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Highlights—July 24, 2004
- Common Dreams: This is the Fight
of Our Lives, speech by Bill Moyers. (Editor's note: This is a must-read article).
Excerpts: But the class war was declared a generation ago, in a powerful paperback polemic
by William Simon, who was soon to be Secretary of the Treasury. He called on the financial
and business class, in effect, to take back the power and privileges they had lost in
the depression and new deal. They got the message, and soon they began a stealthy class
war against the rest of society and the principles of our democracy. They set out to
trash the social contract, to cut their workforces and wages, to scour the globe in search
of cheap labor, and to shred the social safety net that was supposed to protect people
from hardships beyond their control. Business Week put it bluntly at the time: "Some
people will obviously have to do with less....it will be a bitter pill for many Americans
to swallow the idea of doing with less so that big business can have more."
The middle class and working poor are told that what's happening to them is the consequence
of Adam Smith's "Invisible Hand." This is a lie. What's happening to them
is the direct consequence of corporate activism, intellectual propaganda, the rise
of a religious orthodoxy that in its hunger for government subsidies has made an idol
of power, and a string of political decisions favoring the powerful and the privileged
who bought the political system right out from under us. ... To put political muscle
behind these ideas they created a formidable political machine. One of the few journalists
to cover the issues of class -- Thomas Edsall of The Washington Post -- wrote: "During
the 1970s, business refined its ability to act as a class, submerging competitive instincts
in favor of joint, cooperate action in the legislative area." Big business political
action committees flooded the political arena with a deluge of dollars. And they built
alliances with the religious right -- Jerry Falwell's Moral Majority and Pat Robertson's
Christian Coalition -- who mounted a cultural war providing a smokescreen for the class
war, hiding the economic plunder of the very people who were enlisted as foot soldiers
in the cause of privilege.
In a book to be published this summer, Daniel Altman describes what he calls the "neo-economy
-- a place without taxes, without a social safety net, where rich and poor live in
different financial worlds -- and [said Altman] it's coming to America." He's a
little late. It's here. Says Warren Buffett, the savviest investor of them all: "My
class won." Look
at the spoils of victory: Over the past three years, they've pushed through $2 trillion
dollars in tax cuts -- almost all tilted towards the wealthiest people in the country.
Cuts in taxes on the largest incomes. Cuts in taxes on investment income. And cuts
in taxes on huge inheritances. More than half of the benefits are going to the wealthiest
one percent. You could call it trickle-down economics, except that the only thing that
trickled down was a sea of red ink in our state and local governments, forcing them
to cut services for and raise taxes on middle class working America. Now the Congressional
Budget Office forecasts deficits totaling $2.75 trillion over the next ten years. If
link is broken, view
Adobe Acrobat version [PDF--43 KB].
- Working for Change: Falling
through the cracks. How I lost $20,000 as an insured patient in our nation's health
system. Excerpt: In the past couple years I've been hearing others like it -- the
constant being that an awful lot of people have "unique" situations, and an
awful lot of people are ill-equipped to understand, let alone master, the Byzantine
world of our health insurance system. The new Medicare drug discount cards are introducing
far more of the same. When coverage depends on the fine print, you can bet it's the
people who do this for a living that will come out ahead. The house always wins. The
new Medicare drug benefit system is, by all accounts, a complicated fiasco. But then,
it has to be. Hard wired into it -- as into all of our health coverage -- is the imperative
that private insurers make money. Forget ideology; look at the results. For a lot of
people, the system works reasonably well. But for the country's nearly 50 million uninsured,
it doesn't. And then there's the rest of us -- who are insured, pay our bills, but
some how, some way, fall through the cracks.
- Vault's IBM
Business Consulting Services message board is a popular hangout for IBM BCS employees,
including many employees acquired from PwC. Some sample posts follow:
- "Inspiring BCS Team"
by "ibmfree". Full excerpt: BM BCS Canada has recently created a team called "Inspiring
BCS" to address people's concerns and build a 'high performance culture'. This is IBM's
way of saying "Oh my God, how do we stop the flood of PwC Consultants currently leaving
us?" I think this team, conducting focus groups and comprised of a cross-section of people,
is an absolute insult to those PwC people who have been telling the IBM drone managers how
things need to change. And it is pretty obvious that this is not designed to achieve change
in IBM's draconian policies but simply to stem the tide of resignations. The team can't even
get people to attend the focus group sessions. Last year, the head of IBM BCS was told at a
meeting that if she did not do something about the way IBM was treating people she would be
faced with a huge exodus of people. Her response was "Where will they go?". Guess
she is finding out now.
