Jeez. High skilled jobs outside software engineering pay approximately 10-20% less than software. How do you account for that in an 'auction'-based system? It is just a hard truth that unlike a software company, individual talent is proportionally less valuable in a manufacturing company, leading to lower wages (compared to software developers) for: materials scientists, chemical engineers, mechanical engineers, some electrical engineers (power systems, power electronics, etc.).

The reason for this is that a larger portion of a manufacturing company's competitive strength comes from having great manufacturing equipment, ins into markets, etc. vs. just great engineers or scientists. H1B is necessary because many of these special-skills engineers and scientists are foreigners.

This is also the same reason that hedge fund managers or doctors are paid much more than software engineers- the individual's contribution is more important than in other professions. Does this mean that hedge fund managers are more valuable to society and should be preferred over software engineers in a H1B lottery?

The problem is startups would find it hard to hire since it's hard to value equity in a visa application.

Oh well? If payment in scrip lottery tickets isn't considered good enough for minimum wage laws, I don't see why this would be any different.

You actually bring up an interesting point. A startup lures employees with promise of huge payouts in its shares. But it cannot use those offered shares in an all cash competitive war to get H1B's based solely on cash.

There's a lot of things startups can't afford. And most startups are just fine with local talent.

You do auctions for 64k and 500 for startup founders. Then you set up an extra pool of 10k for startup employees. The company has to be younger than 6 years, raise at least 1 mln from venture capital and only 30% of the workforce could be on visas. It will make pseudo startups expensive to run by outsourcing companies.

Why should there be a requirement to raise venture capital? Some founders fund their own companies and are profitable from the start.

Because the outsourcing companies would set up a pseudo startup to abuse it. The solution is to make it expensive for them.