Watch What Happens When You Push Away Skilled Immigrants

(Bloomberg Opinion) -- In a recent Washington Post op-ed, Michael Anton, a former adviser to President Donald Trump, called for an end to birthright citizenship. His proposal was dramatic and ominous. “An executive order,” Anton declared, “could specify … that the children of noncitizens are not citizens.” Worded thus, such an order wouldn’t simply end birthright citizenship — it would strip citizenship from the children of green-card holders and illegal immigrants alike, leaving millions of American citizens suddenly without a country. Stripping millions of citizens of their citizenship would, by any reasonable definition, herald the end of the U.S.’s status as a liberal democracy. Although Anton backtracked on this dark proposal in a follow-up blog post, it’s the kind of idea that, once uttered, can’t easily be forgotten.

If Trump or any other president attempted to issue such an order, it would almost certainly be blocked by the courts, since birthright citizenship is guaranteed by the Constitution’s 14th Amendment. But the mere fact that intellectuals like Anton are willing to contemplate this sort of thing in public must exert a chilling effect on anyone thinking of moving to the U.S.

Nor are threats like Anton’s — or Trump’s harsh policies toward asylum seekers and unauthorized immigrants — the only such discouragement. Without much fanfare, the Trump administration has used rule changes to make life much harder for legal immigrants. U.S. Citizenship and Immigration Services, for example, recently changed its policy so that foreign workers will be targeted for immediate deportation if their petition for visa extension expires while their green-card application for permanent residency is pending. USCIS also changed its website to make it appear that foreign students in technical fields are barred from working side jobs, even though the law still allows them to do so. Trump has also attempted to make it much harder for H-1B work visa holders to find employment. The list of such moves goes on and on.

In other words, Trump and his administration seem to be trying to harass skilled foreign workers out of the country. This is a terrible policy for the U.S. to be following, at a time when those workers are needed more than ever.

Across the country, states and cities are struggling with a pension crisis. With the baby boomers exiting the workforce and the national fertility rate below replacement level, governments are going to need much more tax revenue to continue to support the rapidly growing number of retirees:

Watch What Happens When You Push Away Skilled Immigrants

In addition, governments are going to need more tax revenue to pay for the police, infrastructure, education, sanitation and other services that their citizens demand. Immigrants, especially skilled ones, are key to providing those revenues. Declining regions especially need immigrants to shore up their populations as they lose people to the lure of superstar cities like New York and Los Angeles.

But the U.S. needs immigrants for reasons that go beyond tax revenue and population support. Foreign workers are crucial to maintaining American technological and industrial dominance. Without a continued inflow of skilled workers, the U.S. risks losing its edge to China and other rivals.

Recent research underscores this point. A paper by economists Gaurav Khanna and Munseob Lee takes an innovative new approach to measuring H-1B workers’ contributions. Using detailed data on which products companies sell, they found that the more H-1B workers a company hires, the more new products it sold — a sign of innovation. Additionally, they found that H-1B workers are associated with greater revenue growth. This research comes on top of earlier findings showing that when the U.S. admits more H-1B workers, patenting activity — a rough proxy for research effort — increased. In other words, skilled foreigners are continuing the tradition of immigrants boosting U.S. science and technology.

But in fact, the contributions of skilled immigrants to the U.S. economy probably go beyond their direct benefits to American companies. By doing their high-value work in the U.S. rather than in other countries, immigrants contribute to what economists call clustering and agglomeration effects.

When an Indian engineer works in Mumbai, he spends his salary at restaurants and doctors and electricians in Mumbai — but when he lives in Pittsburgh, his dollars flow to restaurants and doctors and electricians in Pittsburgh. And the more such engineers live in Pittsburgh, the more companies find it attractive to locate their research and development operations there instead of in Mumbai. That concentration of companies raises the salaries of native-born Americans working in Pittsburgh.

In other words, hire skilled workers in America, or they’ll be hired elsewhere. A recent paper by economists Lee Branstetter, Britta Glennon and J. Bradford Jensen underscored this choice. The authors show how technology companies have globalized their research and development operations over the years, moving high-value activity to countries like India, China and Israel. An increase in the economic importance of information technology meant that the U.S. just didn’t have the sheer numbers of skilled workers required to meet companies’ needs — so they went abroad for talent.

Although globalizing R&D helped multinational companies, it represents a missed opportunity for the U.S. By letting skilled workers move in, the U.S. could reap a gigantic windfall from the increasing importance of the tech industry. Cities’ productivity would increase, as would the wages of native-born high-skilled Americans, if more H-1B workers and skilled permanent residents were allowed to come.

Fortunately, skilled immigration is a much higher percentage of total immigration than it used to be:

Watch What Happens When You Push Away Skilled Immigrants

But the U.S.’s current leaders threaten to put a stop to this trend. The anti-immigrant campaign being carried out by the Trump administration, and the dark nativist rumblings of right-wing intellectuals like Anton, are doing the U.S. economy an enormous disservice. Immigrants, especially skilled ones, are key to the country’s future prosperity, and keeping them out is monumental mistake.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

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