My big question here is: What IBM policy has pissed you off the most? There are lots to choose
I could go on but I would love to here what others pick as their #1 IBM piss-off.
- losing a weeks vacation
- the non-compete policy
- 20% drop in per diems
- forced to take flights at bed times
- HR department lies
- no reimbursement for MBA courses
- pay cuts (including 2% reduction)
- poor benefits coverage
- the high deductible applied to prescription drugs before
the % reimbursement is calculated
- the 99% salary, 1% commission
- the bureaucracy required to get anything done
- the use of S&D to sell work
they know nothing about (like process improvement)
- getting a 0% bonus while
partners and office stay get theirs
- the loss of the $750 monthly travel
allowance for being on projects where you are out of town 3 weeks out of
4 for more than 3 months
- the use of resource managers to hound you to
take projects that are well beneath your status (i.e. doing clerical work
when you have been managing multi-million dollar engagements)
- the lack
of a boss or working for an IBM drone who does not know what you do?
continued use of that lousy IBM corporate card while not being allowed
to collect points
- flying economy on long-term projects overseas because IBM
does not grant business class on flights under 8 hours
- being a pawn for
hardware sales and outsourcing
- being seen as a software implementer and
not a management consultant
- realizing that a PwC band 3 - made an IBM
Band 7 - is far more qualified than many IBM bands 8 and up
- the IBM attitude
of moral superiority
- the influence of IBM HR and IBM Legal in day-to-day
- "Dose of reality" responds in "An
excellent list". Full excerpt: Just think how easy
it was for you to come up with your list of problems – you were probably drafting
it as fast as you could type. Testimony to just how far away from viable and
self-sustaining HR policy and employee-related business processes we have come. The
focus groups are just another example of “red-herring” lip service. They
must know what is causing the propensity to resign. The only ostensible benefit of focus
groups would be to find out the relative pain from each of the daggers they have thrown
in the last few years, perhaps to see if they can pull one or two out.
The problem is that laws of inertia and motion work both ways. Until now, they relied
on inertia, and a perceived bad employment market to stem the tide. Even if
they were able to turn back the clock on the majority of these bad policy decisions,
the anger and sense of having been cheated that is felt by the vast majority of staff
will still lead them to seek employment elsewhere. The other problem is that
the current business economics, revenue opportunities and resource capital that remain
are woefully inadequate to enable a material give back of that which has been
taken away from staff the past few years. Add to this the improving employment market,
and it is game, set, and match, unless they can bring themselves to suck it
up and let the quarterly numbers dip until they can regroup organizationally and
strategically. That will never happen with the current regime that has been hanging
on with their “gimmick
of the month” strategy for years.
It is a classic case of whipsaw perpetrated by a group of overmatched, overblown
ex-consultants who are currently running BCS. While I keep my nose out of the
business of the rest of the non-BCS organization, I would be interested in
knowing if they are experiencing the same sense of dissatisfaction and revolt. If
they are, we are really in trouble. As far as my #1 issue, it would have to be the
lack of pay for performance, followed closely by the devaluation of salary levels
that were supported by artificial “external” salary
is the word" by "TheGrumpyOne". Full excerpt: I'm a band D in
IGS in the US. If I tell you anything more than that, I run risk of being identified
and terminated. I will tell you that most of the IBM business units are a lot
more worried about replacing current employees with offshore ones than we are
about hiring new employees. It looks like it will continue that way through August.
That would explain why so many people are bewildered by why they aren't getting responses
from HR. If you aren't able to find a job somewhere else, check back with us
at IBM in early September.
Confused at All"
by "midwest_al". Excerpt: To improve morale, the employee needs to feel valued
and *rewarded*. Would having a manager talk to you more often really improve
your morale if you knew your job was targeted for outsourcing? Also, having
been the 'survivor' of outsourcing myself, the morale gets bad there too, because
now those people wonder if their turn is next. When I worked in the BCS / Financial
area, the managers talked to us a lot about delivering customer value, increasing
utilization and so on with no focus on rewarding us for all the work we were
expected to do. After a while, all you see is their lips moving and a lot of
gibberish noise coming out. My morale did not improve by listening to them
talk, especially the higher level management who communicate like politicians...
big twists of facts, who make noise, but really say nothing. Last year, I traveled
100% of the time with 111% utilization and got no extra compensation for that.
