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    Highlights for week ending June 28, 2003
  • Binghamton Press & Sun-Bulletin: Information gap angers villagers. Excerpts: The pollution from industrial solvents in Endicott (from a former IBM semiconductor plant) may affect as much as 350 acres, according to an update Friday from an IBM spokesman. Early reports from IBM that the plume of chemicals covers 55 acres are incorrect, said Richard Knight, IBM spokesman. A document published in 1999 by the state Department of Environmental Conservation lists the plume at 220 acres. Knight said Friday the pollution in the ground covers 275 acres. Researchers are still defining a boundary of a second plume of chemicals, moving through enclosed air pockets, conduits and enclosed spaces. This, called the vapor plume, does not coincide precisely with the plume moving with ground water. Although the precise boundaries are still being established, collectively the plumes cover about 350 acres, Knight said.

  • Binghamton Press & Sun-Bulletin: Tainted air 'more harmful' than water. Lawyer says IBM dumped chemicals. Excerpts: The hazardous chemicals wafting into hundreds of homes and businesses in downtown Endicott are more dangerous in the air than in the water, a colleague of Erin Brockovich told more than 300 residents Wednesday night. ... IBM Corp. is the source of the pollution and responsible for cleaning it, according to records from the state Department of Environmental Conservation. IBM is in the process of installing ventilation systems in at least 430 buildings. Many who gathered for Schwarz's presentation expressed anger toward IBM and fear and despair about the situation. They broke into applause when Schwarz said he thought the mess was no accident. "I highly doubt this is a spill," he said. "What you have here is a systematic dumping of chemicals."

  • Other articles concerning the Endicott chemical spill are available at this page on the Binghamton Press & Sun-Bulletin newspaper Web site.

  • Social Science Research Network Electronic Library: Reality Testing for Pension Reform, by Pamela J. Perun, Urban Institute, and C. Eugene Steuerle, Urban Institute. Abstract: These are interesting times in the pension world now that there are two diametrically opposed proposals for change before Congress. The first is the Pension Preservation and Savings Expansion Act of 2003 recently introduced by Representatives Portman and Cardin. This bill embodies the traditional type of pension reform, an omnibus statute that tinkers with almost every aspect of the private pension system to make incremental changes. The second is the Administration's attempt at radical change and simplification. Its proposal contemplates a sweeping consolidation in the number and types of defined contribution plans. This paper evaluates these two approaches - one evolutionary, the other revolutionary - and then considers an alternative. Its analysis focuses on the nuts-and-bolts of the private pension system, that is, on the plans that comprise it and the rules that govern them. Its thesis is that examining the architecture and machinery of the private pension system can teach us much about directions for reform.
    • Janet Krueger comments on this paper: This paper on pension reform is worthwhile reading, especially if you plan to spend any time talking to your congress critters about pension issues. While there are some aspects of their proposed 'alternative' that might raise your hackles, such as the elimination of early retirement subsidies, the authors take a more objective look at the legislative proposals currently on the table than many I've seen, and they raise some good points. I particularly enjoyed their lead-off quote from Dave Barry.

  • Pension Rights Center: Fact Sheet on the Portman-Cardin Bill. Excerpt: The Pension Preservation and Savings Enhancement Act of 2003 (H.R. 1776), informally known as the “Portman-Cardin bill”, was introduced into Congress on April 11, 2003 by Congressmen Rob Portman (R-IL) and Benjamin Cardin (D-MD). The House Ways and Means Committee is likely to vote on the bill in July. There is still time to for you to contact your Representative to express your views on these provisions. H.R. 1776 would neither PRESERVE PENSIONS nor ENHANCE SAVINGS.

  • Washington Post: U.S. Joining Suit Against Medco. Excerpt: The U.S. attorney in Philadelphia announced yesterday that he is joining a complaint against Medco Health Solutions Inc. that alleges the nation's second-largest pharmacy-benefit manager improperly canceled prescriptions, switched medications without physician approval and sent patients partially filled orders. (Editor's note: Most U.S. IBM employees are required to have long-term prescriptions filled by Medco).

