Why Is the H1-B Pay US Worker Displacement Threshold Set so Low?

Executive Summary

  • H1-B visa recipients are supposed to be people “who are of distinguished merit and ability.”
  • If so, why is the compensation US worker displacement loophole set so low?


This is the original intent of the H1-B visa program was the following:

Several different types of visas were established, including a H-1 visa for “an alien having a residence in a foreign country which he has no intention of abandoning who is of distinguished merit and ability and who is coming temporarily to the United States to perform temporary services of an exceptional nature requiring such merit and ability.”[73] The term “distinguished merit and ability” was not new to United States immigration law; it had previously been used as a qualification for musicians and artists who had wanted to enter the United States. – Wikipedia

H1-B Worker Can Displace US Domestic Workers if The Minimum Pay Level $60,000

This quotation is telling.

For example, federal law requires global companies employing large numbers of H-1B workers to sign a declaration saying they will not displace Americans.(emphasis added)

But there is a loophole: An exemption cancels that requirement if employers pay H-1B workers at least $60,000 a year — significantly less than an experienced technology worker’s salary in many parts of the country. – New York Times

If an H1-B visa holder is only being paid $60,000, how distinguished can they be?

Secondly, how can the compensation be set so low, at or above which it is ALLOWED to displace a US domestic worker? At this level, it means that the US government is essentially encouraging the displacement of US domestic workers. 

Let us move off of the minimum for a moment, because perhaps while this is the legal level H1-B employers are paying far above this.

What Is The Average Pay Level of H1-B Visa Holders

While the minimum is $60,000 allowing displacement, the average is not very much higher than this minimum as the following quotation explains.

Wage depression is a chronic complaint critics have about the H-1B program. The Department of Homeland Security annual report indicates that H-1B workers in the field of Computer Science are paid a mean salary of $75,000 annually (2014) almost 25,000 dollars below the average annual income for software developers [161] and studies have found that H-1B workers are paid significantly less than U.S. workers. – Wikipedia

This $25,000 differential goes into the pocket of the multinationals employing H1-B visas every year.

For three years from 2001 to 2003, 585,000 H1-B visa holders were brought into the US. Were all of these 585,000 individuals distinguished?

Of course not.

Depressing IT Wages

And this further has the effect of depressing wages of US domestic workers, which is not counted in the math above.

This is explained in the following quotation.

It is claimed[164][165][166][167][168][169] that the H-1B program is primarily used as a source of cheap labor. A paper by George J. Borjas for the National Bureau of Economic Research found that “a 10 percent immigration-induced increase in the supply of doctorates lowers the wage of competing workers by about 3 to 4 percent.”[170]

A 2016 study found that H-1B visas kept wages for U.S. computer scientists 2.6% to 5.1% lower, and employment in computer science for U.S. workers 6.1% to 10.8% lower, but resulted in greater production efficiency, lowered the prices of IT products, raised the output of IT products and caused substantially higher profits for IT firms.[171]   – Wikipedia


Every time we analyze another dimension of the H1-B program, we discover another falsehood or scam that is in effect. And the proponents of H1-B visa holders which include the multinationals, Indian government, US immigration attorneys always leave out the vast numbers of H1-B visa holders that are bring brought into the US, or that the pay level to displace a US domestic worker is so low. And the IT media by in large repeats whatever they say without question.