How The H1-Bs Are Pushing Out Domestic US Workers of IT and STEM

Executive Summary

  • The numbers of H1-B workers being brought into the US are hugely underestimated in the media, and they are pushing out US domestic workers.
  • This is shown clearly, but little converted in the corporate-friendly media.


The following is public information, but it is information that neither Accenture, WiPro or any of the companies who continuously import H1-B labor, nor immigration attorneys, nor the multinationals that lobby politicians want the public to know.

What Happens to STEM Graduates?

Amazingly, domestic US graduates in STEM are not being fully deployed in STEM as the following quotations explain.

Studies carried out from the 1990s through 2011 by researchers from Columbia U, Computing Research Association (CRA), Duke U, Georgetown U, Harvard U, National Research Council of the NAS, RAND Corporation, Rochester Institute of Technology, Rutgers U, Alfred P. Sloan Foundation, Stanford U, SUNY Buffalo, UC Davis, UPenn Wharton School, Urban Institute, and U.S. Dept. of Education Office of Education Research & Improvement have reported that the U.S. has been producing sufficient numbers of able and willing STEM (Science, Technology, Engineering and Mathematics) workers, while several studies from Hal Salzman, B. Lindsay Lowell, Daniel Kuehn, Michael Teitelbaum and others have concluded that the U.S. has been employing only 30% to 50% of its newly degreed able and willing STEM workers to work in STEM fields. (emphasis added) –

A 2012 IEEE announcement of a conference on STEM education funding and job markets stated “only about half of those with under-graduate STEM degrees actually work in the STEM-related fields after college, and after 10 years, only some 8% still do.”(Emphasis Added) [159]Wikipedia

And that in total most the STEM graduates who are US citizens don’t even work in STEM!

In July 2014, the US Census Bureau reported that an astonishing “74 percent of those who have a bachelor’s degree in science, technology, engineering and math are not employed in STEM occupations” That translates to roughly 11.4 million of 15 million Americans with STEM degrees who aren’t working in STEM fields. – Sold Out

What is the Real Mismatch in STEM — The Number of Graduates in STEM or the Work Environments of STEM?

So if only 30% to 50% of the STEM graduates are employed/deployed in STEM fields then why do we keep hearing about the need for more STEM graduates?

Secondly, why does STEM does such a poor job of holding onto those that do become educated in STEM? Why do we need more US STEM graduates if after 10 years only 8% of the STEM graduates still work in the field?

It is very unlikely that more than 90% of people who put in the effort to gain degrees in STEM fields want to leave the field by the time ten years have passed. What this sounds like is that the far more significant issue is that STEM is not an appealing area of employment for US domestic workers. Not, as media presents that there are too few STEM graduates.

The following quotation emphasizes this situation.

The Communications Workers of America, which represents 700,000 men and women in the telecommunications industry, said that the committee’s immigration bill would “create preferential treatment for foreign born workers.” They also said, “We can spend millions to educate a STEM workforce but without employers willing to hire these U.S. STEM workers, our work is for naught.” – Immigration Reforms Needed to Protect Skilled American Workers (Senate testimony)

And this quotation.

A few labor market studies, notably by Richard Freeman and colleagues (2004, 2006), have focused on the quality of S&E jobs. These studies conclude that the decline in the native S&E worker pool may reflect a weakening demand, a comparative decline in S&E wages, and labor market signals to students about low relative wages in S&E occupations. Indeed, research finds that the real wages in S&E occupations declined over the past two decades and labor market indicators suggest little shortage (Espenshade 1999).

Similarly, IT executives calling for greatly increasing, or even completely removing, numerical caps on foreign worker visas (e.g. the H-1B) may be sending strong signals to students and current workers about diminished career opportunities. Human capital is a long-term investment and potential S&E students read all the tea leaves before investing. – Into the Eye of the Storm

And in fact, this was predicted, and a predictable outcome of allowing far too many foreign guest workers into STEM studies.

Salaries for engineers with advanced degrees aren’t’ high enough to justify the investment. And why is that? Because the importation of foreign guest workers with advanced degrees is suppressing wages.

This is exactly what an internal report of the National Science Foundation predicted in 1989 when it forecast a deluge of foreign doctoral students would hold salaries down–and drive American STEM bachelor’s degree holders into better-paying jobs outside of their fields of study after graduation.

This, NSF noted, would lead to a vicious cycle of American STEM PhDs seeking “alternative career paths,” or educational pursuits outside their original areas of study, leading tech companies to clamor for more foreign Ph.D. students to fill the gap they helped create. – Sold Out

Let us take a look at one field of STEM that the author has spent his career in and is quite familiar with.

The Impact of H1-Bs on STEM Fields

The impact of the H1-B program on STEM fields is that the lower pay, as well as we have proposed the general discrimination against US domestic workers by Indians and the creation of an environment hostile to US domestic workers, generally decreases the appeal of the field to domestic workers.

The H-1B visa program reduces wages, making STEM careers unattractive to American students. This effect was anticipated: A 1989 internal National Science Foundation report forecast that the H-1B program, then in the proposal stage, would result in a flood of foreign
students into U.S. doctoral programs. The report stated that this would cause wages to stagnate, driving American science, technology, engineering, and math students into finance and law–exactly what did occur.

The impact of the foreign-student and H-1B programs has been to
displace American students from STEM fields. Since the average
quality of the foreign students is lower than that of the Americans,
the result is a net loss of quality in our STEM workforce. – Dr Norm Matloff

The Problem with Employment in the Technology Field

Indian recent H1-B and current H1-B visa holders are making IT increasingly hostile to domestic workers as they target their jobs to be replaced by Indian friends and associates as we cover in the article How Indian IT Workers Discriminate Against Non-Indian Worker.

