Business Expert: Automation, not Immigrants, Have Taken U.S. Jobs

When Fariborz “FG” Ghadar was in Silicon Valley several years ago, he saw an alarming billboard. It read: “H-1B Problems? PIVOT to Canada.”

Sponsored by the Canadian government and aimed at highly skilled immigrants in the technology sector, “It essentially said, If you are having difficulty getting a visa in the United States, consider coming to Canada,” says Ghadar, a professor of global management policies at Penn State’s Smeal College of Business. When the United States severely limits the number of visas it issues to highly skilled immigrants, many of those needed workers vote with their feet. “We no longer are alone in trying to attract the best and the brightest,” he says. “Countries like Canada, Australia, and New Zealand are going after our highly skilled people, and having a lot of success.”

It’s crucial to our economy to keep the smart, ambitious people who come here to study as well as the global experts who enhance our nation’s competitiveness.

The current environment is far cry from the one Ghadar entered when he settled permanently in the United States in 1978. At the time, he embarked on a series of exciting projects: He launched a chain of computer stores; started an executive education company; set up 26 stock exchanges for countries around the world; created a consulting company; taught business management at the university level; and founded the Center for Global Business Studies, a research organization focusing on international business trends.

“This is a country that allows me to do wonderful things. The entrepreneurial spirit that is encouraged in the United States is unbelievable,” he says.

Born in Iran, Ghadar first came to the United States with his parents when he was 2 years old. The family returned to their homeland when he was a young child, and his father worked as an Iranian ambassador. Ghadar returned to the United States for his higher education, receiving bachelor’s and master’s degrees from the Massachusetts Institute of Technology and a doctorate in international business from Harvard University. He worked at the World Bank Group before returning to Iran to take a vice-ministerial post in charge of non-oil exports. But in 1978, shortly before the Iranian revolution, he returned to the U.S. and eventually became a U.S. citizen.

In his recent book, Becoming American: Why Immigration Is Good for Our Nation’s Future, Ghadar dispels many myths that Americans have about immigrants, including the notion that immigrants are a drain on the U.S. economy. Ghadar notes that in 2012, 42 percent of American Fortune 500 companies were founded by immigrants, and that those companies have created more than 10 million jobs and $4.5 trillion in annual revenue, or 30 percent of the gross domestic product.

“When people say immigrants cost the economy, it’s just not true,” he says.

One study Ghadar conducted with two teaching assistants analyzed American job losses, and found that jobs were lost to automation, not to immigrants. “So what’s the strategy?” says Ghadar. “It’s not to beat up on the immigrant. It should be to retrain these guys. It’s cheaper for us to train them so they can be productive for the factory of the future. That’s the German strategy, and they are very successful at doing that.”

For older workers who aren’t able to adapt, Ghadar suggests creating a social network to support them. “That’s also cheaper than having these guys get all upset and come up with immigration policies that are just outrageous,” he says.

For all of these reasons, Ghadar supports immigration reform that would help the United States attract and retain talent. “It’s crucial to our economy to keep the smart, ambitious people who come here to study as well as the global experts who enhance our nation’s competitiveness and, yes, create jobs.”