NEWSWEEK: How The Trump Administration’s Wrong-Headed Policies Threaten To Turn Silicon Valley Into The “Next Detroit!”

http://www.newsweek.com/2017/09/29/donald-trumps-policies-could-turn-silicon-valley-another-detroit-667662.html

Kevin Maney reports:

D“The end of the 1960s turned out to be Detroit’s apex. In the early 1970s, dubious U.S. economic and foreign policy led to disaster when the Middle East OPEC nations initiated an oil embargo. Gas became scarce and expensive, and Detroit was caught focusing on the wrong products—ostentatious gas-guzzlers—at the wrong time, giving Japanese makers of small cars an opening in the U.S. market. Pulitzer Prize–winning auto historian Joseph White wrote about two fateful mistakes that made things worse. First, “Detroit underestimated the competition,” he said. The likes of Toyota and Honda had become much more adept than industry executives realized. Second, the U.S. companies “handled failure better than success.” Detroit’s decades of triumph set up the hubris, waste and bad practices that came to haunt it.

From there, it was a short trip to loss of market leadership, layoffs, plant closings and a city that fell into a desperate decline.Think that could never happen to Silicon Valley? Like 1970s Detroit, Silicon Valley seems to be handling success rather badly. Look at the twisted mess at Uber and the culture wars tearing at Google’s guts. Insanely high valuations of private companies are starting to look like a perilous pyramid scheme Bernie Madoff might admire. High costs and ever-worsening congestion are making the San Francisco Bay Area nearly unlivable for all but the superrich. At the same time, much of U.S. tech is underestimating the competition, particularly from China and the European Union.Making it all worse, the Trump administration seems to be doing everything it can to help shove Silicon Valley off its pedestal. Trump’s policies on trade, immigration and investment are giving competing nations openings to steal important chunks of Silicon Valley’s global leadership, lure away talent and divert capital to other rising tech centers—even France. (You know, the country President George W. Bush once said doesn’t even “have a word for entrepreneur .”)

Related: Is the Silicon Valley Bubble about to Pop?The Silicon Valley tech industry isn’t going to suddenly crumble and vanish. Detroit’s auto industry didn’t disappear either. But there’s a clear demarcation point in the early 1970s, when Detroit’s worldwide hegemony ended. The CEOs, founders and wizards of Silicon Valley would be misguided to think they’re immune from any similar stumble off their pedestal.

. . . .

Most damaging of all may be the policies of the Trump administration, which has been implementing or proposing one policy after another that puts the industry at a competitive disadvantage.Earlier this year, the president initiated a review of H-1B visas for foreign workers, which tech companies rely on to bring in talent. More recently, the Trump administration delayed —and may kill—the International Entrepreneur Rule, which would make it easier for foreign company founders to bring their startups to the U.S. “At a time when countries around the world are doing all they can to attract and retain talented individuals to come to their shores to build and grow innovative companies, the Trump administration is signaling its intent to do the exact opposite,” said Bobby Franklin, president and CEO of the National Venture Capital Association.And in early September, Trump said he will end the Deferred Action for Childhood Arrivals program, which has allowed undocumented immigrants who were brought to the U.S. as children to stay. Now, they may be deported. Some are valuable employees of tech companies. Microsoft pledged to pay the legal expenses of any employees who face deportation as DACA ends. Microsoft President Brad Smith called Trump’s decision “a big step back for our entire country,” and the industry worries that it will further discourage talented foreigners from coming to the U.S.Other countries have started pursuing international talent like sharks circling surfers at dusk. “I myself hope that many of these engineers will come to China to work for us,” said Robin Li, CEO of Chinese tech giant Baidu. Canada’s minister of innovation, Navdeep Bains, launched a recruitment program, saying, “We want to be open to people.” French President Emmanuel Macron announced that tech talent can “find in France a second homeland.”Even more detrimental to U.S. tech are two other Trump decisions: pulling out of the Paris climate accord and dumping the Trans-Pacific Partnership (TPP) agreement on trade with Asia.”

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Read the rest of the story at the link.

 

Government by the arrogant, ignorant, incompetent, biased, and unqualified has its downsides! It’s something that we’re all going to learn over the next four years, assuming that Trump doesn’t get us into a world-ending nuclear war before then. Perhaps one of the stupidest consequences of some very stupid policies: one of the main beneficiaries is likely to be China, one of our biggest tech competitors, and unlike Canada, also a potential hostile military threat! Trump and his cronies are dangers to our national security!

