The market is truly global. I work at a small company and I coordinate with or lead people working in 8 different time zones. I wish I had some of those guys in the office with me, but few that I did ask were not interested in relocating to the US.
So, the alternative to an H1B worker sitting in a cubicle here is the same guy sitting in a cubicle overseas working for you (if you are lucky), or competing with you. The article the OP posted says as much – 70% of the work is being offshored.