The U.S. banking mess is a trickle-down scandal. The fat cats will siphon off billions in TARP funds while their “solution” trickles down onto your head — like water torture. While you’re bailing out the bankers, they lay you off and use our tax dollars to hire your replacement from overseas. Great way to put people back to work.

In Banks look overseas for workers, an Associated Press investigation reveals that while their balance sheets were tanking last year, the biggest banks (which are getting the biggest bailouts) started pursuing one-third more H-1B work visas than in 2007 to fill top-level positions with foreign workers. The average positions pay $90,721. We’re talking about senior vice presidents, analysts, corporate lawyers, and, er… ah… human resources specialists. That’s over 4,000 jobs.

Now, I’m not a troglodyte or a socialist. I believe the U.S. must compete with foreign producers (including workers) or suffer the consequences. But I’m not a putz, either. U.S. taxpayer dollars are being used to help stupid bankers recover their footholds in the financial world, and part of the deal is to resurrect dead American jobs.

Use those tax bucks to hire foreign workers right after the crash resulted in Americans losing their jobs? ‘Fraid not.

In a normal economy (if there is one), competition from foreign workers is a reality. We may not like it, but we have to deal with it. But in a crisis where nothing is normal and the government is propping up the economy, natural competitive issues are put aside in the interest of saving the country. That means American jobs.

When the fat cats are banking on H-1B to bail themselves out, it’s time to, er, ah, skin the cats.

(Hey, I have a cat that no one’s gonna skin… it’s a metaphor so don’t send me hate mail.)

  1. Nick:

    You put it well. I can’t say that this is a surprise, but it is appalling, and one would hope it would pave the way for a long-overdue overhauling of the H-1B program. I am not going to hold my breath waiting for it, however.

  2. the corruption is always there.
    How do u explain H1-Bs being hired STRAIGHT OUT OF 3rd Tier colleges in NON-HIGH TECH jobs?

    I’m in New york. I went to Baruch College. Half the foreign students there can’t speak english properly. YET, they have no problems being recruited at the who’s-who of american corporations! What special “imported” skillset does it take to add/subtract numbers in a spreadsheet? However, their presence keeps the same corporations from hiring even that few extra US workers.

  3. If you follow NBA basketball (if Bob Lewis can use off the wall metaphors I can) you know that there are trends which make no sense. At one time, the accepted knowledge of the draft was that anybody “good” had to be a high school senior, or, at worst, a college freshman. A college senior was considered unwanted, no matter how obvious his skills. My own Detroit Pistons drafted some 6-11 JuCo transfer with a half year of experience in the first round, with the excuse that he was the only one left with no real college experience.

    Sometimes I think that American Business believes that anyone from Asia must be better than anyone from the USA.

    But, I’ve said it before here, I’ve know a few H-B people, and THEY HATE THE SYSTEM TOO! (Now I’ve got it out of my system). Maybe, we can get it fixed now.

  4. Great post Nick. The bailout for the banks is completely screwed up. The fat cats are being rewarded for collaborating in creating massive economic failure. The bank bailout has proven to me that there is an absolute double standard for the rich and powerful vs. “us”. Everyone says that we couldn’t allow them to fail, but I have to say, “why not?” By not allowing bad practices and stupidity to drive these fat cats into business failure, you ensure that they’ll stay in power over their industry and keep making ridiculously bad decisions in the future.

    I’m sick and tired of the business world telling us its “just business” when they screw us over, but when they start suffering from their bad judgment, they go running to mommy government and get given _our_ money to save their skins.

    Capitalism and true democracy died when the bank bailout was passed. To say that it was “necessary” to prop up the economy may have been true. But I think sometime in the future we’ll find out that if we’d have suffered through the pain of letting the banks fail now, we would have averted a larger disaster later. Like the spoiled child continuously bailed out by their parents, the banks aren’t going to learn. They’re going to keep pushing it until there will be no way out of total disaster.

  5. Nick,
    I agree with Phil in that there are bad ideas that get traction and take a while to work through. It seems like the regulators forgot why certain banking rules were establihsed during the depression to prevent excessive speculation and bank failures.
    The combination of greed and free market dogma did rhe rest.
    I would add another requirement for any company receiving bail out money that uses the H1B program. They would be required to post the job for three months on a national database for US citizens before the job could be given to an H1B candidate. Also, an employer would be required to submit a detailed letter of rejection to any US citizen who applies and is not hired if the job goes to an H1B candidate.

    John Z

  6. Jason, I think you hit the nail on the head.

    “I’m sick and tired of the business world telling us its “just business” when they screw us over, but when they start suffering from their bad judgment, they go running to mommy government and get given _our_ money to save their skins.”

    This is no longer “just business.” It’s a crisis that demands everyone work together. I just read that President Obama is looking at an order that would limit exec compensation to $500k for any bank that takes TARP money. More to spend on “more expensive” American workers? Or will this result in the best execs leaving the banking biz? It’s being argued that we want execs who are in it for the money, or who’s going to turn the ship around? Is it possible that $500k execs will be lame and incapable of innovation that gets us out of this mess?

