Recently I authored a posting titled "The American-Bashers," describing how those who seek to increase the supply of cheap foreign labor in technical fields have resorted to name-calling and the bashing of U.S. natives to promote their agenda. Apparently to prove my point, "The Startup Visa and Why the Xenophobes Need to Go Back into Their Caves" by Vivek Wadhwa appeared just two days later. Its content reflects the current marketing campaign to sell more cheap foreign labor by promoting it as "entrepreneurs."
The core of the spin used to sell cheap foreign labor is to put lipstick on a pig. An H-1B visa requires "attainment of a bachelor's or higher degree" [8 U.S.C. § 1184(i)(1)(B)]. A BS from India's extensive network of correspondence schools is all the education it takes. Promoters of increasing foreign labor describe this level of achievement as being the "best and brightest."
In actuality, the U.S. already has visas for the best and brightest (the O visa) with no numeric limits whatsoever [8 U.S.C. § 1101(a)(15)(O)]. A large number of people actually do get O visas. In 2007 there were 46,533 O visa admissions. (An admission is one entry into the U.S., not actual visas approved - there were 461,730 H-1B admissions that year.) The ratio of O to H-1B (about 1:10) is surprisingly high. Thus, anyone being excluded from getting a visa because of quotas is not among the "best and brightest" because, if they were, they would be able to get an O visa. (It is also worth noting that there is no wait for employment-based green cards in the first preference, which is the permanent-resident equivalent of the O visa).
Few people who are trying to sell the need for more foreign labor ever want to mention the O visa because it undermines the argument that the U.S. is blocking the highly skilled from coming.
Mr. Wadhwa is one of the few to take the plunge. In doing so, in the piece referenced above, he engages in flights of fantasy to explain how O visas are inadequate (and why we need entrepreneur visas):
Now let's discuss the genius visa. Any immigration attorney will tell you that qualifying for this visa is so hard that even Einstein wouldn't have cut it.
In truth, any immigration lawyer who would make such a statement is so incompetent that he should not be consulted for anything, including how to tie a shoe.
While a Nobel Prize is not required for an O visa, it can be used to demonstrate eligibility [8 C.F.R. § 214.2(0)(3)(iii)]. Einstein's 1921 Nobel Prize in Physics would qualify him for an O visa today (Einstein came to the U.S. in 1936). And clearly, many people without Nobel prizes get O visas.
Wadhwa describes the O visa requirements as, "You've got to have a perfect academic record, have topped every class you took and have as many as 10 independent authorities say you walk on water."
Good grades and academic record are not even among the eligibility criteria for an O visa and the 10 independent authorities is pure invention [8 C.F.R. 5 § 214.2(0)(3)(iii)]. In short, Mr. Wadhwa's description of O visa requirements is simply nonsense - I have included the text of the regulations at the end of this posting to demonstrate the absurdity of his characterization of them.
Mr. Wadhwa's text suggests that his criticism of the O visa originates because he would not have been eligible for such a visa to come to the United States. Wadhwa states "I don't know my total value-add to the American economy but I certainly added hundreds of millions of dollars over the life of my two startups."
I would venture to guess that Mr. Wadhwa's investors would not agree with that assessment. His last startup, Relativity, received more than $24 million in venture capital. The husk of the company was recently sold for $9.7 million.
I point out the pounding Mr. Wadhwa's investors took to illustrate that entrepreneurship is hit-and-miss. If free market venture capitalists cannot reliably pick winners, how can we expect the Congress and the regulatory bureaucracy to do so? There is simply too much chance involved in predicting corporate success to base immigration policy on potential entrepreneurship. What is more, the current investor visa is already filled with abuse.
If you look at where immigrant entrepreneurs come from, the uselessness of an "entrepreneur visa" becomes quickly apparent. Smart Money published a list of 10 companies founded by immigrants:
• Carnival Cruises
• Procter & Gamble
• U.S. Steel
This list appears to either be the source of or have common origins with the talking points sheets for the entrepreneur visa push; see here, here, and here.
