Example. Individual A : Master's of CS from Stanford, Passed interviews, Java, SQL, Hadoop, JSF - Requested salary - 115k
Individual B : PhD Student at Stanford, Passed interviews, Java, SQL - Requested salary - 95k
Job requirements: Java, SQL, Hadoop, JSF
What would you decide on as the hiring manager, you have a limited amount of funds per year and need to meet a deadline. You know A is more qualified, but B is 20k cheaper. As a manger if time permits you will select B since he is cheaper and can acquire the skills needed in his spare time from his fellow engineers or from online materials. In making this decision B has the advantage due to price manipulation, and you allowing him to work even though he in under qualified.
Some might say this scenario is unrealistic but both candidates are using their salary to improve their lives, it just so happens B takes a lot less money (due to being born in a poorer country) to improve his life then A. Typically what you will see in the valley is B living in an apartment with 4 or 5 other people for 3 to 4 years periodically sending his money to his mother country. He can then start a company easily in that new country with his capital, meanwhile A plans to raise a family locally.
Much of this is happening right now http://www.nbcbayarea.com/investigations/Silicon-Valleys-Bod... Google, Facebook, Linkedin, Everyone does this in the valley.
