For Mark Zuckerberg, Discriminating against American Workers is Good for Business

March 2014

Mark Zuckerberg has proudly proclaimed that his support for “comprehensive immigration reform” is not just about self-interest because it would resolve issues that “don’t just touch our part of the industry, but really touch the whole country and touch what is right for us to do as a people.” However, a cursory inspection of the situation reveals that immigration reform is not a humanitarian cause for Zuckerberg, but one that stands to greatly benefit him personally by making his company more profitable at the expense of American workers.

During the past year, the national news media joined with the establishment of the Republican and Democratic parties, as well as various advocacy and business groups, to help win passage of the Senate Gang of Eight bill (S.744), which would result in blanket amnesty for illegal aliens and a massive increase both in legal immigration and guest workers, including a virtually unlimited number of foreign “high-skilled” workers for the tech industry. 

There is currently a push for the House of Representatives to take up the Senate bill “piecemeal,” the logic supposedly being that passing the amnesty and immigration increases of S.744 in component parts would cause less of a backlash by voters. The Facebook founder and CEO has been at the forefront pushing support for S.744 and has unequivocally embraced amnesty. Why is Mr. Zuckerberg such a staunch backer of mass amnesty, since very few illegal aliens are likely to have the skills his company would need? Because he knows without amnesty he won’t get the thousands of additional foreign guest workers he wants. 

Profit Motive is the Real Motivator for Zuckerberg

Zuckerberg awarded himself a record $2.3 billion in compensation in 2012, while his company not only did not pay any taxes on over $1 billion in revenue, Facebook received major tax refunds from the state and federal governments. Many Republicans who oppose increased spending on welfare benefits for individuals have no problem supporting corporate welfare payouts to billionaire CEOs.  They do so with the understanding that some of this largesse will flow back into campaign coffers, and will grease the skids of corporate lobbying in D.C.

According to the non-partisan Center for Responsive Politics, which tracks such issues as lobbying and campaign spending, Facebook has spent over $6.4 million lobbying the federal government in 2013 (spending $3.9 million in 2012), and its contribution to political candidates have increased eightfold between 2008 and 2012. Facebook has actively lobbied in support of S.744, which would raise the annual cap on H-1B nonimmigrant (temporary) guest workers from 65,000 to 180,000 and would eliminate the ceiling on green cards for foreign STEM (science, technology, engineering, and mathematics) workers. 

Facebook also lobbied in favor of House bill H.R. 2131, which would increase the available STEM visa pool so that companies such as Facebook could import more workers, thus displacing native workers and driving down overall wages. The obstacle to  passing a stand-alone STEM bill is that the Democratic Party will only agree to vote for it if it is combined with blanket amnesty for 12 million illegal aliens. This is the real motivation guiding Mark Zuckerberg’s “selfless” pursuit of comprehensive immigration reform. It’s no surprise that a tech CEO would want to shift the balance of power more in his favor, but no one has gone to more trouble to erect a smokescreen to disguise his motives than Zuckerberg. 

FWD.us and Americans for a Conservative Direction

In addition to Facebook’s direct lobbying, Zuckerberg was instrumental in the founding and funding of FWD.us (along with Bill Gates) with the stated goal of achieving “comprehensive immigration reform that allows for the hiring of the best and brightest,” which translates as making sure the tech industry has an inexhaustible supply of cheaper foreign workers. The FWD.us staff is stocked with self-professed “progressives” and was partnered with such far-left groups as the MoveOn.Org and The Daily Kos until it was revealed that Zuckerberg was also funding a faux grassroots group called Americans for Conservative Direction. That group ran ads supporting the Keystone Pipeline, including one praising Sen. Lindsey Graham. 

As FWD.us was running pro-pipeline ads, Elon Musk, the founder of electric car maker Tesla Motors, resigned from the group. Musk said that instead of engaging in subterfuge, the “right way to win on a cause is to argue the merits of that cause.” A FWD.us spokesperson responded to Musk’s resignation by saying “not everyone will always agree with or be pleased by our strategy,” which is another way of saying some people are not as completely disingenuous in their support of political causes as Mark Zuckerberg.

