MAGA Republicans have long criticized the H-1B visa program, which allows U.S. organizations (businesses, non-profits, and government) to enter a lottery for the right to hire high-skilled foreign workers temporarily. Up to 85,000 visas are up for grabs annually. Critics argue the program takes jobs away from American workers, who are purportedly President Donald Trump’s top priority. So, it wasn’t surprising to see him require any organization petitioning to employ an H-1B worker to pay $100,000—a fee few can afford.  

Will this de facto ban on H-1B visas protect American workers? Don’t count on it. Likely the opposite will result: Fewer U.S. jobs and weaker U.S. companies. 

There are shortages of American STEM workers, and a de facto ban on H-1B visas would make several things more likely. First, American tech firms competing in global markets will be more likely to hire persons to work overseas, either as remote workers or via a foreign affiliate. The consequence would be fewer tech jobs in America. Second, because American companies “export” services when U.S.-based workers deal with foreign clients, shifting workers overseas would recategorize these exports, worsening the trade balance that is Trump’s obsession. Indeed, America enjoys a surplus in service exports that would diminish if firms increased their offshoring.  

Finally, if U.S. companies had less access to foreign talent, they would be less competitive than their foreign counterparts, including Chinese companies. As peer-reviewed research shows, the share of workers with H1-B visas in any given state positively correlates with patents issued in that state, controlling for other variables, such as the number of high-tech workers more broadly. Foreign workers contribute to innovation and, by extension, job growth.  

Opponents of the H-1B program base their critique on faulty assumptions. For instance, they argue that employers use the program to undercut American workers’ wages. However, a 2010 peer-reviewed study found that after controlling for the state in which IT professionals work and for job titles, IT professionals with an H-1B earn 2.6 percent more than their American counterparts. That wouldn’t be the case if firms like Apple bypassed American IT professionals in favor of cheaper foreign ones. 

There’s also evidence that H-1B workers boost workers’ wages at their firms.

Research finds that firms that win H-1B visas are more likely to survive long-term than other firms, and that most employees working at these firms experience wage increases. One study found that young college-educated workers, whether foreign- or native-born, experience a 4 to 5 percent wage increase at firms with H-1B visa workers, while young, non-college-educated workers experience a 3 percent wage increase. Moreover, this study found no adverse effect on the employment of native-born workers at the firms. Critics of the H-1B program ignore the shortage of qualified high-caliber workers in America due to the poor quality of the U.S. educational system. H-1B opponents assume that a worker is a worker and that companies can hire an American if they need someone. At the signing ceremony for Trump’s proclamation, Commerce Secretary Howard Lutnick made this point: “If you’re going to train somebody, you’re going to train one of the recent graduates from one of the great universities across our land. Train Americans, stop bringing in people that take our jobs.” Ah, if only it were that simple. 

Compared to other fields, few Americans earn STEM degrees, and many who attempt them don’t finish. In fact, the Department of Education reports that only 41 percent of students who started STEM majors in college in 2009 earned a STEM degree. Part of the reason is likely inadequate high school preparation. By 2016, more high school students in California took ceramics than computer science. Additionally, 15-year-old U.S. students ranked 28th out of 37 OECD countries in math. More recently, the latest scores from the National Assessment of Educational Progress (NAEP)—also known as the “Nation’s Scorecard”—show that only 55 percent of twelfth-graders achieved “basic” proficiency in math.  

As a result, America simply isn’t turning out enough STEM graduates to fill the expected demand. According to the Bureau of Labor Statistics, employment in STEM fields is expected to grow more than double that of non-STEM occupations by 2029. This shortage of homegrown talent is why 45 percent of U.S. STEM employees with a doctorate are foreign-born. 

Even if we could wave a magic wand and improve education—a highly dubious proposition—employers wouldn’t realize the benefits for another two decades, though they need qualified workers now. 

