The Football Draft and Immigration
Imagine you’re the GM of your favorite NFL team and you have the lucky ticket, the first pick of the draft. However, instead of studiously evaluating players to create a Super Bowl champion, you irrationally ignore the first pick and get nothing in return. Worse yet, you may have helped to educate, train and mentor that top draft pick. You have nothing to show for it and now every competitor has an advantage over you.
Although this is truly irrational, this is our current immigration policy in practice. Please note, I am only referencing legal immigration.
Unemployment is at a historically low 3.5% without enough supply to meet demand. The labor participation rate has fully recovered from the pandemic. Furthermore, 81% of those between the prime working years of 24 and 54 are employed. This is a 40 year high.
There are many contributors to this dilemma, but the largest is 10,000 baby boomers retiring each day. Unfortunately, there are not enough Gen X, Y or Z workers coming behind to fill the demand gap.
This leaves nearly 10 million unfilled jobs in the US resulting in significant implications to our nation’s stability.
Instead of falling for the politicization and vilification of immigrants, realize Team USA has three choices. We can have ten million babies and instantly give them 22 years’ worth of life experience and training. We can do nothing and allow our great nation to suffer.
Or, we can “draft” the best and brightest players from other nations who are eager to experience capitalism and freedom in the US. This is a tide that lifts all boats.
A robust plan for immigration is the solution, not the problem. To facilitate this, though, we need an efficient system to evaluate, and welcome, top draft picks to Team USA.
The 1996 book The Millionaire Next Door documented the success of immigrants. First generation Americans are some of the most entrepreneurial and financially successful members of our society. However, they are not taking “American” jobs. They are massive job creators. This increases GDP and tax revenues.
As of 2022, more than half of billion-dollar start-up companies were founded by immigrants while another 10% are first generation Americans born to immigrants. A full 80% of billion-dollar start-ups have an immigrant in a C-Suite or similarly impactful position.
One-third of Nasdaq companies are run by first generation immigrants and, according to the New American, 44.8% of the Fortune 500 companies were founded by immigrants or their children. These companies produce $8.1 trillion in annual revenue and employ more than 66,000 people each on average. Collectively, these immigrant-led companies employ 14.8 million people.
Texas, alone, is home to 22 immigrant-led Fortune 500 companies. Their combined revenue is nearly $845 billion.
If these “new American” companies were split out as their own nation, they would be the third largest economy in the world!
Our nation benefits from the talents, vision and drive, of people making massive sacrifices to call USA home.
However, our mismatch of workers and retirees continues to degrade due to our broken immigration system. According to CNBC, this year there have been approximately 484,000 applications for H-1B visas for skilled workers, but only 85,000 approvals. In previous years, about half of H-1B visa applications were approved. This year, only 17% have been approved.
The formula for success is clear. Our nation is built upon capitalism and entrepreneurship. Immigrants realize this phenomenal system does not exist in other nations. They are willing to make huge sacrifices to land on our shores and unleash their work ethic.
These jobs produce revenues to fund salaries, taxes, roads, schools, Social Security and many other societal benefits. Most importantly, these benefits accrue to Americans, regardless of political affiliation.
Our elected leaders are running Team USA at a tremendous deficit. This is not rocket-science. Let’s stop trading away the best draft picks. Fixing our immigration system will deliver the greatest nation a wonderful economic tailwind. In the process, we remain a melting pot of all-stars pushing the envelope of what is possible. This makes us the envy of the world.
Dave Sather is a Certified Financial Planner and the CEO of the Sather Financial Group, a fee-only strategic planning and investment management firm.