H-1Bs not going like hotcakes

Date: Wednesday, May 25, 2005 3:15 PM

JOB DESTRUCTION NEWSLETTER

by Rob Sanchez
May 25, 2005 No. 1266

Congress approved an additional 20,000 H-1B visas in the Omnibus
Spending bill of 2004. Companies claimed that they were ready to hire
the H-1Bs as soon as they could get visas approved, but so far it seems
like there is no hurry to hire the additional H-1Bs.

U.S. Citizenship and Immigration Services on Tuesday said it
has received petitions for only 6,400 of the 20,000 new visas
approved by Congress late last year.

I asked Ed Frauenheim if he has heard an explanation for this lull in
H-1B hiring. He was just as surprised as I was and couldn't offer a
reason.

This lull is very surprising because everything I read before the USCIS
opened the floodgates on the visas has indicated that employers were
standing in line for visas. Harris Miller and his organization ITAA
were even fighting over a proposed rule change that would have allowed
companies outside of his inner circle to get visas. In a very real
sense just a month ago there was a feeding frenzy over getting visas.

Right now I am as baffled as Frauenheim. There are several plausible
explanations for the strange data.

1 - U.S. companies have suddenly decided they would rather hire U.S.
citizens instead of H-1Bs. This is the most far-fetched explanation so
I decided to list it first.

2 - Actually there are far more active visa petitions than the USCIS
knows about. This may be the most likely reason for the low numbers
because the CIS has already demonstrated that they are incapable of
managing the H-1B visa program. In the past they have had many
accounting and tracking problems with H-1B visas.

3 - Employers are importing so many workers with L-1 visas that they
don't need as many H-1Bs. Unfortunately it's almost impossible to get
current information on the number of L-1 visas issued so this scenario
probably cannot be verified.

4 - Hiring for high-tech jobs has gone down so much that employers can
hire lower numbers of H-1Bs and still not hire a single American. The
monthly labor statistics from the DOL for April may give statistical
support for this scenario:

The computer systems design and related services sector
added 1,100 jobs to 1.18 million, and the management and
technical consulting services sector expanded by 3,400
jobs, to 799,400.

Let's do some simple math for the month of April by adding the total IT
and consulting jobs that were created. I won't include the 65,000 visas
that have already been gobbled up by employers.

computer design 1,100
tech consulting 3,400

Total Jobs 4,500

H-1B petitions: 6,400

Extra petitions 1,900

Remember what Intel CEO Craig Barrett said? Most of you probably don't
so here is a repeat:

"Intel can be a totally successful company without
ever hiring another American."

Let me reiterate the obvious conclusion from #4 - With the current low
number of high-tech jobs being created, employers are filing enough
H-1B petitions to fill every job position being created. If L-1 visas
are factored in there are plenty enough visas to not only fill every
job, but to replace thousands of Americans that have jobs.

DISCLAIMER: Using April job creation statistics for May could create
errors. There is also a lot of doubt about exactly what should be
counted because the BLS doesn't have clear-cut categories for the types
of jobs H-1Bs take.

To view the monthly jobs report go to:
http://www.bls.gov/news.release/pdf/empsit.pdf

I will continue to monitor this situation and I'm open to alternate
theories that could explain why companies aren't stampeding to petition
for visas.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://news.com.com/H-1Bs+not+going+like+hotcakes/2100-12_3-5718819.html

H-1Bs not going like hotcakes

By Ed Frauenheim

Story last modified Tue May 24 13:01:00 PDT 2005

After a push to increase the number of H-1B guest worker visas
available this year, U.S. employers have hardly been rushing to snap
them up.
U.S. Citizenship and Immigration Services on Tuesday said it has
received petitions for only 6,400 of the 20,000 new visas approved by
Congress late last year.

The new H-1B visas are reserved for foreign workers with at least a
masters degree from a U.S. academic institution, and were added to
the controversial program's original annual cap of 65,000 after
businesses called for an exemption.

"We had anticipated that the petitions might come in at a much faster
rate," said USCIS spokesman Chris Bentley.

On May 12, USCIS began accepting applications for the additional 20,000
visas for the fiscal year beginning Oct. 1, 2004.

