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Donald Trump’s anti-immigration stance threatens the heart of American innovation

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Silicon Valley is terrified of Trump

Republican Presidential Nominee Donald Trump Holds Election Night Event In New York City Photo by Mark Wilson/Getty Images

President-elect Donald Trump is causing a stir in Silicon Valley. After riding the path to the White House in part thanks to his anti-immigration rhetoric, Trump is now casting a shadow over the tech industry’s use of high-skilled foreign labor. Chief among the interests of industry luminaries is the potential expansion of the H-1B visa program, one of the Valley’s primary sources of overseas talent acquisition. Now, a Trump presidency puts that initiative at risk.

Because Trump has flip-flopped on the topic in the past, it’s uncertain whether he’ll heed the advice of Facebook CEO Mark Zuckerberg and others to allow more foreign-born computer scientists and software engineers to fill US jobs. In fact, despite his supporters’ defense that Trump is focusing on illegal immigrants, his proposals may in fact undermine legal immigration in ways the tech industry has never seen before.

“This was essentially a right-wing populist campaign. A big share of that populism was a belief that we have too much immigration,” says economist Rob Atkinson, president of tech policy think tank Information Technology and Innovation Foundation. The most likely outcome, in Atkinson’s eyes, is that H-1B visas “will be restricted, limited, and harder-to-get” and that tech companies will “have to go through more hoops to prove there’s not an American that can get the job.”

Already, Silicon Valley’s largest immigration lobbying group, the Zuckerberg-backed FWD.us, is mobilizing to prevent a rollback or freeze on reform. “Our team at FWD.us — made up of Republicans and Democrats, native-born Americans and immigrants alike — remains fully dedicated to an America that values immigrants,” reads a statement put out yesterday. The group cites exit poll data indicating 71 percent of Americans support a pathway to citizenship.

Yet it’s clear FWD.us is concerned. President Todd Schulte followed up the initial statement with a second plea to “stand up for your beliefs, stand with the communities who need you right now, stand for those who can’t stand for themselves and remember that a lot of people don’t have the option to walk away from this fight.” It’s not just the lobbying groups, but investors as well that fear a Trump presidency may adversely affect the industry. Technology stocks are down across the board this week for some of the biggest companies on the planet, including Amazon, Google, and Facebook.

The urgency comes from the uncertainties of a Trump administration, but also the personal stakes. The CEO of Google, Sundar Pichai, is an immigrant. As are Google co-founder Sergey Brin and Microsoft chief Satya Nadella. The entire Silicon Valley philosophy rests on the idea of rewarding individuals for hard work, talent, and ingenuity — regardless of race, class, or country of origin. Trump’s vague immigration policy proposals threaten this worldview. In a very material way, they also threaten the workforces of both the juggernauts and startups of the tech industry that use the H-1B and other visa programs to expand talent searches around the globe.

Google CEO Sundar Pichai wrote an impassioned defense of immigrants and Muslims last December as Trump’s campaign gained steam.
Photo by Justin Sullivan/Getty Images

According to the National Foundation for American Policy, more than half of all US technology startups are founded by immigrants. So without an easy path toward citizenship, or in the face of a clamping down on foreign work visas, Silicon Valley faces to lose more than just its lobbying goals in Washington. It could begin to see its influence in all sectors of modern industry — from entertainment to transportation to finance — wane as foreign workers and startup founders are denied entry and begin establishing technology centers outside the US.

This could have a number of lasting ripple effects as large tech companies start feeling disadvantaged. “A company like Oracle or some of the enterprise software companies, you could see them potentially losing global market share because of this,” Atkinson says. To counter, those companies could look to Canada. “Places like Vancouver, Toronto, even Montreal could be an option for American tech companies,” he adds. Canada could also use this opportunity to court foreign startup founders away from places like Palo Alto.

As it stands today, the H-1B visa is the most widely used system for bringing in high-skilled foreign labor into the US, allowing in and extending the stay of more than 315,000 foreign workers as of 2014. This amount has increased over the years due to country-based exemptions and renewals that extend the total approvals far beyond the 85,000 per year cap. H-1B visas last three years, with a three-year extension allowed.

Still, Silicon Valley and groups like FWD.us are fighting for a broader expansion and easier path to citizenship to allow foreign workers to remain and stay employed permanently. One such proposal includes granting green cards to any foreign student who graduates from an American university. The overall idea is to urge as many as people as possible to pursue tech jobs in the US. Critics, Trump included, say the program is abused to let companies rely on low-cost labor from cheaper countries. In one high-profile case, Disney laid off hundreds of tech workers last year and replaced them with Indian contractors in the US on H-1Bs. The situation, which got Disney sued by its former employees, has become emblematic of H-1B abuses.

As it stands, more than 65 percent of all approved H-1B petitions in 2014 were for computer-related jobs, and 96 percent of all approved petitions were for people with bachelor’s degrees or above. The median salary for H-1B workers was around $75,000 two years ago. However, six out of the top 10 H-1B visa recipients in 2014 were IT-focused companies headquartered in India that focus on selling contracts for temporary employment.

Trump has been forced to acknowledge the H-1B’s pros and cons in the past, but his position, like his stance on many topics, has remained slippery. As far back as October of 2015, Trump was challenged by a campaign website statement admonishing US companies for hiring foreign workers, demanding instead that companies “hire from the domestic pool of unemployed.”

When asked about the H-1B system by moderator Becky Quick that month, Trump said, “I’m in favor of people coming into this country legally. And you know what? They can have it any way you want. You can call it visas, you can call it work permits, you can call it anything you want … as far as the visas are concerned, if we need people, it’s fine.” This answer contradicted his actual policy proposals, which suggested raising the wage requirements for H-1Bs — to address a criticism that H-1B workers are used primarily as cheap labor — and adding a requirement to seek out domestic candidates prior to hiring foreign workers.

Final Presidential Debate Between Hillary Clinton And Donald Trump Held In Las Vegas Photo by Win McNamee/Getty Images

Later, in March of this year, Trump was asked to clarify his position again by Fox News debate moderator Megyn Kelly. “I’m changing. We need highly skilled people in this country, and if we can’t do it, we’ll get them in,” Trump said. However, after the debate, Trump’s campaign released a statement saying the H-1B program was full of rampant abuse.

“The H-1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay,” the statement read. “I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers for every visa and immigration program. No exceptions.”

Trump appeared to come to rest on the topic in a later Republican debate in March, when he admitted to relying on the H-1B program for his own businesses, but admitting he “shouldn’t be allowed to use it” and adding, “We shouldn’t have it. Very, very bad for workers.” So if anything, Trump’s position on the H-1B program would appear to be pushing against the wishes of Silicon Valley, even if he has exhibited moments of self-doubt or change.

What this extreme uncertainty says for the future of Silicon Valley employment is unclear. But Trump’s policy proposals don’t reside on the strongest economic footing. The theory is that if you make it harder to hire foreign workers, tech companies will be forced to both raise wages and look to American talent to fill those roles. Those are workers that, in the eyes of H-1B critics, are either too expensive or not young enough to fit the cynical Silicon Valley mold of young, foreign, and cheap. In practice, it may not actually play out like that.

“I believe that dynamic works in truck driving,” Atkinson says. “It’s not hard to become a truck driver. It’s really hard to become a software engineer. You’ve got be, first of all, smart. You’ve got to know a lot about math. That eliminates a lot of people in this country.” And if you raise the price of acquiring talent? “They [tech companies] get their talent elsewhere,” Atkinson adds. “Truck driving is a domestic market for skills. Tech is a global market for skills.”