To create U.S. jobs, bring in immigrants

September 13, 2011

Bernd Debusmann is a Reuters columnist. The opinions expressed are his own.

WASHINGTON — In tandem with the $447 billion jobs plan President Barack Obama announced on September 8, his administration is breathing new life into an old program to draw job-creating foreigners to the United States. It’s known as the EB-5 investor program, has a clouded history, and can’t bring much relief to America’s unemployment misery.

But with 27 million people unemployed or underemployed and Obama’s own job depending on whether or not he can bring down the unemployment rate in time for next year’s presidential election, every job-creating opportunity is worth pursuing.

Which is why Homeland Security chief Janet Napolitano and Alejandro Mayorkas, the director of U.S. Citizenship and Immigration Services (USCIS), announced “streamlining measures” to America’s complicated immigration laws a few weeks before the president laid out his ideas on how to spur growth, a mix of tax cuts and infrastructure spending.

Unlike the Obama plan, tweaks to existing immigration rules need no approval from Congress so the administration has no-one to blame if the streamlining fails to yield results, such as a rush of foreigners investing $500,000 in a U.S. project that generates at least 10 jobs in areas of economic hardship and high unemployment. The incentive, apart from possible profits: a fast track to a “green card” (permanent residence) and U.S. citizenship for the entrepreneur and his family.

Long an object of desire for millions of would-be immigrants, a green card normally takes years to get. Approval for a conditional EB-5 green card can come through in a matter of weeks and the USCIS has established a Premium Processing Service that “guarantees processing within 15 calendar days for “projects that are fully developed and ready to be implemented.”

The impact of the enhancements announced by Napolitano and Mayorkas remains to be seen. According to projections by the Congressional Budget Office, the agency that provides economic data to Congress, lowering the unemployment rate by 1 percent (it now stands at 9.2 percent) would require 316,000 new jobs per month. That dwarfs the jobs created by the EB-5 program.

Since its inception in 1990, according to USCIS estimates, the program resulted in more than $1.5 billion in capital investments and created at least 34,000 jobs – an average of 1,700 a year. There has not been a single year when the annual quota of 10,000 EB-5 green cards was taken up. A Government Accountability Office report in 2005 blamed, among other things, “an onerous application process and lengthy adjudication periods.”

Those kinks have been ironed out, to hear the government tell it, and the United States is ready “to attract the best and brightest from around the world.”

But foreigners thinking of putting down $500,000 (for projects in depressed regions) or $1 million for other projects would be well-advised to read a Reuters report, the result of two months of investigations, on misleading promotions of the system by some of the specially-designated American businesses (known as regional centers) that are allowed to offer EB-5 visas to foreign investors.


The report comes to the conclusion that the EB-5 program is anything but an easy and certain path for wealthy foreigners to get into the U.S. and stay there. In fact, only 54 percent of the immigrants who start the process of gaining permanent residence through the program actually attain it, according to the report, published in December.

Since the beginning of the year, USCIS has been working on enhancements of the process and its backers see it as a win-win proposition. One of its most vocal champions, Stephen Yale-Loehr, a professor at Cornell University Law School, says it’s a win for U.S. businesses finding it difficult to get bank loans, it’s a win for the foreigner who gets a green card (if the project flourishes) and it’s a win for American workers because jobs are being created.

Hard-core opponents of immigration see a different picture. David North of the Washington-based Center for Immigration Studies, greeted the announcement that the EB-5 process was being streamlined with a blast of criticism headlined Administration Caves to Open-Borders Advocates on Investor Visas.

This is a reflection of a general anti-immigration mood thanks to which new legislation to attract foreigner entrepreneurs to the United States is stuck in Congress. Called the Startup Visa Bill, it was first introduced last year by Senator John Kerry, a Democrat, and Richard Lugar, a Republican, and re-introduced with modifications in the spring. The aim is the same as the EB-5 program but the barriers to entry are lower and the procedure differs.

Under the legislation, a foreign entrepreneur would qualify for a conditional green card if he can raise $100,000 from a U.S. venture capitalist. The green card would become permanent if the new venture created five new American jobs and raised at least $100,000 in annual revenues.

The bill has won fulsome praise from the technology industry, where foreign entrepreneurs have played leading roles, but the prospect of its passage in an election year look as remote as the comprehensive immigration reform Obama promised when he campaigned for the presidency in 2008.

Even less likely to persuade immigration opponents is an unorthodox suggestion from one of the most prominent advocates for an overall reform of an immigration system he has described as completely broken – New York Mayor Michael Bloomberg. His idea: offer visas to foreigners who agree to live in blighted cities, such as Detroit, for seven years without claiming any welfare benefits.

