Last month congress passed and the President signed an $18bn jobs bill "providing tax breaks for businesses that hire previously unemployed
workers and extending funding for infrastructure and transportation
projects."
While I can't argue too much with the idea of using tax breaks to spur hiring and investing in infrastructure, I think smart immigration reform might be a better way to create jobs in this country. Tom Friedman agrees and in today's NY Times, he writes:
“Between 1980 and 2005, virtually all net new jobs created in the U.S.
were created by firms that were 5 years old or less,” said Litan. “That
is about 40 million jobs. That means the established firms created no
new net jobs during that period.”
and
“Roughly 25 percent of successful high-tech start-ups over the last
decade were founded or co-founded by immigrants,” said Litan. Think
Sergey Brin, the Russian-born co-founder of Google, or Vinod Khosla,
the India-born co-founder of Sun Microsystems.
It is not surprising that new companies are creating the jobs in this country. Most businesses don't last forever, they start, grow, hire, eventually get fat and happy, stagnate, and then fail or are sold off. Add to that assertion that technology is changing things and that companies based on older technologies are likely to suffer and decline, and you come to the obvious conclusion that new company formation is the key to job growth.
That second quote from Friedman's piece is about tech jobs, but I would bet that immigrant led business creation is not limited to tech companies. The "fat and happy" thing is unfortunately true about many US citizens. But immigrants are rarely "fat and happy" so they work hard, start businesses, hire employees, and build companies. That's the american way. To quote again from Friedman's piece:
What made America this incredible engine of prosperity? It was
immigration, plus free markets. Because we were so open to immigration
— and immigrants are by definition high-aspiring risk-takers, ready to
leave their native lands in search of greater opportunities — “we as a
country accumulated a disproportionate share of the world’s high-I.Q.
risk-takers.”
We need smart immigration reform in this country. We are not inviting many of the world's "high-IQ risk takers" to come to America any more. And worse, we are asking many of them to leave. That must change.
Regular readers of this blog know that I'm a big fan of the startup visa idea and have been working to get it made into law. That is a small, but important, part of the bigger challenge. We need comprehensive immigration reform in this country. We have always been open to immigration in this country. It is fundmental to what this country is. We cannot change our approach and expect to continue to have a prosperous country.
