Do immigrants take jobs or create them?
Shortly I will be participating in the March for Innovation, in support of liberalizing our immigration policies. I wanted to share some of why I favor a more open approach to immigration, in particular for highly skilled immigrants.
I will start with the counter-argument. In an environment of high unemployment, fears that immigrants take jobs from Americans are heightened. Why should we bring in immigrants to do good jobs when there are plenty of out-of-work Americans? To many, this argument is compelling. I don’t agree.
As the leader of a rapidly growing technology company, I am looking to hire the best talent I can get. I am a patriotic American and I want us to have a strong economy and plentiful jobs for all members of our society. At the same time, we live and work in a globally competitive environment. When we find someone with exceptional talents, I want to us hire them. I need us to hire them. We must make our company strong, so that it can grow and thrive and continue creating jobs and innovating.
While 10gen is still small – under 300 employees – we are growing fast and we have offices around the world. We’ve found talented people all over the world. When we found a talented engineer in Iceland, we hired him. We hired him initially to work in our London office, and eventually he moved to the US. His visa to come to the US took a while, but he was productive in our London office while it was being processed. When I found a talented HR executive in France, we hired him, again initially in London. Again he eventually moved to the US.
Some would argue that these hires cost American jobs. I don’t agree. If our immigration policies didn’t allow us to move these employees to the US, they would still be working in London. They would be paying taxes in the UK and their salaries would be contributing to the UK economy. I think the American economy is stronger with them here, paying taxes and contributing to our economy.
Moving beyond anecdote, studies have shown that for every 100 foreign born workers with and advanced degree in Science, Technology, Engineering or Mathematics from an American University an additional 262 jobs are created for US natives. Adding 100 H-1B (skilled immigrant) workers created 183 jobs for US natives. Perhaps more surprisingly, adding 100 H-2B (less-skilled non-agricultural) workers added 464 jobs for US natives.
Many of the jobs tech companies hire immigrants for are engineering jobs. They are often very high end engineering jobs designing complex products where hiring the best candidates in a global labor pool can make the difference between success and failure for the company. If that engineer is successful and builds a good product, many more jobs follow. The company will hire sales people and accountants. It will hire human resources people, marketing people, administrative assistants, and cafeteria workers. Those workers will buy cars and houses. They will go to the doctor and to the dentist. They will pay property taxes, send their children to school, eat out at Denny’s, and shop at Home Depot. We don’t associate those jobs in sales, accounting, dentistry, food service, and retail with a foreign-born engineer but we should. It is engineering excellence and innovation that power the tech industry and much of our economy.
Not only do immigrants help with employment, they also help balance the budget. In 2009, the average foreign-born adult with an advanced degree paid over $22,500 in Federal, State, Social Security and Medicare taxes. Their families received welfare, unemployment, medicare, and other cash benefits of less than one tenth that amount. More skilled immigrants will help balance our budget.
Finally, as I alluded to above, immigrants are huge contributors to innovation. They found companies and invent things. 44% of silicon valley startups are founded by immigrants. And its not just startups – 40% of the Fortune 500 were founded by immigrants or their children. On the patent side, at the top 10 patent-producing US universities, more than three quarters of patents have at least one foreign inventor.
Economic relationships are complex. It is easy to see a foreign worker as taking an American job. It is harder to see how that engineer who build something innovative creates jobs for Americans selling that innovation, servicing those customers, and indirectly building houses and cars, educating children, and serving meals for those employees. In the end, the choice is not whether that highly talented foreign-born engineer takes a job from an American. The choice is whether that highly talented foreign-born engineer innovates here or elsewhere. I choose here.