AILA’s Solutions Campaign continues with our new multi-media player and website! Watch AILA experts explain the need for a real solution to our broken immigration system. Help get the word out – the solutions are here and they are achievable!
By ANGUS LOTEN
San Francisco entrepreneur Brian Wong has already hired two employees and secured $300,000 in funding for his start-up, and hopes to have a staff of 40 or more full-time workers by this time next year.
But there's at least one red flag in his business plan: Mr. Wong isn't American; he's Canadian. As such, his long-term immigration status is up in the air. That kind of uncertainty can spook investors and clients alike, says Mr. Wong, whose start-up, called Kiip, aims to develop a new mobile game advertising platform.
"It's already hard enough to raise funds and this is an added risk," Mr. Wong says of his temporary visa status.
With prospects for the latest immigration reform efforts fading in the Senate—and new Republican lawmakers calling for tougher border security—Mr. Wong and other immigrant entrepreneurs are holding out hope for a separate bipartisan bill that seeks to spur job growth by easing visa restrictions on foreign-owned start-ups.
The StartUp Visa Act, introduced by Sens. John Kerry (D., Mass.) and Richard Lugar (R., Ind.) in February, would grant permanent residency—that is, a green card—to any foreign-born entrepreneur whose new business attracts at least $100,000 in venture capital or angel backing out of a total $250,000 in equity financing, while creating five new jobs within two years. The bill is expected to be reintroduced in the Senate as early as January.
Last week, Senate Democrats blocked a vote on the Dream Act, a bill that provides a path to citizenship for younger undocumented immigrants, in the face of strong Republican opposition.
By contrast, the start-up visa bill has won broad support among both parties. It's also backed by some big names in venture capital and angel investing, including Y Combinator's Paul Graham and Foundry Group's Brad Feld, who have faced a dearth of homegrown start-up activity since the economic downturn.
While the recession has forced many Americans to go into business for themselves, fewer are taking on employees, according to recent Labor Department data. That's left policymakers targeting small-business job-creation programs at existing firms, through a mix of grants and tax credits. Yet data show start-ups are strong vehicles for job growth. In a typical year, an average of 800,000 jobs are created by firms in their first full year of business, compared with just 335,000 by firms launched six to ten years earlier, according to a study by the Kauffman Foundation, an entrepreneurship advocacy group in Kansas City, Mo.
And foreign entrepreneurs have long played an outsized role in the U.S. start-up sector, especially in the tech industry. Immigrants are nearly 30% more likely to start a business than nonimmigrants, the Small Business Administration says. University of California researchers estimate about a third of Silicon Valley technology firms were started by Indian or Chinese entrepreneurs, while a joint study with Duke University found at least one immigrant founder in over a quarter of all engineering and technology firms launched in the U.S. since the mid 1990s, together generating nearly 450,000 jobs by 2005. Google Inc., Intel Corp., Yahoo Inc. and eBay Inc. all had at least one immigrant founder.
Yet many of these companies were also started on a shoestring, leading some tech industry insiders to say the bill's capital requirements are far too high.
"What I've seen is people raising maybe $50,000 or $100,000 at the most," says Edith Yeung, a 33-year-old Silicon Valley technology consultant who hosts monthly tech entrepreneur meetings.
Before getting her green card three years ago, Ms. Yeung had been on a string of temporary visas since leaving Hong Kong in the early 1990s. Her last was a six-year H-1B visa tied to her employer.
"It was frustrating. I wanted to start something on my own, but I was stuck," she says. "If I left my job, I would have to leave the country."
As it is, the bill is a more accessible version of the current EB-5 visa, which offers a green card to foreign entrepreneurs whose businesses have an upfront investment of $1 million and employ at least 10 workers. Last year, less than half of the allotted 10,000 EB-5 visas were issued, largely reflecting a dearth of qualified candidates. The start-up visa bill proposes filling these unused slots, rather than creating new spots and raising immigration quotas.
Though restrictive, the start-up visa's high capital requirement is certain to filter out sole-proprietorships, while ensuring it attracts innovative, mostly tech-savvy entrepreneurs, says Bob Litan, a researcher at the Kauffman Foundation. The downside, he says, is that only a handful of immigrant entrepreneurs will qualify.
"Hardly any businesses get venture capital in a given year," Mr. Litan says. "This isn't going to have much of an impact on the U.S. economy and I suspect that's why so few people are opposed to it."
Still, like all recent immigration reform efforts the bill's future is far from certain. A companion bill sponsored by Rep. Jared Polis (D., Colo.), which is a similar reworking of the EB-5 visa, was rolled into a comprehensive immigration reform package that's currently stalled in the House.
