A new study warns that proposed wage mandates for H-1B visa holders could make it harder for US companies to hire skilled foreign workers, particularly scientists and engineers. The research, conducted by the National Foundation for American Policy (NFAP), highlights concern over a proposal that would require employers to pay H-1B professionals significantly above current market rates.
Potential impact of wage hikes:
The proposed wage changes, including a requirement to pay at least the “median local wage,” could price many skilled foreign graduates out of the job market. The report suggests that instead of creating more opportunities for U.S. workers, the mandates could push companies to move jobs offshore.
A recent amendment by Senator. Bernie Sanders to the Laken Riley Act will result in raising wages for H-1B workers by as much as 72% in some cases. For example, a newly graduated software developer in San Jose would have needed to be paid over $80,000 more per year than under current law. The Senate did not vote on the amendment, but similar measures could be debated as Congress considers immigration reforms.
Concerns for employers and workers:
NFAP argues that the “median local wage” does not reflect real-world pay structures, especially for entry-level workers. In many professions, median wages are based on individuals with over a decade of experience. Requiring employers to pay such rates to all H-1B workers could make it financially unfeasible to hire recent graduates or early-career professionals.
NFAP notes that about 70% of full-time graduate students in fields like electrical engineering and computer science at U.S. universities are international students. The research suggests that proposed amendments on wages which would make hiring challenging would drive away top talent and weaken the US workforce in key industries, such as artificial intelligence and semiconductor engineering.
The study also raises fairness concerns, suggesting that requiring employers to pay foreign-born recent graduates significantly more than U.S. workers with greater experience could lead to legal challenges.
Policy challenges:
Similar wage mandates proposed during the earlier Trump administration were struck down in court for violating administrative rules. NFAP warns that if Congress moves forward with new wage mandates, it could have similar negative effects, including fewer job opportunities for skilled foreign graduates and increased outsourcing by U.S. companies.
As discussions on immigration reform continue, policymakers will have to weigh the impact of wage mandates on employers, workers, and the broader economy. The NFAP study suggests that imposing inflated wage requirements on H-1B visa holders could do more harm than good, potentially weakening the US position as a global leader in technology and innovation.