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Warding off International Students Will Destroy US Jobs

The possibility of working in the US attracts some of the world’s brightest young minds to its universities which drives innovation and economic growth.

Image credit: Muhammad Haikal Sjukri on Unsplash

An ongoing lawsuit filed by the American labor union, The Washington Alliance of Technology Workers, or “Washtech,” is threatening to increase unemployment and damage the ability of the US to attract highly-skilled foreign talent. The target of the lawsuit is Optional Practical Training (OPT), which allows international students to remain in the US for a limited period of time post-graduation.

As the authors of this piece are both international students from the UK, Patrick a graduate student at George Mason University, and Alice currently finishing her OPT year working at a university-based research center, the subject hits close to home. We promise we’re not trying to steal your jobs.

The current COVID-19 pandemic has already been used as a justification for curtailing immigration, and could add more fuel to the fire given concerns over high US unemployment. However, ending or limiting OPT will have a detrimental effect on US citizens both now and in the future.

OPT is a period of work authorization for international students in F1-visa status following the completion of a degree in the US The work must be related to the student’s field of study and generally lasts for 12 months, but may be extended an additional 24 months for students in STEM fields. The OPT program plays a key role in attracting international students to US universities.

The “Washtech” lawsuit challenges DHS authority in the initial ruling, and questions whether appropriate rulemaking procedures were followed in 2008 and 2016. Restricting the OPT program has also been on the Trump administration’s regulatory agenda for the last four years, and a target date of August 2020 has been set to enact amendments. 

“Washtech” claims that the OPT program leads to reduced employment opportunities for US citizens. However, a team of scholars at the National Foundation for American Policy found that the OPT program had no effect on US employment, and that there was actually a negative relationship between unemployment and the number of OPT applicants between 2008 and 2016. Similarly, Business Roundtable modeled a scenario in which new immigration policy led to a 60 percent decline in OPT participation. They found that this would cause real US GDP to decline by about 0.25 percentage points by 2028, and lead to the loss of 255,000 jobs held by native-born workers.

In July 2019, several large business associations successfully petitioned to become party to the lawsuit in order to defend OPT suggesting that they are fearful of how changes could affect their bottom line. In November 2019, over 100 US colleges, ranging from Ivy League schools to state university systems, signed on to an amicus brief opposing the lawsuit.

Restricting OPT will stifle economic growth by creating persistent gaps in the labor market. It will disable businesses’ ability to acquire foreign talent based on market needs and scarcity of domestic workers. Research undertaken after the 2009 recession shows that this could be particularly advantageous during downturns.

Over the past few years, burdensome visa rules have influenced international students to choose countries with a more liberal stance on immigration, leading to a decrease in enrollment for U.S institutions. In Canada, for instance, foreign students automatically qualify for work permits upon graduation. If OPT were to be limited or ended, US universities would likely continue to see significant drops in the enrollment of foreign students.

During the 2018-19 academic year, international students contributed $39 billion to the US economy, and supported 455,622 American jobs. The Trump administration and “Washtech” claim to want to protect US jobs, but creating an unfriendly environment for international students will lead to the destruction of the very jobs that they support.

In addition, foreign students contribute to US exports when they spend money on university tuition, housing, dining, or other expenses while present in the US The Trump administration pledged to reduce the US “trade deficit,” but restricting the flow of foreign students will reduce America’s fifth largest export and widen the deficit further.

The possibility of working in the US attracts some of the world’s brightest young minds to its universities which drives innovation and economic growth. Studies have shown that international students are highly entrepreneurial and are far more likely to found startups and file patents than their American counterparts. A Mercatus Center study demonstrated that for every foreign worker hired in an industry, 5 to 7.5 domestic jobs are created for Americans in the same industry. In the 2019 edition of their Fortune 500 report, the New American Economy Research Fund showed that 45 percent of Fortune 500 companies were founded by immigrants.

Innovation and entrepreneurial spirit create jobs and promote prosperity. Limiting or abolishing the OPT program will redirect the next generation of entrepreneurs toward countries with a more liberal stance on immigration, and deprive the US of future innovation and the job creation that would come with it.

“Washtech” and the Trump administration’s baseless claim that restricting the OPT program will reduce “foreign competition” is a fallacy. In the short term, US unemployment will increase as international student enrollment declines, while in the longer term, US innovation will lag inflicting serious collateral damage on us all.

  • Patrick O’Connor is a second-year MA student in the Department of Economics at George Mason University. Patrick graduated from Seton Hill University with a BA in mathematics and minors in business administration and finance.

  • Alice Calder is a contributor for Young Voices and TradeVistas, writing on issues in trade, the future of work, and the intersection of economics and culture. Follow her on Twitter @AliceCalder.