Immigration and Economic Impact

I was born and raised on a farm in a small town in Ohio. I've worked to get H-1B visas and green cards for my team members my entire career. There are three simple economic arguments for increasing legal immigration by highly educated workers: 1) If another country pays to raise and educate a child through college and that young person then moves to the US, we just gained a fully mature tax payer at zero cost. All the news about student loans? In this case, another country paid for that education. They bore all the costs, we get all the benefits. 2) Education in most countries that send us H-1B candidates is incredibly limited and highly competitive. The result is, only the absolute cream of the crop in those countries gets a chance to apply for an H-1B. We are literally stealing the very best from other countries. To stop that would be suicidal madness. 3) Highly educated immigrants create jobs. Yes, they also compete for jobs, and I competed against some exceptionally brilliant leaders from all over the world. But those leaders have now either created or lead some of our most impressive companies. This debate ends up being complicated for many emotional reasons: a) If you need a job and someone born outside the US gets one you wanted, it is easy to blame and hate, because while overall legal immigration may be good for the country and the economy in general, in that situation it was bad for you. b) Legal immigration gets lumped in with immigration in general and people coming in to the country illegally. Since there are far more people who come in illegally, that conversation dominates the immigration discussion, drowning out the nuance about highly educated workers. c) There are plenty of problems with our domestic education system, including runaway costs, that we need to fix so that all people, including people born in the US, can get world class education. Luckily, online education and AI tutors will create more of this access at lower costs. I no longer need to attend an exclusive university when the best education is available from anywhere. Finally, there are many moral arguments for immigration. Here is just one: Evans is a Welch name. I can trace my ancestry to John Evans, who came to Virginia in 1712. Those 300 years do not change the fact that I am still an immigrant. Even "native" Americans came to this country across a land bridge. "First Peoples" means "first people to get here," not "magically grew from the ground like grass." It is certainly reckless to attempt to have a nuanced discussion about something as explosive as immigration in a limited length format like LinkedIn. At the same time, I am absolutely going to stand up for my many brilliant colleagues who came to the US on H-1B or other visas. They are my friends and our country is better off for their presence, talents, and hard work. I welcome constructive discussion of how we can make a better world, and a better America, for all of us.

One of the most effective things the U.S. or any other nation can do to ensure its competitiveness in AI is to welcome high-skilled immigration and international students who have the potential to become high-skilled. For centuries, the U.S. has welcomed immigrants, and this helped make it a worldwide leader in technology. Letting immigrants and native-born Americans collaborate makes everyone better off. Reversing this stance would have a huge negative impact on U.S. technology development. I was born in the UK and came to the U.S. on an F-1 student visa as a relatively unskilled and clueless teenager to attend college. Fortunately I gained skills and became less clueless over time. After completing my graduate studies, I started working at Stanford under the OPT (Optional Practical Training) program, and later an H-1B visa, and ended up staying here. Many other immigrants have followed similar paths to contribute to the U.S. I am very concerned that making visas harder to obtain for students and high-skilled workers, such as the pause in new visa interviews that started last month and a newly chaotic process of visa cancellations, will hurt our ability to attract great students and workers. In addition, many international students without substantial means count on being able to work under OPT to pay off the high cost of a U.S. college degree. Gutting the OPT program, as has been proposed, would both hurt many international students’ ability to study here and deprive U.S. businesses of great talent. (This won’t stop students from wealthy families. But the U.S. should try to attract the best talent without regard to wealth.) Failure to attract promising students and high-skilled workers would have a huge negative impact on American competitiveness in AI. Indeed, a recent report by the National Security Commission on Artificial Intelligence exhorts the government to “strengthen AI talent through immigration.” If talented people do not come to the U.S., will they have an equal impact on global AI development just working somewhere else? Unfortunately, the net impact will be negative. The U.S. has a number of tech hubs including Silicon Valley, Seattle, New York, Boston/Cambridge, Los Angeles, Pittsburgh and Austin, and these hubs concentrate talent and foster innovation. (This is why cities, where people can more easily find each other and collaborate, promote innovation.) Making it harder for AI talent to find each other and collaborate will slow down innovation, and it will take time for new hubs to become as advanced. [Truncated due to length limit. Full text, with links: https://lnkd.in/gGs-2RrD ]

