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H-1B Visa Applications As An Economic Indicator

The demand from American companies for high-skilled immigrants seems to be up this year. And that could mean something is about to change for the overall economy.

There is a cap on the number of visas the government gives out for these kind of workers every year. Lately, that cap has been 85,000. Demand always outstrips supply, but for the past couple of years, it has taken at least a few months to hit the quota. But this year, the H-1B visas might be gone by the end of the week.

Kramer Levin, just one big immigration firm in New York City, is having a record year with these visa applications. It represents companies that want to hire these workers. The firm is processing hundreds of requests from clients for the likes of financial analysts, software engineers, actuaries and information technology (IT) professionals.

When I visited last Friday afternoon, I saw buckets of FedEx envelopes lined up in the mailroom, ready to go. The lawyers, who'd been working late nights for months, were getting ready to go to happy hour now that everything was filed. The window opened April 1. They were done.

So what does the scene at this law firm tell us about the economy? After all, 85,000 jobs is not a lot. The U.S. economy adds an average of 100,000 jobs every month.

The surge in demand does tell us things are getting back to normal. This was the typical scene — a big push like this, at these kinds of immigration firms — before the recession, back when it used to take mere days or weeks to fill the quota.

Pia Orrenius, an economist at the Dallas Federal Reserve, says these workers are the ones companies hire to upgrade Web platforms, or expand their mobile analytics. They're the ones they hire when it looks like business is about to turn around.

"The demand for these workers comes from the demand for the services these firms produce," Orrenius says. "Once firms decide that the economy has turned around, that's when they decide to upgrade their systems."

And that could mean lots more hiring for all kinds of workers later this year.

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Transcript

DAVID GREENE, HOST:

Economists are constantly looking for numbers that tell us something about what's really happening in our economy - consumer confidence, the unemployment rate, GDP growth. NPR's Zoe Chace brings us another economic indicator. It doesn't move the markets. It's not in a press release. And you can find it in law offices in the top of the New York City skyscrapers.

ZOE CHACE, BYLINE: The indicator? Applications for temporary skilled worker visas, the H1-B visa. These are visas that allow highly skilled immigrants to work for U.S. firms.

TED RUTHIZER: Financial analysts, corporate executives, chemists, accountants.

CHACE: A big one, always - computer guys. IT. Ted Ruthizer is a lawyer with Kramer Levin, a big firm, that helps these foreign professionals get their visas. Actually, he works for the companies that are trying to hire these people. A lot of the best people in tech and science fields are foreign born. These visas are a way American companies can hire them. And for the last couple years, there hasn't been much hiring going on - until this year.

RUTHIZER: The numbers have tripled from what they were last year. They have tripled.

CHACE: There's a cap on the number of visas the government gives out for these kind of workers every year. Lately, that cap has been 85,000. The past couple years, it's taken at least a few months to hit the quota, but this year they might be gone by the end of the week. Rutheizer's firm alone is processing hundreds of these visas. It's a record year for them.

RUTHIZER: See, they're all ready to go out the door here. All in the FedEx envelopes beautifully put together, right?

CHACE: Down in the mailroom of this skyscraper in New York, everything has to be like clockwork. Immigration starts accepting these visa applications on the first of April. If they'd arrived too early, immigration won't accept them. But if he waits even a day past the first, his clients won't be first in line and they might not get a spot.

For the past couple months, everything has been geared to this moment, the day the window opens to accept the applications. And so...

RUTHIZER: We didn't tell you we're actually taking everybody for some serious drinking and celebrating at 5:30.

CHACE: So, what does this scene at this law firm tell us about the economy? After all, it's 85,000 jobs we're talking about - that is nothing.

The economy creates over 100,000 new jobs every month on average. Well, first, it tells us that it's getting back to normal. Before the downturn, this was the normal scene before April 1st at all law firms like this. That's how eager these firms were, before the recession, to hire foreign professionals.

Pia Orrenius, economist at the Dallas Federal Reserve, she says these workers, remember, they're scientists, technicians. They're the ones companies hire to upgrade Web platforms, to expand their mobile analytics. In other words, they're the ones you hire when it looks like business is about to turn around.

PIA ORRENIUS: You know, the demand for these workers comes from the demand for the services that these firms produce. Once firms, you know, decide that the economy has turned around, they're seeing far more demand for their customers. Then they decide to upgrade their systems. They decide to provide, you know, different may be better, more improved new technology to their customers.

CHACE: All this activity, she says, results in more hiring all over. If this indicator is correct, demand for high-skilled foreign workers can mean more jobs for unemployed Americans later in the year.

Zoe Chase, NPR News.

GREENE: OK, later today on ALL THINGS CONSIDERED, NPR's Martin Kaste digs further into the H1B visa issue. While big high-tech firms are leading the push to expand the program, the biggest users of these high-skill visas are consulting companies; companies that often specialize in outsourcing American jobs.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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