> skilled labor does not want to live in rural and middle America.

I'm unsure about this, and think it's kind of a chicken and the egg problem. I know tons of people who are from the midwest that would prefer to be there, but tend to flock to the coast simply because it's hard to find as rigorous of a professional environment back home.

It's not a chicken and egg problem. Cities are much more efficient for labor and companies. You have a larger pool of talent, a larger pool of freshly educated replacements for those who retire or leave, and often more services available for said talent.

Edit: Now that I'm thinking about it a little more I can maybe sympathize a little bit. I prefer to live in rural areas in some ways due to my hobbies, but I'm never going to as the economics of a tech company, or even a company that needs skilled, educated workers makes no sense in rural areas. So there's something to the want vs. choice angle, but what one fantasizes about has little to do with economic realities. Plenty of people want high paying low skilled manufacturing jobs to be a thing again, that doesn't mean it's realistically going to happen.

Another factor is the 2-body problem. If most of the workers are looking for a city with enough jobs for two different careers, then that's where employers will need to be to hire them.

I don't disagree with what you're saying, but one thing about less dense areas including parts of the midwest is you can commute from rural areas into the downtown of a city in under an hour (where these are parts of metro areas that can contain over 2 million people).

I'm not suggesting that a headquarters needs to be in these smaller cities either, but often times right now, there isn't even a satellite office with any engineering.

s/want/choose/ in the original, I think.

That's an entirely different problem, and switching H1B to an auction will only exasperate it without solving the task that H1B is intended to solve.