Why The Cold War Between Tech CEOs and Trump Is About To Go Nuclear

Tyler Durden's picture

Over the weekend, openly defiant CEOs, particularly among the tech sector, expressed their displeasure with Trump's Friday executive order temporarily banning refugees and limiting travel from seven Muslim countries, with both words and deeds, among which the following (summary courtesy of Axios):

  • VCs funding the ACLU: Several venture capitalists, as well as a few entrepreneurs, took turns soliciting donations to the American Civil Liberties Union through social media and personally matching those donations.
  • Airbnb volunteers to help provide housing for impacted immigrants: The home-sharing company said that it will work with travelers and organizations to provide housing for those impacted by the executive order, whether through volunteer hosts or by funding housing.
  • Lyft and Uber commit millions of dollars to legal aid: On Sunday, Lyft said it will donate $1 million to the ACLU over the next four years. Later in the day, Uber said it will create a $3 million legal defense fund for impacted drivers, as well as provide legal assistance and compensate their lost wages.
  • Google is setting up a $2 million crisis fund: The search giant has set up a fund that will donate to the American Civil Liberties Union, Immigrant Legal Resource Center, International Rescue Committee, and UNHCR.

On Monday morning, former US Treasury Secretary Larry Summers, speaking in an interview with Bloomberg Television, said that he is “gratified” by what he heard from the tech community.  “As global businesses, they have a huge stake in the United States being a nation of the Statue of Liberty rather than being a nation of refugee camps.” He added that “they have a huge stake in the United States supporting an open and tolerant global system, they have that stake for their employees, their customers, they have it for the reputation of the United States and they have spoken out.”

Donald Trump sitting down with tech CEOs during less turbulent times.

That may be, but the biggest reason for the anger by tech CEOs at the Trump administration is a simple, and a more selfish one. The reason for the simmering cold war between tech CEOs and Trump can be summarized in just three letters: H1-B. The bottom line is that tech CEOs fear Trump will single them out for outsourcing jobs or shut down the so-called H-1B visa program they use to hire high-skilled foreign employees for crucial engineering and technical jobs.

And, as Axios adds, White House officials say they are right to be nervous, especially about changes to the visa program. Chief strategist Steve Bannon and policy chief Stephen Miller are known to be deeply skeptical of the program, and will have a strong, vocal ally when Jeff Sessions gets confirmed as Attorney General. Some further observations:

  • Trump's mixed messages: On the campaign trail, he promised to "end forever the use of H-1B as a cheap labor program." He later signaled in a meeting with tech leaders that he's most concerned about companies misusing the visas to displace lower-wage American workers.
  • How it works: Visas are capped at 65,000 a year, with 20,000 additional visas for foreign workers with master's degrees. The demand for the visas is so high that the cap is usually exceeded within a few days of the application window opening. The visas are distributed to companies through a lottery system.

Tech companies such as Microsoft, Google, IBM, Cisco, Apple, Intel and Facebook say the visas are crucial for specialized jobs they can't fill domestically because of a shortage of American graduates with the right technical skills. When CEOs spoke out over the weekend about the ban, they pointed out the importance of allowing the "best and brightest" to work in the U.S.

* * *

Which is why if a news report about Trump's next imminent executive order is accurate, the simmering cold war between the tech CEOs and Trump is about to nuclear.

Bloomberg reports that the Trump administration has drafted an executive order aimed at overhauling the work-visa programs technology companies depend on to hire tens of thousands of employees each year.  If implemented, the reforms could force wholesale changes at India companies such as Infosys Ltd. and Wipro Ltd., and shift the way American companies like Microsoft Corp., Amazon.com Inc. and Apple Inc. recruit talent. Companies would have to try to hire American first and if they recruit foreign workers, priority would be given to the most highly paid.

The draft of Trump’s executive order covers an alphabet soup of visa programs, including H-1B, L-1, E-2 and B1. The first is a popular program with technology companies and is aimed at allowing them to bring in high-skill workers when they can’t find local hires with the appropriate skills. The legislation caps the number of people who can enter the U.S. annually at 85,000, including those with undergrad and master’s degrees.  

The average salary of an H-1B worker at Apple is reportedly more than $100k.

