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ONLINE INSIDER
A Site Selection Web Exclusive, January 2013
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Open Windows,
Open Doors

While Washington dithers, cities roll out their own visions of
immigration policy and its role in economic development.

ONLINE INSIDER
Amsterdam, whose redeveloping harbor area is pictured here from the offices of an architecture firm, has been looking outward to immigrants and to global trade connections for 400 years, and is home to some 180 nationalities.
Photo courtesy of U.S. Chamber

by ADAM BRUNS
If Not Now, When?: Illustrating the bipartisan clamor for change in immigration policy, Randy Johnson, senior vice president for labor, immigration and employee benefits for the U.S. Chamber of Commerce, has been involved in talks with major unions about immigration reform.
"The U.S. is excellent at importing cheap products from the rest of the world. Let's try importing some human capital instead."
— James Surowiecki, The New Yorker, August 2012


"We have remarkably byzantine visa procedures in America. I hear complaints every day from business and university leaders in Massachusetts."
— Massachusetts Gov. Deval Patrick, Hillel Moral Voices Lecture, Tufts University, April 30, 2012

Reform of U.S. immigration policy is on the tips of so many tongues of all political stripes that it seems a foregone conclusion decisive action will take place soon. But an overwhelming sense of agreement may be the most foreign concept of all in the rancorous halls of the nation's capital, and therefore is just as likely to be stopped for questioning, asked for its papers and run out of town.

Asked for advice to U.S. city leaders grappling with immigration in the face of stalled immigration policy reform in Washington, D.C., Eberhard Van der Laan, mayor of Amsterdam, told Site Selection this week that the future will belong to cities "just because of this … We should never give foreigners the idea they're not welcome here. We're not hostages to our national government."

He should know. His city, celebrating the 400th anniversary of its Golden Age this year, is home to 180 nationalities, which his deputies say outnumbers such cosmopolitan locations as Berlin, Brussels and London, and contributes a great deal to the economic development promise of both Amsterdam and the Netherlands as a country.

"We want those Indian IT experts," adds the mayor's spokesperson Tahira Limon, citing another statement from the mayor at a major immigration policy conference in the city last year: "Our diversity is an asset first and foremost, instead of being a challenge," he said.

Amsterdam is home to a mere 800,000 residents, in contrast with the 313 million residents and 11 million illegal immigrants in the United States. But some U.S. cities, regions and states also know that immigrant-friendliness could be a strong card to play for their cities' future economic development. And multinational companies, vexed by the often fruitless effort to secure work visas for foreign expats coming to the U.S., and the "re-export" of top foreign students who attain degrees at top American schools — are paying attention to immigration dynamics in their site selection decision matrix.

How best to navigate the sea of information, opinions and ideas? Taking a cue from Amsterdam, where the windows are large and uncovered and the thinking is as free and open as the doors, we present here some glimpses of data and views onto immigration's past, present and future in America.

State Laws

States such as Arizona, South Carolina, Georgia and Alabama have moved forward with aggressive laws to keep illegal immigrants out of their states. While some leaders insist those laws have had little if any influence on their economic development efforts with international companies, others acknowledge the discomfort.

"It was never intended to create an issue that would become a barrier to economic development," said Greg Canfield, secretary of the Alabama Dept. of Commerce, during a speech in Atlanta in December 2011. But "during implementation of a law, you often find consequences not anticipated. The governor [Robert Bentley] is actively pursuing activity to address some of the problems with this law that could have an impact on economic development moving forward. You can expect to hear a more clearly defined path to that from our governor and perhaps from the legislature as well.

"We have a lot of friends in the state who are not from Alabama," Canfield noted. "We have 417 foreign-based manufacturers located in Alabama, representing 31 nations. Since 1993, when Mercedes-Benz first located in Alabama, the boom has really been felt, and the people of Alabama value those relationships."

In May 2012, Bentley signed into law a slightly softened version of the original measure, but one that still included requiring a check of immigration status of public school students, among others. The 11th Circuit Court of Appeals in August ruled that provision unconstitutional, and a state appeal for a new hearing was rejected in October.

Visa Troubles

Russell Ford is an immigration and higher education attorney with Graham Adair, whose slogan is "Creating a Workplace Without Borders." He says the biggest issues he's dealing with are the shortage of H-1B visas, the short time before expiration of visas issued by the Mexican embassy, and the expense of the H-2B (seasonal visa) process for small and medium enterprises.