  • Washington Post: ATF Eyes Bargaining Exemptions. Excerpt: The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is considering plans to exempt from collective bargaining 600 inspectors who have been represented by a union for more than 30 years. If Justice Department officials sign off on the move, the ATF would notify the Federal Labor Relations Authority that inspectors could no longer engage in collective bargaining through the National Treasury Employees Union, to which they have belonged since 1970. ... Colleen M. Kelley, president of the NTEU, which represents 150,000 employees in 29 agencies, called the plan a "disgraceful act of union-busting" that fits a pattern of anti-union decisions by the Bush administration.

  • Yahoo! News: White House Won't Release Medicare Memo. Excerpts: The Bush administration's top Medicare accountant has calculated how millions of senior citizens would be affected by bringing private managed care into the program, but the administration won't release the information. An earlier analysis suggested that a Republican plan to inject market forces into Medicare could increase premiums for those who stay in traditional programs by as much as 25 percent. If that's still the case, it could help Democrats who argue that the GOP plan is risky for those who want to stay in traditional Medicare, where they can pick any doctor, rather than move to a managed care plan. The administration's Medicare chief threatened to fire his top actuary, Rick Foster, if Foster released his calculations to Capitol Hill Democrats who requested the analysis, officials said.

  • New York Times: New Drug Plan Far From Cure-All, Retirees Find. Excerpts: In Washington, President Bush and Congressional leaders praise the Medicare legislation as historic. But here, as elsewhere in the country, retirees are experiencing what Robert J. Blendon, a health policy expert at the Harvard School of Public Health, calls "sticker shock" — the realization that, after so many promises, the proposed drug benefit will look nothing like what they expected. They are confused by the complex structure of the plans, and upset that the coverage will not begin until 2006; Mrs. Fox said she did not expect to live that long. They do not understand why the proposals have a "doughnut hole," a gap in coverage.

  • Newsday: House Advances Health Savings Accounts. Excerpt: Republicans said the new accounts would give more choice to individuals at the mercy of inadequate or expensive plans offered by their employers. "We want power to go to the people. We want power to go to the consumers," said Rep. Paul Ryan, R-Wis. Democrats said employers will use the new accounts as an excuse to raise out-of-pocket costs for employees or eliminate coverage altogether. "This is a radical effort to dismantle our employer-based system," said Sander Levin, D-Mich.

  • New York Times: Very Richest's Share of Income Grew Even Bigger, Data Show. Excerpts: he 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period. The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992. ... In 2000, the top 400 on average paid 22.3 percent of their income in federal income tax, down from 26.4 percent in 1992 and a peak of 29.9 percent in 1995. ...

    The rate actually paid by the top 400 in 2000 was about the same as that paid by a single person making $123,000 or a married couple with two children earning $226,000, according to Citizens for Tax Justice, a labor-backed group whose calculations are respected by a broad spectrum of tax experts. The group favors higher taxes on the wealthy, and its director, Robert S. McIntyre, said yesterday that the I.R.S. data bolsters that viewpoint. "Regardless of which party these 400 are in, these are the guys Bush wants to help, even though they have so much money they don't know what to do with it," he said. "How Bush feels about the half of the population that doesn't have much money is he got them a tax cut worth an average of $19 each." If link is broken, view Adobe Acrobat version [PDF--21 KB].

