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I feels like, with most policy things, it’s just under-regulated and easily abused. The tossing out of misused and underdeveloped policy and programs instead of fixing it is getting so fucking tiring. Have an imagination, it’ll do us all some good.
It is actually just a terrible system. H1B visas are tied to employment and specific positions so the recipients of them are denied labor bargaining power. Skill based immigration that isn't employer tied is much more fair to both the immigrant and citizens around them.
So it's less that H1B is bad because loopholes and exploits and more that it's just a deeply flawed idea from the get-go.
It was designed to be exploited. If companies cannot actually find local talent (in coding, for example: LOL, not buying that for one minute, having seen way too much of this nonsense over the decades) then, by all means, we should be making permanent immigration options here much easier, expedited, etc....and the individual should not be tied to the company in any way whatsoever.
Oddly enough, this is not the situation these poor companies lobby the government for, though.
H1-B exists to solve an imaginary problem of skills shortages among US engineers and programmers. The reality in the vast percentage of cases is that employers want skills that Americans have, at wages that Americans refuse to accept. That essential part of the program cannot be reformed, since it's based on a lie. The remaining very small percent of positions where a bona fide skills shortage exists could be reformed by breaking the tie between the sponsoring employer and the visa, allowing the H1-B holder to change jobs to one where they're paid a market rate. That would at least eliminate the use of H1-B holders as scab labor.
Source: I was a hiring manager in the software industry who recruited dozens of H1-B holders, and know all the scams and evasions used to "prove" that no suitable local candidate could be found.