Bank of America in Costa Rica – “Endless Opportunities.”

In a large, English language newspaper advertisement in La Nacion where the Bank of America logo is positioned inside what appears to be a diamond engagement ring, the words “and they worked happily ever after” and “endless opportunities in the finest financial services company in the world” might taste a little bitter in the mouths of the tens of thousands of employees of Bank of America in the USA who have been laid off or, should we say “divorced” by the company?

Having received billions of dollars in bailout money (“Citigroup and Bank of America each eventually received $45 billion worth of bailout funds…” one might be somewhat baffled as to how Bank of America can legitimately describe themselves as the “finest financial services company in the world” but, they are certainly growing here where they have 600 employees in Costa Rica who, according to Frank Lafuente, the Communications Manager of Bank of America – says: “Advise debtors on how they can readjust their debts to keep their homes.” “Aconsejar a los deudores sobre cómo pueden reajustar sus deudas para mantener sus casas”.

70% of the employees in Costa Rica are between the ages of 18-25 and moving jobs ‘offshore’ to Costa Rica may be good for Costa Rica – for the time being – but according to a new March 2011 report (55 pages) “The Evolving Structure of the American Economy and the Employment Challenge” by Michael Spence, a Nobel prize-winning economist and professor of economics at New York University’s Stern School of Business and Sandile Hlatshwayo a researcher at New York University’s Stern School of Business, who have carefully examined offshoring, in the words of Paul Craig Roberts (1), “ruined the income and employment prospects for most Americans.”

In the report, “They note that the American economy has seen the lower and middle components of the value-added chain moving to the rapidly growing markets abroad and warn that soon higher-paying jobs may follow low-paying jobs in leaving the United States.”

“The trends in value added per employee are consistent with the adverse movements in the distribution of U.S. income over the past twenty years, particularly the subdued income growth in the middle of the income range. The tradable side of the economy is shifting up the value-added chain with lower and middle components of these chains moving abroad, especially to the rapidly growing emerging markets. The latter themselves are moving rapidly up the value-added chains, and higher paying jobs may therefore leave the United States, following the migration pattern of lower-paying ones.”

“Many of the middle-income group, however, are seeing employment options narrow and incomes stagnate. Recent surveys suggest that people have doubts about the opportunities available for future generations. This may be pessimism induced by the tremendous shock of the crisis, high unemployment, and a difficult recovery. But it appears that the declining employment opportunities in the tradable sector for middle-income employees predate the crisis. Uncertainty about both the quantity and quality of the employment opportunities for this group is considerable.”

Most intelligent, hard working people understand that sending jobs offshore – in this case out of the USA – is destroying the US economy, we don’t need Nobel prize-winning economists to tell us that. Technology and capital can be moved quickly anywhere in the world, the big difference for jobs is the cost of labor…

I have no problem with any company moving to Costa Rica and employing lots of Costa Ricans to compete in Costa Rica however, it doesn’t sit well with me when companies who call themselves Bank “of America” take jobs away from hard working Americans and move them to other countries and then compete with companies in the USA.

Chris Hedges writes about the “finest financial services company in the world” when he says that: “[Bank of America] sends out home invasion teams to throw Americans out of their homes through bank repossessions or foreclosures, and of course many of these people were given loans that the lenders knew they could never repay often under fraudulent conditions… and yet there has been absolutely no investigation–no criminal charges–brought against these corporations.”

• So isn’t it ironic that these young Bank of America workers in Costa Rica are advising debtors in the USA about how they can readjust their debts to keep their homes in the USA?
• Is it fair to the US taxpayer that Bank of America hasn’t paid a nickel in federal income taxes in the past two years and received a “income tax refund from hell” of $666 million for 2010?
• Is it fair that the Bank of America is allowed to play by a different set of tax rules, while simultaneously paying out obscene bonuses to its CEO and kicking hardworking Americans out of their homes?

I agree with Sr. James Goldsmith, the Anglo-French billionaire financier, who said that: “the economy is there to serve the fundamental needs of society, which offers prosperity, which are stability and which are contentment…”

The American consumer may be able to buy a whole load of cheap ‘stuff’ made in China at Walmart in the USA these days but, if more and more people are losing their jobs to the Chinese, the Indians and the Costa Ricans, the net effect is that the whole economy and the very fabric of society is now suffering in a serious way.

• 16th February 2010 – Bank of America Security Officers Protest Job Losses and Cuts to Health Care Coverage. – “It’s not right that Bank of America can take billions of tax dollars, dole out astronomical bonuses while cutting jobs and benefits from working people,” said Mike Fishman, President of 32BJ SEIU.”
• 20th September 2010 – Layoffs Said to Be Near for Bank of America Unit. “Echoing the slowdown in activity that has hit Wall Street’s biggest institutions, Bank of America plans to cut several hundred jobs in its investment banking unit this week, according to employees.”
• 21st September 2010 – Bank of America Layoffs Coming: Report. “Managers in certain “profit-challenged areas” have been told to cut about 5% of staff, according to the report.”
• 1st December 2010 – Bank of America layoffs hit Charlotte. “Bank of America is laying off a “small percentage” of its staff in the Global Technology & Operations division of the bank.”
• 10th December 2010 – Expect BofA job count to fluctuate throughout 2011. “The bank in recent weeks has announced substantial layoffs as it looks to cut costs.”
• 22nd January 2011 – Bank of America looks for deeper cuts. “Bank of America plans more belt-tightening in 2011, likely meaning more job cuts ahead at the nation’s biggest bank…”
• 15th March 2011 – Bank of America cuts consumer banking jobs. “A little more than 100 employees were affected by the move, bank spokeswoman Anne Pace said Monday.”
• 15th March 2011 – Bank of America cutting jobs in consumer banking. “Bank of America will cut a “small number” of jobs in its consumer and small business banking unit, a spokeswoman confirmed.”
• 9th May 2011 – “Bank of America is laying off 1,500 loan processors and underwriters as it closes 200 of its small loan fulfillment centers. The layoffs come as the bank expects its mortgage loan volumes to drop by 25 percent this year from last and it looks to cut its expenses.”
• 25th May 2011 – Bank Of America Illegal Foreclosures In Utah. The attorney general for the state of Utah sent Bank of America Corp. (BAC) Chief Executive Brian Moynihan a letter last week warning him that one the bank’s units was conducting illegal foreclosures in Utah.

Paul Craig Roberts (1) has also written extensively about the very serious consequences of moving US jobs offshore: “We must hope that Spence’s paper will encourage thought. On the other hand, the bought-and-paid-for-economists will confront Spence with their fantasies that the US would be enjoying full employment if only government did not discourage employment with unemployment compensation, food stamps, income support programs, unions, minimum wages, and regulation.”

He asks: “Will the US business and economic establishments heed these warnings, or will the US become a third world country as I predicted at the beginning of this century?”

And lastly, after making a US$4.4 billion profit, Bank of America received a US$1.9 billion refund from the IRS in 2010… Sound fair to you?

Labour costs in Costa Rica may be low compared to the USA and Canada however they’re high compared to many other parts of the world and in this wage race to the bottom, surely it’s only a matter of time before Bank of America starts firing people in Costa Rica and advertising for “Endless Opportunities” in India? Or perhaps in China?

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Written by Scott Oliver, author of 1. Costa Rica Real Estate Scams & How To Avoid Them, 2. How To Buy Costa Rica Real Estate Without Losing Your Camisa, and 3. Costa Rica’s Guide To Making Money Offshore.

(1) Paul Craig Roberts served as an Assistant Secretary of the Treasury in the Reagan Administration and is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.