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- Janet Krueger answers a question about IBM pension plans. Excerpt: Actually, the 30 years of
service cap is not the basis of the age
discrimination charges in Cooper v IBM -- the cap is purportedly
based purely on years of service, rather than age, so is not
necessarily age discriminatory. To see the age discrimination that is built into the 1995 formulas,
you need to take two employees of different ages, with equal years
of service and earnings, and see whether they earn equal benefits
under the plan for each year. If the younger employee earns more
than the older employee, then the plan can be found to discriminate
Since the online tool only lets you look at your own benefits, and
does not let you input a hypothetical person who is several years
younger or older than you, you won't see the problem just by asking
for online reports. You can start to see it if you download the
input your data, and then see what happens to your retirement
benefit if you adjust your birth year. To be very explicit about the problem, IBM actually
year of birth in the formula, with older employees being credited
with a lower interest rate than younger employees... Most of the press reports on Cooper v
IBM have been focused on the
cash balance conversion IBM introduced in 1999 -- they tend to
overlook or ignore the problems in the 1995 plan, although most
people who have looked at it detail agree the discrimination in that
plan is much more egregious...
And why, you might ask, is it more egregious -- two reasons...
First, as described above, it explicitly factors age into the
formulas in a very negative way. Second, most IBM employees still,
to this day, believe it is a 'traditional' defined benefit plan --
IBM did the first conversion to a hybrid plan, otherwise known as a
pension equity plan, or PEP, without full disclosure -- and courts
have frowned upon 'secret' or 'hidden' conversions...
- New York Times opinion by Bob Herbert: We're
More Productive. Who Gets the Money? Excerpt: t's
like running on a treadmill that keeps increasing its speed. You have to go faster and faster
just to stay in place. Or, as a factory worker said many years ago, "You can work 'til you
drop dead, but you won't get ahead." American workers have been remarkably productive in recent
years, but they are getting fewer and fewer of the benefits of this increased productivity.
While the economy, as measured by the gross domestic product, has been strong for some time
now, ordinary workers have gotten little more than the back of the hand from employers who
have pocketed an unprecedented share of the cash from this burst of economic growth. What is happening
is nothing short of historic. The American workers' share of the increase in national income
since November 2001, the end of the last recession, is the lowest on record. Employers took the
money and ran. This is extraordinary, but very few people are talking about it, which tells you
something about the hold that corporate interests have on the national conversation.
So if employers were not hiring workers, and if they were miserly when it came to increases in
wages and benefits for existing employees, what happened to all the money from the strong economic
growth? The study is very clear on this point. The bulk of the gains did not go to workers, "but
instead were used to boost profits, lower prices, or increase C.E.O. compensation." This is
a radical transformation of the way the bounty of this country has been distributed since World
War II. Workers are being treated more and more like patrons in a rigged casino. They can't
win. Corporate profits go up. The stock market goes up. Executive compensation skyrockets.
But workers, for the most part, remain on the treadmill. ... I have to laugh when I hear conservatives
complaining about class warfare. They know this terrain better than anyone. They launched the
war. They're waging it. And they're winning it. If link is broken, view
Adobe Acrobat version
- "ibmmike2006" comments.
Excerpt: On the other hand, how do you stop the abuse of Corporations in how
the Productivity dollars are shared and distributed? At IBM, before
Gerstner, you felt that the Productivity was being shared, partly, to
everyone around you. When times were good, the little things,
appreciations, the family dinners, informal awards, more new people
with less layoffs, the general spirit level was higher. You could
whistle "Happy Days are Here Again" and mean it. Money was not a
motivator, but it helped. But, for the last decade or so, there have
been continued layoffs, continued threats, never a feeling your
efforts were being rewarded, intimidation, and abuse even when
the "Good times" returned. In essence, you felt like you were
being "used" like a worn out computer mouse, only to be discarded if
you lost your ability to keep up the same hectic "bad Times" pace
that robs you of time with your family and community. Today it seems, keep working harder,
faster, "you may keep your job,
maybe", see what Productivity gets you........more hours with less
average pay, rules. Executives don't seem to listen or care, just
look at the Executive Compensation portion of the IBM 2003 Proxy.
Look at the loss of double time for Sundays, Loss of 10% Variable
pay........announced this last year at IBM to IGS.
