Another factor is that even though there may be plenty of graduates with STEM degrees, they may not have the exact skills a company wants. Just about every job

Another factor is that even though there may be plenty of graduates with STEM degrees, they may not have the exact skills a company wants. Just about every job posting is looking for someone with very specific knowledge of languages, frameworks, tools, platforms. etc. How many people with a CS degree already know the technologies that your company is using? By expanding the employee search to the entire world, companies are more able to find someone who has the specific skills they need. Yes, they are very likely trying to hire H1-B to pay less salary. But they are also hiring H1-B to save money by not having to pay for training. Even companies that work with very obscure proprietary technologies that almost nobody knows seem to insist on hiring people who have experience with that technology rather than hiring an otherwise skilled candidate and letting them learn on the job.