The Daily Caller

The Daily Caller
A A  

Billionaire Steve Case says immigrants will offset middle class job losses

Photo of Neil Munro
Neil Munro
White House Correspondent

Middle class Americans face a tough future because robots and machinery are eliminating their jobs, according to Steve Case, an entrepreneur who earned roughly $1 billion by creating the first successful internet firm, America Online.

But Congress could help the situation by passing an immigration bill that would import some foreign entrepreneurs and almost 30 million low-skilled workers over the next decade, Case told an audience of D.C. lobbyists and lawyers gathered on Tuesday by the business-backed Bipartisan Policy Center.

“I think it’s [a] tough” task to protect the middle class, Case said after being asked a question about automation by an audience member.

“I share the concern that the technology has enabled a lot of [good] things, but also replaced a lot of things,” including workers, Case said.

But some jobs will be created as technology companies revamp the education and healthcare sectors, he predicted.

Outside the high tech sector, “there are lots of great businesses in lots of sectors of our economy that [show] innovation and drive a lot of growth,” he said.

He cited the Chobani yogurt company, whose sophisticated factory is in upstate New York, the heavily-marketed Under Armor clothing firm which manufactures clothes in China and Sweetgreen, a new chain of salad restaurants.

On Wednesday, Case announced that his investment firm would provide $22 million to help the chain expand.

The chain employs 600 workers and managers, at more than 20 restaurants. A company spokeswoman declined to say how much the workers are paid. Only the managers get healthcare benefits, according to the company’s website.

Nationwide, line workers at fast-food restaurants are paid $8.90 an hour, according to the New York Times. That’s $356 for a 40-hour week, or $18,512 for 52 weeks of work, or less than two-fifths of the nation’s median wage, at $50,000. Workers at “fast casual” restaurants get similar pay.

Case recently returned home from a two-week trip to Oman, Bhutan, Laos, the Maldives Islands in the Indian Ocean, Botswana and Spain.

 

 

Case’s comments about the middle class came after he told the audience that Congress could improve the economy by increasing the inflow of immigrant professionals and entrepreneurs.

Case has repeatedly praised the Senate’s passage in June of an immigration bill that would provide 30 million green cards to immigrants, plus millions of work permits to guest workers during the next decade.

The bill would provide enough low-skilled immigrants and temporary guest workers to provide a foreign replacement for every well-paid or poorly-paid American aged from 20 to 30.

The massive influx would also shift more of the nation’s annual income towards investors and away from American wage earners.

“You constantly have to reinvent yourself, that’s true for companies and its also true for nations,” said Case told the audience of lawyers and lobbyists.

Case is a leading advocate for increased immigration, and he’s got a $200 million investment capital firm that invests in new high-tech companies which hire cheap, immigrant high-skill labor. Those companies include LivingSocial and Brainscope.

“We’ve got to fix our immigration system so we can win the battle for [foreign-born] talent — it is critically important,” Case declared.

His firm also invests in elite resorts that gain from cheaper low-skill labor, and from additional high income customers.

The information economy has been good for Case.

In 1985, he joined the small company that would grow into America Online. In 2001, under Case’s leadership, AOL had grown so fast that it merged with Time Warner, making him a billionaire.

 

 

In 2005, he bought a gated, seven-acre, $24.5 million estate in an exclusive part of McLean, Virginia whose population mostly consists of native-born, wealthy people of pallor.

He told his audience Tuesday that new jobs will be created when new technology companies cooperate with governments and large commercial enterprises to revamp the education sector and the health sector.

Entrepreneurs will need “to bring more of enterprise mentality, more of cooperation mentality,” when they work with governments and large companies, said Case, who is a high-profile supporter of President Barack Obama and other Democrats, and is also a member of Obama’s council on jobs and competitiveness.

Case has invested some of his money in an education software companies, Echo360, Koofers and BenchPrep, and in healthcare companies, such as Everyday Health and Extend Health.

That cooperation among governments and companies quickly reaches into politics.

In the immigration fight, Democrats are offering Case and his business allies an increased flow of immigrant employees — if the progressives get something more valuable in exchange.

What the Democrats want is business pressure on GOP legislators to back amnesty for the 11 million Democratic-leaning illegal immigrants, and also to permanently double the annual immigration rates of low-skill workers.

