“If President-elect Donald Trump stays true to his word, Apple should hope that a big wad of extra cash can help compensate for what are likely to become big fights with the new administration over trade, encryption and immigration,” Anita Balakrishnan reports for CNBC.
“Even though Apple would benefit immensely from Trump’s proposed tax reform, the president-elect’s stance on trade with China, his immigration-hawk attorney general, and his cybersecurity appointees could pose threats to America’s wealthiest company, industry watchers said,” Balakrishnan reports. “Trump’s victory comes at a time when Apple and the government are more intertwined than ever. Under CEO Tim Cook, Apple has spent about 3½ times more on lobbying than when co-founder Steve Jobs led the company, according to data collected by the Center for Responsive Politics.”
“With a 26 percent tax rate and $216 billion stored offshore, Apple would benefit from Trump’s proposals to lower the business tax rate to 15 percent and allow the one-time repatriation of corporate profits held offshore at a tax rate of 10 percent, Bernstein analyst Toni Sacconaghi wrote in a research note,” Balakrishnan reports. “‘Trump’s stance towards tightening H1-B visas could negatively impact the company in the near term, given Apple and other companies in the Valley is a hotbed for technology developers,’ [said Daniel Ives, senior vice president of finance and corporate development at mobile cloud maker Synchronoss Technologies, who covered the company on Wall Street for years]… While Cook hasn’t made direct comments about the issue, Alphabet’s Eric Schmidt has defended the use of foreign labor and called for reform of the program, arguing that if the U.S. kicks out out American-educated engineers, ‘they go and build competitors to our companies.'”
Balakrishnan reports, “‘That said, Apple is in a position of strength around R&D and developer talent worldwide, so while they would have to slightly pivot on their hiring around H1-B visas if Trump went down the path, it would not have a long-lasting impact to their model.'”
Read more in the full article here.
MacDailyNews Take: Some say that the crux of the H-1B visa system is about securing cheap, immobile labor. With his quote above, Schmidt basically confirms the immobility bit.
If an engineer leaves an employer in the midst of an urgent project, this can be a major problem for the employer. The H-1B and green card programs give the employer heavy leverage to force workers to stay. — Norman Matloff, Professor of Computer Science, University of California, Davis
Vivek Wadhwa confirmed the cheaper aspect over nine years ago in November 2007:
I was one of the first [CEOs] to use H-1B visas to bring workers to the U.S.A. Why did I do that? Because it was cheaper. — Vivek Wadhwa
U.S. President-elect Trump’s position paper is still online and states the following regarding H-1B visas:
· Increase prevailing wage for H-1Bs. We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program’s lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program.
· Requirement to hire American workers first. Too many visas, like the H- 1B, have no such requirement. In the year 2015, with 92 million Americans outside the workforce and incomes collapsing, we need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office, not USCIS.
· End welfare abuse. Applicants for entry to the United States should be required to certify that they can pay for their own housing, healthcare and other needs before coming to the U.S.
· Immigration moderation. Before any new green cards are issued to foreign workers abroad, there will be a pause where employers will have to hire from the domestic pool of unemployed immigrant and native workers. This will help reverse women’s plummeting workplace participation rate, grow wages, and allow record immigration levels to subside to more moderate historical averages.
Scholars debunk claims of high-tech workers shortage, question tech industry’s ‘free pass’ – May 19, 2014