Introduction: What is abundance?
There is reason to be deeply optimistic about the future of the US economy. Yes, at the moment we face many headwinds—shortages in labor,1Josh T Smith, “Immigration as One Tool to Fight Inflation,” The Benchmark, June 14, 2022, https://www.thecgo.org/benchmark/immigration-as-one-tool-to-fight-inflation/. housing,2Salim Furth and Emily Hamilton, “Housing Reform in the States: A Menu of Options for 2023,” Policy Brief (Mercatus Center at George Mason University, July 2022), https://www.mercatus.org/publications/urban-economics/housing-reform-states-menu-options-2023. medicine, gasoline, fertilizer,3Frank K. Nti, “Impacts and Repercussions of Price Increases on the Global Fertilizer Market,” USDA Foreign Agricultural Service, June 2, 2022, https://www.fas.usda.gov/data/impacts-and-repercussions-price-increases-global-fertilizer-market. baby formula, and microprocessors continue to linger. At the same time, the rapid development of vaccines, the resiliency of digital technology and communications, and our history of innovation all point to a bright future.
The lesson of these shortages and our post-COVID world is simple: We need to build. We need abundance. With the right policies in place, America can, and will, succeed.
Abundance means greater economic growth, higher quality of life, greater environmental sustainability—all at cheaper prices. A future of abundance is not guaranteed. It is a place for conditional optimism. Meaning that if Congress takes the right steps in important areas, then abundance is within reach.4We take the term from Paul Romer. Paul Romer, “Conditional Optimism,” October 8, 2018, https://paulromer.net/conditional-optimism-technology-and-climate/.
The American people believe in our ability to achieve abundance. According to the CGO Abundance Poll, Americans generally believe in the power of innovation to achieve big goals.5Taylor Barkley and Jennifer Morales, “Abundance Poll,” The Center for Growth and Opportunity at Utah State University, https://www.thecgo.org/research/abundance-poll/.They also believe that governments both facilitate and impede helpful technologies. Three-quarters of Americans believe technology and innovation are good for society and 39% believe technology and innovation will be the primary means through which America will solve the problems we’ll face over the next 100 years.
However, Americans are mostly unsure whether now or the future is the best time to be alive. A quarter of the American public believes right now is the best time to be alive and only 16% believe it will be better 200 years in the future. Forty-two percent aren’t sure. This means there is an opportunity to cast a better vision for the future.
According to the Abundance Poll, Americans say that Congress (59%) and the president (47%) are hurting our opportunities for a prosperous future. The most helpful institutions are businesses (38%) and colleges and universities (37%).
In this paper, we outline steps that Congress could take in technology, environmental, and immigration policies to promote abundance. Each section below provides concrete recommendations Congress could enact today. We chose to focus on these areas because they undergird most economic activity and reforms would cause large improvements in the quality of life of all Americans.
Technology and Abundance
Encourage competitive tech markets
Software companies, including Big Tech companies, remain key economic drivers, sources for private research and development, and platforms that benefit consumers. They should remain empowered to drive economic growth and provide value to consumers. We need a competitive environment so incumbent organizations can’t regulate away startups. Americans are skeptical that a bureaucratic agency can do better at regulating online content than platforms themselves. Over half believe social media companies are justified in their content moderation decisions of all kinds and less than half want the government involved in regulating them.
Improve FDA approval processes
Cheap, accessible, effective, and safe medical technologies and services are key markers of abundance anywhere. The Food and Drug Administration controls access to vibrant sectors of the US economy while keeping consumers safe. According to the Abundance Poll, more than half of Americans want safety to be a focus for the government. They also believe the FDA should conduct safety reviews independently and not accept safety reviews from other countries. This indicates confidence in the FDA when compared with international equivalents.
The agency has also been slow to act. It is receiving more drug approval submissions than ever and approval times are taking longer and longer. Shortening approval times while maintaining safety standards would save lives and boost economic productivity.