For brevity I am going to omit DuPont, Pfizer, Procter & Gamble, and U.S. Steel from further discussion as these companies were all founded in the 19th Century and the immigration policies in place then have little relation to those we have now.
This leaves Carnival Cruises, eBay, Google, nVidia, Yahoo - and Intel, that I save for last.
Ted Arison, the founder of Carnival Cruises, is the only founder in this list who comes close to fitting the model of a potential entrepreneur-visa immigrant. He came to the U.S. around age 20; made his fortune after "The Love Boat" television series invigorated cruise lines; and then renounced his U.S. citizenship to avoid taxes - which probably why Arison is never mentioned in the push for visas.
Among the others founders on the list:
• Pierre Omidyar, founder of eBay came to the U.S. with his parents at age six.
• Jerry Yang, co-founder of Yahoo: came with the U.S. as a child at age 8.
• Sergey Brin, co-founder of Google: Immigrated with his parents at age 6.
• Jen-Hsun Huang, co-founder of nVidia: also came to the U.S. as a child.
Then we come to Intel. Smart Money discusses "Co-founder: Andy Grove." According to Intel, its founders were Robert Noyce and Gordon Moore - two native-born Americans. Dr. Grove, who came to the U.S. as a refugee in his 20s, was a very early employee of Intel and Intel states that "Dr. Grove participated in the founding of Intel."
This expansion of who is a founder from those who actual start the company to include those who were there early on highlights a point I made previously: that if you measure immigrant entrepreneurship by the percentage of companies that have at least one immigrant founder (rather than by their percentage of founders) you get an artificially inflated result. This expansion of the definition of a founder further skews these results.
But notice here that the dominant feature of the current high-profile immigrant entrepreneurs is that they came here as children. There is no mystery here: As the percentage of immigrants in the population has risen, the percentage of immigrant entrepreneurs has followed along.
The fundamental problem with the entrepreneur visa idea is that no one has a system that can identify which six-year-old child immigrant is going to grow up to create a successful startup.
This is not to say that the immigration system should not be skills-driven - it should. However, immigration based upon something as chance-driven as entrepreneurship is fundamentally poor public policy.
* * *
O Visa Requirements, 8 C.F.R. § 214.2(0)(3):
(iii) Evidentiary criteria for an O–1 alien of extraordinary ability in the fields of science, education, business, or athletics. An alien of extraordinary ability in the fields of science, education, business, or athletics must demonstrate sustained national or international acclaim and recognition for achievements in the field of expertise by providing evidence of:
(A) Receipt of a major, internationally recognized award, such as the Nobel Prize; or
(B) At least three of the following forms of documentation:
(1) Documentation of the alien’s receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor;
(2) Documentation of the alien’s membership in associations in the field for which classification is sought, which require outstanding achievements of their members, as judged by recognized national or international experts in their disciplines or fields;
(3) Published material in professional or major trade publications or major media about the alien, relating to the alien’s work in the field for which classification is sought, which shall include the title, date, and author of such published material, and any necessary translation;
(4) Evidence of the alien’s participation on a panel, or individually, as a judge of the work of others in the same or in an allied field of specialization to that for which classification is sought;
(5) Evidence of the alien’s original scientific, scholarly, or business-related contributions of major significance in the field;
(6) Evidence of the alien’s authorship of scholarly articles in the field, in professional journals, or other major media;
(7) Evidence that the alien has been employed in a critical or essential capacity for organizations and establishments that have a distinguished reputation;
(8) Evidence that the alien has either commanded a high salary or will command a high salary or other remuneration for services, evidenced by contracts or other reliable evidence.
(C) If the criteria in paragraph (o)(3)(iii) of this section do not readily apply to the beneficiary’s occupation, the petitioner may submit comparable evidence in order to establish the beneficiary’s eligibility.
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