Tag Archives: Silicon Valley

Elton Gallegly’s Anti-Immigration Strategy: Ruin California’s Economy

Rep. Elton Gallegly is the Chair of the House Subcommittee on Immigration. He’s also one of the most egregiously anti-immigrant leaders in Congress, pushing a strategy to force a mass deportation, cleverly couched as “attrition through enforcement.”

Unfortunately, Gallegly’s zeal to get tough on immigrants would have profound consequences for California and the rest of the United States.

California’s agriculture and food production are the envy of the world.  The state’s farmers not only help feed the world, but keep prices low and jobs here in the United States.  Yet this great agricultural machine is under assault by one of California’s own members of Congress: Elton Gallegly.  Instead of embracing the business-labor compromise bill known as AgJOBS that would legalize farm workers and make changes to the H-2A guest worker program, Gallegly is trying to divide the business community from labor leaders and destabilize the agriculture industry in the process. 

Gallegly has already held hearings that tried to pit Latinos against African Americans. (His hometown paper, the Ventura County Star, reported on March 1, 2011 “Immigration hearing turns into racial battle”) and designed to create tension between native-born citizens and naturalized citizens, which Rep. Xavier Becerra (CA-31) blasted as “scapegoating on steroids.” 

Gallegly’s next hearing is titled, “The H-2A Visa Program – Meeting the Growing Needs of American Agriculture?”  His approach is to insist that the solution to our farm labor crisis is an employer-friendly guest worker program, instead of the thoughtful, realistic, bipartisan approach embodied by AgJOBS that includes stronger labor rights for workers, changes to the visa program desired by employers, and a way for undocumented farm workers to earn legal status if they have worked in the agriculture industry.

Gallegly knows that California’s agriculture industry is dependent on a foreign-born and mostly unauthorized workforce.  Yet, due to our broken immigration system, the foreign-born workers who comprise the overwhelming majority of our agricultural workers have few avenues to become legalized and, without them, farmers have few avenues to keep their farms operating at full capacity.  It’s already bad enough. But, Gallegly is intent upon making a bad situation worse.  Importing new workers through a revised H-2A program, and deporting the seasoned workers who have been here for years, is not the answer.  A reasonable approach, like the AgJOBS legislation, is.

But the impact of Gallegly’s policy prescriptions will not just hurt agriculture.

Not too far north of Gallegly’s district lies another of California’s economic crown jewels: Silicon Valley.  According to Tech Crunch, the U.S. immigration policies are having a devastating impact on entrepreneurship:

NBC Nightly News anchor Tom Brokaw visited Silicon Valley last month to meet immigrant entrepreneurs. At Microsoft’s Mountain View campus, he met with a dozen of them. More than half said that they might be forced to return to their home countries. That’s because they have the same visa issues that Kunal Bahl had. Unable to get a visa that would allow him to start a company after he graduated from Wharton in 2007, Kunal returned home to India. In February 2010, he started SnapDeal—India’s Groupon. Instead of creating hundreds of jobs in the U.S., Kunal ended up creating them in New Delhi.

At a time when our economy is stagnating, some American political leaders are working to keep the world’s best and brightest out. They mistakenly believe that skilled immigrants take American jobs away. The opposite is true: skilled immigrants start the majority of Silicon Valley startups; they create jobs.

Meanwhile, entrepreneurship is booming in countries that compete with us. And more than half a million doctors, scientists, researchers, and engineers in the U.S. are stuck in “immigration limbo”. They are on temporary work visas and are waiting for permanent-resident visas, which are in extremely short supply. These workers can’t start companies, justify buying houses, or grow deep roots in their communities. Once they get in line for a visa, they can’t even accept a promotion or change jobs. They could be required to leave the U.S. immediately—without notice—if their employer lays them off.  Rather than live in constant fear and stagnate in their careers, many are returning home.

Constant fear is what Gallegly is instilling in immigrants across the economic spectrum.

California’s economy, from Silicon Valley to the Central Valley and much of the rest of the state, relies on the labor of immigrants. And, it’s no secret that California’s economy is already in a precarious state.  A report from the Immigration Policy Center documented the positive economic effect immigrants have on the state:

A 2008 study by the California Immigrant Policy Center concludes that immigrants in California pay roughly $30 billion in federal taxes, $5.2 billion in state income taxes, and $4.6 billion in sales taxes each year. In California, “the average immigrant-headed household contributes a net $2,679 annually to Social Security, which is $539 more than the average US-born household. Additionally, “immigrants are among California’s most productive entrepreneurs and have created jobs for tens of thousands of Californians. By 2000, immigrant owners of Silicon Valley companies had created 72,829 jobs and generated more than $19.5 billion in sales.”

A report from the Congressional Budget Office, The Role of Immigrants in the U.S. Labor Market: An Update, noted the major role of immigrants in California:

The foreign-born labor force is disproportionately located in certain states, and in those states, its members make up a substantial share of the total labor force. In 2009, 6 million of the 24 million foreign-born members of the labor force resided in California alone, and another 9 million lived in just five additional states—New York, Florida, Texas, New Jersey, and Illinois. A third of the labor force in California was foreign born, as was over a fifth of the labor force in the other five states. By comparison, in the remaining 44 states, the foreign born made up less than 10 percent of the labor force.

