During the 2016 election, President Donald Trump ran on the idea that small towns in America have been left behind. He understood that, while overall economic indicators suggest recovery from the Great Recession, many parts of the country are still struggling to create jobs. He tapped into the frustration felt by the Heartland fighting to make ends meet while those in large coastal cities and major tech hubs seem to thrive.
While Trump proved almost uncannily good at diagnosing what ails much of America’s Heartland, his immigration policies stand to actually worsen the current state of affairs.
After all, we know that prosperity and economic growth result directly from innovation. Innovating companies create high-paying jobs they fill with high-skilled people — and this creates a domino effect for the surrounding community. In fact, the Journal of Labor Economics cites that the hiring of one young skilled immigrant worker was found to be associated with the hiring of an additional 3.5 workers over the following 14 years.
It’s clear, then, that one path to recovery for small towns in America is through high-paid, high-skilled jobs. In today’s economy, that means jobs in science, technology, engineering, and mathematics (STEM). But where is that talent going to come from? There’s already a major talent shortage, and it’s forecasted that by next year, there will be 2.4 million unfilled jobs in STEM fields in the United States. Companies can’t bring jobs to small towns if the talent isn’t there or not willing to move there.
Once upon a time, it was common for major companies to set down roots in suburban and rural areas, knowing that talented employees would move to them. Today, though, the trend has reversed. Major corporations are moving from suburban and rural locations into major city centers to attract the talent that they need — especially STEM talent.
Take Caterpillar, for example. The construction giant, which first set up manufacturing operations in Peoria, Illinois in 1910, announced earlier this year it plans to move the company’s headquarters to the Chicago area. Why, you ask? Executives cited better transportation, but more importantly access to a larger pool of tech-savvy talent.
How can small cities in the Heartland compete? The solution may lie in hiring high-skilled foreign talent. Foreign employees are a key part of filling STEM roles in major cities, but they have also proven essential to many smaller cities.
We can look at the H-1B visa as a proxy for a city’s demand for high-skilled foreign labor. The U.S. cities where the demand for H-1B visas is greatest per capita include many in the Heartland, notably Minneapolis; Pittsburgh; Plano, Texas; and Troy, Michigan.
In other words, these cities have a significant demand for high-skilled talent that native-born workers aren’t filling — so they need to turn to immigrants instead. Immigrant founders in the U.S. created an average of 760 jobs per company, and the value of those companies tops $168 billion. Not to mention in 60 percent of the largest metro areas, immigrants accounted for all of the new growth in Main Street businesses.
Strengthening the Heartland through sensible immigration policies is important, and we have much work to do. Before Trump was elected, the U.S. was ranked 26th out of 65 in terms of best countries to relocate. Notwithstanding Trump’s promises to restore the Heartland and lighten regulations, his immigration policies are making it more difficult for companies to sponsor foreign talent. Not only is the administration advocating for greater limits on legal immigration, but things like the executive orders that ban travel outright, failure to support measures like DACA (although now it is reported that Congress has come to an agreement on legalizing DACA), the cancellation of the Entrepreneur Visa, the call for review of the H-1B visa through the “Hire American Buy American” executive order, and the sharp increase in immigration site visits and requests for evidence in visa applications have created an unwelcoming environment for foreign workers.
So what is the solution for these cities?
We need immigration reform. If we don’t improve companies’ ability to sponsor talent and create a welcoming environment where expats want to live and work in America, we are greatly hurting their prospects for growth — along with the cities dependent on them. These small cities won’t be able to survive, let alone grow and thrive, without access to the important lifeline foreign-born talent provides.
From my perspective, there’s a few courses of action we need to take.
First, reinstate the Entrepreneur Visa. This visa allows entrepreneurs, specifically those who can demonstrate significant public benefit and show considerable capital investment, to enter or remain in the U.S. And if paired with incentives for these entrepreneurs to start companies in smaller towns, this could significantly spur growth in such areas.
Next, expand the H-1B program and allocate more of these visas to smaller towns. As outlined above, the more we can bring high-skilled workers to these communities, the greater the economic impact over time.
Lastly, we need to target redevelopment in the Heartland, offering incentives for companies to move their industries to those locations and providing the means to build and bring the right talent to support sustained growth.
Dick Burke is the president and chief executive officer of Envoy, a global immigration technology services provider.