Saving jobs for citizens may not save economy
A provision in the stimulus package limits the hiring of foreign workers by companies receiving government bailout money -- how this might be a bad idea.
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The global economic crunch is forcing some governments to limit immigration and foreign work visas to try to keep jobs available for citizens instead of immigrants. This week Australia announced it was limiting immigration limits by 14 percent. Here in the U.S., a provision in the economic stimulus package limits the hiring of foreign workers by any company receiving government bailout money, including all those big banks.
It sounds like common sense to protect citizen's jobs, but Vivek Wadhwa, Duke adjunct professor and a researcher at Harvard Law School's Labor and Worklife Program, explains on "The Takeaway" why he thinks it will hurt the economy in the long term.
Professor Wadhwa: "What tends to happen is, when you start ... being protectionist, it becomes a snowball, and one thing leads to another and ultimately you end up hurting the economy, and that's what I fear is going to happen over here with the legislation that was passed limiting the rights of banks to hire MBAs -- foreign students basically."
He says it's difficult to reconcile peoples' fear of loosing their jobs with the argument that foreign workers are good for our economy: "It's very, very difficult, and I've been barraged ... [with] nasty emails from people because I've been saying we need to keep our doors open, we need to keep encouraging skilled immigrants to come here to start companies.
"The fact is, if you look at the data, over the last 10 to 15 years, the vast majority of start-ups basically have been founded by immigrants -- 52 percent of Silicon Valley start-ups were founded by immigrants. Immigrants have contributed significantly to global patents, they basically have created more jobs than they have taken away ... if you now start telling your foreign nationals 'we don't want you anymore,' and you start telling companies to fire foreigners before they fire Americans, it's a slippery slope."
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