Because the H1-B visa employee is legally bound to the job, he becomes more attractive than hiring a US citizen, (assuming equal salary and qualification).
The fact that the green card process resets if the employee switches jobs is crazy. That really does make it an "indentured servant slave visa".
Also, H1-B visas get 50%-150%+ raises when they get their green card, which proves that the H1-B visa suppresses wages.
Anyhow, this article is great:
https://en.wikipedia.org/wiki/Indentured_servant
One of the similarities that stuck out to me:
Most white immigrants arrived in Colonial America as indentured servants, usually as young men and women from Britain or Germany, under the age of 21. Typically, the father of a teenager would sign the legal papers, and work out an arrangement with a ship captain, who would not charge the father any money.[10] The captain would transport the indentured servants to the American colonies, and sell their legal papers to someone who needed workers. At the end of the indenture, the young person was given a new suit of clothes and was free to leave. Many immediately set out to begin their own farms, while others used their newly acquired skills to pursue a trade.
The question of legality would come down to whether it's voluntary or involuntary servitude. But as a practical matter, I think it would be good for all people (not companies) if we found a more lenient path to citizenship as it wouldn't put as much downward pressure on salaries and wouldn't make H1-Bs preferable over others, all else being equal.
The green card process for a H1-B is particularly annoying and restrictive though, as is the arbitrary time limit.
Not sure what you mean by "the H1-B visa employee is legally bound to the job". Sure, your company's name is printed on your visa but it is excessively easy to transfer to a new employer.
This is less of a problem for people from non-Indian and non-Chinese backgrounds, since the wait time is reasonably short. The priority dates for Indians and Chinese though make it such that once your green card is started you're stuck for literally years.
Labor certification and I-140 processing used to be painfully slow. I waited 3.5 years just for my labor certification. However, the new PERM process is much quicker, so you'd probably only have to wait 1 or 2 years to be eligible for portability.
I know a few H1-B visa holders who were and I cannot imagine the stress they went through. Fortunately they all found jobs in time, although when you've got a time limit, you end up making some compromises.
Bringing a foreign employee over is incredibly expensive. The reason companies do it isn't to get a grateful slave that will do anything to hold his job and rise ahead. They do it because a shortage of skilled workers locally, and incredible competition from other companies.
Not to mention all the hassle and uncertainty of interviewing someone, and then not knowing for months or even years if they can come over and start working.
As someone that works for a company that hires a LOT internationally, trust me, we'd much rather hire locally. But our needs are greater than can be found in one place, so we have to broaden our reach.
I've been in this industry for nearly 20 years. There is no shortage. There IS A HUGE SHORTAGE of engineers willing to work for the pay and conditions that an H1B will work for though.
H1B has lot of restrictions most idiotic being that the spouce has to sit idle. That is idiotic.