There’s No Such Thing as Too Many Smart Workers

by on January 5, 2007 · 14 comments

An excellent point from Joe at Techdirt:

We’ve argued, along with many others, that it’s a clear benefit to the overall economy and the tech industry in particular to have skilled and educated immigrant workers come over from abroad. Still, it’s always nice to have some data to back this assertion up, just to ward off accusations of being a wild idealist. A new study published by Duke University finds that a full quarter of all tech startups between the years 1995-2005 had a immigrant either as a founder or key executive. These companies, it’s estimated, employed a total of 450,000 workers, and had revenues of $52 billion. The mistake made by those who oppose immigration for economic reasons is that they think of the overall economic picture as being fixed. In other words, they look, say, at the number of jobs in existence today, and simply assume that if more people compete for them, then domestic workers will increasingly go unemployed, while overall wages will be depressed. But as studies like this show, there’s nothing fixed about the economy. There’s always room for new startups, while existing companies will hire more people, assuming that they’re talented and can add value. As the researchers note, the process of immigration is inherently ambitious, and going through it is a sign of one’s inclination to take risks. As more data like this becomes available, it’s going to be an increasingly difficult argument to make that an intelligent and skilled immigrant workers somehow drag down the economy.

I think it’s just nuts that we place so many restrictions on immigration by highly-skilled workers. One can make a plausible argument (one I don’t agree with, but plausible) that current limits on immigration of low-skilled workers are necessary to avoid placing undue burdens on taxpayers, given that low-skiled immigrants might collect more in social services than they pay in taxes. But this argument simply doesn’t apply to a guy with 20 years of experience as a computer programmer or a master’s degree in economics. Such workers are all but guaranteed to have well-paying jobs and contribute to the tax base in the short run. And in the long run, some of them will go on to create successful businesses that will employ Americans and create new wealth.

So I don’t know why we don’t let every single person who has an advanced degree or can demonstrate significant technical skills into the country. It’s good for the immigrants, it’s good for the companies that employ them, and in the long run it’s good for everyone.

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About Tim Lee

Timothy B. Lee (Contributor, 2004-2009) is an adjunct scholar at the Cato Institute. He is currently a PhD student and a member of the Center for Information Technology Policy at Princeton University. He contributes regularly to a variety of online publications, including Ars Technica, Techdirt, Cato @ Liberty, and The Angry Blog. He has been a Mac bigot since 1984, a Unix, vi, and Perl bigot since 1998, and a sworn enemy of HTML-formatted email for as long as certain companies have thought that was a good idea. You can reach him by email at leex1008@umn.edu.

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  • http://weblog.ipcentral.info/ Noel Le

    Tim, check out the NAS pubication: Building a Workforce for the Information Economy (2001). It talks about the importance of foreign workers in building an information economy thats highly complex and specialized;in particluar, the H1-B tech work visa.

    On the one hand, I feel for American tech workers who have their jobs shipped overseas, or who cannot find work here. However, the benefits to the American economy of foreign talent is obvious.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, check out the NAS pubication: Building a Workforce for the Information Economy (2001). It talks about the importance of foreign workers in building an information economy thats highly complex and specialized;in particluar, the H1-B tech work visa.

    On the one hand, I feel for American tech workers who have their jobs shipped overseas, or who cannot find work here. However, the benefits to the American economy of foreign talent is obvious.

  • Bob K

    “in the long run it’s good for everyone”.

    Everyone in the US, or everyone in the world? Aren’t we doing the rest of the world a long-term favor by arbitrarily limiting our share of the brain drain?

    Whose utility are we maximizing here?

  • Bob K

    “in the long run it’s good for everyone”.

    Everyone in the US, or everyone in the world? Aren’t we doing the rest of the world a long-term favor by arbitrarily limiting our share of the brain drain?

    Whose utility are we maximizing here?

  • Brian Moore

    This also applies to doctors. My fiancee has recently interviewed for her residency. Apparently American medical schools each get hundreds of applications from qualified foreign medical graduates (that’s graduate, not student). They turn down the majority (90%) of them.

    They do this because the supply of residencies is limited artificially. Many of these individuals are not just med school grads, they are full blown practicing doctors who want to come to America, but we require them to re-do much of their training.

    We are explicitly turning away (by mandate) thousands of DOCTORS who wish to come here and practice medicine. We are artificially limiting the supply of doctors in a time in which medical costs are skyrocketing. Does this sound like a good idea?

    “Everyone in the US, or everyone in the world? Aren’t we doing the rest of the world a long-term favor by arbitrarily limiting our share of the brain drain?

    Whose utility are we maximizing here?”

    Well, foreign countries often benefit from the discoveries and inventions of immigrants who ply their trade in the freer US environment. We usually invent new things to sell them — and those countries like to buy new things.

