Illustration by Bloomberg View
Illustration by Bloomberg View

To see the results of self-defeating U.S. immigration policies, you need only open your browser to www.canadavisa.com. There, you’ll see a shrewd neighbor fishing for talent at U.S. expense.

At the top of the website, in large print, is the question: “Currently on an H1B Visa or otherwise working or studying in the United States?” There is nothing subtle about the appeal. Canada is seeking skilled foreigners who’ve grown frustrated with the U.S. visa gantlet, which can take a decade for the lucky few who manage even to begin it.

Plans to loosen U.S. restrictions on high-skilled immigrants have been kicking -- and getting kicked -- around Washington for years. The latest comes from a bipartisan group of senators, who last week introduced legislation to ease the logjam on visas. The Startup Act 2.0 would create a new visa for immigrants who graduate from U.S. universities with a master’s degree or doctorate in science, technology, engineering or math fields. It would also create an entrepreneur’s visa to enable immigrants with capital to start businesses and create jobs in the U.S.

These are not new ideas. The House of Representatives overwhelmingly passed a bill to expand high-skills visas last fall. That promptly fell prey to politics in the Senate.

Economic Necessity

A combination of economic necessity and demographic change makes immigration reform -- even limited progress like the Startup Act 2.0 -- more crucial than ever. The growth rate of the U.S. labor force is declining. Fewer young workers are entering the labor market as older ones retire, a combination that exerts a drag on economic growth. This has been compounded by the 2008 financial crisis and the job losses that ensued. From 2007 to 2011, the rate of new business creation slowed by 23 percent. Even before the recession, trouble was apparent; from 2000 to 2007, job creation in the U.S. was weaker than for any decade since the 1930s.

If jobs aren’t being created, why does the U.S. need more immigrants? A survey by the McKinsey Global Institute found almost two-thirds of companies say they have “positions for which they often cannot find qualified applicants, with management, scientists and computer engineers topping the list.” A Kauffman Foundation report found that in 2011 immigrants were more than twice as likely to start businesses as native-born Americans. A Duke University study found that immigrants helped start more than a quarter of the technology and engineering companies established in the U.S. from 1995 to 2005.

A smarter, more open immigration policy can do much to create jobs and boost growth. The U.S. annually issues just 65,000 H-1B visas for highly skilled immigrants, with 20,000 more going to foreign professionals who graduate from a U.S. university with a master’s or doctoral degree. Yet in 2011, more than 150,000 students from China alone were studying in the U.S. Roughly 40 percent of international students receive U.S.-based grants or scholarships. In effect, the U.S. invests heavily in the education of foreigners -- most of whom are enrolled in the science-related fields that fuel high-wage employment -- and then prohibits them from pursuing job opportunities, allowing other nations to reap the benefits.

Reap they do. According to a report by the Partnership for a New American Economy and the Partnership for New York City, Singapore’s foreign-born population has quadrupled in the past two decades, to more than a third of its total population. Many of the newcomers are highly-skilled. Australia issues 15,000 fewer employment-based green cards to foreigners than the U.S. does -- though the U.S. has 14 times its population.

Labor Crossing Borders

Labor, like capital, is increasingly flowing across borders. Even Germany has loosened historically restrictive immigration policies in response to labor shortages in technology and math-related fields. In contrast, the U.S. remains too burdened by anti-immigrant politics to welcome the many highly educated, skilled workers who would contribute to the U.S. economy if only they could.

The U.S. no longer ranks first among nations in the percentage of its population with post-secondary education; it is 16th. It needs more of the foreign-born workers who have proved central to the creation of companies and jobs.

Comprehensive immigration reform is on hold. The Dream Act, which would create a path to citizenship for young illegal immigrants who serve in the armed forces or attend college, is blocked. Because of backing from business lobbies, the Startup Act 2.0 has a window of possibility in this Congress. Senate and House leaders should put immigration politics aside and push it through.

Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View columns, editorials and op-ed articles.

Today’s highlights: the View editors on cutting a deal with Iran; Edward Glaeser on what the latest housing numbers tell us; Margaret Carlson on Romney’s public-sector experience; Clive Crook on an EU debt plan; Peter Orszag on the problem with spending caps; William Pesek on Osaka’s problematic mayor; Luigi Zingales on capitalism and populism; John O’Brennan on Ireland’s fiscal referendum.

To contact the Bloomberg View editorial board: view@bloomberg.net.