A new report says foreigners granted temporary visas to work in the United States are paid far less than their American counterparts, despite a federal law requiring employers to provide them with fair compensation.

The Center for Immigration Studies said the visa program, known as H1-B, allows U.S. firms to hire professional-level workers from other countries for periods up to six years, provided they are paid the same as comparable American workers or the “prevailing wage” for that job, whichever is higher.

John Miano, author of the study, said the law was designed “to prevent the hiring of foreign workers from depressing U.S. wages and to protect foreign workers from exploitation.”

But, he says, according to federal wage data provided by the U.S. Department of Labor, computer programming firms are instead, on average, paying foreign workers far less than American workers.

“The data suggest that, rather 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,” he wrote.

Among Miano’s findings:

  • On average, H1-B applications for foreign computer workers were for wages $13,000 less than for American employees in the same occupation and state.

  • Wages for H1-B workers are “overwhelmingly concentrated at the bottom of the U.S. pay scale.”
  • Nearly half of applications for H1-B computer programming workers (47 percent) “were for wages below even the prevailing wage claimed by their employers,” while just 4 percent were among the top 25 percent of wages for equivalent U.S. workers.
  • Employers hiring more H1-B workers tend to pay them less than comparable U.S. workers; employers making application for more than 100 H1-B workers pay them $9,000 less per year on average than U.S. workers doing the same job.

“This H-1B visa program was created in 1990 as a guest-worker program for specialty occupations,” wrote Miano, who said the program “is technically classified as a non-immigrant program.”

Originally limited to 65,000 visas a year, it has become especially popular with American high-tech employers like Bill Gates, founder and head of Microsoft Corp., who has pressed Congress to get rid of H1-B visa caps altogether.

“The whole idea of the H1-B thing is don’t let too many smart people come into the country. Basically, it doesn’t make sense,” Gates told a group of lawmakers on Capitol Hill in April. “You can’t imagine how tough it is to plan as a company where we say, ‘Let’s have this engineering group and staff it.’ You get a few and then you go through these periods where nobody can come in.”

The U.S. Chamber of Commerce also supports the program.

“In addition to essential workers, the U.S. economy continues to need access to skilled workers in many sectors. Access to technology, scientific, education, health, and engineering workers, which the United States is not producing in adequate numbers, continues to be a Chamber priority,” it says.

Other businesses and business interest groups continually have pressured Congress to raise the H1-B visa caps, saying they can’t find enough American workers to fill open positions, a claim Miano’s report appears to debunk.

Critics justified?

Since 9-11, a number of lawmakers have been reluctant to remove current H1-B caps, saying they worry the program could be used by potential terrorists to gain access to the country.

Others who worry more about American jobs may see their criticism justified by the report’s findings.

Rep. Tom Tancredo, R-Colo., is among a growing bipartisan group of lawmakers who long have opposed H1-B because they believe U.S. companies utilize it to import cheaper labor and undercut American workers. He and others support either substantially reducing the number of visas granted by the government annually or elimination of the program altogether.

“The fact is that many, many of our jobs are being taken by illegal immigrants or by people who are here legally but are willing to work for less than an American citizen would work for,” Tancredo says. At the same time, Republicans are being pressured by “the people who have business interests, to avoid doing anything that might impede the flow of low-cost employees, low-wage, low-skilled people. …”

“Corporations are providing a glass ceiling for American workers in a trap of virtual servitude for low paying, overworked H1-B employees,” adds Rep. Bill Pascrell, D-N.J. “My friends, that is not an exaggeration, that is not hyperbole, I found this through research to be the truth.”

Other critics of the program say several former employees of American high-tech firms suffered the ultimate indignation when they were forced by their companies to train their H1-B replacements – then were laid off.

Congress holds the line

Last week a House-Senate conference panel dropped a provision from budget legislation that would have allowed an additional 30,000 H1-B visa applicants to enter the U.S. every year. The current 65,000 cap was reached before the government’s Oct. 1 fiscal year began.

“This is very, very disappointing,” Sandy Boyd, a vice-president at the National Association of Manufacturers, said in response.

“What’s distressing about this and what the Senate clearly understood, is there is a real global competition for this work and for these employees and the question is not whether the work is going to get done, it’s where the work is going to get done,” Boyd said. “We’ve missed a real opportunity by not ensuring the work would be done here.”

Miano, in his report, says the current cap should remain in place because it “is the only real safeguard in the H-1B system.”

He also says it would be relatively easy to fix the program so U.S. employers could no longer exploit foreign workers at the expense of American employees.

“Limit the number of H-1B visas that an employer can obtain each year based on the number of U.S. employees the company has,” he wrote, in addition to requiring employers “to use a standard wage source produced by the federal government when making prevailing wage claims for [applicants].”

He also advised setting a higher standard employers must use to compensate H1-B workers rather than prevailing wage, “such as the 75th percentile … to prevent widespread use of H-1B workers from depressing U.S. salary levels.”

Miano also recommended closer monitoring of employers using H1-B workers.

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