IMHO that is why the wages are lower - would you give your employee a raise if you knew that he had absolutely no way to quit your lousy job for something better?
Incorrect. You can transfer your H1-B quite easily. However you can't transfer an L1-B (intra-company transfer from a foreign country). But even in that case, you can apply for an H1-B while you are in US and then change jobs once you have received your H1-B.
Also, all the H1-B holders I know get very good salary - often higher than 'the market'. When you leave your home, get a visa and come to work half-a-world away, you are not going to dick around. You are going to do everything you can to maximize what you came here for.
The H1Bs who work at Google probably get paid a pretty decent wage (though even then, the restrictions on how and where they can work, as well as the difficult in changing professions, probably does still drag down wages relative to what they would earn if they were totally free agents).
The H1Bs at the body shops are often paid miserable wages, and these visas are used without question to fire Americans and replace them with foreign nationals. Keep in mind that 7 of the top 10 users of the H1B visa are actually Indian Outsourcing companies.
Here's a link to the story about the usage of H1B (the link is msnbc, but the original story was on businessweek) http://www.msnbc.msn.com/id/17048048/
Here's a link to an NPR segment
http://www.npr.org/templates/story/story.php?storyId=1424156...
According to Ron Hira (from the NPR) link:
"infosys was certified by the department of labor meeting the prevailing wage requirement to bring 100 computer programmers in at $9.15 an hour. HCL America got 75 programmers at $24,000 a year."
The real debate is how prevalent the two camps are - Microsoft and Google insist that the H1Bs are exceptional engineers who couldn't be found "at any price" in the US, and who create huge amounts of wealth. They would tend to claim that the abuses are minor, the kind of thing that happens in any complex system.
Opponents, on the other hand, tend to say that the abuses are widespread, and that very talented engineers are a small minority of the H1B workers.
For the record - I believe that talented engineers from overseas are exceptionally valuable to the US and should be allowed in without all the indentured crap. However, I believe that recent evidence demonstrates that the abuses are extremely widespread, and that the H1B has greatly reduced the appeal of engineering careers at a time when the US desperately needs to ensure a steady supply from within its own population.
In fact, the INS would check that the green card applicants were getting paid market wages. When an employee reached that point in the process, his salary was actually increased as appropriate. But for those of us that had no such immigration issues, we never got such an upward adjustment.
(Things may have changed since then. That was the early '90s, the time of a big downturn in the industry)
I got paid a little extra to do technical interviews for this purpose. A green card applicant had to prove that there were no available US citizens that could do the job, so we'd run an ad in the Times, soliciting applicants for that job. I would then give them technical interviews so difficult that they couldn't pass, thus proving that our employee was the only one qualified.
However changing jobs does slow down your Green Card process as some of the paper work has to be redone when you join a new company.