"We hit the cap last Thanksgiving," Ford says of the H-1B challenge, "which means a company hiring a graduate can't file an H-1B until April 1, 2013, and it won't be effective until October. So it means going a whole year without being able to recruit a certain kind of talent."

Companies then try to work through other programs, but "a lot of times they're just blocked out," says Ford. "Then we try to get creative with investor-type visas [such as EB-5], but there has to be a treaty that allows for an EB visa. And when you're talking China and India, where a lot of folks are coming from the science, technology, engineering and mathematics [STEM] areas, we don't have those treaties. You can't even do a consultant-type arrangement. So you've ended any chance of getting them here. There is a lot of frustration on the company level."

H1Bdemand

Most companies are looking to here in the STEM degrees, he says, and looking to fill positions in IT, financial analysis, R&D and engineering. As the "cap season" approaches in April, "we have companies who start reaching out to us this time of year to get everything cued up and ready," says Ford. "We have 35 to 40 in the pipeline now, and I'd venture to say 25 to 30 of those are for STEM-degree-type hires."

A July 2012 analysis by the Brookings Institution's Metropolitan Policy Program of the geography of H-1B visa requests — particularly in the metropolitan areas with the highest demand between 2001 and 2011 — reveals that:

  • "Demand for H-1B workers has fluctuated with economic and political cycles over the last decade and reflects a wide range of employers' needs for high-skilled temporary workers. Employer requests have exceeded the number of visas issued every year except from 2001 to 2003 when the annual cap was temporarily raised from 65,000 to 195,000. Employers requesting the most H-1B visas are large companies subject to the cap specializing in information technology, consulting, and electronics manufacturing. Science, technology, engineering, and mathematics (STEM) occupations account for almost two-thirds of requests for H-1B workers; healthcare, finance, business, and life sciences occupations are also in high demand. Over the last decade the federal government has distributed about $1 billion from H-1B visa fees to fund programs to address skills shortages in the U.S. work force."

  • "Metropolitan areas vary by the number of employers using the H-1B program and the cap status of the employers. Demand in corporate metro areas (such as Columbus, Ind., and Seattle, Wash.) comes predominantly from private employers subject to the annual visa cap, while in research metro areas (such as Durham, N.C., and Ann Arbor, Mich.), the demand is driven by universities and other research institutions exempted from the cap. In mixed metro areas (such as Atlanta, Ga., and Trenton, N.J.), a variety of employers are demanding temporary high-skilled foreign workers."

  • "In 92 of the 106 high demand metropolitan areas, STEM occupations accounted for more than half of all requests. Computer occupations were the most highly requested occupation group in all but 11 metros of the 106 high-demand metros, where engineering, healthcare practitioners, and postsecondary teachers were more requested. Metropolitan areas also vary on occupational concentration, ranging from 74 occupation groups requested in the New York metro area, to 15 groups requested in Bloomington, Ill."

As for the Mexico issue, Russell Ford says even if an approved H-1B is good for three years, the Mexican government is issuing visas that expire after one year. Ford says that's keeping intra-company transferees and high-level employees from Mexico from procuring driver's licenses and qualifying for loans and leases.

"That's the other side of the coin of reform — the small issues you don't hear about, the difficulties of everyday life for these folks," he says. "They're here, and working, but day to day things are difficult."

The H-2B expense is making things difficult for businesses such as ski resorts in New England or Gulf Coast seasonal employers.

"Employers try year after year to fill these positions with local workers," says Ford, but absenteeism or leaving for other opportunities is a problem. "These things crop up, and these owners have no other option than bringing in foreign workers for the season," Ford explains, "but the process and cost is so prohibitive. An owner on Cape Cod just ended up shutting down his inn, because the locals didn't show up, and the H-2B process was cutting into his profits."

As for state laws trying to one-up the federal government, he says whether you agree with e-verify requirements or not, states such as Arizona, Rhode Island, Georgia and Alabama can be seen as restrictionist.

"Companies get nervous when they're required to do more than the federal law requires," he says. "I haven't had a client say 'I'm not going to do business in this state because of it,' but they have moved employees from one division to another so that they dropped the number of employees in the state in question low enough that they wouldn't have to e-verify. I think Alabama has felt the effects, especially in the agricultural industry." The unintended consequence and unspoken worry, he says, is that line workers at assembly plants might be struck by the same sort of scrutiny.

