In the Wall Street Journal, Matthew J. Slaughter of the Tuck School of Business, one of our most interesting public policy thinkers (see “A New Deal for Globalization,” which he co-authored with Kenneth Scheve in 2007), makes the familiar case for high-skilled immigration while adding insight by drawing on his own experiences as a teacher and mentor:
Since the financial crisis, America’s immigration policy has further tightened. Buried in the American Recovery and Reinvestment Act of 2009 was the Employ American Workers Act, which restricted H1-B hiring at any U.S. company that received government support from either TARP or new Federal Reserve credit facilities. This act foolishly hurt hundreds of finance companies by limiting their talent pool precisely when they needed new talent the most.
I saw the damage done by this misguided legislation firsthand. Within days of the president signing it into law, a number of U.S. banks reneged on job offers extended months earlier to foreign-born M.B.A. students. Six Tuckies were soon in my office, confused and upset at suddenly facing unemployment. By graduation only one had secured employment in America, after randomly winning a visa lottery. The other five all secured jobs—but all abroad. All five said they would probably never return to the U.S. because of the Employ American Workers Act. The long-term result? Lost ideas. Lost jobs. Lost taxes.
And of course this short-sightedness has a pronounced impact on the agglomerations of talent that help drive the success of our knowledge-intensive service industries.