How increased US legal immigration can benefit trade, economy

How increased US legal immigration can benefit trade, economy

During the economic recession, many people complained that jobs in the United States had largely been taken by immigrants and that left fewer opportunities for adults who were US citizens before immigrants arrived. Now, however, during a stronger US economy — US GDP will likely increase by more than 2.5 percent in 2018 — we wish we had more workers available, and immigrant workers are just fine, if not better, people say.

In a recent dinner gathering in New York, many executives with freight forwarders/shipping agencies described their challenges in recruiting qualified employees, due to the US’s tight labor market. Some had experienced problems performing reasonable services for exporters and importers in certain US regions, due to labor shortages. At the same time, salary and wages had increased 10 to 15 percent for some new hires. Furthermore, overtime pay, generally, had also increased, since many companies could hardly maintain sufficient manpower, given the manpower shortage, as their businesses boomed.

The US labor shortage

Further, the labor shortage not only exists in white collar jobs throughout the industry, but a more-serious shortage exists in the trucking sector and also in the warehouse segment, two largely blue collar-dominated work areas. These days, most freight forwarders around New York’s John F. Kennedy International Airport and near the New Jersey harbor have to pay more for trucking services for shipments, as numerous trucking companies are short truck drivers, especially those who drive trailers, the 18-wheel, tractor-trailer trucks we see on our highways. In other words, trucking fares have gone up.

If we look around and read the reports published by different media, the US labor shortage not only affects the shipping industry, but almost in every other sector as well. According to the US Labor Department’s latest Job Opening and Labor Turnover report, there currently are 6.7 million job openings in the United States that require qualified workers. As a result, some companies have lowered their job qualifications bar by dropping certain qualification requirements, such as having a college degree, etc., in order to attract applicants.

Looking at the problem from a positive angle, we should give credit to the current US administration for doing a good job in creating such an economic boom for our country. At the same time, we notice that the similar, above-trend GDP growth rates are also occurring in other regions of the world.

In the meantime, some New Yorkers who winter in Florida, affectionately known as “snow birds,” are clearly noticing that, quite different from several years ago, it is very hard these days to hire immigrant workers to mow their lawns and clean their yards in the Sunshine State. They further point out that finding immigrant workers to undertake intensive work, in general, is becoming a serious challenge in smaller cities and towns. As a result, businesspeople and residents in many parts of Florida now pay much more to hire different workers to undertake these tasks, and in many cases they are not happy with these new workers’ job performance and work attitude. These companies and employers miss the immigrant workers.

The H-1B visa program

Concerning the information technology sector, corporations in Silicon Valley and New York City — where jobs largely have been filled by young immigrants who graduated from US colleges and graduate schools — are facing their steepest challenge ever in recruiting qualified and talented employees, as the Trump administration is tightening immigration policy regarding almost every category, including for those who have received a higher education in the United States. Take the H-1B visa program as an example: the H-1B program allows companies in the United States to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent. H-1B specialty occupations may include fields such as science, engineering, and information technology, and the United States government currently caps these applicants at 85,000 per year. That number is far less than what this country needs for the high tech, medical, and engineering industries; the 85,000 ceiling is not much different from the 2005 to 2012 period, during which many high-tech corporate CEOs urged Congress at hearings to expand the quota and allow more temporary workers with a higher education to stay and work in our country. These days, one of the most outspoken persons on the issue is Microsoft CEO Satya Nadella. On numerous occasions, Nadella mentioned the challenges involving in applying for work visas for spouses of H-1B recipients and the problems associated with the repeal of the Deferred Action for Childhood Arrivals (DACA), or “Dreamer”, program. Nadella is an immigrant from India with an MBA from the University of Chicago, one of the nation’s leading higher education and advanced eduction institutions.  

There are hundreds of thousands of talented and educated immigrant workers and entrepreneurs like Nadella in this country that have made great contributions to our economy and daily life, and their migrations to the United States may or may not be related to H-1B visa program.  For instance, Jerry Yang, the co-founder of Yahoo, and Steve Chen, the co-founder of YouTube, were both born in Taipei. As for the current CEO of Google, Sundar Pichai, similar to Nadella, was born and grew up in India and holds an MBA degree from University of Pennsylvania. Another interesting thing is — and not too many people know this — the founder of Apple, the late, great Steve Jobs, who launched the “smartphone revolution” when he created the iPhone, was the son of a Syrian immigrant. The list goes on and on.

Today, according to reports in numerous metropolitan daily newspapers, including The Wall Street Journal, applying for an H-1B visa is in fact taking longer, compared with the period before this administration. In addition, extending existing visas also is becoming more challenging for applicants. The main reason is related to the new immigration policy, which is deploying tougher rules, at the very same time that our high tech, engineering, and medical fields are demanding more qualified workers for their fields. The “deregulation policy” that this administration is proud of has, ironically, been moving in an opposite direction concerning every part of the immigration process, despite the fact that the H-1B visa program attracts the best workers for our country.

