Being more senior, my world of coworker and colleagues has been a mix of highly skilled people, largely in the AI/ML space. There are many H1Bs among them, but there has been no difference in the ability of the US citizen subset and the H1B subset in getting jobs.
Even closer to the entry level, the H1B pool all came from very competitive and elite universities, and all of them also had advanced degrees.
I do believe the market for fresh out of college software engineers without much specialization is tight, but I also don't see many H1Bs in that category either (but again, that could just be because of my own cohort I'm surrounded by). A PhD from NYU/Harvard/MIT with an undergrad at a place like IIT or Tsinghua is not in the same talent pool as newly graduated undergrad students from a standard US university.