“Our country’s immigration policies should be designed and implemented to serve, first and foremost, the U.S. national interest,” the draft proposal reads, according to a copy reviewed by Bloomberg. “Visa programs for foreign workers … should be administered in a manner that protects the civil rights of American workers and current lawful residents, and that prioritizes the protection of American workers -- our forgotten working people -- and the jobs they hold.”

The foreign work visas were originally established to help U.S. companies recruit from abroad when they couldn’t find qualified local workers. But in recent years, there have been allegations the programs have been abused to bring in cheaper workers from overseas to fill jobs that otherwise may go to Americans. The top recipients of the H-1B visas are outsourcers, primarily from India, who run the technology departments of large corporations with largely imported staff.

 

“If firms are using the program for cheap labor, I think it will affect them and they will have to pay workers more,” said Ron Hira, an associate professor at Howard University. “If tech firms are using the program for specialized labor, they may find there are more visas available.”

 

The Trump administration did not respond to a request for comment on the draft. The proposal is consistent with the president’s public comments on pushing companies to add more jobs to the U.S., from auto manufacturing to technology.

It’s not clear how much force the executive order would have if it is signed by the president. Congress is also working on visa reforms and the parties will have to cooperate to pass new laws. Zoe Lofgren, a Democratic congresswoman from California, introduced a bill last week to tighten requirements for the H-1B work visa program.

"My legislation refocuses the H-1B program to its original intent – to seek out and find the best and brightest from around the world, and to supplement the U.S. workforce with talented, highly-paid, and highly-skilled workers,” Lofgren said in a statement.

Meanwhile, as Bloomberg adds, India’s technology companies, led by Tata Consultancy Services Ltd, Infosys and Wipro, have argued they are helping corporations become more competitive by handling their technology operations with specialized staff. They also contend the visa programs allow them to keep jobs in the U.S. and that if they have to pay more for staff, they will handle more of the work remotely from less expensive markets like India. Trump, however, see things differently.

“Inspections and investigations in the past have shown no cases of wrongdoing by Indian IT services companies, which have always been fully compliant with the law,” said R Chandrashekhar, president of Nasscom, the trade group for India’s information technology sector. “The industry is open to any kind of checks in the system, but they should not cause any hindrance to the smooth operation of companies.

 

The proposed Trump order is also aimed at bringing more transparency to the program. It calls for publishing reports with basic statistics on who uses the immigration programs within one month of the end of the government’s fiscal year. The Obama Administration had scaled back the information available on the programs and required Freedom of Information Act requests for some data.

 

Whatever specific changes are implemented, they are likely to add to the expenses for India’s technology companies. That may accelerate a shift to new kinds of services, such as cloud computing and artificial intelligence, said Raja Lahiri, partner at the Mumbai-based partner at consultancy Grant Thornton India

“The visa challenges are not going to go away easily,” he said. “They will continue to be a challenge for Indian IT companies.”

But while the pain for India will be acute, it will be Silicon Valley that may be most impacted, as suddenly its favorite source of cheap, skilled labor is eliminated. How it will responds remains to be seen.

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techpriest's picture

Looks like Trump is grabbing them by the wallet.

FreezeThese's picture
FreezeThese (not verified) USisCorrupt Jan 30, 2017 9:28 AM

You and a few other white males ... good thing we stopped that mother with two kids and held them for 20 hours without food - I was beginning to lose sleep ... and that 5 year old detained - phew, who knew what he was up to ... can't believe how many people showed up for his inauguration yest ... oh wait ...

wildbad's picture

i guess that the "Titans" of industry will now have some competition and will have to re-earn their stripes.

subsidy sucking parasite companies are not free market.

when i see "disruptive technology" firms trying to shut out other disruptors i smell the same shit that all monopolist spew.

Chris Dakota's picture
Chris Dakota (not verified) wildbad Jan 30, 2017 9:48 AM

Sanctuary City

Mayor Ed Lee of San Francisco is an agent of China. He travels there all the time.

He was investigated by the FBI and they dropped it after he stole the election. http://www.huffingtonpost.com/2011/10/23/ed-lee-supporters-accused_n_102...

http://sfpublicpress.org/news/2016-01/shrimp-boy-lawyer-claims-judge-shi...

His campaign manager busted for kiddie porn.

http://sfist.com/2016/12/24/political_consultant_enrique_pearce.php

He will be arrested.

