THE H-1B WAGE GAP

THE OUTSOURCING PIPELINE: WHO PROFITS MOST

Nearly 75% of H-1B hires are outside the Top 25 firms, and the wage gap for those firms is -18.3%. Firms that hired just one H-1B worker show a gap of -19.7%. Underpayment is systemic – not limited to a few bad actors.

CONCENTRATED IN HIGH-TECH, BUT UNDERPAYMENT IS UNIVERSAL

Software Developers alone account for 38.3% of all H-1B employment. Nearly half the H-1B workforce is in a single industry: Computer Systems Design. Over 43% of H-1B workers concentrate in just five metro areas (vs. 15% of Americans). Before adjusting for these differences, H-1B workers appear to earn more than Americans – a 20-percentage-point reversal once location, occupation, and industry are accounted for.

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 (noncompete agreements) shows they reduce wages by 4–14%.

BATTLE-TESTED: CONFIRMED ACROSS METHODS AND DATA SOURCES

The revised study addressed two published critiques and strengthened its methodology with proper inflation adjustment, better geographic controls, industry fixed effects, and a private-sector baseline. The CPS independently confirms the same -15.5% gap. An alternative “likely H-1B” identification method in survey data confirms a gap exceeding -12%. The job seniority bias – comparing new H-1B hires to experienced Americans – accounts for only 2.9 percentage points, leaving a “true” gap of approximately 12.6%.

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

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. This finding has been revised, stress-tested, and confirmed: employers would pay well over $100,000 per visa and still hire – proving the program is driven by cost savings, not genuine need.

You can read the study here.