What's the best cure for insomnia? A congressional committee testimony replay on C-Span! Or so I thought while recently having trouble catching Z's. With no Ambien in sight and all the sheep in New Zealand counted, I presumed Bill Gates' testimony to the House Committee on Science and Technology to be my next best option.
There Bill comfortably sat in front of Congress—the second richest man in the world, Microsoft founder, accused monopolist, renowned innovator, and beloved philanthropist. As he extolled the needs of the science community to remain globally competitive, I was sure I'd be in dreamland in minutes. Yet Mr. Gates' remarks intrigued me.
The main thrust of Gates' message was the problematic US deficit. No, not the trade or budget deficit, but the dearth of domestic scientists, engineers, and mathematicians. Bill deplored both deficiencies in the US public school system and a mysterious lack of interest by students to pursue these degrees, leaving US businesses with few human capital options in scientific fields. To make matters worse, US graduates are no longer the best in the world.
Can it get any worse? It can. Further exacerbating the scientist shortage, restrictive immigration policies set by Congress for H-1B visas limit US companies' ability to hire the best engineers, mathematicians, and scientists from other countries. H-1B visas are for college-educated foreigners looking to work here in the States. This year, the arbitrarily set quota of 65,000 for H-1B visas was filled in one day! One day!
Gates' plea to Congress: Restricting US companies from hiring the top minds in scientific fields is hurting the domestic economy. In other words, a shortage exists for a high demand good (human capital) not being produced domestically and the government has imposed trade restrictions impeding economic growth.
A defiant Dana Rorabacher (R-CA) demonstrated an interesting understanding of economics by engaging Gates in a brilliant exchange:
Rohrabacher:If we bring in more people from the outside, realizing that we're bringing the most talented people from other countries, will it not hurt those countries? And will it also not depress the wages in our own country that people like yourself would have to pay your employees in order to get quality people or in order to train people within our own society?
Gates:That's right, and what I've said here is that when we bring in these world-class engineers, we create jobs around them. . . . The B and C students are the ones who get those jobs around these top engineers. And if these top engineers are forced to work, say, in India, we will hire the B and C students from India to work around them.
Bill Gates could not be any clearer: If the top minds in science (who are mostly from Asia) are not hired within the US, they will be hired somewhere else and create jobs around them within that country.
When a genius invents the next YouTube, a new medical breakthrough, efficient water desalinization, etc., whole companies or business units sprout. As an economy, where do you want these companies to be located? India, Ireland, China? Absolutely, if you are India, Ireland, or China!
Gates again, "…It's a total win-win situation for the economy and job creation to not force these people to be employed outside the United States. We at Microsoft, partly because of the current U.S. immigration policies, we created an office up in Vancouver, Canada, because that government, like virtually every government other than the United States, recognizes that competing for talent and encouraging talent, particularly talent educated in a country, getting them to stay, that that's very, very important."
In a time when Congress is searching for helpful ways to improve the seemingly struggling US economy and dipping stock market, allowing domestic businesses the ability to hire innovators and remain technologically competitive with the rest of the world makes more sense than sleeping through the problem.
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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.