In his words: “Overnight you would fill it with new people who would fill it with new jobs.”


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My plan would be two paths to US citizenship. Auction spots for people who speak and read English at a university level. The number of spots would be based on unemployment levels. If the unemployment rate was 4% there would be 100,000 spots auctioned. If the rate was 8% there would be 0. The second path would be for people who hold a Master’s or post-bachelor’s professional degree from a US university and have a job offer for 24 months guaranteed work paying over the median wage. Again, all permanent citizenship spots would be based on the current unemployment levels. Finally, tighter, faster enforcement of visitor visa overstay.

Posted by M.C.McBride | Report as abusive

Mr. Mc Bride, I agree with your general idea except that there must be a minimum bid level on the visa auction. The amount should be at least one year of median level compensation. The applicant should also have a US partner or co-sponsor who is willing to purchase a reasonable amount of equity in the proposed venture of the applicant. This “investment” of american capital will give some guarantee that the visa will go to a person with real competence and also that someone with skin in the game thinks the proposed venture is a reasonable risk.

Posted by hacimo | Report as abusive

Selling US citizenship is a BAD idea, especially with U-6 unemployment at 16.2% (assuming we believe BLS statistics).

Bringing in educated foreigners is simply a cop-out for the abysmal state of primary and secondary education and the degenerate family structure (and policies) in the US. The same could be said for the UK.

Is it simply an Anglo-American coincidence or is it how capitalism values human resources as just another fungible commodity?

Posted by upstater | Report as abusive

[…] ColumnPresident's policies giving US jobs awayOneNewsNowBloggings on Immigration LawILW.comReuters Blogs (blog) -Roll Call (subscription)all 31 news […]

Posted by A pathway forward, or a slippery slope? – The Hill (blog) | Immigratio | Neera Bahl & Associaltes, LLC | Report as abusive

Mr. Debusmann is clearly favoring the interest of giant corporations. The American citizen be damned.

Pick any city, let’s say, Cincinnati, Ohio. Any city will do. Let’s say Cincinnati.

Now, bring in 100 busloads of freshly graduated plumbers (4,000 new plumbers), who want to enter into the plumbing business in the Cincinnati, and make a living.

The result? Wage rates for plumbers will become depressed. The existing 960 plumbers in Cincinnati, once busy every day, competing, and making a good living, will now have much less work, or no work at all.

The school for plumbers in Cincinnati, will have no new students. All the Cincinnati highschool kids hear from their fathers and uncles that plumbing is no longer a good way to make a living. In droves, they choose some other path in life.

This is what the H1B visa has done to the American engineering profession. H1B brings busloads of foreign engineers to America, thus driving down wages, closing American engineering schools, and discouraging American kids from majoring in engineering.

The moneyed interests, of course, do as Mr. Debusmann is doing. They always strive to have lower wages, because that increases their profits. The American worker be damned.

So the chorus, the chant of the large corporations never changes decace after decade: We want more workers, more immigration.

What they really mean is we want lower wages, and then more lower wages, forever and ever.

Or am I missing something?

Posted by AdamSmith | Report as abusive

[…] To create US jobs, bring in immigrantsReuters Blogs (blog)Called the Startup Visa Bill, it was first introduced last year by Senator John Kerry, a Democrat, and Richard Lugar, a Republican, and re-introduced with modifications in the spring. The aim is the same as the EB-5 program but the barriers to entry …EB-5 Pilot Program Popular in ChinaJD Supra (press release)all 31 news articles » […]

Posted by To create US jobs, bring in immigrants – Reuters Blogs (blog) | Immigr | Neera Bahl & Associaltes, LLC | Report as abusive

I like the ideas here – I think that those that graduate with engineering or similar degrees ought to have green cards stapled to their diplomas….

Those are the people that create jobs, not the folks swimming over. I wouldn’t sell it either, but I would expand on the process of years of military (Only military) service and education in exchange for citizenship – those soldiers would value it far more than the silver spooned trust fund babies currently governing the US.

Posted by J1simple | Report as abusive

@AdamSmith – Hi Friedrich Hayek here. 😉 I hear what you’re saying, so if you’re concerned with that, why not offer “incentives” such as zero tuition for citizens graduating with engineering, or similar, degrees. To that end, I would say ZERO scholarships for those majoring in the “soft sciences” like philosophy, sociology, etc. This has nothing to do with monied interests. There is a DESPERATE need for engineers in ths country, including those to serve US interests such as military, etc. go to any jobs website and type in engineering, there are jobs for those who have the skills and we desperately need it.

