Merit-Based DACA?

The Deferred Action for Childhood Arrivals (DACA) program was established by an Executive Order from President Obama in June 2012 to protect children of illegal immigrants from being deported. The program was deemed “unconstitutional” by Attorney General Jeff Sessions, and formally rescinded by the Trump administration in September 2017 with the caveat that implementation be delayed by six months to give Congress enough time to deal with the disposition of nearly 800,000 DACA recipients (called Dreamers) who currently receive temporary deportation protection and work permits. According to many accounts, including the left-leaning New York Times, report that an “exasperated” President Trump is earnestly looking for a way to allow Dreamers to remain in the United States legally.  From a Jobenomics standpoint, instituting a Merits-Based (also commonly referred as talent-based, skills-based or points-based) DACA program may be a way out of the current humanitarian/ constitutional conundrum and worthy of consideration by Congress.

DACA allowed immigrants who entered the country illegally as children to receive a renewable 2-year period of deferred action from deportation and eligibility for a work permit.  In order to qualify, Dreamers came out of shadows, paid a fee, passed background checks, received Social Security cards and work permits under the promise of government protection. The majority of Dreamers are currently in school or working. Some are on active duty in the U.S. armed forces. Others have even started their own business. 

For the most part, Dreamers are productively engaged in pursuing the American dream.  According to an August 2017 survey by the Center of American Progress, most of the Dreamers are presently in their 20s and about 80% arrived when they were 10 or younger. For the most part, these Dreamers are more inculcated with American culture than their “home” countries. Consequently, these Dreamers should have established a track record that would make a Merits-Based DACA program feasible. Merits-Based Immigrant has been endorsed by the President and is attractive to many Republican and Democrat legislators.

A Merits-Based DACA program would “vet” Dreamers into three general categories: Keeper, High Potential, and Deportable. Keepers would consist of highly talented and skilled candidates that would be granted Green Cards (a permit allowing a foreign national to live and work permanently in the U.S.). The High Potential cadre would be granted extensions of the temporary work permits that they already have been granted under DACA. The Deportable category would consist of criminals, gang members and those that have chosen perpetual public assistance over workfare. 

Instituting a Merits-Based DACA vetting program could be relatively straightforward. For example, those serving in the U.S. armed forces could be granted a Green Card upon an honorable discharge. Business owners, college grads with high GPAs or critical STEM skills, and high-performance employees of reputable corporations could also qualify as Keepers. On the other end of the spectrum, online background checks of police and welfare records could provide justification for deportation. All others would likely fall in the High Potential category. People in this category could be given a finite amount of time to prove their potential via employment or special programs involving public or civil service to their communities.

Instituting a Merits-Based DACA program may also be worthy of consideration by Congress as a potential template for the parents of these children (aka DAPA, a proposed expansion of DACA), other productive undocumented immigrants, as well as a framework for comprehensive immigration reform. 

A merits-based immigration system and comprehensive immigration is imperative for two major reasons: (1) the U.S. economy will be highly dependent on integrating and enabling the Hispanic community that will be the largest minority demographic as the United States transitions from a majority-minority to a minority-majority nation status within the next 25-years, and (2) to compete on the world’s stage, the United States must attract and retain the best and brightest people from other countries to study, work, become citizens and start businesses via a merit-based immigration system.

(1)  Minority-Majority Nation.  As the largest U.S. minority group, Hispanics are transforming the American landscape. In 2007 at Los Pinos (the Mexican White House), this author queried the former politician and First Lady of Mexico, Margarita Zavala de Calderón, about the future of Hispanic Americans. Her answer was quite unexpected. She stated that “one-half of all Americans will be Hispanic or married to a Hispanic by 2040” and their participation would be paramount to the collective success of both the U.S. and Mexican economies. So far, her prognostication appears to be prophetic.

Year 2011, marked the first year in U.S. history that minority births exceeded White births. In 2015, over 50% of all U.S. children aged 5 years old were minorities. By 2020, more than 50% of all U.S. children are expected to be part of a minority race or ethnic group. By 2044, America will be a minority-majority nation. California, Texas, New Mexico and Hawaii are already minority-majority states. Minority-owned businesses are already the fastest growing group in the American business community. Unleashing the potential power minority business owners will greatly benefit the U.S. economy and help unite a race-divided nation. As forecast by the U.S. Census Bureau, by 2044 minorities are projected to be in the majority (over 50% of the U.S. population) given current demographic growth rates. 

