Wall Street Elites: Reverse Brain Drain

Published 10/17/08 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

It is no surprise that the U.S. Job market has dried up significantly in recent years. It is not even surprising to hear that Wall Street – the epicenter of America's elite – has stumbled mightily, hemorrhaging thousands of jobs as companies like AIG, Merrill Lynch, Bear Stearns and Lehman Brothers tried to stay afloat. But it may be surprising to consider where those new members of the workforce are now looking for stable income: overseas.

Foreign markets are suffering from the economic recession as well, but not to the degree we have seen in the United States. As a result, many qualified American workers are looking abroad for stability in these uncertain times, according to The Wall Street Journal.

American financial professionals seem to be most interested in coastal cities in China, the Persian Gulf and Europe. Developing economies in India, Russia and Brazil are also considered attractive.

It might be expected that a recent college graduate or MBA recipient would be willing to move overseas to make a name for themselves, but much of the interest is coming from professionals already working in the financial industry. The idea of looking into an “emerging market” for job security is symptomatic of just how bad the situation in New York and other financial hubs has gotten. An emerging market is typically unstable and prone to massive fluctuation. In markets like India and China the boom has been pronounced and steady. In Brazil and Russia, long-term viability has yet to be proven. The fact that each of these is considered equally enticing for would-be applicants shows how far down the rabbit hole the American finance industry has fallen.

Not only are layoffs increasing as financial firms implode, but hiring rates are also dropping. An investment firm isn't laying off a high-salary worker and replacing them with cheaper, younger labor. The firm is laying off a high-salary worker and simply taking a hit to its productivity, hoping that the payroll savings will offset the revenue losses.

Hiring at many U.S. firms is stagnant, the same cannot be said of firms in Dubai and Shanghai, where the talent pool continues to get bigger and better. Robert Olman, president of Alpha Search Advisory Partners, is an expert in the hiring processes of hedge funds and investment banks. He believes that the current malaise will continue well into 2009.

The United States cannot afford to lose talented professionals – and in many cases, their families – in yet another key area. The U.S. has already been gutted by NAFTA and the WTO which make outsourcing to cheap labor markets in Mexico, India, China and elsewhere almost unavoidable. The only bastion left in the U.S. economy was our finance and banking sector, but it has come under fire from upstart foreign competition and is now being poached of some of its best talent. The government hopes to convince you to spend this country out of our recession – that's what the Economic Stimulus Act was intended for – but we simply cannot do that without income. Without viable job options there can be no income, and thus no recovery.

from: http://www.economyincrisis.org