New Delhi: The rug that is the H-1B visa has been pulled from under the American immigrant community –– leaving Indian visa holders and aspirants in flux. However, despite a popular belief –– obtaining the H1B is seen as an acquisition of the American dream –– a number of research papers suggest that H-1B holders tend to earn less than their US counterparts.
A 2024 paper titled H-1B Visas and Wages in Accounting: Evidence from Big 4 Payroll and the Ethics of H-1B Visas, published in the Journal of Business Ethics, finds that Big 4 firm Deloitte pays US citizens working in tax and audit 10 per cent more than H-1B holders. While members of the firm suggested that they rely on H-1B obtainees due to a shortage of qualified American chartered public accountants (CPAs), “critics” stated that it was largely a cost-saving mechanism.
“There are several other explanations besides a desire to save on wage costs that could drive this wage discount (such as a difference in English communication skills or an attempt to recoup the considerable filing fees involved in hiring an H-1B worker),” the paper reads, noting that their results are in tandem with the “pattern predicted by H-1B critics.”
The 10 per cent difference between the salaries of US employees and H-1B holders is seen across roles, the paper, which accessed hacked payroll data from Deloitte, notes. The researchers also conclude that the rise in H-1B holders does not adversely impact American hires –– “we find no evidence of H-1B employment driving down the wages of peer U.S. citizen employees,” the report concludes.
‘Compelled to stay’
Meanwhile, the technology sector, which has long depended on the ubiquity of Indian labour, is also subject to a similar differential. Even as of two decades ago, on average, H-1B wage claims were $16,000 lower than the US equivalent. Moreover, companies were “significantly understating what US computer workers are earning in order to justify paying low wages to H-1B guestworkers in those occupations,” according to a 2007 report published in the Center for Immigration Studies.
“90 percent of H-1B employer prevailing wage claims for programming occupations were below the median U.S. wage for the same occupation and location, with 62 percent of the wage claims in the bottom 25th percentile of U.S. wages,” reads the report.
Another study from 2007 published in Science finds that STEM H-1B workers earn 5 per cent less than Americans with the same qualifications. Conducted by researchers at Georgetown University, the study also shows that H-1B holders who refrain from “job-hopping” make about 11 per cent less than US citizens.
“Lowell (author of the study) speculates that foreign workers are paid less because they are often compelled to remain with the same employer to get permanent residency within the 6 years of stay allowed by their visas,” a report on the study notes.
“Lowell says this ‘de facto bondage’ — the residency process, which can take years, starts anew if they change jobs — has the effect of depressing salaries not just for foreign workers but for natives as well.” The H-1B visa is seen as a springboard –– a necessity for a US permanent residency.
Trump’s $1,00,000 hurdle is only for fresh applicants. Even so, it has sent the once powerful Indian diaspora into a frenzy. It also stands to fundamentally alter the relationship between Indians and the American dream.
(Edited by Aamaan Alam Khan)