Silicon Valley leaders favor mass immigration, for no good reason
In 2013, a group of tech heavyweights, led by Facebook’s Mark Zuckerberg and including fellow oligarchs Eric Schmidt (Google) and Bill Gates (Microsoft), founded FWD.us, a lobbying and advocacy group that would go on to spend millions of dollars promoting “comprehensive immigration reform.” Of course, the founders had not anticipated the 2016 election of Donald Trump as president.
Neither had a bevy of pundits, some of whom, in the wake of Trump’s victory, have attempted to recalibrate — witness longtime immigration enthusiast Fareed Zakaria speaking about the need for Democrats to take “less absolutist” positions on immigration and to put more emphasis on admitting skilled workers. But more typical was the reaction of those such as the New York Times’ Bret Stephens, a house conservative. In a satirical column, Stephens touted the alleged superiority of immigrants to native-born Americans — focusing, inter alia, on cherry-picked data showing their allegedly superior educational achievements and entrepreneurial skills.
FWD.us and Zuckerberg began by emphasizing skilled immigrants but then backed off as critics on the left accused them of “elitism.” “The bigger problem we’re trying to address is ensuring the 11 million undocumented folks living in this country now and similar folks in the future are treated fairly,” Zuckerberg wrote on Facebook.
But do we need “comprehensive immigration reform” to maintain our technological and entrepreneurial leadership? Will America’s technology and innovation base be devastated by President Trump’s crackdown on illegal immigration, his attempts to reform legal immigration, and his temporary ban on admitting travelers from a small number of countries with governments known to be unstable or hostile to the U.S.? Data on immigrants in Silicon Valley suggest that the answer is no.
Stephens lambastes those who wish to enforce our immigration laws with respect to so-called DREAMers, who came to this country illegally as youths. But if past trends hold, those who will benefit from amnesty programs and comprehensive immigration reform are unlikely to be a significant share of our next generation of top-flight engineers and scientists.
Instead, the amnesty advocated by Stephens and Zuckerberg would disproportionately benefit the 28 percent of immigrants who have not finished high school (the figure for the native-born is 8 percent). These include the foreign-born house cleaners and taxi drivers who are already half of the work force in those sectors.
Unsurprisingly, the current approach to amnesty has had a catastrophic effect on the employment prospects of young American-born citizens whose formal education stopped at or before graduation from high school. Their employment rate fell from 66 percent in 2000 to 53 percent in 2015, as low-skilled immigration to the U.S. soared.
The typical technology company saw little benefit from these immigrants. The data show that the most successful technology companies are disproportionately founded by native-born Americans — and that the immigrants who do found top tech companies tend to have arrived already highly skilled and educated. They are seldom undocumented, refugees, or members of any of the other immigrant categories prioritized by the Left.
Consider the children of these highly skilled and educated immigrants. The National Foundation for American Policy (NFAP), which promotes increased immigration, looked at the 2016 Intel Science Talent Search and found that, of the 40 finalists, 33 had immigrant parents. Of those 33, all but three had parents who were at some point living in the U.S. on H-1B visas, temporary cards reserved primarily for workers with skills in high demand in the technology industry. On the surface, this seems to be a huge endorsement of increased immigration, which is how NFAP frames it.
But these highly skilled immigrants are wildly unrepresentative of U.S. immigrants as a whole. Of the 40 finalists, 25 had parents from India and China. Three were of mixed U.S.–immigrant parentage (and were therefore eligible for citizenship). If we did nothing more than include the children of U.S. citizens and of Chinese and Indian holders of H-1B visas, we would have covered more than 90 percent of U.S. prize winners. It appears that none arrived illegally.
Even that, however, overstates the significance of employer-based H-1Bs. Of the nine eventual award winners who were children of immigrants, only one appears to have parents who came to the U.S. directly for employment. The others graduated from U.S. universities, usually with advanced degrees. All but one were from India, which at the time of their entry contributed only 2 percent of the annual immigration to the United States.
The Trump administration has floated commonsense proposals for H-1B reform. Currently under review by the Departments of State, Labor, and Homeland Security, they would raise standards that a tech immigrant would have to meet, and they would restrict his ability to take lower-end jobs.
The false claim that the United States must embrace comprehensive immigration reform to maintain its leading role in science is a simple continuation of the rhetoric we heard in the presidential campaign. Last year, The Hill breathlessly announced (and liberals relentlessly retweeted) that all six Americans who had just been named Nobel laureates in the sciences and economics were immigrants. But of these six immigrants, five came from Great Britain, one from Finland. Together, those countries currently contribute less than 2 percent of U.S. immigrants annually. Moreover, all of the six came to the U.S. as accomplished academics whom America would have welcomed regardless of their national origin.
How about when budding students who are the children of accomplished immigrants grow up to be scientists and engineers? Immigrants undoubtedly play a vital role in Silicon Valley, four in ten of whose residents are now foreign-born. But what is striking about the Valley’s most successful companies is not how many were founded by immigrants, but how few.
