Guys, they ran the EXACT same "labor shortage" playbook in the 1990s when they got caught abusing it back then.
Don't be blind fools.
The H-1B work visa is fundamentally about cheap, de facto indentured labor. Tech industry lobbyists pitch it as a fix for labor shortages and a way to hire the world’s “best and brightest."
In practice, these claims are invalid. Most H-1Bs, even those hired from U.S. universities, are ordinary workers doing ordinary jobs, and their overall quality is often lower than that of Americans.
This program isn’t used because there are no qualified Americans. It’s about cheap, immobile labor:
Type I Wage Savings:
- Paying H-1Bs less than comparable Americans (in fully legal ways, thanks to loopholes).
- Most H-1Bs are under 30, and younger workers cost less in wages and healthcare, so employers use H-1B to avoid hiring older Americans, where “old” means 35. The key is the four-tier prevailing wage system, which effectively sets wage floors by level of “experience”—in reality, by age.
Type II Wage Savings:
- Hiring younger, cheaper workers to avoid employing Americans over 35, who command higher salaries.
- The primary appeal of H-1Bs, especially in Silicon Valley, is their “handcuffed” status. Sponsored workers cannot easily leave, particularly if a green card application is underway, making them extremely attractive to employers. Even supporters of H-1B, like Vivek Wadhwa, have admitted underpaying H-1Bs. Multiple studies show that H-1Bs are often paid less than similarly-qualified Americans. This is partly because H-1Bs, lacking mobility, cannot negotiate better pay.
Abuse of H-1B runs throughout the tech industry, including large U.S. firms and top immigration law firms, not just Indian “body shops.”
It also occurs in hiring foreign students at U.S. campuses.
Underpayment of H-1Bs is a documented fact, supported by congressional reports and multiple academic studies. Even staunch defenders of foreign worker programs have admitted it:
“I know from my experience as a tech CEO that H-1Bs are cheaper than domestic hires…[the] mechanism is riddled with loopholes.” — Vivek Wadhwa, former tech CEO and vocal advocate of expansion
Representative Zoe Lofgren, historically the H-1B program’s strongest ally in Congress, has also acknowledged that undercutting American wages is built into the system:
“…the average wage for computer systems analysts in [Silicon Valley] is $92,000, but the prevailing wage rate for H-1Bs in the same job is $52,000.” — Rep. Zoe Lofgren
Though Lofgren proposed a 2011 reform bill, it would not have closed major loopholes and would have added a “automatic green card” track. It also scapegoated Indian IT services, which is inaccurate and overlooks that the entire industry uses H-1B for cheap labor.
Underpayment is usually legal due to loopholes in H-1B law, not due to lax enforcement.
For instance:
The “prevailing wage” excludes market premiums for “hot” skills, so the legally required wage is lower than the true market rate.
The “actual wage” (paid to workers in the same job) can be dodged if the employer redefines jobs or if most workers in that role are also H-1Bs.
PERM data show employers routinely pay H-1Bs only at or near the prevailing wage. This underpayment pervades not just Indian “bodyshops” but also big mainstream U.S. tech firms.
Though visa sponsorship costs a few thousand dollars, employers easily recoup that by saving tens of thousands annually per underpaid foreign worker.
No credible (non-industry-sponsored) study shows a tech labor shortage.
Wages for both entry-level and experienced professionals remain largely flat. Unemployment figures don’t capture underemployment or forced career changes.
Undergraduate STEM programs produce more than enough bachelor’s graduates. The supposed shortage at the PhD level stems from the influx of foreign grad students, which depresses wages and discourages Americans from pursuing doctoral degrees—exactly as predicted by an NSF internal report in 1989. Even the NIH found that a glut of foreign lab scientists drives talented Americans away from the field.
In reality, employers hire only a fraction of domestic applicants, often discarding those deemed “too expensive” (i.e., over 35). Companies also exploit H-1Bs for offshoring facilitation, contradicting claims that visas prevent shipping jobs overseas.
Industry advocates say H-1B is needed to keep “the best and brightest” in the U.S., but most H-1Bs are not in that elite category, and Americans with experience or advanced degrees often match or exceed their innovation potential. Research shows no patenting advantage for H-1Bs, and some evidence suggests the opposite.
Green card fast-tracks won’t fix age discrimination; foreign workers would still be young and cheap relative to older Americans. Calls to keep foreign students in the U.S. so they don’t help competitors are disingenuous; many do transnational work anyway.
Except in very narrow cases, employers are not required to recruit Americans first. Inflated claims that each H-1B job “creates” additional jobs have been discredited. Meanwhile, most foreign students who want to stay, do stay.
At a minimum, the definition of prevailing wage needs to be changed in the legislation to reflect genuine market pay.
IMPORTANTLY, provisions targeting fraud/enforcement are less crucial because the main problem is legal loopholes, not illegal conduct.
THE ISSUE IS NOT FRAUD
They are trying to hide the ball by saying there needs to be reform to prevent fraud.
The LOOPHOLES are the issue, and this is something that they conveniently obfuscate and detract from.