Govt should drop immigration quota & produce more high-value workers

Immigration is the hot topic in politics on both sides of the Atlantic.  It was a prominent part of the leadership debates and virtually no analysis of Labour’s loss appears complete without some mention of it.

Despite Gordon Brown’s much-publicised gaffe after an exchange with a voter on that subject, it is hard to see how immigration discussion in the UK could devolve to a level of cabaret to match that in the US, where a national dispute about a harsh Arizona law meant to crack down on illegal immigration recently featured a state official sending a petulant letter to the mayor of Los Angeles threatening to cut off the city’s power supply.

The rhetorical heat in the US centres primarily around illegal immigration from Mexico; some of the argument is economic, some of it clearly cultural/racial (the fact that the Arizona law went into effect at the same that the state banned a public school course on ethnic studies because it, apparently, excessively lionised the influence of great Mexicans and Mexican culture is not insignificant), while the most cogent argument centres around security at the border, where Mexico’s drug war has intensified and increasing jumps over the line.

The UK is not faced with a similarly dire security issue, but the debates share a common irony: the argument becomes fraught around the question of low-to-semi-skilled migrants with limited English, a subject on which there is actually broad political agreement – no party, in the US or UK, wants an influx of a large number of comparatively low-value workers with limited command of the language of business, and all appear to recognise the security threat posed by insufficiently-policed borders. The relevant and important argument, on the other hand, gets second billing: what to do about highly-skilled migrants?

US policy on this subject has taken a sharp turn over the course of the last decade. In 2001, the primary vehicle for highly-skilled migrants, the H1B visa, was capped at 195,000 issued per year; the cap today is 65,000. H1B migrants can stay for a maximum of six years, and then must leave the US.

There is an open debate amongst policymakers about the value of the current H1B cap (most intense during the 2006 election cycle). In the technology sector, the cap is largely condemned because it makes it difficult to import talent (and where many of the industry’s leaders are either themselves immigrants to the United States or the children of immigrants).

This view has gained strength in other sectors, as well; the director of a major TransAtlantic executive-services firm told Left Foot Forward recently that the most common concern his organization fields is that private entities cannot import the talent they want because of the visa restriction and cannot find it in the US. The phrase “reverse brain-drain” has entered the policy lexicon, although evidence so far is largely anecdotal.

The Coalition Government has pledged to undertake an immigration quota, although the agreement says only that it “will consider jointly the mechanism for implementing the limit”. That plan is supported by groups like Migration Watch, whose recent report overstating the number of migrants allowed into the UK was dished on this website. Even if Migration Watch’s numbers had been 100 per cent accurate, however, it and the Government have failed to answer a core question, the same question that goes unanswered in the US: what, exactly, is the argument against highly-skilled migrants? Why is having skilled people around a bad thing, regardless of their nationality?

The prime argument, of course, is that they take jobs that would otherwise be held by born-citizens. This is a song to which most in the policy-world can sing the lyrics by heart. Consider this, though: in April 2009, the unemployment rate in the United States stood at almost 10%, but there were more than 3 million open job postings, 1 million of which had been open for more than a year. Even 195,000 H1B visas (the 2001 limit) would fill only 20% of those positions that had been open for a year; the current limit, 65,000, is a drop in the bucket.

Employment is about much more than immigration. In 2005, according to the OECD, 35% of Britons and 39% of Americans between the ages of 24 and 35 had a tertiary degree, ranking the countries 12th and 8th, respectively; Russia was the leader, and Poland the most-improved over the period 1999-2005. Meanwhile, UNESCO reports that the UK ranked 16th in the world in 2005 in percentage of the population employed as researchers in science and technology, a key engine of innovation and wealth (the US was ranked fourth).

These indicators don’t tell the entire story, but they certainly point to the conclusion that Britain is neither generating nor employing enough highly-skilled workers; the US is in a stronger position but the trajectory suggests it may be losing its edge, as well. Britons do not need to fear migrants coming to the UK and taking their jobs – they need to worry about the high-value jobs that will never exist in Britain at all as firms look elsewhere for skilled talent.

Restricting the number of trained professionals and entrepreneurs allowed into the UK will only exacerbate this problem. If the Coalition Government is serious about Britain’s economic vitality, it will drop or de-fang the immigration quota and focus on producing more high-value jobs and the workers to fill them.