.

Immigration Blog

Responsible Ways to Increase Compliance with H-1B Visas

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While critics often overstate problems with H-1B temporary visas, it is good policy to eliminate H-1B visa fraud in a practical manner. Perhaps the best way is to empower the potential victims of such fraud – H-1B visa holders. To the extent the current legal regime is insufficient to protect H-1B professionals it can result in individuals being taken advantage of, which harms the H-1B visa holder and, potentially, American workers.

Even if the typical H-1B visa holder is not an indentured servant, as critics allege, situations can arise that leave an individual vulnerable to exploitation. For example, one type of case is when a professional enters the United States but goes a number of months without working or being paid. Such an employer has acted illegally, since it is explicitly against the law to “bench” or place someone in a nonproductive capacity and not pay the individual.

Recommendations

To address these and other situations a number of measures can be taken that would enhance protections for H-1B visa holders and, indirectly, U.S. professionals.

First, Congress, USCIS and DOL should explicitly protect the immigration status of any H-1B visa holder who files a complaint alleging a violation by his employer. Whistleblower protections exist under current law. However, these provisions are not widely known, carry a degree of ambiguity, and are virtually unpublicized by the Department of Labor and U.S. Citizenship and Immigration Services.

More explicit language by Congress can be combined with effective action by government agencies to protect the immigration status of whistleblowers. This should not require an employer to pay a salary to an individual simply because he or she filed a complaint that is pending, since that can easily be abused. And there should be discouragement in the law or regulations regarding the filing of frivolous claims. However, making it clear that an H-1B visa holder who files a complaint can stay in the United States in H-1B status (and seek other employment) while a complaint is adjudicated would increase protections for the individuals and the integrity of the H-1B visa process.

Second, a process should be in place for an H-1B visa holder to file for private arbitration, if necessary, to retrieve disputed wages owed. Such a dispute may not rise to the level of a formal complaint or perhaps an individual feels uncomfortable contacting federal authorities over a private wage issue. While government bureaucrats are not universally loved in America, they are loathed in other nations. The right to arbitration of a wage dispute, which could also carry protection of immigration status, would help provide greater employee-employer balance for a group of people concerned with their immigration status in the United States.

Third, increase employment-based green card quotas and eliminate the per country limit for skilled immigrants. The possibility one would need to re-start the process with a new employer can limit the mobility of someone in H-1B status, which would make them less likely to complain. While most employers only want people to work for them who wish to be there, some employers could take advantage of a situation created by Congress not increasing the quotas for employment-based green cards.

Fourth, all H-1B visa holders should receive the key documents relevant to their case and H-1B status. This includes a copy of the labor condition application, which carries wage information and, for example, the I-797 approval notice. USCIS and the Department of Labor should seek to ensure H-1B visa holders are receiving the documentation they are entitled to, as well as information related to protection of immigration status and how to file complaints.

Finally, Congress should avoid enacting measures that would be so restrictive as to encourage U.S. employers to hire skilled foreign nationals abroad rather than in the United States. Two such actions would be to apply “recruitment” and “nondisplacement” attestations to all U.S. employers. There is no evidence of a need to expand the scope or application of these attestations. In the days of flexible job functions and multiple locations such provisions can cause a General Counsel to conclude his or her company may be unlikely to be in compliance if they hire any H-1B professionals. The safer alternative would be to expand outside the United States rather than risk such legal liability.

Current Law Addresses Key Concerns

Current law already addresses the main concerns of critics. Under Section 413 of the American Competitiveness and Workforce Improvement Act (passed in 1998), a company found committing a “willful” violation of the law regulating the proper wages for H-1B visa holders and displacing a U.S. worker is barred for three years from hiring any foreign nationals in the United States and faces up to a $35,000 fine per violation.

The problem is that the solutions proposed by some critics are essentially thinly disguised efforts to prevent employers from obtaining H-1B visas for any skilled foreign nationals, not really an attempt to address abuse. If one were concerned with companies committing fraud, then strict new requirements would not impact businesses that already ignore the current rules but rather would affect those who obey the law.

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.