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- CBS Marketwatch: Let
the debate begin. Treasury's cash-balance pension proposal a starting point
at least. Excerpt:
The Treasury's Department's proposed overhaul of cash-balance pension plans
is certain to kick off a necessary debate. But whether the Treasury is taking
a step in the right direction (or right distance for that matter) depends
on whom you ask. ... Unfortunately, advocates for employees and employers
say the Treasury's solution to ensuring fairness to older workers may be
a nonstarter. The AARP's Frank Toohey, for instance, wants an even longer "hold
during which employees would have the ability to choose whether to stay in
the cash-balance pension plan or the old defined-benefit plan. "The proposal
will protect workers who are 60 and older, but not those 50 or 55," he
says. "Those workers will be will be stuck without
- Business Week: Why
IBM Called In The Consultants.
The deal for PWCC is challenging Big Blue, but it should pay off in the long
run. Excerpt: When IBM (IBM ) scooped up PriceWaterhouseCoopers Consulting
in October, 2002, Big Blue bet that the $3.9 billion deal would help solve
its long-standing challenge of sluggish revenue growth. The consulting
business itself seemed to offer bright growth prospects, and PWCC's 30,000
whip-smart consultants were supposed to help drive sales of IBM's other
products and services. ... But on Jan. 15, IBM's Business Consulting Services,
which includes the PWCC consultants, stumbled. While the rest of IBM's financials
for the fourth quarter were strong, revenues for the BCS group fell 2%, to
$3.25 billion, compared with expected growth of 3%. The news was enough of
a surprise that Merrill Lynch & Co. (MER ) analyst Steven Milunovich slashed
his revenue prediction for the consulting group from 10% growth in 2004 to
a 4% decline.
- Forbes: Birth defect suit against IBM to go to trial. Excerpt: Feb 10 (Reuters)
- When Heather Curtis took a factory job at IBM in 1980, the pregnant, 22-year-old
was assigned to dip silicon wafers into acids and solvents as part of a process
used to make computer chips.
Despite complaints that fumes from the job gave her headaches and a sore
throat, IBM assured Curtis her workplace was safe, according to her lawyer.
Months later, Curtis gave birth to a daughter so severely deformed that
she lacked knees and had a skull too small to accommodate her brain. "IBM's doctors and managers told her that there is absolutely nothing to worry about,
that this was a perfectly safe place," Curtis's attorney, Steven Phillips of law
firm Levy Phillips & Konigsberg LLP, said. "She believed all of the doctors." ...
Fear, whose firm also represented R.J. Reynolds in tobacco litigation,
said IBM will prove there was no link between chemicals and the birth defects,
and would bolster that view with testimony from pediatricians and obstetricians.
- New York Times: Executive
Pay, Hiding Behind Small Print. Excerpt: Summary
pay tables, required by the Securities and Exchange Commission since 1992,
help investors see where their hard-earned money goes. But three areas cry
out for reform by regulators: deferred compensation, supplemental executive
retirement plans and executive payouts when a company undergoes a change
in control. As Brian Foley, a compensation expert in White Plains, put it, "The
big print giveth but the small print giveth even more." And, sometimes,
there is no print at all.
Supplemental executive retirement plans are also annoyingly opaque. Actual amounts
in executives' plans are undisclosed; tables outline only what executives may receive
based on years of service, salary and bonus.
Shareholders are paying these bills. They have a right to know the costs in plain,
- Alliance@IBM: IBM
Stockholder Proposal: Full Disclosure of Executive Officer Compensation. Excerpt: WHEREAS compensation for IBM’s executive officers
is listed in the annual report, but their total compensation and related
company liability is not readily discernable by some professional investors
or by the average shareholder; and WHEREAS this leaves shareholders with
an inadequate and incomplete picture of the company's future liabilities
on behalf of those executive officers; RESOLVED that IBM's Board of Directors
establish a policy and practice to provide full and transparent disclosure
of all forms of compensation issued and promised to Company executive officers.
This should include, but not be limited to, their salary, bonuses in all
forms, loans, and their share of deferred compensation schemes such as 401k,
EDSP and the IBM Savings Plan, stock options, life insurance, retirement benefits
and any other perks which constitute a current or future liability for shareholders
of over $2000. This disclosure shall be made in plain English and in dollar
terms using industry accepted accounting principles, including the total
benefits paid in the prior year, the total projected obligation, and the plan
assets set aside to cover that obligation, for each of the executive officers.
- Bloomberg: U.S.
CEOs Replace Option Grants With Free Shares: Graef Crystal.
Excerpt: As the bulk of U.S. companies disclose executive pay for 2003, we
will find that stock-option grants have declined in size. That's the good
news for those who think chief executive officers are paid too much. The bad
news is that free share grants have taken up, or more than taken up, the slack.
- Vault's IBM
Business Consulting Services message board is a popular hangout
for IBM BCS employees, including many employees acquired from PwC. Some sample
- Richard Stanger's
Great News - No Money: Stunned. Author: Joe Dirt. I have always
defended IBM as a great company but the e-mail today that states
the 2003 "well is dry" for Perform Bonus
Plan payouts was the final straw. In short, no employee will get
any type of bonus for 2003 even if your PBC is a 1 and your utilization
is 120%. I never had a problem cutting costs, billing extra hours
(when asked), doing my part for the team, etc. It seems the team
has no honor nor commitment.
