Working in the Financial Sector in the US - Coursework Example

Graduate Guide: Working in the Financial Sector in the US Introduction A former British colony, the US is a nation of diverse culture, encapsulatingan influx of multi-ethnicity and number of different values and conventions.(Adams and Strother-Adams, 2001, 91) The hyphenated American is characteristic of US ethnicity since the US population is primarily comprised of immigrants who have settled in that region over the last five hundred years.(Florina and Peterson, 2000, 97) For example, being an American can include African-American, Irish-American, Italian-American and so on. The cross-cultural dynamics of the US lends itself to social mobility and the very idea of social mobility gave way to migration to the United States which it turn created social mobility. Politically, the US is a constitutional republic of 50 federal union state and is predicated on the concept of “majority rules” and minority rights are protected. (Scheb and Scheb II, 2002, 6) Government rule is characterised by constitutional accountability in the democratic tradition. (Raskin, 2003, 36) The US Federal government is structured so as to promote a separation of powers and include three branches. They are the Legislative branch which is comprised of the Senate and the House of Representatives; the Executive which is the President and his cabinet; and the Judicial branch which includes the Supreme Court and all lower courts. (Raskin, 2003, 36-38) The government is historically a two party system with Republican and Democratic parties forming the government, having been elected by virtue of free and regular elections. (Raskin, 2003, 36-38) The US’s economic system is structured around a capitalist framework. (Lederman and Maloney, 2007, 185) The Gross Domestic Product (purchasing power parity) of the US is the largest in the world, only 4% less than that of all of Europe with the US sustaining a PPP of US 13,780,000,000,000 in 2007 compared to the EU’s US$14,430,000,000,000. (CIA, 2008) According to the US State Department, the US private sector sustains just over 67% of the US GDP. (USA Economy In Brief). The US Economy, as well as the remainder of the developed and developing world has been in recession since December since December 2007. (Grynbaum, M. A. 2008) Be that as it may, the financial sector has had a long history of success in the US, with finance and insurance representing the largest net income in the US. (US Census Bureau, Statistical Abstract of the United States, 2007) In 2005 over 155 million Americans were employed with at least 80 percent of those jobs held as full time jobs. (US Census Bureau 2008) The number of migrant workers in the US both documented and undocumented is estimated to be at least 2.5 million with a majority of those workers originating from Latin America. (Sharita, 2007) The Financial Sector in the US The financial sector in the US has a history of varied success and failure. For instance during the 1920s, the finance sector was very important to the US economy bringing in a large portion of the US net income.(Philippon, 2008) However, collapses in the Stock Exchange in the 1930s and 1940s dropped the financial sector’s GDP to 2.5% in 1947. (Philippon, 2008) The market recovered slowly by 1970, and continued at a more rapid pace, reaching close to an 8% GDP by 2006. (Philippon, 2008) In a joint report issued by New York Mayor Michael Bloomberg and US Senator Charles Schumer, the US financial sector was referred to as “too big and important to take for granted.” (Bloomberg and Schumer, 2007) Regarded as pivotal to the US national economy and international competition, the US financial sector is committed to growth and development. At the time of issuing the report, Bloomberg and Schumer reported that the US financial sector lead the world, but there were concerns that the EU’s financial sector was at a stage where it was almost equal to that of the US. (Bloomberg and Schumer, 2007) The growing concerns about the continued success of the US financial sector were expressed as follows: “There is an urgent need for concerted but balanced action at the national, State and City levels to enhance the competitiveness of the US financial markets and defend New York’s role as a global financial center...US financial institutions and markets are positioned competitively to meet future customer needs and to support sustained growth in the domestic economy.” (Bloomberg and Schumer, 2007) It is obvious from the report by Bloomberg and Schumer that the success of the US financial sector is measured by its global conquests. To this end, customer services reaches out to multi-national markets. This fact together with the multi-cultural and multi-ethnicity of the US’s domestic markets ensures that it is not only desirable, but necessary, that migrant workers form a part of the US financial sector. a) Employment Opportunities in the US Financial Sector New York represents the strongest area in the US for job opportunities in the US’ financial sector. While the US financial sector cut at least 52,500 jobs in 2007 these jobs were primarily related to sub-prime mortgages. (Gralla, 2008) While mortgage and real estate businesses were cutting jobs, companies in New York hired at least 1,900 persons. (Gralla, 2008) Gralla explains that: “The securities