THE H-1B WAGE GAP

February 13, 2026

author Published by Joe Jenkins

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The H-1B Wage Gap

THE H-1B WAGE GAP

How the H-1B Program Undercuts American Workers

Source: George J. Borjas, NBER Working Paper No. 34793 (February 2026)

KEY FINDING

H-1B workers earn 16% less than comparable American workers – a gap of nearly $30,900 per year – generating approximately $100,000 in payroll savings per hire over a six-year visa term. This is after controlling for education, age, gender, occupation, and location.

THE OUTSOURCING PIPELINE: WHO BENEFITS MOST

75% of H-1B hires are outside the Top 25 firms, and the wage gap for those firms is -18.5%. Firms hiring just one H-1B worker show a gap of -22.2%. Underpayment is systemic – not limited to a few bad actors.

Firm	Avg. H-1B Salary	Wage Gap vs. Americans
Tech Mahindra	$86,600	-34.8%
HCL	$86,800	-32.2%
Wipro	$78,900	-26.8%
Capgemini	$97,600	-21.1%
Infosys	$82,700	-13.7%
Tata Consultancy	$83,600	-11.5%
All Other Firms (75% of hires)	$97,900	-18.5%

AMERICAN STEM WORKERS HIT HARDEST

Occupation	% of H-1Bs	Avg. Native Pay	Wage Gap
Software Developers	38.3%	$146,900	-29.8%
Computer Programmers	2.9%	$109,500	-30.0%
Financial/Investment Analysts	1.8%	$130,700	-40.0%
Mechanical Engineers	2.2%	$104,000	-22.7%
Electrical/Electronics Engineers	3.0%	$113,100	-14.0%

A CAPTIVE WORKFORCE: RESTRICTED MOBILITY DEPRESSES WAGES

H-1B workers change jobs at just 9.4% annually, compared to 20–25% for comparable American workers. This restricted mobility gives employers market power to suppress wages. Research on similar contractual restrictions shows they reduce wages by 4–14%.

THE PREVAILING WAGE DECEPTION

Employers classify 80%+ of H-1B workers below the median prevailing wage level. But actual skill analysis reveals nearly 75% are above the median of the native skill distribution. Amazon classified 61% of its H-1B workers at the lowest wage level; Microsoft classified 53% there. The system designed to protect American workers is being systematically gamed to justify lower pay.

THE FEE TEST: IT’S ABOUT CHEAP LABOR, NOT TALENT

If employers truly couldn’t find qualified Americans, a fee would eliminate demand. Instead:

At a $100,000 fee: 47–64% of H-1B workers would still be hired
Revenue-maximizing fee: $118,000–$264,000 per visa
Annual revenue generated: $6.2–$22.4 billion
Impact on visa usage: All or nearly all 85,000 visas would still be used

THE BOTTOM LINE

The H-1B program is not filling a talent gap – it is providing a captive, underpaid workforce that depresses wages for American workers in high-skill occupations. The program transfers wealth from American workers to employers: firms pocket the savings while comparable Americans earn less or are displaced entirely. Software developers alone face a 30% wage disadvantage when competing against H-1B hires. Employers would pay $200,000+ per visa and still hire – proving the program is driven by cost savings, not genuine need.

You can read the study here.

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