Bill Gates Advocates Immigration Reform

Via Dean Baker who likes to go after Washington Post editorials – comes a guest editorial from Bill Gates:

For centuries people assumed that economic growth resulted from the interplay between capital and labor. Today we know that these elements are outweighed by a single critical factor: innovation. Innovation is the source of U.S. economic leadership and the foundation for our competitiveness in the global economy. Government investment in research, strong intellectual property laws and efficient capital markets are among the reasons that America has for decades been best at transforming new ideas into successful businesses. The most important factor is our workforce. Scientists and engineers trained in U.S. universities – the world’s best – have pioneered key technologies such as the microprocessor, creating industries and generating millions of high-paying jobs … Two steps are critical. First, we must demand strong schools so that young Americans enter the workforce with the math, science and problem-solving skills they need to succeed in the knowledge economy. We must also make it easier for foreign-born scientists and engineers to work for U.S. companies.

Mr. Gates is making four policy recommendations: (1) a stronger commitment to education; (2) more government investment in research; (3) patent protection; and (4) more open borders for foreign-born scientists and engineers. The first two strike me as good ideas and one can debate whether patent protection policies are the first best means for promoting R&D. But I’m sure the last recommendation will set Lou Dobbs off and has drawn a little fire from Dean (more on this later). But let’s hear Mr. Gates out:

American competitiveness also requires immigration reforms that reflect the importance of highly skilled foreign-born employees. Demand for specialized technical skills has long exceeded the supply of native-born workers with advanced degrees, and scientists and engineers from other countries fill this gap. This issue has reached a crisis point. Computer science employment is growing by nearly 100,000 jobs annually. But at the same time studies show that there is a dramatic decline in the number of students graduating with computer science degrees. The United States provides 65,000 temporary H-1B visas each year to make up this shortfall – not nearly enough to fill open technical positions.

Dean responds:

The other reason why I am so fond of Mr. Gates piece is that he argues for more H1B visas to admit highly educated workers, but then adds: “this program has strong wage protections for U.S. workers: Like other companies, Microsoft pays H-1B and U.S. employees the same high levels – levels that exceed the government’s prevailing wage.” There you have it, Bill Gates is assuring the country’s highly educated workers that they need not worry about being treated like the country’s autoworkers or dishwashers – the law will ensure that they will not have their wages depressed by foreign competition. Of course, the increased supply of foreign workers does depress wages, but is interesting that such a pillar of the IT era feels the need to assure U.S. professionals that they will not be subjected to international competition.

Bill Gates – liberal! But hold on a second here. If there is excess demand for these professionals, wage floors are likely irrelevant. Isn’t the real issue that the chairman of Microsoft afraid that excess demand will drive up the wages of his R&D engineers? So increasing engineers from other countries is being called for to mitigate the rise in wages. I don’t want to be too critical of what Mr. Gates is saying as I think it is a good idea that talent from overseas can move to Redmond, Washington or San Jose, California even if Lou Dobbs despises the idea of giving economic opportunity to anyone from abroad. But there’s another matter to this debate, which Dean ably notes:

Regular BTP readers know my view on this one – we make our less educated workers compete with low-paid workers in the developing world. This has benefitted highly educated workers by driving down the cost of manufactured goods, restaurant meals and other goods and services produced by low-paid workers from the developing world. International competition for the highly educated workers would lower the price of the services they produce and thereby benefit less educated workers.

I better stop now before anyone confuses me with Lou Dobbs. After all, it’s breakfast time and I’ll likely enjoy a very good meal at a low price precisely because Los Angeles has always been open to our neighbors down south pursuing their best economic opportunity.