THE RECENT MIDTERM elections are just the latest in a long string of events that have put immigration in the national spotlight. Unfortunately, the politics distract the public from understanding the critical role of legal immigrants in making our nation and our state more economically competitive.
Foreign talent is critical for staffing science and technology companies, many of whom are struggling to fill roles in a tight labor market, and for new business creation. Immigrants have started a quarter of all businesses in Massachusetts while only making up 17 percent of the workforce, creating jobs and increasing wages, productivity, and living standards.
One important source of foreign talent is international students, many of whom study in the US hoping to gain employment and permanent residency here.
Massachusetts is one of the main beneficiaries of this influx of foreign talent. The Commonwealth ranks fourth in the nation for total number of international students, with more than 66,000, and we rank second on a per capita basis.
Foreign students make up about 18 percent of all graduate students in the US, but four out of five of them study in the all-important science, technology, engineering and math fields.
These students are also more likely than their native peers to start businesses that employ 10 or more people. According to the National Foundation for American Policy, international students have founded unicorns (private start-ups worth $1 billion or more) in the US worth $591 billion. The foreign-born founders of 25 of these companies graduated from Massachusetts colleges and universities.
But of late, more foreign students have been choosing to be educated elsewhere. The number of international students in the US has declined every year since 2016.
COVID certainly played a role in the 45 percent decline between 2019-20 and 2020-21, but in a 2019 Institute of International Education Survey, 60 percent of respondents said the social and political environment was a factor that made them less likely to come to the US, and 83 percent cited the visa application process.
The two are clearly related, as anti-immigrant sentiment and rhetoric have led to tighter restrictions on entering the country and a national environment less hospitable to immigrants.
Much of this can be attributed to the Trump administration. Its “Muslim ban” in 2017 and attempted rule changes for international students at remote schools in 2020 likely exacerbated uncertainties for prospective immigrants and made them less likely to come to the US.
One of the most popular and frustrating visas for immigrants – the H1B – allows employers to petition for highly educated foreign professionals to work in “specialty occupations” that require at least a bachelor’s degree or its equivalent.
As recently as 2003, the annual cap on those visas was 191,000. Today, it’s 85,000. Because H1B runs a lottery system, 74 percent of applicants are rejected before their filings are even adjudicated.
To make matters worse, employers must pay up to $28,620 to file an initial application for a three-year H1B visa and for an extension due to government fees and attorney costs. These impediments come at a time when we should be encouraging more international students to remain in the US – and Massachusetts – after graduation.
F1 visas, through Optimal Practical Training (OPT) work authorizations, allow foreign students studying in the US to accept temporary employment in areas directly related to their studies. Past reforms to the program led to a 400 percent enrollment increase.
The program is ripe for additional reforms such as allowing students to work outside their field of study.
Red tape is another problem. In the UK, the average processing time to receive work authorization is less than 56 days; US OPT authorizations take 213-426 days.
The COVID pandemic has changed our lives in countless ways. It has also altered the economic competitiveness calculus. Many high-value employees no longer need to live within just a few miles of their employers. This has transformed the competition from one focused on companies, to one focused on talent.
Winning that competition will require Massachusetts to leverage one of its biggest economic advantages – its many excellent colleges and universities – to recruit more of the educated immigrants who have already been an engine of entrepreneurship and business creation to build their lives and careers here in the Commonwealth.
Charles Chieppo is a senior fellow and Aidan Enright is an economic research associate at Pioneer Institute, a Boston-based think tank.