I never thought that I would say this but IBM Global Services is
no longer a place for me to work. I always looked for the best
in IBM and for the few of us who are left..this is the last straw.
Run from this company as you are nothing but a cog.
- Just a bit... Author:
murph72727 The company gets $7.6B in profits, an increase of 43% over
last year, and the consultants get jacksh$t?
No wonder everyone I know is looking for a new job.
- We will meet the target
next year!!! See how. Author: I_want_out. I know of 10+ guys who
were 110% billable. we lost vacation time for the damn project. Guess
what our new approach will be: trail our ass off, milk our vacation
to the last second, and make sure no to be more than 95% productive.
Let us see how IBM will meet next year's target
this merger work? Not without the talent. Author: llr429. IBM has
really tried to make this merger palatable, but it's still not working.
[Ex: to set expectations, every meeting quickly begins with 'Are
you Legacy Blue or Legacy PWC?'] PWC talent continues to leave in
droves. Even a senior BCS leader recently said she couldn't keep
up with the churn. Why are we leaving?
1) We came to consulting to do real client services work. Not to
sell boxes or do system integration.
2) We are motivated, entrepreneurial and driven. We don't understand
a culture that stifles creativity and shrugs off timelines and client
3) If we deliver, we expect reward: cash. Not a reprimand that 25%
growth in a down economy was not good enough.
4) We want to do our job, which is working with the client -- not
spend hours each week managing IBM bureaucracy.
5) We are leaders, but where's the leadership? No training, no career
path, no lower levels to grow and develop (it's all outsourced),
no decision tree.
The partner model wasn't ideal, but now no one knows how decisions
are made and no one's accountable.
5) We want to be proud of the work we do and the brand we represent.
We didn't miss the horrifying change in our client surveys, re the
latest Gartner 'magic quadrant' and the scary comments from our clients.
In the end, IBM picked us, we didn't pick them. For many of us,
it's time to move on.
In 3 years, it will be interesting to see how many of 'Legacy PWC'
are still around.
- Washington Times: Hidden
health cost coup. Excerpt: One of the biggest beefs
that liberals have against conservatives is that the latter are reflexively
pro-business. That is, whatever the business community wants, conservatives
will bend over backward to give them.
This is untrue for principled conservatives. But, sadly, the Bush administration
and the Republican Congress keep giving liberals ample reason to believe the stereotype
is fact. ... George W. Bush is not a movement conservative, as Ronald Reagan was.
I doubt seriously if he even knows the names of more than a small handful of
conservative intellectuals and has read any of their works. The same can be
said of almost all corporate executives. But without some grounding in the intellectual
tradition of the conservative movement, it is very easy to assume the conservative
and the business position are one and the same.
The worst example of subverting conservatism to aid business is the recently enacted
Medicare drug benefit, which the Bush administration rammed through Congress with
unprecedented pressure. This legislation will cost trillions of dollars. A key reason
for the high cost is that it applies to all elderly, including those who already
have drug coverage from their employers or private insurance. It would have cost
a fraction as much to aid only those without drug coverage.
The incredibly more expensive option was chosen exclusively to benefit big businesses.
The universal option justified including large business subsidies in the legislation
to keep companies from simply dropping their retiree drug coverage and dumping it
all on the taxpayer. Some large companies anticipate hundreds of millions of dollars
from the federal government in coming years — funds that go straight to their
bottom lines because it relieves a liability they already have.
- Kansas City Star: "Offshoring" study ordered
to a vote. Excerpt: Sprint Corp. must include a proposal on its proxy statement
that asks the company's board to study how sending jobs overseas will affect
the company's brand name and reputation.
... The union pension fund's proposal asks Sprint's board of directors to establish “an
independent committee to prepare a report evaluating the risk of damage to the
company's brand name and reputation in the United States resulting from Sprint's
offshoring initiative and make copies of the report available to shareholders of
the company upon request.” Sprint last summer signed contracts with IBM Global
Services and EDS to outsource hundreds of information technology jobs. The jobs
are expected to be moved offshore. More recently the company signed a contract
with IBM to outsource 1,600 Sprint customer service jobs. Though IBM has said the
jobs will not be sent overseas, it is expected that eventually the jobs could be
handled by call centers in India or other countries.
asks "Anyone know who Jesse Greene is? It appears he was the
CFO of Eastman
Kodak and came over to IBM in 2003 as the Officer and Treasurer of
IBM. In October 2003, he had stock valued at $150,000 and in February
2004 he had IBM stock valued at $1,146,000 million. Wow what a
shrewd investor? Now being a new IBM employee, how did he exercise
(buy) IBM stock for $13.36 a share on July 25, 2003 and then sell the
same shares for $83.50 a share? July 25, 2003 was a $140,280 payday
for this Mr Jesse Greene. When was he given IBM stock Options when it
was $13.65 a share? Was the 40,000 IBM shares "Awarded" on April 3,
2003 priced at $13.65 a share?
