H-1B demand falls short of supply

Economic recession continues to threaten U.S. jobs and shrink demand for foreign talent; industry watchers say the paltry number of petitions filed shows the market for H-1B visas is self-regulating

Fewer companies filed petitions for H-1B visas this year as the economic recession continues to threaten U.S. jobs and shrink the demand for foreign talent.

U.S. companies since April 1 have filed some 42,000 petitions with the U.S. Citizenship and Immigration Services agency for 65,000 H-1B Specialty Occupation Visas available for 2010, a fraction of previous years' petitions. In 2007, the USCIS received some 150,000 petitions in a matter of days, and in 2008 the agency conducted a lottery after 163,000 petitions were filed in less than a week.

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Because this year's cap hasn't been reached, the USCIS will continue to accept applications for the 65,000 general H-1B visas (as well as for the 20,000 visas made available to recipients of a graduate degree from a U.S. university; roughly 20,000 petitions for these advanced degree visas have been received so far in April, but the agency expects not all will be approved).

Industry watchers say the paltry number of petitions filed shows that despite U.S. lawmakers working to restrict the number of H-1B visas permitted, the market will dictate what the country needs in terms of hiring foreign talent.

"There is no need to do a lottery this year, and these numbers show that the market for H-1B is self-regulating. The cap mandated by Congress is artificial," says Eleanor Pelta, a partner at law firm Morgan, Lewis & Bockius in Washington, D.C., and an official with the American Immigration Lawyers Association. "Congress should let the program regulate itself because this year proves that employers will apply for the numbers they need according to the dictates of the economy."

Nonetheless, restrictions in the economic stimulus package have proposed to limit those companies receiving government funds from hiring foreign nationals without first exhausting all other U.S. options. For instance, one provision would restrict H-1B hiring at companies that have received funds from the Trouble Assets Relief Program (TARP) and that have more than 15 percent of their workers on visas; these companies would be required to prove they have diligently recruited American workers for the position and that in hiring a foreign national they are not replacing a U.S. citizen.

But for the most part, the companies that might be eligible for money from the government under such programs aren't hugely dependent on H-1B visas for filling positions. According to the National Foundation for American Policy (NFAP), less than 1 percent of the staff at some of the largest U.S. financial firms hold H-1B visas. For instance, Goldman Sachs and JPMorganChase filed for 227 and 236 new H-1B visas in 2007, which represented 0.74 percent and 0.14 percent of their total employees, respectively.

"The updated government restrictions have very little to do with the drop-off in petitions," Pelta says. "But the senators and congressmen that really have problems with the H-1B program will not look at this year's petitions as an indicator that the program should be allowed to meet the needs of U.S. companies in good and bad economic times. There are restrictions in place and government agencies are equipped to enforce them without requiring an unrealistic cap."

Pelta says demand for H-1B visas follows the job market, and as more companies seek to hire foreign nationals, oftentimes that means an increase in jobs for U.S. citizens as well. A March 2008 NFAP brief reports that rather than displacing American workers, data showed for every one H-1B position requested, U.S. technology companies increased their employment by five workers.

"If the U.S. wants to participate in the global economy, it must shed some of its protectionist and outdated policies, and lawmakers must realize we need to view resources globally as well," Pelta says. "Short-sightedness on immigration programs could hurt our universities and businesses five years down the road."

This story, "H-1B demand falls short of supply" was originally published by Network World.

Copyright © 2009 IDG Communications, Inc.

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