- "i_be_mad_as_heck" asks IBM retirees to attend the IBM Shareholder's Meeting. Excerpt: Many retirees
no longer receive a pension check, just a monthly bill
for retirement medical coverage. When they retired, they were told
that they would receive the same retirement medical coverage that
employees receive at no cost. They were also led to believe that
they would receive regular COBRA increases. Now their meager pension
check is gone, and just to rub it in, they have to send in a monthly
payment to cover the balance due for retirement medical coverage.
What an outrage for those that contributed to the success of IBM for
so many years. I sure hope Lou enjoys his annual checkup at the Mayo Clinic. There
are many retirees paying for it with lost benefits.
We need 10,000 retirees and spouses to show up at the Annual
Shareholders Meeting ("ASM"), and let Sam know exactly how they feel
about the retiree health coverage increases. Usually, only a few hundred shareholders and Evelyn
Davis show up at
the ASM. You can be sure that if 10,000 angry retiree shareholders
and spouses show up at the meeting, it will get management's and the
BOD's attention. Nobody likes bad publicity. Retirees may not be
able to win in a court of law, but they can win in the court of
public opinion. If the retirees don't do it, nobody else will. If you don't speak up
for yourself, Lou and Sam win.
- Information on attending the IBM Shareholder's meeting and the anti-offshoring rally that follows
is available at the Alliance@IBM Web site.
- Arizona Republic: As
companies profit, workers getting raw deal. Excerpt: They're rising: gross
domestic product, industrial output, corporate profits, the stock market and, especially, productivity.
They're falling: job creation over the past three years, pension coverage, paid health care,
job security, savings and polls tracking confidence in the direction of the economy. ... Corporate
profits reached nearly 41 percent of national income between the first quarter of 2002 and the
fourth quarter of 2003. That compares with a historical average of 15 to 18 percent, according
to a study by Northeastern University. Labor compensation accounted for 38 percent of national
income, compared with a historical 65 percent. Corporations continue to reward top executives
lavishly, despite nods to correcting the excesses of the 1990s. "In reality," the New
York Times reports, "most
chief executives took home more cash and more stock last year." ... It wouldn't be such an
explosive issue if everyone were equally afflicted. But there's a growing gap between those who
work for a living and those who live off their "returns." It wouldn't be as corrosive
if these trends were purely the result of natural economic forces. But people sense that policy
is being gamed for the benefit of the powerful.
- Washington Post: IBM
Buys Indian Back Office Service Firm. Excerpts: International Business Machines
Corp said on Wednesday it would acquire Daksh, India's third-largest back-office services firm,
in the biggest acquisition yet in the nation's booming $3.5 billion sector. ... The deal, expected
to be closed in May, will give the world's largest computer maker access to privately held Daksh's
6,000-strong employees, who mainly offer call center services to 13 clients including Internet retailer
- "dbx1912" describes what it's like to be an IBM SSR. Excerpt: When I hear how these SSR's have
been treated over the past 10 years
or so I have to either laugh or cry. IOW are they really that stupid, or just frightened sheep
pointed toward their eventual slaughter? Many of these folk use their own cell phones for business
claim expenses with IBM. Many are terrified to claim tolls and parking as well so they absorb
this cost too. Others purchase their own tools and supplies because they get yelled
at if they order anything. ...
FWIW if I have to fart on my own time I bill IBM for it and I lost
the guilty feeling a long time ago when I saw how much IBM has taken
from me. IBM wants truth in reporting and actual and reasonable and I am
giving it to them, every single dime even if I get it back 10 pennies
at a time. I used to drop my parts returns at UPS on my own time when I
happened to go buy the drop (25 miles away BTW), now I make certain
IBM not only gets billed for my time but the 25 miles as well and I
am entitled to it.
Don't be a sucker! Management is laughing all the way to their VPP when fools use their
own cell phones and pay their own bills. Think about it. Doesn't it make sense to get paid
for the work you do? BTW as far as cell phones are concerned, do you realize how
unprofessional it is to call other customers from a clients phone.
IOW calling Sears from Wal-Mart to set up a call.
It not only looks bad, but it is bad. Cell phones are a commodity like toilet paper and there
is no reason
why every SSR shouldn't have one. As far as benefits are concerned, I suggest every single
SSR talk to
their local EMC CE and see what he/she gets. Don't do it on an empty stomach though because
you will puke. IBM says they follow the market averages but again they lie.
| Coverage on H1-B and L1 Visa and Off-Shoring Issues
- BusinessWeek: A
Double Standard on Trade.
