That's the mark of a successful market system: negative feedback loops so that the more out of equilibrium the system gets, the more incentive there is to bring it back into equilibrium.
I'd rather see the caps disappear too, but changing from a lottery to an auction seems politically achievable (particularly since it helps Apple/Google/Facebook, all of which have strong lobbying arms, while hurting TCS/Infosys/Wipro, who most Americans would be happy to see disappear), while declaring open-season on tech immigration would engender strong resistance from people who have nothing to do with tech.
My girlfriend has a PhD from an ivy league university, and even she didn't get an H1-B!
That would be a great compromise. Ph. D.'s instead of high school grads is a good trade. But it was lost among the politics of higher profile illegal alien amnesty negotiations. And then the amnesty didn't go anywhere either.
I think Trump may have mentioned this compromise at the last debate -- even he liked it.
This American Life had a good show about a DV winner from Somalia:
http://www.thisamericanlife.org/radio-archives/episode/560/a...
Except the job market isn't limited to immigrants, and not all immigrants are equal in quality. The bottom isn't zero, it's the average wage for U.S. citizens, because otherwise you'll drive down the wages for U.S. citizens.
You will get H1B shops opening in remote, rural locations and then using the immigrants to consult in other, more expensive locations. The goal is to get qualified immigrants to work directly for companies at those company locations.
Speaking as a tech worker in Silicon Valley, I don't care. Everybody who works in tech here makes enough; indeed, one of the reasons why the cost-of-living is so high is because there's broad-based prosperity among techies that drives up the cost of basic necessities like housing. If tech salaries fell, that would actually put less pressure on the non-tech population here, who are the ones who are really hurting.
It'd be far less disruptive than the current system, which puts that pressure on software engineers working for big companies in say, Minneapolis, where the average software engineer salary isn't much more than the general population.
Maybe your employer values you, but I'm guessing someone can do your job for less, especially if there is a H1B visa value added to it.
The whole problem is that H1B shops are gaming the system, and with a national auction, it gives them more leeway to game it further.
That's the ideal benefit. Skilled Americans should be employed when available and their salaries should be high and rising. The more incentives not to use H1-Bs, the better.
The ostensive goal of the program is to provide workers with skills that aren't available in the USA. If they really aren't available, a few disincentives aren't going to slow them down, but we know that a large majority of applications are fraudulent. They exist to replace American jobs with low paid indentured foreign labor. There's no good reason to promote that.
That's not how people are hired in exceptional circumstances, as is the stated intention of the H1-B law. That IS how people are hired for outsourcing body shops, which should not survive this change.
The H1B chop shops are typically hiring just for the lottery that happens once a year.
All employers will be incentivized not to sponsor H1B visas because it will become a bidding war. It's not a 1-day event - most of the sponsored immigrants have been already working for the employer for months through temporary OPT or CPT.
The solution is to finally open up more H1B visa seats and do away with the lottery system. To be approved for the visa the immigrant already needs to be making the same or greater than the average U.S. citizen salary in the same area anyways.
Edit: The problem with a bidding war isn't the price as many of you are thinking, it's the volatility. Employers are setting these wages when they hire immigrants many months in advance, and they won't do it if there is a risk they will be outbid later.