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Silicon Valley vs. Trump – The H1B Visa Elephant in the Room

23 February 2017

On the heels of President Trump’s attempt to temporarily shut down travel from seven countries for 90 days, a group of 97 predominantly technology companies filed an amicus brief condemning his policies. The companies claimed that the move was “inflicting substantial harm on U.S. companies.” The brief was filed in support of a Washington state lawsuit against Trump’s “ban” and was supported by tech giants Amazon and Microsoft. The top companies signing the brief include Apple, Google, Facebook, Snap, Twitter, Expedia and Uber. Amazon has a separate immigration lawsuit against the administration.

The brief further claims that, “Immigrants make many of the nation’s greatest discoveries and create some of the country’s most innovative and iconic companies. America has long recognized the importance of protecting ourselves against those who would do us harm. But it has done so while maintaining our fundamental commitment to welcoming immigrants—through increased background checks and other controls on people seeking to enter our country.”

At first blush, one wants to say, “Kudos…how nice…Silicon Valley is sticking its neck out to protect immigrants.” At second blush, I ask myself, is this altruism or is the motivation solely to protect access to cheap labor that immigrants provide, especially in the technology sector, and potentially to the detriment of our own STEM graduates?

I have a hard time believing that those of you who signed the amicus brief did so because you are appalled that immigrants from the seven countries (that hardly represent those who you hire), are prevented from coming into the country. Instead, you are up in arms because curtailment of immigration by the administration would dramatically affect your profits and your ability to continue to have that stream of cheap labor. Right?

So, what could this substantial harm be that the executive order inflicts? The brief reads, “It hinders the ability of American companies to attract great talent; increases costs imposed on business; makes it more difficult for American firms to compete in the international marketplace; and gives global enterprises a new, significant incentive to build operations—and hire new employees—outside the United States.”

Silicon Valley hires low-wage workers. H-1B visas allow companies to employ foreign professionals in “specialty” occupations --  75% of technology workers are foreign born and many were hired within the H-1B visa program. They earn a lower wage than their American peers and they have no ability to negotiate a new job—making them entirely subject to their employer to stay in the U.S. Yet, they take precedence over American workers and current lawful residents.

Not only are Silicon Valley companies signing amicus briefs, some entrepreneurs formed a company called True North so that U.S. companies can create subsidiaries in Canada, relocating their U.S. based employees to Vancouver. Vancouver already has Facebook, Microsoft, Amazon and Twitter satellite offices. Per the Vancouver Economic Commission, the tech companies generate $23 billion in revenue and 30% of venture capital funds are going to Canada. Canada also has a “Start-up Visa Program” hoping to attract those with temporary visas in Silicon Valley and Seattle. Since the election in the U.S., interest in the Canadian alternative is mushrooming.

Currently in the U.S., the visas are assigned through a lottery annually. In 2016 approximately 236,000 petitions were filed for the 85,000 visas available. The visas are awarded to the companies and not the person, and are tied to a specific job. This is why the workers, once here, find it nearly impossible to change jobs to another company. The process in that case starts over.

Jeff Sessions has long been critical of the program, and in 2015 introduced legislation to restrict the availability of the visas to large outsourcing companies, the largest users of the visas. Many besides Rep. Sessions are pushing for reform. The Institute of Electrical and Electronics Engineers (IEEE) is in favor of abolishing the lottery for awarding visas to companies providing the highest paying jobs.

Immediately after signing the seven-country ban, Trump also penned an executive order that will cause Silicon Valley tech workers to get a raise -- targeting H1B visas. Congress’s own report indicates that H-1B visa holders receive lower wages, smaller signing bonuses and less ability to move up in the ranks.

While it isn’t known for sure what Trump will do regarding the H-1B program, or how far he will go in the doing, the purpose of this article is to say that while I understand that H-1B is a source of cheap labor for you, and it’s hard to fault that, given the pressure to maintain the bottom line -- just call it what it is rather than professing altruism.

I’ve spent some time looking at the H-1B program, our own STEM graduates and whether or not there is a shortage or a glut of talent in this country. Articles I’ve penned on the topic include: "Stymied by the Truth of STEM," "Why aren’t our STEM graduates hired?" and "You’d Rather Import than Retrain. Why?"

On the other end of the spectrum affecting Silicon Valley firms and all corporate giants in the U.S. are the tax benefits under Trump that will likely accrue to companies that manufacture here, bringing even more jobs to the country. It will be a balancing act in the consideration of H-1B versus tax breaks and avoiding fees to sell their products in the U.S. should they decide to go north.



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Discussion – 2 comments

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Re: Silicon Valley vs. Trump – The H1B Visa Elephant in the Room
#1
2017-Mar-01 9:15 PM

"I have a hard time believing that those of you who signed the amicus brief did so because you are appalled that immigrants from the seven countries (that hardly represent those who you hire), are prevented from coming into the country. Instead, you are up in arms because curtailment of immigration by the administration would dramatically affect your profits and your ability to continue to have that stream of cheap labor. Right?"

What you're saying here seems contradictory to me. If Silicon Valley companies aren't hiring meaningful numbers of people from the countries affected by the travel ban, how are you arriving at the conclusion their motivation for the amicus is based on losing their stream of cheap labor?

Re: Silicon Valley vs. Trump – The H1B Visa Elephant in the Room
#2
2017-Mar-05 4:13 PM

Scot, thanks for posting. I believe that the companies involved are concerned about Trump doing anything about immigration that could eventually lead to an impact on the H1-B program.

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