President Trump says his new executive order will force tech companies to hire more American workers. But Silicon Valley leaders, who rely heavily on H-1B visas for high-skilled employees, say they're not the problem.
The Trump administration introduced an executive order Tuesday named "Buy American, Hire America" that directs federal agencies to review the H-1B visa program. The goal is to eventually require companies to recruit higher-skilled and higher-paid workers rather than cheaper workers from other countries.
"With this action we are sending a powerful signal to the world that we are going to defend our workers and protect our jobs and finally put America first," Trump said at speech in Wisconsin on Tuesday in which he called for a "long overdue" reform of an H-1B program riddled by "widespread abuse."
The order was met with skepticism within the tech industry, which has long argued that the U.S. economy needs to attract the best workers from across the globe, not just the best on American soil, to prosper. They say others, namely outsourcing firms based overseas, are exploiting the visa program. And they say if the administration cracks down on the tech industry's foreign hiring, it could result in just the opposite of what Trump wants.
"It is an extremely competitive and fast-moving industry," said Ayda Akalin, an immigration attorney whose clients include Silicon Valley start-ups and entrepreneurs. "If they can't find top engineers locally, and they also can't otherwise hire foreign talent through the H-1B program, then they are certainly going to look elsewhere."
That could mean a rise in outsourcing or tech companies setting up more offices in other countries such as Ireland and Canada, which are more welcoming to foreign workers, Akalin said.
"I can't imagine that was the intended result," she said.
Under the Trump administration, the Department of Homeland Security has already said it would establish a stricter vetting process for computer programmers. The United States Citizenship and Immigration Services also said it would conduct more site visits to catch H-1B visa fraud, and the Justice Department warned employers seeking visas to not discriminate against American workers.
The executive order signed Tuesday calls for federal agencies to review the H-1B program and also government procurement practices so that more contracts are awarded to American manufacturers.
The order itself doesn't bring substantive change; Akalin chided it as mere "tokenism." But the changing attitude toward foreign workers is already having a chilling effect in Silicon Valley, according to immigration attorney Reaz Jafri.
Jafri is currently representing two clients struggling to get H-1B visas to stay in the U.S. One, a Spanish national who graduated from the Stanford Graduate School of Business, has decided to establish his robotics start-up in Spain rather than wait to see if he can stay in the U.S. Another is a Chinese national who has already raised money for an artificial intelligence start-up that will probably have to be headquartered overseas.
"This will hurt our country and our economy," Jafri said of the executive order. "The reason why Google, IBM and Apple are what they are today is because they were able to recruit the best from around the world."
The U.S. issues 85,000 H-1B visas a year through a lottery system. Facing what they describe as a lack of qualified talent, many tech firms bolster their ranks with H-1B workers. Google, for instance, hired as many as 743 workers on H-1B visas as recently as 2013, according to technology website Recode. A Brookings Institute study found in 2012 that there were 17 H-1B visa requests for every 1,000 jobs in Silicon Valley.
Both Jafri and Akalin agree that reform is needed, specifically in regards to large India-based outsourcing companies that grab thousands of H-1B visas each year such as Infosys and Tata Consultancy Services.
The companies are accused of gaming the system by inundating the federal government with applications. Complaints also persist that the firms are undercutting American job-seekers by providing foreign workers for jobs that don't require special skills at wages lower than market rates.
"We support immigration policies that create jobs rather than outsource them," Silicon Valley venture capital firm Unshackled Ventures said in a prepared statement. "The H-1B is designed for the highest-skilled worker, but when 13 of the top 15 H-1B visa filers are global outsourcing companies, who pay lower than market rate wages, the H-1B program's purpose is in jeopardy."
In a series of tweets Monday after news first broke about the Trump administration's order, Todd Schulte, president of the tech advocacy group FWD.us, said companies that are too dependent on H-1B visas should have less priority in the lottery for the visas and argued for a ban of third-party placement of workers.
Infosys said in an e-mailed statement it was helping U.S. companies remain competitive.
"It is our endeavor to help clients leverage the best U.S. talent together with the best global talent to drive economic growth in the U.S., ensure the U.S. continues to be at the forefront of innovation, and bring skills and education in the new technologies that will transform our world," the company said.
The criticism of outsourcing firms from the tech industry is hypocritical, said Norman Matloff, a professor of computer science at UC Davis who noted that Silicon Valley was only recently "falling over itself" to be critical of Trump's immigration policies.
"It's a deliberate attempt to deflect attention from themselves," said Matloff, who believes both Indian outsourcing firms and the biggest U.S. tech companies are guilty of abusing the visa program. "This is exactly their PR strategy. Blame the outsourcing companies."
Meanwhile, the Information Technology and Innovation Foundation, a nonpartisan Washington think tank, said Trump's merit-based system could work under certain conditions.
"Replacing the H-1B lottery with a more merit-based system could advance the program's goals of attracting people with advanced STEM skills," the group's president, Robert D. Atkinson, said using the common acronym for science, technology, engineering and math. "We also welcome efforts to root out abuse, better enforce the existing rules, and increase the salary requirements, as long as we continue to welcome highly qualified STEM workers."
Atkinson is less optimistic about any attempts to delay hiring decisions, such as a requirement employers keep job openings unfilled for a certain period to give American applicants more time.
"We are talking about fast-moving industries," he said. "Companies get opportunities, and they have to jump on them. Delaying them for too long would be bad for innovation, job creation and growth."
Demand for H-1B visas isn't restricted to the tech world. Snap-on, the tools maker that hosted Trump's speech Tuesday in Kenosha, Wis., employs at least 17 people on H-1B visas, according to public records.
Follow me @dhpierson on Twitter