The more I cogitate on the May jobs report, released last Friday by the BLS, the more uncomfortable I get about the economy’s prospects. There are a bunch of reasons why (listen to this week’s #InsideEconomics podcast), but high on the list is the sharp drop-off in labor force growth. Given the new population controls, measuring labor force growth is tricky, but by my calculation, it’s at a standstill. Look to the severe restrictions on immigration. This time last year, the foreign-born labor force was growing 5%. It’s now declining. The native-born labor force remains moribund. The implications of a flagging labor force are disconcerting. It means serious disruptions to businesses that rely on immigrant labor, ranging from construction and agriculture to hospitality and retailing. It also means higher inflation, just when the higher tariffs are set to push up prices. It also means the economy’s real potential GDP growth – that pace of growth consistent with stable inflation – is much lower. It is currently closer to 1% than the 2% we have come to think of as typical. Think of what this means for everything from asset returns to our already dire fiscal outlook. #laborforce #laborgrowth

Lots of economists are asking what would happen if the estimated 8 million undocumented workers in the United States were deported. Keep in mind that when economists think about labor markets in broad terms, they don't usually care whether someone is undocumented. A worker is a worker. One easy conclusion is that pay for low-wage occupations would rise. As a result, so would the cost of producing many goods and services. Add in sky-high tariffs, and inflation would likely surge again. Another conclusion is that the demand for some goods and services would fall. Don't forget that there would be noticeably fewer consumers for lots of everyday products. Jobs might be lost in these areas as companies tried to preserve their margins. A third conclusion is that labor markets across the country would be fractured, since many jobs depend on the presence of undocumented people. A construction company that relied on undocumented labor might have to close down. A farmer unable to harvest their crops might go bankrupt. Lives would be disrupted in other ways, too. If home health aides, manicurists, and gardeners disappeared, people would have to spend more time doing these jobs themselves instead of their usual work and leisure. At least, they would have to do these jobs until the labor market could supply replacements. That might take a while. But there's another question not many economists have asked. If people you saw every day, who worked for you, who worked with you, who took care of you, were suddenly rounded up and sent to military camps, would it be okay with you? What would you do? What would you say? #labormarket #immigration #ethics [Image: Manzanar War Relocation Camp, by Dorothea Lange]

42% of U.S. hired crop workers are undocumented immigrants.  That’s 2 in 5. (Source: USDA) As many as 73% of agricultural workers are immigrants. That’s 3 in 4. (Source: Fwd.US) Without foreign-born workers, agricultural output is expected to fall by $30-$60 billion.  (Source: AFBF) Fear of immigration enforcement is already keeping these farm workers from going to work. And this fear is already having a negative impact on harvests. Don't believe me? Check out what’s currently happening with citrus harvests in California. According to the president of California Citrus Mutual, “People aren’t going to work and kids aren’t going to school. Yesterday (Jan 9th) about 25% of the workforce, (and) today (Jan 10th) 75% didn’t show up”. Another California farm owner, Peter Belluomimi, a grower and packer of lemons, mandarin oranges, and navel oranges – citrus fruits that end up on the shelves of Kroger and Trader Joes – reported (on Jan 21st) that just 5 of 30 workers came to work. That’s 1 in 6. You don’t need an economics degree to see where this is going. Labor shortages will lead to reduced harvests. Reduced harvests will lead to supply shortages. Supply shortages will lead to increased food prices. Immigration policy & economic policy can’t be separated. They REALLY can’t be separated when it comes to food prices. And that’s just from labor shortages & reduced harvests. It says nothing about tariffs or reciprocal tariffs. It says nothing about foodborne illness outbreaks. It says nothing about lost yields from climate shocks. But all of those will almost certainly drive up food prices too. This is not a political post. This is a reminder to start with data. This is a reminder to consider second-order effects. This is a reminder to talk to all of your stakeholders. This is a reminder that strategy should precede tactics. This is a reminder that blind action has negative outcomes. This is a reminder that half-baked solutions worsen problems. And yes, this is a reminder to stock up or – better yet –  This is a reminder to start tending your own garden. #food #foodprices #economics #finance

𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫 𝐑𝐮𝐥𝐞: 𝐀 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐋𝐚𝐮𝐧𝐜𝐡𝐩𝐚𝐝 𝐟𝐨𝐫 𝐒𝐭𝐚𝐫𝐭𝐮𝐩 𝐓𝐚𝐥𝐞𝐧𝐭 𝐚𝐧𝐝 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 The International Entrepreneur Rule (IER) has drawn recent attention after the US reaffirmed its support for the program, which aims to attract global talent and fuel innovation, economic growth and job creation. The updated policy allows immigrant founders to remain in the US for up to five years, giving them time and opportunity to focus on scaling their businesses. By creating a more welcoming environment for immigrant entrepreneurs, the US can maintain its position as a global leader in innovation. Some of the world’s biggest tech companies began as startups founded by immigrants or children of immigrants, including Jensen Huang of NVIDIA, Sergey Brin of Google, Steve Jobs of Apple, Elon Musk of Tesla, Jay Chaudhry of Zscaler, Nir Zuk and Rajiv Batra of Palo Alto Networks, Aneel Bhusri of Workday, Brian Chesky of Airbnb, Tony Xu of DoorDash, Scott Farquhar of Atlassian, Ali Ghodse of Databricks, and Eric S. Yuan (he / him / his) of Zoom. Many of us at Mayfield Fund also started our journeys in the US as immigrant founders, and many of our portfolio companies include at least one first or second generation immigrant founder as well, including Armon Dadgar and Mitchell Hashimoto of HashiCorp, Dheeraj Pandey of Nutanix and Devrev, Manish Chandra of Poshmark, Pradeep Sindhu of Juniper Networks and Fungible/Microsoft, Manu Gulati of Nuvia/Qualcomm, Rehan Jalil of Elastica/Symantec and Securiti, Lyndon Rive of SolarCity, Ankur Singla of Volterra/F5, Guru Pangal of StorSimple/Microsoft and CloudSimple/Google, Rajiv K. of Innovium/Marvell Technology and Auradine, Seshu Madhavapeddy of Frore Systems, Ben Bernstein of Twistlock/PaloAltoNetworks and Gutsy, Murli Thirumale and Gou Rao of Ocarina/Dell Technologies and Portworx/Pure Storage. We all had to navigate a daunting immigration system as we launched and grew our businesses. I believe a program like the IER will make a tremendous difference in the lives of international founders—particularly those from India—who now face the same challenges. As I shared in an earlier post the Indian diaspora has had a massive impact in the US (see attached report), and this for sure will accelerate the impact of Indian American entrepreneurs. Policies like the IER will become increasingly important in the era of AI, which brings with it the opportunity to build groundbreaking technology that changes how we work and live. Please share a comment with your own insights and experiences. #immigration #founders #entrepreneurs #startups

There’s been a lot of speculation in the past two weeks following the election about the incoming administration and the changes we’re likely to see in the workplace and labor market. I've been reflecting on what these shifts could mean for the #futureofwork — and the potential implications are both complex and concerning. We may be entering a period of significant policy changes, including labor regulations, immigration, and workforce classification. Among these, one stands out for its sweeping potential impact: large-scale deportations and visa restrictions. This graph from The Conference Board speaks volumes, underscoring the critical role of immigrant workers in sustaining the U.S. labor force and economy. Policies that remove millions of workers could have severe consequences, such as: 1️⃣ Labor Force Shrinkage: Deporting a large number of workers would significantly reduce the U.S. labor force, exacerbating labor shortages in industries like agriculture, construction, and hospitality—industries already struggling to fill roles. 2️⃣ Economic Contraction: Fewer workers mean less productivity, reduced output, and slower economic growth. The data clearly shows that large-scale deportations would directly impact GDP, with sharp declines that the economy would struggle to recover from. 3️⃣ Pace Matters: Sudden, mass deportations would cause immediate and significant economic harm. Even a slower approach wouldn’t shield the economy from lasting damage to labor force participation and growth potential. 4️⃣ Policy Intersections: This highlights the interconnectedness of labor policies and economic outcomes. Policymakers must consider how such measures could unintentionally worsen labor shortages, drive inflation, and destabilize workplaces. To business leaders, this is a moment to engage your workforce. Open communication about potential changes builds trust and fosters resilience in times of uncertainty. As we prepare for what’s ahead, it’s crucial to have informed, data-driven conversations about how policies will impact businesses, the economy, and the workforce. Let’s ensure the decisions we make support a stable, sustainable future of work. What are your thoughts? How can leaders balance these changing economic realities to ensure a stable, sustainable workforce? I would love to hear your thoughts!

