Features & Columns

Silicon Valley Economy Cries Out
for Immigration Reform

The backlog for green cards has hit immigrant entrepreneurs and Silicon Valley businesses hard
Pratik Dakwala

Pratik Dakwala arrived in the United States from India 13 years ago. He started the application process for his green card nine years ago. He's still waiting.

"You have no idea how frustrating it is," Dakwala says.

A core member of Immigration Voice, a nonprofit organization and online forum for employment-based green card applicants, Dakwala currently works as a marketing consultant in San Jose. If you have the potential to create jobs, the odds of becoming a permanent U.S. resident shouldn't be comparable to striking the lottery. But for some of the most talented workers in Silicon Valley and nationally, the employment-based green card process ranges from random to a rigged game.

In 2004, only 16 percent of legal immigrants were categorized as skilled workers. But over the past nine years, the employment-based green card process has backlogged and retrogressed so much that people must wait several years or even decades to become permanent residents. Applicants from China and India can expect the longest waits, because no more than 7 percent of the annually allotted 140,000 employment-based green cards may be issued to natives of any one country.

"You see colleagues from other countries get their visa in six months to a year," Dakwala says.

A recent Kauffman Foundation study found that of all engineering and tech companies founded by immigrants in the last six years, 41.3 percent had Indian or Chinese founders. Vivek Wadhwa, one of the study's co-authors, suggests that Congress's inability to enact immigration reform for the highly skilled is adversely affecting job creation, particularly in Silicon Valley startups. These immigrants either return home or look elsewhere to start a business, says Wadwha, whose book, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, was published in October.

Since 2005, the proportion of immigrant-founded companies in Silicon Valley has dropped 8.5 percentage points, from 52.4 percent to 43.9. The proportion of immigrant-founded companies nationwide has dropped from 25.3 percent to 24.3 percent since 2005.

Emily Lam, senior director of health care and federal issues for Silicon Valley Leadership Group (SVLG), a nonprofit that advocates on behalf of local businesses, notes that it's impossible to prove a negative proposition about the impact on the local economy, but she adds that the raw data suggest a flaw in the system.

"It's hard to put a price on that kind of thing, other than that when we see more innovation in startups abroad, more technology developed abroad, that's probably the best indicator of how it's hurting us," she says. "We don't know if we just sent away the next Sergey Brin [Google's co-founder] or someone like that. We don't know what they would have done here versus there."

Aihui Ong is the founder and CEO of Love With Food, a gourmet food-subscription service based in Santa Clara. She came to the United States from Singapore in 1999 and received her green card in 2003, a few years after applying.

"It's a terrible process to go through; a lot of paperwork, a lot of fees, and you don't know how long it will take," Ong says. Had she come from India or China, where the majority of high-skilled immigrants coming to America were born, the wait could have taken far longer.

"Zimbabwe has the same number of H-1 visas as China," points out Lam, who along with SVLG officials and local business owners are lobbying politicians in Washington, D.C., this week for immigration and tax reform. "I think when these caps were created they were arbitrary. We're at a very different place now."

Congress has yet to pass any legislation that would expedite wait times for employment-based green cards. Either eliminating the per-country limits or providing quota exemptions for foreign students who earn advanced degrees in science, technology, engineering or mathematics—STEM fields—would constitute significant improvement, according to a brief from the National Foundation for American Policy.

The Fairness for High-Skilled Immigrants Act, or H.R. 3012, would eliminate the per-country ceilings that particularly hurt Chinese and Indian applicants. According to the most recent quarterly report, about 12,170—or about 8 percent—of the pending applications for employment-based green cards are from China. Roughly 60 percent, almost 93,000, are from India. The government admits those numbers are probably low.

H.R. 3012 passed by a huge margin in the House of Representatives in November 2011, but it went nowhere after Sen. Chuck Grassley (RIA) put a hold on the bill. He lifted that hold this summer, but no action has been taken by the lame duck Senate. In September, Immigration Voice held a rally in downtown San Jose in support of the bill, but no action will be taken until next year under the newly elected Congress.

H.R. 6429, the STEM Jobs Act, is another bill that addresses high-skilled immigrants already living in the United States, but it did not pass in September. The bill would have allocated up to 55,000 green cards per year to immigrant graduates with advanced degrees in STEM fields. However, there were drawbacks.

U.S. Congresswoman Zoe Lofgren (DSan Jose) voted against the bill, because it would have sacrificed the Diversity Visa Lottery Program for the new allocation of visas for STEM graduates. The lottery program provides up to 55,000 visas each year to citizens from countries with historically low rates of immigration to the U.S. The majority of these visas go to applicants from Africa, particularly in Egypt, Nigeria and Ethiopia.

Dakwala argues that the bill is also flawed because it would increase backlogs and add complexity to an already confusing process. The House is expected to vote on a slightly revised version of H.R. 6429 at the end of the week. The new bill still eliminates the lottery program and boosts the number of green cards available to foreign graduates.

Currently, when foreign students finish their graduate studies, they often leave the country or apply for an H-1B visa, which allows for up to six years of residence. The US only issues 85,000 H-1B visas for highly skilled workers every year, and the temporary nature of the visas hinder those who hold them from making long-term commitments. Even advancing one's career presents difficulties, because a promotion or new job title could require restarting the application process.

"For every decision," Dakwala says, "you have to put the immigration issue in front of it."

His application delay has meant postponing things like buying a house or starting a company. Ong admits that without a green card, she would not have been able to have her own business.

"Having a green card is like striking the lottery," she says. "It's the price you have to pay to do the work you want."

Ong started her company 10 months ago, and already she's hired seven people. Nationwide, immigrant founders of engineering and technology companies have employed roughly 560,000 workers and generated an estimated $63 billion in sales from 2006 to 2012, according to the Kauffman Foundation.

"As an entrepreneur, I'm creating jobs," Ong says. "The government should speed up the green card process."