H-1B visas, which allow skilled foreigners to work in the United States
for up to six years, have long been a point of debate in the tech
industry. Microsoft Chairman Bill Gates stirred up the pot recently by
calling for the elimination of H-1B visa caps.

Thirty-nine percent of visa petitions approved in 2003 were for workers
in computer-related occupations, with nearly 37 percent of all
approvals that year for workers born in India.

Critics who have blasted the H-1B program say it has undermined U.S.
wages, is ripe for abuse and fuels the shift of skilled-labor positions
to overseas locations. Industry leaders have said the visas serve
instead as a brake on offshoring. They also have rejected the claim
that H-1Bs amount to a cheap-labor program, defending the visas as a
means to ease skilled-labor shortages and give U.S. companies access to
international talent as they compete globally.

The current slow pace of petitions for the new visas is the latest
twist in what has been a bumpy road for the visa program over much of
the past year. On Oct. 1, USCIS said it had already received enough
visa petitions to meet the annual cap of 65,000 for fiscal year 2005.
Later, the agency acknowledged it had accepted 10,000 too many
petitions because of a surge in applications in late September.

Given that about two-thirds of approved petitions translate into

actual visas, that could mean the annual cap this year will be exceeded
by 6,500 visas, Bentley said. The agency has said it has since improved
its processing methods.

Apart from that error, USCIS has drawn fire for how it has handled the
allotment of 20,000 new visas. In March, the agency indicated the
additional visas would be available this year to a range of
workers--not just to those with advanced degrees. That upset Compete
America--a coalition that includes businesses, universities and trade
groups--which accused the agency of reversing its position and
undercutting congressional aims.

Earlier this month, USCIS said the visas will be reserved for foreign
workers who have received a master's or higher degree from an academic
institution in the United States.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://news.com.com/U.S.+economy+adds+tech+jobs/2100-1022_3-5698033.html

U.S. economy adds tech jobs

By Ed Frauenheim

Story last modified Fri May 06 12:14:00 PDT 2005

A variety of sectors in the technology industry added jobs in April,
another sign of a possible turnaround in the employment scene for U.S.
computer pros.
The broader U.S. economy also added a better-than-expected 274,000
nonfarm payroll positions, and the unemployment rate remained 5.2
percent, according to the U.S. Labor Department's monthly jobs report.

Payroll jobs in computer and electronic-products manufacturing rose by
2,600 in April to 1.33 million. The telecommunications field bulked up
by 6,700 jobs, to 1.04 million. And tech services jobs also were
created. The computer systems design and related services sector added
1,100 jobs to 1.18 million, and the management and technical consulting
services sector expanded by 3,400 jobs, to 799,400.

"The new (Bureau of Labor Statistics) numbers reflect what we are
seeing regarding hiring in the technology sector," said Dion DeLoof,
president of Anteo Group, an IT staffing and consulting company.
"Hiring has been increasing at most of our Fortune 100 clients in their
technology groups, and we are seeing this at our midsize clients as
well. The job market is considerably better for application software
developers compared to the third and fourth (quarters) of last year.
Salaries are rising as well. Our clients are forecasting continued
strength in the next couple of months regarding hiring."

The fatter tech payrolls amount to another bit of good news for

workers in the tech industry, who weathered hundreds of thousands of
job cuts in the wake of the Internet bust.

A recent report indicated that the U.S. tech industry may have reached
the bottom of the trough last year when it comes to employment. In
addition, technology professionals have reason to be cautiously
optimistic about jobs at start-up companies. Venture capitalists have
been raising increasing amounts of money, and the cash is expected to
fuel a new wave of investments in fields including energy, wireless
communications and the Internet.

Not all the signs are clearly positive, however. Tech pros face the
threat of increased automation and the prospect of their jobs being
shifted offshore. The average number of unemployed workers in nine
high-tech categories fell by 64,000 last year but remained close to
150,000, according to the Labor Department. And in the first three
months of this year, technology companies slashed nearly 60,000 U.S.
jobs--twice the number trimmed in the same period last year.

Not all tech sectors added jobs in April, according to the Labor
Department report. The sector made up of Internet service providers,
search portals and data processing lost 800 jobs, falling to 392,000.

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