Ron Unz for U.S. Senate - Mobile

Ron Unz for U.S. Senate

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Solving Silicon Valley's Immigration Problem

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As a software developer and company co-founder who has lived in Palo Alto since the early 1990s, I understand the extraordinarily important contribution that immigrants have made to our technology industry over the last half century and the crucial role they play in maintaining American competitiveness.

I’ve found it unfortunate that for years top Silicon Valley companies have faced a desperate shortage of H-1B visas, which are intended to allow them to hire foreign workers possessing unique skills. These severe immigration restrictions have led top companies such as Facebook, Google, and Apple to lobby Congress for an immigration reform package that includes a large expansion of this visa program, currently capped at 85,000 per year. However, these efforts by the tech community’s and other groups have ended in repeated failure.

One reason for this political failure has been the scandalous nature of the current H-1B visa system. Although originally intended to apply only to unusually skilled individuals, the visa program has been misused as a means of eliminating the jobs or driving down the salaries of ordinary American tech workers.

Over the past year, The New York Times has described how a large fraction of annual H-1B visas are captured by low-end outsourcing companies such as TCS, Cognizant, and Infosys, which are then hired by corporations such as Disney to replace their in-house tech workers with cheaper immigrant labor.

Longtime American employees are forced to train their immigrant replacements, then eliminated in mass layoffs so that these wealthy corporations can boost their profits. Since so many of these H-1B workers are paid less than their American counterparts, this process also exerts continual downward pressure on the incomes of tech workers throughout our economy.

Under such circumstances any significant expansion of H-1B visas is merely a recipe for destroying one of the few remaining well-paying job categories in our society and further impoverishing the American middle class. This is a clear violation of the legislative intent behind the creation of the H-1B visa program.

The obvious solution to this political and economic dilemma is not to expand but instead to reform the H-1B system.

H-1B visas constitute a scarce government resource that is now being provided under an annual first-come, first-serve procedure, with companies allowed to submit an unlimited number of individual applications. This is a totally absurd allocation model, and allows companies to easily game the system. As a result, in 2014 outsourcer TCS received over a dozen times the number of H-1B visas for its low-end immigrant tech workers as did Apple for its elite hires.

The obvious solution is to switch to a market-based alternative, with the government instead auctioning off these visas, thereby providing those crucial immigration slots to the companies to which they provide the greatest value.

Under such a reform proposal, the Googles, Facebooks, and Apples of our country would easily outbid the outsourcing firms, whose only competitive advantage is the low salaries they pay their immigrant workers. And since the former might end up bidding $20,000 or more merely for the right to hire a particular foreign worker, there would be absolutely no downward pressure on the wages of America’s millions of existing technology workers. Meanwhile, any additional costs incurred by these top companies would be negligible compared to the value of the lost business opportunities they currently suffer when they are unable to hire the extremely talented foreign workers they require.

Sometimes the best means of fixing a broken system is simply forcing it to comply with its original intent.

Ron Unz, a former theoretical physicist and software company co-founder, is a Republican candidate for the U.S. Senate in California. He wrote this for the Mercury News.