  • Brian Moore

    This also applies to doctors. My fiancee has recently interviewed for her residency. Apparently American medical schools each get hundreds of applications from qualified foreign medical graduates (that’s graduate, not student). They turn down the majority (90%) of them.

    They do this because the supply of residencies is limited artificially. Many of these individuals are not just med school grads, they are full blown practicing doctors who want to come to America, but we require them to re-do much of their training.

    We are explicitly turning away (by mandate) thousands of DOCTORS who wish to come here and practice medicine. We are artificially limiting the supply of doctors in a time in which medical costs are skyrocketing. Does this sound like a good idea?

    “Everyone in the US, or everyone in the world? Aren’t we doing the rest of the world a long-term favor by arbitrarily limiting our share of the brain drain?

    Whose utility are we maximizing here?”

    Well, foreign countries often benefit from the discoveries and inventions of immigrants who ply their trade in the freer US environment. We usually invent new things to sell them — and those countries like to buy new things.

  • http://www.techliberation.com Tim Lee

    Bob, trade and migration are not zero-sum games. When a skilled Indian or Chinese worker migrates to the United States, he’s likely to benefit his compatriots back home in a variety of ways. He might start a business that increases trade between the United States and his home country. He might send money back to help his family. He might contribute to organizations working to improve conditions in his home country.

    But even if emigration is harmful to the migrant’s native country, I don’t think that justifies forcing him not to migrate. People are not the property of their governments. They don’t have an obligation to stay in their home countries in order to benefit their countrymen.

    Millions of Americans every year move from state to state in search of economic opportunity. No doubt my native state of Minnesota was unhappy when, after 8 years of education at state expense, I took a job on the East Coast. It’s probably unfair that Minnesota taxpayers paid for my education and then didn’t receive the benefits of my taxes. But I don’t think anyone believes it should be illegal for me to leave Minnesota. People ought to have a right to seek economic opportunity wherever they can find it.

  • http://www.techliberation.com Tim Lee

    Bob, trade and migration are not zero-sum games. When a skilled Indian or Chinese worker migrates to the United States, he’s likely to benefit his compatriots back home in a variety of ways. He might start a business that increases trade between the United States and his home country. He might send money back to help his family. He might contribute to organizations working to improve conditions in his home country.

    But even if emigration is harmful to the migrant’s native country, I don’t think that justifies forcing him not to migrate. People are not the property of their governments. They don’t have an obligation to stay in their home countries in order to benefit their countrymen.

    Millions of Americans every year move from state to state in search of economic opportunity. No doubt my native state of Minnesota was unhappy when, after 8 years of education at state expense, I took a job on the East Coast. It’s probably unfair that Minnesota taxpayers paid for my education and then didn’t receive the benefits of my taxes. But I don’t think anyone believes it should be illegal for me to leave Minnesota. People ought to have a right to seek economic opportunity wherever they can find it.

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    Bob, trade and migration are not zero-sum games

    But certain regions will benefit more than others, and the USA cannot turn a blind eye to the political and economic instabillity that their policies create. To do so would be phenomenly stupid

  • http://enigmafoundry.wordpress.com eee_eff

    Bob, trade and migration are not zero-sum games

    But certain regions will benefit more than others, and the USA cannot turn a blind eye to the political and economic instabillity that their policies create. To do so would be phenomenly stupid

  • Charles

    I should check again where this statistic came from, but I remember reading that the money immigrants in Canada personnaly send to Haiti is greater than the total help Canada supplies to Haiti. Granted this is not about the US and only about one third-world country, but still. Of all the policies a country can come up with, I don’t think immigration laws are the most damaging to the rest of the world.

  • Charles

    I should check again where this statistic came from, but I remember reading that the money immigrants in Canada personnaly send to Haiti is greater than the total help Canada supplies to Haiti. Granted this is not about the US and only about one third-world country, but still. Of all the policies a country can come up with, I don’t think immigration laws are the most damaging to the rest of the world.

  • Brian Moore

    “But certain regions will benefit more than others, and the USA cannot turn a blind eye to the political and economic instabillity that their policies create. To do so would be phenomenly stupid”

    So what you’re saying people will look around and say “my country sucks so bad that I will pay the enormous cost of moving around the world” and this will create political instability in those nations?

    Perhaps it is not the fault of the nation who provides the immigrant his new home, but rather the fault of the nation who made his old one so bad he wanted to leave?

  • Brian Moore

    “But certain regions will benefit more than others, and the USA cannot turn a blind eye to the political and economic instabillity that their policies create. To do so would be phenomenly stupid”

    So what you’re saying people will look around and say “my country sucks so bad that I will pay the enormous cost of moving around the world” and this will create political instability in those nations?

    Perhaps it is not the fault of the nation who provides the immigrant his new home, but rather the fault of the nation who made his old one so bad he wanted to leave?

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