- "ibmaccountant" replies. Full excerpt: My recollection of Jesse Greene was
the he allegedly was an expert in
a very critical area of multi-national finance, Transfer Pricing. At
that time, IBM and other US multi-nationals had been allegedly
playing tax games in foreign countries for years by manipulating
cost of goods across borders. The hiring was probably done over a 3-Martini
lunch, since at that
time a long of things were happening between IBM and Kodak In light
of the SEC actions at Xerox, the close executive
relationships, swapping and the outsourcing between Xerox and IBM
versus office products services, remember?) Transfer Pricing Dynamics
ought to be an interesting area of interest for the SEC and
shareholders. One question that would bring down the house at the AGM
would be if
someone asked if IBM's transfer pricing tax matters between Japan
UK are resolved, and if so, what was the result? Did we pay anything?
The press seems to be scared to ask even though the Poughkeepsie
Journal report an as yet unfinished UK tax investigation over 2 years
- Jim Hightower: The
Corporate Abandonment of America. Excerpt: Something major
is taking place in our country that corporate chieftains don't want us talking
about: Jobless creep. It's no longer blue-collar families that are seeing
their jobs hauled offshore to faraway havens of low-wage production. Now
it's hundreds of thousands (and soon to be millions) of well-paying white-collar
and high-tech jobs that are being shipped overseas by America's wage-busting
CEOs – and joblessness
is creeping quietly but relentlessly upward, ensnaring families that previously
thought they were solidly entrenched in the upper reaches of the middle
class. CEOs are paranoid about any public discussion of this explosive movement,
but internally they giddily exult at the prospect of essentially abandoning
our country and its middle-class in order to fatten their profits on foreign
workers. IBM, which is leading the way, even has coined a corporate euphemism
for moving more and more of its white-collar jobs out of the country: "Global
sourcing." The rush is on. A Microsoft executive has instructed department
heads in this software giant to "Think India" and to "pick
something to move offshore today." This is deliberate job destruction,
but it is also much more – it's
an open assault on America's middle-class and on America's unifying social
ethic that "we're all in this together."
- Linda Guyer: Report
from the Outsourcing Front. Full excerpt: Heard yesterday that a group
of employees in Southbury were told
their jobs are going overseas. All were web developers in IGS with
an internal client. In Endicott, one of the employees whose job is going
to Brazil called
me yesterday. Not only does she have to train her replacement, she
has to interview the candidates for her job, and recommend one of
them. Her manager will not answer her questions about a severance
package and she was in shock to learn that other employees, also web
developers whose jobs are going to Brazil, were told there is no
severance package. She thought she could sue IBM over this - and I
had to tell her no, there is no law that requires a company to give a
severance package. Other Endicott employees are being told that at the
end of 60 days
they will be on the bench. I am sympathetic, but if we had all voted for
a union a couple of
years ago, severance packages could have been negotiated and would
now be contractually required. http://www.allianceibm.org.
- Business Week: The
Jobs of Tomorrow: A New Low? According to a new Bureau of Labor Statistics forecast, most of the big
growth areas will be low-skill -- and low-paying. Excerpt: Americans don't
just want jobs. They want interesting jobs that pay well. But according to
a forecast released Feb. 11 by the federal Bureau of Labor Statistics (BLS),
a large share of new jobs will be in occupations that don't require a lot
of education and pay below average. The fastest growth of all will be for
medical assistants, who require nothing more than "moderate on-the-job
training." ... Only two of the occupations on the top-10 list of total
job growth require at least a bachelor's degree (namely, post-secondary teacher
and "general and operations manager"). If you didn't get any education
past high school and aren't planning to, the abundance of jobs that don't
require a college education is good news. Better to have a job than not.
But don't expect to be well-compensated for your labors. In the Information
Economy, the gap is large and growing between the earnings of people who
have college degrees and those of people who stopped at high school or before.
American workers with less education are being battered by two powerful forces.
Computerization and automation are wiping out jobs in both manufacturing
and office work. Offshoring is sending other jobs abroad.
| Coverage on H1-B and L1 Visa and Outsourcing Issues
- Washington Post: Realities
Make 'Offshoring' Hard to Swallow. Excerpt:
Or put another way, all those countries benefiting from "offshoring" haven't
yet used much of their new income to buy American goods and services.
Indeed, in a set of papers that has been used to boost public support for
offshoring, the consulting firm McKinsey & Co. estimated that every
dollar of service activity transferred to India generates only about 5 cents
in additional U.S. exports. Finally, the standard model relied on by defenders
of offshoring assumes a world of perfect competition. But as Princeton University
economist William Baumol and Ralph Gomory, IBM's former research
director, point out in an intriguing new book, there are now many
industries in which competition is imperfect because entry by new
firms is virtually impossible. That leads them, by way of some
fancy mathematical footwork, to the conclusion that trade may not
always be the win-win proposition economists have always said it
was, particularly when it is between higher-income countries or
involves higher-skilled industries.
