H-1B Filings Fall Sharply, Apparently Due to the Economy

By David North on April 9, 2010

This morning USCIS announced that the number of H-1B petitions filed in the first week of the month fell sharply from last year's comparable period, and even more dramatically vis-a-vis earlier years. One of the impacts of this is a major blow to the agency's budget.

H1-B slots are subject to congressional ceilings, as well they should be; it is a very controversial program. The pattern is for a rush of applications in the first week in April for nonimmigrant jobs to start on the following October 1.

The ceiling on the principal category is 65,000 new petitions; last year 42,000 petitions were filed against that number in early April; this year it is only 13,500 according to an article in today's edition of Immigration Daily.

There is also a statutory ceiling of 20,000 more H-1B slots for those with advanced U.S. degrees (usually master's); last year at this time there was a complete set of 20,000 applications, and this year there are only 5,600 of them.

In earlier years there had been so many more applications than slots that USCIS ran an H-1B lottery to pare down the number of petitions to the statutory levels.

Why the drop in applications? There could be a variety of reasons, such as employers worrying about the Labor Department's punishment of at least one industry malefactor as noted in an earlier blog, or it could be that high tech employers have decided to hire more U.S. residents and fewer foreign workers, or, much more likely, it is the economy.

As we often hear about the broader economy, putting on additional workers is just about the last thing that happens as a recession passes. That is apparently true in the specialized H-1B economy as well.

Neither Immigration Daily nor the agency's press release mentioned a major by-product of the fall in applications – potentially a very substantial drop in income for USCIS. Not only was the shortfall of applications substantial, a difference of 42,100, but H-1B applications are among the most lucrative for the agency, with many if not most of them going for $3,740 each. Multiplying the two numbers produces a sum in excess of $148 million.

That number, in turn, is a significant 5 percent of the entire agency's budget request for 2010 of $2,867,232,000 (see p. 128). The USCIS Director, Alejandro Mayorkas, has been telling various audiences that his agency, despite his hesitations about raising fees on individuals, is in the process of doing just that; today's news, if borne out throughout the year, will simply make that process more painful.