Hate to break it to you but someone with a PhD is not a 'new grad', they have often been working in a high pressure job for ~5 years post graduation, usually re

Hate to break it to you but someone with a PhD is not a 'new grad', they have often been working in a high pressure job for ~5 years post graduation, usually required to do teaching, assist on their supervisor's research projects (lots of grunt coding), and do research and write a thesis. In this hypothetical, their value comes from having specific expertise on top of general skills. There is no guarantee you will be able to find an American with those skills, even for $129k. If there is a long term need, and the industry doesn't move somewhere cheaper, eventually there will be more applicants. I've yet to meet any company who says 'no problem, we'll just delay that project until we can find someone'. You could have a payroll tax on H1Bs, say 25%, that goes toward funding STEM PhD stipends, and peg their minimum salaries to be greater than the median of comparable American salaries. Though that may create a perverse incentive for companies to pay locals a lot LESS so as to reduce the overall salary bill. Needs some expert modelling...