Here's an interesting new book from Jacob Funk Kirkegaard warning of the dilemma America faces as our skilled workers are retiring faster than they're being replaced and our immigration policies won't keep up with the demographic changes. Here's the gist of the book's conclusions:

America rose
to economic prominence on the shoulders of the most highly skilled workforce in
the world. However, during the last 30 years, skill levels in the US workforce
have stagnated. Americans aged 25-34 today do not possess higher skills than do
their baby boomer parents. So when American baby boomers retire, they will take
as many skills with them as their children will bring into the US workforce.
While their parents may have been "the brightest kids on the global trading
block" when they entered the workforce, Americans entering the workforce today
barely make the global top ten. America is no longer a skill-abundant country
compared with an increasing share of the rest of the world. As a result, in the
coming decade, America could face broad and substantial skill
shortages.

Successful implementation of education policies will produce
more high-skilled Americans only in the long term. In the short to medium term,
America will increasingly need foreign high-skilled workers and will therefore
have to reform its high-skilled immigration policies and procedures not only to
welcome the best and the brightest but also to make it easier for them to
stay.

Meanwhile, as America debates the merits of immigration reform,
other rich countries, such as the United Kingdom, Canada, Australia, France, and
Germany, have rapidly revamped their high-skilled immigration systems, turning
the United States into only one of many destinations for high-skilled
immigrants. Moreover, traditional origin countries of high-skilled emigrants to
the United States, such as China and India, have actively begun luring their
nationals back with special offers.

For America to regain its leadership
in global talent, it must urgently reform its high-skilled immigration programs,
particularly the H-1B temporary work visa and legal permanent resident (green
card) programs. The two programs play a substantial role in bringing in foreign
high-skilled workers and permanently keeping them here and could play an even
bigger role as demand for high-skilled workers in the US economy
increases.

This study verifies that concerns for the plight of American
high-skilled workers in the face of significant inflows of foreign high-skilled
workers are unfounded. Kirkegaard investigates empirically the labor-market
situation faced by US software workers--the group that is usually depicted in the
US media as facing the greatest risks from globalization--and reveals that these
occupations enjoy full employment at record levels in today's US economy.


New firm-level data on L-1 (intracompany transferees) and H-1B usage for
2006 show that a dozen Indian information technology (IT) companies are the top
petitioners for these visas. Several US IT companies are also heavy users of the
two visa programs. Beyond the top ten, a very broad range of US and
multinational companies, as well as US public institutions from different
sectors of the US economy, account for the demand for foreign high-skilled
workers on temporary work visas. Data on visa issuance reveal that Indian
nationals dominate both the H-1B and L-1 visa categories.

The legal
permanent resident (green card) program is important predominantly as a tool to
maintain rather than expand the existing high-skilled workforce in the United
States. More than 90 percent of the green cards are issued via adjustment of
status (e.g., from H-1B temporary worker to legal permanent resident) requested
for high-skilled foreigners already residing and most likely employed in the
United States. But national bottlenecks in the current green card system (e.g.,
per-country limits for countries such as India and China, long waiting periods,
and costly and time-consuming application process) may force many employed
high-skilled workers to leave the United States once their temporary visas
expire.

Based on these findings, Kirkegaard offers a coherent package of
proposals to reform the US high-skilled immigration system in a manner that
enjoys broad political support:



o drop the Department of Labor (DOL) Foreign Labor Certification
(i.e., obtaining DOL's approval for hiring foreign workers) for high-skilled
green card recipient categories E-2 (professionals holding advanced degrees or
persons of exceptional ability) and E-3 (skilled workers, professionals with
bachelors' degree, and unskilled workers);

o exempt green card recipient
categories E-1 (priority workers), E-2, and E-3 from the annual per-country
national limit;

o drop the DOL Labor Foreign Labor Certification for
H-1B workers;

o increase and target enforcement of prevailing wages in
intensive users of H-1B visas;

o abolish the annual congressional cap of
65,000 for H-1B visas;

o abolish the annual 20,000 congressional cap and
grant automatic H-1B visas to interested foreign master's and doctoral graduates
from US universities;

o restrict the share of foreign high-skilled
workers that a single business entity over a certain size can employ on
temporary work visas--including both H-1B and L-1--to a sensible level of maybe 50
percent;

o strike a bilateral immigration agreement with India and
create a new visa category for workers in the IT services/software sector; and


o regularly publish official firm-level immigration data and detailed
data on the characteristics of all high-skilled immigrants.