AP Investigation - Banks sought foreign workers
AP Investigation - Banks sought foreign workers
Date: Monday, February 02, 2009 7:29 PM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1969 -- 2/02/2009 >>>>>
Co-authorship of news articles can be a good thing, but only if the left foot
knows what the right foot is doing. Frank Bass and Rita Beamish published an
article on banks that hire H-1Bs that exemplifies the left/right foot
syndrome.
The story is very similar to the recent ones about how Microsoft is laying off
Americans while retaining H-1Bs. Banks and other types of financial
institutions are doing the same thing. The bailout is a whole different issue.
Bass and Beamish fall into a trap of trying to link the bailout with the
hiring of H-1B visa holders.
Banks have been hiring H-1Bs for a very long time so this article should be
old news for those that have studied the H-1B issue for awhile. Bass and
Beamish confirmed that banks have been hiring H-1Bs for a long time when they
reviewed six years of hiring data. In view of the data they reviewed, the
following statement is a non-sequitur:
Banks collecting billions of dollars in federal bailout money sought
government permission to bring thousands of foreign workers to the
U.S. for high-paying jobs, according to an Associated Press review
of visa applications.
The evidence shows that banks hired H-1Bs with or without the bailout.
Furthermore the article failed to discuss the far bigger outrage that the
bailout does nothing to stop the banks from hiring H-1Bs. Neither does Obama's
stimulus plan.
The entire article needs to be read to see the left foot right foot syndrome
kicking in. Early on the article says:
The dozen banks receiving the biggest rescue packages, totaling more
than $150 billion, requested visas for more than 21,800 foreign
workers over the past six years for positions that included senior
vice presidents, corporate lawyers, junior investment analysts and
human resources specialists. The average annual salary for those
jobs was $90,721, nearly twice the median income for all American
households.
At the end of the article they wrote:
Foreigners are attractive hires because companies have found ways
to pay them less than American workers.
Both statements are true, but they seem to contradict each other. On the one
hand they say H-1Bs get paid a lot of money, and on the other end they say H-
1Bs are cheap labor. My guess is that the authors wrote these sections
separately but didn't do a full editorial review. Unfortunately the point was
lost that an H-1B could be hired for $90k for a position that is worth at
least $150k. It was a perfect opportunity to demonstrate how H-1B is used to
depress wages. Bass and Beamish were so close and yet so far from explaining
this important concept.
Bill Gates made a similar argument to Congress when he said that all of their
H-1Bs are paid high salaries while conveniently forgetting to mention how low
the wages were compared to what a comparable American worker would expect to
earn. Of course nobody in Congress challenged him on that point either.
Several versions of this article are appearing in newspapers and on the
internet. The first one included below is the long version that was published
in the Houston Chronicle. In it there are some thought provoking quotes from
David Huber, Sen. Chuck Grassley, Ron Hira, Michael Bloomberg, Arlene C.
Roberts, and Jennifer Scott.
The second article from google news is the one you will find in most
newspapers. It is a butchered version that lacks the quotes, and consequently
most of its impact and meaning.
Bass and Beamish did some good research for that article. Hopefully they will
publish a better edited and longer version so we can get more insight into
what they discovered about banks and H-1B. It's a subject that isn't discussed
nearly enough.
Addendum: Sorry about the negativity here. I'm in a bad mood because the
Cardinals lost to the Steelers. I had most of this newsletter written before
the game began, so the disappointing loss isn't the cause of my somewhat
negative critique. Actually the length of the game gave me more time to
reflect on what the article was really saying.
Most of us in Arizona are in a dour mood, but we will get over it.
Considering the Cardinal's record over the years we are very happy that they
had such a stellar season, and that the Superbowl was such a thriller all the
way to the end. I'll try to improve my outlook for the next newsletter -- I
promise!
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.chron.com/disp/story.mpl/headline/biz/6241230.html
Banks sought foreign workers as Americans were laid off
By FRANK BASS and RITA BEAMISH Associated Press
Feb. 1, 2009, 11:22AM
Share Print Email Del.icio.usDiggTechnoratiYahoo! BuzzSANTA CLARA, Calif.
-- Major U.S. banks sought government permission to bring thousands of foreign
workers into the country for high-paying jobs even as the system was melting
down last year and Americans were getting laid off, according to an Associated
Press review of visa applications.
The dozen banks now receiving the biggest rescue packages, totaling more than
$150 billion, requested visas for more than 21,800 foreign workers over the
past six years for positions that included senior vice presidents, corporate
lawyers, junior investment analysts and human resources specialists. The
average annual salary for those jobs was $90,721, nearly twice the median
income for all American households.
As the economic collapse worsened last year -- with huge numbers of bank
employees laid off -- the numbers of visas sought by the dozen banks in AP's
analysis increased by nearly one-third, from 3,258 in the 2007 budget year to
4,163 in fiscal 2008.
The AP reviewed visa applications the banks filed with the Labor Department
under the H-1B visa program, which allows temporary employment of foreign
workers in specialized-skill and advanced-degree positions. Such visas are
most often associated with high-tech workers.
It is unclear how many foreign workers the banks actually hired; the
government does not release those details. The actual number is likely a
fraction of the 21,800 foreign workers the banks sought to hire because the
government only grants 85,000 such visas each year among all U.S.
employers.