- Fortune: Think
Globally, Save Your Job Locally, By Anne Fisher. Excerpt: We've all seen
the bleak statistics: U.S. companies have sent well over a half-million tech
jobs overseas in the past couple of years. What the numbers don't show is
the bitter frustration of skilled and experienced techies whose livelihoods
expressed in hundreds of e-mails that followed a bit of advice to
a college student signed Windy City (Jan. 12), who asked whether,
in an increasingly global economy, it might not make sense to get
some international work experience. I said it would, on the grounds
that the global economy is not just a buzz phrase anymore. (Hmm,
it seems all those consumer goods we've gotten so cheap for so long
suddenly come with a downside. Who'd have guessed?) If you think
jobs are fleeing this country now, just wait awhile. So far, according
to the best industry estimates, only about 5% of U.S. IT jobs have been
shipped to India, New Zealand, and Eastern Europe. But by 2007 at least
23% will have gone. Not a techie? Don't get cocky. IT folks may just be
the canary in the coal mine. Notes a reader named Hans: "There is almost
no limit on the technology that can take jobs overseas. Anyone in any field
who has ever thought, 'Gee, I could just as easily do this job from
home,' or who has smiled at the thought of working from a laptop
on a beach should understand that his or her replacement 'could
just as easily do this job' from Bangalore." Gulp.
"A 1988 MIT grad with more than a dozen issued patents and 15 years
of experience at Oracle and Siebel hasn't worked in over two years."
- CNN Lou Dobbs Tonight: Interview
With Ed Gillespie: Congress Looks to
End Outsourcing. Excerpt: Tonight: DOBBS: American companies shipping hundreds
of thousands of jobs overseas. We call it exporting America. The
White House calls it good for America. Congress wants it stopped.
The White House on the defensive tonight over jobs, Iraqi weapons
of mass destruction, and the president's military service. My guest
tonight is the chairman of the Republican National Committee, Ed
Gillespie. ... Tonight, the White House is on the defensive, even
before the Democratic Party has settled on a presidential nominee. Despite
a firestorm of criticism, the administration today maintained its claim
that the outsourcing of American jobs to cheap overseas labor market is
good for the economy. As for lawmakers on Capitol Hill, both Democratic
and Republican, they blasted the White House. And one Republican lawmaker
tonight is calling for the president's chief economic adviser to resign.
... GILLESPIE: Well, Lou, I haven't seen this report. I have seen the news
accounts of it. And all I know is this, that, if we're going to create jobs
in this economy, the president's six-point plan for job creation is the
way to do it. He's vigorously out there every day working to make sure every
American who wants a job can find a job. And his policies are the ones that
are going to continue to foster economic recovery in this country. And raising
taxes and increasing regulation and allowing for these lawsuits that drive
up costs of goods and services and close down doctor's offices and to engage
in the kinds of policies or to support the kind of policies that the Democrats
propose are going to result in more job loss, not more job creation. I guarantee
- Journal News (Westchester County, NY): Proposed
law targets offshoring.
Excerpt: Two state lawmakers from Westchester County are introducing
legislation that would prohibit companies from receiving state aid
if they send jobs out of New York. Corporations that outsource work
to other parts of the country or overseas would be barred from economic
development aid for five years. "It sends a very strong message to
companies that are exporting jobs to foreign countries that if you're
going to outsource, you're not going to be permitted to receive state
Sen. Nicholas A. Spano, R-Yonkers, who is sponsoring the bill with
Assemblyman Richard Brodsky, D-Greenburgh. The lawmakers — both up
for re-election this year — are
tackling a topic that's been in the news regularly as prominent U.S.
companies such as IBM Corp., General Electric and Intel announce
plans to trim costs by moving jobs to countries where labor is cheaper.
Forrester Research predicts that $136 billion in wages will move
overseas in the next 15 years. New York joins 14 other states, including
New Jersey and Vermont, that have introduced legislation that seeks
to staunch the flow of jobs overseas, said Ralph Montefusco, a former
IBM employee and a union organizer with the Alliance@IBM/CWA Local 1701.
- Sify News (India): Outsourcing
is win-win for India and US: Bush advisors.
Excerpt: US President George W Bush has been told by his key Economic
Advisors that outsourcing of services to India and other countries
in which they have a comparative advantage is a win-win for both
exporter and importer and that export and import of services is as logical
as the export and import of goods.
N Gregory Mankiw, Chairman of Bushs Council of Economic Advisers,
told a press conference here that the Council in a report to Bush
made it clear that it makes no difference whether outsourcing in
India, for example, is in comparatively low-skilled jobs or high-skilled
jobs, say radiology.
- Economic Times (India): Outsourcing
to add 22 mn US jobs. Excerpt: Based
on the research that the McKinsey institute had carried out, Ms Farrell
said conservatively, for every dollar invested in the offshore space,
$0.58 was directly saved. This could be either redistributed to investors
or customers. But she added that there were indirect benefits to
the US, in terms of the import of US goods and services into India
by Indian service providers, and so there was some transfer of profit
back to the parent in the US. She pointed out that the Bureau of
Labour Statistics was predicting a job gain of 22m in the US by ’10,
against a job loss of 2m due to offshoring.
... Daniel Grisworld, associate director, Centre for Trade Policy Studies, Cato
Institute said, “People don’t understand what a great opportunity
offshoring is for US companies. Apart from huge savings, it allows
US companies to concentrate on their core competencies and the people
(in the US) can move on to higher paying, more creative, more value generating
added that the election rhetoric in the US was always worse than
its final result.
