The argument made by critics of H-1B professionals is straightforward – the only reason companies hire them is because they will work more cheaply. In fact, the argument is central to criticism of H-1Bs and will likely never be conceded by critics, since all assertions about skilled foreign nationals rest on the premise that they work more cheaply.

One can recognize the value of permitting skilled foreign nationals to work in the United States without assuming the entry of every individual results in a storybook ending. America is an immense country with large and small employers and when tens of thousands of new people enter the U.S. labor market for the first time each year it is possible some of these individuals will be taken advantage of or will not recognize their true market value. This may be more likely to occur at some small IT services companies, which have been cited in the press.

However, the law, common sense and available data indicate that, on the whole, H-1B visa holders are paid appropriately based on their age and work experience – even if this does not take place in all circumstances.

Under section 212(n)(1) of the Immigration and Nationality Act, employers must pay H-1B visa holders the higher of the prevailing wage or actual wage paid to “all other individuals with similar experience and qualifications for the specific employment in question.”

To knowingly violate this law risks heavy fines, debarment from using the immigration system for hiring skilled individuals and much bad publicity for the company. That is why one rarely hears of any company with a recognizable name found to have willfully underpaid an individual on an H-1B visa.

Think about what would be necessary for a large or even medium-sized company to (unlawfully) maintain two wage scales – one for foreign nationals, one for U.S. workers. The records would be available and accessible to government auditors on demand – and such audits are frequent these days from U.S. Citizenship and Immigration Services. Moreover, a mid-level employee in the human resources department, perhaps several of them, would have to work with a company’s general counsel office and likely an outside law firm in a conspiracy to underpay foreign nationals. All of this would risk the reputation of the company and the livelihood of the employees involved. And since employers generally pay up to $5,000 to $6,000 in legal and government fees to hire H-1B visa holders, to make this conspiracy worthwhile the amount of underpayment would have to be significant.

After all this is done, can the H-1B professional thwart this conspiracy by simply leaving the employer to work elsewhere? Yes. Do H-1B visa holders change jobs? Yes, it happens quite often, particularly when the economy is good. Immigration attorney and former INS general counsel Bo Cooper recently noted in Congressional testimony that his law firm often processes cases for clients for an H-1B professional to move from one employer to another.

Again, none of this is to deny that some individuals may be shortchanged. It’s more to explore the extent to which one can say that H-1B visa holders in general are underpaid and only hired to save money.

What the Research Shows

In a January 2011 report, the Government Accountability Office (GAO) found H-1B visa holders generally earned the same as U.S. professionals when compared in the same fields and age groups. For example, in the category Systems Analysis, Programming, and Other Computer-Related Occupations, the median salary for an H-1B professional was higher ($60,000 vs. $58,000) than for a U.S. professional in the age group 20-29 and the same ($70,000) in ages 30-39. (See Table 1 below.)

Table 1

Median Reported Salaries of H-1B and U.S. Workers: Systems Analysis, Programming, and Other Computer-Related Occupations

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

In the age group 20-39 for Electrical/Electronics Engineering Occupations, the median salary for an engineer in H-1B status was higher than for a U.S. engineer – $80,000 vs. $75,000. (See Table 2.) For some reason, U.S. workers in the age 40-50 range earn more in this field than their H-1B counterparts, but since relatively few H-1B visa holders enter the U.S. after the age of 40 (less than 10 percent) and only a portion of those enter this field it is difficult to know whether the data are significant in any way.

Table 2

Median Reported Salaries of H-1B and U.S. Workers: Electrical/Electronics Engineering Occupations

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

Table 3 shows in the age group 20-39, H-1B professionals earned $47,237 compared to $35,000 for U.S. professionals for jobs in college and universities.

Table 3

Median Reported Salaries of H-1B and U.S. Workers: Occupations in College and University Education

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

What Do These Results Mean?

The data show one needs to compare individuals with similar ages and fields when comparing salaries. Since U.S. professionals tend to be older than H-1B visa holders, U.S. professionals will tend to earn higher salaries. But that doesn’t mean H-1B professionals are only hired because they earn less. Recent U.S.-native-born college graduates earn less money than more experienced native-born professionals in the same field. Does that mean recent native-born college graduates are paid less than more experienced individuals because of wrongdoing by American employers? Of course not. Salaries in America are based on a variety of factors. Individuals with greater experience should be expected to earn higher salaries.

Conclusion

There are reforms that would make the situation better both for workers and legitimate employers. First, strengthen the rules for whistleblowers and make such rules more widely known. Second, increase portability for individuals with pending green card applications so it is easier for a professional to leave a current job if necessary. Third, increase the employment-based green card quota and/or exempt from the quota individuals who received a masters degree or higher from a U.S. university, which would move many people into permanent resident status much more quickly. The green card backlog makes it even more important that Congress refrain from enacting crippling restrictions on H-1B visas, since otherwise it would be difficult for skilled foreign nationals to work in the United States.

The debate over H-1B visas is rarely civil. But hopefully more people will agree that individuals born outside the United States have much more to offer America than, as critics assert, a willingness to work for less money.