US immigration policies hamper entrepreneurial ambitions

According to UNESCO statistics, the United States of America has been one of the top destinations for international students to pursue higher education and broaden their skills development and life experiences. Countries like China and India are top suppliers of foreign students to American universities.

If they ultimately want to start a business in the US, international students need to first become permanent residents (ie obtain a green card). The preferred route for these individuals to obtain a green card is via the H-1B visa programme – that is, an American company sponsors an H-1B visa for a graduate international student and then initiates the green card process for that student in the name of securing longer term employment.

The alternate route via the EB-5 investor visa – which involves investing a minimum of US$500,000 in a commercial enterprise and creating 10 permanent full-time jobs for US workers – is incredibly expensive, particularly for a graduating international student.

The main issue for current H-1B visa holders is the delay in receiving their green card. This is especially true for the Indian immigrant population in the US, with current immigration policies leaving a disproportionate number of Indian immigrants waiting in the green card line.

As of April 2018, there were 306,400 working Indian immigrants (632,219 including spouses and minor children) waiting for a green card and the current waiting time is 151 years for the personal classification EB-2 (Advanced degree) category. Therefore, given the wait time, these individuals are less likely to receive their green cards in their lifetime.

Impact of green card delays

Our recent research shows that 70% of highly skilled Indian immigrant respondents in the US are seriously thinking about emigrating to a more visa-friendly country due to current US green card delays.

We also found that 30% of these participants have already applied for permanent residency in a more visa-friendly country and 9% have already received their permanent residency in a more visa-friendly country.

Given these figures, it is possible that if these intentions were to turn into actual turnover and emigration actions, US organisations would stand to lose between US$19 billion and US$54 billion from this loss of talent and the costs associated with having to replace it.

It is also important to note that these green card delays are causing major work-related issues for immigrant workers, such as wage stagnation, job insecurity, travel issues and lack of career progression opportunities.

Many of our participants also noted that current green card delays are preventing them from starting their own businesses.

These challenges are also associated with health-related implications among immigrant workers, linked to constant fear of the unknown (uncertainty and feeling stuck due to the green card backlog), stress, frustration and chronic health issues which may lead to burnout issues and low performance and organisational commitment.

Implications

Our recent findings are in line with recent reports that restrictive work visa policies in the US are pushing legal immigrants (international students and workers) to Canada. There are also signs that ripple effects are now being seen at the level of international students.

According to US Department of Homeland security data, the enrolment of international students declined by 4% between 2016 and 2017. Importantly, about half of this decline is due to fewer individuals from India studying computer science and engineering at the graduate level in 2017.

This is even more striking when we note that this drop followed an increase of over 50% between 2012 and 2016 in the number of enrolments of international graduate students in the science and engineering domain. These statistics also affect American universities, as high net tuition fee revenue from international students could be used to offset the costs of enrolling domestic students.

Furthermore, lower enrolment of international students has already resulted in budget cuts and cancellations of certain programmes in several US universities.

More generally, 2019 statistics show that the US higher education system is continuing to decline in the global rankings, with the loss of almost 20% of top rankings for US university departments.

The challenges associated with immigration policy (especially green card delays) are driving recent highly skilled graduates back to their home countries.

According to Vivek Wadhwa, a distinguished fellow and professor at Carnegie Mellon University: “Hundreds of thousands of highly skilled workers as well as the graduates of top American universities have returned home because of America's flawed immigration policies. They are in leadership roles at top research labs and at the unicorns in China and India. America has lost an entire generation of entrepreneurs and innovators and bolstered its global competition.”

For example, Kunal Bahl from Wharton School of Business of the University of Pennsylvania returned to India and launched Snapdeal, one of India’s biggest domestic e-commerce firms; Sandeep Aggarwal from Washington University founded online marketplace portal Shopclues; and Naveen Tewari from Harvard Business School is one of the founders of mobile advertising giant InMobi.

Food for thought

The current US presidential administration recently proposed a new rule whereby international students with a US masters degree would be given preference among those vying for one of the limited H-1B visas. Unfortunately, this ‘merit-based’ rule does little to reduce the current green card backlog for Indian immigrants in the US.

Although the Trump administration has been critical of the existing H-1B visa programme, this work visa programme has supported some of the most recognised business leaders of our time, including Sundar Pichai, CEO of Google, who has a masters from Stanford University and an MBA from Wharton, and Satya Nadella, CEO of Microsoft, who has a masters from the University of Wisconsin-Milwaukee and an MBA from the University of Chicago Booth School of Business.

All of this raises the very serious question of whether internally focused and isolationist 'Buy American, Hire American' policies may actually be backfiring and contributing to the loss of entrepreneurial talent that really could help make America great. This is the potential result if the US continues on its path to losing its competitive edge as a world leader in innovation and technology development.

It may be, as President Donald Trump recently noted in his 2019 State of the Union Speech, that the US welcomes legal immigrants in large numbers. Actions speak louder than words, though, and we wonder how many legal immigrants, especially international students with entrepreneurial ambitions, are actually willing to spend their entire life waiting for their green card on an H-1B visa, essentially functioning as an indentured servant?

Pooja B Vijayakumar is a researcher at Kemmy Business School, University of Limerick, Ireland. Christopher JL Cunningham is UC Foundation Professor, department of psychology, the University of Tennessee Chattanooga, USA. The research that this article draws on can be found here.