On April 1, the US Citizen and Immigration Services will begin accepting applications for the coveted H1-B visas that will let high-skilled foreign workers hold jobs in the United States in 2013. In the past few years, high unemployment rates in the US have prompted criticism of the visa program, which allows the hiring of as many as 65,000 foreign workers.
That cap has not been raised for 2013, though the application fee hikes will remain in effect through Sept. 30, 2014. Beginning in 2010, a new law required the submission of an additional fee of $2,000 for certain H-1B petitions and $2,250 for certain L-1A and L-1B petitions.
Last year, the H1-B visa cap for 2012 was reached in November. That was slow compared with previous years, when the cap was reached within days.
The visa awards may be less controversial this year, because unemployment rates appear to be falling. The Wall Street Journal reports that the number of US workers filing unemployment claims has fallen to its lowest level since 2008.
Initial jobless claims fell by 5,000 to a seasonally adjusted 359,000 in the week ended March 24, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast that claims would increase by 2,000.
The prior week's figure was revised to 364,000 from a previously reported 348,000. Labor made its annual adjustment to seasonal factors this week, causing revisions to claims data back to 2007. As a result, recent weeks' figures were adjusted up...
Still, the unemployment rate remained high last month at 8.3% and may decline only gradually.
There remains a disparity between the needs of the US manufacturing industry and the skill level of available workers. Yesterday, I cited a survey by the manufacturing consortium Prime Advantage that said manufacturing companies are struggling to fill open positions. (See: Midsized Manufacturers Upbeat About 2012.)
Fifty-seven percent of the survey respondents said they had unfilled positions (more than double last year’s 23 percent). And 65 percent of respondents with open positions cited the inability to find skilled workers locally as the main reason for this problem. Competition for talent and labor force immobility were also cited as causes.
One reason for the disparity might be a gap between the skills required in the manufacturing workforce. To cut costs and compete with low-cost foreign labor, US manufacturers have been investing in automation. Although people are required to operate the machines, specific training is required. Prime Advantage reports that companies are investing in training and retraining employees. As a long-term solution, respondents emphasized promoting manufacturing as a strong career choice in local educational institutions.
H1-Bs have always been a hot button in the high-tech industry. Proponents argue that the visas are good for the industry, because they bring specialty skills into the US. Opponents argue that they displace US workers who need jobs. What has been your company's experience in finding workers? Has it hired foreign workers to work in the US?
The need and type of people who apply for the H1-B visa will continue to evolve. If we pay close attention, though, we'll find this process tells as much about us as it does about the applicants. Will applicants snap up the visas, will we have to scrap the program because some believe we don't need it or will we scrap it simply because demand falls off?
A very good article, but I am guessing there are additional factors to consider. One factor that I would hypothesize has bearing is the economic motivation that manufacturers have for claiming they cannot find trained workers in the US. With pay still being lower overseas than in the US, foreign workers brought to the US have lower pay expectations than US workers. It is tempting for manufacturers to say that US workers with the proper skills cannot be found, than admitting the primary motivation is economic.
As for the fall in initial jobless claims, this is of course not the complete picture. There is still a huge pool of unemployed here in the US. The fall in claims merely indicates (and I emphasize the word indicates) that the pool is not growing as fast as it did previously. Moreover, we know that job growth has been dismal, which is why the unemployment rate is still so high. In fact, it would be much higher if it were not for the way it is calculated. That is, the unemployment rate does not actively seek to count those long-term unemployed who are no longer eligible for unemployment benefits, treating them instead as no longer looking.
The bottom line, for me, is that H1-B visas are means of continuing to bring in cheaper labor, not more educated labor. Seeing as many highly skilled (and highly competent and intelligent) workers that I see right here in the US, it seems ridiculous to believe the claim that US companies need to continue importing labor from overseas. However, the ridiculous can often be made into official dogma with the aid of political power, and that is what seems to have happened here.
"...will we scrap it simply because demand falls off?"
As long as there is a sufficiently high differential between pay expectations of US workers and foreign workers, I find it very hard to believe that the H1-B visa system will be scrapped.
Rich, I don't believe US Congress will unilaterally scrap the program either. However, the utility to manufacturers and potential foreign employees may determine its continued value. Considering the size of the US economy, I don't believe the 65,000 per year visa allocation will directly impact employment and I don't see it as the main factor repressing wages either.
You may be right that it is being abused and that should be corrected. It costs employers a lot to recruit foreign employees plus there's a limit to the number of years such workers can stay in the US. It's not the best way to run a business by simply relying on "cheap imported labor."
"I don't believe the 65,000 per year visa allocation will directly impact employment and I don't see it as the main factor repressing wages either."
The threat of H1-B visas may have more clout than the one-to-one replacement numbers may indicate. I know that H1-B visas are not supposed to replace US workers, in theory, but I suspect they do. While you are right that the total number of visas is a small percentage of the US market, the visas do seem to have significant leverage in that they represent a powerful threat and reminder to US workers to keep their own expectations down.
It would be interesting to see whether H1-B visas decline as US salaries stagnate and perhaps decline in real terms.
"The fall in claims merely indicates (and I emphasize the word indicates) that the pool is not growing as fast as it did previously. "
The fall in claims may also be due to the fact that people no longer apply for jobs because they are fed up to be told that they don't have the skills companies need. But globally it is good indication that the economy is recovering.
It is my observation that many a engineers from India who go to US for further studies finally end up taking Finance jobs. So the original skill sets by which they enter US is not utlised at all.
Such migration from an engineering career to a non engineering career defeats the basic purpose for which they got entry into US
May be US immigration laws should impose some restrictions of alloting H1-B visas to such cases thereby ensuring that the visas are used for the right purpose.
Since they are issued for highly skilled employment, one could also argue that the economic impact (assuming that a domestic worker could have been placed in the same capacity) is disproportionate to the number of visas issued.
"The fall in claims may also be due to the fact that people no longer apply for jobs because they are fed up to be told that they don't have the skills companies need."
Initially I was going to argue your point, but then I thought about how reasonable it is to think that the US skill set and all of the US's abilities have flown out the window and disappeared overnight, so I decided not to attempt to challenge the logic and power of your hypothesis.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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