Without a visa, Mr. Wong says he'll be forced to launch his start-up back in Canada, taking the new jobs with him.
"I've been back and forth to Toronto and Vancouver so many times it's ridiculous," he says. "It's something I think about every night. It would be so much easier to just stay there."
Write to Angus Loten at angus.loten@wsj.com
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Washington D.C. - Today, the Senate voted 56 to 43 against proceeding to the Defense Authorization Act. This procedural vote, which basically followed party lines, ends consideration of critical social issues that affect the military and were to be offered as amendments to the bill. Among the amendments not considered is the DREAM Act, an immigration bill that would provide legal status to young people who graduate from high school and pursue college or military service.
Washington, D.C. - Senate Majority Leader Harry Reid announced that he would attach the Development, Relief, and Education for Alien Minors (DREAM) Act to the Department of Defense authorization bill expected to come before the Senate as early as next week. The vote will be an important test of whether Congress can transcend partisan politics and work together on crafting solutions to the broken immigration system that both Democrats and Republicans acknowledge is in desperate need of reform. That the proposal will be considered as an amendment to the Defense Authorization bill is appropriate, given the Department of Defense's support for DREAM Act as a way to improve military readiness.
First introduced in 2001, the DREAM Act would address the plight of young immigrants who have been raised in the U.S. and managed to succeed despite the challenges of being brought to the U.S. without proper documentation. The proposal would offer a path to legal status to those who have graduated from high-school, have stayed out of trouble and plan to attend college or serve in the U.S. military for at least two years.
Each year, approximately 65,000 undocumented students graduate from high school, many at the top of their classes, but cannot go to college, join the military, work, or otherwise pursue their dreams. They belong to the 1.5 generation - any (first generation) immigrants brought to the United States at a young age who were largely raised in this country and therefore share much in common with second generation Americans. These students are culturally American, growing up here and often having little attachment to their country of birth. They tend to be bicultural and fluent in English.
Research has shown that providing a legal status for young people who have a proven record of success in the United States would be a boon to the economy and the U.S. workforce. University presidents and educational associations, as well as military recruiters, business and religious leaders have added their voice to those calling for passage of the bill. Foreign-born students represent a significant and growing percentage of the current student population. Unfortunately, immigration status and the associated barriers to higher education contribute to a higher-than-average high dropout rate, which costs taxpayers and the economy billions of dollars each year.
The DREAM Act would eliminate these barriers for many students, and the DREAM Act's high school graduation requirement would provide a powerful incentive for students who might otherwise drop out to stay in school and graduate. This will help boost the number of high skilled American-raised workers. As they take their place in the workplace as hard working, taxpaying Americans, they will contribute a lifetime of revenues at the local, state and federal level.
Deputy Undersecretary of Defense for Military Personnel Policy, Bill Carr, supports the DREAM Act and stated that the law would be "good for readiness" and would help to recruit "cream of the crop" students. The DREAM Act is part of the Department of Defense's 2010-2012 Strategic Plan to assist the military in it's recruiting efforts.
For more information on the DREAM Act see:
An interesting read from Julia Preston of the New York Times regarding allegations from Republican lawmakers that the Obama administration is attempting to enact “meaningful immigration reform absent legislative action” — that is, without the consent of the American people through a vote in Congress.
Katie Couric talks to experts on both sides of the Arizona immigration law (SB 1070) that has ignited a firestorm of controversy as well as a federal lawsuit. She is joined by Christina Rodriguez, a Law Professor at NYU; Doris Meissner, a Senior Fellow at Migration Policy Institute and a former INS Commissioner; and Dan Stein, President of the Federation for American Immigration Reform (FAIR).
As a follow up to President Obama's immigration speech last week, Kiran Chetry, Anchor of CNN's American Morning interviews Univision anchor Jorge Ramos, author of a new book, "A Country for All". Ramos comments on President Obama's speech and urges him to make comprehensive immigration reform a priority. Last week, President Obama called for securing the borders and paving the way for an estimated 11 million undocumented immigrants to become legal citizens.
This article really struck me about the impact of Arizona's tough, new immigration law. Although, they are all living and working in the US legally, they could be adversely impacted as the new law requires state and local law enforcement officials to inquire about immigration status during any lawful stop such as a minor traffic violation.
Is South Carolina about to pull an Arizona? Illegal immigration has become a hot topic around the nation and there's even discussion that South Carolina may pass a similar law to Arizona.
