H-1B workers are paid the same prevailing wage as American workers are.
Congress hangs its hat on this myth as well. Although the law was written with this stipulation, the loopholes are rampant, and the law is not enforced. This is the underlying reason that companies love to hire H-1B programmers. Cheaper labor is the reason that the industry lobbied Congress to raise the H-1B quota. This prevailing wage myth is one of the ways that Congress was tricked into agreeing to the quota increase.
To see exactly how companies manipulate the system and underpay H-1B workers, and to see an actual LCA form at work [Click Here]
Norm Matloff’s paper covers this prevailing wage issue in considerable depth, and is quoted directly below:
The industry lobbyists form a lone voice on this issue. There is a broad consensus that the H-1Bs are indeed exploited in terms of wages and working conditions. This was found in
- the study at UCLA, which found that the immigrant engineers were paid 33% less than comparable Americans
- the study at Cornell University, which found underpayment of H-1B programmers and engineers by 20-30%
- my study at UC Davis, finding that immigrant programmers and electrical engineers were paid 15-20% less than comparable Americans
- the report by the Immigration and Naturalization Service, which found that the computer-related H-1Bs were paid a median of $53,000 per year, far below the national median of $66,000 for this field
- the audit done by the Department of Labor, finding that 19% of the H-1Bs were not even paid the salaries promised by the employers on the visa application forms
- the report by the National Research Council, which found that “H-1B workers requiring lower levels of IT skill received lower wages, less senior job titles, smaller signing bonuses, and smaller pay and compensation increases than would be typical for the work they did”
- articles in respected, pro-business publications such as Forbes Magazine (“Indian programmers working in the U.S. on temporary H-1B visas typically earn 25% to 30% less than their naturalized colleagues”) and the Wall Street Journal (“recruiting foreign talent is cheaper than hiring Americans”
- statements by the H-1Bs themselves, who have formed the national organization ISN (www.isn.org) with a goal of persuading Congress to reform the program
One need not even use data sets to see the problem. Most H-1Bs are de facto indentured servants, unable to switch jobs. Thus they cannot leave for a higher-paying job elsewhere, nor can they negotiate higher wages with their present employers by threatening to leave. So, they have lesser opportunities than do normal workers who are free to move about in the market. Thus it is indisputable, from basic economic principles, that on average they are making less money than they would if they had their freedom.