Reforming the US immigration system to make America attractive again

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Earlier this week, a CNN-University of New Hampshire poll showed Indian-American entrepreneur Vivek Ramaswamy to have become the most popular Republican presidential candidate after Donald Trump. Recently, Ramaswamy had pledged to overhaul the H-1B visa system, advocating for a merit-based selection process, instead of the current lottery system.The US immigration system is widely recognised as broken. But issues at the US-Mexico border take precedence over much-needed reforms for legal immigrants, including skilled workers, entrepreneurs and students. In the context of reforms, OpenAI CEO Sam Altman had tweeted, ‘One of the easiest policy wins I can imagine for the US is to reform high-skill immigration. The fact that many of the most talented people in the world want to be here is a hard-won gift. Embracing them is the key to keeping it that way. Hard to get this back if we lose it.’

The need for legal immigration reforms extends beyond H-1B visas. It includes addressing the employment-linked green card backlog, which particularly affects Indian nationals, and preventing family separations due to ‘agedout’ children. There is also a need to create new visa categories, such as for startup founders. Bills introduced for such reforms have faced challenges in the legislative process.

The legal immigration system in the US is riddled with static immigration quotas for work visas. In addition to numerical quotas, the immigration laws also micromanage demographics with a per-country cap for green cards.

According to a Cato Institute study based on March 2023 data, about 1.07 million Indians are stuck in the employment green card backlog (EB-2 and EB-3 categories), with a processing time estimated at 134 years (or 54 years when considering factors like death or ageing out). In July, Canada seized the opportunity to attract skilled talent disenchanted with the US immigration system by announcing an open-work permit programme for 10,000 H-1B candidates, which was quickly filled.

US leaders are not immune to the dangers of losing out on the global war for talent. In July 2021, a House subcommittee on immigration and citizenship held hearings from a cross-section of domain experts on, ‘Oh, Canada! How outdated US immigration policies push top talent to other countries’. The hearings threw up a host of ideas and solutions. Given the current strained relations between India and Canada, the US has an opportunity to now immensely benefit — if it introduces pragmatic immigration reforms.

The US lacks a startup visa programme. This is surprising given that 44.8% of Fortune 500 companies were founded by immigrants or their children. According to a recent American Immigration Council study, these immigrant founded companies generated $8.1 trillion in revenues in 2002 and employed over 14.8 million people.

Ilya Strebulaev, professor of finance at Stanford Graduate School of Business, has pointed out that 474 US unicorn founders (44% of his sample size) are first-generation immigrants, with 8% hailing from India.

Unlike countries like Canada, Germany or Australia, which offer path ways to permanent residence for entrepreneurs, the US provides only limited parole through its International Entrepreneur Rule (IER) programme. This allows qualified international entrepreneurs — who meet specific requirements, including funding — to stay in the US for two-and-a-half years, with the possibility of an extension of a similar tenure.

The National Venture Capital Association has noted that many entrepreneurs enter the US on an H-1B visa, and spend many years working for an employer before obtaining a green card that enables them to start their venture. Given the decades-long wait time for Indians, this translates into lost opportunities. Unfortunately, a bill to introduce a startup visa did not make progress.

A few days ago, the US Citizenship and Immigration Services (USCIS) initiated the modernisation of the H-1B visa programme by sending a proposed rule to the Office of Management and Budget (OMB) for review. These rules are expected to redefine the employer-employee relationship and enhance anti-fraud measures in the H-1B cap e-registration system. The process leading to finalisation will take several months. Additionally, the Joe Biden administration plans to release a preliminary draft in June 2024 to raise wages for H-1B visa holders.

As an alternative to the lottery mechanism, the Trump administration had proposed a selection rule that prioritised H-1B cap visas based on wage levels, favouring those with the highest salaries in their occupations and geographic areas. Critics argued that this approach could harm international students who often start their careers in H-1B status at lower wage levels. This, in turn, they added, would make the US a less attractive education destination. Or, it could make it difficult for hospitals in remote areas to get immigrant medical and paramedical staff.

There is an ongoing debate about whether the US work visa system should be points-based. However, it is important to note that Canada’s points based mechanism is for those seeking permanent residency. The US could potentially draw insights from Canada’s Global Talent Stream (GTS) programme, which quickly approves temporary work visas for ‘required’ skilled foreign professionals without numerical quotas.

Canada has also recently introduced category-specific express entry draws for permanent residency. For specific draws in 2023, the occupations covered will be healthcare, STEM, trade (carpenters, plumbers, electricians, etc), transport, agriculture and agri-food.

Canada’s immigration policies are flexible and designed to meet its changing needs. The US appears bogged down with antiquated laws and its stringent legislative process.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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