Immigration Reform: Don’t Leave Entrepreneurs Out in the Cold
The United States has long served as a haven for immigrants escaping the crushing economic conditions of their home countries. Once boasting unusually high levels of economic freedom, the unique nation was fertile ground for those who needed a place to plant and nourish their ideas.
Millions have flooded into the United States since the 19th century, and their fiercely entrepreneurial spirit has played an instrumental role in the US ascension to economic stardom — more than any Ellis Island or USCIS official could have imagined when stamping their papers at the country’s door.
In spite of the contributions that immigrants have made, particularly in the entrepreneurship realm, the United States still lacks a visa designated specifically for entrepreneurs wanting to get started. As David Bier of the Competitive Enterprise Institute explains, “A true entrepreneurship visa would permit anyone willing to start a new U.S. business and capable of supporting themselves and their family with that business to do so.”
Unfortunately, obtaining anything close to an entrepreneurial visa under current United States law requires candidates to squeeze into a long, nearly algorithmic series of conditions. Visas with restrictions are available, such as the E-2, which admits investors whose home countries have a “relevant treaty” with the United States (which excludes several major countries). It also requires investors to justify their presence every two years, which puts even the most successful CEOs in a precarious position. The EB-5 was a step in the right direction when it was created in 1990, allowing immigrant investors to take up permanent residence in the United States. However, it requires a minimum investment of US$500,000 in an existing business.
While the immigration system may appear to categorize applicants with the same deftness as an algorithm, it is fraught with kinks and ignored error messages. According to a 2013 report by the Competitive Enterprise Institute, even the proposed immigration reform is a “bureaucratic Catch-22.”
Evidently, no one cared to notice the legal error message that should have come up when E-2 and EB-5’s conflicting standards were applied, along with another that requires entrepreneurs to own a US business for two years before they are eligible to apply for a visa. Nor did an objective human eye compare policies to those of other countries, and notice that ours are not ones that attract or retain talent.
Recent rumblings about a reform are encouraging, but it would be hard to call the results “progress.” The SKILLS Act successfully passed in June and did include an entrepreneurship visa, but its helpfulness and status is negated by the similarly onerous investment requirement ($500,000). Perhaps worse, it added new fees — “Welcome to the United States” — and perpetuated central planning and nativist assumptions with a new “wage calculation to better protect American workers.”
Those in the White House may be catching on to the economic benefits of repairing an admittedly “broken” immigration system. The CEI report notes the unfortunate political oblivion that complicates otherwise positive legislation, but the growing bipartisan consensus that it should be easier to live and work in the United States is a promising sign.
Much of the current discussion about immigration reform remains gridlocked over the granting citizenship to illegal residents, who have been recognized as a notable portion of the labor force. Taking the pending reform as a whole, though, a Congressional Budget Office report cited by the White House estimates its passage would bring 3.3 percent higher economic activity (GDP) by 2023 — relative to growth estimates under current law.
Still, to maximize this reform’s potential for economic growth, entrepreneurs simply cannot be left out of the equation. Treating producers of wealth with a trace of respect might be a bit too Randian for lawmakers to stomach, but they must remember that immigrant entrepreneurs who are allowed to start businesses can (and will) create jobs and spur growth more effectively than a law or stimulus package ever could.
The United States has a long way to go towards achieving immigration reform, especially as concerns about Obama’s trustworthiness halt progress. However, if the reforms are sensible and the economic benefits of easier immigration become apparent, one hopes the United States government will revisit visas categories and welcome entrepreneurs. To do so would celebrate the presence of people who continue to make this country prosperous.