Instead of creating jobs, Gallegly is scaring workers with the threat of deportation. Instead of bolstering his state’s economy, Gallegly’s obsession with deporting immigrants or hiring replacement workers through an employer-friendly guest worker program could seriously damage it.

Cross-Posted at America's Voice. 

The Storm That Created The “Rust Belt” Is Heading For Silicon Valley

This fall I was invited to cover the the Keep It Made In America Tour put on by the Alliance for American Manufacturing.  I spent a week driving around Michigan, Ohio, Pennsylvania and West Virginia, ejoying the fall colors and visiting small towns all along the way.

I live in Silicon Valley where in spite of the high unemployment — still 10.6% — it’s still pretty nice here, so the extent and especially breadth of the decline of so many cities and towns was a shock.  Everywhere you go you see America’s infrastructure crumbling!  Of course I know this has been going on, but when you actually come from somewhere that is still pretty nice and see it firsthand – and everywhere – you really see it.

As I drove around these states I saw pretty much the same thing in town after town. As you approach the town on the highway the first thing you encounter is what I will call the vulture circle that surrounds it. This is the circle of Wall Street-owned chains emulating the Wal-Mart model of sucking cash out of the area and sending it away to the wealthy elites who own … almost everything now. These are the national chains that are all the same in every town, all selling the same stuff, all made in China, all putting the local small businesses out of business.

As you drive into town the next thing you encounter is the circle of home equity extraction, with newer houses that have taken on big first and second Wall Street mortgages. These houses mostly look OK — except the foreclosures with the brown lawns and grass growing in the cracks in the driveway. This area has car dealers and strip malls that used to sell expensive cars or nice goods.  These dealers and stores feasted on those “take money out of your house” refinancings or second mortgages. Now they have nail and hair salons or are just “for lease.”

As you get closer to the center of town you come to the areas of older houses, more of them boarded up than you want to see, with old, boarded-up stores on a few of the corners of the larger streets. Where there are still-occupied houses they have bars on the windows.

Finally you come to the old, crumbling downtown where there are many empty storefronts, some boarded, the lost dreams of the local small business-owners.  Here and there you see, between the vacant lots, a few government buildings.

And then somewhere is what they always call “the old plant.” This is one or more closed-up, fenced-off, rusting old factories or mills.  They are fenced off, with lots of broken windows, and maybe part of a building is falling down.  This is where the people used to work but the jobs moved to Mexico or China.

Much of the country is like this now. So many of the older small towns, crumbling, the money sucked out by the Wall Street elite. The factories sold off, closed. The people can’t make a living, the towns can’t make a living, the country can’t make a living, the Wall Street elite making a killing.

You can see the process starting here in Silicon Valley, too.  As you drive around this area you see that one of every four or five office or light-industrial buildings has an “Available” sign. The region has the same number of manufacturing jobs as it had when the “tech revolution” began.  The rest have moved to China.  We don’t make cell phones here.  We don’t make flat-screen TVs here.  We don’t make computers here.  We certainly don’t make iPads here — even though Jobs is his name!  

Even exclusive Palo Alto has empty storefronts on the main drag. (You know the economy is bad when the rug stores on University Avenue are actually going out of business!)  It is even happening here. It will get worse.

In July Intel’s retired CEO and Chairman Andy Grove wrote an important opinion piece,

How to Make an American Job Before It’s Too Late, in which he warned,

Clearly, the great Silicon Valley innovation machine hasn’t been creating many jobs of late — unless you are counting Asia, where American technology companies have been adding jobs like mad for years.

[. . .] As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.

Please take the time to read Grove’s entire piece.

The storm that created the rust belt is heading our way, and we need to pay attention.  What will it take for American companies to create American jobs rather than jobs outside America?

This post originally appeared at Speak Out California.

More on Silicon Valley’s Government Handouts

Down below, Robert Cruickshank does a brilliant job of taking down Michael Arrington’s hypocritical anti-government screed on TechCrunch, arguing that what Arrington should really be complaining about is corporate domination of American politics, not big scary government regulation.  Cruickshank also implies, in passing, that the high-tech industry should be the last to complain about government meddling, given that it was the Defense Department that created the internet in the first place.

One thing Cruickshank leaves out is that not only was Big Government the midwife (if not the mother) of Silicon Valley, but it’s also been its bodyguard, protecting online commercial ventures from their rivals on the mean streets of the free market.  In 1992, the Supreme Court deemed retailers exempt from having to collect sales taxes on purchases made in states in which the retailer has no physical presence.  Since then, online stores have enjoyed a major competitive advantage over their brick-and-mortar competitors, especially those that are local, independent, and without the resources to establish an online or mail order merchandising business.