Due to the H1-B program and the H4 program that allows spouses of H1-B visa holders to apply also to work, the IT recruiting market in the US has been taken over by Indian recruiters who are hostile to US domestic workers as we cover in the article Why Dealing with Indian Recruiters is Futile for Domestic Workers.

Is it any surprise that domestic IT workers (the “T” in STEM) are being pushed out of the IT sector?

literature review by Yi Xue and Richard C. Larson of MIT found that there is and isn’t a STEM skills shortage — it depends on where you look. In the academic job market, for example, they conclude there is no noticeable shortage; in fact, there is an oversupply of PhDs competing for tenure-track faculty positions in many fields (e.g., biomedical sciences, physical sciences). But the government sector and private industry have shortages in specific areas. In the private sector, for instance, software developers, petroleum engineers, and data scientists were found to be in high demand. – The Harvard Business Review

This is also covered by Dr Norm Matloff.

No study, other than ones sponsored by the industry, has ever shown a tech labor shortage. The congressionally-commissioned NRC study failed to find one, as did a later study by the Dept. of Commerce. Note carefully that unemployment rates are not very useful, due to workers being forced to leave the field when work becomes hard to find; the former engineer now working at Radio Shack counts in the data as employed. See also the quotes below on STEM grad study and careers.

Why Are There So Many Poorly Paid STEM Senior Positions?

Something that is little discussed is how many advanced degrees in STEM lead to low pay.

“Recently, after 7 years of grad school at Vanderbilt, Earls and Westmoreland, her husband, both took postdoc positions at St. Jude Children’s Research Hospital in Memphis, Tennessee…’I … think that my family expects that now we’re making tons and tons of money because we have Ph.D.s. We don’t know how to tell them that, no, we’re [each] making less than a schoolteacher,’ Earls says” — Science Careers, April 11, 2008

What Happened to STEM Wages?

While industry complains to Congress about STEM shortages, the fact that STEM wages have stagnated is not part of their testimony. Notice the following quotation.

Real hourly wages (adjusted for inflation) grew on average just .7 percent a year from 2000 to 2012 for STEM workers, and annual wages grew even less–0.4 percent per year. Wage growth is very modest for most subcategories of engineers and technology workers. – Sold Out

Inflation is lower than the cost of living. This means that STEM wages from 2000 to 2012 were negative versus the cost of living. This is precisely what the industry wants, ever-decreasing wages. And of course, they don’t want this pointed out. If there were actual shortages, then, according to generally accepted economic theory, wages in STEM would have increased faster than the cost of living increases. However, the opposite occurred.

When Were These Studies Communicated to the Public?

We have reviewed many articles on H1-B on the web, and we have not come across these studies a single time. The narrative presented is that the H1-B program is necessary to access high skilled non-US employees. It is sporadic for the impact of H1-Bs on the domestic worker population to even be discussed. This is related to the topic of how the numbers of H1-B visa entrants to the US is minimized versus the reality as we cover in the article How the H1-B Program Understates The True Number of Yearly H1-B Visas.

These statistics are shocking, and yet to the vast majority of media entities. They cannot analyze or communicate these statistics or the reality of working in STEM fields and are satisfied with repeating the talking points of the employers — which prefer to increase the number of people studying STEM, rather than doing anything to make staying in STEM more appealing as a career.

How About Women in STEM?

The common refrain has been that STEM fields are inherently male-dominated and made unappealing to women.

However, the statistics show that STEM fields are unappealing to both sexes as the vast majority of STEM graduates leave the STEM field of employment within ten years of graduating with their degree. It may be true that even a higher percentage of women with degrees in STEM leave their STEM careers. However, with such a high percentage of overall graduates leaving their STEM careers, it would be a severe mistaken analysis only to observe that women tend to be leaving STEM. If STEM is inherently hostile to women, then why are the men leaving?

This fits into the natural bias of establishment media entities in that they are perfectly willing to cover stories that deal with the injustices against women, as this plays into the narrative of gender discrimination. However, they are unwilling to discuss the overall injustices against workers overall (this is because workers also include men), as this is inherently anti-corporate. That is establishment media entities are eager to point their finger at men, but not at corporations.

Secondly, discrimination against US domestic workers by Indian workers is also not of interest. This is because as in the eyes of the establishment media discrimination is only discriminatory if the victim is non-white. As those engaging in discrimination are not white, it does not fit their framework of discrimination. And in fact, pointing out discrimination against (predominantly) whites by non-whites is “racist.”

For discrimination or victimization to occur, the victims must be non-white males, and corporations cannot be mentioned as the entities responsible.

How Pay is Held Down in STEM by H1-Bs

Why does a PhD bring such a small percentage salary premium? As mentioned above, a group of policymakers in the federal government actually planned for this to occur. The central factor underlying the small magnitude of the salary premium in the CS case is the H-1B and related foreign-labor programs. A 1989 policy paper by Peter House, Director of the Policy and Research Analysis Division of the National Science Foundation warned of a trend of increasing PhD salaries in science and engineering, and proposed remedying this “problem” via having large enrollments of foreign students in U.S. PhD programs.301 The NSF paper not only noted that the foreign influx would hold down salaries, but also conceded that this lid on salaries would dissuade domestic students from pursuing a doctorate:

Note by the way that the influx of foreign students also holds down graduate assistantship pay, in the same manner as described for industrial pay above. This further dissuades American students from pursuing a PhD. – University of Michigan Journal of Law Reform 


H1-Bs are a primary factor that is driving domestic STEM graduates out of IT. And yet this factor is treated as if it is invisible, and the symptom is instead allocated to the shortage of STEM graduates — even though the statistics on the extraordinarily high percentage of STEM graduates that leave the field is public information.