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    Highlights—December 17, 2005

  • New York Times: The Next Retirement Time Bomb. By Milt Fruedenheim and Mary Williams Walsh. Excerpt: Thousands of government bodies, including states, cities, towns, school districts and water authorities, are in for the same kind of shock in the next year or so. For years, governments have been promising generous medical benefits to millions of schoolteachers, firefighters and other employees when they retire, yet experts say that virtually none of these governments have kept track of the mounting price tag. The usual practice is to budget for health care a year at a time, and to leave the rest for the future. Off the government balance sheets -- out of sight and out of mind -- those obligations have been ballooning as health care costs have spiraled and as the baby-boom generation has approached retirement. And now the accounting rulemaker for the public sector, the Governmental Accounting Standards Board, says it is time for every government to do what Duluth has done: to come to grips with the total value of its promises, and to report it to their taxpayers and bondholders.
  • Center on Budget and Policy Policies: House Pension Bill Would Make Some 2001 Tax Cuts Permanent for the First Time. Bill Also Discriminates Against Moderate-Income Taxpayers. By James Horney and Robert Greenstein. Excerpts: The bill’s tax provisions also contain a serious inequity. They would fully protect the generous pension tax cuts for higher-income taxpayers enacted in 2001 from the effects of inflation over time, while allowing inflation to erode severely the one significant retirement tax benefit enacted in 2001 for lower- and moderate-income taxpayers. By 2015, a significant portion of this retirement tax benefit for lower- and moderate-income families — known as the saver’s credit — would cease to exist. [...]
    Conclusion: To allow the severe erosion over time of the principal tax incentive for modest-income families to save for retirement does not make sense as retirement policy. To do so while protecting very generous retirement tax-cut benefits that go overwhelmingly to higher-income taxpayers who generally are able to save adequately for retirement anyway, without these tax subsidies, is even less defensible. And incorporating regressive tax policy of this nature into a bill that swells budget deficits, and opens the door to still more deficit-increasing tax cuts in the future, stands sound policy on its head. The tax provisions of the House pension bill contain some beneficial features, such as provisions that would encourage “automatic enrollment” in employer-sponsored retirement plans. The tax provisions as a whole, however, manage simultaneously to represent irresponsible fiscal policy, inequitable social policy, and unsound retirement-saving policy.
  • Representative George Miller (D-CA) Statement on Boehner-Thomas Announcement on Pensions. Excerpt: An analysis by two independent agencies, the Congressional Budget Office and the Pension Benefit Guaranty Corporation, concluded that the House bill worsens the pension crisis by increasing claims on the federal government by billions of dollars, thus boosting the chances of a massive taxpayer bailout and the loss of billions of dollars in employee and retiree benefits. The Republican bill does nothing to stop companies from dumping billions of unwanted promises on to taxpayers at the expense of workers; allows companies to deeply cut the benefits of older workers; and repeals longstanding pension protections that prohibit investment firms from giving conflicted, self-interested investment advice to employees.
  • Statement of Kathi Cooper of the Cooper v. IBM Personal Pension Plan case regarding the US House of Representatives Passage of a Pension Bill (H.R. 2830). Full excerpt: Today the House passed a pension bill (H.R. 2830) that does not have the same employee protections as the Senate version (S. 1783).
    The Senate pension bill finds a balance between the needs of employers for increased flexibility in designing private pension plans and the needs of employees for protection against the most extreme adverse impacts of conversions to cash balance pension plans.
    I hope that the Senate bill prevails in conference when both bills are reconciled.
  • Janet Krueger comments on the Pension Bill. Full excerpt: Too late for that specific house vote, but not too late to let your views be known... It won't be too late until the final bill is signed into law. Before then, we can ask the conference committee to PLEASE include the age protections that were in the Senate version of the bill when they merge the two bills together. And we can let people in Washington know that if the final bill includes retroactive cash balance legalization without age protection, they need to vote it down...
    Since the conference committee won't convene until next year, you have time to send a written letter to your representative and your senators letting them know how you feel. Feel free to copy or reference Kathi Cooper's letter when you do so.
    Thanks in advance to every one of you who sits down before New Year's day to send 3 letters to Washington! (One to each of your senators and one to your representative...)
  • Boston Globe: A world unto itself. By Steve Bailey. Excerpts: It may be of some comfort to those 50,000 managers at Verizon Communications Inc. who are fuming about having their pensions frozen and losing their retirement health benefits to know that the people at the top know all about hard work and sacrifice. Take, for instance, Doreen Toben, Verizon's chief financial officer.
    ''Horses are an incredible amount of work," Toben told Fortune magazine two years ago. ''I was raised on a horse farm in Harding Township, N.J. My father worked on Wall Street. There were always horses on the property, and we grew up with horses and fox hunting with the likes of Jackie Kennedy and stuff. When you got home from school, you would have to muck your own stall. You would brush your own horses. You would groom your own horses." [...]
