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A Need for a More Informed Public

Jonathan Ortmans, President, Public Forum Institute

Most policymakers are starting to both heed entrepreneurs for their job and wealth creation efforts during these tough times as well as pick up on one of our nation’s biggest source of high-growth start-ups: immigrant entrepreneurs. But if public reaction to a recent NPR segment and recent Washington Post commentary on the topic are anything to go by, I fear we have a long way to go to convince the average American citizen.

However, policymakers can and should reassure Americans anxious about job loss at the hands of high skilled immigrants. Yes, creating “Entrepreneurs Visas” would indeed permit entrepreneurs from other countries entry into the United States. The Kauffman Foundation has spelled out the rationale behind this proposed tool and how it would function. Initially, entrants would be screened for a temporary visa based on either the outside capital they had attracted or revenues from U.S. sales they already had recorded. However, Green cards would only be granted later if the entrepreneur had hired a minimum number of U.S. workers. This type of visa is already embodied in the revised version of the Kerry-Lugar Startup Visa Act, but that particular proposal unfortunately limits the number of startup visas—mostly, I am guessing, to make it palatable to Americans. Why limit these visas when their holders would create numerous jobs right here in the United States without “taking a job” from any other U.S. workers?

Alternative options still seem to focus on expanding the number of temporary H1-B visas, a measure constantly debated. The House Subcommittee on Immigration Policy and Enforcement met recently to hash out concerns related to the H-1B program, created 20 years ago to enable U.S. employers to hire highly skilled foreign workers for three years, with the opportunity to apply for an additional three-year extension. During this period, H1-B workers could request green cards, although they must be willing to face backlogs (one million skilled professionals are waiting). It is true that many research studies have shown that the H1-B visa has benefitted innovation through increased patents and other means. However, focusing on this visa to address the need for economic growth seems considerably less appealing in the 2011 context than a visa that by its very definition stimulates net job growth. By merely increasing the annual cap (currently at 65,000 visas, plus 20,000 for beneficiaries who received advanced degrees in US universities), the H1-B visa appears as a workers’ visa instead of job-creators’ visa. And while a step in the right direction, increasing immigrant entrepreneurship through technical, non-legislative tweaks like the recent updating of the H1-B guidelines to clarify that business owners on H1-B visas could work for their own companies provided that they work full time for the company and are treated like an employee, is still too weak to generate a significant number of net new jobs.

To be certain, startups are struggling. Recent Kauffman data found that while an increasing number of firms have been created each year since the last recession began, the number of new firms with employees continues to drop. In other words, new companies are not only starting small, they are staying small. Our nation clearly needs to increase the pool of entrepreneurs who have the ability to grow and add jobs—and it can start by opening its doors to all who are willing and capable of building high-growth companies in the United States. Washington seems amenable to this…that is if someone can explain the net positive result in terms of new jobs to the public.

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