The Broken Social Contract of Immigration and Tech

The ongoing discussion about legal immigration uncovers a fractured agreement between Silicon Valley and the middle class.

Frustration is growing among Americans regarding the influx of legal immigrants who are seen as replacements for local workers. This trend initially became evident in the tech sector, where opportunities for middle-class Americans began to vanish.

In the 70s and 80s, Americans were pioneers in developing personal computers. The launch of Mosaic in 1993 made the internet accessible, marking the start of a tech boom that continues today. Many middle-class families encouraged their children to pursue tech careers, believing it was the key to future success.

This belief created an unspoken agreement: students would lean away from fields like economics or medicine, assuming that tech companies would welcome them upon graduation. However, the Immigration Act of 1990 altered this understanding, instituting a cap of 65,000 visas annually for foreign workers, undercutting America’s middle class.

Palmer Luckey, founder of Oculus and CEO of Anduril, shed light on the misuse of H-1B visas in Silicon Valley during a February 2025 interview on the Shawn Ryan Show, characterizing it as a scheme that displaces American workers with cheaper foreign labor, which he likened to modern-day slavery.

Statistics show that computer-related jobs represented just 26 percent of H-1B visas in 1995, skyrocketing to 42 percent by 1996, according to a paper from the Center for Migration Studies.

The push for foreign labor didn’t just happen; the information and communications technology (ICT) sector actively campaigned for it.

The paper notes, “The ICT industry has been the dominant user of the H-1B program over the past two decades,” with a significant number of these visa holders coming from India. From 2000 to 2015, the percentage of Indian recipients of approved H-1B petitions rose from 49 percent to 71 percent.

Major tech companies like Microsoft, Google, and Facebook have hired many H-1B workers and have consistently sought even more.

As early as the mid-1990s, tech firms began advocating for an increase in the H-1B cap due to the constraints they faced. Lobbyists and organizations dedicated to immigration reform specifically focused on skilled workers emerged during this period.

Political figures, including former President Bill Clinton, sought support from the tech industry for their campaigns, while firms enjoyed unfettered access to the government through their political action committees. This reliance on foreign workers spanned both major political parties.

By the early 2000s, the pattern of displacing American workers was intensifying, and lobbying continued to push for a higher cap on foreign worker visas.

In just over three decades, the U.S. tech sector transitioned from relying on local talent to prioritizing cheaper foreign alternatives.

Isaiah Taylor, founder of Valar Atomics, expressed concerns over the deteriorating relationship between Americans and the tech industry, suggesting that a compromise is necessary before it’s too late. He argued for a recognition that the tech sector operates within a national framework and that the middle class supports the very industry that seeks to replace them.

Yet, it’s essential to acknowledge that it wasn’t the middle class that shattered this social contract. Rather, it was the tech industry’s unbridled ambition and its disregard for the American workforce that led to this rift. Many in the middle class were eager to support advancements in tech, but now they feel the sting of betrayal. The expectation that they would simply accept this displacement is increasingly untenable.

If the tech sector is concerned about the growing dissatisfaction among the American public, it must face the reality of what has driven this division. The future of sustainable growth in data centers, social media, and AI hinges on mending the relationship with middle-class workers. Any new initiatives should prioritize a renewed agreement that protects American jobs and ensures workers aren’t left to train their replacements.