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Greg Siskind on Immigration Law and Policy

Would Liberalizing H-1B Rules Bring iPhone Manufacturing Back to the US?

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If you didn't read last weekend's really interesting New York Times article on Apple and why the iPhone is made in China rather than the United States, you really ought to read it. One area the reporters discuss is how US immigration policy has factored in to Apple's decision. The article looks at labor costs and while there are some savings with making the iPhone in China, that is not the primary driver in why the phone is not made in America.



But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans -- it would require transforming the national and global economies. Apple executives believe there simply aren't enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.



One interesting part of the article is discussed at the very end. Steve Jobs hosted a dinner for President Obama and which was attended by leading Silicon Valley executives. A few ideas were discussed on ways to encourage companies to bring manufacturing back home.



At dinner, for instance, the executives had suggested that the government should reform visa programs to help companies hire foreign engineers. Some had urged the president to give companies a "tax holiday" so they could bring back overseas profits which, they argued, would be used to create work. Mr. Jobs even suggested it might be possible, someday, to locate some of Apple's skilled manufacturing in the United States if the government helped train more American engineers.


Economists debate the usefulness of those and other efforts, and note that a struggling economy is sometimes transformed by unexpected developments. The last time analysts wrung their hands about prolonged American unemployment, for instance, in the early 1980s, the Internet hardly existed. Few at the time would have guessed that a degree in graphic design was rapidly becoming a smart bet, while studying telephone repair a dead end.



This is a point I've raised many times in this column. Immigration is not a zero sum game where hiring a foreign worker means a loss of a job for an American. In the Apple case, tens of thousands of manufacturing jobs could be created in the US to make iPhones if perhaps a few hundred or thousand highly skilled immigrants were readily available to fill positions where there are too few qualified Americans.


That's why I am encouraged to see Newt Gingrich promoting completely eliminating the H-1B visa cap. Our current H-1B cap was created in 1990, before there was an Internet. We are essentially handcuffed by rules set three decades ago for a very different American economy. And we are paying dearly for Congress' unwillingness to modernize our immigration policy.

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Comments

  1. Sid's Avatar
    Sorry Greg. This is a bad example in support of H-1B. Foxconn, (the company that manufactures many Apple products), predominantly hires unskilled assembly line workers. Manufacturing jobs of that kind would only come back to the US if the value of the dollar depreciates a lot against the renminbi and slave labor is allowed again.

    The tax holiday idea is complete nonsense. No one hires just because they have cash lying around. If there's future unmet demand for goods and services that require more labor to increase production or provide additional services, only then do corporations hire. Apple has close to $100 billion dollars in cash. They can easily pay the tax if they want to. BTW, John Chambers of Cisco is a major advocate of the tax holiday. He's the one who majorly lobbied for it at the dinner. They try to add Steve Jobs' name to every idea because people are hesitant to attack someone who has just passed away and has been given sainthood by the blogosphere. He is mentioned in the same sentence as Edison and Newton, which IMO is a joke.
  2. JoeF's Avatar
    I agree with Sid. Assembly line work isn't the kind of job the H1 is targeting.
    On the iPod packaging, for example, it says "Designed in California, assembled in China." Similar on other tech devices, eBook readers, smartphones, Roomba, etc.
    The H1 is more for people who design these devices, not for people who assemble them.
    This whole stuff of people working 20-hour shifts, etc. would only be possible in the US if we'd roll back all employee protection laws. Not gonna happen. Nobody wants what essentially amounts to slave labor here (well, maybe Mr. Gingrich, with his 'school kids should work' proposal...)
    The Apple executive quoted in that article strikes me as someone right out of the 19th Century.
  3. George Chell's Avatar
    There is always one problem whoever is the President...Senator Charles "the Assinine" Grassley.
  4. Greg Siskind's Avatar
    The point of the comment in the article was that the inability to bring in enough workers in a few key categories ended up in the outsourcing of a whole lot more jobs.
  5. Another Voice's Avatar
    Also a point to consider is the silla gap in the American work force as express by business people all over the US.
  6. Limbo's Avatar
    Weren't some workers at the Apple factory committing suicide by jumping out windows and jumping off roofs because of the atrocious slave labor conditions?