    Ah, I’m not a compensation expert :-)

  7. Nick,

    You’re right everyone needs to work together. But I have no time to listen to execs from the banks complaining about government regulating them too much. They ASKED for government to help and now they’re going to be getting lots of it, and in my opinion its just too bad if they don’t like what they’re getting. Be careful what you wish for.

    As you can probably tell, I think TARP was an AWFUL idea. My belief is that history books in the future will look back on it as the worst bill ever passed by congress…

  8. Every year, the engineering community bewails the raising of the cap on H1-B visas as importing even more foreign workers will lower wages for Americans. I’m not worried about competing for jobs with foreigners, I just want it to be on a level playing field — it’s not that we can’t compete with them; it’s that they aren’t allowed to compete with us. H1-B employees are essentially a captive work force for the companies that initially sponsor them. If these employees could shop around for a better-paying job the way US citizens do, they would, and H1-Bs would not be a cheaper alternative to domestic workers. The whole program would disappear overnight.

    Lance ==)————

  9. Lance, you draw an important distinction. H-1B hires cannot compete here. They’re almost indentured servants. The program was intended to bring needed expertise to companies that can’t get it domestically. But we’re far from that scenario on the wholesale level that H-1B is used. Remember that the purpose of H-1B was to bring in needed help. But the outcome is that it *seems* to skew salaries downward. Am I wrong?

  10. Nick, you are wrong on this one.
    H-1B workers are people like everyone else.
    But you deny them the basic right of being treated equally. You deny H1b workers equal opportunity.
    Imagine if there would be a law in place that would claim that all people named “Nick” have to get special permission to work. All “Nick”s would be denied right to get a job during the crisis. All “Nick”s would be blamed for lowering wages.
    Would it be fair?

  11. Dennis,

    I don’t see how I’m denying H-1B workers anything. Once they are in the country on jobs, they are protected by their H-1B status. (Though it’s not much protection, as H-1B actually restricts their right to work anywhere but the company that sponsored them.)

    What I’m suggesting should be restricted in such an economic emergency is the ability of companies that have been granted tax funds to survive to hire from outside the U.S.

    How is that denying H-1B workers (who by definition have work already) any rights?

    I’ve said it before and I’ll say it again. Generally speaking the U.S. must compete with foreign labor. But it’s quite clear that H-1B effectively subsidizes foreign labor by enabling U.S. employers to pay less to fill jobs.

    H-1B workers need more rights. Once they are brought here, they should not be treated like indentured servants.

    I don’t understand your comments. The H-1B system ALREADY denies H-1B workers equal opportunity. What I’m addressing is the employers, not the H-1B workers.

  12. @ Everyone :I am an Indian grad student,I came to the US last fall to do my Masters in Computer Science.I could not fully afford it,so I had to take a loan.

    At that time the situation was not this bleak.Lehman had not crashed, but after I came here, the slowdown started.I had thought that I would work for 2 years in US,pay off my loan and go back to India.

    Now the situation isnt the same, inspite of being in a top 30 school, the job scene is pretty sad because of two reasons.
    1. The economy is in general slow
    2. Bailout bill makes the employers wary of hiring international students.

    Now I have a loan on my head and am looking for a job with the constant question of “what if” beating in my head because I might not be able to pay off the loan on an Indian Salary.

  13. I agree with Lance…if international workers were allowed to compete on a straight line basis with American workers (in IT), we’d have a very different picture.

    Don’t feel too sorry for yourself,Aman…Along with thousands of other displaced IT professionals, I am also now looking for a job, and experience employer wariness of hiring anybody. The problem I have (and have had for the last 5 years) is that I can’t compete with H-1B visa candidates who will work for half, which, as I understand it, still beats Indian salary by a mile.

  14. Its pretty interesting to read the posts but what I do feel is no real person has been able to visit both sides of the coin with its true images on either side.

    There are a lot of misconceptions about H1B in this country. And for people in general, the awareness is on a very low scale as to the legalities and the complexities.

    Let me first start off by addressing that the H1B workers dont just qualify as workers but are educated and performing individuals. Yes, they are humans too, like you, me, or anyone else.

    They left a way of life, to come to a foreign land, in hopes of bettering their future and their generations to come. There is no law of humanity that can deny that to someone who abides by laws and works hard to achieve it. Even the forefathers of current US citizens came the same way. So dont complain of foreign individuals but learn to live in a truly global non polarized world.

    secondly, its not easy to pivot yourself on the forefront of condemnation. Believe me, getting an H1B visa is not that easy. But yes, one needs to either have the same rights IF one is paying the same amount of taxes, social security, medicare and medicaid as any other employed US citizen. Show me the distinction in what an H1B pays to the government in the form of dues than what a US citizen pays. We can talk of regulating basic human rights corrected by a political system thereafter. Stop complaining else stop asking for taxes if you cannot better represent people.

