Many of America’s best and brightest students are applying their talent in ways that hurt, rather than profit America. There are two main so-called “brain drains” weakening America as college students graduate: the return of international students to their homelands and the flocking of elite students into the financial industry.
The International Brain Drain
Brain drain has been a common term in international economics for decades, but not until recently has it become a cause for concern in the eyes of Americans. Brain drain is defined as the emigration of a large group of individuals with technical skills or knowledge. When inbound, brain drain has always remained essential to the strength of the country. America, the land of opportunity, has long been a prime destination for foreigners. Countries around the globe have had their top minds “stolen” by the U.S. These “stolen” minds have flourished and become some of the most successful people in America: Pierre Omidyar of France founded EBay, Sergey Brin of Russia co-founded Google, and Jerry Yang of Taiwan co-founded Yahoo. However, the tightening of immigration policies is beginning to destroy this advantage, creating a reverse brain drain as high-end talent leaves the U.S.
Who is leaving the U.S.? The massive numbers of international students who enter America for college are increasingly choosing to say “goodbye America,” “gàobié měiguó,” “alavidā amērikā,” and so on as they exit the country upon graduation. In 2010, over 690,000 international students were studying in America. These international students take up an enormous part of the American education system, obtaining more than half of the doctorates earned by American universities in math, computer science, and engineering. Historically, most of these students would stay in America after finishing college: five years after graduation, 92% of Chinese students (128,000 total) and 81% of Indian students (105,000 total) were still in America.
A combination of increased standards of living back home and restrictive American immigration policies have flipped the situation around. The booming economies and improved research and development of countries such as China and India, along with the prospects of living near family have led many of America’s top college graduates to return home, bringing their skills and ideas with them. While America clearly cannot inhibit all of this, a loosening of rigid immigration policies could slow this trend.
The United States limits the number of foreigners who seek careers in the U.S., creating a logjam of applicants struggling to gain citizenship. According to the National Foundation for American Policy, a highly skilled Indian national could wait up to 70 years for permanent status. Inventors, investors, and entrepreneurs who would love to enrich America, are being turned away. On top of that, the years the country just invested in the student’s education are wasted.
If this movement continues, the strength of America is destined to fall. Immigrants have accounted for 52% of Silicon Valley start-ups, 25% of US global patents, and 47% of PhD students. Is the country beginning to lose sight of its roots stemming from immigration? Canada, Australia, and other countries have policies designed to attract and keep skilled immigrants. The US, however, is sending the best of the best back home, so they can compete with America.
The American business community is insisting that President Obama takes action to keep these well-abled brains in the U.S. In rhetoric, Obama agrees that the brain drain is a concern, stating that, “Our future depends on reaffirming America’s role as the world’s engine of scientific discovery and technological innovation.” As mentioned earlier, over 50% of the company founders in Silicon Valley, the epicenter of America’s scientific discovery and technological innovation, are immigrants. In reality, nothing has yet to be done to solve the brain drain problem. Will America still be the most technologically advanced country in 20 years? Not at this rate.
Immigration is a tough issue, and there are certainly key disputes over its real effects on the country. Many Republicans have the steadfast opinion that immigration can only be trouble. The chief point against immigration is that immigrants are taking jobs away from Americans. With unwavering views supporting and repealing this argument, you could spend a lifetime studying the complex economics of the situation and fail to find the correct answer. Do immigrants take American jobs away? Yeah, probably. But how many jobs do you think companies such as Google, EBay, and Yahoo have added? And how much have these companies and others alike contributed to America’s economy?
In prominent Republican Pat Buchanan’s Suicide of a Superpower: Will America Survive to 2025, Buchanan associates continued immigration with the end of the Republican party and the eventual demise of the United States. Citing bankrupt California as an example, Buchanan makes the argument that the immigrants coming in are tax consumers, rather than taxpayers. As this path continues, America will slowly crumble. Buchanan’s position, though, focuses on illegal immigration and that of Hispanics, not the largely eastern collection of international college students.
Can a general consensus be reached that the other groups of immigrants who are entering America for college are indispensable to the country? Is there a way to favor the types of immigrants that are taxpayers and contributors rather than tax consumers and freeloaders? For the good of America, we sure hope so.
The Finance Brain Drain
A recent Los Angeles Times article highlighted a different problematic brain drain: The flooding of elite students into the financial sector – the same financial sector that many believed destroyed America’s economy over the past few years with their Wall Street greed. In other words, elite students are choosing money over social good.
Prominent banks annually carry out their most rigorous recruiting pushes at top schools, such as the Ivies, MIT, and Stanford. In 2010, even with the crisis in the financial sector, over 15% of Harvard, Stanford, and MIT students entered the financial service industry. Only consulting jobs drew more students.
