I've come to the conclusion that the H1B operates in two parallel universes that have almost nothing to do with each other. On one side, you have companies like Apple and Google, trying to hire very talented people, often graduates of top American universities. They see it as absurd that the US would keep these workers out, and they have a point. I also believe that these companies treat their H1B workers more or less the same way they treat their US Citizen workers. There is a slight difference, of course, in that the greater restrictions on mobility do have an influence on wage negotiations and so forth, even when both parties are acting in "good faith." But all in all, when you look at this first universe, you wonder why people are complaining about the visa - in fact, it's so baffling that you start to wonder if the complainers are just "xenophobes".

On the other extreme, you have extremely abusive "body shops" where employers think nothing of threatening to revoke a visa to manipulate a worker. I think that many people who work for the first universe were a little shocked to discover that the biggest recipients of the H1B visa are generally overseas outsourcing companies.

http://www.businessweek.com/table/08/0305_h1b.htm

If you're interested in reading more about serious abuses of the system, I'd recommend reading some of Ron Hira's work (a public policy professor at Rochester) - he did an interview on NPR a while back where he discussed some of the really outrageous cases (some H1B recipients were paid less than $9/hr and met the "prevailing wage" requirement... how on earth can this be happening with a visa designed to remedy shortages of "critical, highly skilled and educated workers"? And how is it that google is running out of visas when we're allocating them to companies paying such low wages!)

It's fubar. The US badly needs a solution, but there are so many competing interests that it's difficult to find a common ground. There is some outright xenophobia. There are people who don't really like immigration, and want to limit it wherever they can. There are companies that want to lay off their entire IT department and replace it with non-citizen workers who can't negotiate their wages. There are engineers who feel positive about immigration in general but resent a specific program specifically brings in more engineer, on the grounds that there is no greater a "shortage" in engineering than any other field, at least when you consider wage growth. There are people who support very liberal immigration policies and figure more is better. There are people who think it's crazy to tell graduates of top STEM programs that they aren't allowed to stay. Some people say that we should staple a green card to every graduate degree in a STEM field (but interesting, not to every law degree or MBA, degrees that are more popular with Americans...)

Unfortunately, the result is stalemate and a program that nobody likes, but everyone uses, because how else are you going to do this You work with the system you have.

My own opinion is that we should make every effort to keep and attract top talent to the US in all fields, but we also need to be aware that the market distortions of visas targeting specific types of workers can, if we're not careful, end up deterring Americans from entering specific fields (creating a self-enforcing cycle of "shortages"). I think we can balance this with good legislation (and the countries that "solve" it will have a big competitive advantage over everyone else), but it's a tall order considering the many angry and conflicting interests around this issue.