Immigrants to the US are now heading home

published 1 June 2012

Changed economic circumstances mean many immigrants to Western countries are returning home. What does this mean for the global economy? Matthew Partridge reports.

What's the issue?

According to The New York Times, there are worries that the flow of immigration into the United States is in danger of reversing. The think tank Partnership for a New American Economy (PNAE) claims that China, and other countries, are "seeking to persuade highly skilled citizens who have settled in America to return home to start businesses there". China has offered six figure bonuses to scientists who return home (see below).

The Economic Times (of India) also notes that, "in growing numbers, highly educated children of immigrants to the US are uprooting themselves and moving to their ancestral countries. They are embracing homelands that their parents once spurned but that are now economic powers."

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Even low-skill immigrants are turning their backs on America. The Los Angeles Times notes that from 2005 to 2010 net Mexican immigration to America was nearly zero. Indeed, Jeffrey S Passel, a senior demographer at the Pew Hispanic Center, thinks that, "by the end of the period, we were seeing more people moving to Mexico than leaving".

Why is this taking place?

Many think that American immigration policy forces immigrants who would like to stay to return home. The PNAE report claims that, "too often, our immigration policy is simply self-defeating. After being trained at American universities, top foreign-born graduates are told to go home and compete against the US." In contrast, other countries are "making employment, investment, visa, and tax incentives available to those who make the move".

However, economic factors also play a part. The Times of India suggests many reverse-immigrants think there are more opportunities in fast-growing developing countries, such as India, than in America. One expert believes that, in India, "markets are opening; people are coming up with ideas every day; there's so much opportunity to mould and create. People here are running much faster than the people in Washington."

Does this matter for the US?

A few economists believe that the return of skilled immigrants strengthens trade links between America and their original country, leading to "brain circulation", which benefits both countries.

However, most people agree that reduced immigration, especially for highly skilled workers, is bad for the US economy's long-term health. New York Mayor Michael Bloomberg believes that "America has always been a magnet for the world's most talented and hardest working our success has been built on immigrants who have powered our industries and started new ventures that today rank among the world's leading companies."

In the El Paso Times, Bill Hammond complains that "our universities train the best science, technology, engineering and maths (STEM fields) graduates in the world. Companies like Google and Facebook started with research conducted in our universities by both foreign and US-born students. But too many... don't stay and contribute... Instead, they go abroad to our competitors because they can't get a visa to remain here."

Is this happening elsewhere?

According to The Wall Street Journal, a similar trend is occurring in Europe, driven by the euro crisis. "Economic distress is driving tens of thousands of skilled professionals from Europe, and many are being lured to thriving former European colonies in Latin America and Africa."

At the same time, "an influx of Third World immigrants whose labour helped fuel Europe's growth over the past decade is subsiding. Hundreds of thousands of them, including some white-collar professionals, have been returning home." One popular destination is Brazil, which "is profiting from Europe's decline. It is wooing foreign engineers and other construction-related specialists to help carry out housing, energy and infrastructure projects." There are around 1.46 million foreign temporary workers in Brazil, "nearly 330,000 from Portugal and 60,000 from Spain".

What should America do?

Experts agree that immigration law needs to be changed to make it easier for graduates educated in US universities, skilled workers and entrepreneurs to move to, and remain in, the US.

The PNAE suggests that "seasonal and labour-intensive industries" should have "access to foreign workers when they cannot find Americans to fill jobs". Local governments "should be able to recruit more immigrants to meet regional needs".

If the US acts fast it should manage to slow reverse immigration. As Rupa Subramanya notes in The Wall Street Journal, "there are indeed opportunities in India, but (compared to America) it's hardly a cake-walk".

China's attempts to woo scientists

Four years ago China began "The Thousand Talents programme". According to Global Times, an English-language Chinese newspaper, the scheme "seeks to recruit 2,000 elite scientists and other experts...now living overseas". Recruits receive "a one-time, tax-free cash allowance of one million yuan ($157,637), a residency permit in the city of their choice and permanent resident visas for those who took citizenship in their adopted countries and their families".

But there are issues. An official said that, although less than a third of those who apply... are accepted, it has not been easy attracting the very best candidates. He says many of the very best are concerned about China's environmental pollution and the lack of transparency in applying for research funds in China. "Many also believe better career prospects still exist overseas."