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By Jack Ganssle

The Decline of the H1-B

Summary: H1-B visas are barely being issued any more.

The subject of H1-B visas always elicits howls of fury, both pro and con. I find the idea of bringing smart people to the USA is compelling, especially if they eventually become citizens and remain here. But many rightly view the visa as a vehicle for companies to drive down engineering salaries. On the third hand, as Tevye might say, high salaries tend to drive labor offshore.

(Fashion models have special rules regarding H1-Bs, which, to my mind, gives lie to the entire program. Surely there are armies of pretty young folks willing to make Faustian bargains to get into that industry. The story of the Hollywood-bound načve actor is both old and accurate.)

The Wall Street Journal is reporting ( that H1-Bs have declined - by a lot. Company requests for them ("petitions") are off by 80% from 2009. In 2008 each of the 65,000 allowable H1-Bs was taken on the first day of the program; in the following years the quota was never filled. 2009 saw 45,000 being issued, with 16,500 the next year and so far about 8,000 in 2011.

The article cites the poor economy, better opportunities in their home countries, and higher fees as contributing to the reductions.

The WSJ reports H1-B fees have increased from by $2000 from $325 (according to the Feds the fees are complex and higher). That's a pittance when an engineer's loaded cost can exceed $150k/year. Though some companies are rumored to make those they bring in under the program pay these fees, that practice is illegal.

Several people interviewed in the article indicated they had a much better chance in their own country than here, a typical citation reading "Ten years back, I had this 'nothing will change in our country' attitude, [I realized] for an IT professional like me, India is the place to be, with its booming tech industry." Certainly it's true that in many developing nations engineering is the place to be. Travel to these places and you'll find hotbeds of high-tech, with typically young engineers eager to succeed. It's logical to assume that people want to be where their families are, given a decent job.

These visas are issued via petitions from companies, not from individuals, and those requests are down significantly. According to the big Indian companies like Tata and Wipro have drastically reduced their requests for the visas, as has Microsoft, Oracle and other outfits that traditionally use a lot of labor under this visa program.

The bottom line seems to be that companies just don't need H1-Bs much any more.

Published May 11, 2011