Needless to say I have left for another company that pays me more for doing
the same thing. But since I now feel adequately compensated, my morale is doing quite
fine. So when you have managers and executives who make their quarterly profits
a priority, they could care less about morale, since that is not their motivating
- CNET News: IBM
tries to hook computer science students. Excerpt: IBM will supply universities
with free software and deeply discounted hardware, hoping to lure students away from
Microsoft's popular Windows-based development software. Announced Tuesday, the IBM
Academic Initiative is designed to create computer science curricula around IBM-backed
technologies, notably the Java programming language and open-source software such as
Linux. IBM is heavily invested in industry standards like Java and Web services, which
form the basis of many of its products. It also sells servers with Linux, the open-source
server operating system that has stemmed the growth of Microsoft's Windows.
- New York Times: No
Wonder C.E.O.'s Love Those Mergers. Excerpt: Shareholders like it
when their companies are acquired, because their stocks rise in value. Chief executives
like it, too, because their severance agreements kick in. And that means they can become
truly, titanically, stupefyingly rich. Wallace R. Barr, the chief executive of Caesars
Entertainment, is the latest to line up for his barrel of bucks. Last week, Harrah's
announced it would acquire Caesars for $5.2 billion. Thanks to accelerated vesting
of options and stock awards, Mr. Barr stands to receive almost $20 million under so-called
change-of-control provisions in his contract. And if Mr. Barr resigns from Caesars "for
good reason," the
contract says, he is entitled to an additional $6.6 million after the two companies
merge. ... One reason that shareholder outrage has been muted may be that few people,
beyond the executives themselves and maybe the company's compensation committee, know
how costly these pay deals are. Even with all the scrutiny of corporate governance
in recent years, a full tally of what executives will earn in retirement or under a
change of control is simply not disclosed. Not anywhere. ...
And, my, how the list
of goodies can go on. First comes the executives' severance pay, almost always nearly
three times salary and bonus. Accelerated vesting of stock options and stock awards
quickly follows; sometimes the options are granted with their full terms remaining
- up to 10 years - giving them tremendous value. Then there are the three additional
years of pension credits that get tacked on to an executive's pay, as well as the 401(k)
match, years of health care benefits and the cash value of perquisites at the time
of termination - such as use of the corporate jet, country-club memberships, allowances
for financial planning advice, office space and secretarial services. All in one delightfully
fat lump sum. AND don't forget that executives' pensions are often based on the unusually
high severance pay, which ratchets the numbers way up. Of course, one downside to these
enormous payments is that they generate stunning tax bills for executives. Good thing
their contracts almost always require the companies to pay. And how! The so-called
excise tax gross-up provisions can be so colossal that, according to one pay expert, a
major merger was scuttled because the cost to cover executives' tax bills exceeded $100
- San Diego Union-Tribune: Company
offers a cost-free benefit: days off. Excerpt: Like
a lot of companies, Gen-Probe views employee benefits as a key to recruiting and keeping
the best workers. But the San Diego biotech has found one unintended benefit
from its 9/80 workweek program, which gives workers a day off every other Friday. "We
have a rule that we don't have meetings on Friday," said Roy Burchill,
Gen-Probe's senior director of human resources. "People look forward to working
on Fridays now because they know they won't be interrupted by meetings and they'll
be more productive." Burchill said workers don't seem to mind working 9-hour days
when they know they'll be rewarded with a three-day weekend every other week. The
9/80 work scheduled is regularly identified as one of the company's most valuable
employee benefits in worker surveys. ... At the law firm of Luce Forward Hamilton & Scripps,
administrative officer Ray Berry said he has a budgeted a 15 percent increase for
employee health insurance premiums, which will be assessed in October. "I don't
know what it's going to be yet, but I certainly am praying that it stays under that," he
said. Gen-Probe proudly touts that its employees don't have to contribute anything
toward their health insurance premiums. Burchill said the company saves money by
being self-insured, and the company's 800 employees seem to understand there is a direct
relationship between their use of medical care and how much it costs the company.
