Compensation for H1Bs includes potential American citizenship. Depending where you're from, this can be worth a lot. Therefore these employees will still accept much lower pay from the employer for similar work
Since the big chunk of H1Bs are for people from India and China, Citizenship through employment is almost impossible for most of them, especially those born in India. This link explains the why and how very well http://7monthsvs70years.siia.us
People born elsewhere (other than China, India, Philippines) and are here on an H1b, are better off in terms of chances of getting a Green Card and a citizenship in a decent amount of time.
The reason is that U.S. Immigration laws only allocate 14% of annual quota to employment-based (EB) petition. The majority go to family-based (FB) petitions. Indian have a much higher EB/FB ratios, whereas Chinese have many more FB petitioners, e.g. cross-ethnicity marriages. Chinese also have one more eligible category than Indians---green card for asylees.
Ethnicities/nationalities like Mexicans have negligible skilled EB immigrants and have a much higher reliance on FB to immigrate a whole family to the U.S. (oftentimes derisively called out by Republicans as chain immigration), and thus they face longer FB backlog compared with Chinese FBs and Indian FBs. For example, as of today, the backlog for an Unmarried Child of an Mexican immigrant is 21 years, whereas that of Indians and Chinese are 7. (https://travel.state.gov/content/visas/en/law-and-policy/bul...) The priority date for a skilled Mexican immigrant programmer, who would be filing for either EB2 or EB3, is current (no backlog).
Since the system is heavily family-oriented, EBs often found themselves in very awkward positions as either the scape-goat for America's economic problems or distractions among partisan fights. A lot of things do not make sense. For example, the spouse of an EB petitioner does not count as "family-based" but takes up one more EB slot, and their school-age children, despite not being employed for work, are counted as "employment-based" immigrants. In addition, to offset the number of green cards given out to Chinese nationals after the 1989 Tian'anmen Square Massacre, a number of greencards are deducted from Chinese EB quota. Just making small changes to these two issues can ompletely eliminate Chinese backlog and greatly shorten Indian backlog. However, the politicians couldn't care any less about sensible solutions. While Democrats typically only pay the lip service, Republicans' common tactic is to hide their anti-immigration attempt behind a big banner of pro-skilled immigrants. The Rs either will try to trade the EBs with zeroing out refugee quota or slashing FBs in half, for example. They may have a good point (U.S. admits more refugees than employment-based immigrants annually), but touching that hot-button issue will never get Democratic votes, and it beginning to increasingly look like Republicans' political show vote.
A point to be noted, is that the arbitrary per country cap for EB green cards, was added in the last 30 years, to surreptitiously add a subtle anti-Asian bias, to reduce the number of Chinese immigrants entering US. Looks like Indian and Philippine citizens are caught in the cross fire now.
If you speak to high skilled immigrants in US who understand the situation, you'll see them being equally highly frustrated with the Democrats and the Republicans, and their respective supporters. Everything seems to be so focussed on DACA and illegal immigrants, that the legal ones are left in limbo.
Though to paraphrase what you're saying, if we just forget about all other petition types (sounds like they're not interrelated anyway, at least on the supply side), it still means India has ~10x the amount of EB seekers vs China. That's surprising fact stands on its own.
Because I think (not sure) many Chinese grad students are required to go back to China because their govt funded their studies or because they have a tech industry that’s leap frogging in terms of latest tech or have access to EB-5 visa or move to Canada.
Compare that to the number of immigrants from India, most of them use up family’s life savings to study in the US and try to recover from working in US. Unlike students from other countries, who can apply for a green card when they are studying (by getting a willing employer through their connections), can get their work authorization and Green Card itself before their 3 yr OPT expires.
Which means, there’s mostly people from backlogged countries, applying for h1b visas!
That means, there’ll be some %age of applicants who are willing to get treated like slaves by the employer, and these are the employees who have poisoned the basket of apples. And USCIS is looking at the basket very suspiciously.
People born elsewhere (other than China, India, Philippines) and are here on an H1b, are better off in terms of chances of getting a Green Card and a citizenship in a decent amount of time.