    It gets better: ''Our horses are warmbloods, which come from Europe. A thoroughbred, which you see on a racetrack, is considered a hotblood. The warmbloods are much more mellow, and they're also bigger. So we go over to Europe and buy them. Generally the ones that she has now cost someplace between $150,000 and $300,000. That's her cutoff. Some of these horses are half a million to a million. It really is a world unto itself."
    Heaven knows, a mom has to draw the line somewhere. Toben and Verizon's senior management just decided the place to draw the line at the nation's second-largest telephone company is with the pension and retirement healthcare benefits for its managers, including 3,500 in Massachusetts. After next June, managers will stop earning pension credits and managers hired after the first of the year will receive no pension benefits at all. Verizon managers with less than 13 1/2 years with the company will no longer receive subsidized retiree medical benefits. Verizon's unionized workforce of 105,000, and its 210,000 retirees, fear they are next. [...]
    This changing world will cost Ralph M. Casillas, a Verizon manager in Thousand Oaks, Calif., about a quarter of his pension, or about $101,000, he estimates. That wouldn't even buy a low-end nag for Toben's daughter, but for Casillas, 56, it means he will be working longer than expected. Says Casillas about Verizon's senior management: ''These guys don't know what the inside of a grocery store looks like." [...]
    Verizon's bosses are sharing the pain, freezing their own pension plans. They can afford it. Through the end of last year, the company had contributed $13.8 million to Seidenberg's pension plan and $11.9 million to president Lawrence Babbio's plan. Verizon contributed $3 million to Toben's pension. Last year alone, Seidenberg received $13.1 million in total compensation plus stock options worth $4.2 million. Toben received $4.5 million in total compensation and $1.3 million in options.
  • Los Angeles Times: In the Dark on Medical Pricing. Consumers often aren't getting the information they need to find the best healthcare deal. By Debora Vrana. Excerpts: Think shopping for a big-screen TV is tough? Try finding the best mammogram reader in your neighborhood or the cheapest place for a checkup. "Consumer-driven" health plans, which typically combine a high-deductible insurance plan with a savings account, are seen by many in government and industry as a way to slow the growth of healthcare costs. With their own bucks at stake, the theory goes, wise consumers will shop for the best deals, forcing providers to keep a lid on prices and improve quality.
    But supporters and critics alike say a crucial ingredient is missing: the information that consumers need to comparison-shop. "Right now, there's no Shopzilla for an angioplasty," said Patti Smith, head of Adobe Group, a healthcare communications firm in La Crescenta that helps large companies. [...]
    "You can ask about prices, but even then because of the emotion involved in healthcare, people tend not to ask — and in an emergency situation, forget about it," Fox said. "It's very difficult for people to turn to a doctor and say, 'Hey, for 50 bucks cheaper I can get this down the street.' " Critics say it's too much to ask America's consumers to solve the problem of rising healthcare costs on their own. "In the healthcare market, unlike the mall, not all consumers are created equal," said Jamie Court, head of the Foundation for Taxpayer and Consumer Rights, a Santa Monica advocacy group. "Often the consumers who need services the most have the least ability to shop."
  • The Commonwealth Fund Issue Brief: Early Experience With High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey. Excerpts: Survey findings indicate:
    • Lower satisfaction with consumer-driven plans [...]
    • Higher out-of-pocket costs [...]
    • More missed health care [...]
    • More cost-conscious consumers [...]
    • Lack of information
  • Fortune Magazine: Quoted Often, Followed Rarely. Thirty years after he published the "bible of software engineering," Fred Brooks talks about managing teams of people and why projects so often go wrong. By Daniel Roth. Excerpts: In 1975, Frederick Brooks published The Mythical Man-Month. It had no right to succeed. The book detailed Brooks' experience managing IBM's bet-the-company System/360 computers and OS/360 software, and featured odd illustrations, an awkward title, and loads of jargon. Yet Brooks' deconstruction of what went right and wrong became a must-read among tech and nontech execs; dog-eared copies are still passed around. The best known passages expose flaws in the then common use of "man months"—the tool (okay, gender-biased tool) for estimating project cost and length. A 12-man-month project might have three people assigned to it for four months; if delays set in, managers simply added more people. Brooks proved that doing so increased bureaucracy and training, leading to Brooks' law: Adding people to a late software project makes it later. He also laid out new strategies for organizing teams and managing creative types. In November, Brooks, now 74 and since 1964 a computer science professor at the University of North Carolina at Chapel Hill, explained in his Southern drawl why people still turn to his book for guidance. Edited excerpts...