But there is one more factor: The United States does not have a monopoly on aptitude, and workers with high aptitude are, on average, more valuable to employers than workers with less ability. Given the world’s population relative to America’s, the sheer volume of talent outside the United States is larger than inside it. If the president is truly worried about some U.S. companies hiring skilled foreign workers when they could be hiring skilled Americans, a better solution would be for Congress to allow the U.S. Citizenship and Immigration Service to auction off the 85,000 H-1B visa slots available each year to the highest bidders. Organizations needing them will bid up the price and win the auctions. In contrast, organizations that can find skilled American workers to hire for less than the auction price, plus salary and benefits for a foreign worker, will do that instead. To make the process fairer for startups and young firms, as well as for non-profits and universities, Congress could establish two auctions: one for firms under five years old and one for firms five or more years old. It could also establish auctions based on firm size, revenues, or category of organization (non-profit, university, etc.) to ensure a level playing field for competitors.  

It’s time for an honest debate. We can turn inward and protect a relatively small number of American workers, weakening the nation. Alternatively, we can allow U.S. employers to recruit a modest number of the best and brightest from around the world, yielding a more innovative and stronger nation. 

The post Trump’s H-1B Visa Plan Will Backfire appeared first on Washington Monthly.

The progressive movement, from its very beginnings, put great stock in marshaling scientific and technological advances to solve social and economic problems. For a quarter century or more, the movement’s adherents took a rational, technocratic approach to reforming everything from financial institutions to schools.

Early progressives were big believers in accelerating productivity as a means of increasing people’s wages and improving their work lives. The author and social activist Jack London captured the sentiment of the times, at least for Socialists, when he said,”Let us not destroy these wonderful machines that produce efficiently and cheaply. Let us control them.” Indeed, in those early days, progressives differed from conservatives only insofar as they were more concerned about ensuring that the fruits of productivity growth were widely shared with workers and consumers.

Unfortunately, a growing number of progressives in the last few years have become decidedly ambivalent, if not downright hostile toward the idea of increasing productivity, seeing it as a threat to progressive goals of full employment, fairness, and stability. Many of today’s progressives believe that average American workers no longer benefit from gains in productivity, and that productivity growth through technology-based automation will ultimately kill jobs. Gains in productivity, the logic goes, mean that fewer workers are needed to do the same work. Robots and artificial intelligence are the poster children for these fears.

But in truth, the only sustainable way to increase wages for Americans and to help increase government revenues is what it was a century ago: to raise productivity. That’s why a truly progressive economic agenda must include pro-productivity policies that drive growth. This includes policies such as increased public investment in research and technology as well as tax policies that spur investment in equipment and machines.

Wages Can’t Grow Unless Productivity Rises

Many prominent progressives argue that despite vast gains in productivity, average workers have benefited little. For example, the liberal Economic Policy Institute (EPI) states that the vast majority of U.S. “workers have not benefited from productivity growth for four decades.”

If this were true, then progressives would be well justified in abandoning their faith in productivity. But it’s not.

Liberal economist Dean Baker finds that from 1973 to 2006, median hourly compensation grew by 20.1 percent while what he calls “usable” productivity – “productivity growth that can be translated into higher wages and living standards” – rose by 47.9 percent over that same time period. While Baker attributes the difference in wage and productivity gains to rising inequality, he also cites “a more fundamental problem”:

[E]conomic growth, or more specifically productivity growth – has not been very strong over this period. Productivity growth is the key variable to measure, because over the long-term, productivity is the main determinant of living standards.

Data from the Congressional Budget Office also show that the bottom 90 percent got between 42 and 47 percent of the growth in after-tax income since 1980. To be sure, average Americans would have gotten more if income inequality had not increased, but they would have gotten nothing had productivity stalled completely. Sustainable real wage increases are simply not possible unless productivity grows as well. In the absence of productivity gains, the lion’s share of wage increases are merely nominal – the products of rising inflation.

