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Our immigration system is not serving our economic needs. As a country, we are facing an aging population and a severe shortage of workers. The work force population aged 25-34 will actually decline in the next decade without immigration, and workers above the age of 45 will increase the fastest. The median age of our work force will approach 40. Over the next 10 years, retirements and the slow growth in the working-age population will mean work force growth close to zero even while new jobs are being created. In fact, without immigration, available jobs will grow faster than the work force. Currently, a shortage of essential workers exists for positions that require only on-the-job training or experience and no college degree. These positions include landscaping workers, agricultural workers, construction workers, janitors and cleaners, nursing aides, waiters and waitresses, and food-preparation and other service workers. The problem will only be exacerbated in the future because only two of the top 10 largest-growth occupations from 2004 to 2014 require a bachelor’s degree, and most of the growth occupations require only moderate or short-term on-the-job training. There are many Americans working in these occupations with immigrants — both legal and illegal — filling the gap created by a combination of demographics and the current low unemployment rate in the United States. Immigrants would be better able to fill these economic needs, if only our immigration system would let them. The Construction Labor Research Council issued a labor-supply outlook, finding that the construction industry would need 185,000 new workers a year for the next 10 years. The National Restaurant Association projects that the restaurant industry will add more than 1.8 million jobs between 2005 and 2015, an increase of 15 percent. At the same time, the National Restaurant Association study notes that the 16- to 24-year-old labor force — the demographic that makes up more than half of the restaurant-industry work force — is not predicted to grow at all in the next 10 years. ARBITRARY CAPS Unfortunately, our broken immigration system remains stuck in the failed approach of arbitrarily set employment visas. With only 5,000 permanent visas available each year for essential workers, an employer would have to wait five to 10 years to bring over an experienced roofer from Mexico. The temporary-visa category for essential workers outside of farming, the H-2B visa, also has arbitrary caps that do not correspond to economic needs. Congress continues to address this issue with temporary fixes that only postpone a permanent resolution. The H-2B program is capped at 66,000 visas per year, and this number has not been adjusted since this visa category was created in 1990. Last year a law was enacted that temporarily exempted from counting toward the cap temporary seasonal workers who have participated in the H-2B visa program during the past three fiscal years. It also split the visas so that only 33,000 would be granted in the first six months of the fiscal year so businesses with needs later in the year would not be left stranded. But this temporary fix did nothing to address the long-term shortage for permanent workers in the U.S. economy. Until now, this need has been filled by unauthorized workers. Meanwhile, businesses are demanding a dependable legal system that allows them to bring in the workers they need quickly and efficiently. These arbitrary quotas are also threatening our technological leadership and economic competitiveness. Employers need to hire the best candidates to develop new products and markets, expand business opportunities, and create new jobs. The artificially low caps on the temporary visa for highly skilled workers, the H-1B visa, hurt U.S. competitiveness. They allow other countries to hire these talented individuals or force American companies to carry out projects in other countries where key personnel can be found. It wasn’t always like this. From fiscal year 2001 until fiscal year 2003, the H-1B program cap stood at 195,000, and that cap was never reached. In fact, as the tech boom took a dive, in fiscal years 2002 and 2003 less than half of the 195,000 H-1B visas were used. In essence, during these three years the market determined how many high-skilled foreign workers U.S. companies would get to meet their needs. In fiscal year 2001, for example, 164,000 H-1B visas subject to the cap were approved, while in fiscal years 2002 and 2003 not even 80,000 were approved. At the moment, however, the H-1B program, for the most part, is capped at 65,000 visas per year. (There’s a limited exemption for some foreign graduates of master’s and Ph.D. programs from U.S. colleges and universities.) Even before the economy started to recover, the 65,000 cap was way too low. For the past two years this cap has been reached before the beginning of the fiscal year, forcing petitions to be put on hold and delaying the hiring of much-needed employees. The unrealistically low caps also create a logistic nightmare for companies and the government, because companies rush to anticipate their needs and prepare their applications months in advance. Then the government must deal with all the applications being filed at once, because all employers are filing as soon as they are allowed to in order to avoid losing their workers. This system creates delays, inefficiencies, and higher error rates at a swamped agency. A MARKET APPROACH The solution must be to create a system in which employment-based visa limits are not set arbitrarily at