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Will the Border Bill Stifle More than Illegal Crossings?

So what was in that border security bill President Obama signed into law as Congress headed out for its August recess? Simply, it’s beefed up enforcement: more border patrol agents, more high-tech surveillance equipment, and better communications equipment for the U.S.-Mexico border to help stop illegal immigrants, drugs, and weapons from coming into the United States.

Republicans have been pushing for more enforcement, especially as reaction to Arizona’s new immigration law has made it clear that the American public thinks that the federal government is falling down on the job. For their part, key Democrats viewed it as a down payment for further reforms down the road.

Interestingly, the bill’s $600 million price tag will be primarily paid for by major hikes in visa fees for H-1B workers--skilled foreigners working primarily in high-skilled and technology fields. This will not be an across the board increase though. Firms employing more than 50 foreign workers constituting more than half of their workforce will be subject to a quintupling of fees. Indian tech firms seem to be the target, and according to the Senate bill sponsor Charles Schumer (D-N.Y.), “It will level the playing field for American workers, so they don't lose out on good jobs here in America because it's cheaper to bring in a foreign worker than hiring an American worker."

Last year H1-B visas were not snapped up at the breakneck pace of previous years. The new fee structure should both fuel and inform the debate over whether immigrants “crowd out” jobs and reduce the wages of U.S.-born workers in the tech sector. Over the longer term, how will the industry adapt--by paying higher fees to continue to employ the same workers or will they begin hiring citizen workers (who, of course, may be foreign-born naturalized citizens)? Will they move operations out of the United States or not even bother considering starting up operations here? Will this type of protectionism in the name of border security (!) get in the way of US competitiveness and innovation capacity?