Increasing Productivity Doesn’t Kill Jobs – It Creates Them

In an economy that still is not creating jobs fast enough, some progressives argue we can ill afford to embrace machines that destroy jobs. As liberal economist Joe Stiglitz states, “It doesn’t have political appeal to say the reason we have a problem [job losses] is we’re so successful in technology.”

But studies from organizations as diverse as the International Labor Organization, the Organisation for Economic Cooperation and Development and the United Nations Industrial Development Organization show that increases in productivity lead to more, not fewer, jobs. From 1947 to 2012 there was an inverse relationship between productivity growth and unemployment: periods of higher productivity were associated with lower rates of unemployment.

One reason productivity creates jobs is that when organizations raise productivity, they don’t put those savings under a mattress; they either cut prices or raise wages. And people spend their higher wages or savings on a wide variety of things: Going out to dinner, buying a new car, sending their kid to college. This spending creates more jobs while at the same time fueling a positive and optimistic cycle of more spending, more jobs, more investment, and so on.

Another reason higher productivity creates jobs is that it helps firms maintain or expand global market share. A principal way that rich countries can compete with low wage nations is to be more productive. For example, German manufacturers invested 65 percent more in machinery and equipment over the last 15 years to drive productivity than did U.S. manufacturers. That’s one reason why the German economy has a 55 percent higher share of workers in manufacturing and why they run a manufacturing trade surplus, including with China, despite paying their workers 40 percent more than U.S. manufacturing workers.

But some still refuse to see the connection. In their book, The Second Machine Age, Andrew McAfee and Erik Brynjolfsson argue that after growing together in the prior decades, “productivity and employment have become decoupled” since 2000. And many progressives have latched onto this factoid as proof that productivity kills jobs. But the reason productivity gains and employment rates became “decoupled” is that while productivity continued to grow (albeit at a much slower rate than before), the growth of the working-age population slowed. The number of Americans aged 25-54 years entering the workforce declined, as did the entry of women into the labor market, as the 30-year long expansion peaked. In other words, the slowdown in labor force growth had absolutely nothing to do with productivity growth and everything to do with changing demographics. Employment can’t increase if the population of potential workers doesn’t increase as well.

Raising Productivity Won’t Contribute to Inequality – It Will Reduce It
Many progressives blame productivity for increasing inequality, seeing it as the cause of the “hollowing out” of middle-class occupations. However, as the liberal Economic Policy Institute (EPI) has shown, productivity has not been the cause of income inequality in recent decades. EPI finds that inequality didn’t increase because middle wage jobs were eliminated by productivity gains. Rather, inequality increased within occupations, with some individuals making “winner-take-all” incomes at the expense all other workers in the same occupation. This had nothing to do with productivity.

Moreover, high productivity has historically been associated with reduced income inequality, not more. During the 1960s, productivity grew at rates more than twice as fast as it has in the last 10 years. However, income inequality declined while median family wages increased by almost 30 percent.

Higher Productivity Means More Government Resources to Spend on Progressive Goals

A key impediment to achieving many progressive goals is the size of the federal budget deficit. Even those who deny that the national debt is a problem admit that it would be easier to increase federal spending if budget deficits were not so large. Higher productivity can play a key role in boosting revenues.

If we could increase productivity by 1 percentage point a year, after ten years, federal revenues would be more than $400 billion larger due to economic growth. That money could be used to increase public investment and spending to advance social goals like reducing poverty, fixing our cities, and expanding health care.

Raising Productivity Improves Living Standards for the Middle Class

Higher productivity is also key to bringing more Americans into the middle class.

Efficiency gains in the manufacturing of consumer goods and the production of food mean that these products are now more affordable for middle-class consumers, and that families have more income to spend on items like education and housing.

For example, American households in the third income quintile spend just 12 percent more on food at home than do households in the second (lower income) quintile, but they are able to spend almost 50 percent more on housing and twice as much on retirement savings and other insurance. Getting more Americans into these higher income levels can’t happen without greater productivity.

***

Ultimately, the question is whether we would prefer to forestall productivity and consign our children to a world no better than the one we have now. The answer is no.