  • Workforce Management: Why The Meager Raises? Despite strong corporate earnings, real wages for American workers will finish 2005 down by about 2 percent because of rising prices and small annual pay increases. By John Hollon. Excerpts: I ’ve been in the workforce long enough to understand the cardinal rule of the Christmas bonus: Be humbly grateful for whatever you get no matter how odd, inappropriate or paltry the gift or bonus might seem. This is a rule I didn’t really appreciate until the year that the president of the company I was working for decided that the holiday gift should be--and I am not making this up--lambskin fanny packs. No one knew what to make of such a "gift," but some enterprising employee actually figured out where the fanny packs had been purchased and returned his for store credit. He received the grand sum of $17, and in short order there was a run on the store of other employees trying to get rid of their "gift." [...]
    That all makes sense until you read, as I did, in the Los Angeles Times last month that "corporate earnings keep rising at a double-digit pace while workers are lucky to get even low single-digit wage increases." The Times noted that operating earnings of companies in the Standard & Poor’s 500 rose 11.5 percent in the third quarter of 2005, the 14th straight quarter of double-digit corporate growth. [...] This is all great economic news, except, as we point out in this month’s Data Bank Annual, real wages for American workers will finish 2005 down by about 2 percent because of the combination of rising prices and small annual pay increases. Next year doesn’t look any better, either: Salary increases for 2006 will fall in the 3.5 percent to 3.7 percent range, which is at or below the various forecasts for inflation. [...]
    There’s been a lot written in the wake of Peter Drucker’s passing last month, but one of his core principles was that successful businesses create the conditions that allow their employees to do their best work. Some of these conditions surely include knowing when to make a prudent investment in the workforce--in pay increases that keep the talent on board, in training that improves skills and increases productivity, and in incentive compensation that better aligns workers and the business to reach ever higher goals. While my personal experience makes me appreciate the thinking behind the Disappearing Christmas Bonus, I just don’t get the ongoing obsession with the Puny Pay Raise
  • USA Today: Bogle: Capitalism has suffered 'pathological mutation'. By Russ Juskalian. When John Bogle, a 50-year veteran in financial services, says capitalism is in trouble, there is only one proper reaction: You listen. First, Bogle's qualifications: He founded the first index fund in 1975 (Vanguard 500 Index Fund). In 1999, Fortune named him one of the four investment "Giants of the 20th Century," and in 2004, Time magazine called him one of the world's 100 most influential and powerful people. A lifelong businessman (and Republican, he likes to add), Bogle is nothing if not the champion of idealistic capitalism. [...]
    In The Battle for the Soul of Capitalism, Bogle argues that our current system has undergone " 'a pathological mutation' from traditional owners' capitalism to a new form, managers' capitalism." (Related: Read an excerpt of The Battle for the Soul of Capitalism). With power moving away from owners of securities, this new system has been led afoul by "grossly excessive executive compensation and stock options, part of an enormous transfer of wealth from public investors to the hands of business leaders, corporate insiders and financial intermediaries." [...]
    So how does Bogle suppose we fix an industry — moreover, an economic paradigm — in which shareholders put up 100% of the cash, assume 100% of the risk and get only 25% of the returns? "The place to begin is with a federal government commission that works to resolve the problems of our intermediation society, and fosters the development of an investment society that gives owners a fair shake."
  • AFL-CIO: A Global Call for Human Rights in the Workplace [PDF]. "Protecting the right to form unions…is vital to promoting broadly shared economic prosperity, social justice and strong democracies." Excerpt: As people around the world prepare to observe International Human Rights Day on Dec. 10, we, the undersigned Nobel Peace Prize laureates, are gravely concerned about the state of workers’ rights in many countries. International Human Rights Day commemorates the adoption by the United Nations in 1948 of the Universal Declaration of Human Rights. This declaration, which has become the cornerstone of the modern human rights movement, states clearly and unambiguously that all people have an inalienable and fundamental human right to form and join trade unions for the protection of their interests. Protecting the right to form unions is not only required by the Universal Declaration but also is vital to promoting broadly shared economic prosperity, social justice and strong democracies. [...] Signed by:
    • The Honorable Jimmy Carter, Nobel Peace Laureate 2002
    • His Holiness the 14th Dalai Lama Tenzin Gyatso, Nobel Peace Laureate 2003
    • International Physicians for the Prevention of Nuclear War, Nobel Peace Laureate 1985
    • Máiread Corrigan Maguire, Nobel Peace Laureate 1976
    • The Honorable Dr. José Ramos-Horta, Nobel Peace Laureate 1996
    • The Most Rev. Desmond Tutu, Nobel Peace Laureate 1984
    • The Honorable Lech Walesa, Nobel Peace Laureate 1983
    • Betty Williams, Nobel Peace Laureate 1976
    • Professor Jody Williams, Nobel Peace Laureate 1997
  • Yahoo! message board post by Linda Guyer (President, Alliance@IBM). Full excerpt: Here is the letter from several nobel Laureates, including former President Carter, to the White House. On Thursday, Dec. 8, over 3,000 people marched on the White House to deliver the Nobel Laureates' statement and the petition. The White House refused to accept them. (Editor's note: See the AFL-CIO item above for a link to the letter).
