The H-1B Prevailing Wage is Substantially Below the Median Wage of U.S. Workers

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While several bills, such as the "SKIL Act of 2006," aim to nearly double the annual H-1B quota, all such bills provide for the legal displacement of U.S. workers by underpaid foreign workers under a flawed prevailing wage provision. The H-1B "prevailing wage" is a sham that allows employers to pay H-1B workers 25% below market wages while claiming full compliance with the law.

The Programmers Guild, an organization advocating for US-based computer professionals, finds that the prevailing wage protections in pending immigration legislation, such as the "SKIL Bill," authorize corporations to pay foreign tech workers $25,000 below the wage paid to average U.S. workers in the same professions.

The General Accountability Office (GAO) reports that the Department of Labor (DOL) had approved thousands of H-1B applications, in spite of clear prevailing wage violations within the applications. But GAO did not consider whether the prevailing wages themselves were flawed. Had GAO evaluated the DOL's prevailing wages against actual U.S. wages, the number of violations might have exceeded one hundred thousand.

In the Silicon Valley, California region, the median wage in 2004 for the occupation "computer programmer" was $83,500. This median represents the wages for U.S. workers with average skills and experience. But of the 9721 LCAs (Labor Condition Applications) for H-1B computer programmer in the region in fiscal year 2005, 2877 (29%) were for a salary of $57,000 or less, and fully 8193 (84%) paid less than the median wage of $83,500.

Proponents of the H-1B program argue that H-1B workers are the "best and brightest" workers in the world, bringing specialized skills that U.S. workers lack. But if wages are an indication of value, the opposite is true: In Silicon Valley only 16% of H-1B workers are earning at least what an average American programmer earns, and this ratio holds across the U.S.

In Fiscal Year 2005 the Department of Labor certified that H-1B computer programmers in Silicon Valley earning as low as $40,000 per year, and these wages were found to be in compliance with prevailing wage requirements by both the DOL and the GAO.

Rather than defining "prevailing wage" as the median wage of U.S. workers within the occupational category, DOL defines four wage levels. For San Jose this scale is:

Level 1 wage: $57,762 year

Level 2 wage: $72,800 year

Level 3 wage: $87,838 year

Level 4 wage: $102,877 year

DOL further specifies that this occupation is in "O*Net JobZone 4" and requires a Bachelor's degree.


The 2004 O*Net wage details for Computer Programmer are found by going to the following link and then scrolling to the bottom and selecting "California" and then "San Jose" in "Wages by Metropolitan areas." The result is a normalized wage distribution for computer programmers in Silicon Valley:

10th Percentile: $53,700

25th Percentile: $66,500

Median: $83,500

75th Percentile: $103,800

90th Percentile: $129,000


To casual observers everything appears to be in order: The four wage levels fall roughly within these five normal distribution points. The flaw is that DOL directs employers to use the Level One (17th percentile) wage UNLESS the requirements of the position exceed "a minimum of two to four years of work-related skill, knowledge, or experience is needed for these occupations. For example, an accountant must complete four years of college and work for several years in accounting to be considered qualified."


Thus, even if the H-1B worker possesses a PhD, if the job they are filling does not require an advanced degree, DOL directs employers to utilize Wage Level One as their prevailing wage.

The DOL wage level worksheet is here:


Step 1: Enter Wage Level 1

Step 2: If the years of experience are GREATER THAN the low-end O*NET (e.g., more than 2-4 years), add a 1, 2, or 3 as appropriate.

Step 3: If the required education is GREATER THAN a BS degree, add 1 or 2 as appropriate.

Step 4: If the job requires special skills or licensing BEYOND what the profession normally requires, add a 1 or 2 as appropriate.

Step 5: If the job includes SUPERVISORY duties, add 1.

SUM: For an average job requiring average skills and education, DOL instructs employers to use wage level 1

DOL's "prevailing wage" that is $25,000 below the wages of average-skilled U.S. workers in the same job classification is a sham. Congress, DOL, and GAO should defend how wages at the 3rd to 17th percentile of what average U.S. workers earn are "prevailing wages," or they should fix the problem within their pending H-1B legislation.

The Programmers Guild calls on Congress to set the base "Prevailing Wage" for H-1B and L-1 workers as the median wage earned by U.S. workers within the classification for the region. Currently Congress and DOL are creating a financial incentive for corporations to lay off their skilled U.S. staff and replacing them with foreign workers on H-1B and L-1 visas.


The Programmers Guild advocates for the interests of U.S. computer programmers and other tech workers. The Guild endorses Congressman Pascrell’s H.R. 4378, which would amend H-1B legislation to require employers to first recruit U.S. workers, along with other protections. See for more information.


SKIL Act of 2006 (S.2691):

Commentary on House version of SKIL Bill (H.R. 5744).

HR.4378 - Pascrell Defend the American Dream Act of 2005


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