H-1Bs Earn More Than U.S. Counterparts? Not So Fast


The contention of H-1B haters that the visa program is a conspiracy by government interests, big business and liberal media to import cheap labor is ignorant, distracting and tiresome. But a new report arguing that H-1B visa holders earn more than their U.S counterparts is equally distracting, and almost as ignorant.


The report, prepared by two professors at the University of Maryland's Robert H. Smith School of Business, challenges the commonly held understanding that if anything, H-1B visa holders tend to be paid below-market wages in violation of U.S. law. A May 21 article on eWEEK quoted this from the report:

"IT professionals without U.S. citizenship earn approximately 8.1% more than those with U.S. citizenship; IT professionals on an H-1B or other work visa earn approximately 7.9% more than those with U.S. citizenship; and IT professionals with a green card earn approximately 13.6% more than those with U.S. citizenship or work visa holders."
"The salary premiums for non-U.S. citizens and for those on work visas fluctuate in response to supply shocks created by the annual caps on new H-1B visas. Setting lower and fully utilized annual caps results in higher salary premiums for non-U.S. citizens and those with work visas."

The eWEEK article included a short Q&A with the report's authors, Professors Hank Lucas and Sunil Mithas, but didn't question their findings or provide a counter view. Fortunately, a May 20 article on CIO.com did.


According to the CIO.com piece, the University of Maryland report was based on data collected from online salary surveys conducted by InformationWeek and Hewitt Associates from 2000 to 2005. Check this out:

The Lucas-Mithas research deviates from the findings of other studies investigating the effect of temporary visa programs on the salaries of U.S. IT professionals. According to Lucas and Mithas, H-1B visa holders earned an average of $75,358 from 2000 to 2003, compared with the average U.S. citizen's salary of $66,836. (The InformationWeek survey did not ask about visa status in 2004 and 2005). But according to the U.S. Citizenship and Immigration Service (USCIS), the median salary for H-1B visa holders in computing professions during the 2000 to 2003 period was just over $50,000.
"It [seems] strange to me that the authors would depend on sampled data when we have the whole census of new H-1B recipients' salaries reported [by] the USCIS, at least in aggregate terms," says Ron Hira, associate professor of public policy at the Rochester Institute of Technology. "For computing occupations those data show low wages relative to Bureau of Labor Statistics wages for Americans. The median salary for new H-1Bs is comparable to the entry-level wages for freshly minted bachelors in computer science, as reported by the National Association of Colleges & Employers. So half the new H-1Bs are being paid at- or below entry-level wages."

Moreover, the CIO.com article pointed out that the report's findings were potentially flawed because of the self-selective nature of the data:

Hira suggests there may be a self-selection bias at play when using a sample population. The data Lucas and Mithas used comes from 50,000 IT professionals, including 809 temporary visa holders, who opted to participate in an online salary survey. The researchers say the overall sample and sample of non-U.S. citizen foreign-born IT professionals in their study is reasonably representative of the U.S. population.
While those numbers may line up, it's unlikely that H-1B or L-1 grantees who depend on their employers for their visas and who earn lower than average wages would participate in such a survey, says Hira. "The [Lucas-Mithas] report may be able to control for some additional factors that affect wages, but there is no doubting the USCIS characteristics data," says Hira. "It is a census, not a sample."

The professors are sticking to their guns, but come on. When you publish research that turns conventional wisdom on its head, you need to do a much better job of validating your data.


Lucas and Mithas got a lot of press as a result of their controversial report. That may be good for their careers in academia, where the pressure to maintain a high research profile is intense. But it's as if they went on a hunt for data to back a pre-ordained conclusion, and they settled for the best they could find. Their report is a disservice to the H-1B discussion.