To achieve these goals, CGO researchers recommend the following policy changes for the FDA:
- The FDA can shorten review times by allowing post-launch monitoring of drugs. This would permit the FDA to continue to monitor safety after approving new drugs.
- Instead of releasing information only on approved drugs, the FDA should also provide information on drugs that were not approved.6Anna Chorniy, James Bailey, and Emma Blair, “FDA Drug Review Reforms,” Mercatus Center, January 9, 2020, https://www.mercatus.org/publications/healthcare/fda-drug-review-reforms.
- The FDA should be required to estimate costs of time delays in approval processes. For example, the FDA was slower than other countries in approving rapid COVID tests. This policy recommendation would likely alleviate that problem as well as other delays.
- To improve approval speeds, the FDA should prioritize safety and reconsider its role in efficacy testing given safe off-label use of many approved drugs.7 Daniel B. Klein and Alexander Tabarrok, “Do Off-Label Drug Practices Argue Against FDA Efficacy Requirements? A Critical Analysis of Physicians’ Argumentation for Initial Efficacy Requirements,” The American Journal of Economics and Sociology 67, no. 5 (November 2008): 743F775, https://doi.org/10.1111/j.1536-7150.2008.00597.x.
- Congress should consider amending the Emergency Use Authorization (EUA) process. Section 4 of Public Law 108–276, where the EUA legislation resides, should include directives on how decisions should be made at the FDA to grant an EUA. Increased clarity on the process would eliminate delays when quick, safe deployment of medical technology is necessary.
Make broadband a reality for all Americans
Broadband, both wired and wireless, will continue to serve an outsized role in economic growth. It could be both cheaper and more ubiquitous without additional government investment. Therefore, cheap, ubiquitous, high-speed internet connections should be available for all who want them.
To this end, CGO researchers recommend the following:
- The National Telecommunications and Information Administration (NTIA) should create a formal process for the government to engage in commercial spectrum transfers. At present no such process exists.8 US Government Accountability Office, “Spectrum Management: NTIA Should Improve Spectrum Reallocation Planning and Assess Its Workforce,” US Government Accountability Office, January 27, 2022, https://www.gao.gov/products/gao-22-104537.
- Congress should structure a series of hearings to understand how permitting has been expedited in broadband, the gaps that still remain, and the lessons that can be applied to other industries.9 William Rinehart, “Vetocracy, the Costs of Vetoes and Inaction,” The Center for Growth and Opportunity, March 24, 2022, https://www.thecgo.org/benchmark/vetocracy-the-costs-of-vetos-and-inaction/#telecom-broadband.
- The FCC should study what would be needed to make the transition towards a voucher system for low-income households.10Brent Skorup and Michael Kotrous, “Narrowing the Rural Digital Divide with Consumer Vouchers,” Mercatus Center, October 13, 2020, https://www.mercatus.org/publications/technology-and-innovation/narrowing-rural-digital-divide-consumer-vouchers.
Remove barriers to transportation innovation
Transportation speeds have been stagnant since 1958 for both passenger and cargo. Rapid, affordable transportation of people and cargo are core to achieving an abundant economy. The following are ways Congress can spur increased cargo efficiencies and remove barriers to faster passenger travel:
- Create deadlines for the FAA to integrate drones into the airspace.
- To allow supersonic travel once again, Congress could tell the FAA that until it develops a categorical exclusion from NEPA for supersonic flight, it cannot require special authorization for flights exceeding Mach 1 if the aircraft is being operated by its developer and flown between 7 am and 7 pm.
- Moreover, Congress could require the FAA to allow civil supersonic flights over the United States if their cruise sonic boom is shown to be less than 90 PLdB.
Expand employment flexibility
Gig work provides flexibility during uncertain times in the economy. Historical tax data shows a trend toward more work in the gig economy in the late aughts, but this has contracted. Congress should ensure that its policies are agnostic and do not favor particular industries.
