Note to USCIS: Small can be Good!

Yesterday, the Senate approved a multi-billion dollar package of tax breaks and government-backed loans to aid small businesses. It was a victory for the Obama Administration. As Senator Barbara Boxer stated, “Small businesses are the major job creators in our economy, and this legislation will ensure that our small businesses have the tax incentives and credit they need to expand and hire.”

It is abundantly clear that the success of small businesses is key to the overall success of the U.S. economy. A recent study by the Ewing Marion Kauffman Foundation looked at U.S. Census data which showed that, on average, new firms add 3 million jobs in their first year, and that during a recession, job creation at start-ups remains stable, while net job losses at existing firms are highly sensitive to the economy. In addition, start-ups tend to retain on average, 80% of their total employment in their first five years of business, unless exposed to a prolonged recession. A survey by the Gallup Poll on confidence in American institutions shows that 66% of Americans have confidence in small businesses, as opposed to 19% confidence in big business.

Why should immigration agencies care about the Administration’s interest in supporting small business and the overwhelming statistics about their importance to the economy? That’s an easy one. Because foreign nationals start a large percentage of new businesses in the U.S. Consider these numbers from a 2008 report from the Small Business Administration Office of Advocacy:

Immigrants represent 12.5% of all business owners

Immigrants are 30% more likely to start a business

16.7% of all new business owners are immigrants, and in some states more than 30% of all start-ups are founded by immigrants

And, according to a March, 2009 Wall Street Journal blog article (quoting an article in the Richmond-Times Dispatch), the values that immigrants bring with them to the U.S. about thrift, avoiding excess debt and relying on family support are helping many immigrant-owned businesses ride out the recession better than other businesses.

There is no doubt that Congress should be paying attention to these reports and formulating solutions–other than the EB-5 category– that make it easier for immigrant entrepreneurs to come to the United States. But USCIS needs to pay close attention too.

We know that USCIS’s primary mission is to implement and enforce the nation’s immigration laws as they relate to the granting of immigration benefits. And USCIS is to be lauded for its hard work–recently begun under USCIS Director Alejandro Mayorkas–in reviewing the quality and timeliness of its adjudications.

But USCIS has an opportunity to support the ailing U.S. economy as well. Currently adjudicators are applying unnecessarily narrow interpretations of laws and regulations that are casting a chill over the efforts of small entrepreneurs to be successful in the U.S. with their new and emerging businesses. From a policy perspective, this is evident in the Neufeld Memo, which indicated that business owners could not qualify for H-1B (professional in a specialty occupation) status. It is also clear from adjudicatory trends in the ” multi-national manager” context, which include reports of denials on the basis that  business owners cannot qualify as multi-national managers for the purpose of temporary visas or lawful permanent residence, because they are not “employed” by the sponsoring enterprise–an absurdly restrictive definition of the word “employed.” These are relatively recent developments, after several years of dealing with push-back  from the agency in the form of requests for additional evidence and denials on issues such as whether a foreign national can qualify as a multi-national manager where he or she manages a staff located in one or more different countries, whether start-ups in business for a year continue to be viable when they only have a small staff, and other related challenges for those seeking to set up shop or expand operations here.  USCIS has a legitimate concern about fraud–but should not presume that a business is fraudulent simply because of its size.

This is not a plea for USCIS to focus on the economy rather than its primary mission. But to the extent that existing law and regulations offer USCIS the opportunity to support and encourage foreign enterpreneurs, business people and investors, the agency should be ready to interpret those laws and regulations as generously as possible –for the benefit of all Americans.

by Eleanor Pelta