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Green Cards for Entrepreneurs

Article by Robert E. Litan February 13, 2013 //   4 minute read

Since the early years of President Bush’s second term, federal policy makers have been stalemated on immigration reform. Virtually all of the debate has focused on what to do about the roughly 11 million illegal immigrants already here. Both Presidents Bush and Obama have advocated giving illegal immigrants a pathway to citizenship. Unfortunately too many other elected officials have preferred policies intended to send them home. This debate has not only been unconstructive in its own right, but has distracted attention from a potentially much more politically palatable, though admittedly limited, approach to immigration reform: namely, giving green cards to immigrants who want to establish businesses in the U.S. and employ American workers. A terrific television program that recently ran on WNET (you can watch it here) highlights the important contributions of immigrant entrepreneurs to the U.S. economy. By definition, immigrant entrepreneurs don’t take jobs from anyone, they create jobs. While this may not be true immediately upon their arrival, a visa program can be constructed that makes their continued stay in the U.S. contingent upon their hiring of non-family Americans. The Startup Visa Act, sponsored by Senators John Kerry (D-Mass) and Dick Lugar (R-Indiana) would do precisely that. It proposes three “doors” for immigrant entrepreneurs. Two “doors” are tied to minimum thresholds of third-party capital committed to their enterprises, and the third is tied to prior revenue earned in the U.S. Another act — the Startup Act, introduced by Senators Jerry Moran (R-Kansas) and Mark Warner (D-Virginia) — contains similar provisions beyond just immigration reform that would spur new firms and nurture their growth. This act would create 50,000 new work slots for foreign students who complete their degrees at American universities in science, technology, engineering, or math (STEM) disciplines. In addition, the act would provide another 75,000 new work permits for immigrant entrepreneurs. The U.S. already has an ample supply of potential immigrant entrepreneurs who are ready to take advantage of a more sensible startup immigrant visa program. There are roughly 1 million high-skilled immigrants already working in this country under limited 6-year visas who otherwise will have to return home. In addition, roughly 120,000 foreign students graduate from U.S. universities annually, about half of them with highly useful degrees in STEM disciplines. Under current policy, these high-skilled immigrants also have to go home after finishing their studies — even though these students typically pay full tuition and thus effectively help subsidize many U.S.-born American students who receive financial aid. Despite the welcome rebound in new jobs being generated in the U.S. economy over the past several months, it will take years of sustained job creation to get back to anything resembling full employment. Allowing job-creating immigrants to come to this country (or remain here) would be an important contribution toward this effort. This should be an easy sell for politicians worried about getting reelected while they and their consultants work on ways to convince the American people of the net benefits of broader immigration reform.