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H-1B Pay Drags Down All Salaries

Immigrant engineers with H-1B visas may be earning up to 23 percent less on average than American engineers with similar jobs, according to documents filed with the U.S. Department of Labor. Salary data from Labor Condition Applications (LCAs) lends credence to arguments that lower compensation paid to H-1B workers suppresses the wages of other electronics professionals.

The lower LCA-based pay rates, considered unreliable by some, raise questions about the value of H-1B workers--and of U.S. engineers in general--to their employers, and add fuel to the debate that has long swirled around the H-1B program.

LCA "wage rate" and "prevailing wage" data are not actual salaries. But the average salaries calculated by EE Times based on that data indicate that employers are paying H-1B workers less than Bureau of Labor Statistics wage estimates. That's illegal, according to the Department of Labor, which administers the H-1B program. The department requires an employer to pay H-1B workers the same as other workers with similar skills and qualifications, or the prevailing wage, whichever is higher.

"There are plenty of studies, including my own, that show this disparity in wages," said Norm Matloff, a professor of computer science at the University of California, Davis, who writes frequently on immigration employment and H-1B visa issues. Lower salaries undermine employers' contention that they need H-1B workers to fill jobs for which Americans can't be found, Matloff said. "Otherwise, salaries would be rising."

The average H-1B salaries calculated by EE Times are based on data from 459 of 65,536 LCA petitions filed by employers seeking permission to hire immigrant professionals in federal fiscal year 2005. Specifically, the data comes from LCAs naming one of three positions commonly held by engineers: electronics engineers, electrical engineers and computer hardware engineers.

The average salary cited in the LCAs for each of the three positions was below the mean annual salaries for those jobs in 2004 as determined by the U.S. Bureau of Labor Statistics' Occupational Employment Statistics survey of employers.

The average annual wage or salary for electronics engineers was $69,851 in the LCAs, or 9.8 percent less than the $77,450 mean annual-wage estimate determined by the BLS OES survey. The LCA average for electrical engineers was $63,268, or 14.7 percent less than the OES survey's $74,220 mean. And the LCA average for computer hardware engineers was $64,426, or 23.3 percent less than the $84,010 average found by the OES survey. (A detailed comparison of LCA-based and OES salaries can be found in this week's By the Numbers, page 26.)

Underpaid H-1B workers displace American information technology workers and put undue pressure on salaries, said Kim Berry, a software developer who serves as president of The Programmers Guild, an activist group for IT industry professionals. "This is happening under the radar across the country," he said.

Prevailing wage
Intel Corp. compensates its H-1B workers "under the same structure as our domestic employees," a company spokeswoman said. "It's actually illegal to pay less than the prevailing wage for any employee sponsored under the H-1B visa." Intel employs approximately 3,000 H-1Bs, a majority of whom work in VLSI design, device physics or optics, the spokeswoman said.

IBM Corp. takes guidance on salaries for its roughly 2,500 H-1B visa workers from BLS OES data. "We get our numbers from the OES page," an IBM spokesman said. "We do that every time." An overwhelming majority of those workers are engineers, and their benefits package is similar to what IBMers receive. IBM complies with all Department of Labor wage requirements, the spokesman added.

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