H-1B visa applications lowest since 2003

The Si Valley newpspaper reports:

More than six months after the federal government began accepting petitions for work visas popular with Silicon Valley companies, thousands of spots remain open, a reflection of the nation's high unemployment and the political pressure to hire citizens, experts say.

As of last week, 46,700 H-1B visa applications had been submitted, thousands less than the 65,000 allocated for fiscal year 2010 and the lowest number since 2003. The cap for 20,000 additional H-1B visas reserved for foreign graduates of U.S. colleges with at least a master's degree was met, though applications are still being accepted.

Tech industry insiders say the recession is primarily responsible for the dearth of applications. "There is definitely a sense that there is a growing hostility toward some of the (visa) programs, but I don't think that is related to the downturn" in petitions, said Jenifer Verdery, Intel's director of work force policy. "You are not going to see big ramp-ups in hiring during the downturn."

If the H-1B visas were used legitimately, then demand would not be dropping so much. The visas are supposed for short-term employment in specialty skills where no American is available. The need for such workers does not vary much with the ups and downs of the economy.

But nearly all of the H-1B workers only have skills that are readily available from USA workers. When there is a recession and high unemployment, American workers can be hired cheaply. When unemployment is low, those same skills are available in those same American workers, but it costs more to hire them. So foreign H-1B workers are attractive because they can be hired more cheaply.

I say that the phonyness of the H-1B program is proved by how sharply demand for H-1B visas varies with the unemployment rate.