  • Forbes: The IRS 400. Excerpt: The 400 highest-paid Americans earned $69.6 billion in adjusted gross income in 2000, or just under $174 million each, according to a U.S. Internal Revenue Service report released yesterday. The income of the IRS 400 has risen dramatically in recent years. In 1992, the top 400 reported adjusted gross incomes of just under $19 billion for an average of a relatively paltry $46.8 million. The top 400's percentage of the overall pie has been growing too: In 1992, the top earners garnered .52% of all reported adjusted gross income; in 2000 they earned 1.09%. ... Who are these guys? While the IRS doesn't name them--privacy concerns and all that--a peek at the Forbes list of top-paid CEOs for 2001 (which corresponds roughly to the 2000 tax year) can match some names with the numbers. Editor's note: Former IBM CEO Louis Gerstner was the 6th highest paid CEO in 2001, with total compensation of $103.4 Million.
    • According to Forbes, in 2002 Lou Gerstner was the 364th richest American with a net worth of $630 Million.

  • Money/CNN: 8 million may lose OT pay. Bush administration proposal would dramatically alter rules for paying overtime, study says. Excerpt: More than 8 million workers in the United States will be ineligible for overtime pay under a plan proposed recently by the Bush administration, a research group said Thursday. ... The EPI questioned the appropriateness of the Labor Department's implementing such sweeping proposals without Congressional approval. "There is no reason to believe...that Congress has authorized the Department of Labor to dramatically reduce coverage...taking overtime protection away from millions of workers," wrote the authors of the study, Ross Eisenbrey and Jared Bernstein. "Yet that is exactly what the Department of Labor has proposed." ... The proposal could also cause workers to work longer hours, since the Labor Department doesn't put any limit on the number of hours per week an employee must work, the group said in a study published on its Web site. "Once employers are not required to pay for overtime work, they will schedule more of it," the study said.

  • The Economist: Is Big Blue the Next Big Thing? Excerpt: If IBM gets it right, on the other hand, and the firm escapes unscathed from legacies of the past decade (earlier this month IBM said that regulators are investigating its accounts filed in 2000-01), its new model could trigger broad, industry-wide changes. Sensing the danger, a rival group of technology firms has already begun to gather around now-struggling Accenture and mighty Microsoft, which feels the Linux threat to its own operating systems. And IBM's use of Linux is also encountering legal problems (see article). Having previously chosen not to overpay for PwC Consulting, HP may soon feel the need to look for another consultancy. So, too, might EDS, whose purchase of A.T. Kearney, another consulting firm, has not worked well. The engineers of Silicon Valley may still cling to the hope of finding, at long last, the Next Big Thing—a technology so whizzy it makes all those share options valuable again. But what if tech's next big thing turns out not to be a technology at all, but a better way to make it work?

Coverage on H1-B and L1 Visa and Outsourcing Issues

  • infoWorld: Offshore outsourcing pushes down services prices. Excerpt: The rising popularity of offshore outsourcing will continue to push down the prices of IT services for the next several years, a welcome development for IT buyers but a challenge for IT service providers, according to a new IDC study announced Monday. Offshore outsourcing services are provided from a different country in which the client is based. These services provided from abroad often cost less than similar services provided domestically. India has emerged as the world's largest provider of offshore outsourcing services, and the U.S. as the largest consumer.

  • rediff.com (India): American citizens use the Web to protest against outsourcing and non-immigrant visas. Excerpt: Outsourcing and non-immigrant visas seem to be sore topics for Americans right now. More than a dozen sites have sprung up to protest against the practice of outsourcing IT jobs to India and employing Indian professionals for software jobs in the US by issuing the H-1B and the L1 visa. In fact, the protests have grown quite vociferous online. ... "We are here to save American jobs. We are not racists, xenophobes or bigots. We are displaced American workers. Displaced by a little known immigration visa approved by congress at the request of a large US corporations. These visas known as H-1B and L1 are used to import foreign workers to replace American workers with cheap foreign labor," claims h1bprotest.com. Editor's note: This article includes links to several Web sites that have been set up to protest outsourcing and non-immigrant visas.

  • Rep. Tancredo (Republican, Colorado) recently testified before Congress about H-1B and L-1 visas. Excerpt: These companies are circumventing the congressionally-mandated safeguards and rules imposed under the H-1b program. And our government knows it. This is not news to anybody inside the Department of Labor or inside the administration. They just do not care. ...

