Skilled Migrants Needed

Anna Li, a test engineer with Peregrine Semiconductor, has been in the United States for five years on a H-1B visa.

Image: Laura Embry/SDU-T/ZUMA Press

American businesses are in a mad dash to attract employees with talent and skills, but finding them on U.S. shores has proved to be a challenge.

A recent survey of more than 2,000 companies by Manpower Inc., an employment-consulting firm, found that 41 percent of businesses are having trouble filling positions. That figure comes in below last year’s 44 percent, but Manpower expects the talent squeeze to intensify as 77 million baby boomers get set to retire.

Skilled employees such as teachers, technicians, managers, accountants, and information technology workers were the most difficult to find, according to the survey. Looking ahead, the U.S. Department of Labor estimates that 80 percent of the 30 fastest-growing jobs over the next seven years will require some form of post-high-school degree. This list is dominated by medical and I.T.-related positions. (High-skill jobs, however, were not as well represented in the Labor Department’s findings, making up 27 percent of the occupations with the largest expected job gains.)

Another concern is that, with intense technological change, the shelf life of many I.T.-related skills resembles that of eggs more than Spam. Website builders were much in demand just a few years ago, but now almost anyone can put together a webpage, thanks to new software.

While there’s no doubt that low unemployment is also exacerbating the difficulty of finding talented personnel, employers may continue to have trouble even if the economy slows down and unemployment increases. It’s doubtful that the labor pool will contain enough qualified people to fill the skilled jobs. Take a look at the current educational makeup of the unemployed on this chart:

So how did we arrive at this state?

While more than two-thirds of high-school graduates enter college, only about 50 percent go on to earn a degree, according to Susan Dynarski, an economist at Harvard University. This fact, combined with slowing population growth, means that the supply of educated labor from within the U.S. hasn’t been meeting companies’ demand—especially for tech-savvy professionals, as the internet has taken off over the last decade.

Other countries in a similar situation, such as Britain and Germany, have transformed their immigration systems to favor more highly skilled applicants.

And Canada’s point system has helped that country raise the number of immigrants with college degrees to 39 percent. Canada’s scheme requires applicants to score at least 67 out of 100 points on a range of metrics, including education, knowledge of English or French, employment experience, adaptability to Canada, and whether employment has been arranged. Last year, about 20 percent of immigrants given permanent residence in Canada acquired it through this system.

In comparison, only 10 percent of immigrants to the U.S. were granted residence based on their skills.
But Canada’s system, created in the 1960s, has come under fire because the government has been slow to evaluate applications, creating a backlog of close to 800,000 requests.

A proposed U.S. system, which was killed in the Senate, would have also placed a heavy emphasis on job skills and education. The immigration bill’s Democratic opponents are likely to be in power the next time immigration reform is on the agenda, after the 2008 elections, dampening the prospects for a change in direction.
That’s too bad, because academic research has shown that targeted immigration policies could alleviate some of the demographic challenges that lie ahead.

A group of researchers tested what would happen if the number of low-skilled immigrants doubled. The results weren’t pretty. Having more low-skilled immigrants could raise payroll tax rates and lower real wages, because this group is more likely to use government services and thus raise the costs of those services, according to a 2004 study by Hans Fehr and Sabine Jokisch of the University of Würzburg in Germany and Laurence Kotlikoff of Boston University.

On the other hand, the researchers found, raising the number of highly skilled immigrants would have a beneficial impact because of their increased productivity.

Some immigrants also contribute to American innovations. A 2005 study by World Bank researchers found that the presence of foreign graduate students and highly skilled immigrants increased the number of patents granted by 5.37 percent and 6.7 percent, respectively.

Of course, the U.S. has not stood still in trying to attract skilled foreign workers. H-1B temporary visas have allowed companies to fill specialized positions that they weren’t able to hire American talent for. About 115,000 jobs were filled with recipients of H-1B visas in 2005. The immigration bill would have scrapped the H-1B system in favor of the point system.

But if the U.S. eventually turns to an immigration system that heavily favors skills over other attributes, there are a couple of caveats to take into account:

First, more than 25 percent of skilled immigrants in the United States are either not working, can’t find employment, or have jobs they are overqualified for, according to a recent report on international migration by the Organization for Economic Cooperation and Development.

Second, the U.S. is not the only country looking overseas for talent. Competition for skilled workers from other nations, coupled with the emergence of China and India, means highly educated workers have other options besides trying to immigrate to the United States. With globalization, the U.S. is no longer the only land of opportunity.