    Can you ever pay an H1B visa holder unemployment benefits? One has 10 days to leave the country if you loose your job. Imagine putting in 10 years of your life, building a house, a family, putting them through school… wrap it up in 10 days and leave??? Is that what the forefathers of US citizens came on shore with?? Can they confront this idea? I guess we all know the answers to this.

    Now lets visit the other side of the coin. H1B system has been exploited. They have been exploited by companies big and small. There are those candidates who cannot speak English. or English at par with an American (with the accent). There are people who come in with fake degrees or fibbed resumes. There are companies who endenture people and skim off their paychecks. As much as 60 – 70%.


    The companies looking to saving money hire H1 workers. From companies that are branded as consulting companies but are nothing more than ‘body shoppers’. They make them work for abot 50% of what they bill the clients for. The rest is just pocketed. Guess what. Most of those so called consulting companies are owned and operated by – US citizens!!
    So the mega corps made the money by negotiating on benefits. And the small body shoppers make money by entangling such hardworking people by promising them a better future once they are naturalized as US citizens or atleast possess a green card.

    Which also brings about another question. Imagine a H1B worker that came in as a student, started working, pays 15,000 a year as taxes yet, if s/he loses his or her job, will be forced with nothing but to leave the country. Are you telling me, that a person contributing close to about 50,000 to 75,000 over a 5 year period has no promise on becoming a part of a system that has promised and proven over years to teh success of companies as Microsoft, Intel, Google, NASA, companies in Medicines and health care, automobile, – you name it!

    So dont blame the H1B worker. They are here in hopes of bettering their lives. Just as the earliest settlers did. the ones whose progeny todays prides itself or sees itself as being a US citizen. And distinguishes or for lack of words, discriminates H1B workers.

    Fix a system that does not work. Bail yourself out by fixing corporate greed. Realize that the top 3% of the people control 97% of the world’s wealth. Its not upto an H1B worker to dictate your way of life so stop complaining but stand up and stand with the H1B worker to fight for the common good of all as humans.

    Visit the basics of what H1B comprises of and then face off on the facts of how H1B workers work.

    You will think twice before posting any more on this issue. If your education system is failing, dont blame the failure on a system nobody understands but on why your system of education has failed us all!!

  15. For the faint at heart, here is a quick recap on some heuristics! Read it to its fullest interpretation from a world renowned author.

    Thanks for your time, your patience and above all, your understanding!

  16. Rahul,
    You speak eloquently for the Indian people who are the majority of the H1b and green cards that are displacing American workers in the higher paid professions. I work with many of your fellow countrymen and like them very much, however I know many highly educated Americans that worked in technical fields but can no long use their education in their chosen professions because of foreign workers and the misguided perception that Americans are not well educated. In fact many of the foreign workers came here initially to get an education in our colleges & universities because the education is far superior. It has been my experience that the Indian intellect and ability in all areas of technology is greatly over rated. Although I have met & worked with many fine, gracious, & intelligent Indian men & women, I have not worked with any that could out think or out perform the same demographic of American workers. I also know many highly technically skilled Americans that do not have college degrees but can perform just as well if not better (since they have more to prove) than many of the finest foreign workers I’ve dealt with. I for one am sick of the foreigners that come to America & get executive positions in large corporations, than hire only their own countrymen/women to fill the best positions. I know a corporation that hired an H1b Indian to manage their HR Dept. Within two years this person was a VP in the company and had laid-off 90% of the African Americans in technical positions, almost as many of the Caucasian Americans also, and had hired Indian-Americans and Indian H1b’s to replace them. Even now, this company is only interviewing Indians for openings in technical positions. How is this not racism and ethnocentrism against Americans in our own country! Why are American politicians telling our kids to go to school for engineering and computer jobs if all we are going to do is hire foreign workers to fill these positions. Politicians better wise up. If we give all the best paying jobs away to foreigners, than who is going to supply the tax system with money to pay back all the debt they are running up???

  17. I think Nick’s original point was about companies that hire H1B employees based solely on their willingness to work for lesser pay. I understand your point Nick, and I think the solution lies in modifying the rules to allow an equal playing field.
    Any other action that reduces or restricts H1B hires would result in a situation where the really qualified workers from other countries eventually find another place to put their talents to use. Of course, you will also lose the inadequately qualified foreign workers, and some American citizens could definitely benefit from it in the short term. In the long term however, it could discourage talented individuals from seeking employment in the US and encourage new start-ups elsewhere.

  18. I agree with Shannon. But you should realize that when American companies like Ford,GM and MCDonalds set up bases in India..Indians dont object to the fact that the top job goes to an American.

    Also, compare the population my friend..
    with hardly 500 million people with land 3 times the size compare that to India with a billion people and 1/3rd the size in land..
    Please absorb some of our educated youth and let them give their talents and boost your economy..