Fraser Forum

Trump, Clinton, Cruz, Canada, and the battle for brainpower

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The McKinsey Global Institute has said that the world could have 40 million too few college-educated workers by as soon as 2020. In the United States and other developed economies in North America and Europe, companies will require 16 to 18 million more college-educated workers than will be available in 2020. While there’s a good deal of controversy surrounding future supply and demand conditions for highly skilled labour, the broad consensus seems to be that developed economies will require millions more college-educated workers, especially in the sciences and engineering, than will be available at current real wages as early as the next decade.

If this development comes to pass, companies in North America will either need to raise real wages substantially, find ways to substitute capital for labour or tap new sources of skilled labour. With respect to the last option, increasing the immigration of highly educated workers is seen by the governments of a number of developed economies as a partial solution to a looming scarcity of skilled labour. Both Canada and the U.S. draw upon skilled and highly educated foreign workers and, indeed, arguably compete for many of the same types of immigrants.

The main U.S. immigration program for highly skilled foreign workers is the H-1B visa. In 2015, 233,000 people applied for the H1-B visa; however, currently there are only 85,000 H-1B visas available each year. An expansion in the number of H-1B visas available to be filled could indirectly and adversely affect the supply of skilled immigrants available to other countries, including Canada, particularly in the technology sector. In this regard, the positions of the main remaining candidates for the U.S. presidential election are relevant not only to the prospects for the U.S. economy but also to Canada’s economic outlook.

In fact, the current leading candidates have somewhat mixed positions on expanding the H-1B program. The two leading Republican candidates are virtually diametrically opposed. Specifically, Donald Trump is on record as viewing the use of the H1-B visa as a cheap labour program. He is in favour of instituting an absolute requirement to hire American workers first for every visa issued. On the other hand, Ted Cruz supports increasing the H-1B visa cap substantially. Specifically, he’s in favour of quintupling the number of visas in the H-1B program. The leading (and near certain) Democrat candidate, Hillary Clinton, hasn’t said much in her campaigning about her stance on H1-B visas; however, she has gone on record in the past as being on the side of boosting H-1B visa numbers in order to contribute to innovation, although she also expressed some reservations about having “enough” jobs for Americans during the depths of the 2009 recession.

In short, the outlook for U.S. immigration policy as it affects highly educated workers is uncertain. Nevertheless, there is certainly a possibility that the U.S. will become more aggressive in trying to attract such workers in the future absent a Trump presidency. If so, Canada will need to up its own game at attracting skilled and highly educated workers from abroad.


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