the whim of bureaucrats without some significant relationship to economic needs. Also, before we look to future needs for essential workers, we need to stabilize our current work force by creating a rational and fair method for providing current unauthorized workers in the country a path to legal permanent residency. For the future flow of all workers, the U.S. Chamber of Commerce continues to push for a permanent fix to the current nonsensical system of arbitrarily set caps that require businesses to run to Congress every time the economy takes off and the need for workers becomes urgent. The current system works against our own national interest by diminishing our ability to enhance our competitiveness and by undermining predictability in the business planning process. Reaching the caps on H-1B and H-2B visas, particularly given the lack of permanent visas, means many American companies are kept from hiring highly skilled workers when they need them most. As a result, seasonal needs in hotels and other industries have not been met. An excellent solution to this conundrum would be to implement a market-based approach to the visa caps. Currently, S. 2611, the Comprehensive Immigration Reform Act of 2006, passed by the Senate, contains such an example of a workable market-based cap. With S. 2611, if the H-1B visa cap is reached during a given fiscal year, the cap for the subsequent year goes up automatically. Several immigration proposals, including the version of S. 2611 that was reported out of the Senate Judiciary Committee, contain a more elaborate market-based formula that allows the cap numbers to go down when the cap is not met or to increase during an ongoing fiscal year to account for the unexpected needs of the economy. Yet some bad habits die hard, and an amendment to S. 2611 on the Senate floor took out the market-based formula for temporary essential-worker visas. It substituted a rigid cap that, by all accounts, allows less than half the number of visas for essential workers needed to meet the needs of our growing economy. Of course, workers in the United States should have an opportunity to get these jobs before an employer seeks to fill those vacancies abroad. Most employment-based visa programs already require that an employer attempt to find American workers before opening a position to foreign workers. In addition to recruiting American workers first, S. 2611 requires employers to pay the higher of the wage paid to similarly situated employees or the prevailing wage for the occupation. This adds an additional incentive for employers to look for U.S. workers first. Current law and proposed legislation also include strong provisions to ensure that foreign workers are not used to replace laid-off workers or used in a labor dispute, such as a strike. The chamber believes that foreign workers should receive the same benefits, have the same working conditions, and enjoy the same protections typical of similarly employed American workers. In fact, the truth is that obtaining a foreign worker is always more expensive and cumbersome than hiring a worker already in the United States. For example, in addition to the time restraints and the uncertainty, an employer hiring a worker under the H-1B visa program must pay a $1,500 fee to provide scholarships and training for American workers, a $500 anti-fraud fee, $1,000 for prompt application processing, a $185 Immigration Service fee, and about $3,000 in attorney and mail charges. Thus, an employer not only pays the H-1B worker the prevailing wage for American workers and places this new employee under the same conditions as his American counterparts, including work hours, shifts, and benefits, but also directly spends about $6,000 more than it would for an American worker. HELPING GROWTH Finally, the benefit of a market-based system has dramatic positive macroeconomic implications. In fact, the Congressional Budget Office estimates that the amendment that changed the market-based cap in S. 2611 to an artificially rigid low cap for essential workers would cost the U.S. Treasury about $2 billion in revenues in the next 10 years. More important, the CBO estimates that a market-based approach like the one found in the original S. 2611 would add more than 3 million employees to the American work force by 2016. It concludes that the work performed by those added employees would increase the production of goods and services, raise the gross domestic product, help both private and public saving — in part by helping reduce the federal deficit — and increase the amount of funds available for investment. The CBO estimates that with its original market-based cap, S. 2611 would increase GDP between 0.3 percent and 0.4 percent, on average, from 2007 through 2011 and between 0.8 percent and 1.3 percent, on average, from 2012 through 2016. This would have a positive federal budgetary impact of about $80 billion to $160 billion in those 10 years. Immigrants have provided half of all of the growth in our work force nationally in the past decade. They are now 1 in 8 of our workers. For the next decade immigrants will continue to be the primary factor in any work force growth. An economy cannot grow and create new jobs without a work force to fill them. To continue our economic prosperity and technological leadership, we need a system that reacts to the changing needs of our global economy. Although the market might not have all the answers, it definitely should be part of the solution.
Angelo I. Amador is director of immigration policy at the U.S. Chamber of Commerce.

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