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H-1B Cap Exhausted 11/22/2011

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On January 26, 2011 the H-1B cap was met and no further H-1B numbers are available for fiscal year 2011. Petitioners may file cases for the 2012 fiscal year cap starting April 1, 2011.
 

USCIS confirmed that the H-1B cap was reached on November 22, 2011.  The H-1B visa, created through the Immigration Act of 1990 became a staple of the tech industry in the early oughts.  Studying the demand and speed of consumption of H-1B visa numbers gives insights into long term trends in US job markets from offshore labor to real demand for IT workers.

Below is a table showing the H-1B cap for each USCIS fiscal year from 1992 to 2011 and the speed with which it was consumed for that year.  The data appear to validate Nandan Nilekani's quote "the world is flat" (later borrowed by Thomas Friedman for his book of the same name).  Technology is rendering the location of many sorts of workers irrelevant and that means multinationals and US companies are increasingly hiring workers abroad rather than in the United States and therefore the demand for importing workers into the United States has waned somewhat since the height of the IT boom (1999 to 2003).

However, it is interesting that the H-1B cap for FY 2012 was reached earlier than in 2011 or 2010.  This increased H-1B visa consumption for new H-1B workers may reflect an improvement in the job market for skilled workers requiring a bachelor's or higher degree.
 

Fiscal Year Date Cap Reached Total Numbers Available Total Cap Petitions Filed
2012 11/22/2011 85,000 85,000
2011 01/26/2011 85,000 85,000
2010 12/21/2009 85,000 85,000
2009 04/08/2008 85,000 85,000
2008 04/01/2007 85,000 85,000
2007 05/26/2006 85,000 85,000
2006 08/10/2005 85,000 85,000
2005 10/01/2004 85,000 85,000
2004 02/17/2004 65,000 65,000
2003 Cap Not Reached 195,000 105,314
2002 Cap Not Reached 195,000 109,576
2001 Cap Not Reached 195,000 163,600
2000 03/20/2000 115,000 164,814
1999 06/11/1999 115,000 138,000
1998 05/10/1998 65,000 65,000
1997 09/01/1997 65,000 65,000
1996 Cap Not Reached 65,000 55,141
1995 Cap Not Reached 65,000 54,178
1994 Cap Not Reached 65,000 60,279
1993 Cap Not Reached 65,000 61,591
1992 Cap Not Reached 65,000 48,645

Companies seeking to bring foreign workers to the United States have other options once the H-1B cap is reached including using the E-3, TN-1, E-1, E-2, L-1 and several other categories.  While these alternatives are not open to every petitioner, they are available to many companies.

The last time that the cap was exhausted faster was in 2009, when it was reached on 04/08 instead of this year's fill date of 11/22.  Although this year's cap was exhausted more quickly than the previous two years, the H-1B visa demand is closer to the 2010-11 period than to 2009 when the cap was reached in only eight days.

As the world flattens, the need to move workers to the US may wane.  As telecommunications technology improves, knowledge workers like IT consultants, business consultants, scientists, accountants, and many others who work in fields where it is easy to collaborate using messaging, file sharing, shared databases, video conferencing and other technologies to work from where they are.

To be competitive, American labor is going to have to compete on price with Chinese, Indian, Bangladeshi, German, Mexican and Taiwanese labor.  It will have to compete based on skill, education and productivity as well as price.

As the world flattens further, it will seem more logical to limit flows of immigrant workers because of the additional costs and political problems such flows engender.

It is unclear how many companies have shifted to the L-1 visa program to circumvent the problems presented generally by H-1B visa regulations including minimum salaries, worksite location restrictions and other regulations.  But the requirement that the US company be related to a foreign parent, subsidiary, or affiliate likely limits to some extent the ability of many companies to hire L-1 workers.

Although the H-1B cap was reached a full two months earlier in FY 2012 than in FY 2011, the H-1B program is not far from its pre-IT boom consumption levels of less than 65,000 new H-1B workers per year.  It will take time for this reduction in H-1B visa consumption to work its way through the system because H-1B workers often remain in the United States for six years or longer and many pursue residence.  But after a few years of reduced H-1B inflows, the foreign national employment profile of US knowledge-based industries could very well permanently return to pre-IT boom era numbers.

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