Immigrants to America: Keep Your H1-Bs

This week brought more evidence that when it comes to high-tech foreign workers, America’s future problem is going to be not too much – but too little – immigration. Till last year, the demand for H-1B visas – the temporary work permits that allow high-skilled immigrants to legally work in the country – was so great that the entire year’s 85,000 quota would get filled within the first week these visas became available on April 1. Not this time. The Boston Globe reports that immigration authorities last week decided to extend the application deadline for these visas because they have about 20,000 H-1Bs still leftover.

Part of the reason for the plummeting demand of course is the recession. With the economy slowing, companies are hiring fewer people – foreigner or otherwise. But the other reason, as I noted in my column Goodbye Chang, So Long Singh last month is that with the economies of India and China – major high-tech donor countries – doing relatively better than America’s, thanks to liberalization, these immigrants have less interest in the U.S. in the first place. Not just that, there is growing evidence that the émigrés already here are returning home. Many of them are even renouncing their green cards – an unprecedented development in U.S immigration history. (About a third of the immigrants in previous waves returned home as well, but that’s not because they didn’t want to stay but because, for one reason or another, they couldn’t).

The real test of immigrant interest will come once the economy picks up again. If new immigrants continue to spurn the U.S. and existing émigrés continue to return, as Duke University researcher Vivek Wadhwa’s recent study suggests that they may, then the American economy will have to make some painful adjustments. Indeed, companies that can’t bring workers here might well have to move to these workers. In short, more off-shoring and outsourcing.

The liberalization of Third World economies has profound implications for global immigration patterns that our venerable leaders in Washington D.C. have not even begun to grasp. Indeed, while people like Sen. Charles Grassley, R-Iowa, have been railing against foreign immigrants taking high-paying U.S. jobs, other countries are putting in place policies to snap up these folks. (Although these efforts have back-tracked a bit, thanks to the global recession.)

President Barack Obama this week announced that he wants a major overhaul of the U.S. immigration system. He should begin by recognizing that the game has changed completely. Going forward, America will no longer be able to count on being the automatic first choice for the world’s best and brightest. It will have to compete for them with everyone else, including their home countries.