  • Communications Workers of America (CWA): Thousands Picket White House, Rally Nationwide. Excerpts: Fed up with the erosion of workers' rights in the United States, thousands of chanting, sign-waving union members formed a giant picket line in front of the White House on Thursday to demand that the Bush administration and American employers recognize that workers' rights are fundamental human rights. "America used to stand proud before the world as a land where the right of working people to have a union was respected. But today, that right has been destroyed," AFL-CIO Executive Vice President Linda Chavez-Thompson told the crowd. "The right-wing politicians cut back the law to just about nothing, and the corporations trample on workers' freedom like it's their personal doormat." [...]
    Cohen made the point that CEOs would never work without contracts, yet expect exactly that of workers. "You hire lawyers to bargain for yourselves multimillion dollar contracts, the most obscene the world has ever seen, then you hire a different bank of lawyers who make sure front-line workers never get a chance to bargain for themselves," he said, adding that fighting for democracy in America means "democracy in the workplace, human rights in the workplace." [...]
    Saturday marks the anniversary of the United Nation's adoption of the Universal Declaration of Human Rights in 1948, which specifically addresses the fundamental right of workers to form and join unions. But those rights exist on paper only in the United States today due to the combination of rollbacks in laws and state and federal policies, pro-business appointments to the courts and National Labor Relations Board and the NLRB's long delays in processing workers' unfair labor practice complaints. Even Human Rights Watch has taken notice of the erosion of American workers' freedom to form unions. An HRW report points to the "culture of near-impunity" that pervades U.S. labor law and practice and notes, "Human rights cannot flourish where workers' rights are not enforced."
  • Computerworld: China surpasses U.S. in global IT sales, report says. China sold more IT and communications gear than the U.S. in 2004. By Nancy Gohring. Excerpt: China surpassed the U.S. to become the world's No. 1 exporter of IT goods in 2004, according to a report released today by the Organisation for Economic Co-operation and Development (OECD). China exported $180 billion worth of information and communications technology (ICT) goods last year, including mobile phones, laptops and digital cameras, up from $123 billion in 2003. ICT exports from the U.S. grew at a slower rate, rising from $137 billion in 2003 to $149 billion in 2004, the OECD said. The data also showed that the U.S. imports more ICT goods from China than from any other source. China supplied 27% of ICT imports to the U.S. in 2004, up from 10% in 2000.
  • BusinessWeek (courtesy of Yahoo!): India And China: Not Just Cheap. By Roger L. Martin. Excerpts: There's a romantic notion in North American business that our future lies in design and innovation, while India and China will serve as the home of low-cost operations. It's a nifty twist on David Ricardo's seminal early-19th-century theory of "comparative advantage," which explained why cloudy and cool England exported woollen goods to sunny and hot Spain, which in turn exported wine to England. In the modern example, we get to have highly paid professionals designing innovative enhancements to products and services, while India and China have lower-skilled and much lower-paid workers churning out the products and services we design. [...]
    The problem is that the scenario disintegrates as I ride through the streets of Hyderabad, fresh from a visit with Ramalinga Raju, Satyam Computer Services' (SAY) founder and chairman. Satyam ranks as the 20th-largest company in India by market cap and is a major global player in the info-tech services game. [...]
    At Tata Consultancy Services' gorgeous Mumbai campus [think Citibank on a 23-acre chunk of Central Park], I learned about its central goal of providing customers with a user experience that delights and surprises. To accomplish this goal, Tata sends its technically educated professionals to the TCS Management Training Centre to gain a thorough understanding of how to craft the customer environment, prototype new solutions, and manage change. [...]
    Consequently, North American companies err if they assume they'll win because their Indian competitors will pay no attention to design and innovation. If the leading Indian companies' design and innovation intentions haven't already manifested themselves, they soon will. That means North American companies need not only commit to design and innovation but also recognize design and innovation as one of the key fields upon which they'll fight the competition. They must put resources behind it. Too many large North American companies have cultures that promote lackluster design and conformity. That must change -- or they're going to lose on both cost-effectiveness and innovation. It will prove a quick and decisive loss, not unlike the trouncing of the EMS providers by the Taiwanese ODMs.
