As with virtually every policy, Donald Trump has been remarkably inconsistent. Despite his anti-illegals theme, believe it or not, critical elements of his platform on immigration have been no different. One of those blotches of flip-flopping was the dissemination of H-1B visas for professional workers, the same visa used in Silicon Valley.
“The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult for poor and working class Americans — including immigrants themselves and their children — to earn a middle class wage,” read Trump’s thin policy prescription on his campaign website back in March (which has since been edited but retained by The Washington Post). “We need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office not USCIS [U.S. Citizenship and Immigration Services].”
And yet, when directly challenged on the issue just over a year ago in one of the first Republican primary debates, he played coy.
“I’m in favor of people coming into this country legally. And you know what? They can have it any way you want. You can call it visas, you can call it work permits, you can call it anything you want.”
“As far as the visas are concerned, if we need people, it’s fine. They have to come into this country legally. We have a country of borders. We have a country of laws. We have to obey the laws. It’s fine if they come in, but they have to come in legally.”
He then flipped that stance again at another primary debate in March, saying he would absolutely end the program.
“I know the H-1B very well. And it’s something that I, frankly, use, and I shouldn’t be allowed to use it. We shouldn’t have it. Very, very bad for workers.”
“It’s very bad for business in terms of — and it’s very bad for our workers and it’s unfair for our workers. And we should end it.”
It is that Trump’s Uncertainty Principle that will likely drive further venture investor anxiety in the private markets, just as we have seen in a global selloff in the public markets.
Lou Kerner, an investor with The Social Internet Fund and The Israel Syndicate on AngelList and is also a registered Republican who spent the past year excoriating The Donald, thinks the major drawback for Silicon Valley will likely be foreign workers lack of interest to make the trip to a country that just elected a visceral anti-immigrant candidate.
He tells Geektime, “The disruption in the flow of foreign workers to the US will occur in two different ways. The first, and likely larger impact, will be felt immediately, as foreign workers will be reluctant to come to the U.S. to work in a country where the leader has vilified immigrants and where work permits are expected to be harder to get.”
He then notes, “The second is in the potential increased difficulty of foreign workers to get work permits or to have them shortened.”
That reflects trends in Europe, where a recently scrapped scheme to blacklist skilled visa holders rattled the UK, and Sweden where visa holders face more frequent renewal schedules. But that’s just the attitude says Kerner. Curbs on H1-B visas are a possibility from a policy standpoint.
Adam Fisher of Bessemer Venture Partners, however, does not agree.
“Will this disrupt trends to allow the free flow of foreign workers and ability of startups to scale? I don’t think so. Silicon Valley does not like Trump, but Trump didn’t run against Silicon Valley, but rather Washington,” Fisher argues, saying he doesn’t expect Trump’s anti-immigrant policies to hit skilled visa policy on tech startups.
“Silicon Valley doesn’t rely on foreign workers, but rather immigrants, many of whom are already US citizens or at least residents in the US,” he clarifies.
A centrist in wolf’s clothing?
Fisher expresses some cautious optimism though, saying, “Personality aside, he is likely to govern as a centrist as he learns how to speak to a broader audience and how that audience interprets him.”
That thought might be based on the indisputable fact that Donald Trump is a serial liar whose harsh policies might have been hyperbole to boost his poll numbers (not Fisher’s words, but my own analysis).
That wouldn’t dismiss fears about his competence though, and the perception among many that he was not studious enough to have deserved being nominated for president to begin with.
OurCrowd Founder and CEO Jonathan Medved downplays some of the concern, again saying it was too early to say for sure if Trump’s perceived lack of qualification is real enough to drastically impact the startup economy (or the economy in general), somewhat reflecting the words of billionaire Mark Cuban who asked people to give Trump a chance.
“I think it’s way, way premature. Give the guy a break. He’s going to be tasked with leading the world’s greatest power and economy,” Medved proclaims, appealing for calm in a storm of uncertainty. He says that when markets panic and move too soon, they lose money. That approach has never been helpful to investor confidence, and it won’t start to be now.
“This is not something where we can press rewind. As a VC and businessperson, you have to deal with reality,” he posits.
And what did we learn from all this?
So what should Silicon Valley learn from what just happened or do to prepare for the next four years? Fisher’s words aren’t exactly comforting.
“Only a reminder that good things always come to an end, and that startups must be agents of good, not just profit,” he believes.
Kerner thinks this will ultimately be a wake-up call for the new upper middle class and active components of Silicon Valley. The economic power of the region and growing influence of the sector haven’t yet translated into political influence. That will change.
He asserts that, “Silicon Valley will become more politicized, recognizing that they want their voice to have more of an impact than it did in this election.”
So is anyone in the venture world optimistic right now? Medved thinks in a world of extremely dejected venture capitalists and elites, at least someone is: “Peter Thiel is obviously very happy.””