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Tuesday, April 3, 2012

How the U.S. Creates Jobs Overseas

There is a great editorial up on that is well worth reading.  In The Great Overseas Job Creator Erik Anderson points all the wonderful ways that U.S. immigration policy not only does not "save American jobs" - it actually creates them in other countries.  How?  Here are a few choice examples.

Take the L-1 and H1-B visa programs which are the object of much political infighting.  An L-1 visa allows an international company to transfer an employee working in an office outside the U.S. to a position in the the U.S.  Multi-national companies often do this with managers, executives and other specialized workers.  Not only does it give them international experience but it also means that these people can spend a few years at corporate soaking up the company culture at the source.  However,  it now appears that the USCIS (US Citizenship and Immigration Services) are tightening up the issuance of these non-immigrant visas (Indians seem to be a target) and international companies are furious.  Something similar appears to be happening with the H1-B program.  Will these restrictions result in more Americans getting jobs?  Answer appears to be "no."  International companies are devising strategies to manage the situation which basically means: if you can't bring the person to the job, take  the job to the person.  In a word - offshoring.

Anderson gives an excellent example of how this works in the real world.  Apple, he reports, has created (directly or indirectly) 514,000 jobs in the U.S.  That sounds very impressive until you learn that Apple has 700,000 workers in China.  Surely wages are one factor but another, according to the late Steve Jobs, was that Apple could not find the 30,000 engineers necessary for on-site support in the U.S.  So those jobs went to a country that could.

One might weep if the situation were not so incoherent as to make you want to roll under the table with laughter.  On one hand there are increased restrictions, a massive immigration bureaucracy and flaming anti-immigrant rhetoric all in the name of "saving jobs."  On the other there are presidential candidates arguing that the U.S. ought to staple a green card “to the diploma of every eligible student visa holder who graduates from one of our universities with an advanced degree in math, science or engineering."   That's an interesting idea.  And what is going to happen when those eligible visa holders figure out that they have just signed up to live and work in one of the only countries in the world that taxes citizens, immigrants and residents on their worldwide income?   Singapore won't do that.  Neither will Canada or Australia or a whole host of other nice places.  And all of those places would be more than happy to welcome highly-qualified U.S. educated immigrants to work in their companies or in the subsidiaries of U.S. companies overseas who will keep them (and their jobs) overseas because it is too much of a pain to bring their talents in the U.S.  

So, if I understand correctly how this all works, fewer highly-qualified immigrants in the U.S. means more highly qualified immigrants in our countries means more jobs for us.


I think all of us living outside the United States should personally thank each and every American politician, the Internal Revenue Service, the Treasury Department and the United States Citizenship and Immigration Services for the bounty they are bestowing on us.  Keep it coming, folks. :-)


Anonymous said...

Hi Victoria,
I completely agree.
But what about UK and the continental Europe? There is shortage of skilled labour there as well. EU seems to work it out with the Blue card (any statistics on how many have been issued so far?) And UK? - the last time I read about UK, the immigration system was welcoming wealthy immigrants instead of skilled immigrants (Ref. Will it be able to sustain this model in the long run?


Victoria FERAUGE said...

Hi K.

Thanks for the link - that was an interesting read. I don't think it's the whole story though. See this post on Overseas Exile

I think the EU will loosen up. The problem is that member-states have to be very careful with their publics - especially in an election year. I think they will find ways to get around the laws they already have and once public attention is off the topic, they will openly start chasing after those highly-qualified immigrants. Just my .02.


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