Otherwise, they will be outsourced. And that’s what you’re missing.

Posted by J1simple | Report as abusive

Oh yes, absolutely. In this community, businesses are importing thousands of workers from India and other Asian states to work in tech firms. It seems America just does not have enough low cost nationals to do the work.

Posted by SanPa | Report as abusive

I am prevented by the editor from speaking frankly to you regarding the insanity of your proposition. Suffice it to say that I find it almost unimaginably foolish.

Posted by gfm2011 | Report as abusive

Well the common flawed opinion that H1Bs cause a dent in unemployment can be viewed differently…Businesses are always going to compete on cost. What America has that other low cost nations do not is good infrastructure and in most case transparent business laws..what they don’t have in abundance is high skilled workers, i think immigration should be reformed to the effect that it is easier for firms to hire foreign workers with skills…better to earn a reduced rate rather than not have a job…on top of that if you add incentives for investors that’s even better..infrastructural costs in India or China are quite high, i can see some reverse shoring where Chinese or emerging economy entrepreneurs invest in the US creating jobs.etc….

Posted by welcome1 | Report as abusive

My contract-engineer husband – experienced in several disciplines and industries – was just laid off for the fourth time (or is it the fifth?), in two years, yet we must bring in even more foreigners? Sorry, but that doesn’t make a bit of sense.

The “best and the brightest” are right here in the U.S. of A, Mr. Debusman.

Posted by 2old2givea | Report as abusive

Three Presidents did what was best for Americans instead of behaving as pandering politicians. Hoover during the Great Depression ordered the deportation of ALL illegal aliens to make jobs available for Americans. Truman deported 2 million illegal aliens after WWII to open jobs for Americans and returning veterans, and in 1954 Eisenhower deported 13 million Mexicans over two years in a program called Operation Wetback so WWII and Korean Veterans would have a better opportunity for jobs. Tweak the onerous tax code and tweak the minimum wage, and I should think there would be a decrease in unemployment on all levels of “skill”…just a thought!

Posted by hummering | Report as abusive

[…] by Rep. Zoe Lofgren (D-Calif. …EB-5 Pilot Program Popular in ChinaJD Supra (press release)To create US jobs, bring in immigrantsReuters Blogs (blog)all 43 news […]

Posted by Lawmakers praise visa programs aimed at job creation – The Hill (blog) | Neera Bahl & Associaltes, LLC | Report as abusive

[…] troubled program to sunset, Department of Homeland Security Secretary Janet Napolitano has “streamlined” the EB-5 immigrant investor green card process — guaranteeing processing within 15 […]

Posted by Michelle Malkin » The Cash-for-Visas Program | Report as abusive

[…] troubled program to sunset, Department of Homeland Security Secretary Janet Napolitano has “streamlined” the EB-5 immigrant investor green card process — guaranteeing processing within 15 […]

Posted by The Cash-for-Visas Program | TrendPoster | Report as abusive

We have become a nation of people who know the price of everything and the value of nothing.

Posted by coyotle | Report as abusive

[…] for a fast-track to residency should examine the track record of the program. An investigation by Reuters last December revealed that barely half of EB-5 applicants eventually got a green […]

Posted by New Investor Visa Program Picks Up Steam Under Obama Administration | Report as abusive

The discussion on Job Creation can not be complete without talking about a very acute shortage of capital in the US of A. The fact is most businesses have struggled desperately to keep their “existing” lines open. Forget new credit, even existing lines have been revoked by most banks.

Lets face it, if the business owner, has his carefully planned out working capital spreadsheet – corrupted by a Bankers bad macro (a.k.a mumbo jumbo Derivates), the resulting lay-offs are but inevitable. Lets not get started on the bankers here – enough ink and screen space has been invested on their immense contribution to Job destruction.

Coming to the investor programs, what many readers miss is the fact that these investor programs bring in people with Capital. Capital that can jump start projects. Capital that is not available from within the country. Capital that will create jobs. Jobs that we desperately need.

Let us also not forget that investors with a million dollars of net-worth and half a million in liquid assets – have many many countries wooing them. Canada, UK, Australia, NZ, even Bulgaria – all have the red carpet rolled out for these immigrants. Don’t believe that there are other options for these investors – Google for “Investor Visa Network”

Programs designed to attract business founders and investors, need all the support – from the government and from those who care about job creation in this nation. It will definitely support the much needed recovery.

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