<<<<< 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-D6IZW04tcpxXAo0up
iQD962NB8G0

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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