With regard to local economies, the thing that hits people the most is e-verify, says Ford, due to a waiting period of 60 to 90 days as the data is reviewed, and the poor operational and PR effects when non-confirmed workers are found.

"Bad press for e-verify has caused some employers to second-guess whether they want to be in those states," says Ford. "I think e-verify has to be federally mandated. It has good bones and is a good concept, but I don't know if it's there yet."

Asked which countries are offering a good model, Ford says in Canada, known for its openness and welcome to immigration, "their adjudications at the border have been much stricter," for instance for U.S. residents seeking work visas. "There are more hurdles to overcome, and more problems at the border. They seem to have adopted a more American-type policy where they're trying to 'protect their own.' I have two clients who do quite a bit of work in Canada. A year and a half ago, their consultants were going in as business visitors. The border has started requiring them to get work permits for stays of a week to a week and a half."

That said, the Ontario provincial government of Dalton McGuinty launched a new immigration strategy in November. A news release said the launch was motivated in part by Canadian federal government decisions that it blames for reducing the proportion of economic immigrants coming to Ontario. Without continued immigration, Ontario's working age population will begin to decline by 2014, said McGuinty. New immigrants make up 30 percent of Ontario's labor force.

Australia and New Zealand, meanwhile, are opening up too.

"They're doing more on their side to attract immigrants," says Ford. "They see the value to their economy and to diversity. And they're trying to be a more viable option for education, saying, 'Come here, and it's as good as a U.S. education. And not only that, but we'll help you get a job after you graduate."

Foreign Students

Ah, yes, the graduation conundrum. If any plank seems to attract the most agreement in the U.S., it's the idea that foreign students here on student visas who are forced to return to their home countries upon graduation should, instead, have green cards stapled to their diplomas.

On January 10, nearly two weeks before President Barack Obama prominently mentioned immigration reform in his second inaugural address, U.S. Chamber of Commerce President and CEO Thomas J. Donohue did too, announcing it as one of five planks in the Chamber's 2013 "American Jobs and Growth Agenda" in his annual "State of American Business" address. In addition to securing borders and finding "a path out of the shadows" for the 11 million undocumented immigrants who live in the United States today, Donohue specifically mentioned the education aspect:

"Our laws must be revised to welcome needed labor and talent into our economy through thoughtfully-designed guest worker programs," he said. "This includes provisional visas for lesser-skilled workers. It also includes expanding the caps for high-skilled visas, and, expanding green cards for foreign nationals who graduate from our colleges and universities with advanced degrees.

The American Association of State Colleges and Universities has a policy agenda that includes the belief that "undocumented students who were brought to this country as children should have access to higher education and a path to citizenship, enabling them to contribute their talents to America's work force and knowledge economy." That stance was buttressed in 2012 by the announcement that the Dept. of Homeland Security that children of undocumented immigrants "will be considered for relief from removal from the country or from entering into removal proceedings. Those who demonstrate that they meet the criteria will be eligible to receive deferred action for a period of two years, subject to renewal, and will be eligible to apply for work authorization."

The AASCU also believes that "states should have the right to set their own tuition policy for undocumented students. Additionally, AASCU supports greater access to the U.S. higher education market for international students and academics to improve global knowledge transfer and cross-cultural understanding." Among its policy aims:

  • Relieve problems associated with the valid acquisition of H-1B visas and EB green cards.

  • Protect provisions under current law that permit exemptions from the annual visa cap on H-1B visas for the academic community.

  • Support changes in legislation that would raise the current limitation on new visas per year imposed on employers from the business community.

  • Support the VISA process that increases access into the U.S. for legitimate international students and scholars, in part through the effective utilization of biometric technology employed by U.S. VISIT.

Asked for her perspective on potential immigration legislation, Amy Scott, associate vice president for federal relations at the AASCU, says, the removal of the seven-percent-per-country cap on employment-base green cards would "help graduates and future employees from high-sending countries like China and India. Our colleagues in the high-technology sector were particularly supportive of legislation in 2012 that would have removed the cap, because they are attempting to hire people from China and India."

She also calls attention to the proposals of Senator Marco Rubio (R-Fla.) and Sen. Orrin Hatch (R-Utah), both of whom expressed interest in offering a series of smaller immigration bills.

"They prefer the piecemeal approach rather than one comprehensive bill," she says, offering the example of a bill addressing high-skilled immigrants only. Meanwhile, the White House is working closely with Senate Democrats to draft a comprehensive immigration bill.

