Nowadays, many companies in America hire H-1B visa holders and this visa is given to those foreign workers who come to America especially to work in technical and professional fields. These visas have become an attractive option for employing companies because they allow them to save on labor costs. However, according to a new economic study, American companies pay their H-1B employees less than their American employees, which has become a big issue.

This study was conducted by the National Bureau of Economic Research (NBER), in which salary data of lakhs of appointees was examined. According to this research, H-1B visa holders are paid approximately 16 percent less than equivalent US workers, when factors such as education, occupation, age, gender and location are adjusted.

Salary difference between H-1B visa holders and American employees

In this research paper, it was found that if the salary figures are seen without any adjustment, then H-1B workers earn about 13 percent more salary than American workers. Although this figure is about workers who work in America’s high-wage technology sectors, when job role and geographic location are taken into account, the difference reverses and H-1B workers’ wages are 16 percent lower.

This means that the pay gap increases to 29 percent, which can be a big disadvantage for H-1B visa holders. George J. Borjas, who was part of the study, told Newsweek that he was surprised to see how many companies use H-1B visas and how many hire only one or two H-1B workers. According to him, the salary difference is huge even in these companies.

Companies are saving millions of dollars for H-1B visa holders

The study also revealed that these companies save a lot on salaries for their H-1B employees every year. According to estimates, companies that hired H-1B workers saved an average of $100,000 per employee over six years, a savings that could be attractive to companies, especially if they hire large numbers of H-1B workers.

High demand for H-1B visa and pressure from companies

Every year a large number of applications come to America for H-1B visa, but the number of these visas is limited. Between 2021 and 2026, there were more than 450,000 applications every year for only 85,000 visa places. However, these companies are still struggling to get visas. The study says that companies are trying to take advantage of these visas because of these savings and this helps explain the high demand.

Employer’s profit and worker’s loss

This study has also revealed that a major reason for paying low wages to H-1B visa holder employees is that the visa holders are tied to the company. This means that an H-1B employee does not have the opportunity to easily change jobs to another company. Because of this, companies can force these employees to work at lower wages because they do not fear that the employee will change jobs quickly.

Fees for H-1B visa will increase in future

From 2027, companies seeking H-1B visas will have to pay a fee of $100,000. This policy was announced by US President Donald Trump and was aimed at preventing abuses and raising funds for immigration services. However, this research shows that the savings of the companies are so high that they can easily bear this fee, without it causing any hindrance in their getting the visa.

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Indians have been most affected by the strict steps taken by US President Donald Trump regarding the H1-B work visa program. Visa fees have been increased manifold. Amidst this tough stance of the Trump administration, billionaire businessman Elon Musk has praised Indians. He appreciated the cooperation of Indians in the development of America and also advocated continuation of the visa program.

Elon Musk, CEO of American aerospace company SpaceX, strongly supported the H1-B visa and said that America has benefited a lot from the talented people from India. He warned that it would be really bad for America if the visa program was scrapped. He said that America needs Indian workers today more than ever. Elon Musk admitted that outsourcing companies misuse the visa system. He said that this deficiency should be removed and not the visa itself should be stopped.

Elon Musk made this comment during an interview with investor and entrepreneur Nikhil Kamat on his podcast People By WTF. Musk said, ‘Yes, I think America has benefited a lot from the talented Indians who came to America… America has benefited immensely from the talent of India.’

Regarding H-1B visa, Elon Musk said that even though there has been some misuse of this work visa program, he strongly believes that it should not be stopped. He said, ‘It is right to say that… some outsourcing companies have abused the H-1B system and we need to stop this abuse, but I am not at all part of the ideology that this program should be closed. Some right wing people think so. I think they don’t understand that doing this would be really bad.

Elon Musk has said this at a time when America has started strictness on a large scale to prevent misuse of H-1B visas. American technology companies widely use this visa to employ foreigners. Indian professionals, especially technology sector workers and doctors, are among the largest groups of H-1B visa holders.

Elon Musk alleged that during the tenure of former President Joe Biden, there was large-scale illegal immigration, which created a negative impact. He said, ‘If there is a huge economic incentive to come to America illegally and get government benefits, then naturally people will try to come to America. This whole incentive structure was wrong.

When asked what is his message to the young entrepreneurs of India, Elon Musk said that he respects all those who want to create something. He said, ‘Aim to give more than what you want to get. If you want to create something valuable… provide useful products and services… then the money will come automatically.