Or, in the interests of compassion, the indentured workers.

As I've said before, H1B approval requires that employers pay more than the average wage of U.S. citizens working the same job in the same area.

The "prevailing wage" of an IT worker at these outsourcing firms (Tata, Infosys, etc) is precisely $60k. These $60k workers will replace salaried employees at many firms making twice that much.

So a company doesn't need to hire H1Bs directly. They can just setup a contract with one of these outsourcing firms to supply workers. That's precisely what Disney did when they replaced a huge number of IT employees with H1Bs.

The cap on the number of H1Bs prevents Disney from setting up their own little H1B shell corporation to perform the same function which is why they (along with many other big corporations) complain to Congress about the cap. If the cap weren't there they wouldn't need to outsource to Tata et al in order to completely screw over American workers.

Disney recently recanted their layoffs and are keeping their workers [1], and Tata and infosys are under investigation by the USDL [2].

You always have people trying to break rules, and the H1B is no different. H1B wage violators are a separate issue to the cap & lottery issue in the article, and being addressed accordingly.

[1] http://www.nytimes.com/2015/06/17/us/in-turnabout-disney-can...

[2] http://www.natlawreview.com/article/commentary-tata-consulta...

The wage violations are in no way a separate issue.

Care to elaborate?

Cap (or no cap) doesn't influence a select group of employers from breaking the H1B visa rules and being disqualified.

To support this point, in the area where I live, Tata Consultancy has been awarded H1B visas for the positions Data Warehouse Engineer with a base salary of $60,000 a year.

I work at a company where we are trying to hire a data warehouse engineer in the same geographic region. We absolutely can't hire anyone that is remotely qualified for less than $80K a year. Typically we're talking about at least $90K.

It blows my mind that the government isn't able to properly track an average wage for a profession when they have tax data coming in annually from every working American.

In theory, yes. In practice, this is worked-around pretty easily. Why do you think outsourcing companies even bother to hire lots of foreigners, if they could have just as well hired locals for less?

Because there isn't enough local talent to fill demand, which is what the H1B system addresses.

While that might be true in a few cases, in most it flatly isn't.

Correction: Local talent willing to work at lower wage rates.

Lots of laws require lots of things that, in reality, simply don't materialize.