How H-1B workers affect U.S. jobs

Cover of "The Services Shift: Seizing the Ultimate Offshore Opportunity" by Robert Kennedy

TEXT OF INTERVIEW

Renita Jablonski: Today is the day U.S. companies can tell their immigration laywers to file for H-1B visas. These are the visas for highly-skilled foreign workers. University of Michigan Business Professor Robert Kennedy is with us now. He happens to be in India on a student recruiting trip, where a good chunk of these workers come from. Professor, what's the tone around the application process this year?

Robert Kennedy: There's a big political backlash this year, largely because of the financial crisis. And there's kind of, you know, globalization backlash, against NASA, against China imports and against, you know, bringing in foreign workers into the U.S.

Jablonski: Part of that includes critics who called the H-1B visa program a real obstacle to Americans getting jobs during this very tough recession.

Kennedy: Yes, that's true, I mean that criticism's out there. But there's a lot of reasons to think that there's not a lot of displacement going on. First of all, the fairly complicated procedure -- you have to file, you have to wait a few months to get approval. There's, you know, many, many times more applications then there are approvals -- there's about 65,000 permitted per year. But this is only one-twentieth of 1 percent of the total U.S. workforce.

Jablonski: Complicating things this year is a provision in the legislation around the bank bailout money that says financial firms that take government funds are restricted from hiring H-1B visa holders. I'm wondering if foreign workers are right now discouraged by this type of thing or if some of the protectionist sentiment that's out there right now.

Kennedy: I think there's a bit of that. And there's two ways to look at this: one is actually applications for H-1B visas, and I suspect that there'll be a small decline in the applications. A different way to look at it, though, is we're in the middle of admissions season in graduate schools. I'm a professor at Michigan's business school, the Ross School, and we're actually seeing a decline in all international applications across the board. And they're quite worried that they're going to go and spend $100,000 on an education and then not be allowed to work.

Jablonski: Robert Kennedy is the director of the William Davidson Institute at the business school at the University of Michigan. His new book is "The Services Shift: Seizing the Ultimate Offshore Opportunity." Professor, thanks so much.

Kennedy: OK, thank you.

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