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H-1B workers earn less than American counterparts, report says

The visa holders are supposed to be paid prevailing wages

January 3, 2006 12:00 PM ET

Computerworld - WASHINGTON -- H-1B visa IT workers earn on average $13,000 less than their American counterparts, according to a study of U.S. Department of Labor records released by the Center for Immigration Studies.

H-1B workers are paid less, even though the law requires that they receive prevailing wages, according to the study by John Miano, a former chairman of the Programmers Guild, a group that has been critical of the H-1B program.

Miano's report compares wage data that employers file with the Labor Department against U.S. wage data collected by the Bureau of Labor Statistics. While employers must attest that they will pay prevailing wages on a form called the Labor Condition Application, Miano says in the report that agency officials haven't been required to verify that data.

Meanwhile, employers can use their own salary surveys for entry-level workers to justify paying lower wages, "rather than more relevant and objective data sources, to make prevailing wage claims when hiring H-1B workers," wrote Miano.

The H-1B "has destroyed the entry level job market," Miano said in an interview, adding that he believes keeping the cap at its current 65,000 level will at least minimize the damage.

One result is lower wages for H-1B workers. For instance, the study found a mean 2003 wage for H-1B programmers of $49,258. Labor Department data pegged the mean 2003 wage salary for U.S. programmers at $65,000.

Miano sees the H-1B visa program as a vehicle for moving jobs offshore, but argues that productivity improvements, and not hiring programmers at lower wages, can bring savings to software development.

"It's my personal view that we have twice as many software developers in this country as we need," said Miano, who said that improvements in development tools, processes and better work environments can reduce development costs. Seemingly simple things, such as "getting rid of cubicles and replacing them with enclosed offices" can reduce office distraction and boost productivity, he said.

Recommendations for improving the wage disparity, which can put downward pressure on the rates paid to U.S. workers, include limiting the number of H-1B visas that an employer can obtain each year based on the number of U.S. employees at each company, as well as requiring companies to use a "standard wage source" produced by the federal government when making prevailing-wage claims.

The report also suggests that the ability of H-1B workers to seek better wages from other employers be limited. The H-1B visa has a six-year limit but allows the foreign worker to apply for permanent residency. While visa holders can change jobs, Miano says a workerwho changes employers is unlikely to get permanent residency.

The 65,000 H-1B cap for the 2006 federal fiscal year that began in October was reached last year. A proposal to hike that cap this year by 30,000, which was included in the Deficit Reduction Omnibus Reconciliation Act of 2005, failed to win House approval last month.

Congress is allowing an additional 20,000 H-1B visas to foreign students graduating from U.S. schools with advanced degrees, but that cap is very close to being reached, according to the U.S. Citizenship and Immigration Service. As of Dec. 27, 18,636 visas had either been issued or were pending.

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