The following policies would allow greater expansion in the gig economy:
- Maintain the incentive for traditional employers to offer health insurance plans to their workers and create that same incentive for employers working with independent contractors in the gig economy.11Megan E. Jenkins, Brain Isom, and Chris Koopman, “Tech-Enabled Gig Jobs: Policy Solutions for the Future of Work,” The Center for Growth and Opportunity, April 23, 2021, https://www.thecgo.org/research/tech-enabled-gig-jobs-policy-solutions-for-the-future-of-work/.
- Remove the provision of benefits as criteria for classifying workers as employees or independent contractors.
- Reduce or cap the subsidies to employer-sponsored insurance.12Liya Palagashvili, “Barriers to Portable Benefits Solutions for Gig Workers,” The Center for Growth and Opportunity, October 21, 2020, https://www.thecgo.org/research/barriers-to-portable-benefits-solutions-for-gig-economy-workers/.
Environmental stewardship and abundance
Environmental debates often pit economic growth against environmental health. However, both are essential to provide the quality of life Americans desire. Economic growth can promote environmental health when policies are enacted that encourage innovation and prioritize cooperation over conflict.
The policies outlined below aim to move the US toward a future of abundant, clean energy and flourishing natural resources. Americans’ confidence in that future is uncertain. According to CGO polling, 54% of Americans do not think affordable energy production is likely in the next 50 years. Permitting reforms and electrical grid updates will help enable that future, as will better management of our natural resources through proactive wildfire management and collaboration with private conservation actors.
Faster clean energy development is possible with procedural tweaks
One of the biggest impediments to the clean energy transition is unnecessary delays due to the National Environmental Policy Act (NEPA). The act was intended to ensure that the government considers environmental consequences before undertaking a project.13OP US EPA, “Summary of the National Environmental Policy Act,” www.epa.gov, February 22, 2013, https://www.epa.gov/laws-regulations/summary-national-environmental-policy-act#:~:text=NEPA. It applies to all major federal actions, including permits, policies, regulations, licensing, and grants.
However, a law intended to ensure government projects promote environmental health has become a critical bottleneck in developing clean energy projects. Most of the delays from NEPA are caused by Environmental Assessments (EA) rather than Environmental Impact Statements (EIS), but both are intended to determine the environmental impact of a proposed project. EISs take longer to complete, but there are many fewer of them. On average, about 200 EISs are done each year, while there are nearly 12,000 EAs per year.14 Eli Dourado, “Why are we so slow today?” The Center for Growth and Opportunity, March 12, 2020, https://www.thecgo.org/benchmark/why-are-we-so-slow-today/. Most regulatory delays can then be dealt with by limiting the need for EAs, which are a regulatory invention and were not included in NEPA’s statutory language.15National Environmental Policy Act, 42 U.S.C. (1970), § 4321 et seq, https://www.energy.gov/sites/default/files/nepapub/nepa_documents/RedDont/Req-NEPA.pdf.
An EA is a concise public document prepared by a Federal agency with the purpose of aiding the agency’s compliance with NEPA. It is used to support the agency in determining between two outcomes, an EIS or a Finding of No Significant Impact (FONSI). If the following rules were changed, the agency could determine whether an EA was necessary to make a finding of no significant impact, meaning many delays could be prevented before they emerge.
Two changes would allow an agency to issue a FONSI without going through an EA if it believes it is clear there really is no significant environmental impact.
- “40 CFR 1501.5(a) shall have no force or effect.” This section of NEPA requires agencies to prepare an EA even for “a proposed action that is not likely to have significant effects”.16Findings of No Significant Impact, 40 C.F.R. § 1501.6, https://www.law.cornell.edu/cfr/text/40/1501.6. Removing that requirement would still leave in place 1501.5(b) which says that an agency may prepare an EA any time it feels it would be helpful.