Progressives should encourage, rather than resist, productivity growth as the means to improving the living standards and economic well-being of the middle class. This means they should embrace a national productivity agenda. This should include a wide array of policies, but three are worth mentioning here. As corporations have cut funding for incumbent worker training, government policy needs to step in, as a better trained workforce not only helps boost labor productivity, it makes it easier for workers to get other jobs if they are laid off. We need significantly more funding for productivity-related R&D, in areas such as robotics, artificial intelligence, and more durable materials. Finally, given that U.S. companies invest significantly less as a share of GDP in new machinery, equipment and software than they did 40 years ago, we need stronger tax incentives to encourage companies to invest in new, productivity-enhancing technology.

Many progressives are also uneasy about productivity because they see it as too disruptive. As demonstrated above, higher productivity actually is not very strongly related to net job loss. Nevertheless, progressives need to champion transforming the Trade Adjustment Assistance Act (TAA), which helps workers hurt by trade, into a comprehensive Trade and Technology Adjustment Assistance Act (TTAA), to help all displaced workers, no matter the cause of their displacement – and to help workers adapt to changes brought by gains in productivity and automation.

Progressives were right to embrace technological advances and productivity a century ago, and it is all the more important to embrace them now, because constant innovation is the lifeblood of our economy. To slow progress or reverse course would be to gradually impoverish rather than enrich people’s lives – which would be a decidedly unprogressive thing to do.

The post The Progressive Case for Productivity Growth appeared first on Washington Monthly.

Unfortunately, America’s innovation environment – our “national innovation system” (NIS) – is currently threatened by misguided public distrust of technological progress and the economic, political, and social institutions that help create it.

While the right cringes at “crony capitalism” and insists the government should not partner with private industries, the left equates business success to the “one-percent.” Combined, these viewpoints contribute to “neo-Ludditism,”a growing fear of innovation and technological progress, whether regarding genetically modified organisms (GMOs), big data, or automation. Misconceptions of how technology will impact privacy, labor markets, health outcomes, and personal freedoms are perpetuated by interest groups and the media and damage America’s ability to effectively compete internationally in the most advanced industries.

These trends are particularly troubling given the efforts of our global competitors to strengthen their own innovation systems and promote their use in boosting economic and job growth.

As I describe in a recent report, America’s National Innovation System is best understood as being comprised of three separate components: (1) a strong and collaborative business environment; (2) a supportive trade, tax, and regulatory environment; and (3) an innovation policy environment that supports research, entrepreneurship, and human capital development. Together, these three components can be visualized as an innovation “triangle,” with each “side” supporting a valuable success factor necessary for excelling in a globalized, knowledge-based, innovation-driven economy. Three strong sides will foster economic evolution and keep a nation at the top of the world economy.

It is clear that the first side of the triangle – the business environment in America – remains strong. U.S. firms are among the tops in the world in reinvesting profits in information technology goods, providing venture capital, and offering financing options to firms.

The second side of the triangle – the U.S. trade and tax environment – is also healthy. Because our system primarily focuses on protecting and benefitting consumers of goods and services—as opposed to producers—the United States erects few barriers to entry for new businesses. When market forces fail to deliver competition, stringent anti-trust policies ensure non-monopolistic prices for consumers. As a result, our regulatory, standards, and intellectual property systems are actually fairly good at keeping up with technology and adapting to accommodate new entrants.

Of course there is room for improvement. At times, businesses are caught focusing on short-term profits at the expense of long-term objectives as Americans become increasingly unwilling to invest in the future. Moreover, budget cuts for regulatory agencies means they have less ability to calculate the costs and benefits of individual regulations, decreasing efficiency and effectiveness. Consequentially, the regulatory burden for young firms has increased over the last 20 years, and it is now easier to open a business in Canada than in the United States.

