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Demand down for US visas for skilled workers

Applications indicate fewer firms have plans to hire or need to look overseas

By Hiawatha Bray
Globe Staff / April 13, 2010

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The nation’s labor market may be on the rebound, but demand for the special visas that allow companies to bring skilled workers to the United States is much weaker than last year.

The US Citizenship and Immigration Services said last week that it has received about 13,500 requests for its standard H-1b visas since it began accepting applications on April 1. That’s far fewer than the 42,000 requests filed during the same period last year, during the worst of the recession.

The agency sets an annual quota of 65,000 of the H-1b visas. Companies, rather than individuals, apply for the visas in order to bring foreign workers with special skills into the country to work for three to six years. H-1b visas can be used to hire all kinds of specialized workers, including chefs and fashion models, but they’re especially popular with computer and telecom munications companies. The demand for such visas is an indicator of whether companies intend to hire skilled workers and need to recruit overseas because US candidates are in short supply.

The falloff in H-1b applications comes at a time when the US economy is emerging from the recession. March saw the biggest monthly hiring surge in three years, with 162,000 jobs created, but the unemployment rate stands at 9.7 percent. Federal officials have predicted the jobless rate will remain high for the rest of the year.

Ron Hira, a professor of public policy at Rochester Institute of Technology, said that the higher number of visa applications at this point in 2009 was probably due to “pent-up demand from the prior year.’’ In 2008, the entire H-1b quota of 65,000 was reached in a week; many companies who missed out may have resubmitted their applications the following year.

But after the early surge in applications in 2009, demand for H-1b visas came nearly to a halt, as recession-ravaged firms stopped hiring. The quota was finally filled in December, nine months after the visa window was opened.

Hira said the weakness in demand has carried over into 2010. A supplemental H-1b program for foreign workers with advanced degrees has a quota of 20,000, but has received 5,600 applications. Last year, the quota for that program was nearly met in the first week.

Rebecca Peters, counsel for legislative affairs at the American Council on International Personnel, a pro-immigration lobbying group, said the slow uptake of visas this year could be good news for foreign students who’ll soon graduate from American colleges and universities. Many have taken temporary jobs at US firms, and would like to stay on as H-1b visa holders. But in recent years, the visas have been used up in April, a month or two before they graduate. “A lot of employers don’t want to hire until they have that diploma in hand,’’ Peters said.

If the H-1b visa quota remains unfilled for months, these foreign students will have time to complete their studies and look for jobs with US companies. Indeed, Peters said “we might just see a little bump’’ in H-1b applications in late spring, as companies try to employ a new batch of international students.

Peters said that the falloff in H-1b applications this year shows that companies only use the visas when they’re unable to find enough skilled American workers, and not as a way to hire cheaper foreign workers. “Use is tied to the economy, and we are in a recession,’’ Peters said. “People aren’t hiring as much.’’

Peters said that the United States should end the H-1b visa quotas, and let companies hire as many as they want.

But Hira favors tougher restrictions to ensure that US firms actively search for qualified Americans before seeking foreign workers. Hira also said that companies should be required to pay H-1b employees higher wages than they pay their US employees. “They should pay a premium,’’ said Hira, because the foreign workers “are supposedly the best and the brightest.’’

Hira and Peters agreed the United States should make it easier for highly skilled foreigners to obtain permanent resident status and US citizenship. Peters favored offering permanent residency to any foreigner who obtains a graduate degree from a US university.

Hiawatha Bray can be reached at bray@globe.com.