- Striking the words “based on the environmental assessment” in 40 CFR 1501.6(a). This allows the agency to prepare a FONSI without first conducting an EA.17 Environmental Assessments, 40 C.F.R. § 1501.5, https://www.ecfr.gov/current/title-40/chapter-V/subchapter-A/part-1501/section-1501.5.
These changes would leave NEPA intact, ensuring the government considers environmental impacts in its planning, but make it easier for projects to be completed without unnecessary delays and uncertainty.
An even simpler procedural shift could catalyze the development of clean energy on federal land. Categorical exclusions under the Energy Policy Act enable certain oil and gas projects to bypass the NEPA permitting process. This lowers the cost of exploration and development, enabling faster permitting and exploration. If we want to transition to energy from cleaner sources, we should expand these categorical exclusions to give cleaner technologies, like geothermal, the same advantages. Geothermal is a cleaner alternative to oil and gas that in some cases can use the very same wells and has significant skill overlap, providing clean energy jobs for oil and gas workers needing to transition.18Aletta Leitch, Brendan Haley, and Sara Hastings-Simon, “Can the Oil and Gas Sector Enable Geothermal Technologies? Socio-Technical Opportunities and Complementarity Failures in Alberta, Canada,” Energy Policy 125 (February 1, 2019): 384–95, https://doi.org/10.1016/j.enpol.2018.10.046.
Resilient grids enable secure and affordable access to electricity
Investing in the electrical grid is essential to provide Americans with abundant, affordable energy, and to be prepared for the increased electrical demand as more things become electrified.
Much of the existing electrical infrastructure is like having dial-up in an age of broadband. The way we price electricity and monitor energy use has not changed significantly in the last century. A system built to move electricity in one direction must become multi-directional,19Lynne Kiesling, “Innovations and Decentralized Energy Markets,” The Center for Growth and Opportunity, March 23, 2020, https://www.thecgo.org/research/innovations-and-decentralized-energy-markets/. in part because rooftop solar turned consumers into producers who can now sell their power onto the electrical grid.20Grant Patty, Josh Smith, & Katie Colton, “Net metering in the states,” The Center for Growth and Opportunity, July 31, 2018, https://www.thecgo.org/research/net-metering-in-the-states/.
Alongside changes in supply, electricity demand has also changed. Smart thermostats make coordination between electricity users automatic and simple. Today, consumers can be called upon to consume less through demand-side programs that adjust a home’s electricity consumption during moments of stress on the electrical grid.21“Demand Response.” Energy.gov, www.energy.gov/oe/activities/technology-development/grid-modernization-and-smart-grid/demand-response; Kiesling, L. Lynne. “Promoting Innovation in the Electricity Industry.” Papers.ssrn.com, 8 June 2010, ssrn.com/abstract=1621973, http://dx.doi.org/10.1111/j.1468-0270.2010.02000.x; Kiesling, Lynne, and Vernon Smith. “How Texas Electricity Regulators Can Use Markets to Make the Grid More Reliable.” Dallas News, 28 Feb. 2021, www.dallasnews.com/opinion/commentary/2021/02/28/how-texas-electricity-regulators-can-use-markets-to-make-the-grid-more-reliable/.
Two changes would bring the electrical grid closer to a modern system reflecting today’s energy generation and consumption capabilities:
- Legislators and utility regulators should work to expand alternatives to state-granted monopolies on electricity provision. As a guide for first steps, regulators can first quarantine the monopoly to the platform on which electricity providers compete.22Michael Giberson and L. Lynne Kiesling, “Governance for Networks: Regulation by Networks in Electric Power Markets in Texas,” In Regulation and Economic Opportunity: Blueprints for Reform, edited by Adam Hoffer and Todd Nesbit, p. 361, Logan, UT: The Center for Growth and Opportunity, 2020, https://www.thecgo.org/wp-content/uploads/2021/04/Regulation_and_Economic_Opportunity_Blueprints_for_Reform.pdf#page=361.
