There are limits to it... Say American applicants were only willing to do the job for $1M/yr, but they can farm it out to a foreign worker for $10K/yr, and the company budget is up to $50K/yr.
I know it's the argument that they claim, yet screw American employees. Hi, I am one.
I worked for 8 years at job where I was making about $125K/yr (including benefits). The job given to a foreign company for $50K/yr. I wasn't offered to take a pay cut, or any other type of negotiation. I just found myself locked out of the servers, and it took them a full day to let me know I wasn't employed any more.
My ex-employer suffered because of it. The outsourced company convinced them that they should be paranoid of me. Every bit of running code, from crons, to public facing interfaces, was rewritten at a cost of over $250K in 6 months. They spent a lot of time hunting for back doors that I simply had never left. I consider back doors a security risk. It's better to focus on keeping the front door secure.
The servers were systematically wiped and replaced (swapping Linux for *BSD). The outsourced company didn't understand the kind of loads my servers were tuned for. On commodity hardware, we could saturate several GigE circuits on any day of the week, and it was redundant enough to take multiple servers or even an entire site outage.
Over the next year, I was told by employees and others associated with the company, about constant failures. The primary revenue sites would go down on a regular basis, because they couldn't tune them properly. When they did operate, they were slow. They did purchase networking hardware I had been fighting for, but they failed to configure them properly either. I suspect the redundancy I had outlined wasn't done, but I don't have any further information on that. They didn't want to reference anything I had done, including 8 years of tuning and analysis of technical requirements.
All in all, from what I've been told by those who are still privileged to information, is that their revenue dropped by millions of dollars.
I don't know if they're still using the other company. I know there was a big fight between the owners, and they parted ways. I'd suspect it wasn't over creative control. Most likely they were seriously impacted by the loss of revenue, and anything could have instigated the split.
They saved about $75K/yr. They lost so much more. There were implications that I might do something to hurt them. I didn't have to, they screwed it up all on their own.
All of my work was well documented. Since the beginning, a copy of the passwords were kept with the owners. In my opinion, it's their company, and they can screw it up any way they want. It just sucks I lost a good job, so a foreign based company could make a little bit more. It sucks for my old company too, as they lost their asses because of it.