Posted on April 6, 2007

Students Fear For Job Prospects In U.S. Visa Crunch

Jim Finkle, Reuters, April 5, 2007

As foreign students prepare to graduate from U.S. universities this spring, many worry that a record number of applications for U.S. skilled-worker visas may cause them to lose jobs they have already been offered.

Fresh university graduates are vulnerable to being rejected for the H-1B visas designated for skilled workers. A record 150,000 H-1B applications were filed in one day this week, nearly double the number U.S. authorities are allowed to grant in a given fiscal year.

The flood of applications raised anew a domestic debate over quotas for the entry of foreign workers.

Visa shortages could ultimately discourage overseas students from studying in the United States over other countries with fewer restrictions on working visas for graduates, said Kay Clifford, associate director of the International Center at the University of Michigan.

“I’m concerned that this will be discouraging to international students,” she said. “They are worried about their futures. They are worried about the impact on their careers.”

In most cases, the government allows students to stay in the country for a year, granting them an F-1 visa to work in a field related to their area of study.

But for many students that Clifford deals with, the ability to stay in the country and work for several years is a key component of their decision to study in the United States.

Some employers will not bother hiring graduates unless they can get them an H-1B visa from the start of their employment, said Ted Ruthizer, head of the business immigration practice for New York law firm Kramer Levin Naftalis and Frankel.

If an employer hires a graduate this spring and is not able to get an H-1B this year, the employee will only be able to work in the United States for 12 months.

Even if that employee manages to get an H-1B when the window opens again in April 2008, he or she would not be able to start work again until October 2008, leaving a gap where the worker would have to go on leave or work outside the country.

The U.S. government will grant 65,000 H-1B visas this fiscal year to people with at least the equivalent of an undergraduate degree and expertise in a specialized field such as engineering or computer programming. An additional 20,000 visas are reserved for those with advanced academic degrees.


Outsourcing is breaking out of the back office.

For years, most service industry jobs that were moved to countries like India were considered relatively low-skill tasks like answering customer inquiries. But that has been changing in recent years, and increasingly the jobs of Western white-collar elites in fields as diverse as investment banking, aircraft engineering and pharmaceutical research have begun flowing to India and a few other developing countries.

In the view of most specialists on the phenomenon, the kinds of jobs that cannot be outsourced are slowly evaporating.

Boeing and Airbus now employ hundreds of Indians in challenging tasks like writing software for next-generation cockpits and building systems to prevent airborne collisions. Investment banks like Morgan Stanley are hiring Indians to analyze American stocks, jobs that commonly pay six-figure salaries on Wall Street.

The drug maker Eli Lilly recently handed over a molecule it discovered to an Indian company, which will be paid $500,000 to $1.5 million a year per scientist to ready the drug for commercial usework that would be significantly more costly if carried out by Americans.

With multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work there. For example, Cisco Systems, the leading maker of communications equipment, has decided that 20 percent of its top talent should be in India within five years; it recently moved one of its highest-ranking executives, Wim Elfrink, to Bangalore, the center of the Indian industry, as chief globalization officer.

Accenture, the global consulting giant, has its worldwide head of business-process outsourcing in Bangalore; by December it expects to have more employees in India than in the United States.

This is not a zero-sum game, in which every job added in India comes at the expense of an American or European one.

In many ways, the shift reflects a changing view at multinational companies as they find it easier to meet growing demand by taking advantage of the improved skills of newly educated people in the developing world. And some companies are returning certain jobs to the United States, finding that the work in India and elsewhere is not up to snuff.

But there are trade-offs as well. As Indian back offices become more sophisticated, Western companies are finding that large parts of their work, even high-end tasks, can also be done from India. From the consumer perspective, India has emerged as a pool of 1.1 billion potential customers for companies seeking faster growth. And so many companies are shifting their energy to where they see their futures being written.


Alan S. Blinder, a former vice chairman of the Federal Reserve and economic adviser to President Bill Clinton, recently described outsourcing as a “third Industrial Revolution” that, by his estimate, poses a risk to the employment of as many as 28 million to 42 million workers in the United States.

“We have so far barely seen the tip of the offshoring iceberg, the eventual dimensions of which may be staggering,” he wrote in the journal Foreign Affairs .

But Mr. Blinder, who teaches at Princeton, added that the consequence should not be large-scale unemployment but a shift in Western job markets.

The West, he argued, would shed jobs in easily outsourced fields, like accounting, and increase work among jobs like police officers and doctors, which must be done in person.