Applications for controversial H-1B visas have fallen over the past two years as many companies are reluctant to bring in foreign talent in the midst of the worst recession since The Great Depression, according to eWeek.com.

“It has to do a lot with the economy and the issue of unemployment in the U.S.,” Kellie Lego, Managing Attorney of the MVP Law Group in Burtonsville, Maryland, told the publication.

Not only are companies reluctant to hire foreign workers with millions of Americans struggling through prolonged periods of unemployment, but bureaucratic concerns are scaring some foreign workers away.

The application process has become cumbersome and some potential H-1B visa workers fear discrimination against immigrants following the passage of a controversial Arizona law that gives law enforcement officials great leeway in questioning those thought to be here illegally.

“They’re given so much scrutiny, it’s hard,” Lego told eWeek.com.

Thus far, there are roughly 40,000 unused H-1B visas, according to the report. Applications have fallen 30 percent in 2009.

Once again in 2009, India led the way in percentage of those applying for the special work permit with 36 percent hailing from the sub-continent. Canada came in second with 6.5 percent, followed by Britain at 4.3 percent and Mexico at 4.2 percent.

The program has drawn a large amount of criticism for the toll it takes on American workers. The H-1B visa program drives down the wages of Americans in certain fields as companies like Microsoft bring in foreign talent and pay less than the prevailing wage.

Increased outsourcing is another effect of the program. In a report compiled by the USCIS, Indian outsourcing firms dominate the list of top H-1B visa recipients. Oftentimes, those businesses will bring in foreign talent, train them in America and send them back to India, displacing an American job in the process.

The abuse of the program is so rampant a 2006 Department of Labor study found that “… H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of the foreign worker.”

Moreover, the study also reported that the statute does not require employers… “to demonstrate that there are no available US workers or to test the labor market for US workers as required under the permanent labor certification program.”

Rather than attracting the ‘best and brightest’ for permanent immigration, as many have claimed, an Economic Policy Institute report found that “the programs have increasingly been used for temporary labor mobility to transfer work overseas and to take advantage of cheaper guest-worker labor.”

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