industry, which is concentrated in New York, is just one part of the overall financial sector that employs more than 6.1 million people and includes mortgage brokers and real estate credit companies....mortgage and real estate lenders tend to located outside New York which is why financial companies in the city were adding staffers while around the nation these employers cut almost 1% of their workers.” (Gralla, 2008) In the fourth quarter of 2007 the New York financial sector grew to just over 1% at over US460 billion making New York City rank among the world’s top 20 financial sectors. (Gralla, 2008) The financial sector in New York employs 11% of the city’s employees, accounting for approximately 35% of all wages in that area. Bankers and brokers earn at least US$200,000 annually in addition to bonuses. (Gralla, 2008) However, as the sub-prime crisis impacts the stock exchange in New York, the unemployment levels in New York City will also be impacted. Even so, the best financial sector job opportunities in the US are centred around Wall Street/the New York Stock Exchange. The recession and together with the terror attacks on the World Trade Centre culminated in the lost of 40,000 jobs in the financial sector in New York. (Gralla, 2008) Even so, New York is still ahead of the remainder of the US financial sector and the push to improve and revive the financial sector generally, promises that jobs will be open to select candidates. In a Skills Survey conducted by Silicon.com Skills in 2008, the US financial services industry suffers most by Information Technology (IT) shortages. (Lormas, 2008) The most sought after IT skills in the financial services are: Languages programming. IT management. Linux. In addition, the Silicon.Com Skills Survey, 2008 also found that there is a shortage of non-IT skills in the US financial services industry. These include, sector knowledge, project management and leadership. (Lormas, 2008) So compared to other professions and practices such as medicine, law, teaching and sales, financial services requires a great many skills and regulatory knowledge. While a dental assistant can get by on mere oral hygiene, a stock broker or accountant requires knowledge of IT as well as foreign and domestic codes of ethics and practice. b) Tips for Working in the US Financial Services Sector knowledge and IT is particularly important in the financial services industry as the securities markets require strengthening. In this regard with the US financial markets suffering in domestic sub-prime mortgages and the domestic banks failing, foreign placement of securities becomes more important in the US Stock Exchange. Foreign securities are are place publicly when they are offered on the public market are listed for public trade in the US. (Hodgdon, Tondkar and Coffman, 2003, 133) Private offerings take place when foreign securities are offered directly to investors in the US. (Bastos, 2006, 66) After the market collapses in the 30s Federal regulations were put in place. (Bartos, 2006, 1) A series of Federal statutes “administered by the US Securities and Exchange Commission” were enacted from 1933 to 1940 aimed at cultivating a regiment of full and frank disclosure. (Bartos, 2006, 2) Sector knowledge is very important in the securities area of the financial services industry and particularly important with respect to foreign securities placement on the US market. Compliance issues are pivotal and migrant workers would be useful in helping foreign investors understand the reach of the various Securities Exchange Acts. While these jobs may be fulfilled by hyphenated Americans, language and cultural barriers can remain a problem. Communicating across cultural barriers and understanding the dynamics of full and frank disclosure within the ambit of the Securities Exchange Commission is obviously going to become more important as the US tries to restore confidence in its financial services sector. The Sarbanes-Oxley Act 2002 is another key area of compliance issues for both foreign and domestic securities’ placements. It was passed in response to US corporate scandals such as Enron in 2001. The act calls for greater transparency and compliance requirements. This is particularly important to foreign employees wishing to seek employment in the US. The chances of securing employment in securities in the US are far more likely now since in recent years world markets have become increasingly global and improvements in information technology have made globalization of capital markets a simple exercise. (Coffee, 2002, 1759) It therefore follows that skills in sector knowledge both abroad and in the US as well as IT skills will improve the chances of a foreigner obtaining employment in the US financial services industry. Survival Tips for Working in the US Union protection and job security in the United States is not as prevalent or strong as it is in the EU and British Commonwealth countries in general. Only about 12% if US workers subscribe to unions compared to 30 present of EU workers. (Fuller, 2005) According to the World Bank, the US ranks first in terms of the ease with which workers can be hired and terminated. (Explore Economies, 2006) Unlike Europe and the British Commonwealth, job security in the US is predicated on minimum government intervention in the private sector. This is primarily