The American Association of Universities also is calling for reforms designed to "turn immigrant talent into American talent," including establishing a clear pathway to citizenship for advanced STEM degree graduates from U.S. colleges and universities; enacting a version of the DREAM Act to help make it possible for children whose parents brought them to the U.S. to attend college; and gradually replacing the seven-percent-per-country cap limitation for employment-based green cards with a first-come, first-serve system for qualified highly-skilled immigrants."

Big Cities Are Big Players

As national legislators fiddle and maneuver, city leaders in such cities as Los Angeles, New York, Cleveland and Chicago are moving forward with dispatch.

The City of Chicago's Office of New Americans was established at the end of 2012 after thorough stakeholder engagement. Given Mayor and former White House Chief of Staff Rahm Emanuel's close relationship to President Obama, the program, piloted by Adolfo Hernandez, is more or less a demonstration project of sorts for some White House aims.

Hernandez is a Chicago native whose father and mother were undocumented immigrants from Jalisco and Durango, Mexico, respectively. They have both since become naturalized citizens. Hernandez remembers helping his father study for the exam when he was only 10, as he himself studied the U.S. Constitution for a test at school. And he recalls his father's pride at being able to return to his workplace of 30 years (Ace Sandblast) and get called by his true given name, as well as how quickly he registered to vote. Hernandez also remembers interpreting and translating for his mother at banks and restaurants when he was just five or six years old.

It's just those sorts of challenges the Office of New Americans will address. Hernandez says it's an economic as well as moral imperative.

"There's a lot that municipalities and counties and states can do," he says. "Make it easy to start up businesses, access to capital, social marketing, licensing and permitting. Make sure students and parents are being welcomed in schools. And developing strong relationships with local law enforcement."

Asked about the Chicago area's response to last year's federal announcement of deferred action for childhood arrivals, Hernandez says, "The energy in our city and schools was palpable. Ultimately, we're looking for a federal DREAM Act or legal reform. But deferred action created an opportunity for many of these young people who were already in college or wanted to attend college. They can not only attend, but get a two-year work permit. It created a ton of hope that yes, there was light at the end of the tunnel. We hosted the largest deferred action youth workshop in the country on August 15th — 12,000 to 15,000 people showed up for information. It's clear people across the country were looking for something like this."


An Associated Press poll this month found 52 percent of Republicans now favor creating a path to citizenship for illegal immigrants, up from 30 percent in 2010.

Could the positive role for Chicago Public Schools 9CPS) envisioned in the New Americans plan be an opportunity for the public schools and teachers union to unite in a common cause that will help erase the national black eye caused by the recent strike, not to mention help raise student performance? The numbers make it a necessity.

"Forty-four percent of our student population in CPS is Latino," he says, and out of those 400,000, close to 10 percent are undocumented. "So we're talking between 30,000 and 40,000 kids undocumented, but we need to prepare every student in CPS to be the work force of tomorrow."

The city's approach seeks to help parents as well as students, whether through learning English or using the seven city colleges' College to Careers program

Hernandez cites negative impacts of the policies adopted in Alabama and Arizona. A University of Alabama study estimated an $11-billion negative net impact on the state from its new immigration law. And, says Hernandez, while most other metro regions around the U.S. have seen an increase in tourism and conferences, Phoenix has seen a steady decrease since the enactment of the Arizona law. "There is a clear impact on the economy, and on people's willingness to travel and relocate," says Hernandez. "It's not a place a large Hispanic organization will want to call home."

Chicago, meanwhile, will host the U.S. Hispanic Chamber's 7,000-strong convention next year. "Leadership on immigration was one of two reasons" they made the choice, says Hernandez. "The mayor said, 'You can't be anti-immigrant and pro-business.' "

The city is home to some 140 nationalities and 49 consulates. While most international trade and economic development connections are made by World Business Chicago, the city is doing its part to aid smaller enterprises. After all, immigrants are 50 percent more likely to open a small business. But the improvements could help everyone.

"We had one of the most complicated licensing processes in the country," says Hernandez. "We had 117 licenses, which is now down to 49 types of licenses. It makes it easier for anyone. We have also started to do workshops in the neighborhoods in Spanish, Polish, Korean, Chinese [and other languages]. We want to get information into the hands of people starting businesses in the city, as opposed to waiting for them to come to us. We hope we're setting an example to replicate in other cities."