- AFL-CIO News for Working Families: Bush
Administration: Ship More U.S. Jobs Overseas. Excerpt: With some 15
million U.S. workers unemployed, underemployed or too discouraged
to continue hunting for work, the Bush administration now is backing
moves to outsource more U.S. jobs. “Outsourcing
is just a new way of doing international trade,” said
N. Gregory Mankiw, chairman of President George W. Bush’s Council
of Economic Advisers (CEA), when releasing the CEA’s annual economic
report to Congress. “More things are tradable than were tradable
in the past. And that’s a good thing.” ... In the Feb. 9 report,
the CEA predicts the economy will generate 3.9 million new jobs this
claim that would mean an average 325,000 new jobs each month. Last
spring, the CEA said the president’s “Jobs and Growth” millionaire
tax cut plan would create 306,000 jobs monthly starting in July.
Yet today, the Bush administration is more than 1.8 million jobs
short of that prediction. “This administration has been projecting
that jobs are around the corner for the last three years,” says Economic
Policy Institute (EPI) President Lawrence Mishel. “Now it’s
claiming that the economy will be able to generate 325,000 jobs a
month, which would be more than the total number of jobs created
during the entire last half of 2003, which was the worst year for
job growth in many years.”
In fact, the economy has lost
a net 2.9 million private-sector jobs and 2.8 million manufacturing
jobs since Bush took office. Meanwhile, the number of long-term
jobless workers has been roughly 2 million for months, and for
much of that time, long-term unemployment has been at its highest
rate since 1983.
“Bush is behaving like a gambler on a losing streak—it’s
double or nothing, with all the chips on the same losing squares,” says
economist and University of Texas public policy professor James
- Computerworld: U.S.
lawmakers: L-1 visa program needs changes. But the
head of the ITAA said the program 'is not broken in any fundamental
way'. Excerpt: Two laid-off U.S. workers testified before a U.S.
House of Representatives committee yesterday that they were fired
by IT companies and replaced with cheaper labor brought to the U.S.
under a worker visa program designed to fill jobs needing special
skills. Patricia Fluno, a programmer from Orlando, said she and about
14 other employees of Siemens Information and Communications Networks
Inc. were laid off in mid-2002 and forced to train their replacements
from India. "We
lost our jobs, and we had to train our replacements so there would
be little interruption to Siemens," Fluno told the House International
Relations Committee. "This was the most humiliating experience of my
life." ... The L-1 visa program is making it easy for U.S. companies
to move jobs overseas, lawmakers argued. "America is in danger of losing
that level of prosperity which allows us to work as an agent for
positive change in the rest of the world," said committee Chairman
Henry Hyde (R-Ill.). "... Are we being lax in the offshoring of American
jobs, often facilitated by 'in-shore' training first given to L visa
holders right here in the United States, so they can take new skills
-- and American jobs -- home with them?" ...
Lantos accused some U.S. companies of using the L-1 visa to drastically lower wages. "What
we are dealing with is high-tech indentured servitude," Lantos said. "We are dealing
not only with a loophole of gigantic proportions, but also a scandal of gigantic
proportions. It's up to the Congress to rectify the situation, and I fully anticipate
- New York Times:
Fearing Repercussions of U.S. Technology Outsourcing. Excerpt: The rising
political reaction in the United States to the loss of some American
jobs to workers overseas is creating a whiplash effect among India's leading
technology companies. "The dramatic buildup of opposition before the
U.S. elections is disturbing," Jaithirth Rao, the chairman of a leading
software and call center company, MphasiS BFL Ltd., said in an interview
at the three-day annual meeting of Nasscom, India's software industry trade
- Chicago Tribune: India
feels backlash on jobs. Excerpt: The escalating
debate over white-collar U.S. jobs moving to India is alive and well--in
India. The growing election-year backlash against outsourcing drew
standing-room-only crowds last week at an international conference
put on by the country's leading technology trade association. "When
the Dilbert cartoon introduces an Indian character called Asok, you
can see what the impact has been," said Arun Kumar,
managing director of Hughes Software Systems, as he introduced a
program on how Indian companies might respond. ... Consider Bangalore,
a city of 6 million in southern India. It has been the country's
Silicon Valley since companies such as Texas Instruments Inc. and
Motorola put electronics plants there in the late 1980s. There's
no vacancy this month at the Leela Palace, a 254-room, five-star
luxury hotel completed 2 1/2 years ago. There are no rooms anywhere
in town. Hundreds of buses ferry thousands of young technology workers
to and from their jobs. Mahatma Gandhi Road, with its neon signs
and shopping malls, looks like a small but no less crowded version
of New York's Times Square. As you enter the Leela, a welcome sign
announces job interviews for Siemens and Infineon Technologies AG,
along with a reception for new Dell Inc. employees. Intel's Indian
operation is across the street. Despite the opulence, poverty is
overwhelming and always nearby. On the other side of a wall enclosing
the lush pool and gardens at the Leela lies a barren field where
poor neighborhood kids play cricket. Cows and goats sift through
a smoldering pile of garbage scavenging for food.
- TechsUnite.org: Survey
Reflects U.S. Tech worker Angst. Excerpt: Five
years ago, a college degree in computer science or electronic engineering
seemed to bestow upon the holder an inside track toward the American
dream. But a study released Wednesday shows that for a large percentage
of technology workers, that dream has either dimmed or has vanished
altogether. The study, released at a WashTech news conference Wednesday
at Carpenter's Hall in Seattle, shows that tech workers are clearly
worried about the future of the industry in the United States. Chief
concerns are declining wages, disappearing benefits and the threat of offshore
outsourcing, Some of the findings: about 25 percent of respondents said
their company had moved work offshore, and one in five said they had either
been forced to train a foreign replacement worker or knew someone who had.