a consequence of the US capitalist system. Job security in private financial sectors will by and large correspond with the economy and the individual business conditions. In other words, supply and demand drives the US employment markets in all private sectors. If the market flourishes jobs will be created, and with higher demands, jobs are more secure. In the current economic crisis job security in the private sector in the US is far less certain than usual. As a result of job insecurity a number of US workers have excluded themselves from the job market by starting their own businesses or becoming self-employed. (Karoly and Zissimopoulos, 2004, 24-47) It therefore follows that job security is tenuous in the US. It is therefore important to create one’s own job security by ensuring productivity. Acquiring knowledge and keeping abreast of developments in the financial services and IT will also create more job security. In light of the down turn in the financial sector it would also be wise to keep in mind that supply and demand do not currently correspond. By keeping this in mind the approach to any job should be guided by hard work, consistency and commitment. A Guide to Further Information for Working in the US The National Labor Relations Act was passed by the US Congress in 1935. (National Labor Relations Act 1935) The purpose of this Act is to foster satisfactory relations between employees and their employers in the private sector. This Act however is aimed at ironing out employment discord that can lead to worker conduct such as strikes and stoppages, conduct deemed to be harmful to the US economy. The Act in addition to protecting the economy, also confers upon the worker the right to collective bargaining and to join labor organizations. Employees suffering under unfair labour practices may file a complaint with the National Labor Relations Board. It is always best to initiate the process by first contacting an information Officer in the regional office of the place where the employee is employed. A list of the National Labor Relations Board offices are located at: http://www.nlrb.gov/about_us/locating_our_offices/index.aspx . A comprehensive guide to conduct giving rise to unfair labour practices is available at: http://www.nlrb.gov/nlrb/shared_files/brochures/engulp.pdf . In order to obtain permission to work in the US a work visa or a Green card is required. The requirements and forms for college educated professionals are available at the US Immigration Support Website. Bibliography Adams, J.Q. and Strother-Adams, P. (2001) Dealing With Diversity. IA: Kendal/Hunt. Bastos, James. (2006) United States Securities Law: A Practical Guide. Kluwer Law International. Bloomberg, Michael and Schumer, Charles. (2007) “Sustaining New York’s and the US’ Global Financial Services Leadership.” Available online at: http://www.senate.gov/~schumer/SchumerWebsite/pressroom/special_reports/2007/NY_REPORT%20_FINAL.pdf Retrieved January 13, 2009. CIA (2008) World Fact Book. Available online at: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html Retrieved January 13, 2009. Coffee, John. (2002) “Racing Towards the Top?: The Impact of Cross-Listings and Stock Market Competition on International Governance.” Columbia Law Review, 102, 1757. Explore Economies.(2006) Available online at: http://www.doingbusiness.org/ExploreEconomies/?economyid=197 Retrieved Jan. 13, 2009. Florina, M.P. and Peterson, P. E. (2000) The New American Democracy. London: Longman. Fuller, Thomas. (June 15, 2005) “In the East, Many EU Work Rules Don’t Apply.” International Herald Tribune. Grynbaum, Michael. (December 1, 2008) “DOW Plunges 680 Points as Recession is Declared.” The New York Times. Hodgdon, C.D.; Tondkar, R.H. and Coffman, E.N. (2000) “Foreign Issuers in US Capital Markets: An Enforcement Perspective.” Advances in International Accounting, 13, 133-155. Karoly, Lynn and Zissimopoulos, Julie. (July 2004) “Self-employment Among Older US Workers.” Monthly Labor Review, 24-47. Lederman, D. And Maloney, W. (2007) Natural Resources: Neither Curse Nor Destiny. World Bank. National Labor Relations Act 1935 Philippon, Thomas. (2008) “Why Has the US Financial Sector Grown So Much? The Role of Corporate Finance.” NBER Working Paper No. W13405. Raskin, James. (2003) Overruling Democracy: The Supreme Court vs The American People. NY: Routledge. Sarbanes-Oxley Act 2002 Scheb, J. M and Scheb, J. M. II. (2002) An Introduction to the American Legal System. KY: Delmar. Securities Exchange Amendment Act 1936 Securities Exchange Act 1934 as Amended Sharita, Laura. (March 14, 2007) “US Far From Free for its Migrant Workers.” Philanthropy Action. Available online at: http://www.philanthropyaction.com/nc/guest_workers_need_more_protection_from_servitude Retrieved January 13, 2009. USA Economy In Brief. (July 2007) Available online at: http://www.america.gov/media/pdf/books/economy-in-brief.pdf#popup Retrieved January 13, 2009. US Census Bureau. (2007) Statistical Abstract of the United States. Available online at: http://www.census.gov/prod/2006pubs/07statab/business.pdf Retrieved January 13, 2009. US Census Bureau (2008). Household Income, Rises, Poverty Rate Unchanged, Number of Uninsured Down. Available online at: http://www.census.gov/Press-Release/www/releases/archives/income_wealth/012528.html Retrieved January 13, 2009. Read More