The US Department of Labor reported on Friday that the unemployment rate fell to7.8%, which is the lowest rate since the recession started.  This rate is still historicallyquite high.  The unemployment rate never exceeded 8 % between 1984-2009.

Many question why the US should allow H-1B visas if many US workers are out of work. The answer is that H-1B visa usage is a microeconomic phenomenon, not amacroeconomic one.

H-1B visas are used by industriesin short supply.  These industriesinclude IT, science, engineering, and healthcare.  Not coincidentally, these industries are expected to havecontinued demand for future workers. 

The Brookings Institute says that the occupations with the largest supplyvacancies are:
1. Computer Occupations
2. Health Diagnosing and Treating Practitioners
3. Other Management Occupations
4. Financial Specialists
5. Business Operations Specialists
6. Sales Representatives, Services
7. Engineers
8. Information and Record Clerks
9. Advertising, Marketing, Promotions, Public Relations, andSales Managers
10. Supervisors of Sales Workers
US high school students ought to be preparing for these jobs if they want to be adequately employed when they reach adulthood.  Until then, Americancompanies will search around the world for talented workers to fill thesesupply shortages. 

One bogeyman in the H-1B debate has always been that H-1Bworkers are only used to tamp down US wages and supplant American jobs.  As we have arguedmany times in the past, there is little evidence that this is actually thecase for at least two reasons.

For one, if the H-1B program was being used to reduce wagesand displace American workers, we would see H-1B workers spread across manyindustries, instead of concentrated in just a few industries.  But we don’t see that.  We see H-1B workers concentrated in just a few industries   

Also, we would see more consistent annual H-1B usage by USemployers.  The incentive to reduceworkers’ salaries is likely greater in a recessed economy, not less.  However, when the economy was in its weakeststate, there were many fewer H-1B visa petitions filed by US businesses.

Critics of the H-1B system should acknowledge that the H-1Bsystem does what was designed to do.  Itprovides needed workers in industries where workers are needed.  It is not a macroeconomic policy, but amicroeconomic one.  The nationalunemployment rate has little relevance.