ZUCKED UP: Why Silicon Valley Is Scared to Death of Trump Part 1

California’s high-tech business wizards like Facebook’s Mark Zuckerberg are in full freak-out mode over Donald Trump, and the key to understanding why lies in the H-1B visa program. As a recent L.A. Times story titled “Donald Trump has done the unthinkable: Unite Silicon Valley” reports:

Ambitious start-up CEOs who swore off talking politics for fear of offending investors are enlisting in campaigns to discredit Trump. Longtime valley Republican stalwarts who have voted for every GOP nominee for decades say they can’t do it this year. The libertarian-minded innovators who just want to get government out of their way have less faith in Trump than they do in even Hillary Clinton, the Democrat with big plans to grow the bureaucracy.

“At least Clinton is not going to go in and burn the place down,” said Reed Galen, a GOP consultant who advises tech companies. “But Trump comes in, and God knows what happens.”

What’s wrong with Silicon Valley? Why the fear of the pro-business Donald Trump, and why is the California GOP establishment joining in the scrum?

Just follow the money.

For years, President Obama and the comprehensive immigration reform crowd has distracted the American public masterfully, getting people to focus on low-wage workers and ignore the more perilous drag on our economy; the devastating impact of immigration policy on the middle and upper-middle class due to guest worker programs that have led to stagnant wages and massive American job losses.

Both Democrat and Republican advocates of comprehensive immigration reform were happy to let both citizens and pundits focus on the problems at our southern border. When President Obama announced his executive action on immigration, he focused on the “bedmakers and fruit pickers” that he claimed were doing jobs Americans didn’t want to do.

Obama’s messaging wizards kept the frame of the debate on low skill, low wage workers. Abracadabra: it worked. Both liberals and conservatives were debating immigration after his address, and opinions flew on the issue of the millions of mostly Mexican and Central American immigrants who would now be able to work legally under Obama’s executive action and how these low-wage workers would impact the economy.

There’s no doubt that the issue of border security and low-skilled workers is important, but they were being used as a focal point of the immigration debate for a self-serving reason.

If Americans started focusing on the impact of guest worker programs like H-1B, the results would be bad for both Democrats and Republicans, costing them both the trust of voters and millions in lobbying money.

Then along came Donald Trump, backed by immigration experts like Sen. Jeff Sessions. Suddenly, the H1-B issue became a focus. The public interest began lighting up the phones at SiriusXM’s Breitbart News Daily morning radio show, and the more the public learned, the angrier they became.

There’s a lot to be angry about. The H-1B program has caused massive layoffs of American workers and over a decade of wage stagnation. More infuriating is that the victims of H-1B are Americans who played by the rules, got an education in a growing field, and thought they’d have a career future.

There have been bipartisan reasons to keep the public in the dark about H-1B and keep them focused on low-wage workers.

If you want to see what’s really going on with immigration policy, look at the cash.

Take a look at a list of the top lobbyists on the issue of immigration and it’s a high-tech wonderland. Microsoft, Intel, Oracle, Qualcomm, Motorola, Google, and, of course, Facebook are all the household names that are spending millions of dollars to influence politicians on immigration.

You may also remember that Facebook’s Mark Zuckerberg went all-in on the immigration issue, forming a new pro-comprehensive immigration reform group called FWD.us and even having a computer “hackathon” for illegal immigration as a promotional event.

For a “hackathon” Wednesday, Zuckerberg brought together a group of undocumented immigrants, the youngest of whom are known as “dreamers” because of the DREAM Act, a proposed immigration reform that would give legal residency to young immigrants who meet certain educational or service requirements.

Those high tech giants aren’t investing in immigration lobbying and doing hackathons because they are concerned about bedmakers and fruit pickers. No, these companies are making a business decision based on getting a return on investment; they spend money on lobbyists, and in exchange, they save more money by taking advantage of immigration programs like the H-1B visa program.

Here’s the official government description of the H-1B program:

U.S. businesses use the H-1B visa program to employ foreign workers in specialty occupations that require theoretical or practical application of a body of highly specialized knowledge, including, but not limited to: scientists, engineers, or computer programmers.

Don’t let the language about “specialty occupations” mislead you. H-1B workers are taking basic, bread and butter tech jobs. In practice, most of  these jobs involve working in I.T. or programming. They don’t require advanced degrees, either: the vast majority of H-1B workers have the equivalent of a Bachelor’s degree.

Microsoft has been a major player in H-1B lobbying and has also used the program extensively. Founder Bill Gates has even testified about the program to Congress, as part of his “sky is falling” policy proposals that included the controversial Common Core education plan. Ars-Technica wrote:

In probably the most controversial portion of his testimony, Gates said that the shortage of trained scientists and engineers had grown so severe that it required a dramatic increase in the number of highly-skilled immigrants permitted to enter the country. He charged that the current limit of 65,000 H-1B visas per year “bears no relation to the U.S. economy’s demand for skilled professionals,” and noted that all of the visas for fiscal year 2008 were snapped up on the first day they were available. As he has done before, Gates asked for a dramatic expansion of the H-1B cap.

Despite the Gates’s claims, there doesn’t appear to be any such labor shortage. One indicator is that college-educated workers in computer and math occupations saw their average hourly wage rise 5.3 percent from 2000 to 2011. That’s an average wage increase that’s just less than half a percent per year. If there were such a dire shortage in a market-based economy, you’d expect wages would have risen.

The real problem isn’t a shortage of workers, it’s that H-1B workers have two big advantages over American workers that make them highly desirable to companies like Microsoft and Facebook.

First, H-1B workers are locked into jobs at much lower wages than average United States salaries. Those cost savings are part of what drives down U.S. wages. This caused even famed free market economist Milton Friedman to say in 2002 that “there is no doubt that the H1-program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy.”

There’s another advantage to H-1B for employers that’s harder to quantify but very real: because they operate under the fear of being sent back to their country if they lose their jobs, H-1B workers are easier to manage.

President Obama talked about workers living in the shadows, but it’s fair to say the entire H-1B guest worker program is living in the shadows.

In part two this report, we’ll examine the secrecy surrounding the impact of H-1B and a bizarre ruling by the Obama administration that makes the cloak of darkness even harder to pierce.


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