Because everyone punts to the next guy.... Managers (often times clueless) wait too long to hire much needed people until everyone is on the dreaded death march. They don't want to have to deal with looking for people so they delegate to HR. HR delegate to the computer in the form of ATS systems.

I beg to differ that there's an actual talent shortage. It seems to me if HR/management got creative on actually getting out and meeting people, things would quickly be solved.

I would agree.

It's not just "we want the top 5%," but "we want the top 5% that will take the median salary for the job title in our particular locale"

Beat me to the punch. Y2K was only one piece of the pie.

You're missing the point...

Supposedly, we want to bring in people on H1-B's because there's no one here who has specific skills that are valuable. In other words, you want to bring doctors who were at the top of their classes and invented stuff not the unwashed masses to code your inventory system in Java (because you can bring in almost any recent grad to do this)

Yet, you're more than happy to take their money...

I would even go one step further: They can only hire an H1-B if they did not offer these jobs (and any training) to the 18,000 people laid off.

In other words, someone hacking on Office could be offered a job writing software for XBox with minimal re-training.

FFFRRRRREEEEEDDDDDOOOOMMMM!

You would be correct. I have read several articles about how you can play word games with titles and responsibilities. For example, posting a Job as a "programmer/analyst" role, you can get away with paying someone a programmer salary but have them do more analyst work. Also, there can be issues with how the government classifies these types of jobs.

Even if they did check things, I've seen write ups on how to abuse the system, like writing job descriptions for senior level positions but listing the job as a more junior level position.

So, they list the job as a "Junior business analyst" or even "business analyst" and then when Uncle Sam comes knocking, they can say "we're paying market rates, here's the BLS data for the position" even though if you looked deeper, the employee is expected to do much more.

Haven't been there studies that prove this? I seem to recall some study that if a company ends up laying off some non-insignificant amount of people over a period of time, that they never really recover over the long term by most metrics - revenue, profits, margins, stock price. In other words it may make some sense to not be trigger happy.

I understand this bit, especially in a litigious society.

On the other hand though, you cannot say that there is a "talent shortage" if you are unwilling to consider (and ask about) this type of work. I know I have a little bit of a speech impediment/stutter and it gets worse when I am in an uncomfortable/unknown/nervous situation. But, it should have no issue programming and working with others. An interview like the OP suggests would quickly defuse the situation, and show that I am competent. In other words, it would level the playing field.

Oh, I have heard the horror stories about people claiming to have senior level skills but perform at a junior level, or below.

The feedback I tend to get is that I am generally not as experienced as some of the other people they generally get, but I generally get good feedback - I don't throw a hissy fit if I don't know something, and can explain things well enough that if I don't get the syntax/algorithmn correct exactly correct.

Was it Lockhead Martin or one of the companies up in Rome?

While I don't doubt there's a lot of people that are on the low end of the curve, I think part of the problem is are these:

(a) interviews. I know I have bombed interviews where they ask about some problem or data structure that you haven't touched in years. I could tell you the theory behind recursion, and figure out an inelegant brute force solution on the spot - if I had access to an editor/compiler/debugger I could eventually figure out the more elegant solution.

(b) I think people become API monkeys because in many cases, why invent the wheel. Unless you're building a Kernel or some other special case application from the ground up, you're going to want to use what is most efficient, most readable, least chance of bugs, etc.

(c) I think people recruit the wrong way. They usually throw up a job ad somewhere and let everything roll in. Many people who you want to hire aren't necessarily on those sites. Or you get some clueless 3rd party recruiter. Many times the people you want are members of user groups or other prof. organizations. The people there are generally higher quality, more willing to learn, etc. And you can get to know them in a lower pressure environment.

Define "unqualified."

Is every taxi driver and burger flipper without any relevant education/experience applying? I would agree that these people are unqualified.

However, if you're getting people who have a relevant education or maybe not the exact experience you're looking for, you'll have a harder time convincing people that they are unqualified. That's more of a gray area. For example, someone who has a computer science degree and does C# applies for a Java job. Their Java may be rusty but the concepts of programming, algorithms, OOP, etc. don't really change. They may appear to be "unqualified" if they are rusty but should be able to adapt.