The U.S. government interferes with the market for foreign laborers by restricting the number and mix of immigrants and setting tight quantitative limits on foreign-born guest workers. This has created a mismatch between the demand for foreign workers from U.S. businesses and their supply, directly leading to the illegal immigration situation we confront today.  — Benjamin Powell and Zachary Gochenour

This is an interesting read of the mismatch supply & demand of highly skilled labor force in the US.  Not surprisingly, there is no mention of TN visas due to the insignificant number of TN status workers.  More on that please see our previous entry.

Broken Borders – Government, Foreign-Born Workers, and the US Economy (Benjamin Powell and Zachary Gochenour)

http://www.independent.org/pdf/policy_reports/2013-09-16-powell.pdf

PDF: Broken Borders – Government, Foreign-Born Workers, and the US Economy

Spoiler/ Conclusion

There is a serious mismatch between labor demand and supply in the U.S. economy that could be alleviated by expanding the role of immigration in growing the U.S. labor force. The problem only promises to get worse in the absence of reform; the aging baby-boomer population and declining fertility rates mean that population growth in absolute terms for working-age Americans is moving toward a historic low. The need for reform has never been greater than it is now.

This study analyzed the current immigration and guest-worker quotas in the United States and found that they fail to meet domestic employers’ labor demands. The speed at which guest worker quotas are reached was given as evidence for the severe shortage, as well as reports coming directly from employers unable to meet their labor needs.

The mismatch is a systemic problem that cannot be solved by better technique: it is simply not possible for government central planners to know what the right level of immigration should be without letting decentralized market forces work.

Multinational businesses are the institutions best prepared for dealing with immigration restrictions, both practically and politically. A wide variety of visa options and work arrangements are available to corporations with offices and employees abroad, such as the L-1 visa and visas for temporary business travel. Multinational corporations are also able to hire labor overseas if they are not able to meet their labor demands with domestic labor. Small businesses are at a serious disadvantage, as they do not have the expertise, scale, or capital to overcome these challenges. Furthermore, small businesses lack seats at the political bargaining table, the availability of which would allow them to shape policy or secure favors and exceptions as large businesses are able to do.

The market for foreign workers in the United States is broken and needs reform. The current U.S. Senate proposal is a mild step in the right direction. It raises immigration caps, but leaves in place the fundamentally broken system of command and control. Red Card, an alternative guest worker proposal, is a much better solution for temporary workers because it lets market forces determine the numbers of admissible guest workers. Ultimately, the United States would be better served by moving to unrestricted migration for both guest workers and those who want permanent residency