- Workday Minnesota: As
tech jobs go offshore, Teamsters devise new strategies.
Excerpt: As U.S. white-collar and high-tech employers continue to
export jobs overseas--to India, Russia, China and elsewhere--unions
are scrambling for new ways to organize those workers, and to aid
them. But as Minneapolis-based Teamsters Local 4 changed its charter
to create a new way to help the information technology (IT) workers, and
as other unions, including Seattle-based WashTech and Alliance@IBM, of Endicott,
N.Y.--both CWA locals--fight to organize those workers, they face
a huge battle. ... Information technology firms justify moving the
jobs overseas by saying they must cut costs, especially given declining
investment due to the high-tech bust and the recession. ...
IBM will ship 4,730 information-technology white-collar jobs overseas
from plants all over the U.S. The average IBM IT worker who will
lose his or her job is an engineer making $75,000-$100,000 year.
A replacement may make a fifth as much. Linda Guyer, president of
Alliance@IBM, estimates the firm could ship one-fourth of its 160,000
U.S. jobs overseas by 2005, a figure she gathered via phone calls
by IBM employees. The job export problem may worsen. The Fisher Center
for Urban Economics at the University of California at Berkeley calculates
many as 14 million service workers, or 11 percent of the nation's
total jobs, are vulnerable to offshoring," the
magazine Fast Company reports. The center's economists call this "a
ferocious new wave of outsourcing of white-collar jobs." ...
The unions aren't the only ones who realize the potential of enlisting
the IT workers. So does one job exporter: IBM. In a conference
call last March involving its human resources people, obtained by WashTech and
Alliance@IBM, the company's Director of Global Employee Relations, Tom Lynch,
was blunt. "Those of us who track union campaigns realize unions rarely
have success in saying you need to unionize to get more money," Lynch
like dignity and justice and fairness, those sort of gut issues,
tend to raise or strike an emotional chord... Being told that it's
not that your job is going away, but that it's moving and you're going to
be put out of work as a result of that certainly raises those kind of dignity
opens center in India, to hire 2,000. Excerpt: BearingPoint Inc.
said on Wednesday it has opened a software development center in India
that will grow to as many as 3,000 employees, joining its technology
services peers to take advantage of India's modestly-paid engineers.
... International Business Machines Corp.
is estimated to have more than 5,000 people in India and is still expanding.
Computer Sciences Corp. said in June it
planned to double its staff to about 1,600 by April. Perot Systems
Corp. has 3,000 employees, or 23 percent
of its workforce, in India, mostly processing information and developing
software for other companies.
- Computerworld: HP sets up India call center. The Bangalore center will
offer after-sales support for consumer products sold in the U.S. Excerpt:
The center, which will have a 600-person staff by June, will initially
offer voice-based support in English, according to Krishnamurthy Purushottam,
director of the new center. "Down the line, we plan to also offer e-mail
or chat-based support," Purushottam said. ... HP currently supports
English-speaking buyers of its consumer products in the U.S. through
about 4,000 staff members provided by partners based in the U.S., Canada,
Mexico and India. For the past two years, HP has outsourced voice-based,
e-mail and chat support for consumer products sold in the U.S. to five
companies in India. Indian partners currently handle about two-thirds of
the volume of English-speaking support requests from users of HP's consumer
products in the U.S. and employ about 2,500 people for this work,
- Wired News: H-1B
Training Program to Be Axed. Excerpt: Facing a drop in
funding and a tough job market for technology professionals, the Department
of Labor is poised to kill a program that trains Americans to fill
positions held by foreign guest workers. The department created the
H-1B Training Program in the late 1990s as a way for Americans to learn
skills in high demand by employers. The funding came from fees employers
of foreign workers paid to get H-1B visas, which allowed the foreigners
to take technical jobs that went unfilled during the dot-com boom. The Labor
Department used those fees and other funding to pay $328 million in
scholarships and grants to community groups to develop training programs
for U.S. citizens and permanent residents. But the flow of funds could soon
come to a halt. In its budget proposal for fiscal 2005, the Bush administration
is seeking to eliminate H-1B training grants. The grants, the budget proposal
states, "have not been proven successful in raising the skills of U.S.
workers in specialty occupations."
- Rep. Bernie Sanders: We
can do it: A Macromedia Flash animation about outsourcing of jobs.
- Business Week: Outsourcing:
Who's Safe Anymore? The federal budget deficit will limit help to displaced workers. Excerpt:
The American economic recovery is more than two years old. But jobs
and worker incomes have yet to rebound. If this recovery had followed the
typical pattern of past recoveries, by now the economy would have created
more than 8 million additional private-sector payroll jobs. According to
Stephen S. Roach of Morgan Stanley, employment is even 2.4 million jobs lower
than the level predicted by the economy's performance during the 1991-92
economic upturn, until now America's worst jobless recovery. And slack labor
demand has depressed wage and salary growth. Since the beginning of the recovery
two years ago, payouts are down 1% in real terms -- in a typical rebound,
they would be up by nearly 8%. The difference translates into about
$350 billion of missing income for America's workforce. What's going on?