The Supreme Court, it should be noted, did not rule it unconstitutional to establish a taxation system for interstate electronic commerce; it merely interpreted existing law as granting this exemption.  At Silicon Valley’s behest, however, state and federal elected officials in the 90s refrained from passing laws to close this loophole and maintained a government-imposed, grossly uneven playing field, quite consciously in order to give preferential treatment to what was then considered a fledgling industry in need of protection.

In other words, politicians used tax subsidies as a tool of centralized economic planning by the government.  It may have been smart, forward-thinking economic planning, but it was economic planning nonetheless, and I don’t recall Arrington or any other Silicon Valley pundit at that time raising the specter of dangerously misguided government bureaucrats trampling over the delicate free market habitat.

Today, the tax privilege for e-commerce continues, though now it’s no longer considered a temporary protectionist measure to help usher in our new economic future, but, like the Bush tax cuts for the rich, an inherent right of these go-it-alone, by-your-bootstraps entrepreneurs who have been subsidized, coddled and protected at every stage of their industry’s manic success story, even after the bursting of the tech bubble exposed the hype and dysfunctionality of Silicon Valley business culture.  The “Main Street Fairness Act” was introduced in Congress as one solution to the problem, but it died quietly in committee.  State governments have tried to fill in for the leadership vacuum in Washington, but e-commerce businesses like Amazon have begun to play hardball with states like Colorado that have tried to devise ways to collect taxes on online purchases in the face of soaring budget deficits.

Arrington might just be libertarian enough to point to repealing all sales taxes as his preferred approach to leveling the playing field between online and brick-and-mortar stores, but unless and until that happens (it won’t), Silicon Valley’s sales tax subsidy will remain not only a drain on desperately needed public resources, but a government-created obstacle to free and fair competition in the retail sector.  If Arrington cares about consistency in his political ideology, he could start by renouncing his own industry’s government-subsidized perks.

Obama and McCain Take Sides in Bay Area Janitors Strike

The presumptive presidential candidates have taken sides in a labor dispute that has engulfed the Bay Area this week–and that reflects the growing income gap that is engulfing our country. While Senator Obama stands with area janitors who are fighting to win a higher standard of living for themselves and their families, Senator McCain is lunching with the CEOs of the multi-billion dollar corporations whose floors the janitors scrub for poverty wages.

Today Obama spoke out against the “unacceptable and ever-growing divide between the wealthiest and poorest among us” that keeps hard-working janitors like Cisco cleaner Maria Lopez making just $11.04 per hour after nine years on the job.

McCain, for his part, embraced that divide yesterday when he attended a campaign fundraiser in Atherton hosted by Cisco Systems CEO John Chambers. The tech industry giant’s sprawling Silicon Valley campus is cleaned by the striking janitors who currently are paid just $23,000 a year–less than one third of what the Center for Economic Policy reports it takes to survive in California.

Some striking workers–on their way to a 600-person, 3-mile “march to close the gap” in Palo Alto–dropped by the fundraiser to call on the two Johns to stop turning a blind eye to the poverty their policies and decisions help to create. When they left, the workers left behind this flyer highlighting a scandalous equation: 10 tickets ($2,300 each) to the fundraiser = 2 tickets for the event’s VIP reception ($25,000 per couple) = 1 year’s salary ($23,000) for a Silicon Valley janitor.

The candidates know what’s at stake in this strike and they’ve made their allegiances clear. I encourage you to learn more and do the same.



~posted by Nadia, SEIU staff

Obama and McCain Take Sides in Bay Area Janitors Strike

The presumptive presidential candidates have taken sides in a labor dispute that has engulfed the Bay Area this week-and that reflects the income gap that is engulfing our country. While Senator Obama stands with area janitors who are fighting to win a higher standard of living for themselves and their families; Senator McCain is lunching with the CEOs of the multi-billion dollar corporations whose floors the janitors scrub for poverty wages.

Today Obama spoke out against the “unacceptable and ever-growing divide between the wealthiest and poorest among us” that keeps hard-working janitors like Cisco cleaner Maria Lopez making just $11.04 per hour after nine years on the job.

McCain, for his part, embraced that divide yesterday when he attended a campaign fundraiser in Atherton hosted by Cisco Systems CEO John Chambers. The tech industry giant’s sprawling Silicon Valley campus is cleaned by the striking janitors who currently are paid just $23,000 a year-less than one third of what the Center for Economic Policy reports it takes to survive in California.

Some striking workers-on their way to a 600-person, 3-mile “march to close the gap” in Palo Alto-dropped by the fundraiser to call on the two Johns to stop turning a blind eye to the poverty their policies and decisions help to create. When they left, the workers left behind this flyer highlighting a scandalous equation: 10 tickets ($2,300 each) to the fundraiser = 2 tickets for the event’s VIP reception ($25,000 per couple) = 1 year’s salary ($23,000) for a Silicon Valley janitor.

The candidates know what’s at stake in this strike and they’ve made their allegiances clear. I encourage you to learn more and do the same.  

She’s In… But Can Hillary Win the Golden State?

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