  • USA Today: Protect yourself from pension freezes. By Sandra Block. Excerpts: Across the country, workers are shivering, and it's not because their cost-conscious office managers have dialed down the thermostat. The chill is coming from their pension plans, which have been put on ice. Last week, Verizon Communications said it's freezing pensions covering 50,000 managers. Verizon's announcement was striking because, unlike many other companies that have frozen or terminated their pension plans, it's financially healthy. [...]
    When your pension is frozen, you get to keep the pension benefits you've already earned. But even if you've accumulated a sizable pension, a freeze can dramatically reduce the amount of money you will receive when you stop working. For example, suppose you're 48 years old, have worked for your employer for 20 years and earn $45,000 a year. Your pension accrues at 1% a year and is based on your salary when you retire. If you get an annual raise of 4% and retire at age 62 with a salary of $77,925, you'll receive $26,495 a year, says Syl Schieber, director of U.S. benefits consulting at Watson Wyatt. But if your pension is frozen at the current level, you'll receive just $9,000 a year. [...]
    The biggest losers in a pension freeze are middle-aged employees who have worked for the same company for years and don't plan to leave. The higher company match won't make up for the loss of their pension benefits, Schieber says.
  • Yahoo! finance board post by "idoubtitagain". Full excerpt: Know something princess, speaking of IGS divisional numbers, its interesting to compare the w.3 IBM internal website as to divisional target status vs. the presentation that is given during quarterly analyst calls. Sometimes it resembles like two totally different companies are being presented, one in which all the IGS divisional "arrows" are pointing "down" vs the glossy slick freelance one given to the analysts that indicates IBM is "hitting on all cylinders".
  • Yahoo! message board post by "ignatz713". Excerpts: Also keep in mind that IBM FOSTERED a paternal attitude towards its employees BEFORE 1999. To say that we should ALL have looked out for ourselves is now indeed hindsight. We well SHOULD have. However, when IBM TOLD us, year after year after year, that pension and retiree medical and insurance et cetera were ADDITIONAL COMPENSATION to our lower than the national average salary, we BELIEVED them. We didn't THINK of leaving because hell, in the end it was all going to be worth it, right? Wrong. We were going to be taken care of for life, right? Wrong. We had loyalty to them, right? Right.
    WHY did we believe them? NOT because we were savvy and self-serving like today's clever crop of MBAs, but because we were weaned in a corporation that treated us like family. Deliberately, misleadingly, in hindsight. We were coddled, and respected, and rewarded, such as it was, for decades. Come on, IF we (would have been) treated like dirt in the 1960s and 1970s, do you THINK we would be in the situation we are now? I don't think so.
  • Tacoma News Tribune: Verizon follows big companies by freezing pension plans. Excerpt: The memo to workers made the changes sound almost upbeat: “Your Work, Your Rewards, Your Verizon,” it read. But to some workers at Verizon Communications Inc., the company’s announcement this past week that it will freeze the pensions of 50,500 managers is nothing but an employer breaking a decades-old promise to its own people.
  • In a Yahoo! message board post, Janet Krueger answers this question from another participant: Is there something else that we can do to change this course of action/direction of the companies (cutting medical benefits for employees and retirees)? Excerpts: Provably not; the writing is on the wall as far as companies go. But there is something we can do as American citizens. We can work to convince our friends, neighbors, coworkers, communities, etc. that the time has come for Universal Health Care. As businesses default on health care promises to retirees, to employees, and to families, there is a growing gap that needs to be filled... Check out www.uhcan.org for a group actively working towards reform. Their list of myths and facts, included below, is worth focusing on.
    MYTH: It would cost too much money.
    FACT: A single-payer universal health plan is not socialized medicine. Under socialized medicine, the government owns the hospitals and clinics. Doctors and nurses are government employees. A single-payer universal health plan preserves private ownership and employment. It has no more in common with socialized medicine than is Medicare. What's unique about a single-payer universal health plan is that all health-care risks are placed in a universal risk pool covering everyone.
    MYTH: Americans would pay more.
    FACT: Several studies show costs for middle-class Americans would not increase. All but the poorest Americans would pay more income tax, but in most cases the tax would be equal to or less than what they currently pay for health insurance premiums, co-pays and deductibles, which would largely be eliminated. Money to take care of the currently uninsured would come from money saved by eliminating private insurance overhead costs and by spending less on high-tech equipment that duplicates or exceeds what's needed in any geographic region.
    MYTH: It would create a huge bureaucracy.
    FACT: Experts say the employer-based managed-care system is already a huge bureaucracy. It consumes 9 to 15 cents of every health-care dollar. Medicare, a single-payer plan for seniors, spends only 2 to 3 cents of every dollar on bureaucracy.
    MYTH: It would cost employers more, make them less competitive and force them to fire employees.
    FACT: Experts say the employer tax would equal but not exceed what employers currently pay for health-care premiums and paperwork/billing overhead created by the current multipayer system.