But the national innovation policy environment, which used to be America’s strength, is perhaps the weakest component of the American innovation success triangle. The United States does not provide nearly enough federal funding for research and development (R&D) in pure and applied sciences, which has led to a steady decline in technological discoveries, advancements, and commercialization by U.S. companies. American labs and universities also fail to effectively facilitate technology transfers to the private sector or to develop the public/private partnerships which are necessary to produce successful high-tech innovation clusters.

Furthermore, the American education system produces an under-supply of graduates with the science, technology, engineering and math (STEM) skills demanded by the most advanced sectors of the economy. Finally, America turns away too many highly-skilled immigrants who create new businesses, engage in academic research, and infuse creative energy into the economy.

The United States used to have the world’s strongest innovation triangle. However, as other nations have realized and the United States has not, nations are currently in a race to build the most effective National Innovation Systems. The nation that wins this race will reap the rewards of future economic prosperity and global leadership that the United States enjoyed since the end of World War II. Already, American high-tech manufacturing strength is slipping and our advantage in science and technological discovery has greatly diminished.

To rebuild the world’s strongest National Innovation System, the United States must strengthen trade, tax, and regulatory institutions, implement policies to encourage research, human capital development, and the flow of ideas, and abandon its absurd phobia of scientific advancement. If we fail to do so, the United States will be left with a slower economy, fewer jobs and a less prosperous society overall.

[Cross-posted at Republic 3.0]

The post The Decline of America’s National Innovation System appeared first on Washington Monthly.

Let’s look at Teitelbaum’s claims. First, he, like most of the shortage deniers, argues that “U.S. higher education produces far more science and engineering graduates annually than there are S & E job openings”. But this counts social science and health degrees, which are not really STEM jobs. Moreover, it’s not accurate to count just job openings, you need to count all hires, including ones when a worker retires or leaves to raise a child. When you do both of these adjustments, the ratio is pretty close to one-to-one.

But it’s even worse than that. Many STEM grads work outside of tech-based industries (e.g., the Intels and Mercks of the world) because employers in other industries need them. As Tony Carnivale, director of the Georgetown University Center on Education and the Workforce, writes (pdf), “…the diversion of STEM talent and STEM workers into other occupations results from the increasing value of the competencies that are associated with STEM occupations…In all but two occupational clusters, the rate of growth in demand for core STEM competencies has increased at far greater rates than the growth in employment.”

Teitelbaum would also have us believe that all is well because more students than ever are interested in STEM. If so, why then do 4 times more high school students take the AP Art History test than the AP Computer Science Test? It’s not because of those high wages in art history jobs. Moreover even if they are interested in STEM, a large share switch out to other majors. Seymour and Hewett found that 44% of STEM majors witch out compared to just 30% of humanities majors.

This high switch out rate is also one reason why STEM graduation rates have significantly lagged behind non-STEM graduation. From 2000 to 2007, non-STEM bachelor’s degrees grew 24% compared to just 16% for STEM degrees, while from 1993 to 2007 total Masters’ degrees increased twice as fast as STEM master’s degrees.

Teitelbaum then falls back on the next standard claim: “Were there to be a genuine shortage … there would be evidence of employers raising wage offers.. . But the evidence points in the other direction.” No, the evidence points in the right direction.

As the Brookings Institution’s Jonathan Rothwell shows, the earnings premium for STEM skills (controlling for experience, education and sex) has grown from around 22 percent in 1990 to 30 percent in 2012. Dartmouth’s Matt Slaughter and UC San Diego’s Gordon Hanson found that “the inflation-adjusted wages of major STEM occupations grew over the last decade while real wages for most other U.S. occupations fell.” Hardly evidence of surplus.

So what’s behind the man bites dog STEM stories? The short answer is ideology. Most of the advocates of no-shortage, including people like Ron Hira, Hal Salzman, Richard Freeman, and of course Teitelbaum are focused more on an agenda of redistribution, ensuring higher wages for workers, including STEM workers. Arguing against shortages is part of a strategy to oppose high-skill immigration policies so that shortages increase even more and already well paid STEM workers get paid even more.

