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On behalf of the billionaires, Elon Musk, CEO of Tesla (which company one of the top employers in the H-1B program) with that arguethat “there is a constant shortage of excellent engineering talent. That’s the fundamental limiting factor in Silicon Valley.” Similarly, Vivek Ramaswamy, another tech billionaire who is an adviser to Trump, said claimsthat American companies need H-1B workers because “our American culture has valued mediocrity over excellence for too long (since at least the 1990s, but probably even longer).” In response, MAGA activists like Laura Loomer and Steve Bannon—but also democratic socialists like Bernie Sanders—with they cut backthat the program helps American corporations at the expense of American workers.
Who is right?
Although economic research clearly shows that immigrants sought after skillscreative dynamism and useful knowledge they bring with them, which also helps domestic innovators, this does not mean that there are no disadvantages to the heavy reliance on H-1B visas.
For example, the argument that the H-1B program helps employers acquire STEM (science, technology, engineering, math) skills ignores the fact that without the program, American educational institutions would feel more pressure to on the part of business to satisfy this need.
The idea that elites force the education system to produce workers with useful skills and attitudes dates back at least to Sam Bowles and Herb Gintis in 1976, Schooling in Capitalist America It goes back to his highly influential book (Education in Capitalist America). Applying their reasoning to the present, we would expect that companies’ increasing demand for skilled STEM workers would manifest itself in the form of support for and investment in STEM education. However, over-reliance on the H-1B program did not develop this type of relationship and made the American elite indifferent to education system is widely recognized its shortcomings towards. Put another way, the problem may not be a cultural respect for mediocrity, as Ramaswamy has argued, but rather that business leaders, intellectual elites, and politicians are not sufficiently addressing the issue.
Of course, this is only one possibility. We cannot say for sure that the response of the education system would be appropriate if it felt more pressure from business life. But be that as it may, it sure is American policymakers should pay more attention to the possible secondary effects of the H-1B program.
A similar argument applies to technology decisions. Even if they are H-1B workers they also enhance innovationtheir presence can influence the direction of innovation. My own analyzes show (theoretical and empirical on the way) that when the supply of skilled labor increases, technological decisions begin to favor such workers. In recent decades, businesses have increasingly introduced technologies that favor highly skilled workers and are automated the tasks previously performed by employees with lower qualifications. Although other factors may have contributed to this trend, the availability of affordable, highly skilled labor for the technology industry is believed to have contributed to this.
This effect again reflects the indifference of business leaders and policy makers. It also suggests that if the U.S. relies on H-1B workers, policymakers should consider other adjustments to ensure that workers without STEM degrees or college degrees are used in corporate strategies and the design of new technologies. .
The last important question is whether can programs like H-1B harm sending countries through brain drain. This is also debatable. Such programs can be mutually beneficial if destination countries have technologies, institutions, and other skilled labor that complement highly skilled immigrants particularly well. In this case, an Indian STEM worker contributes more to global production or innovation from the US than from India, and some of the scientific and technical knowledge generated flows back home.
In fact evidence indicate that such knowledge exchange is already taking place through cross-border ethnic networks. However, this mutually beneficial scenario would not be realized if almost all qualified, innovative workers left their country of origin, because then there would not be a critical mass of workers back home who could benefit from the flow of knowledge.
Moreover, for this win-win scenario to become a reality, the sharing of knowledge and technical expertise related to new innovations must not reach a scale and pace that undermines America’s own comparative advantage (rooted in innovation). In the literature of economics, this question is usually a technological product cycles is examined in its context.
Although we currently have little evidence as to what constitutes too fast an information flow, some believe sothat China benefited unduly in this regard, as it rapidly developed its technologies at the expense of Western companies.
The win-win scenario therefore depends on whether a sufficient number of skilled workers remain in each sending country and whether adequate international protection of intellectual property rights is ensured so that innovators can enjoy the fruits of their own activity at least for a while.
The debate over the H-1B program within Trump’s MAGA coalition raises some important questions about how the United States should think about education and technology in an increasingly globalized knowledge economy. There is a set-up that can ultimately benefit both developed economies and poorer countries. But whether this will be found in the next four years is a question for the future.
Copyright: Project Syndicate, 2024.
Daron Acemoglu
He is a Nobel Prize-winning economics professor at MIT (Massachusetts Institute of Technology). His research concerns, among other things, issues of political economy, economic development and growth, technological development, and income inequality. He received the Nobel Prize in 2024.
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