By Merrill Matthews
A new study by three academic economists, Giovanni Peri and Kevin Shih, both with UC Davis, and Chad Sparber of Colgate University, shows that wages rise fastest in U.S. cities with the greatest influx of highly skilled immigrants.
While one might be inclined to respond by saying, “Well, duh!,” highly skilled people, regardless of their nationality, tend to make and spend more money, raising the standard of living for everyone. But we live in intellectually, as well as politically, challenged times.
The study found that U.S. cities with the greatest increase of immigrants specializing in the STEM professions (science, technology, engineering and math) between 1990 and 2010 saw an increase in wages for college-educated, native-born Americans by 7 percentage points, and 3 percentage points for the non-college-educated population.
In other words, skilled immigrants are good for the economy and for your pocketbook.
And that makes sense. Besides spending more money on a wide range of goods and services, demand for these immigrants’ skills often pushes salaries higher in other fields as well.
However, we artificially limit these skilled workers by imposing a very low cap on the number of H1-B visas that allow them to work here. The current level is 65,000, plus another 20,000 with advanced degrees.
When the H1-B visa application opens in the spring, all of the slots are usually filled in less than a week, creating a huge waiting list.
Why do we impose that cap? Even if someone thinks low-skilled workers deprive Americans of blue-collar jobs, that argument doesn’t apply here. There are technology companies where jobs have gone unfilled for months just because they can’t find qualified applicants.
Ideally, Congress should remove the H1-B visa cap entirely. But if that’s too big a step, it could be phased up: perhaps doubling it the first year, tripling the second and quadrupling the third. A Senate bill that passed last June would double H1-B visas, so that’s at least a start.
Unfortunately, the politics of immigration reform are less clear than the economics, and news accounts indicate that both Republicans and Democrats share some blame. But maybe that will change. Both parties claim they want to move forward, and H1-B visa reform would be a good first step.
— Merrill Matthews, Ph.D., is resident scholar at the Institute for Policy Innovation.