Yet policies established to achieve nothing more than an increase in STEM wages by restricting the supply of workers would have two bad effects. First, they would lead to higher prices for products and services that have STEM talent as a significant input. This would be a transfer payment from all consumers, including low income ones, to some workers, many of whom are already very well paid. Restricting the supply STEM workers would also reduce the competitiveness of U.S. establishments that rely on STEM labor, reducing U.S. jobs and economic growth.

The goal of economic policy should be a “larger pie” via increased productivity, innovation and competitiveness, not a smaller pie with slightly higher wages for a few. Ensuring an adequate supply of high-skilled, STEM labor, through both better domestic education and training policies and more liberal high-skill immigration policies is a key factor in achieving this goal.

The post The Myth of the Myth of the Science and Engineering Shortage appeared first on Washington Monthly.

The continuous budget battles, the brinksmanship over the debt ceiling that led to the downgrading of America’s credit rating last year, and the dangerous, across-the-board spending cuts required by sequestration have hampered both public and private research and development (R&D) investment and reduced the impact and effectiveness of the entire U.S. innovation ecosystem. For example, ITIF has argued that the sequestration cuts in federal R&D could result in a three percent reduction in patents annually while reducing our nation’s gross domestic product (GDP) by a minimum of $203 billion per year through 2021. And while Congress argues over continuing resolutions, our global competitors are ramping up their investments in innovation designed to win in the industries of today and tomorrow.

Every day the shutdown disrupts our innovation engine: furloughed NASA scientists stay home, progress halts on medical breakthroughs funded by the National Institutes of Health, and entrepreneurship loans go unfunded by the Small Business Administration, all while we gamble with our national safety by shutting down disease monitoring programs at the Centers for Disease Control.

But these examples are only a small part of how government drives our innovation economy. Federal investment in basic and applied research and technology development is a critical economic driver, spurring the creation of next generation technologies, enhancing commercialization and augmenting private investment. Numerous examples, from lasers to the Internet to the current surge in natural gas extraction, highlight the central role government support can play in driving economic development, job growth and business investment. And federal money for innovation does not substitute for private investment; in fact, every additional dollar of public research induces an additional 27 cents of private R&D investment.

Unfortunately, over the last two decades, the United States has accumulated a growing investment deficit, defined as the shortfall of investments in the scientific research and new technologies that provide a critical foundation for long-term economic growth. We are now just eighth among OECD countries in R&D as a share of GDP, while federal R&D investment grew in constant dollars at just 0.3 percent per year from 1987 to 2008. In contrast, numerous nations from China to Germany to Great Britain to Sweden are ramping up investments in science and technology even as some of these nations, like Britain, also face large budget deficits.

The U.S. investment deficit has received little attention as the budget fights have gotten more heated. But public and private investment is how we spur innovation, boost productivity and enable competitiveness. Moreover, growing GDP means shrinking deficits as a percent of GDP—the figure that actually matters for debt repayment. As Congress fights over issues like the Afffordable Care Act and raising the debt ceiling, it should remember one key thing: other nations are not sitting still, they want to win the race for global innovation advantage and are making big investments to do so. To say the least, this is most preferable to the U.S. strategy, exemplified by the haphazard, counterproductive budget process and the current shutdown.

The post Shutting Down Our Innovation Future appeared first on Washington Monthly.

The bipartisan “Gang of Eight” proposal included a provision to award green cards to immigrants earning advanced degrees in math, science and engineering from American universities. Another bipartisan bill introduced in January, supported by a diverse group of Senators including Republican Marco Rubio and Democrat Amy Klobuchar, would dramatically increase the number of high-skilled, “H-1B” workers entering the country, now capped at 65,000 per year, as well as use increased visa fees to fund domestic education programs in science, technology, engineering and math (STEM).

In fact, high-skilled immigration reform is such a “no-brainer” that business audiences outside Washington are often mystified that Congress hasn’t already passed a high-skill immigration bill.

