Stimulus bars hiring of some foreign workers

An extraordinarily difficult job market has darkened further for foreign business students looking to get into the American banking industry.

A provision added last month to the $787 billion stimulus package by Sens. Bernie Sanders (I., Vt.) and Charles E. Grassley (R., Iowa) bars banks that accept bailout money from hiring foreign workers to replace laid-off Americans.

Its supporters say it is only fair that banks receiving a huge taxpayer-financed bailout not be permitted to hire foreigners to replace displaced Americans.

Opponents argue the provision sends a xenophobic message to the world while protecting a minuscule number of jobs.

At U.S. universities, particularly business schools, it has created a good deal of confusion, largely because regulations based on the provision have yet to be issued.

Patricia Rose, director of career services at the University of Pennsylvania, said the school knew of two students who saw job offers rescinded as a result of the provision.

Overall, she suggested the provision might affect relatively few jobs. "In truth, we are not talking about large numbers, maybe four, five or six jobs per bank," she said.

Still even a small number of jobs can have an emotional impact on a campus where 12 percent of undergraduates and 40 percent of Wharton School of Business students are foreign nationals.

"It is a terrible thing if you have gotten a job offer and have begun to rearrange your life and the offer is taken away," Rose said.

The provision causing this angst was added to the Troubled Assets Relief Program (TARP). It effectively requires financial firms that have laid off workers and now accept bailout funds to hire only Americans over the next two years to fill the empty positions.

The provision reduces the number of jobs available for foreigners here on H-1B work visas. Those visas give foreigners with prized technical skills temporary work status to fill voids in the American workplace.

"While we are suffering through the worst economic crisis since the Great Depression," Sanders said last month when the provision was introduced, "the very least we can do is make sure that banks receiving a taxpayer bailout are not allowed to import cheaper labor from overseas while they are throwing American workers out on the street." Sanders did not respond to requests last week for an interview for this story.

Among critics of the provision, Vivek Wadhwa, an engineering professor at Duke University, said it was the work of "egotistical, arrogant senators who, while looking for votes, are damaging this country's competitive edge."

"The message we are sending to the world is that we are a bunch of xenophobes," Wadhwa said last week, and "that we do not want foreigners to come here to our land."

The response, he said, would be to "encourage other countries to put up trade barriers."

All of this to save a tiny number jobs, he said.

"We are talking about a fraction of a percent, close to zero," he said.

Ron Hira, a professor of public policy at Rochester Institute of Technology, countered that the provision fairly "closed a loophole" that he contended was being exploited by some banks to use foreign workers to replace Americans.

"These workers were meant to complement American workers, not replace them," he said. "This seems pretty much common sense to me."

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