Friday, March 13, 2009

Why Immigration is Good for America's Business

For all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 an average of 550,000 small businesses were created every month. One factor is a fairly open immigration policy. Vivek Wadhwa of Duke University notes that 52% of Silicon Valley start-ups were founded by immigrants, up from around a quarter ten years ago. But since 2001 the threat of terrorism and rising xenophobia has made immigration harder. Today more than 1m people are waiting to be granted legal status as permanent residents. Yet only 85,000 visas a year are allocated to the sort of skilled workers that might go on to found sucessful businesses of their own.

The Economist


At 3/13/2009 4:22 PM, Blogger DaveinHackensack said...

Dr. Perry,

How many Silicon Valley start-ups were founded by unskilled immigrants from Mexico? There's an enormous difference between the impact of skilled immigrants and unskilled immigrants. As I have argued elsewhere before (e.g., here, "Former Mexican Foreign Minister's Call for Amnesty gets Cool Response from NYT Readers"), we ought to transition to a more rational immigration policy, one similar to the policies of Canada or Australia, that seeks to attract immigrants with high levels of human capital.

At 3/13/2009 4:31 PM, Blogger ExtremeHobo said...

Construction companies find a lot of "human capital" in unskilled immigrants from Mexico.

At 3/13/2009 4:37 PM, Blogger DaveinHackensack said...

"Construction companies find a lot of "human capital" in unskilled immigrants from Mexico."

That was good for them during the real estate bubble, but bad for the domestic unskilled workers whose wages went down due to the influx of unskilled immigrants, and bad for the rest of us (i.e., taxpayers), since unskilled immigrants tend to consume more in government services (e.g., emergency room visits) than they pay in taxes.

In any case, now that we're in a historic real estate bust, and the construction industry is in a slump, these immigrants can go home now, right?

At 3/13/2009 7:17 PM, Blogger Craig Howard said...

Maybe I read too much into Dr. Perry's post, but my hackles are raised whenever I read posts which defend immigration. I doubt that very many Americans at all are opposed to immigration of the legal variety.

We are, however, very much against illegal immigration with all the attendant perquisites of the welfare state that we have to pay for. Gosh, this isn't hard stuff to understand.

At 3/13/2009 8:49 PM, Blogger Thomas Coolberth said...

Extreme Hobo would you like to purchase a home built by unskilled labor? Or do you consider all manual labor "unskilled."

We need the immigrants, primarily, as replacement Americans because the products of our public schools are too dumb and lazy to be of any use.

If we had to rely solely on those who were schooled here, there would be a huge deficit of human capital.

At 3/13/2009 9:40 PM, Anonymous Anonymous said...

Alas there are some things more important than an extra point on the ole GDP growth rate, like national unity and the preservation of the traditional American character. This is another place where open border libertarians part ways with conservatives. I am with you all the way on low taxes, low regulations and free trade though...

At 3/13/2009 11:21 PM, Blogger malpas said...

I wouldn'5t count on the policies of Australia seeking immigrants with high levels of human capital.
Already there seems to be a tendency in Australia to immitate the immigration pattern of the UK.
Even those who theoretically have high human capital are often of dubious value.
Try going to a doctor who speaks bad english.

At 3/14/2009 6:34 AM, Blogger The Chinese Capitalist said...

As an immigrant myself, I find that there is very little opposition or hostility towards legal immigrants. This country is quite welcoming towards immigrants who want to stay here and are invited to.

As a legal immigrant, I also oppose illegal immigration and want the immigration laws to be enforced. Some of my family members recently immigrated legally into the United States after waiting 11 years. That is a long time to wait and I resent that those who unfairly cut in front of them are grouped into the same category. Both of my cousins who came with my aunts and uncles are now in the University of California system and will be productive members. All of my uncles and aunts are working legally and taking English classes, which they began well before they received permission to enter the country. None are on public assistance.

Yes there is a huge difference between legal and illegal immigrants and I resent being lumped into the same category. It makes no sense to do so, just like lumping in chronic drunk drivers with those who have had a sip of alcohol within the past year. Society's anger is directed towards drunk drivers who cause accidents, not all people who have had a drink at some point. The same applies to illegal immigrants.

At 3/14/2009 2:58 PM, Blogger bobble said...

" . . rising xenophobia . ."

that's a joke.

try "rising unemployment".

this is what Vivek Wadhwa said about H1B's before he was, *apparently*, paid off by the immigration lobby:

-Dozens of employers asked to compare American engineers to their much-vaunted colleagues from India and China agreed that "in education, training, quality of work, you name it, in every which way, Americans are better."
Even the best schools in those countries "don’t hold a candle to our best schools," he continues.
Newly hired American university graduates "become productive within 30 days or so. If you hire a graduate of an Indian university, it takes between 3 and 6 months for them to become productive." The image of shortage arises from "emotion versus fact" and "misinformation that
feeds on itself," Wadhwa says.-

At 3/15/2009 2:58 AM, Blogger juandos said...

Immigration is good for America, most especially LEGAL immigration...

We should be suprised the the federal government is screwing up the whole immigration problem?!?!

Is it to much to ask immigrants to speak English or should we let the liberals continue to foist off the costs of not doing so onto the taxpayer?

The real problem though comes from
liberal politicos who aid & abet illegal immigration...

At 3/16/2009 10:39 AM, Blogger ExtremeHobo said...

Extreme Hobo would you like to purchase a home built by unskilled labor?

Have you ever worked construction? I did for a couple weeks as a summer job one year and I was unskilled labor. It really doesnt take a high-school diploma or even a comprehension of English to spread a pile of gravel flat with a rake or every other job they made me do. Every building is built with a collection of people, including lots of "unskilled" labor

At 3/18/2009 2:24 AM, Blogger Jiri said...

Skill has very little to do with it. The correlation between people willing to move to a foreign country and learn a foreign language in order to better themselves and enterpreneurs is quite high.

The mexican lady that cleans my appartment has created her own business. She employs tree other women and they sweep the appartment in quarter of the time. Her only real acquired skill is the ability to speak english, yet she has created and maintains 3 extra jobs on her own. I'd say she did more for the health of California economy than most of the people commenting on this blog.


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