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Crisis and Immigration: Is demand for migrant workers falling in the US?

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This is the first year that the H-1B visa cap has not been reached during the first 5 days of filing applications. The current cap is set at 65,000, with an additional 20,000 for holders of advanced degrees. It seems that the number of petitions for the H-1B visa this year will be far less than last year. The U.S. Citizenship and Immigration Services (USCIS) put out a statement that “it has received approximately 42,000 H-1B petitions counting toward the Congressionally-mandated 65,000 cap.”

Indian information technology companies have been the largest petitioners of H-1B visas in the past, and now these firms are applying for fewer H1-B visas. For example, Infosys Technologies will apply for less than 3,000 visas as opposed to the 4,500 visas that it requested in 2008.
Even Microsoft Corp has applied for fewer H-1B Visas. Brad Smith, Microsoft’s General Counsel said, “I think we’re going to see substantially fewer H-1B applications filed this year compared to last year,” He also mentioned that “the majority of applications will be to extend the stays of existing workers rather than for new hires.”

A major use of H-1B visas has been to facilitate offshore outsourcing. Is the financial crisis having an impact on outsourcing activities? Has the U.S. fiscal stimulus package or the Troubled Asset Recovery Program complicated the hiring of foreign workers for companies receiving federal bailout funds? 


Sonia Plaza

Senior Economist, Finance, Competitiveness and Innovation Global Practice, World Bank

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