"Metro areas are driving innovation," said Bruce Katz, vice president at the Brookings Institution and director of the Brookings Metropolitan Policy Program, in a speech in Atlanta last fall. He noted that the nation's top 100 metro areas constitute 12 percent of U.S. land mass, but generate three quarters of its GDP.

"This is the new economic geography of the world," he said. There is no American economy — it's a network of metro areas."

Thus immigration policy — like policies related to industrial development, sustainability and cluster building — could be a venue for economic development innovation the likes of which the country has not seen.

"In the past, frankly, setting the path has been the role of the federal government, with powers over trade and investment," said Katz. "But something is happening in this country. With partisan gridlock, even the easy stuff has become extraordinarily difficult. So metro areas are becoming the vanguard of policy."

They may just lead the way toward a bipartisan solution that echoes the sentiment of U.S. Chamber President Donohue, who concluded his State of American Business speech this month with the following:

"As we have this important debate, let's remember who we are and where our families would be today if earlier generations of Americans had decided to slam the door shut," he said. "The door to the American dream must always remain open."



Where to Turn

Looking for facts, data, reports and case studies about immigration policy and its influence on economic development and corporate success? We recommend the following:

  • The American Immigration Lawyers Association resource page includes state law updates. In November, AILA President Laura Lichter said, "We know that there are conflicting priorities and many challenges facing our nation. However, bipartisan immigration reform is not just another issue or cause. These are real people who are faced with a process that is beyond broken, made up of outdated regulations and nonsensical policies."

  • In July 2012, the Metropolitan Policy Program of The Brookings Institution released a comprehensive report, "The Search for Skills: Demand for H-1B Immigrant Workers in U.S. Metropolitan Areas." A panel discussion at the event marking the report's release featured Bill Kamela, senior director of education and workforce for Microsoft Corp., which requests more H-1B workers than any other company. "This program is a critically important, though small, part of our work force nationwide," he said. "I asked our HR folks to pull our latest numbers. As of today, we've got about 5,200 job openings in the United States, of which about 3,100 are for computer scientists and computer science engineers. They start at $104,000 a year, and they also get a stock grant and a merit increase immediately. So we are having a heck of a time finding the right kinds of folks to fill those jobs. And really it's exacerbated by the reality of some of the other numbers … We know that last year, for instance, there were 1,600 computer science PhD graduates in the U.S. Roughly 55 to 60 percent are foreign nationals. That leaves about 700 folks for the entire country to hire in any one year in computer science. For business, academia, and government, it just isn't enough, not even close to being enough. And so our pipeline is desperately short of the kinds of workers we need."

  • Last year the National Academies Press released a National Research Council report, "Research Universities and the Future of America," that features immigration reform as one of 10 "breakthrough actions vital to our nation's prosperity and security."

  • In 2006, Mississippi issued its state auditor's report on "Illegal Immigration Costs and Population Trends in Mississippi." Among other findings, it reported that the net cost of illegal immigration in Mississippi exceeds $25 million annually, factoring in such aspects as public education and healthcare provision.

  • The Gallup Organization surveyed people in 146 countries in 2011 seeking their viewpoints on their communities as places for immigrants to live. It found that residents of countries in Europe, the Americas, and sub-Saharan Africa "tend to view their communities as good locales for immigrants, while residents of countries in Asia and the Middle East and North Africa are more likely to view their communities as bad places." The U.S., where 81 percent of residents say their areas are good places for immigrants, is attractive to approximately 145 million potential migrants. Canada, Australia, and Spain appeal to at least 25 million adults, said Gallup in October 2012.

  • The New Americans Campaign is a national network of legal-service providers, faith-based organizations, businesses, foundations and community leaders "modernizing and streamlining access to naturalization services, so that greater numbers of legally qualified permanent residents take the critical step to becoming American citizens." In the midst of the Presidential election, the Center for the Study of the American Dream, based at Xavier University, found via a survey that one in three native-born citizens failed the civics portion of the naturalization test, in stark contrast to the 97.5-percent pass rate among immigrants applying for citizenship.

  • "Immigration and American Jobs" is a Dec. 2011 report from the American Enterprise Institute for Public Policy Research and the Partnership for a New Economy.
Graph and map images courtesy of Brookings

Adam Bruns
Managing Editor of Site Selection magazine

Adam Bruns

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.

   



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