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Wall Street Journal Market Watch

 

U.S. Loses to Canada When It Comes to Immigration

October 18, 2013

By Diana Furchtgott-Roth

With common sense plan, America outdone by Northern neighbor


Canada knows how to run its economy.

Its corporate tax rate, at 15%, is less than half the U.S. rate. Its debt is 35% of GDP, instead of the U.S. rate of 73%. But where Canada really shines in comparison to the United States is in its immigration policy.

Consider the simplicity of the Canadian immigration system. To enter Canada through its federal skilled worker program, applicants are ranked on a points system. One hundred points are possible, and 67 are required to get an entry visa. Included are English and French language skills (28 possible points), education (25 points), experience (15 points), adaptability (10 points), age (12 points), and job offers (10 points).

In contrast, U.S. H-1B temporary visas for new skilled immigrant workers, limited at 85,000 annually, do not meet demand. Acquiring permanent residency (a "green card") is a lengthy and potentially costly process. Talented immigrants, such as the 51% of engineering doctorate earners and the 41% of physical sciences doctorate earners who are foreign-born, are frequently forced to leave the United States. Many come to Canada.

H-1B visa applications can be filed on April 1 of each year. In 2013, the cap was reached within the first week of the filing period. In 1999, Congress temporarily raised the quota to 115,000, and again to 195,000 in 2001, a number that did not exceed demand, but the quota reverted to 65,000 (plus 20,000 awarded for recipients of U.S. advanced degrees) in 2004.

According to Marianne, a citizen of France who studied business at a university in Tennessee, the procedure to hire a foreign worker for an American employer is very complicated. After completing her studies and returning to France, she considered coming back to the United States to work, but opted instead to move to Canada. She said, "It is much easier to immigrate to Canada than it is to the United States."

Marianne told me that U.S. employers have to prove that there is no one in the entire country with the same skills to do the given job, and they have no choice but to have that person from abroad hired. In contrast, it took Marianne about two weeks to put the Canadian application documents together, and another two weeks to get the visa.

Viktor, a Ukrainian who received an American graduate degree in engineering, told me that Canada has a centralized and clear immigration program for professionals. Viktor weighed remaining in the United States or moving to Canada. He noted that those with education and experience who want to move to Canada have to pass an English test and show that they have enough money to support themselves (and their families, if they have them) for the first several months. The Canadian government charges a fee of approximately $2,900 for two people. But this leads to a permanent immigration visa, whereas in the United States an H1-B visa is a three-year temporary visa.

Furthermore, in the United States a spouse of an H1-B visa holder does not have the right to work. This limits family budgets and leaves the employed family member in a weaker position when it comes to negotiating salary increases. The non-working spouse has nothing to do all day. In Canada, there is no limit on the right to work for both spouses in the Canadian skilled migrants program.

Marianne, Viktor, and countless other individuals who wish to settle in the United States are highly educated. Many have extensive graduate training in valuable fields such as engineering, mathematics, or the sciences. In fiscal year 2012, fewer than 5% of those who obtained U.S. permanent resident status were professionals with advanced degrees, compared to over 9% of those granted permanent resident status in Canada.

The Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 on June 27, 2013, but it would not achieve the simplicity of the Canadian system. Getting a visa would still be time-consuming and bureaucratic.

An immigration policy focused on increasing economic growth would seek ways to admit more immigrants with the advanced education levels desired by domestic employers.

Only 14% of U.S. green cards authorizing permanent residence and a path to citizenship were granted for employment purposes in 2012, compared to the 62% of Canadian immigrants who were admitted for economic reasons. For many immigrants, such as those from India, the wait for American green cards can stretch for several decades. Since green cards bring in few workers, most skilled workers use temporary visas. More work visas are also needed for unskilled workers.

One simple way to reform immigration policy is for Congress to keep the same system we have now, but issue more employment-based visas, both to skilled and unskilled workers. Congress could also endorse the sale of visas or auctioning them off to raise revenue at the outset of the process.

Dallas Federal Reserve economist Pia Orrenius and Professor Madeline Zavodny of Agnes Scott College propose that the government auction off work permits to employers that allow them to hire foreign workers. This would simplify our complicated immigration system and create revenue for the Treasury. The authors suggest initial minimum prices that would fluctuate according to demand of $10,000 for a high-skill permit, $6,000 for a low-skill permit, and $2,000 for a seasonal permit. The permits would become tradable.

University of Chicago economics professor Gary Becker has proposed raising even more money by auctioning off green cards to individual immigrants, starting at $50,000, raising about $50 billion annually. Green card purchasers might buy houses, go shopping, or start businesses, all of which helps our economy. Crumbling cities, such as Chicago and Detroit, could be rejuvenated with legal immigrants.

Immigrants want to come to the United States because they see opportunity in gaps in our economy that they have the skills to fill. Instead, many are choosing Canada. It is our loss.

Original Source: http://www.marketwatch.com/story/in-immigration-us-loses-out-to-canada-2013-10-18

 

 
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