Median Salaries for H1-B Visa Workers Grew Five-Times Faster than the Salaries of Equivalent Domestic Workers, Over Last Decade
New data from Pew Research shows that temporary foreign workers (H1-B visa holders) have received significant raises over the last decade, while American workers have suffered from relative wage stagnation.
Over the last decade the median salary for H1-B visa workers rose from $69,455 to approximately $80,000 per year—a pay rise of almost 16%.
By contrast, the wages of domestic workers in similar jobs rose from $73,036 in 2007, to $75,306 today—a 3% increase.
That means the salaries of foreign workers have increased faster than domestic workers by a ratio of 5:1. And, when accounting for inflation, the domestic workers have actually taken a heavy pay cut over the last decade.
Neil Ruiz of Pew Research explains:
The 2016 median salary reported for H-1B visa applicants was higher than the median salary paid to some U.S. workers in similar high-skill occupations. For example, U.S. workers in computer and mathematical occupations had a median salary of $75,036 in fiscal 2016, a slight decrease from 2007, when the median salary was $73,979 (adjusted to 2016 dollars), according to U.S. Bureau of Labor Statistics data on all U.S. workers. The majority (60%) of all H-1B applicants from fiscal 2007 to 2016 were seeking employment in computer and mathematical occupations.
This is plotted below:
The H1-B visa program is the main way US employers hire high-skilled foreigners. Using the program, employers can hire specialized workers (computer specialists, mathematicians, engineers, etc.) for up to six years. This period may be extended if the worker has applied for a green card.
For the US to issue H1-B visas they require employers to prove that no American worker would be displaced, however, this protection is spurious and often circumvented using indirect methods.
The H1-B visa program rapidly grew under the last administration. From Fiscal Year 2015 to 2016 alone, H1-B visa petitions increased from 348,699 to 398,718. In addition, the number of petitions approved increased from 275,317 to 345,262 during the same time period.
With increased labor supply for high-skilled workers, it’s unsurprising that domestic workers’ salaries are going down, even at the upper end of the pay spectrum. As Spencer P Morrison explains:
There have been a number of comprehensive studies looking at the impact between immigration an economic growth. In America, one of the most thorough was a 642 page study conducted by the National Academies of Sciences, Engineering, and Medicine. The study found that immigration negatively impacted the wages and employment prospects of American citizens, particularly working class Americans. This is not surprising, since more workers means more competition for employment, and therefore lower prices (wages). It is basic supply and demand in action.
For a comprehensive look at this topic, check out our article on how mass immigration is bad for the economy.