Shocker's picture

Start hiring American workers

Current Layoff List: http://www.dailyjobcuts.com

-

BennyBoy's picture

 

Keeping cost low:

Mexicans and Central Americans - dirt cheap labor.

Indians H1-B - dirt cheap tech labor.

Americans - high priced labor.

ZD1's picture

No, more like globalists exploiting cheap labor and giving US citizens the shaft.

bamawatson's picture

or a bunch of gutless chickenshit loser squat to piss U.S. citizens laying facing down n taking the shaft

Billy the Poet's picture

If they can spend millions to defend illegal alien cab drivers why can't they give scholarships to American kids and build their workforce that way?

svayambhu108's picture

This would only mean that Tech companies will make again subsidiaries in the poor countries were tech hand is cheap, they are pissed off because they just left from some because they couldn't control it better.

TheMeatTrapper's picture

"This would only mean that Tech companies will make again subsidiaries in the poor countries were tech hand is cheap, they are pissed off because they just left from some because they couldn't control it better."

Tech CEO's are more than welcome to move their operations to third world countries - and watch their code quality and customer service go down the toilet - along with the money they are "saving". 

Escrava Isaura's picture

This article reminds me a little bit of the Cuban doctors in Brazil being booed and called racists by the Brazilians, go figure, right?

Their core issue: Why not Brazilian doctors?

Well, because most Brazilians couldn't afford Brazilian doctors and most of the nation is too stupid to learn science. Actually, something like more than half of Brazilians don’t accept science on religion grounds.

Then, to add insult to injury, you have most of Brazilians wondering why the funken nation is going down.

I just laugh in disbelieve of such stupidity.

 

 

SeuMadruga's picture

Braz-ill was (is?) going down because of 13 years of PT government.

MalteseFalcon's picture

There's a lot of talk this morning about how Trump can't do this or that, because of congress or the courts.

The visa programs can be killed this afternoon with an executive order.

Pen and a phone.

Dragon HAwk's picture

Yeah nice of Oshama to show us how it is done, for 8 years funny how the shoe changes feet, and it gets awkward.

The Saint's picture
The Saint (not verified) Billy the Poet Jan 30, 2017 12:25 PM

Many of the tech companies are clearly Anti-American.  They are controlled by socially crazy CEO's who worry more about people outside the U.S. than their brothers and sisters inside the U.S.

 

runnymede's picture

CEO psychopath types do not 'worry' about anyone or anything beyond themselves and their bottom line. Rank and file libtards, yes, misguided useful idiots as they may be. 

Not understanding this is an error of the highest magnitude. 

rockstone's picture

Dude. The money spent by our government on US citizens for college is staggering and as a result, worthless.

pitz's picture

Kids want/need jobs, not scholarships.

 

Wozniak and Steve Jobs were able to make decent money and gained skills working at HP as teenagers in the 1970s.

 

Imagine if the H-1B program was around back then.  Would the modern IT industry have ever gotten off the ground?

krispkritter's picture

Irony.  Steve 'Jobs'. Coupla bucks a day for Chinese workers? Hope you can invent an A/C unit that works off fire and brimstone you cunt.

Pinto Currency's picture

As if the tech CEO's weren't gunning for Trump before this.

Chris Dakota's picture
Chris Dakota (not verified) Pinto Currency Jan 30, 2017 4:15 PM

Tech CEO's "Keep Obama in President, fuck America!"

TuPhat's picture

Round up all the demonstrators and ship them out in cargo containers back to where they came from.  If they want to work here they should learn not to be disruptive.  Fine all the companys hiring anyone who is illegal would also be good.  There are laws that should be enforced not just the ones they pick and choose.

Chris Dakota's picture
Chris Dakota (not verified) ZD1 Jan 30, 2017 4:15 PM

I don't even like Peter Thiel.

He is a job killer.

Airbnb that has no employees.

Invested in Yelp that tries to destroy Mom n Pop if they can't extort them.

Invested in facebook spy on yourself.

Invested in Zenefits that is destroying Insurance brokers, hell their people didn't even have brokers license. They were drinking on the job and fucking in the stairwells of a really nice building with traditional office tenants.

Palantir  some CIA crap.

Invested in some baby blood live forever start up.

He is evil in my opinion.

 

 

arrowrod's picture

Fucking in the stairwells?  My kind of place.  I'm retired, but would go back to work at Zenefits, and I don't need the money.  Peter Thiel is a guy I would like to associated with.  Fucking in the stairwells,  Yahoo!  (Hope I'm not infringing a copyright.)

