The H-1B Equation

Salary data shows split with wages of U.S. workers

By Patrick Thibodeau

February 28, 2005 12:00 PM ET

Computerworld - Next week, the U.S. government will begin accepting H-1B applications from companies that want to take advantage of an increase in the fiscal 2005 visa cap to hire foreign workers who have advanced degrees from U.S. universities.

Up to 20,000 new H-1B visa slots are becoming available. Opponents of the cap increase say the graduates being hired will take jobs from U.S. workers, including IT staffers. Supporters argue that foreign workers are important to the country's economic health. At the core of the debate lies a question that's likely to re-emerge as the application process begins again: Do H-1B visa holders help or hurt the U.S. workforce?

A Computerworld analysis of wage data from approximately 290,000 H-1B applications filed with the U.S. Department of Labor shows that H-1B salaries declined across the board between the 2001 and 2003 federal fiscal years in a number of IT job categories. They include programming, systems analysis, networking, end-user support and quality assurance (see interactive database tool). The wage decline mirrored what was happening to the pay of U.S. IT workers—at least until 2003, when the salary trends diverged, according to research firm Foote Partners LLC.

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The government's Labor Condition Application database provides data only on new H-1B visa applicants and visa holders seeking a change of status. In addition, the Labor Department lumps the information into job categories that don't easily match with jobs in the private sector. Moreover, the government doesn't track visa holders and doesn't know the rate at which H-1B visa holders lost jobs in proportion to U.S. workers.

But David Foote, president and chief research officer at Foote Partners, said there was a split in 2003: The salaries of U.S. workers increased, while H-1B wages continued downward. That finding comes from comparing the H-1B data compiled by Computerworld and processed by Eastland Data Systems Inc. with salary information that New Canaan, Conn.-based Foote Partners collected through surveys of about 46,000 private-sector and government IT professionals.

In the category covering data communications and networking jobs, for instance, U.S. salaries rose 6.2% in fiscal 2003, Foote said. H-1B salaries declined 2% during that period, according to the Labor Department data. Foote said U.S. salaries in other IT job categories grew at rates ranging from 1.5% to more than 6%, while H-1B salaries saw declines of 1% to 5%.

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