Foreigners do have to be paid prevailing wage, but there are all sorts of loopholes.
What loopholes? Serious question…
My best friend is a H1-B visa nurse from a thirld world country. As soon as she got her green card, she petitioned her parents to come to the US. Then her parents petitioned her 5 siblings. The parents and siblings are not professionals. The parents and a few sibs are now on the dole. America is so great!
Wow, this must have taken about 20 years at the speed the INS (USCIS) lets this happen. It can take 5-10 years to get siblings to the US, and that’s if you’re a citizen already. Parents get to come quicker, but they’re considered “immediate relatives”.
In addition, the parents or siblings will not quality for “means tested benefits” until they have 40 quarters of work under their belt. The petitioner of their green cards signed a statement promising to support them them when they arrived and they are legally liable for all benefits paid, assuming they somehow cheat the system and manage to get the benefits in the first place.
The immigration system has all kinds of protections and barriers to prevent this kind of thing happening. It does a decent job, which is not to say that it couldn’t be improved.
Finally, the H1B visa is not slave labor. The salaries are reported to the government who maintain lists of salaries for given positions. You have to come within the range to get the visa in the first place.
There is no shortage of engineers in the US; in fact, many engineers are involuntarily unemployed. There IS a shortage of engineers who will work for wages as low as the H1-B workers.
I agree that the quality of the H1-B engineers seems to be as good as that of citizens (which at least in the case of software engineers isn’t very good, in my experience). But the H1-B workers are not paid the same, which I believe is mostly because they cannot switch jobs as easily as citizens.