U.S. competitive position and capital investment flows in the economic citizen market: constraints and opportunities of the U.S. investor program

American Journal of Economics and Sociology, The,  April, 1998  by Curtis M. Jolly,  Mary Knapp,  Tridoyo Kusumastanto

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III

U.S. Immigration Policy Changes

THE RISE OF INDUSTRIALIZATION in North America required a large unskilled labor force--an attractive prospect for European emigrants, given the political instability and limited opportunities for economic advancement at home. When new immigrants arrived from countries other than northern and western Europe, however, Euro-Americans became hostile to the concept of immigration. It was blamed for everything from the unhealthy atmosphere in cities to falling wages.

The 1920s saw the beginning of quotas designed to protect and defend a North American sense of ethnic heritage. They initiated what Papademetriou termed an "ideology of limits" (Papademetriou 1993). Numerical restrictions were enforced with little change until the liberalization policy of the 1960s began increasing the flow of immigration. At that point, immigration policy shifted to one of equal treatment of all nations. Family reunification was a primary goal. Presidents Truman, Eisenhower, Kennedy, and Johnson all had maintained that the national origin quotas were discriminatory. Following the Civil Rights Act of 1964 and the Voting Rights Act of 1965, Congress replaced quotas with an annual numerical limit of 170,000; no single country was to exceed 20,000. The pressures and unforseen consequences of the 1965 Act led to the Immigration Act of 1990.

The 1990 act, an update of the Immigration and Nationality Act, redesigned the old preference designations, set ceilings on immigration flows, and limited immigration to three priority designations: family reunification (71%); employment (21%); and diversity (8%) (U.S. Commission on Immigration Reform 1995). The 1990 act changed the balance between family preference and labor market skills. The ceiling for all legal immigrations became 675,000, which was divided into 480,000 for family preference relatives, 140,000 for employment-based immigrants, and 55,000 for diversity (Isserman 1993). For the first time, the employment classification included workers of exceptional ability and also designated approximately 10,000 out of 140,000 employment visas for immigrants who "establish a new commercial enterprise in which $1 million is invested, and which will benefit the U.S. economy, and provide employment for not less than 10 people." Unwilling to remain passive to this seemingly lucrative investment proposition, America's competitors have adopted their own programs.

IV

Countries Embracing Economic Citizenship

Canada

The Canada Investor Program, initiated in 1986, targeted about 18,000 to 20,000 business investors annually (Nash 1987). The country recently adopted a class of immigrant entrepreneur visas under the Immigrant Investor Program for those who commit an irrevocable C$250,000 to an approved project for five years (Richardson 1987). The program consists of three categories of business immigrants: investor, entrepreneur, and self-employed. Its objective is twofold. First, the program promotes, encourages, and facilitates the immigration of experienced business persons from abroad. Second, by applying investment capital to small Canadian business ventures, the program creates and maintains jobs for Canadians and supports provincial economic benefits.