H-1B Applications: A Trickle, a Torrent or Something Else?

Ann All

There are lots of litmus tests used to determine the severity and probable length of the recession, most of them related to spending and/or employment. One being watched with interest by the tech industry is the number of applications received for H-1B visas, which allow U.S. employers to hire skilled foreign workers.


Already, the pace appears to have slowed. In 2007, the number of applications exceeded the available number of visas on the first day the government began accepting them. Citizenship and Immigration Services stopped accepting applications after two days, then used a lottery to award visas. The agency received 163,000 applications in the five days it accepted them in 2008. Of those, 131,800 were for standard H-1Bs, of which 65,000 are available under the current cap. The USCIS also got 31,200 applications for the 20,000 H-1Bs reserved for applicants with advanced degrees. Again, a lottery was used.


We're now a week into this year's application acceptance period with no reports of the usual inundation. The government is still accepting applications.


Some companies may be scaling back their applications due to fear of political repercussions. As I wrote a few weeks ago, a provision in the economic stimulus package places H-1B restrictions on companies receiving funds from the Troubled Assets Relief Program. Since then, reports have surfaced that several U.S. banks plan to reduce their numbers of H-1B workers. One financial services company that has no plans to do so, however, is Goldman Sachs. Said Chairman and CEO Lloyd C. Blankfein:

The U.S. has always been a magnet for many of the most talented, hungry and qualified people in the world. Especially at this time in our economy, do we really want to tell individuals who will help companies to grow and innovate - ultimately creating more jobs - that they should go work elsewhere?

The tough economy and slowing pace of overall hiring appears to be causing others to file fewer applications. Microsoft's general counsel just announced the company, one of last year's largest recipients of H-1Bs, is seeking substantially fewer visas this year. Earlier this year, Microsoft said it planned to shed 5,000 jobs in the most comprehensive jobs reduction in its history. Business is also off for Indian outsourcing companies like Wipro and Infosys, which received the most H-1B visas last year with 7,237 between them.


According to a Computerworld story, it's been 13 years since fewer than 65,000 H-1B visas were issued. Prevailing wisdom, reports Computerworld, is that while far fewer applications may be submitted this year, they will still exceed the number of available visas. With many folks comparing tech hiring patterns during the current recession to those during the economic downturn that followed the dot-com bust, it will be interesting to see just how much demand for H-1Bs drops.


The government issued 163,600 visas in fiscal 2001, fewer than the 195,000 then allowed. Following the bust, just 79,100 were issued in fiscal 2002, prompting the government to revert to its previous annual cap of 65,000 visas in fiscal 2003. The cap has remained unchanged since then, despite the efforts of tech companies and others to persuade the government to raise it.


A recent proposal, put forth by a Homeland Security policy analyst and a research assistant at The Heritage Foundation recommends returning the annual cap to 195,000 and making the cap flexible so that it could automatically increase when a quota is met. They also suggest carrying over any unused visas to the next fiscal year. An action like this seems highly unlikely any time soon for the perenially controversial visa, especially with the economy in such a protracted slump.


The New York Times just published comments from some of the best-known proponents and opponents of H-1Bs, several of whom I have interviewed myself. I think their comments provide a nice snapshot of some of the major issues surrounding not only the H-1B program, but broader U.S. immigration policies. The piece also mentions an article on the topic will be published in the Times this weekend.

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Apr 9, 2009 8:01 AM Dave Dave  says:

I'd like to see more high tech workers coming to live here as opposed to work here for a few years and then leave.  We should be encouraging companies to sponsor these people for citizenship instead of just using them in the H1B program.  In the 1980's and early 1990's, that is what companies would do.  However, they needed to find away around paying for permanent employees and keep costs under control.

What most people don't know is that H1B workers are paid less then their American counterparts.  however, their employer-parent companies can't (by law) charge less for them so they pay them a small percentage of what they make, rent out cheap housing local to their American clients and put the workers up in it so that they can afford to feed themselves and still send money back to their home country.  While these workers are free to leave the arrangement at anytime, it still reminds me of indentured servitude and seems to develop a mindset in the workers.

Apr 9, 2009 8:18 AM Dave Dave  says: in response to yonnie

What's worse is that just like slavery, many of these people are more than willing to do it to each other.  Just to make a little extra money.  Maybe if they wanted to do the H-1B program but not allow the worker to hired by and foreign company (i.e., if XYZ corporation wanted to hire temporary workers, but at competitive rates, then they could get the H1B visas but they couldn't call up Wipro and order 10 people). 

Apr 9, 2009 4:50 PM Russ Russ  says:

Sure there are fewer H1B applications. The Government has been denying H1B extensions and transfers. Every company and immigration attorney knows this. So companies are not filing new applications as it will be a waste of money.

Apr 9, 2009 7:55 PM yonnie yonnie  says:

A 150+ years ago the US had a civil war, mostly about abolishing slavery.  How are H1-B visa's any different?  The best view of what these work visa's really are is still "Indentured Servitude".  It was wrong then and it's still wrong now!

Apr 11, 2009 6:54 PM steve steve  says:

i kept wondering, how come American companies/managers like those H-1b workers so much... . look at companies like USAA that have thousands of those H-1b workers, in this case -USAA- is supposed to be a patriotic American company... .

What is different about those indian workers, are they smarter, more creative, harder working than americans... . in the overwhelming majority of cases those workers are no better than the average unemployed american worker. It seems to be something to do with the Indian culture being centered around a class hierarchy, which translates into a submissive, continuously kiss ass slave culture that makes those indian workers so much seeked by managers...

Apr 13, 2009 1:32 PM solarisias solarisias  says: in response to steve

Hi Steve,

I think you have formed a wrong opinion about Indians in general. First of all have you ever lived outside U.S to understand how it feels like to be an immigrant. Secondly, Indian work culture does support heirary so it is not Kiss Ass Slave Culture, but it is respect for seniority and authority. Finally those so called manager's are not Immigrants mostly, so why do you think they like Immigrant workers rather than fellow citizens. I think you should ask this question to those managers. Once you understand what makes the managers like immigratns more than local's you would be able to understand how to better your work relationship with the managers.

Apr 14, 2009 9:41 AM Mohan Mohan  says:

It is interesting how a discussion, article or a blog on H1 can a lot of comments, with folks polarized on either sides of the camp. Wonder if the decade-old debate is being stirred again as those caught in the economic downturn have a group to 'blame'

Apr 16, 2009 11:08 AM Anita Anita  says: in response to Dave

I agree with Dave's comment regarding creating American citizens.  To the best of my knowledge they are required to file income taxes if they've been in the US for the entire year which is a plus.  My concern is that some abuse their temporary status by establishing credit in America with no intent to pay long term because they are going back to their country.  I know this happens for a fact but cannot devulge the source of this information. 

Briefly I worked temporarily in HR for an Indian IT company with a prescence in the US.  I saw resumes with training not very different from ours.  The only noteworthy difference is that they came here with some experience, even if only months earned back in India.  That  and the organization of their credentials were presented very differently.

Apr 16, 2009 11:25 AM Advani Advani  says: in response to solarisias

I think Steve is partly right. We have plenty of talent in US then to give out H1 visas to Indians. They are far cheaper, pencil pusher and good followers. Ideal for short term projects. Then can be disposed off. I mean if they are so talented then why basic necessities of life are not available to masses in India?

He is correct there is a class hierarchy and most of them are inherently subservient. For a manager they are ideal, cost 1/4 less, dont ask questions and do what is told. When work finished return back.

H1-B visas are a waste, we need to eliminate this program.


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