Feds count H-1B applications as unemployment spikes

Visa filings began April 1; IEEE-USA reports higher unemployment among engineers in Q1

The U.S. government is adding up the number of H-1B visa applications that it has received since the filing window for the next federal fiscal year opened on April 1. If history is any guide, more than enough applications to reach the annual visa cap will again be submitted, despite the ongoing economic recession.

It has been 13 years since the government issued fewer than 65,000 H-1B visas, the maximum number of regular visas that can be awarded under the current cap. And in recent years, the number of applications has far outstripped the available supply, prompting the U.S. Citizenship and Immigration Services (USCIS) to use a lottery to choose H-1B recipients for both fiscal 2008 and 2009.

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The application filing period for H-1B visas comes at a time when unemployment is increasing in IT and when the recession is also hitting the broader spectrum of engineering jobs in a big way. For instance, IEEE-USA, a unit of what formerly was known as the Institute of Electrical and Electronics Engineers but now just uses the acronym derived from that name, said today that unemployment among engineers across all disciplines, including computer-related jobs, is "increasing more rapidly than for professional occupations in general."

The jobless rate among software engineers increased from 1.9% in the fourth quarter of 2008 to 4.2% in this year's first quarter, said IEEE-USA, which counted a total of about 906,000 software engineers with jobs as of the end of March. The group added that for computer scientists and systems analysts, the unemployment rate rose from 3% to 5.7% in the same time frame, with about 776,000 jobs currently filled in that category.

For computer-related engineering occupations as a whole, unemployment jumped from 3.3% to 5.4% over the last two quarters, according to IEEE-USA. In contrast, the unemployment rate for all professional workers increased from 3% to 3.7%, it said.

Gordon Day, IEEE-USA's president, said the spike in engineering unemployment is worrisome because "engineers create jobs." The loss of engineering positions is an indicator that "risk-tolerant" investment capital is drying up, he added.

The USCIS has yet to say how many H-1B applications have been submitted for the government's next fiscal year, which starts in October. The expectation among immigration attorneys is that because of the economic problems, the count will fall short of the 163,000 applications filed last year. That was nearly double the total of 85,000 available visas, which includes 20,000 set aside for foreign workers with advanced degrees from U.S. universities - a category that was added by Congress in 2004.

Demand for H-1B visas typically fluctuates with the economy. In fiscal 2001, when the annual visa cap was set at 195,000, the government issued 163,600 visas. But the following year, after the dot-com bubble burst, the demand for visas fell by half, with just 79,100 being issued.

The regular visa cap was reduced to 65,000 starting in fiscal 2004, though. Even with the addition of the 20,000 visas for advanced degree holders, the visa limits have easily been met over the past few years, with India-based outsourcing and IT services firms topping the list of H-1B recipients in the current fiscal year. The high demand has prompted Microsoft Corp. and other H-1B proponents to call for an increase in the visa cap.

In the past, the IEEE has drawn a connection between the H-1B program and the unemployment rate for engineers. For instance, in 2003, when the visa cap was still at 195,000, the unemployment rate for computer software engineers was measured at 5.2%. But in November 2004, the IEEE said that unemployment among software engineers had shrunk to 3.3%, a decline it attributed to the lowering of the H-1B cap.

Overall high-tech unemployment also fell sharply after the cap was reset. John Steadman, IEEE-USA's president at the time, said that the reduced ability of U.S. employers to fill jobs with guest workers from overseas was "good news for U.S. technical professionals."

Day, the current IEEE-USA president, said today that the organization "continues to be concerned about the H-1B program" and is supporting a proposed overhaul of the visa rules. As part of that, IEEE-USA has staked out a position that favors the use of green cards granting permanent residency over short-term visas.

U.S. Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) are expected this month to reintroduce legislation proposing some H-1B reforms, including the addition of a requirement that companies make "good faith" efforts to hire U.S. citizens for job openings before using H-1B workers.

Any push in Congress to increase the H-1B cap likely will come only as part of a comprehensive immigration-reform bill. It's unclear whether President Barack Obama would back a cap increase at this point, but the White House argued in a court filing last month that the inability of employers to obtain H-1B visas for skilled foreign workers is creating "a competitive disadvantage for U.S. companies."

This story, "Feds count H-1B applications as unemployment spikes" was originally published by Computerworld.

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