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Yet both countries are also jeopardizing their long-term prospects with foolish policy. In particular, their inability to enact sensible immigration reforms means the sectors they rely on to power their growth — from tech to higher education — may lack resources.
The US is the most serious offender. Silicon Valley — not to mention every other high-tech sector in the country — is holding its antiquated and unimproved H1-B work visa system hostage. Only 85,000 H1-Bs are granted per year to people earning at least $60,000; That’s the same number as two decades ago. This figure is apparently insufficient: In April, US immigration authorities announced that they had already received nearly half a million applications for 2023 from companies hoping to import workers.
But the program’s problems don’t stop there. The current round of tech layoffs — including thousands of engineers and other employees at Twitter Inc., Meta Platforms Inc. and others have been let go—highlighting another problem with the US work visa program. Dismissed H1-B holders—among the highest-paid and most skilled migrants in America—are expected to find new jobs or leave the country within 60 days. In the past, this requirement was not so much of a problem, as the sector was booming and anyone who was laid off could be rehired within weeks. However, at a time when a few large employers are laying off employees at once, the 60-day deadline starts to bite.
There is a very real threat that thousands of highly productive workers, many of whom have lived in the country for years, could be lost to the US economy. This would mean that a purely temporary recession could cause permanent damage to future growth.
Unlike the US, the UK has made concerted efforts towards immigration reform in recent years; During his tenure, former prime minister Boris Johnson championed points-based immigration rules that he said would “attract the best and brightest from around the world.” The new system helped increase the number of work visas issued to people from outside the European Union by 80% in two years. Of course, some of those immigrants will be taking jobs that would otherwise have been filled by EU citizens, many of whom are no longer willing to jump through the post-Brexit hoops to work in Britain.
Johnson’s exit leaves his Conservative Party with an uneasy coalition of pro-business reformers and antediluvian Little Englanders. Unsurprisingly, his immigration policies are inconsistent. Faced with a budget crisis, Chancellor Jeremy Hunt had to find growth wherever he could find it — and, as the Daily Telegraph put it, he “relied on an increase in net migration of more than 200,000 people a year.” Helps in economic growth. Meanwhile, Suella Braverman, Hunt’s colleague in charge of migration, says she wants to reduce the number to less than 100,000. This year, the UK exceeded its target by more than 400,000 people.
We have now learned that the Government intends to balance these priorities by drastically reducing the number of overseas students in the UK. One problem is that these students pay very high fees, subsidizing British students and keeping the country’s higher education sector afloat.
The government doesn’t seem concerned: Braverman complains that foreign students are “undertaking low-level courses at inadequate institutions.” But that is a somewhat cavalier way of talking about a sector that supports “more than 815,000 jobs” in Britain. While the student-to-work-visa pipeline may need reform, no country that hopes to grow its high-tech sector will control the flow of bright young immigrants as much as the UK wants.
Ironically, it may be the Anglosphere economy’s very attraction to students, workers and entrepreneurs that allows its politicians to pursue real reforms. In Germany’s somewhat more prudent political climate, where the government officially targets 400,000 qualified foreign workers each year, only 30,000 apply.
Still, the US and the UK would be foolish to discount their natural advantages in the race for the future: their English-speaking businesses and universities. If they really hope to maintain their lead over rivals, they need to accumulate as much talent as possible, not eliminate it.
More from Bloomberg Opinion:
• Rishi Sunak is embroiled in a serious civil war: Martin Evans
• Economic necessity will force immigration reform: Eduardo Porter
• Fear of China gives opportunity to bilateralism: Niall Ferguson
This column does not reflect the opinion of the editorial board or Bloomberg LP and its owners.
Mihir Sharma is a Bloomberg Opinion columnist. A senior fellow at the Observer Research Foundation in New Delhi, he is the author of “Restart: The Last Chance for the Indian Economy”.
More stories like this one are available at bloomberg.com/opinion
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