An argument I've heard for the lower paying jobs at the outsourcing companies is that they can communicate with the offshore teams in the local language. One on-site lead is gathering requirements and funneling work to 20 offshore devs. They work a full day during US hours then spend their evenings on calls with the offshore team. There is a huge supply of people overseas wanting those jobs so that they can get their foot into the US and then find something better. Supply and demand would naturally drive down the wages for those types of jobs.
Another path is to transfer from the bigger outsourcing firms to smaller US based consulting and staffing companies to do contracting work.
At this moment it seems that many companies have frozen their H1-B hiring with all of the US visa uncertainty. This is putting people in tough situations where they can't find work and have families to support that they brought with them to the US.
These are my own observations.