PWS

09-21-17

 

 

 

 

REUTERS TV: Administration’s Newest Enforcement Tool Against Legal Workers: Use Mountains Of Bureaucratic Red Tape To Hamper The H-1B Program! — Also Welcoming Yeganeh Torbati To The Reuters Immigration Beat!

http://www.reuters.tv/v/VbW/2017/09/20/red-tape-ties-up-h-1b-visas-for-skilled-foreign-workers

Hit the above link to see and hear Yeganeh’s report!

Who would have thought that a supposedly pro-business GOP Administration would be thinking of ways to tie-up American businesses in regulatory red tape? Bureaucratic red tape is, of course, one of DHS’s traditional areas of expertise! So, the Administration has found the guys with the “right stuff” for the job!

Congrats again to Yeganeh on taking over as Reuters Immigration Reporter from Julia Edwards Ainsley, who is now over at NBC! The beat goes on! Looking forward to lots more great immigration reporting from Yeganeh!

PWS

09-20-17

 

WSJ: H-1B Visa Demand Falls — Technological Changes Responsible?

https://www.wsj.com/article_email/use-of-h1b-visas-fell-before-donald-trumps-critiques-of-program-1496682157-lMyQjAxMTE3NTA3NjQwMTYxWj/

The WSJ reports:

“WASHINGTON—President Donald Trump has suggested he might find a way to cut the number of coveted H-1B visas awarded to outsourcing firms. But the companies appear to be heading in that direction all on their own, amid technological changes.

Outsourcers’ use of H-1B visas, which are reserved for highly skilled foreign workers, fell last year, before Mr. Trump won the Republican presidential nomination, new data show. The slide occurred alongside increasing criticism of the firms’ business model.

Mr. Trump has criticized the lottery that is now used, where companies all have equal chances at the scarce visas, and signed an executive order directing a review of the program. The order called for changes that would ensure visas are awarded to “the most skilled and the highest paid” applicants, to avoid crowding out American workers.

Six of the seven prominent Indian-based outsourcing companies that do work in the U.S. received fewer H-1B visas in 2016 than they did in 2015, and as a group their numbers dropped 37%, according to a new analysis by the National Foundation for American Policy, a think tank that backs increasing the total number of H-1B visas available. Most outsourcers based in the U.S. and elsewhere also saw declines.

For instance, H-1B visas awarded to India’s biggest outsourcer by revenue, Tata Consultancy Services Ltd., plummeted by 56% to 2,040 last year from 4,674 in 2015. For Wipro Ltd, another major Indian firm, the number also dropped by more than half to 1,474 from 3,079 in 2015.

Other research from previous years shows that the use of H-1Bs by individual outsourcing companies peaked in 2012 and 2013, sliding ever since. Many expect that the number of visas given to outsourcers will decline again for 2017, but those numbers aren’t yet available.

Meanwhile, the number of visas awarded to some large U.S. technology firms, who have a different business model and compete with outsourcers for visas, increased last year. Amazon.com Inc., Microsoft Corp., Alphabet Inc.’s Google and Apple Inc. all received more visas than they did in 2015, the new data show. Such companies typically use the visas to recruit employees with rare skills that attract higher wages than staff employed by outsourcers, and have come under less criticism.

Each year, 85,000 H-1B visas are available, and for the last several years they have been awarded by lottery conducted in April because of overwhelming demand.

Following this year’s lottery, Mr. Trump criticized the process and suggested more visas should go to high-paid jobs as opposed to a lottery where each application has equal chance. Because many outsourcing jobs are paid the minimum required to comply with certain rules—around $60,000 a year—many interpreted Mr. Trump’s comments as a warning to the outsourcers and a possible boon to big tech companies that pay high salaries.”

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Read the full WSJ article at the link.

I also blogged about the need for H1-B reforms yesterday.

 

http://wp.me/p8eeJm-VJ

PWS

06-06-17

WashPost: H-1B Review Part Of EO On Jobs To Be Signed In Badgerland On Tuesday!

https://www.washingtonpost.com/news/wonk/wp/2017/04/17/after-a-series-of-flip-flops-trump-prepares-to-deliver-on-a-key-campaign-pledge/?hpid=hp_rhp-more-top-stories_no-name%3Ahomepage%2Fstory&utm_term=.505868d54ef2

Tracy Jan and Max Ehrenfreund report:

“President Trump plans to sign an executive order in Wisconsin on Tuesday that the White House says will make it harder for tech companies to replace American workers with cheaper foreign labor, and will strengthen rules barring foreign contractors from bidding on government projects, according to senior administration officials.

The officials, in a background call with reporters, said Trump will direct the Departments of Labor, Justice, State and Homeland Security to crack down on fraud and abuse in guest-worker programs by issuing new immigration rules.

The president will also direct the Department of Commerce to review federal procurement rules and trade agreements with a view to putting American firms at an advantage when it comes to winning contracts.

