I'm in the industry, and I have not observed this. Software people get the same rates here, whether they are foreign nationals or domestic citizens.
I think it means companies can hire engineers from India or Russia who remain in India or Russia for 1/3 of the cost of a US worker.
I should add that during the past few years, companies are returning to the US to manufacture goods (or at least part of the assembly). The supply chain was getting to long and costly (contacts, monitoring workers in China and so forth).
I don't disagree, Laz, but you tell only part of the story.
The surplus of foreign labor in software engineering has put a ceiling of around $90,000 on above average code writers.
Adjusted for inflation, their pay level has gone up less than 1% per year since 2000, quite odd, since they are allegedly so hard to find.
Another issue - USA college students.
American kids may be lazy, but they aren't stupid.
Why would an above average American student major in software engineering when his pay will cap out in 7 years, and some kid from India will take his job away in 15 years?
Yes that is the truth in most places, but no one seems to wan to hear it.
I was in India recently and you can’t travel a mile without seeing an engineering school. The problem is they have very little domestic demand, quality of the fly-by-night schools is questionable, and engineering is the only way up most Indians see for themselves.