IndyPat's picture

Go for it. Peter is a homo, so 'associate' with him all you want.

Enjoy your time in the stairwell, numbnuts. Don't forget your AstroGlide!

peippe's picture

FITS.

There, cleaned it up for you. 

"Michelle & Frank had FITS."

Lasted twenty minutes or so...

Kayman's picture

1. For the thousands of billions spent on American education NO ONE in America is qualified?  

2. You can't be a multi- Billionaire if you have to spend money employing Americans ?

 

Bunga Bunga's picture

Qualified, but it cuts the profit margins. Becoming a billionaire would take 10 years instead of 2. That's why tech CEOs are so outraged. It's all about greed, they would sell their grandma for that.

Pissedman's picture

We could pretty much replace all the low innovation ceo's with a computer program. Same with the bankers, he just the supercomputers have already replaced most of the traders.

Let's change the world. Soon h1b will be done so most stem grads will get jobs, then everify will shut down the jobs magnet. Then this stuff gets cleaned up within a couple years.

Imagine the freeway as after millions of illegals are gone, no more rush hours, savings in traffic and associated losses will be trillions.

pitz's picture

The tech firms just don't want to hire Americans.  Its as simple as that.  They go out of their way with bizarre interviewing processes, ignoring the applicants of qualified people, and all sorts of other nonsense.

True Blue's picture

There are even consultancy firms that help companies fail to find 'qualified' applicants and then help them hire H1-B visa holders to fill those job vacancies they 'couldn't' fill with 'qualified' American workers.

DocBerg's picture

The late Irwin Feerst raised the alarm about how hiring foreign engineers was destroying the job market for American EEs, back in the 1980s.  Of course, he was smeared as a racist, xenophobic, hater even back then.  I joined the IEEE just so I could vote for him to be president, but he lost.  Now, it is foolish for any American to go for an engineering degree because they cannot compete with the imports.  Americans don't get to go to school for basically free, and wind up with crushing student loans.  Most of the foreign engineering students at American schools get through on scholarships and assistantships.  I'm glad to see Trump going after this scam.  I hope he prevails!

 

neutrino3's picture

Your 1. provokes legitimate question:

a) students exist for the sake of teacher's middle class?

b) vice-versa?

I'm afraid a) is right answer today. Long time ago it was b).

In my time there were no a,b,c,d ... exams. After fucking limited time math solutions of the scope, ... Fucking verbal questions.  On one exam (Professor was returner from US ) question I got was: "Why Laplace transformation eradicates poles."

I stayed soundless, cuz scope of exam was non-liner systems, not fucking Laplace. I passed Laplace earlier with fine grade, but there was never even a hint on L in higher planes, only technological aspects.

He even gave me two weeks to answer the question, cuz first part of the exam I made fine. There was no internet back then. So I pulled all strings I had for consultation. No professor, assistant, student, even on Math university did not give me the answer.

Two weeks later, I looked the Prof straight in his eyes and told him all the truth and nothing but the truth. He stayed silenced for a while, than gave me passing grade, and lamented: "Now, fuck off"

30+ years later I found this link:

https://youtu.be/an5E940fqZQ

Watch ego/enthusiasm in his eyes. Mr. Trump make America great again. Eradicate snowflakes from education, political and judicial system. Ummmm ... Laplace'em.

 

 

cheech_wizard's picture

and this is what is so weird about the salary issue...

If these are genuine salaries, does any politician or CEO have the actual gall to tell me these are jobs American citizens won't do?

http://www.myvisajobs.com/Reports/2017-H1B-Visa-Sponsor.aspx

Standard Disclaimer: Now I tend to believe that these listed salaries are highly inflated to get foreigners suckered in, thinking they will actually make that salary, when the reality is they won't make but half that amount.

I did a contracting gig with Qualcomm a few years back. I was the token white guy over 50. All the rest of my group were H1B visa holders from India aged 22 to 26. Now Qualcomm comes in at the 41st spot with an average salary listing of $120K+. (This seems to be complete bullshit, as the H1B visa holds were only getting paid $25 to $30 an hour at the most.)

 

nightshiftsucks's picture

Great website,thanks for posting.The company I work for has hired H1B visa workers,I think they were paying in the $80k range but that is in Silicon Valley so not a lot of money but if they could hire a kid out of college that would be a good start.

