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Obama's executive order doesn't fix tech companies' immigration problem

US President Barack Obama is seen on a screen in the White House briefing room during an address to the nation on immigration reform November 20, 2014 in Washington, DC.
US President Barack Obama is seen on a screen in the White House briefing room during an address to the nation on immigration reform November 20, 2014 in Washington, DC.
Brendan Smialowski/AFP/Getty Images

Tech company executives and lobbyists have complained for years that the country's immigration system is hurting American competitiveness. Now some worry an executive order announced Thursday night by President Obama does far more to help workers than companies, and in the wake of a threatened Republican backlash, could make the problem worse.

"This certainly complicates things," said Emily S. Lam, Vice President, Health Care and Federal Issues for the Silicon Valley Leadership Group, a trade group representing nearly 400 Silicon Valley companies. "The executive action makes a difficult situation even more difficult." 

That's because the order couldn't do what tech companies most want: to increase the quota of H1-B visas allowing U.S. companies to hire highly skilled foreign workers. Changing the quota from its current limit of 65,000 workers a year requires congressional action, which could be further delayed because of Republican opposition to Obama's order.

Lam says parts of the executive action are helpful for tech workers, by making it easier for immigrant entrepreneurs to get visas and allowing workers on H1-B visas to switch jobs and have a spouse who is employed. President Obama's executive order allows spouses of  H1-B visa holders to obtain work permits. But for tech companies, the action does little to improve hiring.

"I do think the President did all he could do to help tech, but the unfortunate thing is those are all small fixes," said Lam. "We really do need legislative action to address the fundamental issues."

Mitchell Wexler, a partner at the immigration law firm Fragomen Worldwide, who represents companies in Orange County and Los Angeles trying to hire workers on H1-B visas, says every year he's seeing more demand for foreign tech workers, particularly from companies in the westside area known as Silicon Beach, home to companies like Snapchat. 

"We're representing alot of start-up companies that just can't find the talent they need," said Wexler. 

While he's disappointed the executive action can't increase the H1-B quota , he's pleased to see Obama making it easier for spouses of workers on H1-B visas to work legally, which he says will be a good recruiting and retention tool for tech companies.

"This has been a big problem for a long time," said Wexler. "These foreign nationals are typically dual-income households."

The provision could harm American workers though, warns Norman Matloff, a professor of computer science at the University of California at Davis, who studies foreign labor in the U.S. tech industry.

"Of course one sympathizes with the spouses of H1-B's," said Matloff. "Nobody wants them to sit around unproductive, but on the other hand it swells the labor market. If the labor force swells, the people who are already in that labor force are negatively impacted.”

By the same logic, Matloff is opposed to increasing the quota of H1-B visas, because he says they are a way for companies to hire younger and cheaper foreign workers at the expense of older, more expensive American ones.

But Lam, of the Silicon Valley Leadership Group, says companies usually prefer to hire American workers.

"It's actually not a one-for-one displacement," said Lam. "If jobs don't get filled it's not that it takes the spot of an American. What happens is if the job goes unfilled or they have to go abroad to fill that position because of the nature of the specialized skill set."