H-1B Visa Abuse - How it Supresses US Wages - as IEEE-USA Sees It

Commentary: The H-1B Visa Problem as IEEE-USA Sees It

By Karen Pedersen, Peter Eckstein and Sandra Candy Robinson

Editor’s Note: The following is a letter from the past, present, and future presidents of IEEE-USA in response to a story in View from the Valley that also appeared in the February 2017 issue of IEEE Spectrum as “H-1B Visas by the Numbers.”
As the current, past and future Presidents of IEEE-USA, we read with interest your article on H-1B visa pay [“H-1B Visas by the Numbers,” IEEE Spectrum, February 2017].  IEEE-USA has been actively working with Congress to fix the H-1B visa program for well over a decade.  Our experience with the visa suggests that, while accurate, your article missed some essential truths about the H-1B program.
For example, you point out that, according to H1BPay.com, Facebook pays its software engineers in Menlo Park, on average, US $138,294, which is a pretty good salary.  However, Smartorg pays software engineers on H-1B visas in Menlo Park only $80,000 annually, which is a ridiculously low salary for the San Jose region. 
This difference illustrates an important point about H-1B visas.  While some companies pay their H-1B employees’ salaries equivalent to what American workers get paid, many companies do not. In fact, most H-1B visas are used, not by Facebook and other big tech companies, but by outsourcing and consulting companies. 
And the salaries paid by those companies tell a different story.
For example, Wipro, a large outsourcing company, paid its 104 program analysts in San Jose exactly $60,000 each in 2016.  Brocade, in contrast, paid their programmer analysts $130,000 in the same city.        
Similarly, Infosys, the largest user of H-1B visas, paid their 158 technology analysts in New York City, one of the most expensive cities in the world, $67,832 on average last year, not enough to rent a closet in that city.
A close look at H1BPay.com’s data shows that, as you move past the Googles and Microsofts of the IT world, H-1B salaries tend to cluster around the $65,000 to $75,000 level.  There is a reason for this.  If outsourcing companies pay their H-1B workers at least $60,000, the company is exempted from a number of regulations designed to prevent visa abuse.
But $60,000 is far below 2016 market rates for most tech jobs.
In 2014 (the last year we have good data), Infosys, Cognizant, Wipro, and Tata Consultancy used 21,695 visas, or more than 25 percent of all private-sector H-1B visas used that year. Microsoft, Google, Facebook, and Uber, for comparison, used only 1,763 visas, or 2 percent. 
What’s the difference? Infosys, Cognizant, Wipro, and Tata are all outsourcing companies. Their business model involves using H-1B visas to bring low-cost workers into the United States and then renting those workers to other companies. Their competitive advantage is price. That is, they make their money by renting their workers for less than companies would have to pay American workers.
 This is the real story of the H-1B visa. It is a tool used by companies to avoid hiring American workers, and avoid paying American wages. For every visa used by Google to hire a talented non-American for $126,000, ten Americans are replaced by outsourcing companies paying their H-1B workers $65,000.
This is why, IEEE-USA opposes efforts to expand the H-1B visa program.
In contrast, IEEE-USA supports expanding green card programs to make it easier for skilled non-Americans to become American citizens. Unlike H-1B workers, green card holders are paid the same wages as Americans.  If not, the green card holders simply quit and find a better paying job—something H-1B workers typically cannot do. 
Green cards and immigration, therefore, build our nation’s skilled labor pool and strengthen our economy, while H-1Bs undermine both.
America was built by green card holders, not guest workers.
About the authors:
Karen Pedersen is president, IEEE-USA; Peter Eckstein is past-president, IEEE-USA, and Sandra “Candy” Robinson is president-elect, IEEE-USA


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