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Sunday, September 21, 2003

H1B Visas Feel the Pinch

The IT squeeze reaches all the way back up the line to India. Needless to say, following Cancun, the Indian press isn't treating this as a very positive gesture.

The number of H-1B visas issued to workers in the technology industry dropped nearly 75 percent from 2001 to 2002, according to a new government report. The news comes as the annual limit on the number of visas is set to be lowered Oct. 1. Both the numbers and the rhetoric are starkly different from what they were at the height of the economic boom. And the tech industry's use of the program has seen dramatic changes.

The H-1B visa program allows foreigners to work in the United States for up to six years. It has attracted criticism from some who say it's a way for companies to hire less-expensive workers. As unemployment has risen, complaints have focused on the H-1B and other visa programs, as well as of the corporate practice of moving work to other countries. The number of H-1B visas for initial employment in technology industries fell from 105,692 in 2001 to 27,199 in 2002, according to an annual report on the program released this month by the Department of Homeland Security's Office of Immigration Statistics. The percentage of all H-1B visas issued to tech workers also declined, from 52.5 percent in 2001 to 26.3 percent in 2002.

Santa Clara-based Intel saw a 60 percent drop from 2000 to 2002 in the number of new H-1B visa workers it sponsored, said Tracy Koon, director of corporate affairs. "The reason is the economy,'' said Koon, who added that Intel uses H-1B visas to hire scientists with master's degrees and doctorates. ``Our hiring is down, period, across the board."

AeA, an association of high-tech companies with dual headquarters in Washington and Santa Clara, publicized the government report's findings, saying they show that the program is not being abused. "People who are losing their jobs, they're going to blame the H-1B visas, and this shows that this thing has been tracking the downturn on jobs just like everything else has,'" said John Palafoutas, the group's senior vice president.

Intel's Koon echoed the point: "That's the way this was intended to be working: That is, it was going to wax and wane as the economy waxed and waned.''AeA also cited statistics showing that almost half of those receiving H-1B visas have a master's degree or higher, saying this proves the program is being used for workers who are scarce in the United States.

The question of whether the program is working as intended is important because the expansion of it that Congress enacted in 2000 is about to expire. Unless Congress acts, the annual limit on H-1B visas will drop to 65,000 as of Oct. 1, the beginning of the government's fiscal year. A $1,000 fee for each visa that was used to fund training programs for U.S. workers will also expire. For the past three years, the cap has been 195,000. Not all visas issued count toward this cap -- in 2002, of the almost 200,000 total petitions that were approved, only about 79,000 counted toward the cap. People applying to extend their three-year visa for another three years, for example, or those working for universities or research institutions are not counted. Also, because some people have more than one petition filed on their behalf, the number of petitions is not necessarily the same as the number of workers who come to the country through the program.
Source: Silicon Valley.com

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