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That's the stereotype. As a former H1B holder myself I can say that I never experienced it.

That said, if your employer sponsors you for a green card while you're on an H1B you are quite trapped in your job, and I wouldn't be surprised if people found their wages not rising as much as they would have otherwise.

Because those people don't understand that the "lower salary" H1B people come from consulting sweatshops like Tata.

IBM pays H1Bs dramatically less than their peer companies, and recruits far more H1Bs.. They're terrible;

http://i.imgur.com/hkKLLR2.png

In my experience H1B employees are paid less because those in hiring positions know they can offer less.