THE United States faces a daunting challenge: improving its ability to compete in an ever-changing world economy. To hone that competitive edge, the US should embrace more skilled workers from abroad. Instead, we are turning them away. Thousands of the brightest minds in the world are waiting to pursue the American dream. Tapping that potential through immigration reform is crucial to any ``competitiveness'' solution - something the US government is only beginning to realize.
Two major immigration bills now languish in Congress. The Senate version was sponsored by Sens. Edward Kennedy (D) of Massachusetts and Alan Simpson It was passed last year but is currently back in committee. In the House last April, the immigration subcommittee approved a bill sponsored by Rep. Bruce Morrison (D) of Connecticut. Both bills attempt to bring immigration policy more in line with current conditions, but many legislative hurdles remain before they can be reconciled.
Each hurdle could whittle away the numbers of immigrants Congress ultimately will admit. At this rate, it is unlikely that any comprehensive immigration legislation will become law in the near future.
In assessing the country's competitiveness problems, the supply and skill of human capital is a core issue. Demographics guarantee a shortage of American-born skilled workers in coming years, just when companies most need bright young minds to compete in the international marketplace.
The Hudson Institute's ``Work Force 2000'' study estimated that 20 million new jobs will be created over the next decade - 41 percent of these in the professional, technical, and sales fields requiring the highest education and skill levels. At the same time, the American work force will grow at its slowest rate since the 1930s, creating an ever-growing gap between positions open and qualified people to fill them.
As baby boomers - whose youth and vitality contributed greatly to economic growth since the early 1970s - move closer to retirement, we can expect both a slowdown in productivity and increased demands on the social security system. The net effect will be a drain on the economic performance of the US.
Labor shortages are already affecting US businesses adversely. According to Stephen Moore, founder of Americans for Immigration and an analyst of immigration policy, ``US firms were permitted to bring only about 25,000 highly skilled immigrant workers, including scientists, engineers, computer technicians, and business executives, into the 140 million-person US work force [in 1987]. Industry requested about four times this number to fill skilled positions in domestic labor shortage occupations.''
Frank Kittredge, president of the National Foreign Trade Council, reflected a consensus in the business community when he told Congress last year that increased admission of employer-sponsored immigrants is becoming critically important. At a recent conference on competitiveness at the Hudson Institute, some corporate participants went so far as to argue for no limits on skilled immigration.
Congress might not be willing to go that far, but the message from business is clear: Absent significant changes in immigration policy, American industry's future competitiveness will be limited. Bold and decisive legislation is needed.
Clearly, the quality of human capital is as important as its quantity. The current US education system is failing to meet the needs of a modern society, further damaging our competitive position. Expanding skill-based immigration should not be seen as a substitute for education reform, but as a complement to it, especially in the near term.
While America seems content to rehash old arguments on immigration, other countries are demonstrating the flexibility needed to maintain competitiveness. Currently, Canada admits 25 percent of its immigrants based on their skills, and Australia admits 50 percent. They have listened to the evidence, taken the political risks, and expanded skill-based immigration to meet labor needs. The US, on the other hand, allows only about 4 percent of its 600,000 or so legal immigrants to be admitted based on skill level alone.
The message ``copy Japan'' is too often ballyhooed as a solution to US competitiveness problems. And the intent here is not to propose Canada and Australia as new models. Those countries, in fact, are copying us - or at least what we used to be. American industrial prowess was built on the diversity and vitality created by immigration. We need to remember that.