If the bill passes, Democrats believe they will dominate the federal government in perpetuity. (RELATED: Senate immigration bill to boost House Democrats by 2020)

The business pressure seems to be working.

Republican House Speaker Rep. John Boehner announced Tuesday that he’s hiring Rebecca Tallent, an advocate for increased immigration, to run immigration issues in his office. Tallent formerly worked for the Senate’s leading GOP advocate for extra immigration, Sen. John McCain, and recently worked at the Bipartisan Policy Center which hosted Case’s Tuesday event.

The business pressure is needed, because Republican politicians know that the immigration bill is very unpopular among the voters who elected them to the House, and who refused to put Mitt Romney into the White House.

Case is only of many billionaires and media personalities for additional immigration, and who argue Americans need to resign themselves to perpetual workplace competition with robots, immigrants and foreign workers.

The billionaires include outgoing New York Mayor Mike Bloomberg, Facebook founder Mark Zuckerberg and Microsoft founder Bill Gates.

The billionaires are backed by an army of trade associations and local business leaders, plus progressive and libertarians supporters.

“The skills required for any good job keep rising,” New York Times columnist Tom Friedman wrote in July 2013. However, “a lot of people who may not be able to acquire those skills can still earn a good living now by building their own branded reputations, whether is is to rent their kids’ rooms, their cars or their power tools,” he said.

Libertarian economist Tyler Cowen recently urged Americans to get used to a diet of rice and beans.

“With an income above the national average, I receive more pleasure from the beans, which I cook with freshly ground cumin and rehydrated, pureed chilies. Good tacos and quesadillas and tamales are cheap too, and that is one reason why they are eaten so frequently in low-income countries,” he wrote.

The push for increased immigration is very unpopular because voters know that low-wage immigrants hurt their wages and damage their children’s job prospects, said Roy Beck, the founder of NumbersUSA, which campaigns to reduce the current influx of 1 million immigrants.

Beck echoes Case admission that automation is hurting middle-class jobs.

“The best response isn’t more immigration,” he said, “but less immigration, so that wages rise in many lower middle-class sectors, including restaurants and resorts.” (RELATED: Sen. Graham helps import Jamaicans for work at elite country club)

“We need to be protecting the jobs we can’t ship overseas… Those jobs need to become middle-class jobs by tightening the labor market,” he said.

Case and his fellow billionaires are pushing an immigration “policy that floods the country with people who compete for those jobs,” he said.

Low-wage jobs in the service and hospitality sectors “will never pay middle-class wages if we double legal immigration or even if we continue the present level of immigration,” Beck added.

That shift from a high-immigration/low-wage economic strategy to a low-immigration/high-wage strategy is also being pushed by some GOP leaders, notably Sen. Jeff Sessions.

When asked by The Daily Caller how the huge influx of low-skill workers would help the American middle class, Case offered a platitude.

“The data basically said that immigrant entrepreneurs are job creators,” he said, citing Andy Grove, the Hungarian-born founder of Intel Corp., and Henry Ford, the founder of Fort Motor company, who was actually born in Michigan.

Case did not say what proportion of the current annual inflow of 1 million immigrants are entrepreneurs, nor what portion of the planned 30 million legal immigrants would become entrepreneurs.

However, the recent arrival of more than 10 million immigrants hasn’t notably improved the job situation.

Since 2000, and amid a huge wave of immigrants, the number of native-born Americans with jobs has declined by roughly 1 million, despite a population growth of 16 million, according to the Center for Immigration Studies.

When pressed again to explain how low-skilled immigrant workers would help the American middle class, Case then said that the current population of at least 11 million illegal immigrants are doing low-wage work that Americans won’t do.

“Part of [the Senate bill] is dealing with the people who are already here… in almost all case, [they’re] doing jobs we need to get done… [and] that Americans won’t do” in restaurants, resorts and the agricultural sector, he insisted.

Sweetgreen declined to tell TheDC how much the company pays its restaurant workers.

Americans still do a majority of all jobs in the nation’s restaurants, hotels and food processing centers, working as cooks, maids, butcher, janitors and groundskeepers, according to another CIS study.

When pressed again by TheDC to explain how high immigration would help middle class Americans, Case excused himself, saying “Why do you give Seth [his aide] a call? I’m running late.”

The aide, Seth London, did not respond to TheDC’s emails.

Follow Neil on Twitter