Of the twelve U.S.-based Internet companies that are among the world’s 25 largest in sales, none had a primary founder who immigrated to the U.S. as an adult. Only two had a primary co-founder who was an immigrant. Both of those men immigrated to the U.S. as young children and teamed up with a U.S.-born co-founder. They were not trained abroad but rather were educated in the American system. The father of Google co-founder Sergey Brin was a successful mathematician in the former Soviet Union despite having to endure anti-Semitic discrimination. Ebay founder Pierre Omidayar, the only foreign-born person to start one of the Silicon Valley whales solo, immigrated as a child from France, where his parents were distinguished academics. Such highly skilled immigrant parents were welcomed to the United States legally.
The record is similar when we look at the next generation of Facebooks and Googles. Of the twelve technology companies valued at $5 billion or more in private markets according to CB Insights, only three had a primary co-founder who was an immigrant: Palantir’s Peter Thiel, whose father was a chemical engineer, came to the U.S. from Germany as a baby and founded the company with American-born co-founders. Elon Musk, the founder of SpaceX and Tesla, immigrated from Canada to the University of Pennsylvania. Stripe was founded by two brothers from Ireland who attended Harvard and MIT. All would have been let in under any reasonable policy of merit-based immigration.
In 2016 the National Foundation for American Policy looked at private companies valued at $1 billion or more. Here, the demographics of founders and co-founders who were immigrants sharply diverged from those of America’s immigrants overall. Of 87 companies, 44 had at least one immigrant co-founder, for a total of 61 individuals. Thirty-seven of them were from just four countries: India, Israel, Canada, and the United Kingdom. Eleven were from elsewhere in Western Europe, which currently accounts for less than 10 percent of overall immigration to the United States. In this sample, too, the immigrants who can be seen as leaders in the U.S. technology revolution do not resemble the broader immigrant population in terms of their educational background or country of origin. We are perfectly capable of finding and attracting these immigrants without giving up on borders or otherwise allowing mass immigration.
The H-1B system itself needs reform. In theory, H-1B visas are supposed to bring in workers with skills that Americans don’t have. In practice, the system is rife with abuse. CBS News recently reported that San Francisco State University fired all of its IT workers and replaced them with cheaper workers from abroad. It did so with the help of a regulation issued late in Obama’s second term. In 2016, more than 180,000 H-1B visas were issued. That number is up from 135,000 just four years earlier.
Whatever the current problems with H-1B visas, however, many recipients are skilled workers we should want to welcome. Yet talk to folks in the Valley and you will hear about mediocre H-1B holders hired simply for their low cost. Several reforms, suggested by Trump and others, would dramatically increase the minimum H-1B salary to make sure we were importing only the best and brightest workers. Such reforms would allow the U.S. to continue to attract the most highly skilled immigrants from around the world while admitting fewer technology workers than it does today, to the benefit of American workers who would take jobs for which immigrant labor is not truly needed.
The data show that enforcing our immigration laws and dramatically reducing the admission of unskilled and low-skilled immigrants, including “refugees” (many of whom are not truly fleeing violence but rather seeking economic opportunity), would not reduce our competitiveness. We do not need millions of nurses, gardeners, and restaurant workers coming to the U.S. to displace millions of Americans of all ethnic backgrounds — and disproportionately co-ethnics of the new arrivals — who are fully capable of doing these jobs. (Yes, the native-born may command higher wages, but when did it become a core conservative value that we don’t want working-class Americans of all backgrounds to be able to earn a better living through hard work?)
Highly skilled immigrants will continue to be a key part of Silicon Valley for the foreseeable future. And that is as it should be. But by and large they are identifiable by their academic or professional accomplishments before they set foot in the U.S. Even in Silicon Valley, we could substantially reduce the level of immigration with little effect on competitiveness. A great deal of benefit would accrue to American engineers and computer scientists of all ethnicities and income levels.
If Silicon Valley is dedicated to making sure America continues to recruit the world’s best and brightest workers, it will find a willing partner in the current administration. If the Valley continues to assume, against all empirical evidence, that high levels of unskilled immigration and cheap “tech sweatshop” workers are essential to maintain U.S. competitiveness, no one should be surprised if the Trump administration turns a cold shoulder.
Meanwhile, FWD.us continues to advocate amnesty. “With America facing so many serious challenges, we’re not content to nibble around the edges,” reads the FWD.us website. “We push for policies that overhaul entrenched systems and benefit large numbers of people.” It’s an admirable goal. But the best way to reach it is to build an immigration system that attracts the most professionally qualified immigrants, gives them the greatest possible opportunity to succeed, and does so in a way that benefits all Americans.
And that also means considering immigration in more than just economic terms. Since 2000, Santa Clara and San Mateo counties — the heart of Silicon Valley — have lost more than 300,000 residents (primarily citizens) and added far more than that number of immigrants. No doubt the Valley has birthed tremendous companies during that time and made the Zuckerbergs of the world very rich, but at what cost to the average American who lived here 20 years ago? If an outcome in which almost one out of seven residents is desperate enough to leave the area in less than 20 years is defined as “success,” one shudders to think what failure might look like.
– Mr. Carl is a research fellow at the Hoover Institution, Stanford University.