U.S. Population Growth Rates by Race & Ethnicity

As highlighted in yellow, from 2000 to 2060, the Hispanic is projected to increase from 35,818,000 to 199,044,000, an increase of 83,226,000 or 62% of all population growth during this period. From year 2000 to 2014, U.S. Whites grew only 2% since the turn of the Century as opposed to 37% for Asians, 35% Hispanics and 18% for Blacks. From year 2014 to 2060, the Census Bureau projects that Whites will decline by 8%, whereas Asians are projected to grow by 128%, followed by Hispanics at 115% and Blacks at 42%. The multiracial (officially “two or more races”) population is projected to grow by an incredible rate of 225%—the vast majority being multiracial Hispanic Americans. 

Based on projected demographic trends, minority job and wealth creation is essential to American economic prosperity and social stability as the United States transitions from a White-majority nation to a minority-majority nation. The primary solution to enhancing minority labor force participation and increasing wealth in minority communities involves minority-owned business creation, which is growing significantly faster that White-owned business.

Growth Rate of Minority-Owned Businesses

The Census Bureau performs a Survey of Business Owners twice each decade. The 2011 Survey was conducted for business owners in 2007 and the 2015 Survey for 2012 owners. This growth rate chart was developed by Jobenomics as a summary of these surveys to show the tremendous rate of growth for minority-owned firms during the Great Recession of 2007 to 2009 and the period of slow U.S. economic growth during the post-recession recovery.

All U.S., White, Black, Asian, Hispanic and All Minority (including other racial and ethnical minorities) firms are shown. “Total Firms” include all firms from very big to very small nonemployer (e.g., the self-employed) businesses. “Employer Firms” employ few to thousands of workers.

From 2007 to 2012, All U.S. “Total Firms” grew at 2%, White-owned firms decreased by -4%, and All Minority-owned firms increased by 39%, which is incredible considering the austere times and onerous lending environment from financial institutions. During this time period, Hispanic-owned firms grew at 47%, followed by Black-owned at 35% and Asian-owned at 25%. 

During the same period, All U.S. and White-owned “Employer Firms” downsized by -5% and -3% respectively.  All Minority-, Hispanic-, Black- and Asian-owned firms grew by 20%, 17%, 4% and 23% respectively. 

From 2007 to 2012, the total number of minority-owned firms grew 5.8 million to 8.0 million firms, a 39% increase mainly due to nonemployer/self-employed firm growth. In comparison, White-owned decreased during the same period.

The 2015 Census Bureau Survey of Business Owners also provides detail on sales, receipts and shipment values for all firms. Minority firms did extremely well.  In 2007, All Minority-owned firms contributed approximately $1 trillion to the U.S. economy. In 2012, this amount increased by a combined 53% to $1.6 trillion.  Asian-owned sales, receipts and shipment values increased during this period by 57%, followed by Hispanic-owned by 48% and Black-owned by 38%. 

Today, Hispanics control about $1.3 trillion in buying power, which equates to significant cultural, economic and political power. This buying power is expected to grow reaching 10% of U.S. GDP by 2020. Hispanic Millennials (Generation Y) represent 27% of all Hispanics and 21% of the entire U.S. Millennial generation born between 1981 and 2000, ages 16 to 35 (Hispanic Generation Z, born after year 2000, represent 35% of all Hispanics). In key markets like Los Angeles, Miami, Houston, New York and Chicago, Hispanic Millennials represent up to 55% of all Millennials. Hispanic Millennials are also rapidly growing in markets not traditionally associated with the U.S. Hispanic community. Recent surveys of Hispanic Millennials indicate that 71% believe in the “American Dream” of upward mobility compared to 55% for non-Hispanic Millennials. 42% of Hispanic Millennials versus 23% of non-Hispanic Millennials believed that getting a postsecondary degree was a strong indicator of success. According to the Hispanic Millennial Project, 47% of Hispanic Millennials see owning a business as an indicator of success versus 23% of non-Hispanic Millennials.

Jobenomics sees tremendous future employment and revenue growth potential of minority-owned businesses given the significant rate of growth in minority populations and the rate of minority-owned business expansion over the last five years. Jobenomics believes that doubling minority-owned businesses from 8 million to 16 million is achievable within a decade, if communities implement initiatives to mass-produce highly-scalable small and self-employed minority-owned businesses.

(2)  Merits-Based Immigration Reform. The United States attracts the best and brightest people from other countries to study, work, become citizens and start businesses. In 2015, immigrant startup business entrepreneurs represent 27.5%, up from 12.5% in 1996.  From a Jobenomics standpoint, this is a powerful statistic considering the far-reaching contribution of foreign-born immigrants and their children to American economic growth and prosperity. 

According to a report by the Partnership for a New American Economy, immigrants or their children founded more than 40% of U.S. Fortune 500 companies—a compelling reason why high-skilled immigrants are so critical to U.S. economic growth. About 20% of the newest Fortune 500 companies founded between 1985 and 2010 have an immigrant founder. Many of America’s greatest brands, Apple, Google, AT&T, Budweiser, Colgate, eBay, General Electric, IBM, and McDonald’s, owe their origin to a founder who was an immigrant or the child of an immigrant. The Fortune 500 companies that boast immigrant or children-of-immigrant founders have combined revenues of $4.2 trillion. $1.7 trillion of that amount comes just from the companies founded by immigrants.

