If you're out performed by an H1B you need to step up your game not worry about H1Bs. If you don't have H1Bs they will just out compete you from another country. Did you notice the manufacturing sector leave?
Turns out working hard is a bit more important the graduating from a prestigious school.
How does one have a STEM degree and not have a job? Do they not know about craigslist? Career fairs? Recruiters? elance? etc? Are they somehow physically disabled that prevents them from taking a day labour job? Are they unable to find their library and open a book on Javascript? Ruby? Python? C? C++? UNIX? TCP/IP? HTTP?
Perhaps the real reason they do not have a job is that they feel work is 'beneath' them. Like how can you not find a job... I have a high school education and I get called twice a day, in Vancouver not SF...