Corporations that offshore jobs need to play fair. That means abandoning protectionist
stances when it comes to their products. Excerpt: "I am a software developer who is about
to be 'Bangalored.' Fine. I am not going to pout about it. The media writes that we are
in a 'global economy,' so deal with it. O.K., I will. But we should take the global economy
one step further. If U.S. corporations can offshore their labor, allow U.S. consumers to
offshore their consumption. For example, if Pfizer (PFE ) can offshore its IT staff to
save money, then I should be able to purchase my drugs from Canada or Mexico to save money.
I would like to see how IBM would react if I could buy Thinkpad laptop from Singapore for $300. "U.S.
corporations are lobbying for the right to offshore, yet also lobby for protection for
their products. I say make it fair. If you want free trade, you should feel the sting of
free trade... It's a global economy. Deal with it."
- Computerworld: Outsourcing
Grandma to Mumbai. Excerpt: Outsourcing has decimated the programming
field, but it won't stop there. Consider this scenario, which you might at first think
is ridiculous: It's possible that in a matter of years we might see outsourced thoracic
and other types of expensive surgery. Think about it. Heart operations can cost well over
$250,000. A thoracic surgeon in the U.S. can make as much as $496,000, and hospital beds
can cost over $1,500 per day. But the scene is different in India. A surgeon there makes
much less than his U.S. counterpart, and hospital rooms are far cheaper. For health insurance
companies, this could mean colossal cost savings. Putting a heart patient on an Air India
flight might even be cheaper than sending him across town by ambulette service. Should this scenario
come to pass and you find yourself in this situation, you could try to fight the insurance
company. But heart patients need surgery without delay. They don't have time to appeal what the
health insurance company considers a normal and customary charge. This is my prediction:
After the outsourcing cabal is done with the programmers and systems analysts, it will go after
the doctors. The cost savings to the insurance companies are far too compelling.
- The Financial Express: Outsourcing
Is Less About Economics And More About Politics.
- Washington Post: The
Tech Jobs Gap. Excerpt: The Labor Department's announcement last week
that U.S. employers added 513,000 jobs to their payrolls the first quarter of 2004 and 308,000
jobs in March alone is good news for the economy overall, but the employment picture is less
rosy for the technology sector. Outsourcing of U.S. jobs and broad-based efficiency gains, The Miami Herald pointed out, are
part of the problem. "In an economic irony, the tepid job creation nationally has occurred
against a backdrop of strong growth, low interest rates and mild inflation -- often leaving
analysts befuddled as to why companies haven't been hiring. Experts say one factor has been
sharp rises in productivity, which means companies are hiking output without adding workers.
Second, many jobs being created by the American economic recovery are actually in other countries
-- like China and India -- where positions in manufacturing and technology have been outsourced," The
- Computerworld: Outsourcing
sparks concerns over IT controls to meet Sarbanes-Oxley.
IT auditors worry that outsourcers may not provide the documentation needed to comply with
- Kansas City Star: Offshoring
jobs could drain public coffers, critics warn. Excerpt: As U.S.
companies shift jobs to low-paid workers in developing nations, a growing number of economists
and politicians worry that offshore outsourcing could damage the nation's fiscal health
by draining tax coffers. Although proponents of offshoring dismiss such concerns as far-fetched
or naive, some tax experts say the migration of lucrative technology jobs to India and
China is shrinking U.S. employee tax contributions and could exacerbate state budget shortfalls.
Others say offshoring could erode already-strapped Social Security, Medicare, workers compensation
and other payroll-deduction funds more quickly than anticipated. ... "We're going back to
the 1930s, when we had multiple families living together because times were so tight," said
the resident of Lawrenceville, Ga. "I'm not sure these corporate executives understand the
true costs of outsourcing -- no one's thinking about that, just the bottom line."
- Communications of the ACM: Outsourced
and Out of Control, by Lauren Weinstein. Excerpt: Large-scale
outsourcing is growing at a frenetic pace around the globe. Many outsourced jobs involve
countries where significant privacy laws do not exist; even if those laws are improved
under pressure of potential lost business, effective enforcement would still appear to
be highly problematic. Customer service outsourcing can give risky access to data such
as names, addresses, Social Security numbers, telephone call records, and medical information.
Recently, a Pakistani subcontract worker threatened to post U.S. patients' medical data on the
Web if claimed back pay was not forthcoming. Software, sometimes of a critical nature, is now
routinely subcontracted to foreign outsourced environments, bringing risks of development miscommunication
or worse. The U.S. General Accounting Office noted the possibility of malicious changes to code
since significant U.S. air traffic control system Y2K work had been subcontracted outside the
U.S. without mandated background checks. There are even moves to outsource computer system administration
to foreign centers, often in countries with poor (if any) computer security laws, creating
the possibility of massive abuse of domestic systems by distant persons who could be difficult
or impossible to effectively prosecute. Thanks to subcontracting, you might not even know that
the company managing your system is using such facilities and personnel.
