Foreign‐Born Engineers and Scientists Don’t Undercut Wages: They Earn More

Contrary to the conventional wisdom, new research demonstrates that foreign‐born scientists and engineers in Silicon Valley and elsewhere do not increase unemployment for natives and actually earn more than their American‐born counterparts. That undermines the key premise of restrictive legislation by Senator Alan Simpson, who has asserted that immigrant professionals work for one‐third less pay just so they can get a green card.

The research findings I uncovered for a recent study onemployment‐base immigration do not mean the foreign‐born are takinghigh‐paying jobs from Americans or doing well at the expense ofthe native‐born. The number of jobs available in the U.S. economyis not a fixed number, nor is the amount of compensation paid to workers static and fixed. Both grow basedon several factors, including labor force growth, technology,education, entrepreneurship and research and development.

No correlation exists between a high percentage offoreign‐born PhDs working in a field and a high unemployment rate withinthat field. Engineering and computer science have the highestconcentration of foreign‐born in any PhD field, yet haveunemployment rates of only 1.7 percent and 1.0 percent.

Geosciences and the social sciences have a low percentage offoreign‐born PhDs, and the unemployment rates in those fields are2.2 percent and 2.8 percent respectively.

Even more significant is what analyzing unpublished dataobtained from the National Academy of Sciences and National ScienceFoundation reveals. The data show that foreign‐born engineers andscientists earn higher salaries than their native‐born counterpartswho completed their Ph.D.s and master’s degrees in the same year.This is clear evidence that the foreign‐born are not bidding down wagerates by being willing to work for less than the native-born,since, on balance, the foreign‐born are paid more.

According to the data, the annual median earnings offoreign‐born engineers and scientists are $1,100 more than those ofthe native‐born one to five years after completing their master’sdegrees, $2,000 more 11 to 15 years after, and $4,000 more 16 to20 years after.

At the Ph.D. level, the data are even stronger (see table).Foreign-born Ph.D. scientists and engineers one to six years outof school earn $44,000 compared to $40,000 earned by thenative‐born. The gap between the two groups increases untilreaching a $10,000 foreign‐born advantage for those 16 to 20years after having received a Ph.D.

The data measures people who completed their degrees in thesame year, which is crucial, since, all things being equal, anindividual 15 years in the field will earn more than someonerelatively new. Other things held constant, one would expect tofind that immigrants are paid less than the native‐born because ofthe obvious advantage of the native‐born in language and culture.

Wages are a function of productivity. We can only concludethen from the data that the foreign‐born who work in America areexceptionally productive.

1993 Median Salaries of U.S. Recipients of Ph.D.s in
Science and Engineering: Foreign‐Born vs. Native‐Born

Years Since Earning Degree	Foreign‐Born	Native‐Born
1 – 5 years since degree	$44,400	$40,000
6 – 10 years	$55,400	$49,200
11 – 15 years	$64,000	$56,000
16 – 20 years	$70,000	$60,000
21 years or more	$70,200	$68,000
Source: Unpublished National Science Foundationtabulation of the 1993 Survey of Doctoral Recipients and the 1993 NationalSurvey of College Graduates. Foreign‐Born includes naturalized U.S.citizens, permanent residents and workers on temporary visas(including H‑1B visas).

Research and development would fly offshore if immigrationrestrictions prevented high tech companies from hiring the peoplewho contribute to America’s next generation of products andinnovations. In fact, 28 percent of Ph.D.s involved in researchand development in the U.S. are immigrants. How would the UnitedStates be stronger if instead these highly educated people wentto work for our competitors overseas?

Can we find stories of people being exploited because they areimmigrants? Undoubtedly, but there is no evidence this iswidespreadin the science and engineering fields. Pay scales at companies donot differentiate by national origin or immigration status; theyare established through examining an individual’s merit,experience and education.

The issue of whether foreign‐born engineers are paid less thanAmerican‐born engineers is best summed up by Ehud Yuhjtman, anIsraeli‐born engineer at Santa Clara‐based Chip Express, whooften interviews prospective hires. “You cannot payforeign‐born engineers less. These are smart people, if you tryto fool with them, then they will go someplace else.”