    MYTH: Medicine would be rationed.
    FACT: Managed care already rations medicine. A single-payer universal health plan would ration services based on medical necessity. Managed care rations services based on profit. Under single-payer universal health care, no one would be denied care due to pre-existing conditions.
    MYTH: Americans would have trouble getting in to see a doctor.
    FACT: Canadians, who live in a single-payer system, see their primary care physicians more often than Americans do now. There are more doctors per capita in Canada than there are in the United States. Yet the cost of physician services in Canada is one-third less than it is in the United States. About half the cost savings in Canada comes not from offering less care but by reducing insurance overhead and paperwork. The rest of the savings comes from allocating money to pay for expensive equipment so there is less excess capacity and duplication. Ninety-six percent of Canadians prefer their health-care system to the U.S. model.
    MYTH: Patients wouldn't be able to choose their own physician.
    FACT: According to experts, a single-payer plan would give patients more choice than they currently have in most cases. The United States is the only developed country heading in the direction of less choice. Other countries are building more choice into their systems.
    MYTH: The United States has the best health care in the world.
    FACT: The United States has higher infant mortality, higher surgical mortality and lower life expectancy than Canada. The United States has a much lower rate of access to primary care doctors than Canada. Canada has the same acute care bed-to-population ratio as the United States. Patient satisfaction, quality of care and outcome of care in Canada equal or exceed that in the United States, according to the U.S. General Accounting Office. For this lower quality, Americans pay 40 percent per capita more than Canadians do on health care.
    MYTH: There would be waiting lists for surgeries and high-tech procedures, which is why Canadians come to the United States to get health services.
    FACT: The United States has waiting lists for specialty care, too. Canadians rarely come to the United States for health care. Less than 1 percent of Canada's health budget goes to paying for care Canadians get in the United States. Canada's waiting-list problem stems largely from underfunding, which is being corrected now. Waiting times would likely be no longer in the United States than they are now, because we would still spend much more than other countries do on health care and still have many more specialists and capacity.
    MYTH: Physician salaries would be lowered, as would standards for physician training. It would discourage the best and brightest from going into medicine.
    FACT: Primary care doctors would see little or no change in their salaries. Some specialists would see a decline. All physicians would be paid more if they work in remote or underserved areas. Education, training and licensing policies are so similar for U.S. and Canadian physicians that their credentials are virtually interchangeable.
    MYTH: Canadian physicians are unhappy with their system.
    FACT: Nearly two-thirds are either "satisfied" or "very satisfied." About 500 Canadian doctors emigrate to the United States each year-representing about 1 percent of all Canadian doctors. Some return to Canada.
    MYTH: U.S. physicians don't want a single-payer universal health plan.
    FACT: Despite pervasive negative spin, 57.1 percent of U.S. physicians believe a single-payer system with universal coverage would be the best option for the United States, according to a 1999 New England Journal of Medicine survey.
  • BusinessWeek: About That Engineering Gap... Is the U.S. really falling behind China and India in education? Not really. Take a closer look at the data. Excerpts: In recent years, the worldwide media has cited graduation numbers that show a huge imbalance of engineering graduates coming out of Chinese and Indian schools. One commonly cited set of figures is 600,000 engineers graduated annually from institutions of higher education in China, 350,000 from India, and 70,000 from the U.S. [...]
    >We eventually found our way to knowledgeable employees of the Chinese Education Ministry, and the research head of NASSCOM, Sunil Mehta. After extensive discussions and reviews of more reports and data, we learned that no one was comparing apples to apples. The word "engineer" didn't translate well into different Chinese dialects and had no standard definition. We were told that reports received by the ministry from Chinese provinces didn't count degrees in a consistent way. A motor mechanic or a technician could be considered an engineer, for example. Also, the numbers included all degrees related to information technology and specialized fields such as shipbuilding. There were also "short-cycle" degrees, which were typically completed in 2 or 3 years. These are equivalent to associate degrees in the U.S. Nearly half of China's reported degrees fell into this category. [...]
    We found that the U.S. was graduating 222,335 engineers, vs. 215,000 from India. The closest comparable number reported by China is 644,106, but it includes additional majors. Looking strictly at four-year degrees and without considering accreditation or quality, the U.S. graduated 137,437 engineers, vs. 112,000 from India. China reported 351,537 under a broader category. All of these numbers include information technology and related majors.
  • Portland Business Journal: The engineers are feeling gloomy. By Aliza Earnshaw. Excerpts: Engineers, often stereotyped as rational and emotionless, are getting worked up. Excerpts: A new survey of more than 4,000 engineers reveals that most are pessimistic about the future of their professions, the state of the nation's math and science education, and the ability of the United States to retain its leadership in technology and innovation.