NO ONE KNOWS FOR SURE, but a growing number of observers point to American
companies' outsourcing and offshoring strategies as the force altering
the usual links between economic recovery and employment growth.
Rough estimates suggest that the U.S. has lost 400,000 to 500,000
information-technology-processing jobs to outsourcing over the last few
years. It's a small number in an economy that employs around 130 million
workers, but outsourcing is moving quickly up the wage-skill chain from
call-center employees to software engineers, medical specialists, lawyers,
and financial analysts. Observers may disagree about outsourcing's role
in the current cyclical recovery, but outsourcing will clearly be a powerful
source of structural change in labor market dynamics over the next decade.
Forrester Research Inc. estimates that about 3.3 million American jobs
in business services alone will be shifted overseas during this period.
The actual number of American jobs, including high-wage, high-skill jobs,
in jeopardy is likely to be considerably higher.
- Seattle Times: Bush
Report: Sending Jobs Overseas Helps U.S. Excerpt: In
an evening appearance at George Mason University in Fairfax, Va., Sen.
John Edwards of North Carolina said it would come as a "news bulletin" to
the American people that the outsourcing of jobs overseas is good for
the country. "These people," he said of the Bush administration, "what
planet do they live on? They are so out of touch." Last year's
Economic Report of the President predicted that 1.7 million jobs
would be created in 2003. Instead, the nation lost 53,000 jobs. In
Bush's three years in office, 2.2 million jobs have disappeared.
Since the Great Depression, it has never taken this long for the
economy to begin creating jobs after emerging from a recession. After
the last recession ended in 1991, it took 14 months for employment
to begin expanding. Current problems with the economy have gone on
nearly twice as long, 26 months.
- ZDNet: Offshoring
is all good? Tell that to ZDNet's readers, Mr. Bush. (Editor's note:
You'll need to scroll about half way down the page to see this commentary).
Excerpt: "In 1998, I left my job as an electrician to get a degree
in computer science in order to better myself, my family and to make
more money," Tonn said. "I still have not been able to enter the
industry in a professional capacity. I am currently unemployed and have
been looking for work for five months now. At 44, I'm really wondering if
I have made a big mistake." In his letter, Tonn goes on to describe
how he feels cheated by the country that he and his father swore to protect: "My
father is a WWII veteran. He protected this country, was given a free education,
and had a career of more than 20 years. He helped his kids and has
a good retirement. His actions gave himself and his family a better
life. His own country helped to do this. I served in the Air Force
during Desert Storm. It helped pay for a little college but not much.
I was told that veterans have job preference in this country. My
question to whomever wants to hear it is, 'If the people who fight
and defend this country are going to be systematically swept under
the corporate rug for cost-cutting measures, what is there left to
fight for?' My father and my generation have honored our country
by giving the best years of our lives to it, and to have other countries
reap these benefits cuts very deep. Another factor is that U.S. workers
aren't offered first refusal on these jobs. These large corporations
have undermined the American people. So I will be in the street begging
for money while the Indian, Iraqi, and Singapore people that I gave
my job to put a nickel in my cup."
- Fast Company: Offshore
Storm: The Global Razor's Edge. IBM may send 4,730 white-collar jobs to
India and China. Another 14 million could follow. Excerpt: So, welcome
to your future. Researchers at the Fisher Center for Real Estate and Urban
Economics at the University of California, Berkeley, estimate that as many
as 14 million ser-vice workers, or 11% of the nation's total jobs, are
vulnerable to offshoring. Intel is opening a glittering new $41 million
campus in Bangalore to house 1,000 workers. Morgan Stanley Dean Witter
has announced plans to ship some equity research overseas. "A ferocious
new wave of outsourcing of white-collar jobs," the Fisher Center folks
- New Kerala News (India): Anti-outsourcing
bill killed in Colorado Senate. Excerpt: An anti-outsourcing bill
pending before a state legislature failed to move ahead when a
Colorado Senate panel killed it. The measure, SB 170, would have
restrained movement of jobs overseas and required companies to
keep workers assigned to state contracts in the US.
It collapsed after lawmakers on the Senate State Veterans and
Military Affairs Committee voted four-three to postpone action on
the measure indefinitely. Republicans opposed the bill, while Democrats
supported it. Business interests also fought the measure, said
Rocky Mountain News, published from Denver, the state capital.
in Engineering: Managing the Workforce of the Future (2002) by
Nicholas Donofrio, Senior Vice President, Technology and Manufacturing,
Excerpt: My passion is for engineers and scientists, the people
who generate real wealth in the world. I think we need more of
them. The need for technical talent is clearly a critical issue in my
industry, the information technology industry. Yes, we are going through
a bit of an up-and-down in the economy and, yes, this will be a very
difficult recruiting year for young women and young men on college campuses
around the world. But we will get over that. What’s scary, though,
is the long-term trend in the information technology industry toward
huge shortages of engineers and scientists. Predictions are that there
will be a shortage of perhaps two million, globally, within five years.
If they are right, the debate over H-1B visas will be silenced because
there will be no one to come here to solve our problems. Clearly, the
solution to our problems is to generate more engineers and more scientists,
to encourage people to focus on careers that can literally generate more
real wealth in the world.