With ICE raids continuing to target immigrants across the country, many California farms are left without workers to harvest their crops, according to a recent article in The Guardian. Lisa Tate, a sixth-generation farmer in Ventura County says around 70% of workers are gone. "If 70% of your workforce doesn't show up, 70% of your crop doesn't get picked and can go bad in one day. Most Americans don't want to do this work. Most farmers here are barely breaking even."⁠ Being based in California for 25 years, I did a fair amount of reporting on the agricultural workforce in that vast and incredibly important state. What I saw was hard working men and women, often living in subpar conditions, abiding by the laws and contributing immensely to America's "breadbasket." They are doing important and difficult jobs that most Americans would not do. What is happening now under this administration is a travesty and shows not only cruelty but a poorly planned policy. Captions: Migrant workers harvest strawberries in California, 1995 A tray full of strawberries harvested by a migrant worker in California, 1995. Workers leaving strawberry fields near Salinas, California, 1995. A migrant worker gets a card stamped to verify how many strawberries he's picked at a strawberry farm in California, 1995. Rather than being paid by the hour, workers have their haul weighed to determine how much they get paid, which provides them with little job security. Migrant workers harvest strawberries in California, 1995 A migrant worker washes tomatoes in his makeshift hut. California, 1995. Migrant workers take a bath using a spigot in the field near the shacks where they live. California, 1995. Many migrant workers live in single rooms like this one in Plaza Hotel in Santa Maria, CA.

According to our Labor Market Tightness Index, the U.S. labor market has stopped softening in recent months. What lies ahead? Recent weeks have brought negative shocks to both labor supply and labor demand. Labor supply shock: Stricter immigration policies have reduced the availability of workers in industries like construction, healthcare, and hospitality. Labor demand shock: Layoffs of federal workers and contract eliminations are cutting jobs, with growing overall policy uncertainty further dampening hiring. Both factors point to weaker job growth, but their impact on labor market tightness is uncertain—it depends on which shock is larger. Here’s my take: In the next couple of months, the demand shock is likely to dominate, loosening the labor market. However, as the federal government’s restructuring stabilizes, this effect will fade. Beyond mid-2025, labor supply constraints from immigration policies will persist, likely for at least the next four years. This means that as the demand shock diminishes, the labor market will tighten again. #labormarkets #unemployment #government #immigration

I've posted this before, and I'll post it again because more people NEED to know the facts: I've spent 8 years in immigration, working with Fortune 500 companies spending $20M+ annually on immigration programs. At Lawfully, we've helped 2M+ people with their immigration process. Here are the uncontested facts about immigration: Immigrants (documented & undocumented) contribute more than $3.3 trillion to the American economy. They will drive $7 trillion in GDP growth & $1 trillion in government revenue over the next decade. They pay $525 billion annually in federal, state, and local taxes. They represent 18% of the U.S. workforce—driving high labor force participation, especially in critical industries like agriculture, healthcare, and manufacturing. They account for 26% of physicians, 16% of registered nurses, and 40% of home healthcare workers. They make up 20% of STEM workers and 40% of advanced STEM degrees. They founded or led 44.8% of Fortune 500 companies. Immigrants don't just contribute, they are essential to American competitiveness.