During the election campaign candidate Trump won support from the electorate by promising to bring back job sot America. Now, US President Donald Trump’s order for a comprehensive review of the H-1B visa program could well be based on wrong data.
A controversy raged in the US for months about low-paid H-1B visa holders, mainly tech workers hired by Indian companies, taking away American jobs. During the background briefing on Trump’s ‘Buy American, Hire American’ executive order, a Trump administration official had said that about 80 per cent of H-1B workers were paid less than the median wage in the sector.
Foreigners on H-1B visa who are paid less-than-median American salary provide cost advantage to employers who do not prefer American workers for same jobs. This leads to Americans losing their jobs to foreigners.
But a study by an American think-tank – National Foundation for American Policy (NFAP) – claims there are too few low-paid H-1B workers in the first place by disputing the US government data which shows most workers on H-1B visas are paid less than the median wages in the sector.
According to the NFAP study, the data had wrongly counted more low-paid H1B visa workers than there actually are. “This statistic is misleading as it relies on a Department of Labor database that includes multiple applications for the same individuals since a new filing is generally required when an H-1B professional moves to a new area,” it says. Since mostly younger workers, who are paid less, are sent to multiple offices, they are counted double or triple. This skews the numbers towards lower-paid H-1B workers.
The NFAP study says the data that creates the impression that 80% of could be wrong on another count-understating of salaries by employers. “It may not reflect what employers actually pay individual workers, only the minimum required to be listed for government filing purposes,” says the study. “The wages listed in the DOL database are generally only the minimum that a company is required to pay under the law. Employers are required to pay the higher of the prevailing wage or actual wage paid to all other individuals with similar experience and qualifications for the specific employment in question. That means wages listed in the DOL database typically understate an individual H-1B visa holder’s actual salary,” says the study.
So, the huge number-80%-of H-1B workers being paid less than the median wage is actually a result of double or triple counting and understating of their salaries by employers. If what the NFAP study says is true, then the whole case of low-paid foreign workers taking away jobs of Americans collapses. It would mean the decision of the Trump administration to review the H-1B visa programme is an attempt to fix a problem that does not exist but can end up damaging the US tech sector which requires foreign talent.