The Politics of Immigration and Its Impact on Business

Immigration has long been a contentious issue in American politics, particularly in states like Texas, where the border with Mexico serves as a focal point for entry into the United States. While much of the public discourse centers around the crossing of migrants at the southern border, it is crucial to delve into the business side of immigration, which is often overlooked. Business immigration is the process by which both domestic companies and internationally headquartered companies with subsidiaries and affiliates in the U.S. legally sponsor and employ foreign workers. These companies contribute significantly to the U.S. economy by creating jobs and fostering investment.

Business Immigration: Employment-Based Visas and Investment Options

Business immigration primarily revolves around employment-based visas and investment options for international companies and individuals. Employment-based temporary visas (such as the H-1B, L-1, O-1, and E-2), and permanent residency processes (such as the EB-1, EB-5, and National Interest Waiver), are often utilized to attract skilled workers and investors to the U.S.

The H-1B visa, for instance, allows U.S. companies to employ foreign workers in specialty occupations that normally require a bachelor’s degree or higher. The L-1 visa enables multinational companies to transfer executives, managers, and specialized knowledge professionals to their U.S. offices. The O-1 visa is reserved for individuals of “extraordinary ability” in the sciences, arts, athletics, and business. The E-2 visa allows international companies and individuals to invest substantial capital to create businesses in the U.S.

The EB-5 visa, also known as the Immigrant Investor Program, provides a pathway to permanent residency for foreign investors who invest substantial capital in U.S. businesses that create at least 10 full-time jobs for American workers. Moreover, the National Interest Waiver is a permanent residency process that allows foreign nationals whose work exhibits substantial merit and national impact to obtain a green card if their work is deemed to be in the national interest.

These visas are not just bureaucratic tools but essential for filling gaps in the U.S. labor market. Many industries, including technology, health care, energy, financial services, education, and engineering, face shortages of U.S. workers, particularly in science, technology, engineering, and math (STEM) fields. Previous presidential administrations have specifically identified processes like the O-1 and National Interest Waiver to attract the best talent and enhance U.S. competitiveness.

Nearly 70% of the full-time graduate students in electrical engineering and computer science at U.S. universities are international students, according to the National Foundation for American Policy (NFAP), a non-profit, non-partisan organization dedicated to public policy research on trade, immigration, education, and other issues of national importance. NFAP notes that without the influx of skilled foreign workers, these industries would struggle to maintain their competitive edge and meet the market’s demands.

Furthermore, industries such as construction, trucking, agriculture, hospitality, and food service often face worker shortages for jobs that normally do not require a degree and are often unpopular among U.S. workers. The H-2 visa program has long been in place to allow seasonal workers to enter the U.S. for these types of positions.

Economic Benefits of Business Immigration

The economic benefits of business immigration are manifold. First and foremost, it helps address labor shortages in critical industries, ensuring that businesses can operate efficiently and meet consumer demands. An NFAP analysis found that immigrant workers have been responsible for 88% of the labor force growth in America since 2019.

For example, the U.S. agricultural sector relies heavily on immigrant labor for planting, harvesting, and processing crops, and for working with livestock such as cattle and pigs. Without this labor force, the industry would face severe disruptions, likely leading to higher food prices and potential supply shortages.

In addition, business immigration fosters innovation and entrepreneurship. Many of the world’s leading technology companies, including Google, Microsoft, and Amazon, as well as some large companies in Texas, are known to use immigrant labor in STEM fields. These companies, many founded or led by immigrants, create jobs and drive technological advancements that benefit the entire economy. According to a study by the National Bureau of Economic Research, immigrants contribute disproportionately to entrepreneurship, accounting for a quarter of new employer businesses in the U.S.

Investment-based immigration, such as the EB-5 program, also brings substantial capital into the U.S. economy. Foreign investors who participate in the EB-5 program invest a minimum of $800,000 or $1.05 million in a U.S. business, depending on the location of the business or investment project. The EB-5 investment can fund infrastructure projects, real estate developments, and other ventures that create jobs and stimulate economic growth.

Potential Downfalls of Reducing Immigrant Labor

Despite the clear economic benefits, there is a growing movement to reduce immigrant labor in the U.S. Concerns about job competition, national security, and cultural integration drive these ideologies. However, reducing immigrant labor could have severe consequences for the U.S. economy.

First, it would exacerbate labor shortages in critical industries, leading to higher costs for businesses and consumers. For example, the construction industry, which relies heavily on immigrant labor, would face significant delays and increased costs for building projects. This, in turn, would drive up housing prices, making it more difficult for Americans to afford homes.

Second, reducing immigrant labor would stifle innovation and entrepreneurship. Many of the most successful U.S. startups, those which have created thousands of jobs and driven technological advancements, would lose jobs to competitors in other countries. Without the influx of skilled foreign workers, the U.S. would risk losing its competitive edge in the global economy.

Finally, reducing immigrant labor would decrease the flow of capital investment into the U.S. economy. Through my representation of clients, I work with many international companies who seek to invest in the U.S. They purchase real property, build manufacturing facilities, and employ U.S. workers. Even now, these companies struggle to hire enough U.S. workers for the available positions. If foreign labor is cut off as a supplement to the U.S. workforce, international companies would be less incentivized to invest in the U.S.

It’s important to note that many U.S. business immigration processes are reviewed and adjudicated with the protection of the U.S. worker in mind. For example, the PERM Labor Certification, overseen by the U.S. Department of Labor, is usually the first step toward lawful permanent residency. This process allows an employer to hire a foreign worker to work permanently in the U.S., but only if there are no qualified, able, willing, or available U.S. workers for the prospective job.

A Call for Understanding and Practical Solutions

Immigration should not be an issue that divides us politically. Recent rhetoric is concerning, and if all proposed shifts in immigration policy are implemented, the economy would likely see a sharp and dramatic downturn. It is not arguable that what is occurring at the southern border needs to be fixed. All our presidents—Republican and Democrat—have acknowledged this fact. Yet, only through congressional action can the crisis be ameliorated. It is this author’s opinion that reducing immigration across the board is not something anyone truly wants. Most people agree that our laws can be revamped, especially given that reform has not occurred since Congress passed the Immigration Reform and Control Act of 1986.

Immigration requires a holistic understanding of its full complexity, particularly from a business perspective. The economic benefits of business immigration are clear: it addresses labor shortages, fosters innovation and entrepreneurship, and brings substantial capital investment into the U.S. economy. Reducing immigrant labor, on the other hand, would have severe consequences for businesses, consumers, and the overall economy.

Policymakers, business leaders, and the public need to research and fully understand the practical implications of significant shifts in immigration policy. By doing so, we can develop informed and balanced policies that support economic growth, shore up gaps in the law, and ensure that the U.S. remains a global leader in innovation and entrepreneurship.

Sang Shin is a business immigration attorney with Jackson Walker, who provides legal counsel to companies, individuals, investors, and institutions throughout the U.S. and internationally.