Opinion

The Great Debate

We lose when graduates are told to hit the road

May 20, 2009

John Chen has served as chairman, chief executive officer and president of Sybase, Inc. since 1998. All views are his own.

chenAs I watched the news showing President Obama reaching out to University of Notre Dame graduates eager to shake his hand, I was impressed by the coalition of colors and nationalities in the faces all round the President that says much good about the United States. I also wondered who, among those shaking President Obama’s hand, will be told by an immigration official next week, ”Congratulations, graduate. Now hit the road, leave the U.S., go home!”

When that happens, if it hasn’t already happened to thousands of graduates across the country, the U.S. will be the loser.

The fact is that at commencement time, foreign science and engineering graduates from U.S. universities are itching to stay in America, especially at this time, and put their energy into the most valuable work. This would eventually help us recover economically and go on to thrive as an innovative world trading powerhouse.

Instead, they’ll be told we don’t want their intelligence and their problem-solving skills, or their innovative or entrepreneurial abilities. They’re told to just go back to where they came from — go back to India, to China, to Brazil, to Russia, and to all the other places that we compete with for wealth around the world.

These aren’t queue-jumping immigrants, or illegals trying to outwit border guards. They’re professionals, some with doctorates or masters’ degrees, who observe the rules. U.S. companies want to employ them. Unfortunately, they get lumped in with the general, anti-immigrant bias that cycles through Congress at times like these. and mocks the legal immigration system.

These foreign talent wanted to utilized our H1-B program that allows U.S. companies to hire a limited number of highly skilled foreign workers for the short-term or as a first step to a green card or permanent residence. Every April 1, U.S. corporations—from financial to high-tech firms—file petitions to hire these individuals under the H1-B terms.

We absolutely need H1-B immigrants for what they bring to our economy. I work in the Silicon Valley and the presence of foreign-born entrepreneurs has undeniably been a catalyst for taking the technology industry to a new level. Google founder Sergey Brin is from Russia, Yahoo co-founder Jerry Yang from Taiwan, and Intel co-founder Andy Grove from Hungary.

More than 50 percent of high-tech workers in Silicon Valley are foreign born, according to the Silicon Valley Index, an industry publication. Many of these immigrants go on to become entrepreneurs. In the 10 years to 2005, more than half of new tech companies had foreign-born founders.

The National Foundation for American Policy keeps estimates showing that for each H1-B visa, U.S. corporations hire five additional workers. This is not taking jobs from Americans, which is what we hear from labor unions.  We’re actually creating jobs by bringing bright people into this country.

High-tech companies know this, of course, and we gained valuable support in early May when Ben Bernanke, the Federal Reserve chairman, told the Joint Economic Committee of the U.S. Congress: “I know it’s not very popular to say, but our immigration laws discriminate pretty heavily against talented scientists and engineers from other countries. If you allow more people with high-tech skills to come here, you’d get more innovation and more growth,” Bernanke said.

Not only do we lose in our domestic economy by turning away this huge resource of talent, but we lose in another perhaps even more significant way. Tighter rules and continuing traces of the 9/11 worries about foreigners distort the smart power of our foreign policy that we can use internationally. Reasoned persuasion is a key ingredient of smart power, together with trade deals, foreign aid, diplomacy and cultural influences such as movies and music. We need to boost the persuasiveness of our case by being smarter about keeping talent educated at our great universities, often subsidized by U.S. taxpayers, at a time when we need it most.

By singling out work visa immigrants, we are setting a bad example internationally.  That’s true also when we indulge in trade protectionism.  You can be sure such activities will trigger a round of retaliation throughout the world.  And look what damage we will do to ourselves.

We risk our foreign direct investments of $2.1 trillion.  We risk the market access for more than 2,000 multinational corporations, whose parent companies in the U.S. make up a quarter of our private sector output. We put into jeopardy U.S.-owned foreign assets abroad totaling $18 trillion. Can we afford it?

Comments
52 comments so far | RSS Comments RSS

Many of these graduates will add much more value to their home country than they will add to the U.S. economy.