The L-1 visa program

Concerning the international shipping industry, the L-1 work visa is the only document that allows companies transferring bilingual staff members with knowledge of local customs rules from overseas to work in the United States. As most in the industry are aware, an international freight agent that mainly performs shipping services between the United States and Germany, for example, sometimes requires someone who has work experience in Germany to manage and lead their operations at US branches. It is a similar case for a freight forwarder who is specialized in traffic with Asia, etc. The L-1 visa is not only important for international freight forwarders to recruit managerial employees overseas, it is also used by numerous US trading companies that have overseas factories. Having a staff member who is familiar with the factory operations overseas helps the trading companies deal with their buyers in the United States. Unfortunately, obtaining an L-1 visa is becoming a lengthy process these days. More documents are often needed by the immigration office as supporting documents.

A media outlet reported recently that, lately, the US immigration officers are required to ask the applicants following question in the interviews: 

“Do you think that your future job in the US cannot be done by the American local workers?” 

The reality is, job qualification is an issue that can’t be determined and judged by immigration officers. In addition, at this moment and for the years ahead, we don’t even have enough workers in our country in almost every sector, and at almost every level.  

When the current administration stated that the ongoing restricted immigration rules are imposed for the purpose of protecting more job opportunities for American citizens and workers, it invited the support from voters who have limited knowledge about the current immigration process and the need of human resources departments in various industries. Take the H1B visa as example. The notion of restricting new immigrants with higher education as a way to protect local citizens’ job opportunities does not reflect the true facts of the actual situation in our high tech field at all. Tightening the immigration rules for both H-1B and L-1 visa applications, etc. actually hurts the most important industries of our country. As far as the H-1B visa is concerned, to the contrary, we should immediately expand it and increase the annual quota by at least 20 to 30 percent. To prove the point, just briefly take a look at the picture of H-1B visa applicants in 2016.

In 2016, 236,000 young, educated immigrants had applied for an H-1B visa. Of these, 60 percent had master's degrees or higher, whereas the remaining 40 percent had college degrees. Under the annual cap of 85,000, the United States government had to use a lottery to determine who the lucky H-1B visa winners would be.

Japan — in need of workers

To further confirm a correct direction for our future US immigration policy, the current administration can learn a great lesson from the ongoing predicament of the worker shortage in Japan. Japanese businesses have suffered under this system for quite a while. Japan is a country known for holding the most restrictive immigration policy in the developed world. Historically, Japan has not been as receptive to people of different cultures and languages working in their country, as other developed nations. In the past, many Koreans lived in Japan for two or three generations, who could hardly speak and read Korean, yet they still were refused Japanese citizenship. At the same time, Japan has failed to offer equal opportunities to female workers, most scholars agree, and the percentage of its senior citizens has reached 25 percent of the entire population.

As a result of the above policies, Japan is now suffering a severe labor shortage on every level in all industries, which was not originally designed and executed for the country’s long-term interest, but had ethnic and nationalist roots. According to NHK (the public broadcasting network of Japan, similar to the US’s PBS), as Japan’s economy expands, for every 150 job openings there are only about 100 Japanese applicants available to possibly fill the vacancies. In addition, recruiting workers with college degrees is far more challenging to Japanese corporations than hiring blue collar workers, although there is actually a severe manpower shortage in both classifications.

As some have been aware, despite Japan’s standing in the world as the third-largest economy, ($5 trillion GDP), it has been in a recession for more than 20 years. This year, 2018, is the best opportunity for the country to recover from its economic downturn, but its severe labor shortage is preventing the government from taking advantage of the growing global economy. In response, Japan — for the first time in a century — is opening its door wider, inviting immigrants and foreign workers to fill vacant job openings. Most economists, however, don’t believe that its late awakening will work. In the meantime, many Japanese business executives with large corporations have expressed their envy and compliments over the United States’ (largely) open immigration system over the past two centuries — despite the fact that US immigration law has large room for improvement.

We all agree that current US immigration law is inadequate and the immigration system needs reform. We also agree that all immigrants should enter our country in a legal manner. The Trump administration is doing the right thing by continuing to prevent illegal immigrants from receiving benefits they do not qualify for. Future US immigration law, however, should be designed and executed on the basis of the best, practical interests of our country, not on the basis of racial ideology and nationalism. The direction in which this administration is moving on immigration policy, unfortunately, is not meeting the needs of the US’s growing economy and the long-term national interest. Inviting more legal immigrants into the United States, including, but not limited to, those H-1B visa holders, is a much more important priority than spending a large amount of money to build a wall on the border. And it is an indisputable fact that 97 percent of current US citizens, except Native Americans, are foreign country descendants, and we have been successful in building a strong country with the efforts of largely immigrant families. We should not fix our broken immigration law by imposing more-restrictive rules on potential applicants like other nations did in twentieth century, including Japan. Instead, the United States should accept more legal immigrants and workers from foreign countries, not only for the purpose of filling the high-skill jobs, but for every level of the workforce as well. (And I did not discuss the many social, cultural, and artistic benefits the United States has received from having so many different cultures in one region of the world.) 

Finally, I will note that the United States has been able to enjoy many good things at a lower cost in this country, mainly due to global free trade, the global economy, and an open-minded immigration policy. When an American traveler finds out that he or she has to spend $75 to $100 for a lunch for two at a Chinese restaurant in Switzerland, or $5 to $7 for an apple in Japan, other than appreciating our life in the United States, one should try to understand the reasons behind it. A conservative mentality under nationalism would take us in a direction away from all of the achievements this good country has made in the past two centuries.

Charles Wu is board director at JWJ Express (South Korea). Contact him at