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I'm not sure when it was a good idea and I also don't know a time when it was not being abused, if I'm being honest. At least in IT (and in general, engineering, or so I've heard) going back to the 90s...
Now, the other threat they hold over our heads is that companies will just outsource if we don't allow this, but that's not a law of nature or anything, either. There is no reason we should not tax such services like that, too.
America kept telling their youth (and probably keep telling them) to "learn to code" because those were the jobs they were told Americans should aspire to, etc. Since I've been in IT since the 90s, I have more than my share of doubts about this promise, since I've seen how we are treated and the strong desire in the corporate world to suppress wages, benefits, any sense of autonomy, etc...if America is serious about this message, maybe they ought to look out for the workers.
America will never look out for the workers. The workers have to unionize. Probably even the H1B employees. I think until that happens, we're going to see wages stagnate and fail to keep up with inflation.
Unfortunately people are so cowed by their employees and the system that they won't unionize.
Personally this is why I think we don't have universal healthcare and basic social support systems. They would enable us to negotiate.
The original (presented) heart of the visas were to pull in some of the best and brightest of other countries to fast track them to become Americans, thus bolstering the output of America. This actually resembles the current American brain drain, where other countries are taking advantage of the mistreatment of scientists and other high-intelligence fields in the US to help their country have an even better output. In theory, the original plan makes a lot of sense. Improve the compensation of some of the smartest people around the world, and improve America. But in practice, it is being sorely misused.
I think if you'd ask most (non-racist) Americans about this, you'd probably get a willingness to find some way to get exactly that kind of result. Seems like a win-win all around, except for corporatists only looking at next quarter's profits.
The underlying rationale seems well-founded - there are smart people everywhere, how can we get entice some of them to come here and work for us? Hell, whether it was true or not, that used to be very much America's brand, too.
Unfortunately, the charade and exploitation that is where the H-1B very quickly ended up is very much our brand, now, too, and that just sucks. I'd love to find a way back to that original idea and find a way to live up to it...
Well the H1 came decades before (and still exists, its more generic), and the B was supposed to be specific gaps for skilled workers - longer term allowed, you can change jobs on this one (the original requires you to get a new visa, the h1b you just need to file a petition), allowed for a longer stay which was helpful for people trying to become citizens, it was meant to be used far, far, far less than it is today and has limited that are constantly ignored, etc,
The H1B came out in 1990, it only took a few years for companies to work around the limitations that were intended and use skyrocketed.
So probably for around 2-3 years it was a good idea.