- Jim Hightower: The CostCo
Model. Excerpt: Costco is different... and that really POs Wall Street. The nationwide
retailer treats its 100,000 clerks, forklift operators, and other workers as valued
assets to be invested in and nurtured – unlike the Wal-Mart
model of paying the least you can to rank & file employees, squeezing the last
ounce of toil out of each of them, busting any whisper of unionization, and causing
a workforce turnover like employees are nothing but disposable coffee cups. How different
is Costco? Starting pay is $10 an hour, workers typically earn $40,000-a-year after
three years on the job, the company covers 92 percent of employees' health care costs,
and the Teamsters union provides strong bargaining representation for the workers.
Also, while CEOs at other major corporations average 531 times the pay of their lowest-paid
employees, Costco's top boss takes only 10 times the pay of his typical rank & filer.
His annual salary $350,000 – compared
to some $5 million a year hauled off by Wal-Mart's honcho. "From day one," says
the chief financial officer at Costco, "we've
run the company with the philosophy that if we pay better than average, provide a
salary people can live on, have a positive environment and good benefits, we'll be
able to hire better people, they'll stay longer and be more efficient." It works.
Costco's turnover is minimal, its profits are consistently strong, and its stock
price has quadrupled in 10 years.
- Washington Post: Democrats
Warn of Medicare Drug Costs. Excerpt: Medicare recipients
whose premiums for doctor visits cannot rise more than the annual cost-of-living adjustments
in their Social Security checks won't enjoy that same protection when it comes to their
medicine. Democrats have found that the Republican-written prescription drug benefit,
signed into law last year and scheduled to take effect in 2006, has no premium caps
tied to Social Security COLAs. "This is kind of a sneak attack on Social Security
Pete Stark, D-Calif., said Wednesday at a news conference.
- New York Times: More
Jobs, Worse Work. Excerpts: By industry, the leading sources of
hiring turn out to be restaurants, temporary hiring agencies and building services.
These three categories, which make up only 9.7 percent of total nonfarm payrolls, accounted
for 25 percent of the cumulative growth in overall hiring from March to June. Hiring
has also accelerated at clothing stores, courier services, hotels, grocery stores,
trucking businesses, hospitals, social work agencies, business support companies and
providers of personal and laundry services. This group, which makes up 12 percent of
the nonfarm work force, accounted for 19 percent of the total growth in business payrolls
over the past four months. ... The Great American Job Machine is not even close to
generating the surge of the high-powered jobs that is typically the driving force behind
greater incomes and consumer demand. This puts households under enormous pressure.
Desperate to maintain lifestyles, they have turned to far riskier sources of support.
Reliance on tax cuts has led to record budget deficits, and borrowing against homes
has led to record household debt. These trends are dangerous and unsustainable, and
they pose a serious risk to economic recovery.
- Washington Post: Corporate
Reforms Reassessed. Excerpts: Nearly two years after Congress
passed corporate reform legislation, the law still gets enthusiastic public reviews
from chief executives. But behind the scenes, there is growing pressure to scale back
some of its provisions. ... Rep. Paul E. Kanjorski (D-Pa.), a proponent of Sarbanes-Oxley,
said a congressional vote this week on stock options was the first step toward repealing
reforms enacted after corporate scandals. The House voted 312 to 111 Tuesday to override
accounting standards-setters and modify a proposal by the Financial Accounting Standards
Board that companies treat stock options for any workers as an expense. Just two years
ago, in passing Sarbanes-Oxley, Congress cited the importance of having an independent
body set accounting standards. "How in the world is this good public policy?" Rep.
Carolyn B. Maloney (D-N.Y.), who opposed the change, said on the House floor earlier
- New York Times: When
Politicians Write Accounting Rules, Reality Can Be Forgotten.
Excerpt: Across the ocean, the House of Representatives voted 312 to 111 in favor of
a bill that Warren Buffett has called "lunacy" but that the sponsors called
the Stock Option Accounting Reform Act. The bill would overrule the Financial Accounting
Standards Board and let companies go on ignoring the value of options they give out.
- Health Affairs MarketWatch: Doughnut
Holes And Price Controls. Excerpt: In 2003 citizens of Canada, the United Kingdom,
and France paid an average of 34-59 percent of what Americans paid for a similar market
basket of pharmaceuticals. If the Medicare program were to pay comparable prices for
pharmaceuticals, it would be possible to eliminate the "doughnut hole" in
its prescription drug benefit and keep Medicare drug spending within the overall limits
established by Congress. This provides Congress with a clear choice: reduce the level
of cost sharing and improve beneficiaries’ access to pharmaceuticals, or allow
the pharmaceutical industry to use the higher prices to fund research and development
and to engage in other activities.
