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One company hires the programmer and the other company then gets to point to the existing market and note that there aren't any candidates for the position. The company can then hire a H1-B. If you allow H1-Bs to freely change jobs, the company can't hire the H1-B at a very low salary because the other company can fire the native and hire the H1-B at a salary that is higher than that but lower than the native's current salary.

Of course, firing employees to hire new employees at a lower salary has problems, but this is a toy problem. In a real situation the other company would gradually have job openings open and be filled all the time as employees enter and leave the workforce. If the H1-B can freely switch jobs, he would find it useful to compete with the people entering the workforce for one of those positions.







One company hires the programmer and the other company then gets to point to the existing market and note that there aren't any candidates for the position.


Except there are, since the second company could hire the programmer away from the first company by offering a higher salary. In general, thinking like an economist requires that one treat supply (and demand) as functions of price, not as absolute numbers.
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VoiceOfRa
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