    Having worked for some big tech companies, I think a lot of the noise from executives is purely self serving in terms of beefing up the bottom line by keeping labor costs down. While Gates accumulated tens of billions in personal wealth, he did everything he could to skirt labor laws in Washington state by hiring contractors to work one day less than a year. A lot of these guys are not champions of workers rights by any means, they are more like the robber barons of the industrial revolution.
  7. George Chell's Avatar
    "The point of the comment in the article was that the inability to bring in enough workers in a few key categories ended up in the outsourcing of a whole lot more jobs."

    I have been saying this for a very long time.

  8. Another Voice's Avatar
    "Having worked for some big tech companies, I think a lot of the noise from executives is purely self serving in terms of beefing up the bottom line by keeping labor costs down."

    Business people will always try to get a leg up anyway they can is just the nature of business. I do not think that the American workforce will be able to compete with the slave labor in China in terms of wages. Some low level stuff will remain there or somewhere else, that has little to do with Immigration. But I believe that Greg is on point less H1B visas = More outsourcing and less jobs in the US.
  9. Another Voice's Avatar
    Classy!!!

    Russell Pearce, Ousted Arizona Immigration Law Architect, Elected To Republican Leadership Slot

    http://www.huffingtonpost.com/2012/01/30/russell-pearce-arizona-republican-party-vice-chairman_n_1242006.html
  10. George Chell's Avatar
    Russell "Pinko" Pearce of the Red communist police state of Arizona with Josef "Stalin" Arapio running the state's KGB apparatus!
  11. gg's Avatar
    CNN checking Gingrich baggage from guru David Vitter ...


    CNN's Ashleigh Banfield Quizzes David Vitter Over Prostitution Scandal (VIDEO)


    http://www.cnn.com/video/#/video/bestoftv/2012/01/30/exp-early-vitter-baggage-gingrich.cnn

  12. Jack's Avatar
    Uh oh. Romney has a Bushie:

    Former U.S. Secretary of Commerce Carlos Gutierrez is the Honorary Co-Chair of Mitt Romney's National Hispanic Steering Committee.

    Read more: http://latino.foxnews.com/latino/politics/2012/01/29/romney-on-immigration-four-takeaways-and-secretary-gutierrez-reaction/?intcmp=obinsite#ixzz1l756voW4


    http://latino.foxnews.com/latino/politics/2012/01/29/romney-on-immigration-four-takeaways-and-secretary-gutierrez-reaction/?intcmp=obinsite
  13. Another Voice's Avatar
    Tooo late for him Jack....

    Latinos to Romney -- we don't forget http://www.cnn.com/2012/01/31/opinion/navarrette-immigration-gop/index.html?iphoneemail
  14. Another Voice's Avatar
    Previous link not working here is the story...

    Latinos won't forget Romney's 'anti-immigrant' talk

    http://www.cnn.com/2012/01/31/opinion/navarrette-immigration-gop/index.html?hpt=po_r1
  15. Another Voice's Avatar
    Only Romney thinks that he can have his cake an eat it too.... or that Latinos are that stupid. On the One hand you enroll Kris Kobach and Bay Buchannan and then you want Gutierrez and Rubio to sweet talk Latinos into voting for you!!!
  16. George Chell's Avatar
    The clown keep talking about expanding legal immigration...if he gives some details he will get some support. However, the only detail that he gave was stapling a green card to every foreigne students graduation certificate from a US University...I wish him all the best with Charles "the Assinine" Grassley and Bernie "the Braindead" Sanders sitting in the Senate...not going yo happen and who knows what Jim "the Demented" DeMint is going to do along with Jeff "the Racist" Sessions and David "the diaper" Vitter?
  17. gg's Avatar
    Alabama immigration crackdown costs state up to $11 bln - ha ha !!!

    http://www.publicbroadcasting.net/wrni/news.newsmain/article/0/0/1900247/U.S./Alabama.immigration.crackdown.costs.state.up.to.$11.bln.study
  18. George Chell's Avatar
    "Alabama immigration crackdown costs state up to $11 bln - ha ha !!!"

    Also read letters from clowns who are either delusional or in a state of denial. I still insist that the law pushed Jefferson County into bankruptcy.

  19. Another Voice's Avatar
    "Also read letters from clowns who are either delusional or in a state of denial."

    Knowing the Repuks and Antis they will double down before admitting they are stupid!!!!
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