The reason is, of course, politics.

Some, particularly Democrats, want to tie any movement on high-skill immigration reform to comprehensive immigration reform, recognizing that if a high-skill bill were to pass, the pressure to pass comprehensive reform would lessen. Unfortunately, we cannot afford to let more years pass without reforms that address the need for more high-skill immigrants, particularly in science and engineering. If comprehensive reform goes belly up, which hopefully it will not, Congress should at least pass a stand-alone bill that liberalizes and reforms high-skill immigration or we risk falling further behind our global competitors.

High-skilled immigration has played a vital role in U.S. innovation by making up for the deficits in our current education system in turning out more scientists and engineers. While STEM jobs play a key role in supporting U.S. economic vitality, the U.S. underperforms in STEM education. In 2006, the U.S. had 26 percent of the OECD’s K-12 students but just 14 percent of high-performing math students. Between 1997 and 2009, enrollment in the music theory Advanced Placement test grew by 362 percent, while enrollment in the Computer Science AB test grew just 12 percent. It’s so bad that three times as many students take the Art History AP test as the Computer Science test.

In fact, we appear to be well down the path John Quincy Adams predicted when he said, “I must study politics and war, that my sons may have liberty to study mathematics and philosophy, geography, natural history and naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.” The only problem is while art history might be personally satisfying it does nothing to make our economy innovative or competitive.

It doesn’t get any better at the college level. The United States ranks just twenty-seventh among developed nations in the share of students receiving STEM undergraduate degrees. In 2009, colleges awarded more undergraduate sports-exercise degrees than electrical engineering degrees. At the same time, up to three quarters of master’s and Ph.D. recipients in STEM fields are foreign-born. And these students are increasingly returning home after they graduate, in part because U.S. immigration policies make it difficult for them to stay.

Unfortunately, too many liberal redistributionists like Hal Salzman tell us we don’t need high skill immigration. They argue that all we need to do is just raise wages and those art history majors will switch to computer science. It turns out that information technology workers with a bachelor’s degree already make $29,000 more annually than art history majors, but it’s apparently not enough to persuade budding art historians to switch majors. Policymakers should reject the notion that STEM jobs are like truck-driving and nursing where wages balance supply and demand. STEM jobs are different because (1) they’re global (if U.S. wages are increased too much, companies will meet demand overseas); and (2) they’re not the kinds of job the majority of people choose in some kind of cost-benefit calculus. The reality is that most STEM workers are born (and then made.) And most of them these days are born overseas.

So given the John Quincy Adams orientation of so many Americans, we must depend for at least the time being on high-skills immigration to power our innovation economy. In fact, at least seven studies have concluded STEM immigrants have created 15 percent to 26 percent of the high-tech companies located in the U.S. At the same time, the limit on high-skilled immigration is now set so low—and the demand for high-skilled workers is so high—that we reached the H-1B cap this year in less than a week.

As our dysfunctional politics again leads to gridlock, other nations are already leaping ahead to grab as much of the high-skilled global workforce as they can. Take Canada. Not only have their leaders cut their corporate tax rate and expanded funding for research and development, they have also expanded high skill immigration, including its Start-up Visa, which provides a path to permanent residency for immigrant entrepreneurs. And Canada has not been shy about contrasting their reforms with the morass that is the American immigration framework. The Canadian government recently had billboards erected in Silicon Valley headlined with the slogan “H1-B Problems? PIVOT to Canada.” As Canada illustrates, if we choose to continue to restrict high skill immigration, other nations are more than happy to welcome those workers, with it being our loss.

So by all means the House and Senate should work to pass a comprehensive immigration bill. But if they can’t, can we at least attempt, despite our bitterly divided politics, to get something done? In this case, we ought to at least be able to pass a robust stand-alone high skill immigration bill that will drive U.S. competitiveness and job growth.

The post Half a Loaf on Immigration: Why High Skill Immigration Reform is Essential appeared first on Washington Monthly.