- Second, the wholesale and retail markets for electricity should be brought together.
Together, these steps will move more of the country towards retail choice. Choice offers more options for consumers and better reflects the realities of electricity provision.23Jerry Ellig, “Retail Electric Competition and Natural Monopoly: The Shocking Truth,” In Regulation and Economic Opportunity: Blueprints for Reform, edited by Adam Hoffer and Todd Nesbit, p. 277 – 302, Logan, UT: The Center for Growth and Opportunity, 2020, https://www.thecgo.org/wp-content/uploads/2021/04/Regulation_and_Economic_Opportunity_Blueprints_for_Reform.pdf#page=304&zoom=100,0,0.
Proactive wildfire management can improve human and environmental health
Effective management of wildfires will be crucial to maintaining both economic prosperity and ecological resilience in the coming decades, as more people move into areas at risk of wildfire damage.24Insurance Information Institute, “Facts + Statistics: Wildfires,” accessed August 3, 2022, https://www.iii.org/fact-statistic/facts-statistics-wildfires. Daoping Wang et al., “Economic Footprint of California Wildfires in 2018,” Nature Sustainability 4, no. 3, March 2021, https://www.nature.com/articles/s41893-020-00646-7.
Preventative measures like prescribed burns and mechanical thinning are essential forest management tools that can help reduce the intensity of and damage from wildfires. Quicker and more effective fire management can be achieved by shortening the environmental review process and partnering effectively with non-federal stakeholders including tribes and private groups.
- Add preventative fire projects to the list of actions categorically excluded from NEPA. Fire prevention projects are subject to NEPA and the review process generally takes between three and a half to seven-plus years to complete.25Eric Edwards and Sarah Sutherland, “Does Environmental Review Worsen the Wildfire Crisis,” The Property and Environment Research Center, June 2022, https://www.perc.org/wp-content/uploads/2022/06/PERC-PolicyBrief-NEPA-Web.pdf. Such lengthy procedural requirements often mean that destructive wildfires occur in the areas considered while federal agents wait for an analysis of the environmental impacts of a much smaller, controlled burn.
- Allow Native American tribes to use funds from the Reserved Treaty Rights Land (RTRL) program—which currently provides funds to conduct preventative measures on lands adjacent to tribal lands—to also address prevention needs on tribals lands.
- Increase the value of working as a prescribed firefighter by improving job quality for fire crews and reducing unnecessary regulatory barriers that put would-be firefighters out of jobs.
- Provide increased job security to seasonal wildland firefighters by assigning them to established prescribed burn crews in the off-season.
- Work with states that have inmate-supported fire crews to remove licensing or other barriers that may prevent them from continuing to work as wildland firefighters after they have served their sentence.
Partner with private actors to promote conservation across all land types
The myriad conservation responsibilities of the federal government must be enacted across a vast geographic range on both public and private land. To avoid patchwork conservation and unnecessary litigation, policymakers should take advantage of private conservation by establishing common standards and expanding cooperative programs that engage private landowners.
- Allow private land that meets qualifications to be counted toward the 30×30 initiative.26Megan E. Jenkins and Harrison Naftel. “Making Private Lands Count for Conservation: Policy Improvements toward 30×30.” The Center for Growth and Opportunity, August 4, 2022. https://www.thecgo.org/research/making-private-lands-count-for-conservation/. Conservation easements are a common private conservation method that can help achieve federal conservation goals if properly managed.
- Eliminate syndicated conservation easements or provide clear and sufficiently strict conservation criteria that easements must meet in order to get a tax deduction.
