Demand For H1-B Visas Falls

The demand for visas reserved for high-skilled tech workers had fallen this year. Immigration officials report that applications for the H1-B visa, usually oversubscribed within days of becoming available, have fallen short of the 85,000 reserved slots.

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Here's another sign of the economic downturn. A week after the federal immigration agency started accepting applications for H1-B visas, which are reserved for foreign high-tech workers, it still has not met its annual quota. That has not happened since 2006. Some companies simply aren't hiring anyone these days.

As NPR's Jennifer Ludden reports, others may be reluctant to hire foreigners when Americans are being laid off.

JENNIFER LUDDEN: To get a sense of how dramatic a drop off there's been for so-called H1-B visas, you have to recall the frenzy of recent years. Crystal Williams of the American Immigration Lawyers Association says when the process opened up each April 1st, she got eyewitness reports from the federal immigration agency's processing center.

Ms. CRYSTAL WILLIAMS (Deputy Director, American Immigration Lawyers Association): It was sheer madness. Literally, trucks lined up at the service center in this little town in Vermont to bring these cartons in.

Last year, Federal Express had so many of them that they stopped individually scanning packages in, which is - FedEx never does that.

(Soundbite of laughter)

LUDDEN: Last year, U.S. Citizenship and Immigration Services received nearly twice as many applications as the annual visa quota allows. That limit is 65,000 visas for computer programmers, engineers and scientists, plus another 20,000 for foreign students studying in the U.S.,.

This year, a week out, the agency says it's almost filled the student quota; but so far, it's only received applications for about half the quota for high-skilled workers. Officials say they'll keep accepting more until the quota is met.

Lawyer Crystal Williams says the swings in demand make perfect sense in this bad economy.

Ms. WILLIAMS: Overall, the H1-B process is actually very responsive to market conditions, and I think this shows that it follows the market.

Dr. RON HIRA (Professor of Public Policy, Rochester Institute of Technology): You don't want to read into this that the H1-B program is working as expected. It's not working as expected.

LUDDEN: Ron Hira teaches at the Rochester Institute of Technology. He says, sure, companies aren't hiring now because of the downturn, but Hira says it's a myth that, in better times, companies only hire foreign H1-B workers when they can't find an American for the job. There's no such requirement. And Hira says companies can, and do, even replace U.S. workers with lower-paid foreigners.

Dr. HIRA: So one has to ask the question why any H1-Bs are being hired. It should be a very, very small number who have super specialized skills.

LUDDEN: Some see another reason for this year's drop off.

Mr. VIVEK WADHWA (Executive in Residence, Duke University): Right now, hiring an H1-B worker is toxic.

LUDDEN: Vivek Wadhwa of Duke University points to how Congress recently made it harder for banks receiving federal money to hire foreign workers. He says the overall numbers affected were small, but the law had a chilling effect.

Mr. WADHWA: They're trying to portray hiring an H1-B worker as unpatriotic, and that's scaring tech executives.

LUDDEN: Wadhwa says some of his students have been told as much at job interviews. Recruiters say businesses fear a backlash if they hire H1-B workers. Wadhwa says a lot of students are so frustrated, many are planning to return home to India and China, which may not be bad at all for them.

He says even now, those countries' economies are still growing at six, seven, eight percent a year. So they're still desperate for these young, high skilled workers, even if American companies are not.

Jennifer Ludden, NPR News, Washington.

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