    Engineers interviewed in depth for the survey went so far as to say they would not recommend that their children follow them into the profession. "There's no money in it, there's nothing but layoffs, and it's all being outsourced to India," said one engineer. "There's no respect," comparable to that accorded lawyers or physicians, said another. "Someone with a bachelor's or master's in electrical engineering or software, he's just a flunky."
  • Washington Alliance of Technology Workers (WashTech): Adobe firing here, hiring overseas. By Marcus Courtney and Roberta Wilson. Excerpts: Potentially 600 Employees at Adobe Systems were handed pink slips last week in the U.S., while more than 300 tech workers in India are expected to be handed job offers in the coming year. A Seattle-based Adobe employee, who spoke only on a condition of anonymity, reported to WashTech, “rumor is we had 15-20% cuts across all parts of the company, which is consistent with my department.” However, the employee went on to say that the company did not report the exact numbers of people laid off. A contract employee also confirmed that layoffs did happen at the company last week when asked.
    The Press Trust of India reported yesterday that Adobe plans on hiring aggressively in the country next year. “Adobe is planning to add an additional 300 engineers at its research and development centres in the country in 2006.” The article went on to say that Adobe’s presence in India now totals 650 employees as a result of its merger with Macromedia.
  • The Social Security Network (A Century Foundation Project): Mandatory Private Accounts Are So Yesterday. By Bernard Wasow. Excerpts: A funny thing happened after President Bush backed away from his effort to replace guaranteed Social Security benefits with private accounts. The U.S. Social Security System, deemed backward and patriarchal by administration critics, suddenly is being pointed to, implicity if not explicitly, as a model safety net—just what countries like Chile and Britain need as they struggle to fix their malfunctioning private account based pension systems.
    Reports from distinguished investigators—the World Bank in Chile and the recently released Turner Report in Britain—have suggested independently that those countries need to introduce a universal, guaranteed minimum benefit, financed by general revenues. These investigators conclude that the private account systems that were held up by the Bush administration as examples of how to do it right are really doing it wrong. What is more, the problems of private accounts in Chile and Britain are exactly the sort of problems critics of privatization predicted. [...]
    So Britain and Chile are now studying how to reintroduce universal minimum retirement benefits combined with incentives to accumulate private saving. If they want to send delegations to see how to run a system that provides universal minimum retirement benefits at astonishingly low cost, I am sure our Social Security Administration would welcome them.
  • Workforce Management: Older Workers Seek Flexibility, Autonomy, Learning. New studies support the notion that creative work arrangements may be key to retaining employees 50 and older. Excerpts: Cendant’s approach is exactly what new reports recommend that all businesses do to retain older workers. The more that 50-plus people can control their hours, exercise autonomy and find opportunities to learn, the more likely they will be to continue working, according to two new reports by the Center on Aging and Work/Workplace Flexibility at Boston College and the Families and Work Institute.
  • Seattle Post-Intelligencer: Health Care Reform: Beyond Band-Aids. Excerpts: The brief burst of $3 a gallon gasoline reminded some Americans of how much they rely on oil. As a country, we use more than 20 percent of the world's oil. But our overconsumption of oil, with its problems for both family budgets and the world's environment, is minor compared to how we use health care. A recent series of Post-Intelligencer Op-Ed page articles from people associated with a health care reform group, CodeBlueNow!, carried some shockingly revelatory facts that help illuminate the extent of our failures at providing quality, affordable care for all.
    The United States accounts for a shocking $1.7 trillion of $3.3 trillion annually spent worldwide for health care. That's more than 50 percent, overshadowing the estimates of our gluttonous share of world oil consumption (more than 20 percent). Health care administrative costs -- consider the ever-rising ratio of clerks to physicians in doctor's offices -- account for nearly $300 billion.
    By one measure cited in the series, we rank 37th in the world in quality of care. A study of six advanced nations put this country worst in medical error rates and lack of access to care. The RAND Corp. found that U.S. adults receive only about half of the health care services they need just to avoid or treat some of the main causes of death and disability, such as high blood pressure and heart disease.
    Accustomed to the system as it is, we lose sight of how out of step U.S. health care is. Citizens of other advanced countries spend far less individually or as a society, but have guaranteed coverage for all. And our problems of access, cost and quality are less alarming because they have incrementally grown as we lurch along with a unique, hybrid system haphazardly built around private care, employer insurance, inadequate federal dollars for the elderly and poor and the deadweight of insurance-industry bureaucracy.
  • Reuters, courtesy of the New York Times: GM Suspends 401(K) Match for Salaried Employees. Excerpts: General Motors Corp. is suspending contributions to its 401(k) retirement savings plan for salaried workers, a spokesman said on Thursday. [...] GM now contributes 20 cents for each $1 that workers invest in the 401(k) plan up to 6 percent of an employee's base salary, Herta said. GM last year reduced its 401(k) match from 50 cents on the dollar to 20 cents.
Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.
  • "An Old Man's Ideas" by "ancientblueconsultant". Excerpts: The Blue Pig, especially BCS can certainly be a tough place for anyone. It was tough even in the old days when there was a leadership and corporate direction incented to invest in people. This is especially true if you've had little or no help from your colleagues, and uncaring, mechanical leadership, which I hear is becoming the norm at BCS. [...] First of all, I propose that you need to explore and identify what it is that has made you unhappy at the blue pig. Could be a lot of things, not just one. Not an unusual feeling there nowadays, and you should NEVER believe the problem is all yours, despite what management says. Remember that the job of HR and management is to make you rationalize that your unhappiness has nothing to do with the company and is all because of you. There are winners and losers in IBM. The idea is to make sure losers think the problem is with them, not the organization, even if it isn't true. Make sure you can identify what makes you unhappy in another organization, so you don't repeat the problem in your next job. [...]
    A "high-performer" in the blue pig is as much about politics as it is about talent. You must judge if being a high-performer there is ever possible for you since you are already part of the political landscape in the pig and it is very difficult to shed your past at the pig. First, meet with the high performers at MFP without telling them that you are looking to go there. Are they like you? Could you be like them? If not, then you'll have your answer.
  • "what about the war?" by "sap_pro". Full excerpt: Candor, Your frustration is genuine. H1B holders are a real threat to highly paid "higher end" consultants. However, if you look back - where did they start? 10 years ago or so - these guys did "low level" programming jobs. However at that time, the "high end" consultants did not feel threatened, and did not raise a finger to protect their "lower end" cousins. Over time, they started climbing up the value chain, and now they are threatening the "higher end". Now the industry leaders turn a blind eye to the plight of their "higher end" consultants.
    Given 10 more years (or less),infosys and others will threaten the big guys and then the industry leaders will start whining. By then, it won't matter whether someone whines or not. Such is life. It is the unimaginative leadership of this country that is the root cause. India and other countries are just making use of the opportunity.

New on the Alliance@IBM Site:
  • Alliance@IBM: Attention IBM employees: IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from inside the company. Please send your job cut information and other correspondence from your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax 607 658 9283.
  • "Who's On Our Side" Campaign Will Hold Members of Congress Accountable for Their Votes. Excerpt: The AFL-CIO has launched a "Who's On Our Side" campaign to hold members of Congress accountable for the votes they cast for or against the priorities of working families. "The mission of the AFL-CIO is to fight for America's working families and that means serving as a watchdog and holding politicians accountable when they stand on the wrong side of workers," said AFL-CIO Secretary-Treasurer Richard Trumka in announcing the campaign Dec. 13. "Working families - with the facts in hand - have the power to take back the country and make sure we are represented by leaders who are fighting for our best interests, and not the special interests, every day."
  • From the Visitor's comment page and the Job Cuts Status & Comments page.
    • Comment 12/12/05: I've been looking for some place on the internet to protest the outrageous - and un-announced - increases in health care premiums for IBM employees and retirees. I'm a medicare eligible retiree who had, until this year, elected only the Rx benefit. Up to now this benefit, a 75% discount on most drugs, was free, zero premium. In 2006 it will be $66.00/ month. That's $792.00 a year! More than I would expect to pay for Rx's at my local pharmacy without any IBM discount. And no prior notice of this raise; I didn't find out what the premium would be till I got my 2006 benefits statement earlier this month. I'm sure I'm not the only IBMer who's been similarly shafted. Let's make some noise about this, dammit! -Anonymous-
    • Comment 12/13/05: I wholeheartedly agree with the recent postings about IBM being top heavy with do nothing managers. I have never ever seen so many paper pushers in one place. The sad thing is that they really think they are doing something. At the account I work on there is a ratio of three management types to one technical worker. Guess who does the most productive work? Take heart techies, many companies are starting to once again insource and rebuild their own staffs as the poor quality from the outsourced locations has caused numerous customer complaints. It really comes down to the old saying "You get what you pay for". Most IBM accounts are paying for bloated management. Once companies realize there is no long term benefit to outsourcing they will once again do it themselves so that their IT functions can be tailored to their own specific needs. Also remember that their are 14000 recent layoffs who will tell the truth about the poor quality of work that IBM provides to customer accounts. -Anonymous-
    • Comment 12/19/05: I have been an IBM employee for nearly 29 years. On Thursday, it was announced that our team (about 35 people) that we would be experiencing the equivalent of a 35% pay cut by taking us off a leveraged sales plan and placed onto salary. We have made out numbers for the last 5 years running and have been held in high esteem by the teams we support.. A big blow with timing that made this all the more painful. -Anonymous-

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