Date: Fri, 27 May 2005 14:00:36 -0700 From: Norm Matloff To: Norm Matloff Subject: new H-1B category usage off to a slow start To: H-1B/L-1/offshoring e-newsletter After dire predictions by immigration lawyers that the 20,000 new H-1B visas for foreign nationals having Master's degrees or PhDs from U.S. universities would immediately be snapped up, it turns out that only 6,000 or so have been used so far. A number of "H-1B watchers" have speculated on the causes of this underwhelming demand for the new visas. Here is my guess, a very simple one--the lowering of the H-1B cap to 65K, which occurred in 2003 due to sunsetting of the earlier increase, has actually been working. The IT job market is still terrible, but more jobs are going to Americans (U.S. citizens and permanent residents) that would have gone to H-1Bs. Each year I take a survey of the graduating seniors in my department. Again, the job market is still poor, and likely to remain so, and most of the new graduates are not faring well so far. But this year I've seen a few of these new Bachelor's graduates get jobs that in the past would have gone to people with Master's degrees. In fact, just yesterday I even heard of a case in which an HR staffer at a company suggested to a hiring manager that his requirement that applicants have an MS was unnecessary. I've said many times that an advanced degree is not needed for work in the industry, in the sense of technological skills. The American students know that, and they also know that you suffer financially (recall the NRC finding that getting a PhD results in a loss in lifetime earnings), so they generally don't pursue advanced degrees. That leaves the foreign students in the graduate programs, which is a contributing factor to the tendency of so many employers to hire H-1Bs. I believe that without access to new MS/PhD graduates due to the low H-1B cap, a number of firms have suddenly realized they don't need people with advanced degrees after all. That may explain why the new 20,000-visa category for holdings of such degrees was not immediately exhausted. It is important in all this to keep in mind that the H-1B program is still about cheap labor. Once an employer has decided a job needs an MS, he/she typically will prefer to hire an H-1B even if American MS applicants are available. There are plenty of American engineers with MS/PhDs who cannot find engineering work. Norm http://news.com.com/H-1Bs+not+going+like+hotcakes/2100-12_3-5718819.html H-1Bs not going like hotcakes By Ed Frauenheim Story last modified Tue May 24 13:01:00 PDT 2005 After a push to increase the number of H-1B guest worker visas available this year, U.S. employers have hardly been rushing to snap them up. U.S. Citizenship and Immigration Services on Tuesday said it has received petitions for only 6,400 of the 20,000 new visas approved by Congress late last year. The new H-1B visas are reserved for foreign workers with at least a master's degree from a U.S. academic institution, and were added to the controversial program's original annual cap of 65,000 after businesses called for an exemption. "We had anticipated that the petitions might come in at a much faster rate," said USCIS spokesman Chris Bentley. On May 12, USCIS began accepting applications for the additional 20,000 visas for the fiscal year beginning Oct. 1, 2004. H-1B visas, which allow skilled foreigners to work in the United States for up to six years, have long been a point of debate in the tech industry. Microsoft Chairman Bill Gates stirred up the pot recently by calling for the elimination of H-1B visa caps. Thirty-nine percent of visa petitions approved in 2003 were for workers in computer-related occupations, with nearly 37 percent of all approvals that year for workers born in India. Critics who have blasted the H-1B program say it has undermined U.S. wages, is ripe for abuse and fuels the shift of skilled-labor positions to overseas locations. Industry leaders have said the visas serve instead as a brake on offshoring. They also have rejected the claim that H-1Bs amount to a cheap-labor program, defending the visas as a means to ease skilled-labor shortages and give U.S. companies access to international talent as they compete globally. The current slow pace of petitions for the new visas is the latest twist in what has been a bumpy road for the visa program over much of the past year. On Oct. 1, USCIS said it had already received enough visa petitions to meet the annual cap of 65,000 for fiscal year 2005. Later, the agency acknowledged it had accepted 10,000 too many petitions because of a surge in applications in late September. Given that about two-thirds of approved petitions translate into actual visas, that could mean the annual cap this year will be exceeded by 6,500 visas, Bentley said. The agency has said it has since improved its processing methods. Apart from that error, USCIS has drawn fire for how it has handled the allotment of 20,000 new visas. In March, the agency indicated the additional visas would be available this year to a range of workers--not just to those with advanced degrees. That upset Compete America--a coalition that includes businesses, universities and trade groups--which accused the agency of reversing its position and undercutting congressional aims. Earlier this month, USCIS said the visas will be reserved for foreign workers who have received a master's or higher degree from an academic institution in the United States.