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Joe Guzzardi Why do we allow more immigrants into the U.S. when unemployment is high?

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Joe Guzzardi

Posted: Saturday, March 26, 2011 12:00 am

Legal immigration is a major deterrent to improving the unemployment rate, 8.9 percent nationally but 12.5 percent in California.

As long as the federal government allows significant levels of immigration and continues to issue work-related visas, fewer jobs go to American citizens. Visa categories that automatically include work permits can be had for jobs that range from doctors to fry cooks.

Other visas, like the Investor Business visa (the EB-5), are officially designated as job creation vehicles that allow an overseas investor to come to the United States with the promise that he will start a new business.

But the devil is in the details. The fundamental requirements for an EB-5 are that an investor will put up a $500,000 minimum and supposedly must "create" 10 new jobs in any one of 73 federally designated regional centers where unemployment is high.

A closer look at the fine print shows that the investor has enormous latitude. The visa holder must only prove that his venture has at least "indirectly" created or has "saved" jobs by keeping existing workers employed. For example, if a foreign-born investor opens a bakery that produces hot dog buns, he could claim that his business helps keep baseball stadium frankfurter vendors on their jobs. That may sound ridiculous but remember in the arena of immigration law, no scenario is too absurd.

The EB-5 visa's fundamental premise is flawed and its history rife with fraud.

Created by the 1990 Immigration Act with a cap of 10,000 visas, the EB-5 can could correctly be renamed "The Citizenship for Sale Act."

Since no capital intensive business can be created with only $500,000, the minimum required investment is too small to be taken seriously. What's more, in past years the courts found that some larger investments involved criminal insider access, misrepresentation, money laundering, falsified bank statements and wire fraud, all designed to secure the green card.

Other provisions of the EB-5 are lax to the point of uselessness. While the EB-5 visa holder and his qualifying family members (spouse and minor children) can live anywhere in the U.S., he is not required to physically be in the country but must only demonstrate his "intent" to become a resident. That would include renting a home, obtaining a driver's license or opening a bank account, none of which are absolute evidence of intended residency.

Applicants don't need to manage their business' day-to-day operations or speak English. While it may be hard to envision a successful entrepreneurial effort in today's competitive environment without hands-on management by an English-speaking chief executive officer, Congress disagrees.

Other benefits to the EB-5 holder are that his children can remain in school even if he leaves the country and he can retire in the U.S. Best of all, once the $500,000 minimum is in place, he gets a conditional green card, followed two years later by a permanent green card and then five years later citizenship for him and his family.

Over the past three years, the total number of EB-5 visas jumped from 1,443 in fiscal 2008 to 4,218. While the total may appear small, the trend is discouraging. Why the federal government keeps increasing the work-based visas in a period when employment can't keep up with population growth remains a deep and troubling mystery.

Joe Guzzardi retired from the Lodi Unified School District in 2008. He now lives in Pittsburgh, PA. Contact him at guzzjoe@yahoo.com.

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