ARTICLE ON GLOBAL MIGRATION REFORM

GPI LAW attorney Amien Kacou has a new article in the Fletcher Forum of World Affairs. The article, titled "The Case for Treating Migration as Trade," presents arguments in favor of liberalizing and multilateralizing global migration on the model of global trade.

FOUR H-1B MYTHS

With this H-1B season having drawn to an early close (due to USCIS receiving an overwhelming number of petitions), and with legislative immigration reform still pending, the time seems opportune to dispel a number of myths about the program.

First, some general facts: the H-1B program was created in 1990 to allow U.S. employers to hire up to 65,000 foreign workers (plus 20,000 more with advanced degrees--starting in 2004) in specialty occupations (i.e., typically high-skill work) for a period of three years (renewable once--with shorter extensions available for workers with pending employment green card applications).

So far, about half of all H-1B workers seem to have come from China and India alone. And about half lived in the United States under a different status (often as students) before obtaining their H-1B visa.

The numerical cap (from which institutions of higher education, not-for-profit organizations and government-research organizations became exempt in 2000) was temporarily increased to 115,000 in fiscal years 1999 and 2000, and to 195,000 in fiscal years 2001, 2002 and 2003 (the only time when supply exceeded demand).

Systems analysis and programming occupations tend to account for over one-third of all petitions in any given year. And, more generally, STEM occupations tend to account for almost two-thirds of all petitions. Between five and ten percent are in higher education (mostly biology and life sciences).

Although the demand for H-1Bs tends to be distributed across a large variety of employers, nonetheless, a few large tech and consulting (or staffing) companies account for a disproportionate share (though less than 20%). They include US-based companies such as Microsoft and Deloitte, but also Indian companies such as Tata and Infosys.

The largest geographical concentration of H-1B employees is in the New York metro area (which, perhaps surprisingly, boasts numbers as high as the three great California tech centers combined). For more information, read this 2012 Brookings Institution report.

Now for the myths:

LIBERALIZING INTERNATIONAL LABOR MIGRATION, PART II: Potential Benefits and Costs to Destination Countries

Potential Benefits

• Replacement migration: According to the International Organization for Migration (IOM), the population of high income countries (typical destination countries) such as the U.S. aged between 20 and 64 years old is expected to decline by 23% in 2050 (see World Migration 2008). Younger immigrants could help both address related labor shortages and fund social security and pensions for that ageing population.
• Decreased incentives for illegal immigration and related crimes: According to the IOM, international migrant smuggling now matches drug trafficking as a source of income for organized crime (see here).
• Lower the cost of migrant departure: According to the World Bank, migrants tend to stick to their destination country, even during times of economic crisis, when migration flows decrease (see Migration and Development Brief 11, 2009). I am not so sure that this squares perfectly with more recent (post- Great Recession) experience in the US, but, regardless, perhaps migrants tend to fear losing the opportunity to return if they leave.
• Fiscal benefit: at least in the case of skilled migrants,  they can be expected to pay more in taxes (due to their higher income) than they receive in public benefits.
• Alternative to outsourcing: international labor migration (ILM) may be preferable to outsourcing in at least two respects. First of all, it brings new consumers and investors to domestic U.S. businesses (instead of creating new ones for foreign businesses); and, second of all, it enables high income countries to control labor conditions--through wage legislation for instance--in ways that can favor their domestic populations.
• Specialization of domestic workers in destination countries: In theory, liberalization should favor a better division of labor (see Joel Trachtman, The International Law of Economic Migration, 2009, p. 339).

LIBERALIZING INTERNATIONAL LABOR MIGRATION, PART I: Benefits to Countries of Origin

In December 2011, Robert Guest (business editor for the Economist) described the general case "in praise of brain drain" (i.e., the "transfer of intellectual capital" due to skilled worker migration from poor countries to rich ones), pointing out that, under normal conditions, the transaction benefited poor countries by:

• Motivating their citizens (the majority of which would not be able to emigrate) to acquire "marketable skills;" 
• Creating uniquely-stable financing through remittance flows (money earned in rich countries and sent back home to poor families, which is more than double the foreign aid their allegedly "corrupt" governments receive); and
• Opening channels of commerce (through diaspora networks).

Guest (an economist) failed to mention some easily-overlooked political benefits of so-called brain drain--e.g., releasing key young labor surplus (thus reducing the chances of social unrest). Most poor countries have very young populations in demographic ascent. (A 200% increase is expected in Africa, and around 40% increase expected in Asia, Latin America and the Caribbean, in the 20-64 age group, by 2050.) For poor countries, where those populations are likely to be unemployed and there is currently too little capital for entrepreneurship, exporting even a skilled labor surplus might well increase political stability.