Demand for H-1B visas tumbles

U.S. applications for the visas are a third of what they were a year ago; sharp drop likely due to recession

WASHINGTON -- The initial demand for H-1B visas is off sharply from last year, with the federal government receiving only about a third of the visa petitions it received this time last year. However, petitioners are close to reaching the H-1B cap for the 20,000 visas the government created for advanced degree graduates of U.S. universities.

The U.S. Bureau of Citizenship and Immigration Services (USCIS) began accepting H-1B visa applications on April 1. Last year at this time, the government had received 163,000 H-1B visa petitions for 85,000 visas. That included 65,000 visas for foreign workers with at least a bachelor's degree and 20,000 for graduates of U.S. universities with advanced degrees (see our list of 2008 H-1B recipients).

A USCIS spokesman said that based on preliminary numbers, the agency has "about half the petitions" it needs to meet the 2010 fiscal year cap of 65,000, but it is "just short of the 20,000 advanced degree cap."

(On Thursday, the USCIS updated its figures and said it received approximately 42,000 H-1B petitions that are counted against the 65,000 cap. The agency continues to accept petitions until the cap is reached. It also received 20,000 petitions from aliens with advanced degrees, which is the cap limit. However, "we continue to accept advanced degree petitions since experience has shown that not all petitions received are approvable," the agency said in statement.)

The USCIS may well reach both visa caps for the fiscal year that begins Oct. 1, especially after graduation in May. Foreign students aren't eligible to apply for an H-1B visa until they graduate.

Robert Hoffman, co-chairman of Compete America, a coalition of businesses and universities that have been seeking an increase in the H-1B cap, said a lower demand for the visa was expected.

"What the numbers reaffirm is that this is a program that essentially tracks with the broader demand in the economy," said Hoffman, who is also a vice president for government and public affairs at Oracle Corp.

H-1B demand has fluctuated with the economy. In 2001, for instance, the U.S. issued 163,000 visa applications, but in 2002, after the dot-com bubble burst, the number of visas issued fell by half to 79,000. The visa cap from 2001 to 2003 was set at 195,000.

The U.S. is closer to reaching the 20,000 cap for advanced degree graduates, and Hoffman said many of these applications "are likely from people who are already in the workforce and participating in OPT [Optional Practical Training]." Graduates can work under the OPT program for up to 29 months because of an extension of the program that was approved last year.

John Miano, founder of the Summit, N.J.-based Programmers Guild, said that the only thing the initial H-1B count shows is that "there is an economic component to H-1B usage."

"If H-1B usage were primarily economically driven, in an economy like this, H-1B numbers should go down close to zero," Miano said. He said he expects the entire cap will be filled soon.

Copyright © 2009 IDG Communications, Inc.

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