Wednesday, February 11, 2009

Blame the foreigners

From Greg Siskind's blog:

This morning the Associated Press is running one of the most unfair pieces I've seen in a long time regarding the H-1B visa program. I expect this sort of thing out of the xenophobic fringe press, but the AP is an organization that used to be known for objectivity. The story focuses on the hiring of H-1B workers in the banking sector and is running with the headline "Bailout banks tried to hire foreign workers." Ooh. That's really bad. Lots of Americans losing their jobs and here are these greedy banks hiring cheap foreign workers to replace them. The public has a right to know!

Let's discuss the facts cited in the article first and then we can move on to some of the really biased analysis. The AP's Frank Bass and Rita Beamish (it took two reporters to get a story this wrong?) tell readers that banks receiving more than $150 billion in bailout money hired more than 21,800 foreign workers. Wow. Oh wait, that's over the last six years. So we're talking about 3500 workers a year on average. And some of those years were in a pretty strong economy.

But how much does 3500 even mean? How many workers are there in the banking sector? Quite a lot, actually. According to the Labor Department, even with the economic downturn, there are still more than 8 million workers in the sector. And as of last year around this time, unemployment in the banking sector was just 3.2%. Most of the workers included in the 21,000 were brought in during this extremely low unemployment period.

So let's just be clear - banks seek to fill .04% of their workforce with H-1B workers. The horror!

The AP then goes on to mention that in fiscal year 2008, banks "sought" 4,163 H-1B visas. A couple of points that the reporters failed to mention:

- Fiscal year 2008 actually runs from October 1, 2007 until September 30, 2008. Because of high demand for the H-1B visa, applications must be filed six months ahead of the start of the fiscal year to have any chance so that means these applications were filed in April 2007.

- The number cited is the number of visas sought, not the number actually used. First, only about half of applicants actually got H-1B visas for fiscal year 2008 because of excessive demand. Second, many applicants who are approved for a visa by USCIS don't actually end up claiming the visa at a US consulate and entering to work for the sponsoring employer.

- A lot of those H-1B workers were educated in the US - many receiving MBAs at American universities around the country. We educated these folks so why should we not benefit from their work?

- Just how many H-1B workers in banking have been laid off? I know anecdotally quite a few because I've been helping many people facing sudden unemployment. This is absolutely critical to the story yet it is something left unanswered.

It became apparent to me reading a bit further in the article that this is just a hit piece set up by the same anti-H-1B folks in the high tech sector that have been pushing for protectionism for years. In fact, the only people quoted in the story are Programmers Guild members and Senator Chuck Grassley whose record on this issue speaks for itself. Funny how they can't find a single unemployed banking industry worker they can ask about supposedly training their foreign replacement.

And look at this statement in the story simply recited as fact:

Foreigners are attractive hires because companies have found ways to pay them less than American workers.

Aside from the fact that this is patently untrue, the reporters don't even bother to cite any studies showing this is true. They just state that companies routinely seek to replace more experienced hire paid Americans with these workers. Of course, if this were really possible, I suspect we would see more than .04% of the banking sector filled with H-1B workers. These are greedy bankers after all.

When newspapers that are struggling to survive are shelling out big bucks to the AP to run their wire stories, shouldn't they expect better?

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