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Michigan's Global Economy

Wednesday, April 15, 2015   (0 Comments)
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From The Detroit News' DVoice
By Steve Tobocman

Politicians are apt to hold press conferences for projects that announce even a few hundred jobs. Can you imagine the headline for a government action that produced 15,000 jobs that paid salaries ranging from $60,000 to even $100,000?

Research from the Partnership for a New American Economy—a collection of forward-thinking mayors and CEOs who embrace comprehensive immigration reform—suggests that the federal cap on H-1B visas for skilled immigrant workers cost metro Detroit as many as 15,000 such good-paying jobs for native-born workers from visa denials in 2007 and 2008 alone. (Native-born jobs are the result of increased economic growth resulting from companies’ ability to expand after filling the unmet talent needs for which H-1B visas are used).

On Tuesday, the federal government closed this year’s H-1B application period just five workdays after opening the process. The H-1B visa enables U.S. companies who have identified specific international talent, to whom they are paying at least prevailing wage, to start between October 1, 2015 and September 30, 2016. Experts predict that the 65,000-visa cap will be exceeded by a factor of three-to-one. Last year, the federal government received 172,500 H-1B applications within just five days of the application period opening up. As a result, the immigration authorities hold a lottery to determine which companies and which immigrants can win the right to work together.

It seems almost un-American to deny U.S. companies the right to pay prevailing wage to the skilled workers they want to employ on U.S. soil, doesn’t it? In reality, these caps incentivize American companies to locate these jobs overseas.

The issue is critical to metro Detroit.

New research from the Brookings Institution ranks metro Detroit as using the 8th largest number of H-1B visas in 2013, ahead of Seattle, Boston, and North Carolina’s Research Triangle, as well as Houston, Philadelphia, and Atlanta! Moreover, as a percent of the regional workforce, both metro Detroit and metro Ann Arbor are among the nation’s top 10 metros in prevalence of H-1Bs!

Michigan’s immigrants comprise roughly 6 percent of our state’s population, but account for more than 20 percent of Michigan’s STEM workers with advanced degrees. While STEM shortages continue to grow, over 40 percent of the students earning masters and PhDs in STEM fields from Michigan colleges and universities, and over 60 percent of the PhDs in engineering from 2006-2010, went to international students and immigrants. In fact in 2011, 74 percent of the patents awarded to the University of Michigan system had at least one foreign-born inventor. And each foreign-born graduate for a U.S. university with an advanced degree who stays in the U.S. to work in a STEM occupation is estimated to create an average of 2.62 additional jobs for U.S. workers.

Tel Ganesan, the current Board Chair of TiE Detroit and founder of Kyyba is such a story. Tel moved to Michigan in 1989 to earn a graduate STEM degree at Wayne State and then worked for Chrysler for 13 years, first on his student visa, then on an H-1B before receiving a green card and eventually becoming a citizen. In 2005, Tel launched Kyyba, an applications software and staffing solutions provider that currently employs some 450 workers worldwide with 250 of those employees in Michigan.

On Thursday, April 9th, leaders from Global Detroit, the Detroit Regional Chamber, the Michigan Office for New Americans, MichBio, and Ann Arbor SPARK will be joining Don Hicks, the President and CEO of LLamasoft, an Ann Arbor software development company to talk about the importance of global talent and the impacts of our broken federal immigration system.

Don is a U.S. military veteran, is the President and CEO of LLamasoft in Ann Arbor. Don is an incredible entrepreneur and job-creator whose cutting-edge software in the supply chain and logistics industry helps Fortune 500 companies, as well as the U.S. military, move goods and services. LLamasoft’s software is even used to help deliver much-needed anti-malaria drugs to developing countries. LLamasoft hires the best and brightest STEM graduates from American universities and relies on international talent to support the 200 employees (most located in Michigan), many of whom make six-figure salaries.

Don uses words like “stunning,” “incomprehensible,” and “tragi-comic” to describe federal immigration policy. Given Don’s track record at helping our regional economy create jobs—not to mention the value of LLamasoft’s product to American industry, the nation’s defense, and global health—I think his first-hand experience is more than an anecdote. Economic research suggests that H-1B denials are costing tens of thousands of good-paying jobs to metro Detroit.

And while I know that many members of Congress would eager to remove the barriers that hamper businesses like LLamasoft, the national debate on these issues is clouded in misinformation and fear.

Perhaps more of us need to do our part to inform our colleagues, friends, families, neighbors, and communities about the real economics surrounding immigration. It may be the single best catalyst in revitalizing Michigan’s economy.

Steve Tobocman has spent the past three years spearheading Global Detroit, a regional economic revitalization strategy for the Detroit area focused on immigration and global connections. Steve is the Managing Partner of New Solutions Group, a mission-driven consulting firm that develops smart, innovative, and collaborative solutions that often challenge old paradigms that often restrain success and opportunity. From 2003-2008, Steve served as the State Representative from Michigan 12th State House District in southwestern Detroit, one of the state’s largest immigrant communities. In his last term, Steve served as the Majority Floor Leader, the second-ranking position in the House. During his time in the Michigan Legislature, Steve spearheaded efforts to protect immigrants from predatory immigrant service providers and wrote one of the nation’s strong consumer protection laws for immigrants, the Michigan Immigration Clerical Act. He also championed a variety of community economic development policies. Currently, Steve also splits his time with Global Detroit by co-directing the Michigan Political Leadership Program at Michigan State University, as well as the Michigan Foreclosure Task Force, a 200-member organization that works to fight the foreclosure crisis in Michigan. He also has served as the Interim Director for the Community Development Advocates of Detroit, the Detroit trade association for community development. Follow him @GlobalDET.

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