Here’s what I suspect will be one of many dark aspects of the bailouts, subsidies, and other contortions we’re going through to soften the economic downturn now under way. Bank of America has rescinded job offers to foreign MBA’s as part of the agreement it made with the U. S. government in taking TARP money:
Bank of America has become the first US bank to withdraw job offers made to MBA students graduating from US business schools this summer, citing conditions laid out in its bail-out deal as the reason.
The recently passed $787bn stimulus bill in effect prevents financial institutions that have received money from the government’s troubled asset relief programme from applying for H1-B visas for highly skilled immigrants if they have recently made US workers redundant. [ed. Brit-speak for fired]
BofA, which has received a total of $45bn in Tarp funds, is in the process of digesting two large acquisitions – Countrywide, the mortgage broker, and Merrill Lynch – which will see thousands of jobs lost.
A spokesman for the bank said: “Recent changes in legislation made it necessary for Bank of America to rescind job offers it had made to students requiring H-1B sponsorship.â€
This is the sort of action that invites reprisal, a slippery slope. I can only hope that the hiring practices of companies who take part in the public works e.g. roads and bridges parts of the stimulus package are subject to as much scrutiny. Turning away skilled workers while accepting semi-skilled or unskilled ones doesn’t sound like a good policy to me.
I’m guessing that Bank of America might be rescinding job offers to domestic students as well.
Could be. I’m not re-reporting the story, just passing it on and the FT just reported rescinding of offers to international MBA’s.
What if the situation is this: One-third of MBAs traditionally graduate to jobs in finance and banking. That sector is shrinking and nobody is getting hired. The “no more than 50” jobs rescinded by BoA were never going to happen while BoA was laying off tens of thousands of its employees. The $100,000 in student loans to get an MBA are going to pose a real hardship on recent grad students.
If that is the situation, than blaming the government for job cuts would be in BoA’s interest. The only other person quoted in the article, the Dean of MIT, would not be interested in saying anything that devalues an MBA degree. And the FT? They are a pro-globalization newspaper that loves to run articles like this.
Me? I agree with a pro-globalization stance, but if the TARP restrictions are largely cosmetic, reporting it otherwise actually hurts that stance.
Fair points, PD. Just a tad of color. I have mentioned a previous career stint in banking…..it was Continental here in Chicago. BoA bought Conti, and I was there two years before I got out as BoA was systematically destroying what they bought.
BoA is the single most politically correct organization I have ever seen. Bad mouthing govt or foreign MBA’s as part of a diversion would be wholly uncharacteristic. Totally.
Its been a long time, but I’m thinking they still have that PC thingy going.
Drew, blame may be too hard of word. How about, BoA has every incentive to credit the government with the steps that it has taken.
BTW/ a commentor at Megan McCardle’s heard this story a little differently on the radio. The government TARP money cannot be used to fire employees to hire foreign employee replacements.
A contrarian view is posted at Daily Finance. Since the US grants 65,000 H-1B visas per year, across a variety of skilled occupations, a reduction in H-1B visas to the banking/financial sector would merely create more job openings to foreigners in other sectors. In particular, it would free up more H-1B visas to the tech sector, potentially lowering wages.
The subject of H-1B visas (and L-1 visas) is a complex one. My own view is that we need to rationalize our immigration policy, generally. There are some specific abuses I’m not sure how to stamp out, e.g. writing the job description to fit the international applicant rather than having an available job that an international applicant fills.
I’ve already made one proposal for reforming H-1B visas: have a central clearing house for jobs which a company applies to seek an H-1B visa for.
As I mentioned in the post I don’t think it makes a great deal of sense to have opened borders for unskilled labor and closed borders for skilled labor.