Articles Posted in Technology Workers

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A recent working paper published by Harvard economist, William R. Kerr, and Wellesley economist, Sari Pekkala Kerr, is making waves on the subject of immigrant entrepreneurship. The study asks: just how important are foreign-born entrepreneurs to our economy? Are their contributions truly significant?

The study’s abstract reads as follows:

We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to native-founded companies. Our work quantifies immigrant contributions to new firm creation in a wide variety of fields and using multiple definitions. While significant research effort has gone into understanding the economic impact of immigration into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine several restricted-access U.S. Census Bureau data sets to create a unique longitudinal data platform that covers 1992-2008 and many states. We describe differences in the types of businesses initially formed by immigrants and their medium-term growth patterns. We also consider the relationship of these outcomes to the immigrants’ age at arrival to the United States.

The study is important because it forces members of Congress to conduct a cost-benefit analysis, in order to determine whether or not it is beneficial for the United States to create more opportunities for highly-skilled entrepreneurs and professionals. Regrettably, the immigration debate has largely centered around illegal immigration to the United States, ignoring calls to create more flexibility for highly-skilled immigrants and immigrant entrepreneurs. As it stands today, immigrant entrepreneurs can only obtain a green card via sponsorship from a United States employer. The majority of entrepreneurs are forced to remain in the United States on a temporary ‘dual intent’ nonimmigrant visa, until a U.S. employer agrees to sponsor their green card. Visa options are very limited for highly-skilled immigrants. Even for the most brilliant of entrepreneurs, this process requires time and patience. Our current immigration laws are doing us a disservice since they are keeping out some of the most talented entrepreneurs in the world. Immigrant entrepreneurs are increasingly important because the number of businesses and American jobs they create is on the rise.

Here are some of the study’s findings:

  • As of 2008, at least one in four entrepreneurs among start-up companies are foreign-born. Similarly, at least one in four employees among new firms are foreign-born
  • 37% of new firms had at least one immigrant entrepreneur working for the company
  • At least 1 in 3 start-up firms were founded by an immigrant entrepreneur, with an increasing rate from 1995-2008
  • The share of immigrants among all employees working for start-up companies is on the rise
  • Immigrant employees in low-tech positions comprise about 22.2% of start-up companies, while 21.2% of immigrants work in high-tech positions in start-up companies
  • Among new start-ups backed by venture capitalists, 60% had at least one immigrant entrepreneur
  • Immigrant employees working for a start-up company backed by venture capitalists have higher mean average quarterly earnings

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14604464454_ab9f59b1e0_zA new lawsuit has been filed in federal court challenging the Department of Homeland Security’s authorization of the Optional Practical Training (OPT) for STEM students in the United States. The Washington Alliance of Technology Workers is seeking an end to the STEM OPT program because they claim the program is putting American technology workers at a competitive disadvantage. As previously reported, the Washington Alliance of Technology Workers had been battling the Department of Homeland Security in court for the past year asking a federal judge to invalidate 17-month OPT extensions granted to STEM students, because DHS violated the notice and comment requirements of the Administrative Procedure Act (APA).

In response, the federal judge had ordered the Department of Homeland Security to publish a new final OPT rule to allow certain F-1 students with degrees in science, technology, engineering, or mathematics to obtain employment authorization. DHS published the final rule earlier this year, replacing the previous 17-month STEM extension rule that had been in place since 2008. The new rule published by DHS allows certain F-1 students to apply for 24-month extension of their optional practical training program (OPT) in order to continue working in the United States following the completion of their studies. This new rule went into effect on May 10, 2016. The same plaintiffs who challenged DHS are coming forward yet again, this time questioning DHS policy, and alleging that the STEM OPT program is putting businesses first instead of protecting American technology workers.

The Washington Alliance of Technology Workers is a labor union that represents the interests of American technology workers, who they claim are losing out on jobs to foreign workers because of guest worker programs. The Immigration Reform Law Institute (IRLI) and the labor union are working together to dismantle the program which they say circumvents American labor protections in favor of cheap labor. In a recent statement the IRLI claims that the DHS exceeded its authority by allowing the STEM OPT program to exist. According to them, “not only does the OPT program create more competition for suitable unemployed and underemployed American workers, but it creates a tax incentive for unscrupulous employers to hire foreign labor over American workers because aliens on student visas and their employers do not have to pay Medicare and Social Security taxes.”

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