Four weeks ago, Pres. Biden released his long-awaited immigration reform proposal entitled the U.S. Citizenship Act. If the bill passes Congress and becomes law, it would be the most significant immigration reform since Pres. Johnson signed the Immigration and Nationality Act in 1965. While immigration has become a divisive issue in contemporary U.S. political discourse, with deep partisan divisions on the subject, the U.S. Citizenship Act contains provisions related to employment-based green cards that could grow the U.S. economy and enhance innovation and entrepreneurship.
Under current immigration law, American companies can sponsor foreign workers for an employment-based green card. However, to do so, they must overcome several significant barriers, such as proving a qualified American could not fill the role. This process alone can cost sponsoring companies $10,000.
Additionally, Congress only allows 140,000 employment-based green cards to be issued each year while adding the restriction of no more than 7 percent of that number per country. Under these rules, countries with few applicants receive the same number of green cards as those with a high number of applicants, such as India, China, and the Philippines. Under this system, preference is given to an individual’s country of origin, not their potential contributions to the U.S. economy.
These statutory limits and rigid country caps have created a significant backlog for employment-backed green cards. A recent estimate put the number of foreign workers waiting for them at 800,000. Certain workers from India and China, the two countries with the largest share of employment-based visa applications, in a lower preference category are currently facing a decades-long wait for a green card.
Under Biden’s plan, introduced by Sen. Robert Menendez (D-NJ) and Rep. Loretta Sanchez (D-NJ), the number of available green cards would rise from 140,000 to 170,000 each year, and the per-country ceiling would be eliminated. This provision would not only ensure more workers can enter the United States, but it would allow the government to select workers based on their potential economic contribution, not their country of birth.
The bill would also exempt those who have been waiting longer than a decade from numerical limits on employment-based green cards.
Relaxing restrictions on foreign workers could provide a significant boost to the economy. In its current limited form, immigrants have added about $2 trillion to the U.S. economy and contributed $485.7 billion to state, local, and federal taxes. Explaining the causes of this contribution, the Congressional Budget Office noted when immigration increases, so do labor force and worker productivity, meaning economic output also increases. Undoubtedly, these contributions would increase if more immigrants could enter the country.
For consumers, immigration brings innovation and entrepreneurship, something that has been declining over the past few decades. Immigrants’ importance to innovation was highlighted by the Center for American Entrepreneurship, who estimated in 2017 that half of Fortune 500 companies were founded by immigrants or their children.
Stanford University also highlighted the importance of immigrants to innovation and entrepreneurship. They showed while immigrants only make up 16 percent of inventors, they have been responsible for “30 percent of aggregate U.S. innovation since 1976,” helping develop everything from autonomous cars, social media sites, and biotech products to cell phones.
Recognizing how immigration drives both innovation and entrepreneurship, it becomes clear immigration restrictions cause direct consumer harm by limiting access to groundbreaking technology and products.
The CBO also highlighted this point by suggesting increasing the pool of foreign labor in the United States would significantly enhance innovation and entrepreneurship in the economy.
Large technology companies have also recognized the importance of foreign labor for driving innovation. Microsoft has expressed support for removing the per-country ceiling on employment-based green cards, arguing it was “the best way to promote a robust…innovation-based economy.” Apple’s CEO, Tim Cook, also supported removing per-country limits, tweeting the contributions of employment-based green card holders are “critical to America’s future.”
In its current form, the prognosis for the U.S. Citizenship Act is not positive. A pathway to citizenship for undocumented immigrants will make the bill a tough sell for Republicans while enhanced enforcement on the southern border could make it unpalatable for Democrats. While both parties may disagree on components of the bill, both parties should back the loosening of restrictions on employment-based green cards. Doing so would not only support the U.S. economy, but it would also drive innovation and entrepreneurship. For this reason, both parties should back the relaxation of restrictions on employment-based green cards.