A combination of aggressive recruiting, elite university culture, and the aura of high pay draw these incredible students into finance. Large banks always have a presence at these exclusive colleges, using large salaries to lure both the previously interested, and those with job insecurity or no distinct career path.
For some students, the higher salary is a necessity.
“I don’t have the luxury to go into a field that pays less,” one Dartmouth student told the Los Angles Times. “It’s kind of insurance in a way – it will give me a steady income for me to stabilize my life, pay down my loans – and it will open me up for more opportunities.”
The recent financial crisis has brought out a lot of anger in Americans frustrated with workers in these types of positions, as demonstrated by the Occupy movement. The same resentment motivating the Occupy movement is spawning a new movement – Stop The Brain Drain.
Stop the Brain Drain, founded at Stanford University, has its own website, and has slowly been gaining electronic signatures protesting the brain drain. The movement criticizes the “monopoly” that Wall Street holds on top young talent, arising from large donations to college career centers to obtain preferred access to recruitment. Instead of Wall Street, Stop The Brain Drain promotes careers as entrepreneurs, scientists, and public servants.
While recognizing that the financial industry is very important for allowing the creation and growth of new businesses, the movement emphasizes that major companies are often still greedy. For example, its website notes that Goldman Sachs made 63 % of revenue from its trading in 2010, compared to only 13% from corporate finance.
I personally have nothing against finance jobs and do not view them as selfish or greedy, nor do I care about the Occupy Wall Street Movement. In fact, I am still considering a job in finance as a possible career opportunity. Finance is an integral part of the economy and is a great fit for a lot of people. Although employees in high finance may go over-the-top sometimes in their pursuit for money, it’s not like the majority of other jobs out there aren’t also for profit.
Like many Northwestern students, the last few years of my life have gone as follows:
After spending all of high school working extremely hard to try to be the best and get into Northwestern University, my focus is shifting. College will replicate high school – a bunch of late nights to ensure those A’s. After college, life takes a new direction. Where will my hard work and acquired talents go? Will my focus turn from grades to innovation, public service, money, etc? At this point, that money is looking very tempting.
What can America do to stop me?
The financial sector could be a perfect match for me. Maybe it is inevitable that I end up there. Nevertheless, America still can and needs to attempt to prevent this. In general, the high finance sector does not do much social good. In my opinion, trading money and stocks around isn’t doing anything noteworthy for the world. Considering how intelligent many of these people are, America is not allocating its resources correctly. These are the people who should be changing the world, not just padding their bank accounts.
How Can America Plug The Drain?
America can’t plug the drain.
It can, however, clog it. The fact that international students have family and increasingly higher standards of living is certain to attract some students home. The high pay and prestige of jobs in high finance will also never cease to exist. Who doesn’t want more money?
I’m no expert, but America and its people definitely need to look into these issues and attempt to solve them.
To prevent the international brain drain, America may want to develop a more economically focused immigration system. Despite some potential moral hazards, America could treat immigration like college admissions: only accept the best. If an immigrant does something good for the country, such as start a company, graduate from a top university, or purchase an expensive house, America should make it easy for them to become citizens and continue to contribute to the country.
Do not forget the financial brain drain. America and its top universities should look to solve this as well. America must encourage careers that involve social good – entrepreneurs, scientists, engineers and researchers.
Some of the first steps to stopping this brain drain have already started. MIT recently created an entrepreneurship center for those seeking opportunities at start-ups or small companies. Harvard has encouraged nonprofits like Teach for America to move their recruiting to the same times as banks to give students more options. Even loan forgiveness has been given to some law school students entering public service.
Incentives such as these ought to be extended. Government aid for college could be redistributed to the areas of study that America wants the most. Albert Einstein once said, “I have no special talent. I am only passionately curious.” This curiosity and interest should be incentivized and encouraged at a young age.
Earlier, I mentioned that America was misallocating its resources as its best and brightest students entered Wall Street. But isn’t capitalism all about allocating resources properly? If the free market system were to work as it is supposed to, there would be no reason for the finance brain drain to exist. Well in this case, maybe the problem is that Wall Street does not function in a free market. When the government bailed out the banks in the midst of the recession, America was counteracting its very own principles of capitalism. If America did not bail out the banks, would the high finance sector still have the same power as it does now? Would there even still be a finance brain drain? Perhaps the recent policies of America are the cause of this brain drain in the first place.
If you are an international student, I am not telling you to stay here. If you are a student looking to go into high finance, I’m not saying you shouldn’t. It is America’s job to keep this under control.
America cannot let its best young minds go to waste – it must stop both brain drains.