- Financial Times (May 2, 2001): Skills
shortage puts job market out of balance. Excerpt: The IT skills shortage
affects all industries, not just IT itself. It has now become clear
to even the least technology-minded companies that e-business -
stretching from the supply chain to customer service and beyond
to external partners - can deliver impressive cost-savings and
revenue opportunities. Thus, businesses around the world are expected
to invest more than $5,000bn over the next four years to develop
and run e-businesses, according to IDC, the US-based IT market
analysts. But it says companies are facing difficulties in finding
and keeping talent. ...
"I worry about the whole growth of the industry
being curtailed," says Nicholas Donofrio, senior vice president for
technology and manufacturing at IBM. "I am very optimistic about
the future. But it won't happen if we can't fill all the shortages
we are facing."
Just how severe is the IT skills shortage? Mr Donofrio calls
it "chronic". Peter Radley, chairman of the UK operation
of Alcatel, the French telecoms group, is "concerned about
the shortage of the right skills". At Cisco, the US networking
equipment company, Mike Couzens, head of corporate communications
and training for Europe, calls it a "major problem".
Microsoft started raising the alarm three years ago, says Bernard
Vergnes, chairman of European operations at the US software giant. "The
problem is still around. It is still difficult to find people
with the right IT skills." In the US, Meta Group, the IT
market analysts, estimates that some 850,000 IT staff positions
are unfilled - more than double the figure of two years ago.
As a result, IT salaries - including sign-on bonuses and other
incentives - are rising by between 8 and 15 per cent a year,
says Maria Schafer, head of Meta's executive services division.
on the Alliance@IBM Site:
- Poughkeepsie Journal: Bill
targets firms that move jobs out of N.Y. Legislation would withhold
fiscal aid. Excerpt: A bill that would bar companies that move jobs
out of New York state from getting taxpayer-funded development incentives
is drawing support.
The bill grapples with the hot issue of disappearing jobs, one that
has long been a concern in the state and is now part of a national
debate reaching into the presidential race. Two Westchester County
legislators -- one a Democrat, the other a Republican -- introduced
identical bills in both houses. They define ''outsourcing" as moving
jobs out of the state and ban most forms of incentives from going
to any company that sends jobs overseas or even out of state. The
topic hits home in the mid-Hudson, where top employer IBM Corp. has confirmed
at least one phasing out of local jobs in which the work is going
on the WashTech site:
- Support Consumers and Workers in
the Global Economy—Washington
Voters Need to Act Today. Excerpt: WashTech is lobbying for three bills
in the state legislature that would help stem the tide of exporting
jobs. All three bills need to be voted out of the House of Representatives
by February 17th or they cannot get moved into the Senate for consideration.
We need you to write and call your legislator today and ask that they
support the following bills and ask Speaker Chopp to move them to the
floor of the house for a vote. ... If the state legislature can vote
to spend $80 million on tax breaks for the same high-tech companies that
are exporting jobs, then the legislature can surely vote for bills that protect
Washington's working families who pay the taxes against the unfair abuses
of the global economy.
- Tech Workers
Galvanize Around Offshore Outsourcing. Excerpt: The purpose of the survey
was to quantitatively measure the opinions of U.S. technology workers on
a variety of issues, including free trade, future information technology
(IT) job demand, legislative action, party affiliation and voting behavior.
The results challenge conventional wisdom about “independent” IT
workers who cannot be galvanized around any one set of issues to seek political
change. In fact, IT workers appear to be an emerging political constituency
that is increasingly looking for political action to address its economic
Futures: The Real Impact of the High-Tech Boom and Bust on Seattle's IT Workers.
Excerpt: This groundbreaking report indicates dramatic social changes
have occurred in Seattle as a result of the downturn in the local IT industry.
The report – Uncertain Futures: The Real Impact of the High-Tech Boom
and Bust on Seattle’s IT Workers – raises important questions
about the long-term health of Seattle’s economy and educational system
as median incomes and education rates have declined among non-union IT workers
in the last six years.
- The State
of the IT Industry in Puget Sound. Excerpt: The Evans/McDonough Company
and the Worker Center, AFL-CIO, on behalf of WashTech, conducted two separate
surveys of Seattle-area Information-Technology workers and employers. The
purpose of this project was to evaluate the current state of IT worker training
from the perspectives of both groups, and probe into some of the issues
workers and employers face in the industry. Specific interest was paid to
future industry demand, requirements and expectations for training, and
the experiences of both groups in the industry.
- High-Tech Employee
Rights Guide. Excerpt: If you work in Washington's high-tech industry,
you need to check out this guide. It contains important information regarding
employment trends, answers your questions about your rights, unemployment
insurance, and where to get the latest in training. You will be asked to
register to access the full Employment Guide.
- Disparities Within
The Digital World. Excerpt: A report on wages and working conditions
in the Seattle-area IT sector. How much should you be making? In an
effort to help you answer that question, we have created a comparison
of salary information from four recent wage information sources: Milliman
and Robertson, Salary.com, WashTech, WSA, and the Washington State
- 2000 Salary
Survey. Excerpt: WashTech members know that many high-tech workers often
wonder "How much do other people make that do my job?" Many employers
have unwritten corporate policies that forbid you to talk with your co-workers
about compensation. These policies are in violation of federal labor law;
most high-tech workers don't know that they have the right to freely discuss
pay with co-workers.