- Establish a federal-level database to share information about the conservation easement market and metrics on whether easements are meeting their conservation goals
- Expand partnerships with non-federal partners through the Conservation Reserve Enhancement Program and Working Lands for Wildlife, which rely on state/local governments and private conservation groups to engage landowners in positive conservation.27Megan E. Jenkins, Jennifer Morales, Rebekah Yeagley, and Sarah Bennett. “Cooperative Conservation: Determinants of Landowner Engagement in Conserving Endangered Species.” The Center for Growth and Opportunity, August 4, 2022. https://www.thecgo.org/research/cooperative-conservation-determinants-of-landowner-engagement-in-conserving-endangered-species/.
- Limit liability under the Clean Water Act for private groups who want to help clean up abandoned mines. Congress could authorize “Good Samaritan permits” that would limit liability to violating the permit terms or making the cleanup site worse.28Jonathan Wood. “Prospecting for Pollution: The Need for Better Incentives to Clean Up Abandoned Mines,” The Property and Environment Research Center, February 11, 2020. https://www.perc.org/2020/02/11/prospecting-for-pollution-the-need-for-better-incentives-to-clean-up-abandoned-mines/. Davis, Joe. “Perfection Getting in the Way of Progress.” The Center for Growth and Opportunity, March 3, 2022. https://www.thecgo.org/benchmark/perfection-getting-in-the-way-of-progress/.
Immigration and abundance
US immigration policy is often controversial, but this is despite the usual findings in immigration research showing wide benefits from even small increases in immigration.29Christian Dustmann and Ian P. Preston, “Free Movement, Open Borders, and the Global Gains from Labor Mobility,” Annual Review of Economics 11, no. 1 (August 2, 2019): 793–94, 805, doi:10.1146/annurev-economics-080218-025843. Federal policymakers interested in raising incomes and ensuring the future prosperity of America should see immigration policy as a powerful tool.
Immigration promotes abundance by expanding entrepreneurship and innovation that provide both new jobs for natives and new experiences, goods, and services for the world. This culminates in higher per capita income for Americans.
Three promising immigration tools to promote abundance are:
- Treating US degrees as work visas for foreign students,
- Expanding the H-1B visa program, and
- Using immigration-generated fees to promote STEM education and retraining for US natives.
Expand immigration to boost entrepreneurship and innovation
The US has been a major beneficiary of the talents of people from across the globe. William Kerr’s research shows that from 2000 to 2010, the US took in many more inventors than the rest of the world.30William R. Kerr, The Gift of Global Talent: How Migration Shapes Business, Economy & Society (Stanford, California: Stanford Business Books, an imprint of Stanford University Press, 2019); William R Kerr, “Students, Skilled Immigration and Our Path to Recovery,” in Immigration and Economic Recovery after COVID-19, ed. Josh T. Smith (The Center for Growth and Opportunity at Utah State University, 2021).
Figure 1. Global Inventor Migration from 2000 to 201031Graphic adapted from William Kerr’s research.
This data shows that the US has long been a place that many want to come to in order to grow their ideas into businesses or as basic research. For example, a team of four economists showed that from 1976 to 2012, immigrant inventors produced 23 percent of all patents in the US. This is an outsized proportion as immigrant inventors are just 16 percent of all US inventors.32Shai Bernstein et al., “The Contribution of High-Skilled Immigrants to Innovation in the United States,” July 11, 2019, 76.
Some of this effect is because of the benefits of immigrant students. Economists studying the connections between immigration and innovation show that a one percentage point increase in immigrant college graduates’ population increases patents per capita by between 9 and 18 percent.33Jennifer Hunt and Marjolaine Gauthier-Loiselle, “How Much Does Immigration Boost Innovation?,” American Economic Journal: Macroeconomics 2, no. 2 (April 2010): 31–56, doi:10.1257/mac.2.2.31. The researchers conclude that a college graduate immigrant patents twice as much as his or her native counterpart.