- Washington Post editorial
by Senator Ernest F. Hollings: Excerpt: When it comes to trade, however,
multinational corporations contend that we do not need to protect, but to educate and to
improve skills; productivity is the problem, they say. But the United States is the most
productive industrial nation in the world, with skills galore. BMW is producing better-quality
cars in South Carolina than in Munich. There are other obstacles that need addressing.
For 50 years we have tried to penetrate the Japanese market, but have barely done so. To
sell textiles in Korea, U.S. firms must first obtain permission from the private Korean
textile industry. If you want to sell in China, it's a lot easier if you produce in China. "But
we will start a trade war," is
the cry. Wake up! We have been in a trade war for more than 200 years. And it's the United
States that started it! Just after the colonies won their freedom, the mother country suggested
that the United States trade what we produced best and, in exchange, Britain would trade
back with what it produced best -- as economist David Ricardo later described in his theory
Hamilton, in his famous "Report on Manufactures," told the Brits, in so many words,
to bug off. He said, we are not going to remain your colony shipping you our natural
resources -- rice, cotton, indigo, timber, iron ore -- and importing your manufactured
products. We are going to build our own manufacturing capacity.
We need to organize government to produce and protect jobs, rather than export them. The
Commerce Department recently co-sponsored a New York seminar, part of which advised companies on
how to move jobs offshore. This aid for exporting jobs must stop. The Department of Commerce should
be reconstituted as a Department of Trade and Commerce, with the secretary as czar over the U.S.
trade representative. The department's International Trade Administration should determine not
only whether goods have been dumped on the U.S. market, but how big the "injury" is to
U.S. industry. The International Trade Commission should be eliminated.
A culture of free trade has developed. The big banks that make most of their money outside
the country, as well as the Business Roundtable, the Conference Board, the National Association
of Manufacturers, the U.S. Chamber of Commerce, the National Retail Federation (whose members
make bigger profits on imported articles) and the editorial writers of newspapers that
make most of their profits from retail ads -- all these descend on Washington promoting "free
members of Congress. Members looking for contributions shout the loudest. Not just jobs,
but also the middle class and the strength of our very democracy are in jeopardy. As Lincoln
dogmas of the quiet past, are inadequate to the stormy present. . . . As our case is new,
so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save
our country." Today's dogma is the belief that protectionism will mean trade war and economic
stagnation. But we are already in a trade war, one from which the president and the Congress
on the WashTech Site:
- The March
Jobs Report: Quantity — not Quality. Excerpt: Research analyst and
author Alan Tonelson said the number of jobs generated last month was a pleasant surprise,
but the quality of the new jobs was not. "Most of them are lousy jobs," said
Tonelson, a research fellow at the U.S. Business and Industry Educational Foundation
in Washington D.C. and author of "The
Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are
Sinking American Living Standards (Westview Press). "Most of the new jobs don't
measure up, in terms of wages, to those that were lost." In contrast, the nation's
higher-wages industries continue to lag in job creation. The number of manufacturing
jobs remained level after 43 months of steady declines. Information systems job numbers
fell by 1,000. While the rate of job loss in that industry has slowed, tech firms still
show a reluctance to begin hiring again.
- Show Us the Jobs
Travel Journal. Excerpt: WashTech members Charlie Seaman and Myra Bronstein traveled on
the AFL-CIO-sponsored "Show Us the Jobs" bus tour March 24-31, and wrote personal
journals along the way. Two large chartered buses left St. Louis with 51 riders on board,
one from each state and Washington D.C. You may have watched the tour on television news reports
or read accounts of it on the Web, but what follows are the personal accounts of two
riders, each of whom say the journey affected them in profound ways they will never forget. That
certainly comes through in their journals. We think you will find them affecting, too.
- Filmmaker Documents
Effects of American Job Losses. Excerpt: Last May, television producer
Greg Spotts puzzled over a question he couldn't get out of his mind. With the U.S. economy
supposedly on the rebound, why were so many of his friends out of work? So Spotts, 36,
began to look into it. An hour of research before work one day turned into several hours over
as many days. Spotts could see that something big, something on a global scale was happening.
He learned that hundreds of thousands of the jobs that had been lost in the United States were
showing up in places such as Mexico, China and India.