During the last three months of 2008, the largest banks that received taxpayer
loans announced more than 100,000 layoffs. The number of foreign workers
included among those laid off is unknown.
Foreigners are attractive hires because companies have found ways to pay them
less than American workers.
Companies are required to pay foreign workers a prevailing wage based on the
job's description. But they can use the lower end of government wage scales
even for highly skilled workers; hire younger foreigners with lower salary
demands; and hire foreigners with higher levels of education or advanced
degrees for jobs for which similarly educated American workers would be
considered overqualified.
"The system provides you perfectly legal mechanisms to underpay the workers,"
said John Miano of Summit, N.J., a lawyer who has analyzed the wage data and
started the Programmers Guild, an advocacy group that opposes the H-1B system.
David Huber of Chicago is a computer networking engineer who has testified to
Congress about losing out on a 2002 job with the former Bank One Corp.
He learned later the bank applied to hire dozens of foreign visa holders for
work he said he was qualified to do.
"American citizenship is being undermined working in our own country,"
Huber said in an AP interview.
Beyond seeking approval for visas from the government, banks that accepted
federal bailout money also enlisted uncounted foreign workers, often in
technology jobs, through intermediary companies known as "body shops." Such
businesses are the top recipients of the H-1B visas.
The use of visa workers by ailing banks angers Sen. Chuck Grassley of Iowa,
the senior Republican on the Senate Finance Committee.
"In this time of very, very high unemployment ... and considering the help
these banks are getting from the taxpayers, they're playing the American
taxpayer for a sucker," Grassley said in a telephone interview with AP.
Grassley, with Sen. Richard Durbin, D-Ill., is pushing for legislation to make
employers recruit American workers first, along with other changes to the visa
program.
Banks turned to foreign workers before the current economic crisis, said Diane
Casey-Landry, chief operating officer for the American Bankers Association.
The group said a year ago that demand exceeded the pool of qualified workers
in areas like sales, lending and bank administration. Now with massive
layoffs, the situation is different, Casey-Landry said.
The issue takes on a higher profile as the government injects billions of
dollars into the economy and President Barack Obama pushes for massive
government spending to create jobs nationwide, on top of the $700 billion
already approved for the ailing banks.
"You're using taxpayer dollars and there's an expectation that there are
benefits to the U.S.," said Ron Hira, a national expert on foreign employment
and assistant public policy professor at the Rochester Institute of
Technology. "What you're really doing is leaking away those jobs and benefits
that should accrue to the taxpayers."
But New York Mayor Michael Bloomberg believes more access to "worldwide talent
pools" will better position U.S. financial companies against global
competitors, spokesman Andrew Brent said.
The U.S. Customs and Immigration Service declined to disclose details on
foreign workers hired at the banks that have received federal bailouts. The AP
has requested the information under the U.S. Freedom of Information Act.
Nearly all the banks the AP contacted also declined to comment on their
foreign hiring practices. Arlene C. Roberts, spokeswoman for State Street
Corp. of Boston, which has received $2 billion in bailout money, said the
company has reduced H-1B hiring in recent years, and just hires for
specialized positions.
Jennifer Scott of Yreka, Calif., a retired technical systems manager at Bank
of America in Concord, Calif., said in 2004 she oversaw foreign employees from
a contractor firm that also sent overnight work to employees in India.
"It had nothing to do with a shortage, but they didn't want to pay the U.S.
rate," she said, adding that the quality of the work was weak. "It's all about
numbers crunching."
Frank Bass reported from East Dover, Vt.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.google.com/hostednews/ap/article/ALeqM5gThZRbmq-D6IZW04tcpxXAo0upiQD962NB8G0
AP Investigation: Banks sought foreign workers By FRANK BASS and RITA BEAMISH
-- 8 hours ago
SANTA CLARA, Calif. (AP) -- Banks collecting billions of dollars in federal
bailout money sought government permission to bring thousands of foreign
workers to the U.S. for high-paying jobs, according to an Associated Press
review of visa applications.
The dozen banks receiving the biggest rescue packages, totaling more than $150
billion, requested visas for more than 21,800 foreign workers over the past
six years for positions that included senior vice presidents, corporate
lawyers, junior investment analysts and human resources specialists. The
average annual salary for those jobs was $90,721, nearly twice the median
income for all American households.
The figures are significant because they show that the bailed-out banks, being
kept afloat with U.S. taxpayer money, actively sought to hire foreign workers
instead of American workers. As the economic collapse worsened last year --
with huge numbers of bank employees laid off -- the numbers of visas sought by
the dozen banks in AP's analysis increased by nearly one-third, from 3,258 in
fiscal 2007 to 4,163 in fiscal 2008.
The AP reviewed visa applications the banks filed with the Labor Department
under the H-1B visa program, which allows temporary employment of foreign
workers in specialized-skill and advanced-degree positions.
It is unclear how many foreign workers the banks actually hired; the
government does not release those details. The actual number is likely a
fraction of the 21,800 foreign workers the banks sought to hire because the
government limits the number of visas it grants to 85,000 each year among all
U.S. employers.
During the last three months of 2008, the largest banks that received taxpayer
loans announced more than 100,000 layoffs. The number of foreign workers
included among those laid off is unknown.
Foreigners are attractive hires because companies have found ways to pay them
less than American workers.
Frank Bass reported from East Dover, Vt.
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