- Las Vegas Sun: Group
Urges Universal Health Coverage. Excerpt: Rapidly rising costs,
soaring numbers of uninsured and an epidemic of poor care have caused a health care
crisis that only sweeping reform will solve, an alliance of business, labor, religious
and civic groups said Tuesday. The National Coalition on Health Care said Congress
should require that everyone have basic health insurance, with subsidies for those
who can't afford it. It also called for holding down premiums for the basic package,
simplifying health care administration and reducing medical errors by tying payments
to quality, among other things. "Small changes, incremental changes are not sufficient," said
coalition president Henry Simmons, a physician who served in three Republican administrations. "We've
had 40 years of failure with experiments with that strategy." The coalition did
not endorse any specific approach, but said the options could include a single-payer
system, mandates on employers to offer insurance and expansion of public programs.
The number of Americans without insurance is projected to top 51 million by 2006, up
from 41 million in 2001, the group said. The average annual premium for employer-sponsored
coverage for a family will be $14,565 in 2006, more than double what it was in 2001,
the coalition said. The figures represent the total paid for the insurance by employer
and employee combined.
|Coverage on H1-B and L1 Visa and Off-Shoring
- Associated Press, courtesy of Yahoo! News: Software
Engineer Wants Outsourcing Ban.
Excerpt: A software engineer who twice lost jobs to foreign workers is hoping
Coloradans will get a chance to vote on whether to bar the state from relying
on workers overseas. Richard Armstrong, 40, of Parker is leading a corps of
volunteers to collect enough signatures to place the issue on November's ballot.
Armstrong, a self-described "independent progressive" who has never gotten
involved in politics before, said he began working against "outsourcing" to
foreign workers in 2000 after he was laid off twice and saw co-workers going
through the same thing. At US West, which is now Qwest, Armstrong said he
trained his replacement. "We feel that taxpayers have the right to decide where
their taxpayer dollars are spent," said Armstrong, who runs the Web-based National
Hire American Citizens Society. Armstrong's initiative would bar the state
from hiring temporary workers overseas and hiring temporary foreign workers
in the United States. Legal U.S. residents could still be hired.
- Orlando Weekly News: Mike
Emmons is Mad as Hell. Excerpt: For Michael Emmons, the road from well-paid I.T.
worker to anti-outsourcing activist began on a sweltering June afternoon in 2002
when his Lake Mary employer, Siemens ICN, summoned the entire I.T. department
to a meeting. In less than 30 minutes, nearly 20 highly skilled, white-collar
employees and contractors were asked to pack their belongings and get out. Many
of the workers had been with Siemens for decades. Emmons was a contractor. He'd
been working with the company developing software applications for six years.
What had the employees done to deserve their pink slips? Absolutely nothing.
It was the company that had an epiphany: Flying technically savvy workers into
the United States from India would save a lot of money. The foreign replacements were
willing to work for a fraction of the salary their American counterparts earned,
and since they were contractors, they didn't qualify for benefits. Before they left,
the Siemens exiles were given a choice: train their Indian replacements and get
severance pay, or walk away and get nothing. Two of the 20 fired chose the latter.
... "My anger is not directed toward the foreign workers themselves, it's directed
toward our flawed system," says Emmons. "Every knowledge-based job is in
danger, and all the young college graduates need to wake up because corporatism is
influencing our government. They took my job and they took my livelihood. You don't
do something like this to someone and expect them to turn a blind eye."
- CWA: Offshore Contractors
Target State Government Work. Excerpt: State governments
increasingly are contracting with foreign outsourcing firms, sending millions
of dollars in state taxpayer funds overseas. In many cases, states don't even
realize the extent to which taxpayer-funded information technology work is
being performed offshore. Those are the findings of a new report by the Corporate
Research Project of Good Jobs First, a Washington, D.C. based research group. The
Tax Dollars at Work...Offshore," was conducted for CWA Local 37083, the Washington
Alliance of Technology Workers, and released during a telephone news conference
on July 14. WashTech President Marcus Courtney stressed that there is a real
need to document how IT work for social service programs and other state functions
is being sent offshore. "This issue is generating a lot of attention and controversy
in the states, and as legislatures take up this issue, they need the hard facts on
how offshore contractors are positioning themselves to target the work of
state governments," he said.