Matt KendallFollowing a slew of immigration related changes imposed by the Trump administration, News broke this month of plans to rescind the Deferred Action for Childhood Arrivals (DACA) program, sending a worrying message to approximately 800,000 young undocumented immigrants that grew up Stateside.
The five-year-old policy allows people who came to the US at a young age to remain in the country without fear of immediate removal, as well as giving them the right to work legally.
When reversed in March 2018, any people that fall under the protection of DACA will be eligible for deportation, some of whom are already working in the tech industry.
Bad Vibes
While not as impactful to the sector as the changes to the H1B visa (Apple has expressed concern for its 250 DACA workers, compared to its 23,000 H1B petitions), the move still has an irreversible effect on how foreign workers view the country.
“We sometimes hear from people impacted by the changes to the DACA program, those who are not American born, and spouses or partners of those people,” said Michael Tippett, Co-founder of True North, a company that helps foreign businesses settle in Canada. “Many are saying it’s an unpleasant environment to live in and are extremely nervous about the future.”
All this has created a sense that the United States is no longer a desirable place to pursue a career in technology, so many are looking to Canada as the next best option due to more relaxed immigration policies, special visas for entrepreneurs and tech talent, and tax incentives for businesses.
Adding Insult to Injury
Hired, an online job search marketplace, recently released a study that revealed 40% of its survey respondents have considered relocating to another location since the 2016 election.
Of those individuals, 32% cite Canada as their top choice.
The same report showed a 60% decrease in requests from US-based companies to foreign workers from 2Q16 to 4Q16, which, writes Lindsay Scott, the company’s Director of Communications, “was likely the result of uncertainty around immigration policies generated by the election”.
There was a similar decline in the interest of foreign companies, which became less inclined to engage with US companies following the election. And, perhaps most importantly, 60% of survey respondents believe the current administration will negatively impact the tech industry, with almost a quarter now less likely to start a company in the States.
“Combined with recently announced plans to eliminate a federal rule that lets foreign entrepreneurs come to the US for the purposes of starting new companies, it all adds up to a troubling outlook for the US’s ability to retain talent and foster innovation,” writes Scott.
Ready and Willing to Welcome the Unwelcome
“The issue with the H1B visas continues, so companies continue to look at alternative locations,” said Tippett. “These are mostly large organizations and venture backed companies in the high growth phase of development that have large numbers of employees and take immigration uncertainty into consideration.”
These companies are looking at Canada as their “Plan B”, as it offers an alternate location to ensure that services are uninterrupted and to assure employees that they have their back. The general settlement process in Canada, according to Tippett, takes anything from one year to eighteen months to complete, so with some companies opting to kick things off after the 2016 election, many are now in the final stages.
“The constriction of talent flow in the US is helping to shape the Canadian market,” said Tippett. “Vancouver is growing rapidly, with Microsoft and Amazon expanding there, Toronto and Montreal are booming, and New Brunswick and Atlantic Canada have an emerging cybersecurity sector with the arrival of IBM. The country knows that world-class talent is the lifeblood of innovation.”
With the changes to DACA, H1B, and other immigration policies, Trump’s continued pressure on foreign workers will inadvertently help Canada reach its ambitious goal of creating 182,000 more skilled ICT workers by 2019, and the country is more than ready to accept the help.
Re: H-1B
While lobbying Congress for more H-1B visas, industry claims H-1B workers are “the best and brightest”. Come payday, however, they’re entry-level workers.
The GAO put out a report on the H-1B visa that discusses at some length the fact that the vast majority of H-1B workers are hired into entry-level positions. In fact, most are at “Level I”, which is officially defined by the Dept. of Labor as those who have a “basic understanding of duties and perform routine tasks requiring limited judgment”. Moreover, the GAO found that a mere 6% of H-1B workers are at “Level IV”, which is officially defined by the Dept. of Labor as those who are “fully competent” [1]. This belies the industry lobbyists’ claims that H-1B workers are hired because they’re experts that can’t be found among the U.S. workforce.
So this means one of two things: either companies are looking for entry-level workers (in which case, their rhetoric about needing the “best and brightest” is meaningless), or they’re looking for more experienced workers but only paying them at the Level I, entry level pay scale. In my opinion, companies are using the H-1B visa to engage in legalized age discrimination, as the vast majority of H-1B workers are under the age of 35 [2], especially those at the Level I and Level II categories.
Any way you slice it, it amounts to H-1B visa abuse, all facilitated and with the blessings of the US government.
The National Association of Colleges and Employers (NACE) has never shown a sharp upward trend of Computer Science graduate starting salaries, which would indicate a labor shortage (remember – the vast majority of H-1B visas are granted for computer related positions). In fact, according to their survey for Fall 2015, starting salaries for CS grads went down by 4% from the prior year. This is particularly interesting in that salaries overall rose 5.2% [3][4].
References:
[1] GAO-11-26: H-1B VISA PROGRAM – Reforms Are Needed to Minimize the Risks and Costs of Current Program
[2] Characteristics of H-1B Specialty Occupation Workers Fiscal Year 2014
Annual Report to Congress October 1, 2013 – September 30, 2014
[3] NACE Fall 2015 Salary Survey
[4] NACE Salary Survey – September 2014 Executive Summary