long before the H1B visa extension existed, people here on H1B had very little time to get their green cards. as such, most H1B employees would not dare to leave the company sponsoring them for another company, because if they did, there was a high chance their Visa would expire before obtaining a green card... consequently, we could treat them like crap. although we would need to pay them an average starting salary so as to not trigger suspicions from the dept of labor, we would never need to give them a decent raise or bonus thereafter..and we always justify this lower compensation by writing a less than stellar performance review...afterall, what are they going to do? leave and risk not getting their green card?
hence, we were able to hire and retain H1Bs and keep wage growth very low, since H1Bs would stay with us a long time waiting for their green cards...especially if we made them wait 1-2 years once they were here despite telling them we would start the process immediately prior to hiring. again, what are they going to do, leave? that wage growth suppression was good, and kept growth low for everyone else too. I could hire more people.
but all.thesudden, H1Bs were allowed to extend their visas. you couldn't treat them like crap anymore, because if you did, they would walk over to another company would wouldn't mind restarting their green card process if they were good...and the H1Bs didn't need to worry about their visas expiring...so we actually had to start paying them (and for that matter everyone else) better wages for retention, since H1Bs and normal workers both had relatively the same job mobility....
fast forward to now...were going back to removing the Visa extension. again, removing job mobility for H1Bs....and on top of their spouses won't be allowed to work too...also making them even less mobile....since now a H1B family will only have one income earner. good times again...we can cap wage growth and compensation again since these workers won't have the flexible to move...they won't have a choice again .and the best part...the never of actual visas to be issued hasn't been reduced. so there's still a steady stream of workers that will have a much less flexibility once they get here.