Last week, he decided H-1B, the main gateway to high-qualification foreign professionals. The measure has been announced as a way to protect jobs for US workers, but has the opposite effect: it raises the cost of hiring for innovative companies, reduces the flow of talent and compromises US capacity to support its technological leadership. It is a policy that presents itself as “America First”, but works as “America Last”.
Developed economies support human capital. The presence of qualified immigrants is disproportionate in the areas of Science, Engineering and Mathematics, with measurable effect on productivity and income. Hanson and Slaughter document the centrality of these professionals in the generation of innovation, authored by patents to the founding of accelerated growth companies. Giovanni Peri estimates that a 1% increase in employment due to being associated with a rise of about 0.5% in income per worker, a sign of complementarity, not replacement. The mechanism is known: more diverse and qualified teams expand the technological frontier, unlock projects and attract investment.
There is also the fiscal and demand channel. Qualified professionals pay more taxes than they receive for benefits and, because they have high income, expand local markets of housing, education, health and culture. Discouraging them reduces the future tax base and empties urban ecosystems that depend on sophisticated services. The effect does not appear in a trimester, but over the years it means less productive diversity and less dynamism.
The effects on innovation are the centerpiece. To hire engineers and researchers and many have no cash to absorb a $ 100,000 tariff for hiring. In sectors such as biotechnology and quantum computing, this friction can make projects unfeasible or push them into jurisdictions that treat talent as a strategic asset. The incentive is crooked: it punishes precisely those who would generate jobs and income within the country.
While the US raises barriers, competitors open the way. Canada created a three-year open visa for H-1B holders and sold out the ten thousand vacancies in less than 48 hours. Germany has adopted a system by points and an opportunity card that allows entry to active work search, reducing qualification and recognition friction. A, aimed at Stem young people, as part of an explicit strategy of accelerating technological border areas. In a global talent race, turning the visa into a toll is delivering advantage to rivals.
The idea that raising barriers to qualified immigration would protect the American worker ignore how productivity, innovation and growth are formed. Foreign professionals do not dispute a fixed cake with the natives, they increase this cake. When restricting the entry of those who research, undertake, and leads technical teams, there are a hand from companies that would be born, projects that would come out of paper and technologies that would support jobs and income within the United States.
The debate is about the growth model that the US intends to support. Calling protection a measure that reduces the supply of talent and makes innovation expensive is to exchange immediate political gain for lasting economic loss. If the priority is to compete, the policy should facilitate the entry of those who expand the technological frontier and the fiscal base. Closing the door to these professionals does not put any country ahead, it just delays its development.
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