    So I am saying that it is now approaching a million people, if not more, that are here under an H-1b program that are taking jobs in “that high-tech industry that no other American would take.” Does anybody really buy that? What we know is that they are being given these visas because they will work for less. It is a cheap labor program. Now, let us just say it. If that is the program we want to run, let us tell Americans that is the program. Let us not even hide it under visa titles like H-1b and things nobody has the slightest idea what H-1b means or L-1 visas. I will tell my colleagues what it means, anybody who is listening: it is a cheap labor program. People want to pay less for labor. They know there are people outside the country who are willing to work for less, so let us get them in here.

    To listen to Tom Tancredo testifying on the house floor listen to this 31 minute audio file (requires free RealOne player). Representative Tancredo's testimony regarding H-1B and L1 visas starts at approximately 14 minutes into the audio file. Congressman Tancredo's testimony is available in transcript form on the Congressional Record Web site.

  • Austin American-Statesman: Conference on sending jobs abroad stirs anger. As executives discuss use of foreign labor to cut costs, jobless Americans protest. Excerpt: At the Waldorf-Astoria hotel Thursday, about 125 executives attended the 2003 Strategic Outsourcing Conference, sponsored by the Conference Board, a business association. They heard Chris Disher, a vice president of the consulting firm Booz Allen Hamilton, describe how companies can lower their costs by as much as 80 percent by shifting tasks such as computer programming, accounting and procurement to India, the Philippines, China, Malaysia and elsewhere in the developing world. "There's just no place left to squeeze" costs in the United States, he said. "We need to look to other areas." ... "The U.S. economy is growing and creating jobs; it's just not Americans filling those jobs," said the panel's chairman, Rep. Donald Manzullo. "They have been moved overseas where foreigners will work for a lot less." For example, a beginning computer programmer in the United States might earn $60,000 a year, while the same job in India pays less than $6,000.

  • the-south-asian.com (India): China & India - Major global economic players by 2025. Excerpt: 13. IBM - 2001 $ 25 million , $ 100 million more by 2004. IBM has a joint venture with Tata Consultancy Services . At Bangalore it runs a SEI- CMM level 5 accreditation Software Testing center. Thomas Abrahams is the India IBM CEO . IBM has a Hindi version of Lotus Notes Domino, and a Hindi version of the Data Base DB2 and the WebSphere Application Server is available. It has about 400 professionals. At Pune there will be 500 developers supporting WebSphere Application Server on Linux , NT, AIX, Solaris, HP-UX.

  • Tech Central Station: Outsourcing and Elections. Excerpt: Could this outsourcing produce a major political backlash? Sure, it could. Will it? That's less clear. Right now the issue is owned by relative extremes on the left and right, making it unlikely to produce much movement one way or the other.

  • WashTech News: America's Nouveaux Tech Poor. Excerpt: How will Boeing executives sell planes to U.S. carriers when the number of Americans who can afford to fly dwindles? What plan do Microsoft’s leaders have to maintain their company’s revenues as the number of those who can no longer afford to purchase new operating systems or Xboxes grows? What becomes of the United States as a world leader as other countries surpass our expertise in aerospace and computer technology? These are questions Gary and I sometimes ask one another as we scrub down the deli at the end of the day when we have a few moments to ponder.

This week on the Alliance@IBM Site:

  • Many people have said they did not get the Alliance survey on issues at IBM. If you have not filled out the survey please read the note below and go to the survey link. Thank you. In order for us at the Alliance@IBM to improve our work and sharpen our focus, we have prepared a survey which we are hoping our members, subscribers and friends will fill out. We will share the results with everybody. Thank you for helping and please click on the following: http://r.mb00.net/s/c?k.4nkv.1.20ny.px6. Editor's note: Some of the questions on this survey will remind you of the opinion surveys IBM used to use back when they were interested in the opinions of their employees.

  • The Alliance@IBM has recently added an excellent OffShoring News page, including an IBM Offshoring News section.
"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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