Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Immigration: Why It's Good for Us and the U.S.

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The knee-jerk response to allowing more immigrants into the country is that there will be fewer jobs available to natives. After all, there's a finite supply of jobs at any given time, and a greater number of people to fill them would mean that someone goes without a job or receives a lower wage because workers are that much more replaceable. It's simple -- until you look at the research.

Immigration actually raises wages for a country, and emigration -- the exiting of a population -- is what hurts citizens.

So what's wrong with the popular but flawed equation that says more labor and a constant supply of jobs leads to a worse-off working situation for all? The key is that the supply of jobs increases with immigration. This is because many immigrants hold college degrees and create opportunities wherever they decide to live. And these opportunities not only employ themselves, but can create jobs for others as well.

By studying the effects of immigration and emigration on wages and employment in OECD countries from 1990 on, researchers concluded: "In the long-run, the wage and employment effects of immigration in the 1990s and in the 2000s were rather small and always positive for less educated workers of all OECD countries." The study specifically found that:

Less educated workers in Canada, Australia, the US, Luxembourg, the UK, and Switzerland, which were among the magnets of international migrants, all experienced positive long-run effects from immigration, between 1 and 5%, according to our calculations. To the contrary, emigration, which entails the loss of talent and brains in much larger proportion than the loss of unskilled workers, is the real threat for unskilled workers left behind, even in some OECD countries. Less educated workers in Cyprus, Malta, Ireland, New Zealand, and Portugal all lost between 1 and 6% of their wages because of the flight of highly educated emigrants.

In short, immigrants likely help us out. And it's very unlikely they hurt our job prospects.

A fight for talent
Tech companies especially understand this, as they are fervent supporters of immigration reform through a variety of interest groups like includes the support of Microsoft's (NASDAQ: MSFT  ) Bill Gates, Facebook's (NASDAQ: FB  ) Mark Zuckerberg, LinkedIn's (NYSE: LNKD  ) Reid Hoffman, and Netflix's (NASDAQ: NFLX  ) Reed Hastings. Microsoft trounces these tech peers in terms of number of H1-B workers sponsored -- that is, workers on this special non-immigrant type of visa that allows for six years of work in the U.S. Here's a rough take on how important these types of workers are for each company:

Company H1-Bs in 2012 Percent of Company's U.S. Workforce
Microsoft 4,067 7%
Facebook 384 7.2%
LinkedIn 196 4.6%
Netflix 41 2%

A summit is scheduled in Washington, D.C., at the end of the month to advance immigration legislation, and Zuckerberg himself has promised to spend $50 million to support representatives who work to achieve an updated immigration system. Microsoft offered a different plan to incentivize the government to act: The government could issue an additional 20,000 H1-B visas per year, reserved for jobs in science, technology, engineering, and mathematics. Companies could then pay $10,000 each for the extra visas, raising up to $500 million per year in government revenue with additional expenses such as green cards included..

A growing pie
So the same pie is not split among more mouths; rather, the pie grows along with the number of mouths because of greater opportunities. Immigrants are, after all, twice as likely to start a business, and those businesses can employ natives and immigrants alike. As many companies depend on the skills of highly educated immigrants, watching the future of immigration reform can mean much more for your investments than for your own job.

American companies that win around the world
Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 08, 2013, at 5:35 PM, prginww wrote:

    Nice, so whats stopping unemployed workers from starting their own companies?


Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2673080, ~/Articles/ArticleHandler.aspx, 9/28/2016 6:43:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
FB $129.23 Up +0.54 +0.42%
Facebook CAPS Rating: ***
LNKD $192.29 Up +0.09 +0.05%
LinkedIn CAPS Rating: ***
MSFT $58.03 Up +0.08 +0.14%
Microsoft CAPS Rating: ****
NFLX $97.48 Up +0.41 +0.42%
Netflix CAPS Rating: ***