It is the morally right thing for the U.S. to allow them to return to their native countries and bring those countries into the first world with their valuable western education.

The U.S. graduates far more highly educated and skilled U.S. citizens and permanent residents than the job market can absorb.

Posted by Karla | Report as abusive
 

Hi,

This is my idea of the big picture. It isn’t pretty so bear with me.

The collapse in the US financial markets has reduced consumer demand in the US economy.

If demand is falling in the economy – the only ways a company can make money is pick up a government contract or downsize expensive labor.

If your company gets a TARP/Stimulus package “shovel ready” contract. You shouldn’t have to be fired unless you are genuinely incompetent and are considered a liability to the company.

If your company can’t get one of these TARP/Stimulus contracts, well then it has to cut costs. The only way to do that right now is replace some of the highly paid folks by cheaper H1B imports.

Now if a million or so people get fired in this kind of replacement scheme – that is just not a significant economic fraction of the country. There will be no additional decline in demand on account of that. Even after you get fired – you are still going to keep using microsoft windows, cisco servers, HP printers etc…

So that is just the economic bottom line.

The other thing is that if you block the import of cheap labor, you will cause a precipitous decline in the profitability of private corporations in the US. This means that in order to prevent your companies from going under the government is going to have to have give out more stimulus and more TARP like recovery packages.

That is more ‘socialist’ policymaking that is unlikely to fly either domestically in the US or internationally either. The world simply cannot support any more debt in the US. Keep that up and you will simply see a flight of capital from the US and that in turn will cause a soviet style collapse.

Let me put it another way. This decline in productivity in the US workforce is not new. President GWB faced it in his time, and he dealt with it by creating circumstances that he felt promoted growth but even he had to take a loan from the federal reserve and that has led to this crazy large deficit. President Obama had to take over where President Bush left off and he is only adding to the deficit right now. If the US withdraws from Iraq or Afghanistan, this is going to add another burden in the form of returning soldiers who will have to be retrenched. Given the number of private soldiers that are in this war, this is going to cost money which is going to add to the deficit.

Bluntly speaking the US is tapped out in terms of the loans it can give itself. Any more and the house of cards will likely fall down.

So – sorry – I realize a lot of you all are in pain – but if you interfere with the flow of foreign technical labor into the US, you will most likely cause far more economic problems than you will be able solve.

I feel the government understands this and while it will lend a kind ear to the voices of disgruntled citizens, it is unlikely to actually do anything that is potentially economically suicidal.

You’re simply going to have to suck it up.

Your best bet at this point will be to try and piggy back on defense industrial contracts. Those are open to citizens only. National labs are being asked to rapidly hire people for Stimulus related R&D and no foreigners can apply there. This should be your first choice. It may involve taking a pay cut right now but atleast after a few years you’re a permanent government employee and they can’t fire you. For every 100,000 they pay you, they spend 400,000 in security screening at some of these places, so its way expensive to fire you.

Alternatively you could try exporting your skills to foreign countries. But this is potentially problematic for two reasons, firstly most of you guys don’t know any language besides English. You’re smart and you can learn so its probably okay – but it is a hurdle you will have to cross. Actually places like India need a lot of mid level people and if you adjusted against PPP your salary in India (or China) is way higher than your salary in the US. Secondly, the moment you talk about going to work somewhere else you have to get past the state department and the Dept. of Commerce’s export regulations. There is some totally bizarre stuff about “deemed exports” that has to be cleared. It is possible but it is a huge pain to navigate and they love to throw you in jail if you make any mistakes on that front. All in all, this is a profitable but difficult transition, I can’t say it should be your first choice.

In the interest of disclosure, I am an H1B married to a US citizen, so I do feel the pain at both ends. I get harassed by the DoS idiots who think that just because I have a PhD and the wrong skin color I am some kind of crazy person and my spouse feels every little pinch due to the economy. We get hit by both sides. Oddly enough there are way more people like us than you’d think.

It is a stinking situation and I wish it could be different.

It doesn’t look very good right now nor do I see it getting much better – best of luck to you guys.

There is a sea of misery we have to wade through here.

Posted by s2 | Report as abusive
 

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