Immigrants are also more likely to start businesses than US natives. In fact, they start more small, medium, and large businesses than natives. This extends all the way to the largest companies in the country, the Fortune 500. These are jobs that also pay slightly more than jobs at native-founded firms.34Pierre Azoulay et al., “Immigration and Entrepreneurship in the United States,” American Economic Review: Insights 4, no. 1 (March 1, 2022): 71–88, doi:10.1257/aeri.20200588. About half of America’s startups valued at over $1 billion were founded by immigrants.35Stuart Anderson, “Immigrant Entrepreneurs and US Billion-Dollar Companies,” NFAP Policy Brief (National Foundation for American Policy, July 2022), https://nfap.com/wp-content/uploads/2022/07/2022-BILLION-DOLLAR-STARTUPS.NFAP-Policy-Brief.2022.pdf.
Because immigration increases innovation, it improves the living standards of all Americans. Immigration economists estimate that because immigrants increased the number of people working in science, technology, engineering, and math (STEM) fields, immigration is responsible for about one-third of the US’s economic growth from between 1990 and 2010.36Giovanni Peri, Kevin Shih, and Chad Sparber, “How Highly Educated Immigrants Raise Native Wages,” VoxEU.Org, May 29, 2014, https://voxeu.org/article/how-highly-educated-immigrants-raise-native-wages; Giovanni Peri, Kevin Shih, and Chad Sparber, “STEM Workers, H-1B Visas, and Productivity in US Cities,” Journal of Labor Economics 33, no. S1 (July 1, 2015): 252, doi:10.1086/679061.
To put this into concrete terms—without these immigrants, the native US per capita income would have been around 10 percent less in 2010 than it was with these immigrants. Immigrants enrich the lives of natives.
This 10 percent estimate is larger than other estimates, but that immigration boosts per capita GDP is a common finding.37Francesc Ortega and Giovanni Peri, “Openness and Income: The Roles of Trade and Migration,” Journal of International Economics 92, no. 2 (March 1, 2014): 231–51, doi:10.1016/j.jinteco.2013.11.008; Hunt and Gauthier-Loiselle, “How Much Does Immigration Boost Innovation?,” 52. Another study shows that a one percentage point increase in the immigrant population share raises income per person by about six percent.38Ortega and Peri, “Openness and Income,” 248.
Build a better pathway for skilled immigration to the US
Members of Congress interested in using immigration policy to promote abundance have a variety of options. These include:
- Treating US degrees as work visas for foreign students,
- Expanding the H-1B visa program, and
- Using immigration-generated fees to promote STEM education and retraining for US natives.
On the first, the US makes it difficult for immigrant students to transition to work.39Sadikshya Nepal, “The Challenging Transition from an International Student Visa to an H-1B: A Primer,” The Bipartisan Policy Center, July 15, 2020, https://bipartisanpolicy.org/blog/the-challenging-transition-from-an-international-student-visa-to-an-h-1b-a-primer/. Two primary skilled immigrant programs, Optional Practical Training (OPT) and the H-1B visa are too limited. For a foreign student who wants to start a company, they face either a lottery in the case of the H-1B system or a short timeline of just a few years with OPT. An easy solution to this is to change student visas so that they provide work authorization once a student successfully graduates from a US-based university.
Expanding the H-1B program can also promote prosperity in the US. The number of annual 85,000 H-1B visas has not kept pace with the US economy. In 2004, the last year the program was adjusted, the US economy was a little more than $12 trillion. In 2021, the US economy was almost twice that size at $22 trillion.40U.S. Bureau of Economic Analysis, Gross Domestic Product [GDP], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDP, March 23, 2022. The US has effectively cut H-1B visas by almost half relative to the size of the US economy.41Josh T. Smith, “Competing for People,” The Benchmark, May 25, 2021, https://www.thecgo.org/benchmark/competing-for-people/.
