In his new executive order, President Trump temporarily froze new work visas, including the H-1B, through at least the rest of 2020. That creates some issues for tech companies that rely on the visa—with the CEOs of some large firms speaking out against the suspension.
Apple CEO Tim Cook took to Twitter to express his displeasure over the move. “Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream,” he wrote in part. “There is no new prosperity without both.”
Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream. There is no new prosperity without both. Deeply disappointed by this proclamation.— Tim Cook (@tim_cook) June 23, 2020
Google (and Alphabet) CEO Sundar Pichai chimed in with a similar message. “Disappointed by today’s proclamation—we’ll continue to stand with immigrants and work to expand opportunity for all,” he wrote, adding:
Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation – we’ll continue to stand with immigrants and work to expand opportunity for all.— Sundar Pichai (@sundarpichai) June 22, 2020
Meanwhile, Salesforce Tweeted out a similar statement:
.@Salesforce remains committed to advocating for common-sense immigration policies. H-1B workers generate innovation & growth that benefits us all and it will hurt the U.S. economic recovery and U.S. innovation leadership to further restrict H-1B visas.— Amy E Weaver (@amy_e_weaver) June 23, 2020
And Twitter, not to be outdone, did the same:
Statement on US high-skilled immigration proclamation:— Twitter Public Policy (@Policy) June 22, 2020
“This proclamation undermines America’s greatest economic asset: its diversity. People from all over the world come here to join our labor force, pay taxes, and contribute to our global competitiveness on the world stage.
All of these companies, of course, rely heavily on the H-1B visa for specialized talent. Not only do they source these employees directly; many also rely on consulting and “business services” firms to subcontract H-1B workers. For example, according to a dataset from the U.S. Department of Labor, Google hired 7,604 H-1B candidates directly in 2019—and outsourced an additional 889. Here’s a breakdown of how some other prominent firms hired and subcontracted H-1B workers last year:
When you crunch data from the H1B Salary Database, which indexes the Labor Condition Application (LCA) disclosure data from the United States Department of Labor (DOL), you also find that these firms pay their H-1B workers quite a bit (on average):
However, the median H-1B salary at consulting and subcontracting firms such as Capgemini, Tata, Accenture and IBM is generally much lower, suggesting that subcontracted H-1B workers could end up being paid a lot less than those sourced directly by the big tech companies.
Trump’s order won’t affect those H-1B workers already in the U.S. The impact on tech companies, however, will hinge on whether the suspension extends beyond this year. In theory, a longer ban will drive these firms to hire more workers already in the country, as opposed to sourcing talent from overseas. And that’s exactly the White House’s intention.
“In the administration of our Nation’s immigration system, we must remain mindful of the impact of foreign workers on the United States labor market, particularly in the current extraordinary environment of high domestic unemployment and depressed demand for labor,” the order states. “Historically, when recovering from economic shocks that cause significant contractions in productivity, recoveries in employment lag behind improvements in economic activity.” Any visa suspension, in other words, could readjust demand for labor in favor of domestic workers.