Brain Waste: Researchers Discuss Economic Costs of Skill Underutilization among Highly Skilled Immigrants

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CHAPTERS 

[00:00:45]: Scope, wage losses, and tax impacts 

[00:02:00]: Rising education levels among new immigrants 

[00:02:25]: Disparities for foreign-educated versus U.S.-educated 

[00:02:48]: Key barriers: credentials, market knowledge, perceptions, English ability 

[00:03:24]: Policy and program solutions to reduce brain waste 

[00:04:05]: Brain waste among U.S.-born and policy shift 

TRANSCRIPT

[00:00:11.20] 

America has long attracted some of the world's best and brightest, but not all of them can get jobs that allow them to fully utilize their college degrees or their skills. In fact, nearly 2 million highly skilled immigrants, in other words, those with four year college degrees or more, are either stuck in low skilled employment or can't find work. This phenomenon is known as brain waste or skill underutilization. You may know it best by the old story of doctors driving taxicabs.

[00:00:45.21] 

We estimate that one in four highly skilled immigrants in the United States experiences brain waste. There are approximately 8 million college educated immigrants in the U.S. Labor force, but nearly 2 million either couldn't find employment or are working in low skilled jobs such as cashiers, construction laborers and cooks. Brain waste imposes some significant economic costs on immigrants, their families and the U.S. economy. How much? Our research shows that highly skilled immigrants working in jobs that require no more than a high school degree are missing out on more than $39 billion in wages annually. And as a result, federal, state and local governments are forgoing a bit more than $10 billion in tax payments. These unrealized earnings and tax payments affect the U.S. economy at every level by lowering productivity and consumer demand. And highly skilled immigrants who cannot fully utilize their skills are less likely to earn family sustaining wages and as a result, to achieve financial stability for themselves and their families.

[00:02:00.24] 

This brainwash should be of particular concern right now. Our research shows that the highly skilled make up a rapidly increasing share of the immigrant population. In fact, about half of all recently arrived immigrants had a college degree. That's up from a quarter in 1990. So as the immigrant workforce becomes ever more educated, it only makes sense to try to fully leverage their talents.

[00:02:25.10] 

Brain waste affects some immigrants more than others. It's particularly acute for immigrants who were educated outside the United States. Fully 29% of those earning their degrees abroad worked in low skilled jobs or couldn't find work. That's as compared to 21% of immigrants educated in the United States.

[00:02:48.05] 

So what are some of the barriers that high skilled immigrants face in getting jobs at their skill level? Let me mention a few of the most important ones. One is the difficulty of getting foreign credentials recognized by U.S. employers and licensing bodies. Immigrants unfamiliarity with the U.S. labor market is another. A third is employers negative perceptions of the quality of foreign education and work experience and fourth, limited English skills. When we tried to isolate the most important contributing factor to brain waste, we found that limited English proficiency represented the greatest risk for low skilled employment.

[00:03:24.29] 

The good news is that many of these barriers can be addressed or at least alleviated through targeted programs and policies. Some states, including Michigan and Ohio, are undertaking efforts to remedy brain waste, for example, by connecting international students and immigrant professionals with potential employers. And a growing number of nonprofits and employers are also taking steps, everything from helping immigrants connect with professional English classes to mentorship and network programs that help them redo their resumes and learn what works best in the U.S. job interview setting.

[00:04:05.19] 

Finally, one of our most telling findings is that immigrants are not alone in experiencing brain waste. Our research shows that 18% of U.S. born college graduates in other words, nearly 7 million people also cannot find work at their skill level. What this tells us is that U.S. policies, which currently concentrate on human capital development by getting people into college and on to graduation, need to expand to human capital utilization. It should be a priority for national and state policymakers to ensure that all workers, regardless of their origin, are given the opportunity to fully utilize their human capital in ways that contribute to economic growth and competitiveness.