The United States legal immigration is largely a family-based system.  From an economic and labor force perspective, the United States needs to find ways to attract and retain foreign-born immigrants via a legal skills-based immigration system, also called a talent-based, merit-based or points-based systems used by many countries. 

Skills-based immigration systems assess skilled individuals based upon criteria such as age; past experience; language ability, educational and technical skills; entrepreneurism and ability (technical and financial) to start a business; and “adaptability” to assimilate into the host country.  

Countries like Australia’s General Skilled Migration, the United Kingdom’s Highly Skilled Migrant Programme, Canada’s Express Entry system, and New Zealand Skilled Migrant system are legal skills-based systems.  Each of these countries uses “point calculators” to determine eligibility. For the most part, these calculators are merits-based, but some add points for having a close family relative living and productively working in the country. Many of these countries use their skills-based to “fast-track” highly-skilled immigrants to permanent resident status, whether it is a permanent work visa (aka Green Card in the United States) or citizenship.

Australia uses its General Skilled Migration (aka Skillselect) program to attract migrants to alleviate general labor shortages and attract tradespeople and skilled professionals. Skillselect’s point calculator evaluate potential visa applicants (work visas, student visas, etc.) a series of questions start with age, English competency (a score at least a "6" on all four components of the International English Language Testing System examination), post-secondary education or trade qualification (suitable to an assessment of a relevant Australian assessing authority), and necessary work experience in an applicants nominated occupation.

According to a recent tweet from President Trump, "The merit-based system is the way to go. Canada, Australia!" 

According the Government of Canada, “We choose skilled immigrants as permanent residents based on their ability to settle in Canada and take part in our economy. There is a new system to manage how people with skilled work experience apply to immigrate to Canada. It is called Express Entry.” Express Entry is used to manage applications for permanent residence under these federal economic immigration programs:

·        the Federal Skilled Worker Program (allows skilled professionals with significant work experience, employability, and adaptability to gain legal permanent residence in Canada),

·        the Federal Skilled Trades Program (allows skilled workers with experience in a selected number of trades to gain legal permanent residence in Canada), and

·        the Canadian Experience Class (a popular route to permanent residence for migrants with previous Canadian work experience, such as international students).

Most of the 5+ million open job positions in the United States are likely to remain unfilled due to a lack of domestic skills. While Jobenomics advocates implementation of a national lifelong applied learning and skills-based training/certification program to upgrade the skills of domestic workers, the United States also needs to recruit and retain global talent since the American education system is not producing the kind of workforce skill sets necessary for a competitive society. 

The United States spends much more money and time per student than most countries. Unfortunately, these expenditures do not translate into better performance or competitiveness. According to an Organization for Economic Cooperation and Development report , “students in the United States have particular weaknesses in performing mathematics tasks with higher cognitive demands, such as taking real-world situations, translating them into mathematical terms, and interpreting mathematical aspects in real-world problems.” Among the 34 advanced economies in the OECD, the United States ranked 17th in reading, 20th in science and 27th in math. 

Despite all the political rhetoric about U.S. immigration, comprehensive immigration reform, illegal aliens/undocumented workers and legal immigration, the American populace is mostly uniformed or undereducated about the importance of attracting the best and brightest people from other countries to study, work, become citizens and start businesses in the United States.

Most Americans would be surprised to find that there are 26,258,000 foreign-born persons in the U.S. labor force, comprising 16.7% of the total 157,130,000 American workforce (49% Hispanics, 24% Asian, 18% White and 9% Black) as of 2015. The foreign-born include legally-admitted immigrants, refugees, temporary residents such as students and temporary workers and undocumented immigrants.[9] The U.S. Department of Homeland Security (DHS) estimates the unauthorized immigrant population at 11.4 million up from 8.5 million in 2000 and 2-4 million in 1980.[10] Consequently, there are approximately 15 million legal foreign-born U.S. residents that are increasing a rate of 1-million people per year.

Persons Obtaining Lawful U.S. Permanent Resident Status

There were 1,051,031 new lawful permanent U.S. residents in 2015. After immigrating to the United States, legal permanent residency (green card holder) is the first necessary step to becoming a U.S. citizen—the highest status of citizenship attainable.  Being a valid green card holder means that allows a person to permanently reside in the United States, have lawful rights to work, and petition for family members to receive green card status. After 5+ years of good legal standing, a green card holder can apply for U.S. citizenship (naturalization).  Other ways of becoming a citizen is by being born in the United States (aka “anchor babies”), being born overseas to a United States Citizen parent, living in the United States as a child when a parent undergoes naturalization, and joining the United States armed forces.

