The Center for Immigration Studies just released a critique of the H-IB visa program. The core message of the study is that employers use the visa program to hire professional workers at wages well below the actually prevailing wages of comparable workers – despite a statutory prohibition. I have entered below the executive summary of “The Bottom of the Pay Scale: Wages for H-1B Computer Programmers” by John Miano and, following that, a useful primer of the program from his study.
H-1B visas by occupation are computer 28%, education 14%, administrative 13%, engineering 12%, health 9%, managers 8%, all others 18%. Visas by country of origin are mainland India 36%, China 9%, Canada 5%. all others 50%.
The temporary visa program known as H-1B enables U.S. employers to hire professional-level foreign workers for a period of up to six years. Employers must pay H-1B workers either the same rate as other employees with similar skills and qualifications or the “prevailing wage” for that occupation and location, whichever is higher….The analysis demonstrates that…actual pay rates reported by employers of H-1B workers were significantly lower than those of American workers. ….[R]ather than helping employers meet labor shortages or bring in workers with needed skills, as is often claimed by program users, the H-1B program is instead more often used by employers to import cheaper labor.
On average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation and state.
Wages on approved Labor Condition Applications (LCAs) for 85% of H-1B workers were for less than the median U.S. wage in the same occupations and state.
Applications for 47% of H-1B computer programming workers were for wages below even the prevailing wage claimed by their employers.
Employers can easily manipulate their need to show that the H-1B worker will be paid a prevailing wage. The Department of Labor is hamstrung in enforcing more rigor into this part of the application process.
Employers making applications for more than 100 H-1B workers had wages averaging $9,000 less than employers of one to 10 H-1B workers.
The report goes on to say that many U.S. employers use “bodyshops” (labor service providers) for H-1B workers, thereby making it easier for the employer to obscure how it may be firing American workers in order to hire H-!B workers. And the report says that any investigation of H-1B abuses must be personally approved by the Secretary of Labor.
A primer of H-1B visa program
This H-1B visa program was created in 1990 as a guestworker program for specialty occupations. A specialty occupation is one that requires a college degree or equivalent professional experience. There is no specific skill requirement for an H-1B visa.
The H-1B program is technically classified as a non-immigrant program. H-1B visas are valid for up to three years and can be renewed once for an additional three years. H-1B visas are also tied to employment so that an H-1B visa becomes invalid if the worker loses his job. While employed, it is relatively easy for a worker on an H-1B visa to transfer the visa to another employer. Transfers do not extend the time limit on the original visa.
While the H-1B is a temporary, non-immigrant visa, the law allows H-1B holders to apply for permanent residency and, since H-1B workers can bring their families with them, any children born during their stay become U.S. citizens. While relatively few H-1B workers obtain permanent residency, anecdotal evidence suggests a significant percentage, perhaps the majority, of workers who come to the United States on H-1B visas come intending to stay permanently.
The challenge for H-1B workers who want to remain in the United States is to get a permanent residency application processed within the six-year maximum term of an H-1B visa. Congress has modified the H-1B program to allow workers in the final stages of a permanent residency application to remain in the United States beyond the six-year time limit. However, an H-1B worker who changes employers is unlikely to be successful in getting permanent residency.
The H-1B program was originally limited to 65,000 visas a year. As the popularity of the H-1B program grew in the late 1990s, employers started to exhaust this quota. In 1998, 2000, and 2004 Congress enacted both temporary increases and permanent increases in the program. Figure 1 shows the quota changes over time. The current limits, effective in FY 2005, divide H-1B visa into four categories with different limits:
No limit to the number of visas issued to universities and research institutions.
20,000 visas reserved for those with graduate degrees from U.S. institutions.
6,800 visas reserved for Singapore and Chile under free trade agreements.
58,200 visas for all others.
This complicated visa allocation scheme reflects the political struggles that have surrounded the H-1B program since 1994. The general H-1B quota for FY 2005 was exhausted on the first day of the fiscal year and six weeks beforehand in FY 2006. However, only about a third of the quota for U.S-educated workers was used in FY 2005 and it is unlikely to be used up in FY 2006.”
H-1B visas are often referred to as “high tech” visas since historically most have been issued to workers in computer programming, engineering, or science disciplines. In recent years, while the H-1B quota was temporarily increased, the percentage of workers in these occupations declined.
Workers from India and China dominate the H-1B program. Before the temporary increases in the H-1B visa quota, nearly half of all H-1B visas went to people born in India. During the periods of increased H-1B quotas, the percentage of H-1B visas issued to people born in these countries decreased.