This makes me want to punch the screen. It is ILLEGAL to pay an engineer on an H-1B less than the median salary for that position, precisely because people were worried that foreign labour would be used to undercut wages.
By 'that position' do you mean the position being replaced, or the new position created in order to hire the H1B? And are you taking account of the market price of the additional skills that employee brings, or is that not relevant?
So here's just one loophole: companies find a lower-paid title, and base the 'prevailing wage' on beginning level employees. Now that the 'prevailing wage' is set, try to hire young people with advanced education, special skills, etc. Congratulations, you now have a legal way of paying about half of what a comparably experienced citizen would cost. Bonus: sponsorship does provide good leverage.
Consider H1B employees getting paid the prevailing wage. Is this how you compensate the best talent during a talent shortage? No. It implies you'd pay less if you were confident you could get away with it.
You can't honestly dispute that the program is being used to undercut wages. Legally.
I arrived in this country on an H-1B, and then I co-founded a company where I repeatedly examined the option of hiring employees on H-1Bs. It never, ever made sense to hire a foreign employee if there was a local one available, even though I have absolutely no bias towards hiring American citizens.
The only reason you'd hire an H-1B is if you were out of qualified American engineers, because it is so much harder to hire foreigners.
The chief users of H-1Bs are big, boring companies that can't attract local talent at any price. And then they can't hang on to them, thanks to the American Competitiveness in the 21st Century act, which lets H-1B holders switch companies if they get a better offer. The purpose of the law was to prevent companies using immigration status to "trap" employees at lower wage. Because the immigration system thought of that problem.
The argument that for the same price, you get a more-qualified applicant for a given lower-skilled position doesn't fly, because
a) the cost of an H-1B is far more than their salary; the legal fees run into tens of thousands of dollars before you even consider relocation. Foreign workers are much more expensive.
b) the pool of people willing to up and relocate from a foreign country to the US just isn't that big; the same market that applies to American engineers applies to foreign ones, and they are just as demanding.
c) once in America, the H-1B holders don't need to stick around if their salary is crappy, and they don't. See above.
The fundamental misunderstanding that a lot of people have about talent immigration is that they think there are hordes of unwashed foreigners beating down the doors to get in. They're not. Most people stay where they are. That's why you have to make it easier for them to get in, because we need them more than they need us.
Rank H1B Visa Sponsor Number of LCA * Average Salary
1 Infosys Limited 15,810 $75,062
2 Wipro 7,178 $76,920
3 Tata Consultancy Services 6,732 $64,350
4 IBM 6,190 $82,630
http://www.myvisajobs.com/Reports/2013-H1B-Visa-Sponsor.aspx
Those aren't average salaries for a highly skilled worker in an expensive American city.
In the CNN article, it is mentioned that the most requested position is for "computer systems analyst" which "is also a lower-paying job compared to jobs like software engineer and requires only a two-year degree." It is quite possible that some of those analysts are over-qualified for their jobs and should be making software engineer or senior engineer money.
The Government Acountability Office wrote up a report about 2.5 years ago [1] that does mention limited oversight (page 3). The text:
"Elements of the H-1B program that could serve as worker protections
such as the requirement to pay prevailing wages, the visa’s
temporary status, and the cap itself are weakened by
several factors."
If a company currently pays 100K for a senior software engineer, the median for the position is 100K, and the 90%ile for the industy is 180, is the company obligated to pay 180K to an H1B for this role?
My understanding is that it is not, that 100K would meet the prevailing wage requirements.
Prior to getting an H1-B employee the employer would be required to register a minimum number of employees that will be a peer of the new employee (no bosses or anyone else that may be in cahoots). After 6 months, the government agency responsible for such visas would send a survey to those peers asking them for their title and salary and stating the title and salary of the H1-B employee. They are then asked to rank the title and salary of the employee against their own as well as the skills of the employee relative to their own.