There are few places in the country where the debate over immigration packs more of an economic punch than Silicon Valley.
It's there you'll hear executives warning that their inability to fill jobs by importing skilled foreign workers threatens the nation's economic supremacy. And you'll hear their critics argue that technology companies only wish to hire foreign workers at lower wages than qualified U.S. citizens would command, or want to forestall the sizable training costs required to build up the skill level of the local work force.
Up to now, these two camps have fought nearly to a draw. The high-tech industry did manage to get visa quotas for technologically skilled workers raised to 115,000 annually last year from 65,000, although it wanted even higher limits. But advocates of freer immigration rules for high-tech workers recently got a powerful vote of confidence.
A study published by the Public Policy Institute of California this month found that Chinese and Indian immigrants head nearly a quarter of Silicon Valley's high-tech companies. The scores of high-profile companies they have founded or co-founded include Yahoo and Sun Micro-systems. Those entrepreneurial immigrants--exploiting and expanding ethnic networks here and in their home countries--have become a huge factor in the creation of a borderless world designed around silicon chips and shrunk to human scale by the World Wide Web.
The report, written by UC Berkeley professor AnnaLee Saxenian, could shift the balance of the highly contentious debate over high-tech immigration.
Until now, proponents of importing more technologists have argued mainly from a pure business standpoint: Jobs are going begging. But Saxenian suggests that high-tech immigration is more than a zero-sum game in which foreign workers merely displace the home-grown. Those entrepreneurs create new markets and fuel innovation that benefits everyone in Silicon Valley and beyond, she argues, updating the "rising tide lifts all boats" formula for the New Economy.
On the surface, the argument looks compelling, and not just because of the dazzling success of Silicon Valley.
Saxenian's study highlights the formidable ability of ethnic minorities to become key players in the New Economy. Their success suggests an amazing absence of xenophobia in the tech community--an openness that has created a vibrant multicultural meritocracy that worships flexibility, nerve and new ideas.
And yet, a deeper look makes the Silicon Valley experience suspect.
Decades of economic success in the Valley, fueled by both natives and immigrants, have helped many, but also left many behind. Much of the Latino community, the area's largest and fastest-growing minority group, has seen its standard of living and education deteriorate as the local economy bursts its seams. Income levels between the high-tech elite and its service workers--disproportionately Latinos and African Americans--are diverging rapidly.
Only 55% of the Valley's Latino students graduate from high school, a figure that's steadily declining. Only 19% complete required courses for entering college.
"The Public Policy Institute's own figures show that if you look at the economic expansion that's taken place over the last 20 years, the bottom 20% of Silicon Valley's wage earners have seen their real wages decline," said Leo E. Chavez, chancellor of the local Foothill-De Anza Community College District. "What happens when the largest-growing segment of the population is not participating in economic growth?"
That explosive growth exceeded the region's carrying capacity long ago. All Silicon Valley residents pay a monumental price in traffic congestion and other side effects. Skyrocketing housing prices have put homeownership beyond the reach of most of the area's wage earners, who desperately need Valley jobs but can't afford to live there.
In short, a sizable underclass has not just been excluded from stock options, it has been harmed by Silicon Valley's overheated wealth creation.
There's plenty of blame to spread around. These are hardly short-term or easy problems to solve.
Saxenian implies that opening the floodgates of immigration would sustain the high-tech boom in the Valley and beyond, a message that much of the industry and some economists happily embrace. And they may be right.
But to suggest that such a plan has anything to do with solving the problems of the low-skilled work force--Silicon Valley, everyone's favorite model, offers scant support for that spin on the traditional trickle-down theory. More likely, Chavez suggests, it would promote complacency and prolong the "intractable" problem of bringing the local community's job skills up to the level needed by high-tech companies.
And ultimately, importing more and more foreign workers, regardless of their formidable contributions, could prove unsustainable.
"From a longer-term perspective, a region like Silicon Valley, if it doesn't invest in the people it has already and update their skills, then the region will suffer and become a less desirable place for everyone," said Doug Henton, president of Palo Alto-based Collaborative Economics and the author of several studies of the Silicon Valley economy. "You can't sustain 4.5% job growth if growth of the local work force is 1.5%. Silicon Valley as a region could grow more slowly and still do well."
But "slower growth" is not in the lexicon of the New Economy.
The imperative of change in the Silicon Valley economy--the need to keep pace with technology itself--promotes a dependence on pulling in the best and brightest from anywhere and everywhere. It's a dangerous addiction that inevitably relegates those without the skills or effective social networks to a lower caste in the Information Age.
Times staff writer Charles Piller can be reached at email@example.com.