In order to become a permanent U.S. resident, one must first come to the United States. According to the U.S. State Department, a citizen of a foreign country who seeks to enter the United States generally must first obtain a U.S. visa, which is placed in the traveler’s passport, a travel document issued by the traveler’s country of citizenship. While there are about 185 different types of visas, there are two main categories of U.S. visas: Immigrant Visas (IM) and Nonimmigrant Visas (NIV). 

·        An Immigrant Visa is issued to a person wishing to live permanently in the United States. 

·        A Nonimmigrant Visa is issued to a person with permanent residence outside the United States, but wishes to be in the United States on a temporary basis such as tourism, medical treatment, business, temporary work and/or study.

Categories of Immigrant Visas (IM) Leading To Permanent Residency

With a few exceptions, a foreign citizen must be sponsored by a U.S. citizen relative, U.S. lawful permanent resident, or a prospective employer to obtain an immigrant visa. The sponsor begins the immigration process by filing a petition on the foreign citizen’s behalf with U.S. Citizenship and Immigration Services (USCIS). 86% of all Immigrant Visa issued in 2016 were family-based, 10% were for special reasons such as conflict-related services and a diversity “lottery” to attract immigrants with low rates of immigration to the United States, and, lastly, 4% were employment-based. As discussed earlier, other countries like Canada, United Kingdom and Australia, prioritize employment-based immigration as the primary and fastest route to legal permanent residency.

According to the State Department,[12]there are two primary Family-Based Immigrant Visas: Immediate Relative Immigrant Visas (unlimited) and Family Preference Immigrant Visas (limited). There is no limit on Immediate Relative immigrant visas nor are there any restrictions same-sex spouses. For the family preference category there a four preferences each with a fiscal year limitation: (F1) unmarried children of U.S. citizens and their children, 23,400, (F2) spouses, minor children, and unmarried sons and daughters of a Lawful Permanent Resident, 114,200, (F3) married sons and daughters of U.S. citizens, and their spouses and minor children, 23,400, and (F4) brothers and sisters of U.S. citizens, and their spouses and minor children, 65,000. 

Employment-Based IM Visas

According to the State Department, there are five Employment-Based Immigrant Visas: E1 through E5. Approximately 140,000 employment-based immigrant visas are made available each year to qualified applicants in five preference categories shown above.  

For some unexplained reason, only 25,000 Employment-Based Immigrant Visas were issued in 2016. From a Jobenomics perspective, 25,000 Employment-Based Immigrant Visas out of a total of 617,228 total Immigrant Visas (4%) is borderline criminal behavior from an economic and labor force perspective. At best, this activity is tantamount to an intellectual capital embargo in an era where the United States is failing to fill 6+ million high-skilled domestic job openings and competing for its fair share of billions of global jobs in the Network Technology Revolution.

Over 10 million people visited the United States for business or pleasure in 2016. Over 8 million or 78% (highlighted in green above) are temporary visitors for business or/and pleasure. Due to our enhanced security and perceived anti-immigration policies, the number of “B Visa” visitors dropped over the previous year by 6% or 481,000 visitors. This drop is significant not only from tourist expenditures but decreased business meeting and social contact.

ABC’s of Temporary Nonimmigrant Visas (NIV)

Highlighted in yellow are the E, F, H, J, M, O and P nonimmigrant visa categories of special interest to Jobenomics from a workforce and business development perspective. Persons With Extraordinary Ability (O-visa) who are visiting temporarily should be given the red-carpet treatment and a fast-track to a green card if desired. To a lesser extent, the same should be true for talented or high-potential visitors, students, workers and trainees F, J, H, M and P categories. These 1,554,055 visitors by the very nature of their interest in America (education, training and work) would likely make great additions to the American labor pool and society. Moreover, they probably represent the top 5% in the global gene-pool.

In summary, foreign-born citizens tend to more entrepreneurial than native Americans. Since the U.S. economy needs more entrepreneurs, startup businesses and skilled labor, it would be logical to promote legal immigration from an Employment-Based Preference Immigration Visa standpoint as well as a merits-based recruiting and retaining perspective on Nonimmigrant Visa holders. A Merits-Based DACA system would be a great place to start capitalizing on the foreign-born Dreamers that have spent the majority of the lives in America.

About Jobenomics:  Jobenomics deals with economics of business and job creation. The non-partisan Jobenomics National Grassroots Movement’s goal is to facilitate an environment that will create 20 million net new middle-class U.S. jobs within a decade.  The Movement has a following of an estimated 20 million people. The Jobenomics website contains numerous books and material on how to mass-produce small business and jobs as well as valuable material on economic and business trends. For more information see https://jobenomicsblog.com/