Donald Trump, the infamous real estate mogul, television boss, and now presidential candidate, is well known for his out-spoken nature. His success in the primary rounds have turned his strong opinions from empty threats into viable scenarios, if he is elected president.
It seems that Donald Trump has a vendetta against the Silicon Valley tech industry. He’s openly criticized industry leaders like Mark Zuckerberg and Tim Cook, made cryptic threats towards their companies, and claimed he will “boycott” Apple by switching his iPhone for a Samsung. As the election progresses, it has us all wondering…what will happen to the Silicon Valley if Donald Trump is elected?
Despite his statements about the Silicon Valley, Donald Trump understands the impact that these tech companies can have on the election. That’s most likely his reason for starting out his California campaign right here in the Bay Area.
Two of his opinions, in particular, have created conversations amongst job seekers in the Silicon Valley. First, his view that we are on the verge of a “massive recession” have candidates questioning the security of their positions. Second, his stance on H1B visas have sparked a dialogue between tech leaders and the government on technical skill shortages.
Upcoming Massive Recession
Donald Trump’s recent claims about an imminent “massive recession” on the horizon have sparked concern amongst job seekers in the Silicon Valley. There has been plenty of talk throughout the Silicon Valley about whether there is a tech bubble brewing as there was in 2000, or whether the stock market will drop again.
Recently the Silicon Valley has received mixed signals regarding the market. Apple just recently laid off their contract recruiters in the wake of a revenue drop. This type of news strikes many questions from job seekers. Should they move out of the area? Is their job secure? Should they go find a full time role instead of a contract?
The word “layoffs” tends to incite a panic amongst job seekers, which in turn perpetuates the concern for a recession. Layoffs, however, aren’t the first sign of a recession – hiring freezes are. Companies will put a pause on onboarding any new employees well before making cuts to their workforce.
The Silicon Valley maintains an unemployment rate of 3.7%, a rate much lower than the whole United States at 5%. The area actually hasn’t been at an unemployment rate of 5% since November 2014. The total number of jobs in the Silicon Valley continues to grow, as well. Between Q2 of 2014 and Q2 of 2015, 129,223 jobs were added here.
In the Silicon Valley staffing industry, ERG, Inc has continued to see a robust market, despite the drops in the stock market. Managers are continuing to push along their hiring processes at a reasonably quick rate. There is still a demand for talent in the area, and we continue to see a steady influx of job orders and hires.
H1B Visa Reduction
While he has since backed down from his original statements about H1B visas, Trump maintains that it should become more difficult for foreign immigrants to obtain H1B visas in order to reduce the unemployment rate of citizens. Some highly skilled citizens, alongside Trump, will argue that more H1B holders will impede their abilities to find open jobs that they are qualified for.
According to tech leaders in the Silicon Valley, immigrants holding H1B visas are needed to fill their many openings for specialized engineering positions. They argue that H1B holders provide can valuable skill sets to Silicon Valley tech companies, and they help to address an experienced worker shortage in the area. There have, however, been instances of widespread H1B abuse by organizations that were recently uncovered, and are under investigation. There are also instances of companies taking advantage of these visa holders, paying them well below market rate for their skill set.
The demand for H1B visa has grown an astronomical 2,100% between 2012 and 2016. In just the first five days that applications have been accepted for the visa lottery this year, over 233,000 applicants have filed for only 85,000 spots.
H1Bs are not the only way that influential leaders in the tech community are looking to address this skills shortage. There was a call to action from tech leaders to Congress to institute programs that would teach kids to code in public schools. This push for federal funding for coding programs for students could eventually help solve the issue of technical skills shortages. In the meantime, leaders like Mark Zuckerberg have launched fwd.us, an initiative that encourages the government to allow more highly skilled workers into the country.
In 2015, over 36.8% of the total population of the Silicon Valley is foreign born. Many of the founding members of Silicon Valley giants immigrated to the United States. Sergey Brin, a founding member of Google immigrated to the U.S. with his family when he was a child. Elon Musk of Tesla, SpaceX and PayPal didn’t move to the United States until he was well into his twenties. Musk and Brin are just two examples of many immigrants creating jobs in America. In fact, Inc. reports that immigrants are responsible for founding over half of companies in the Silicon Valley in a 10 year span.
While it remains to be seen how the H1B visa situation will be sorted out, ERG has continued to see high pay rates for all highly-skilled technical consultants, regardless of their work authorization status.
Comments made by politicians on both sides of the spectrum should not impede your job search in the Silicon Valley. With the unemployment rate continuing to drop, despite layoffs, the Silicon Valley will continue to offer a significant numberof engineering positions. Throughout the coming months, we will continue to see a strong influence on the election from tech leaders like Zuckerberg, Gates, Bezos and Cook.
Let’s start the conversation – do you think Donald Trump’s comments hurt the Silicon Valley market, help it, or have no impact on it?