Expanding the H-1B program can be done by simply raising the current cap of 85,000, perhaps doubling or tripling it as members of Congress have already proposed. Or it could be indexed to the US’s economy so that it grows as the economy does. An analysis of expanding the H-1B program found that, in particular, low-wage workers benefited because the additional immigration spurred additional job creation. That represented more opportunities for these workers.42Michael E. Waugh, “Firm Dynamics and Immigration: The Case of High-Skilled Immigration,” in High-Skilled Migration to the United States and Its Economic Consequences (University of Chicago Press, 2017), 205–38, https://www.nber.org/books-and-chapters/high-skilled-migration-united-states-and-its-economic-consequences/firm-dynamics-and-immigration-case-high-skilled-immigration.
Another option is to remove the cap entirely and apply a labor market test instead. This would replace the cap by emphasizing two existing requirements of the H-1B program. First, that employers look for natives before hiring immigrant workers. Second, that employers continue paying higher wages to immigrant workers.43This adapts a proposal from the Hoover Institution’s Tim Kane. Tim Kane, The Immigrant Superpower: How Brains, Brawn, and Bravery Make America Stronger (New York, NY: Oxford University Press, 2022), 248. This would set a merit-based standard rather than a regulatory ceiling that limits US companies’ growth. Research already shows that employers turn to H-1B visas when they can’t find Americans to fill the position44Morgan Raux, “Looking for the ‘Best and Brightest’: Hiring Difficulties and High-Skilled Foreign Workers,” Working Paper (The Center for Growth and Opportunity at Utah State University, February 2, 2021), https://www.thecgo.org/research/looking-for-the-best-and-brightest/. and that immigrants are more expensive than natives to hire.45Omid Bagheri, “Are College Graduate Immigrants on Work Visas Cheaper than Natives?,” n.d.; David J Bier, “H-1B Wages Surge to the Top 10% of All Wages in the US,” Cato at Liberty Blog, April 7, 2022, https://www.cato.org/blog/h-1b-wages-surge-top-10-all-wages-us.
Expanding the H-1B system also directly supports US natives pursuing STEM. The US already uses fees related to H-1B visa processing to promote STEM education. From fiscal years 1999 to 2018, H-1B fees were almost $5 billion.46“Employer-Paid H-1B Visa Fees for College Scholarships and Job Training,” NFAP Policy Brief (National Foundation for American Policy, April 2019), https://nfap.com/wp-content/uploads/2019/04/Employer-Paid-H-1B-Visa-Fees.NFAP-Policy-Brief.April-2019-2.pdf. That is about $250,000,000 each year. In February of 2020, the Department of Labor gave $100 million in grants to retrain natives.47“H-1B Skills Training Grants,” U.S. Department of Labor, accessed March 29, 2022, https://www.dol.gov/agencies/eta/skills-grants/h1-b-skills-training. The US can continue to do this and do more of it by expanding immigration.
A promising option was proposed by Lindsay Milliken and Doug Rand. They propose raising H-1B application fees to account for inflation and using the funds to expand the American Competitiveness and Workforce Improvement fund that promotes training for US workers and research fellowships.48Lindsay Milliken and Doug Rand, “Building an Evergreen $1 Billion Fund for Science and Technology Career Advancement,” n.d., 24. The Department of Labor and the National Science Foundation receive these funds to support STEM education and research by US natives.
Any of these three policies will promote the economic success of the US. Expanded skilled immigration will promote the US’s place as the global leader in technological advancements. It will promote higher per capita incomes and expand job opportunities for the entire country.
The goal of reforming environmental, immigration, and technology policies is to ensure that the future is brighter than today. In a world of abundance, Americans have access to the resources and technology they need to live thriving economic lives. The right reforms move us toward this future where clean energy is abundant and affordable, all Americans have reliable access to the internet and life-saving drugs, and economic growth promotes flourishing communities and ecosystems.
A majority of Americans aren’t convinced that someone born in the future will have a better life than we do right now. But no country in the world is better poised than the United States to push forward innovations that will improve life for future generations. The policies listed above will help create an abundant society, one in which we can trust that our grandchildren will live a better life than we are living.