For all the money Zuckerberg has spent in advocating for political issues, can one tell if he supports the Keystone Pipeline or opposes it? Is he a Conservative or a Progressive? Can he be both at the same time? It doesn’t matter to Zuckerberg, because this isn’t about principles or even ideology. It’s about increasing profit margins and boosting stock prices, even if it means selling his fellow citizens down the river in the process. 

The Facebook Loophole

It should come as no surprise that Zuckerberg would get something in return for pumping millions of dollars into D.C., and what he got was a key provision in S.744 that is commonly referred to as the “Facebook Loophole.”

Tech companies routinely use the H-1B visa program to employ foreign workers at a discount compared to U.S. workers. Under the current law, employers whose workforce includes 15 percent or more of H-1B workers (known as H-1B-dependent employers) must pay higher fees and wages. In order to hire more foreign tech workers without exceeding the 15 percent threshold, Facebook was able to persuade the authors of S.744 to exempt so-called “intending immigrants” (a newly created term for H-1B workers that an employer sponsors for a green card) when determining whether an employer is an H-1B-dependent employer. The green card application filed on behalf of an H-1B worker does not have to be meritorious or even approved by the government; it only has to be “pending.”

This so-called “Facebook loophole” guarantees Zuckerberg a nearly endless supply of cheaper high-tech labor and introduces additional hurdles for experienced U.S. tech workers to find employment. But S.744 also allows Facebook to legally bypass qualified American workers. In the original bill there was a provision that required employers to “attest” that they could not find a qualified domestic worker before hiring an H-1B. This restriction was very weak and easy to circumvent, but it at least allowed employers to be penalized for knowingly discriminating against American workers. Facebook was instrumental in securing the passage of an amendment that stripped out even these minimal protections. 

There is No Shortage of STEM Workers

(as in NO shortage of STEM workers)

Earnings for tech workers have been depressed by the industry’s use of foreign guest workers, and in some cases have even decreased. Recently released statistics from the National Association of College and Employers showed that salaries for workers in the computer science field declined by 2.5% between 2012 and 2013, from $60,038 to $58,547. Overall, the average real wage for tech workers has remained stagnant over the last fifteen years. 

If there was a chronic shortage of these workers, as tech executives claim, salaries for these occupation would be rising sharply. What the tech industry wants is a vastoversupply, and they are willing to spend millions of dollars lobbying now in the pursuit of billions in extra profits down the road.

Tech Industry Claims

“Researchers who study labor markets and representatives of IT employers disagree almost completely as to whether there is a shortage of IT workers. The researchers uniformly believe that there isn’t a shortage while the representatives [of tech employers] vociferously believe that there is.”

–Professor Peter Capelli, The Wharton School, University of Pennsylvania

There may be a consensus among tech industry executives that there is a labor shortage within the technology industry. However, just the opposite consensus has been reached by researcher outside the industry, and their work is supported by hard data and facts. As Dr. Michael S. Teitelbaum, a researcher with the Alfred P. Sloan Foundation points out, “No one who has come to this question with an open mind has been able to find any objective data suggesting general ‘shortages’ of scientists and engineers.”

The facts are that wages in STEM occupations have not kept pace with those of other college graduates, and the wages in some STEM occupations have decreased. There are more than twice as many people in the United States with STEM degrees than are working in the industry, and the U.S. produces more qualified STEM grads than there are jobs created in the industry every year. Two-thirds of those in the United States who have STEM degrees are not working in the industry. The unemployment rate for STEM workers may be low when compared to all other workers (partly because many STEM degree holders are employed in other fields) but the rate doubled from 2007 to 2012, another indicator that there is no shortage of available workers. The only “evidence” in support of a shortage of tech workers has either been produced by industry sources or financed by the industry.