The officials pitched the twin directives as benefiting working- and middle-class Americans who have suffered for too long under unfair trade and immigration rules.

“This is the policy that ensures no one gets left behind in America anymore — that we protect our industry from unfair competition, favor the products produced by our fellow citizens and make certain that when jobs open those jobs are given to American workers first,” the White House said in a statement.

It was not immediately clear how much the administration could accomplish without cooperation from Congress.

“Sweeping changes are going to require congressional action,” said Lynden Melmed, an immigration attorney who had served as U.S. Citizenship and Immigration Services chief counsel within the Department of Homeland Security under President George W. Bush.

However, industry experts said Trump’s executive order was a good first step to protecting the U.S. defense industrial base, and U.S. firms that do business with the federal government.

“It’s one of the few presidential exertions in recent time, that holds out the hope of saving U.S. industrial jobs,” said Loren Thompson, a defense industry consultant and the chief operating officer of the Lexington Institute in Arlington.”

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PWS

04-18-17

WashPost: Administration Warns Employers Not To Use H-1B Program To “Dis” U.S. Workers!

https://www.washingtonpost.com/politics/us-tells-companies-not-to-overlook-qualified-americans/2017/04/04/87fa4e06-1909-11e7-8598-9a99da559f9e_story.html?utm_term=.fe6b3da5783c

Sadie Gurman reports for the AP:

“WASHINGTON — The Trump administration has issued a stern warning to U.S. companies as they begin applying for coveted skilled-worker visas, cautioning that it would investigate and prosecute those who overlook qualified American workers for jobs.

The message came on the opening day of applications for American employers seeking visas known as H-1B, which are used mostly by technology companies to bring in programmers and other specialized workers from other countries.

“U.S. workers should not be placed in a disfavored status, and the department is wholeheartedly committed to investigating and vigorously prosecuting these claims,” Tom Wheeler, acting head of the Justice Department’s Civil Rights Division, said in a statement.

The Obama administration sued companies for violating the Immigration and Nationality Act’s anti-discrimination provisions, including businesses that favored foreigners over U.S. workers. But Monday’s warning in a news release at the start of the visa process appeared to be a first-of-its kind signal to employers not to put American workers at a disadvantage.

U.S. Citizenship and Immigration Services also announced that it would step up its reviews of employers that use H-1B visas, saying “too many American workers who are qualified, willing and deserving to work in these fields have been ignored or unfairly disadvantaged.”

The statements were the latest indication that even legal immigration will be scrutinized under the Trump administration.”

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Interesting that Jeff Sessions and the DOJ’s Civil Rights Division are getting so involved in the H-1B program. Normally, H-1B enforcement would be a matter for the DHS, the U.S. Department of Labor, and the Office of Special Counsel for Unfair Immigration-Related Employment Practices at the DOJ. But, I suppose without any voting rights or police abuse cases to investigate, the Civil Rights Division will have some time on its hands for taking on some new immigration enforcement responsibilities.

Another thought.  Rather than battling the Administration over the H-1B program and threatening to move tech operations to Canada and elsewhere if their demands are not met, why don’t U.S. tech companies and Democrats “think outside the box.”

Why not make areas of the “Rust Belt” with willing workers and high unemployment the new “Silicon Valley East?” Use H-1Bs to re-train U.S. workers for permanent jobs in technology. Build new offices or refurbish abandoned plants. Establish training programs with local community colleges and technical colleges. Fund some opioid addiction treatment programs to get capable workers off of drugs and into jobs where they have some future. Support regional airports in “the hinterlands” that Trump is trying to shut down.

Trump seems only vaguely interested in addressing the real problems of unemployed and underemployed workers. If he actually does succeed in so-called “health care reform,” (that is transferring money from the needy to the rich) their situation will become immeasurably worse. Futile grandstanding like relaxing environmental controls for an “ain’t gonna happen” revival of the coal industry, appointing Gov. Chris “The Bridge” Christie to a form a new governmental committee on opioid addiction, or having Jeff Sessions divert the Civil Rights Division into H-1B investigations aren’t serious attempts to address the issues.

But, so far, the Dems and the leaders of the tech industry have been largely MIA on practical solutions to these problems that Trump seems unlikely to address in any realistic manner. So, while the Dems are tilting at the “Gorsuch Windmill,” which I can guarantee you isn’t a concern for most “Dems turned Trump voters” in the Rust Belt, the opportunity for real leadership, genuine concern for U.S. workers, and demonstrated problem solving is going by the boards. Maybe that’s how Donald Trump became President with 46.4% of the vote.

Just proving once again the Trump might not have to act presidential or accomplish much of positive value to be a two-term President. And, as he has already shown, he can do that relatively easily even if he never attains the approval of the majority of Americans.

PWS

04/04/17