More than 200 years ago, a French Canadian named Julien Dubuque became the first white man to settle in what would later become the state of Iowa.  At that time, the area was inhabited by the Mesquakie Indian tribe and the main industry was the mining of lead.  Though not the first miner in the area, and certainly not one of the indiginous people, Dubuque was nevertheless one of the more productive miners in the area.

Fortunately for Messier Dubuque, national origin was not a qualification for working with the Mesquakie.  Fast forward a few hundred years.  Enter Senator Chuck Grassley.  The honorable gentleman from Iowa has introduced legislation that prohibits American companies from “replacing laid off American workers with foreign workers.”

Of what long-term remunerative benefit is this to the American or global economy?  Shouldn’t job openings go to the most qualified applicant (acknowledging, of course, that “qualified” includes valid H-1B visas, etc.)?  Augmenting the quality of a company’s workforce increases productivity and profitability, generating greater tax revenue for the government (while lowering the tax burden for others) and maximizing value for shareholders.

Furthermore, according to Jeff Segal of breakingnews.com, “many visa holders eventually settle permanently in the U.S., make money and pay lots of taxes.”  Why discourage that?

In a weak economy, especially, the government should take actions to ease, not restrict, the employment of the best and brightest minds from working in the United States.  They should resist temptations to practice discrimination which would keep both innovation and productivity from an American economy when it most needs it.  Hindering competition will simultaneously lower the quality of work while raising its cost for producers — a cost which is inevitably passed on to consumers in the form of higher prices and lower quality goods.

But what of the argument that foreign workers are simply providing the innovation/productivity that would otherwise have been produced by domestic wage earners, and thus “steals their jobs and compensation?”  This week’s Economist, citing a study by Harvard economist William Kerr and University of Michigan (Go Blue!) economist William Lincoln, argues that access to employment of foreign workers actually has synergistic effects on domestic innovation:

When the federal government increased the number of people allowed in under the programme by 10%, total patenting increased by around 2% in the short run. This was driven mainly by more patenting by immigrant scientists. But even patenting by native scientists increased slightly, rather than decreasing as proponents of crowding out would have predicted. If anything, immigrants seemed to “crowd in” native innovation, perhaps because ideas feed off each other. Economists think of knowledge, unlike physical goods, as “non-rival”: use by one person does not necessarily preclude use by others.

Senator Grassley’s legislation is frighteningly reminiscent of the infamous 1930 Smoot-Hawley Tariff Act, but with a side order of xenophobia.  Smoot-Hawley greatly exacerbated the country’s economic recession by restricting the international flow of goods via record tariffs, decreasing imports and exports by over 50%, and contributing to the decade-long Great Depression.

The dangers of protectionism, both economic and social, are risks the country can ill-afford.  While prejudice against foreign workers and foreign goods might serve political expediency, it is a short-sighted and ineffective solution to economic trials, even if it does garner a few extra votes in Dubuque, Iowa for Mr. Grassley.

"Speak American, son."