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Slaughter & Rees Report: Immigrants for the Heartland

America’s struggling communities are in desperate need of high-talent immigrants. We should welcome them, say Slaughter and Rees.

Last year America’s population grew by just 0.4 percent—the slowest growth rate in over 80 years. 

Over the past decade, it grew by an annual average rate of just 0.7 percent, in contrast to a 1 percent or higher average rate over the last 30, 50, and 100 years. Driving this deceleration has been a combination of forces, including fewer births, an aging population, and mostly flat rates of immigration.

But this slow overall population growth of recent years masks tremendous heterogeneity across America’s approximately 3,100 counties. About half of all U.S. counties are now losing population outright each year: 38 million Americans live in the 41 percent of U.S. counties that are experiencing Japan-like rates of demographic decline.

About half of all U.S. counties are now losing population outright each year​.

This decline is stark when examining prime working age adults, ages 25 to 54. Fully 80 percent of U.S. counties—home to 149 million Americans altogether—lost prime working age adults from 2007 to 2017. And it is even starker in terms of talent. In the decile of fastest-shrinking counties, the share of the adult population with at least a college degree is only 15.8 percent today. This level of educational attainment is just half what it is in America’s fastest-growth counties; it is equivalent to where America overall was back in 1978, or to where Mexico is today.

There are far too many communities in America struggling against the loss of prime-age, high-skill workers that is fueling falling productivity, fewer start-ups, stagnant wages and real-estate prices, and strained local government finances.

What to do? On Monday of this week, The Wall Street Journal kindly ran an op-ed column by one of us (Matt S) that—drawing on a new report by the Economic Innovation Group—proposes a solution: a new “heartland visa” that would allow more high-talent immigrants into America who would agree to live and work in demographically struggling communities.

Readers of this missive know well that America’s immigration policy is already far too restrictive. Last month, as it has for years, America inexplicably choked off its dynamic potential despite a wealth of research and experience showing things could be different.

There are far too many communities in America struggling against the loss of prime-age, high-skill work.

On April 1, U.S. Citizenship and Immigration Services began accepting new H-1B visa petitions for the upcoming fiscal year. An H-1B visa allows a company to create a new job for a highly educated foreigner to work in the U.S. for at least three years. The H-1B program, which accounts for nearly all of America’s skilled immigration, imposes an annual cap of 85,000 new visas: 65,000 with at least a bachelor’s degree and 20,000 with at least a master’s degree.

And yet again, demand for these new H-1B visas far exceeded supply. On April 5, USCIS stopped accepting new petitions because more than the cap had already been received. There is a real, tangible cost to the U.S. economy of allocating far fewer skilled-immigrant visas than companies need. Most immediately, the cost is forgone jobs created in the companies and beyond. More broadly, the cost is forgone ideas, innovation, and connections to the world.

But this cost is not borne equally across America, because high-talent immigrants do not spread equally across America. In 2013, one-fourth of all H-1B applications were from companies based in just three metropolitan areas—New York, San Francisco, and San Jose—and half of them were from just nine metropolitan areas. Today, America’s 20 most populous counties account for 19 percent of the country’s total population—but fully 37 percent of its skilled immigrants.

There is a real, tangible cost to the U.S. economy of allocating far fewer skilled-immigrant visas than companies need.

As acute as the need is for high-talent immigrants for America overall, it is even more acute for America’s communities where the loss of prime-age, high-skill workers is fueling falling productivity, fewer start-ups, stagnant wages and real-estate prices, and strained local government finances. Place-based “heartland” visas (PBVs) could help arrest this decline.

PBVs would ideally be additive to America’s overall H-1B visa cap, in part to alleviate that cap’s restrictiveness. Struggling communities would be eligible for PBVs if they met some measure of insufficient dynamism and talent. An immigrant arriving on a PBV would be required to find and maintain a job in her/his host community within some period of time. Ideally, and in contrast to H-1B visas today, PBVs would also be granted to entrepreneurs aiming to start a new business.

Don’t believe that struggling communities could attract motivated, talented immigrants? Consider Ohio, a state with a large number of declining-population counties and communities. A recent study found that in 2016, immigrants accounted for only 4.2 percent of the state’s overall population—but fully 11.8 percent of its science, technology, engineering, and mathematics workers. From 2010 to 2015, the number of immigrant entrepreneurs in Ohio increased by 120,000—while the rate at which native-born Americans opened businesses went down. Immigrants also accounted for more than one of every five “Main Street” business owners in the region, which generated about 239,000 jobs for blue-collar, U.S.-born workers. Said one Cincinnati business leader, “The immigrants that we’re attracting are disproportionately more educated than the native population, so they bring a lot of, for instance, STEM technical degrees into our region that are necessary to fill jobs that we have available. They are increasingly more of our physicians, more of our engineers.” Imagine how much more dynamic Ohio could be with a PBV program.

The potential of PBVs has already been realized in Canada and Australia, two countries whose overall pro-growth immigration policies are widely and rightly lauded. Canada’s Provincial Nominee Program allows provinces and territories to nominate immigrants who intend to settle in them. Before the PNP, 87 percent of all Canadian immigrants settled in Ontario, British Columbia, or Quebec. But under the PNP, from 2010 to 2015 76 percent of PNP immigrants planned to settle outside these three economic centers. Indeed, in Newfoundland and Labrador—the country’s most sparsely populated province—fully 57 percent of its PNP immigrants have remained there. A 2017 report by the Canadian government concluded that “the program spreads the benefits of immigration beyond major cities and helps fill local employment gaps.”

America today does not welcome enough high-talent immigrants. America’s struggling communities are especially in need of them. Place-based visas could address both these problems. Let’s welcome immigrants across America—to the benefit of us all.

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