Elon Musk is right to call out Donald Trump over flawed visa logic

President Donald Trump shook the tech world this week when he suspended a slew of foreign worker visas, in an executive order seemingly aimed at mitigating some of the economic effects of the coronavirus outbreak.

Tesla and SpaceX CEO Elon Musk and Google CEO Sundar Pichai are two of the names voicing their concerns about the visa suspensions, which are expected to particularly affect the technology industry. Musk opined via Twitter: "very much disagree with this action. In my experience, these skillsets are net job creators. Visa reform makes sense, but this is too broad."

The order suspends and limits the entry of people on a series of visas until the end of 2020. It covers the H-1B visa for workers in specialized occupations, H-2B visas for temporary workers, selected J visas where the visa holder is participating in one of the specified roles, and L visas for workers in intra-company transfers. It also covers people accompanying or joining these visa holders.

The H-1B visa has become key to those working in tech. Pew found that 64 percent of H-1B requests in 2011 were for jobs in science, technology, engineering, and math. Around 1.8 million visas were issued between 2001 and 2015.

Pichai, of Google, joined Musk in criticizing the move on Twitter: "Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation - we’ll continue to stand with immigrants and work to expand opportunity for all."

While Musk also condemned the move, it's notable that his space-faring firm SpaceX only hires Americans. Musk explained during a September 2016 appearance at the International Astronautical Congress that his company is unable to hire people on regular work visas due to security regulations:

In the executive order, Trump highlighted an unemployment rate that has shot up dramatically during the coronavirus pandemic. The order cites the Bureau of Labor Statistics, which recorded a 13.3 percent overall unemployment rate in May. Amid these skyrocketing figures, the order claims that the visa programs outlined "pose an unusual threat to the employment of American workers."

The suspension also comes, however, as Trump has struggled to reverse his sliding election fortunes. The visa suspensions tap into some of the themes that propelled him to victory four years prior – addressing economic issues with nationalist rhetoric, wrapped in an "America First" slogan. Trump has sought to rally that same support base in recent weeks.

The most visible of these moves was a re-election event in Tulsa, Oklahoma, Trump's first in three months. The state overwhelmingly voted from Trump in 2016, and his speech revisited some of his well-trodden themes like law and order. City officials said some 6,200 people attended, a thin slice of the crowd prediction publicized by organizers.

Beyond rallying his core voter base, the moves also put the president on a collision course with the tech industry.

Donald Trump vs. tech: the visa suspension

Why removing this high-skill visas likely won't work — It's easy to see this move by Trump as a populist smokescreen that won't actually solve the problem he says it will.

• While Covid-19 has hit every sector of the U.S. economy, the damage has been unequal. Industries that revolve around tourism, like sightseeing tours, have seen devastating losses with over 60 percent of employees losing their jobs. Workers in amusement, gambling, and recreation industries, which covers everything from Disneyworld to Caesar’s Palace in Las Vegas, have seen similar devastation, a recent analysis of government numbers by Business Insider shows.
• Also, jobs that require a personal touch have seen major losses. Analyzing online job postings between March and April, the management consulting firm McKinsey found that the desire for home care and restaurant workers plummeted. There was a 36 percent decline in job postings for childcare jobs, a 30 percent decline in the want for restaurant cooks, and a 25 percent decline in personal-care workers for adults.
• By contrast, there was only an 11 percent decrease in app developer job postings.

In short, the people who lost their jobs are far less likely to be threatened by someone applying for a work visa. The data shows this measure will very likely not, as Trump claims, help free up job openings for the Americans who lost theirs.

Meanwhile, putting H-1B visas in the spotlight sets up a fight that Trump has already started, putting him on one side and the country’s tech leaders, like Twitter CEO Jack Dorsey and Amazon chief Jeff Bezos. Both have been the subject of Trump’s public attacks, be it for supposedly censoring Trump’s tweets or for coverage in the Washington Post, which Bezos also owns.

These companies (along with other well-known brands like Reddit, Facebook, Uber, Lyft, Airbnb, Spotify, and Google) are members of the Internet Association (IA), a trade group that has been pushing for increases in H-1B visas since at least 2013.

In a short statement on June 22, IA Director of Social Impact Sean Perryman said that the group “condemns the administration’s latest executive order.”

Brad Smith, president of Microsoft, also voiced his opposition on Twitter:

"Now is not the time to cut our nation off from the world’s talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country’s critical infrastructure. They are contributing to this country at a time when we need them most."

Opposition also came from those with personal experience of the system. Andrew Ng, former head of Google Brain, wrote on Twitter:

"The suspension of the H1B visa program is bad for the US, bad for innovation, and will shatter dreams and disrupt lives. As a former H1B visa holder, my heart goes out to all the families affected."

Far beyond the economic effects, the visa suspension could also lead to thousands of personal lives being disrupted overnight.