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What the H1B Executive Order Means to Tech — and Fashion

Adriana Lee

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President Trump followed up his underwhelmingly attended Tulsa rally this weekend by blocking visas for foreign workers coming into the U.S. The executive order, signed Monday, is expected to hit the tech sector especially hard and could ripple through others like, fashion, beauty and retail.

Trump inked the order as his previous suspension of green cards, also signed by executive order this spring, was due to expire. But this earlier move didn’t target workers’ visas, reportedly thanks to pressure from American business leaders.

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According to Rebecca Bernhard, a partner at international law firm Dorsey & Whitney in its immigration and labor and employment practices, the latest executive order “builds on the restrictions the Trump administration implemented in April. In addition to extending those earlier restrictions, this new order now curtails the issuance of new work visas for H1B professional workers, H2B nonagricultural workers, nonphysician J-1 visas, and L-1 intra-company transferees, as well as their dependent family members,” she said.

Trump casts the latest ban as a necessary measure, in light of spiking unemployment numbers due to the coronavirus pandemic. In the order, he described these nonimmigrant visa programs as “an unusual threat” to American employment. Trump administration officials elaborated, telling reporters that the order would save as many as 525,000 jobs for American citizens in the face of this crisis.

But critics note that H1B workers tend to fill jobs that suffer from an applicant deficit. And the latest ban may just be the beginning.

“The order hints at more immigration restrictions to come, although additional restrictions will not likely be issued through an executive order,” Barnhard explained. “Further policy is likely to be issued through the federal rule-making process which could take several months. President Trump has made it clear that he sees restricting immigration as a key campaign issue, so it is likely that as the election draws closer we will see further action on these issues.”  

According to Thomas J. Donohue, the chief executive officer of the U.S. Chamber of Commerce, the order is tantamount to “putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses and other workers,” and would send investment and economic activity elsewhere, ultimately curbing job growth.

BREAKING DOWN THE RESTRICTIONS

The scope of the latest executive order covers an array of jobs. While the immediate reaction from the tech sector focuses on H1B, the effect of the entire order could impact more than just Silicon Valley.

Bernhard broke down the visas at stake, as follows:

• H1B visas affect positions demanding specialized education in fields like technology and science.  

• H2B visas cover seasonal workers in nonagricultural positions, including grounds keeping, housekeeping, meatpacking and production-oriented activities.

• J1 visas span various areas, but generally apply to candidates seeking training or cultural experience in the U.S. Exemptions to J1 suspensions include doctors, medical researchers and, more obscurely, secondary school students. 

• L1 visas apply to international companies that want to “transfer managers and executives from their foreign branches or subsidiaries to the U.S.,” she said.

Bernhard pointed out a few key exceptions, such as visa holders already in the U.S., workers in the food supply chain and production and health-care workers researching or treating COVID-19.

But the implications for fashion, retail and other industries seem apparent. H2Bs target seasonal and production workers, among others, while L1 visas may interfere with operations for global brands and other companies with worldwide locations and offices.

Meanwhile, H1B visas don’t apply to the likes of Google and Amazon alone — though as many as 9,000 H1B visa applications were green-lighted for each company last year.

It takes world-class engineering and scientific talent to elevate research and development efforts across a range of operations, from beauty and skin-care labs to apparel brands innovating in areas like textile technology, wearables, production and sustainability.

Also consider the hard lessons pushed on the retail community during the pandemic: As brick-and-mortar sales plummeted during massive lockdowns and tech-enabled businesses found themselves suddenly in pole position to serve homebound consumers, retail’s adoption of technology has only accelerated — by as much as years, numerous experts have told WWD.

Suddenly artificial intelligence and machine learning’s capacity to understand shoppers isn’t a hard sell, nor are new experiences and interactions via augmented and mixed reality, chat bots and many other vehicles.

In other words, tech companies — and their partners — are looking at a policy that will throttle a key talent pipeline at the very moment when innovation and adoption is about to jump forward.

SWIFT AND FURIOUS REACTIONS

There is no doubt that the tech sector is showing concern over the ban. The reactions have been swift, furious and consistent.

A statement from Amazon called the action “shortsighted” and detrimental to the U.S.’s interests.

“Preventing high-skilled professionals from entering the country and contributing to America’s economic recovery puts Americans’ global competitiveness at risk,” the company wrote. “The value of high-skilled visa programs is clear, and we are grateful for the many Amazon employees from around the world who have come to the U.S. to innovate new products and services for our customers. Welcoming the best and the brightest global talent to the U.S. is more important than ever, and we will continue to support efforts that will preserve their ability to strengthen our economy.”

Sundar Pichai, ceo of Google parent company Alphabet, tweeted that “immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation — we’ll continue to stand with immigrants and work to expand opportunity for all.” Pichai was born and raised in India, and received degrees from Stanford University and the University of Pennsylvania before eventually joining Google.

Salesforce’s top legal officer, Amy E. Weaver, didn’t mince words, tweeting that “H1B workers generate innovation and growth that benefits us all and it will hurt the U.S. economic recovery and U.S. innovation leadership to further restrict H1B visas.”

Hot off of Apple’s developer conference keynote on Monday — a presentation that kicked off with a pledge to support diversity and equality — ceo Tim Cook shared his disappointment with Twitter followers: “Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream. There is no new prosperity without both. Deeply disappointed by this proclamation.”

Companies from YouTube, Twitter and Facebook to Tesla, Uber and many others have issued similar sentiments.

Susan Wojcicki, ceo of Alphabet-owned YouTube, noted that “Immigration is central to America’s story, and it’s central to my own family’s story. My family escaped danger and found a new home in America. Sundar Pichai is right — at YouTube, we join Google in standing with immigrants and working to expand opportunity for all.”

In public comments, Facebook called the order nothing short of a “justification for limiting immigration.”

Trump has railed against immigration and related matters for years, turning it into his administration’s marquee issue. He endorsed a Republican Senate bill that aimed to cut legal immigration in half in 2017, the same year he introduced a travel ban on people from seven Muslim-majority countries.

Since then, the matter of immigration has yielded numerous controversies for the U.S., including attempts to build a wall on the Mexican border, steeply restrict asylum requests, separate families and detain migrants — including children — in conditions the United Nations Human Rights chief said last year might violate international law.

Congressional Republicans have largely lined up behind the administration’s actions. But a surprise twist popped up in May: Nine Republican senators, including South Carolina’s Lindsey Graham and John Cornyn from Texas, wrote a letter asking President Trump to reevaluate his looming immigration restrictions on “guest workers,” explaining that they are “needed to boost American business, not take American jobs.”

As for timing, pundits have noted Trump’s knack for changing the national conversation when he’s unhappy with news coverage, so that may have had some effect. On Saturday, after setting expectations of nearly a million attendees at Trump’s Tulsa rally, his campaign saw far fewer in attendance.