Chuck Walla's picture

You can't even live in a dumpster out there on $80k.

TuPhat's picture

A lot of americans who are qualified will work for that amount.   A plus would be that their american coworkers could easily understand their speech.  I have worked with Indian engineers before, some capable, some not so capable and they are hard to understand.

svayambhu108's picture

You didn't work with Chinese, I would blame the connection and ask for meeting minutes and ARs everytime.  The meetings were excruciating. And I am not a native speaker.
They always can come to Romania here a senior is around $10-$15 an hour at most but then the managers are some cunning SOBs and ask for a lot more.

Sokhmate's picture

In my experience, on average, Indians speak in the most indirect, circumvent, issue-dodging, terms. My observation is that they avoid conforntaion at any cost; a quality that's just detrimental in IT.

panhead20's picture

Dumping costs on the taxpayers

False_Profit's picture

zh'ers, more than anyone, should understand that labor rates are a direct function of currency exchange rates.

countries are the means by which the currency rates are manipulated...but there again, we all know that the real manipulators are the globalist banksters, who have no loyalites to any country, only to the total enslavement and control of all humans on earth.

we will not go gently...

groaner's picture
groaner (not verified) BennyBoy Jan 30, 2017 2:41 PM

Immigration is a Globalist Zionist Masonics, Illuminati agenda to de Nationalize countries in preperation for the take over of Marixist Communism which is reponsible for murdering, genicide of 300 million people.. Bolsheviks 1917-1988 and China under Moa.  Yes lets let the UN control us into communist HELL!!  NOT!!

I hope Armageddon occurs before that happens.

TradeByNight's picture

Well this is good for most of the world, the most competitive tech companies that have huge market shares are based in the states, maybe with the loss of profits & cheap labor they will be less powerful and this will create more room in the market for tech companies in other countries! More pie for everybody! 

 

"An investment in knowledge pays the best interest." - Benjamin Franklin

Gold Silver Platinum Palladium

Antifaschistische's picture

Technology...

...here's the cycle of life.  Because companies can import labor cheaper than training and hiring Americans, there are also consequences in our own educational system.  Let's take India for example....while tens of thousands of college "IT" majors waste 4 years learning meaningless things and technically unmarketable and antiquated skills....the Indians wisely ask, "what does the industry need?"   Any 18 year old intelligent person can spend 6 months craming and develop some level of expertise in a niche field, while "IT" majors waste their time studying meaningless subject matter.

If it weren't for the cheap imported labor, the technology industry would have a much more active relationship with educational institutions...helping them and incentivizing them to develop relevant curriculum.  But today?  why bother?   So, this subject becomes inextricably linked to failures in higher ED, as well as student loan delinquencies, etc...

Corporate America also used to have a robust internship (like) program and career development...forget that now.  why bother.

This is a net loss for America, even if it is a gain for Google stock...

NidStyles's picture

Well these "corporations" know the way out of the country, they're all halfway out the door already. Let them leave, and then let the left have California. LOL!

 

These IT guys screw themselves chasing dollars. By the time that four years has passed the industry has changed again. College should be reserved for real STEM stuff. Not IT. IT should be something you simply qual for through certifications. Same with CS outside of solid state.

 

Anyone that thinks getting a four year degree for something that changes every couple of years is not thinking straight to begin with. It's like building a house on sand. The environment is going to destroy your house in a matter of years, and all you have left is a mountain of debt and remains of a worthless degree.

 

Antifaschistische's picture

on that thought...California would never leave, because they could never have their own currency, unless they just throw in the towel and adopt the PESO.  California commerce would get shut down, since the rest of the country would not accept their Peso's in exchange for goods/services....California would immediately descend into economic anarchy with the exception of the farmers...who WOULD still accept and pay their non-illegal/non-immigrants under the table in dollars like they do today.

DownWithYogaPants's picture

As we have seen H1-B's are highly abused.  Disney comes to mind.  As an engineer I can tell you Disney being a consumer facing company is not using the bleeding edge technology.  They don't develop anything new.  But yet they used H1-B to replace workers.   

Thus I say Trump can have a huge effect merely enforcing the law as written.  As I understand it there are restrictions saying "only can hire what you can't find in the USA already".......which means Disney should be being frog walked into the local constabulary.