Compared to last year's flood of petitions for H-1B visas from foreign-national IT professionals, applications are being filed at a significantly slower rate this year. In July, the U.S. Immigration and Naturalization Service announced that approximately 138,000 new H-1B petitions have been approved against the 195,000 limit for FY 2001 which ends Sept. 30. An additional estimated 39,000 H-1B petitions are pending.

By March 21, 2000, the INS had received 115,000 petitions, exceeding the FY 2000 H-1B cap of 107,500. "It is possible that we'll hit the 195,000 limit this year, but we're not sure," says INS spokeswoman Eyleen Schmidt. "If we do [hit the cap], it'll be close to the [Sept. 30 deadline]," she says.

One reason INS is not confident of projections as to when the cap might be reached is that the frequency with which H-1B petitions have been filed has fluctuated greatly -- with a high of 57,836 petitions, or 18.3 percent of the cap in December 2000, and a low of 15,724, or 5 percent filed in February 2001. "There's no good immigration factor [to explain the fluctuations]," Schmidt says. "It's a mystery to us."

Economic reasons?

With daily headlines announcing layoffs in the industry, many American IT workers are asking whether or not U.S. companies are still in need of H-1B workers.

According to chief economist Ron Bird of the Washington-based Employment Policy Foundation, although layoffs are indeed happening and the job market is not as tight as it was two years ago, unemployment is still relatively low. Bird points to "re-employment" as an indicator. "[IT workers] getting laid off are finding new jobs quickly," Bird says.

Disruption in the technology industry, he says, "shows it's a story of change in the economy with the overall employment level growing." And despite a few high-profile events, Bird doesn't believe that on the whole U.S. IT professionals' jobs are jeopardized by H-1B workers "I see no basis for the theory that there's a displacement of American workers for folks coming in under the H-1B program," Bird says.

By Bird's calculations, total employment in the information technology sector has increased during the same time frame as last year -- up 4.8 percent from a year ago July. "There's no doubt about it; there have been more layoffs in the last year than [per] the average year," Bird says. "But it's not as many as if we were in a true recession. The real story is that the flux that's happening is the change in our core economy. People are shifting; they are cycling through, which indicates to me that the system is working."

Bird says the United States is experiencing a "very mixed" economy now. Manufacturing, which Bird says once accounted for one-third of the economy, has been hit hard by the economic slowdown. "But it's so much of a smaller share of the overall U.S. economy than it used to be 30 [years] or 50 years ago that it's not affecting our long-term economy," he says.

Still, Bird believes that the economy is "precarious" and that businesses need to pursue fiscal policies in dealing with the situation and in helping to keep confidence in the U.S. economy strong. "But the interesting thing is that this slowdown, in the context of an economy where the fundamental long-term [forecast] is strong, means that the labor market is still tight." Bird forecasts a labor shortage in the technology sector for the next 30 years.

How does he explain stories about people who have been laid off and unable to find a job or believe that they've been replaced by H-1B holders paid at lower rates? According to his research, some people must look for work for a long time, but they are not the norm. "I can identify a few thousand who have been looking for a year or more, but in the total picture, they are very few. They probably have special circumstances that are not evident on the surface," he says.

By and large, Bird says the numbers indicate that most people are finding new jobs within six weeks to seven weeks. And in anticipation of what some critics may say, he believes that real earnings are not going down, just that wages are not increasing as quickly as in recent years.

» posted by abennett

InfoWorld

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