I posted this on an earlier thread about the same thing....
Here is another nasty little secret that many do not know about. In order to get an H1-B, the person must be sponsored by the employer. In most cases these are temporary or contract workers who are employed by an Indian consulting firm or temporary firm. They are then placed on a contract or a project at a client, like AT&T or Phillips Petroleum. The Indian firm is the employer so they sponsor the indian worker, they are put up in shoddy housing with at least two persons per room, usually more. They are paid extremely low for their skill set, maybe 60% less than the prevailing wage, but they are still billed at a high rate, just less than what an American would get. Example, Indian company pays Kumar a $20/ hour rate but bills Phillips Petroleum $70 / hour for his services. The American with the degree from University of Florida has a pay rate of $55 / hour and his American consulting firm has to bill him to Phillips at $80 / hour. Phillips will take the Indian.
Why will the Indian be willing to accept such a low wage? Because he wants a green card. There is a waiting period to get one. If he leaves his current company and takes a new job at a different company his sponsorship is no longer valid, unless the original sponsor transfers the sponsorship. If he has to get a brand new sponsorship, he legally cannot be here and work until the new sponsorship is approved, it’s government so it takes a while. So he risks being deported and on top of that, the waiting period for his green card resets to the current sponsorship. The Indian companies will NOT transfer a sponsorship and all the Indians know this. I have also heard that in many instances, the Indian company will hold onto the Indian worker’s passport. As a result, they are basically indentured servants and will put up with it until they get their green card. Once they get their green card, they want that very same $55 / hour rate that they originally kept an American from getting. I deal with the Indian firms every day, day in and day out...