Immigrants can make us rich, if we let them

PRESIDENT TRUMP has made immigration a top issue of his second term, signing a number of executive orders and promising further action. These policies include limiting legal immigration and ending birthright citizenship.

Amid these sweeping policy changes, a rift has emerged amongst the President’s allies. On one side, Sriram Krishnan, Elon Musk, and their allies advocate for increasing high-skilled immigration; on the other, Steve Bannon and his allies call for limiting all legal immigration.

A major source of this rift is growing evidence that immigration, especially highly skilled immigration, is a net benefit for host nations. Indeed, recent research suggests legal immigrants are net job creators because of the exceptionally high likelihood that they will own businesses.

A 2023 Pioneer Institute study confirms that this is true for Massachusetts, where immigrants own half of all Fortune 500 companies headquartered in the state, employing almost 900,000 people. Another recent Pioneer study finds that the most immigrant-dense large cities in the US host 15 percent more startups per capita than their less immigrant-dense counterparts and more than double the IPOs and high-value acquisitions per capita. 

In almost every geographic context, immigrants with both high and low levels of education are more likely than non-immigrants to open businesses. 

Unfortunately, we are not taking full advantage of the economic potential of legal immigrants. Despite most Americans supporting steps to make the immigration process easier, 99.4 percent of immigrant applicants were ineligible to come to the U.S. in 2018. Not only is immigration almost impossible because of strict caps, but the immigration system itself is complicated with onerous steps and over 22 classes of visas divided into about 185 visa types, each with very specific pathways into the U.S. 

Additionally, labor market restrictions stifle the ability of legal immigrants to contribute to the American economy. For example, many immigrant STEM graduates are prevented from opening their own businesses for years after graduation because of H1-B visa restrictions that only allow an immigrant to work for the employer that sponsors his or her visa. Refugees must wait a month before they are even allowed to work. And most state legislatures, including every New England state, restrict legal immigrants’ access to professional licenses.    

These restrictions threaten America’s competitiveness, and other countries are beginning to take advantage of our inability to properly harness immigrants’ potential. Canada has instituted a program to allow U.S. H1-B visa holders a three-year open work permit in Canada, and some Canadian companies have gone so far as to plaster billboards in Silicon Valley enticing highly educated immigrants who might be worried about their visa status.  

To take better advantage of the entrepreneurial bounty immigrants offer, US officials should take three major steps. First, caps on legal immigration need to be raised. Because immigrants of all education levels are highly entrepreneurial and innovative, every law-abiding immigrant who is denied entry equates to fewer potential businesses, new jobs, and life-improving inventions. 

Second, officials should streamline and simplify the US immigration process. Its complexity translates to wait times for residence permits that are measured in years, not months or days. This clogs the system and delays the contributions immigrants can make. 

Finally, federal officials should end unnecessary immigrant-related labor market restrictions. H1-B visa constraints delay the contributions of highly educated immigrants who want to start high-impact businesses, and work restrictions for other visa categories strip immigrants of their autonomy and ability to pursue gainful employment.

If federal officials are unwilling to act, there are steps state officials can take. Arkansas, Colorado, and New Mexico have already passed laws to remove immigrant-specific barriers to professional licenses. 

Massachusetts has used a more creative approach to side-step inefficient federal immigration policy. With the Global Entrepreneur in Residence Program, Massachusetts universities can sponsor cap-exempt H1-B visa petitions for graduates with advanced degrees who have founded companies. Other states should emulate the program.

While many were understandably alarmed by the lack of control experienced on our southern border, legal immigrants are not a burden. Rather, they are an incredibly positive force in our country and communities. It is time we act like it. 

Joshua Bedi is a senior fellow in economic opportunity at Pioneer Institute, a Boston-based public policy think tank, and author of a new report on the threat of outdated immigration policies to US economic competitiveness. He is an assistant professor of economics at the University of Wisconsin – Superior.

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