Zuckerberg Supports Polices that Discriminate against the Best and Brightest: America’s Own STEM Workers

Younger Workers Can’t Find Jobs

“There have been many predictions of [science] labor shortages and…robust job growth… And yet, it seems awfully hard for people to find a job. Anyone who goes into science expecting employers to clamor for their services will be deeply disappointed.”

–Jim Austin, editor of Science Careers

In January 2013, the Center for College Affordability and Productivity reported that over 24 percent of individuals working in retail sales had a bachelor’s degree. In addition, with data from the Bureau of Labor and Statistics, they reported that there were 28.6 million jobs requiring a college degree while there were 41.7 million employed college graduates. So, the amount of college graduates is far outpacing the amount of jobs requiring a college degree leading to severe underemployment among skilled workers.

Salary stagnation has caused many STEM graduates to seek employment outside the industry, leading to what computer science professor Norman Matloff call “an internal brain drain,” meaning that the “best and brightest” young Americans are essentially denied a well-paying career in STEM fields. Harvard labor economist Richard B. Freeman observes, “You can’t say, ‘I want more visas’ and ‘I expect more Americans to enter the field’… The thing that always strikes me about these business guys is they never say, ‘We should be paying higher salaries.’”

Older Workers Are Being Laid Off

The tech industry, including Facebook, faces incessant accusations of age discrimination.  Zuckerberg confirmed his bias to the San Francisco Chronicle:

I want to stress the importance of being young and technical… Young people are just smarter. Why are most chess masters under 30? I don’t know. We may not own a car. We may not have family. Simplicity in life allows you to focus on what’s important.

In 2012, tech firms in Silicon Valley laid off 48,000 employees, and those who are over the age of 35 have a much harder time getting a new job in the industry.   UC-Davis computer science professor, Norman Professor Matloff has written extensively about this problem:

The industry claims that older Americans can’t be hired because they lack up-to-date skills and need retraining. But this assertion is at odds, for example, with the documented incidents in which major U.S. firms have fired American workers and forced them to train their foreign replacements (Hira 2010); in these situations, clearly it was the Americans who had the skills, not the foreign workers. Instead, the skills issue is a pretext for hiring cheaper workers.

Zuckerberg’s Form of Immigration Reform Would Harm American Tech Workers

Zuckerberg told The Washington Post that “we need the most talented and hardest-working people. We need to train and attract the best.” So what is his solution to the problem of unemployed and underemployed college graduates? Is he devoting his energies to lobbying for policies that will put America’s young people to work, giving them the opportunities that past generations of American have had? No, instead Zuckerberg would rather declare America’s own not good enough and displace them with imported workers.

Foreign STEM workers don’t lack necessary skills as most of the jobs they end up performing are not technically advanced. The problem is that there are tens of thousands of American workers who can do these jobs but are being passed over for cheaper foreign alternatives. The Government Accountability Office (GAO) found in 2010 that 54 percent of H-1B guest workers were approved for entry-level jobs (described as needing “basic understanding of duties and perform routine tasks requiring limited judgment”), and 83 percent of H-1Bs fall into the lowest two wage levels. Just 6 percent of H-1B workers were being paid at the highest pay level. Certainly, these are not the world’s best and brightest. In fact, by any measure, when any direct comparisons are made between American STEM workers and students and their foreign counterparts, Americans come out ahead.  

The kind of reforms Zuckerberg supports would lead to the further exodus of older workers from the tech industry and it would prevent many recent STEM grads from securing well-paying jobs. The scales have been heavily tipped in the industry’s favor for many years, but that is not good enough for some tech CEOs. Their view is that the U.S. immigration system exists solely to increase their profit margins and, the way that Congress has kowtowed to the Silicon Valley plutocrats, it appears many politicians share this view. There is a one percent in the United States, and many of them they reside in Silicon Valley, and they have exhibited no concern for their fellow Americans.