Loosen Quotas for High-Tech Immigrants

Stephen Moore is an economist at the Cato Institute, the libertarian think tank in Washington

The resiliency of the U.S. economy continues to confound almost all economists and government forecasters. This is an expansion like almost no other in American history, with trillions of dollars of new wealth having been created since 1991. What is underappreciated is the extent to which this expansion has been propelled by high technology. As economist Lawrence Kudlow of the mutual fund investment management firm American Skandia has noted, "This bull market economy is being pulled along by dramatic productivity gains in the high-tech sector." From computer software to pharmaceuticals to financial services to semiconductors, the U.S. is the global leader.

U.S. policymakers should be doing everything possible to foster this remarkable productivity revolution in high tech. The good news is that in most cases, this simply means leaving the industry and its trailblazing firms like Microsoft alone. Laissez faire created the microchip age in Silicon Valley. Laissez faire will perpetuate its growth.

But the industry needs access to the kinds of technically trained workers who built the Silicon Valley prosperity. This means better trained U.S. workers, but it also means high-skilled immigrant workers. An estimated one-third of the scientists and engineers in the high-tech sectors of California are immigrants. Unfortunately, the immigration laws are byzantine and antiquated when it comes to fueling the high-tech expansion. U.S. firms are now permitted to recruit just 65,000 skill-based immigrants under a program called "H-1b." Industry gobbled up those visas in the first six months of this fiscal year. For the rest of the year, the golden door is effectively slammed shut.

Last month, the Senate passed legislation by Spencer Abraham (R.-Mich.) that would temporarily alleviate the shortage by raising the H-1b ceiling to 95,000 workers. But in the House, Rep. Lamar S. Smith (R-Texas) has moved a bill through the Judiciary Committee that is worse than no action at all. It would require any firm that hired an H-1b immigrant worker to agree to a de facto "no layoff policy." It also would let loose a swarm of Labor Department snoops into the laboratories of high-tech companies.

It would seem inconceivable that Republicans would craft a policy that would hamper our most productive industry, but that is what Smith has done. His bill proposes the kinds of command and control labor policies in France, Italy, Germany and all those other worker paradises where workers are guaranteed jobs for life--if they can find one, given double-digit unemployment rates.

Why entangle industry in all this new red tape? These skilled immigrants will not take jobs from American workers--they will almost certainly create jobs by making our industries more productive. In fact, many of these companies were founded by immigrants. Ten of the most successful high-tech firms in the U.S.--Sun Microsystems, Intel, Computer Associates, Solectron, Lam Research, LSI Logic, AST Computer, Wang Laboratories, Cypress Semiconductor and Amtel--have at least one major partner who is an immigrant. These firms employ 75,000 workers and generated $28 billion in gross domestic product. So much for immigrants being costs to the American economy.

"Immigration is a critical factor behind the U.S.' commanding competitive position in semiconductors, as it is in almost every 21st century industry," says T.J. Rodgers, president of Cypress. The combination of good old Yankee ingenuity and the top talent from the rest of the world gives U.S. firms an awesome advantage against foreign rivals.

Imagine for a moment that one National Basketball Assn. team was given the top five draft picks year after year. No other team could possibly compete with the collection of talent this team would assemble. This is the kind of advantage that U.S. industries have over European, Japanese and Chinese competitors through immigration. We have all of their best players. Talented and productive people are the globe's scarce resource. In many scientific fields today, the unemployment rate is less than 1%, which means the needed workers don't exist in the domestic labor market.

Abraham's proposal to increase H-1b visas to 95,000 a year is a start, but eventually we should triple or quadruple that number. We should also scrap the nonsensical expanded Labor Department police powers in the House bill and then streamline the immigration process.

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