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Highlights—January 19, 2008

  • Wall Street Journal: IBM Sales, Profit Give Tech a Healthier Look. Surprising Strength Fuels Market Rally; SAP Also Is Upbeat. By William M. Bulkely. Excerpt: IBM Chief Executive Samuel J. Palmisano said in a statement the improvement was "led by strong operational performance in Asia, Europe and emerging countries." IBM said it will report quarterly revenue of $28.9 billion, up 10% from a year earlier and about $1 billion above analysts' estimates. About six percentage points of the gain came from currency translation, reflecting the dollar's fall against the euro and other currencies.

  • Fortune: Don’t get too excited about IBM. By Jon Fortt. Excerpts: The market was all set to throw itself a big pity party, and along comes IBM to ruin it all. But it’s too soon to say Big Blue’s sunny report will be enough to breathe life back into tech stocks. Good news from the tech bellwether sent the overall stock market higher this morning, and boosted IBM’s (IBM) own stock price by 7 percent in early trading. The company, which serves as a gauge of corporate technology spending, pre-announced fourth quarter operating earnings that were 24 percent higher than a year ago, and fourth quarter revenues that rose 10 percent to $28.9 billion, both beating analyst expectations. The company’s full report is due Thursday.

    Still, a little perspective is in order. Even at the heights of its Monday rally, when it danced around $105 per share, IBM stock is short of the $111 reached just a couple of weeks ago. And it’s far from the 52-week high of $121 per share it achieved last fall.

    What, then, to make of the IBM pre-announcement? CEO Sam Palmisano gave some interesting spin: “The broad scope of IBM’s global business — led by strong operational performance in Asia, Europe and emerging countries — drove these outstanding results,” he said in a statement. “IBM is well-positioned as we begin 2008 as a result of our global business reach, solid recurring revenue stream and strong financial position. We are on track to achieve our long-term earnings-per-share roadmap objective in 2010.

    A translation, for those who don’t speak CEO: “U.S. corporate buyers don’t look so hot, but thanks to a weak dollar and overseas customers, we’re making the best of it. Since no one expects the dollar to perk up soon, that overseas income should keep us looking good in 2008. Don’t forget, we have a huge services business, so customers pay us to fix their old stuff even if they don’t buy new stuff! And we have $16 billion in the bank! So don’t panic. Look! Profits!

  • Gizdmo: IBM Wins Most Sexist and Degrading Promotional Device Award (at CES 2008). Full excerpt: I have so many issues with this LCD shirt that IBM is making women wear at CES, I don't know where to start. First off, they're instructed to say "Are you looking at my chest?" as people pass by. And supposing I do just that, why have her feminine curves been replaced with a grotesque bionic interface? Don't tell me this thing is a touchscreen. The end result is that I pay no attention to the ad at all. Sorry, IBM, there are some things technology can't improve. Spare this poor woman—bring back the sandwich board.
  • InformationWeek: No, The Tech Skills Shortage Doesn't Exist. Employers game the system and misrepresent the key market indicators. By Ron Hira. Excerpts: Employers claim there is a severe shortage of IT workers in the United States. Listen in on any klatch of CIOs, and the conversation inevitably turns to their difficulties finding talent. Microsoft's Bill Gates, Intel's Craig Barrett, and other captains of tech industry argue that the situation has reached crisis proportions. ...

    A key indicator of tightness in any labor market is wages--more specifically, whether wages are rising much faster than the norm. IT worker wages grew by a modest 2.9% in constant dollar terms from 2003 to 2005, according to Department of Labor data compiled by the Commission on Professionals in Science & Technology (CPST). This increase is indeed greater than the average 0.6% growth for all professional occupations, but the gains for IT workers were hardly robust and don't indicate any significant scarcity. More recently, we've seen some growth in the wages for newly minted bachelor's degree computer scientists, according to the National Association for Colleges & Employers. Salaries for those entry-level jobs rose from $50,744 in 2006 to $53,051 in 2007, an increase of 4.5%. But those gains were almost completely gobbled up by inflation, which ran about 4.3% in 2007.

    Another factor in considering the relative health of the IT job market is the level of risk employees face. As any investor will tell you, riskier investments should have the higher potential payoffs. It's no different with careers. While there are no formal measures of the risk and uncertainty of IT careers, it's obvious that they have soared over the past few years. The train wreck of 2002-2004 in the IT labor market derailed the careers of many professionals; some tech pros haven't come back.

    Meantime, employer norms have shifted radically. Long gone are the days when IBM never laid off a worker. Nowadays, companies don't think twice about shipping IT work overseas or bringing in lower-cost foreign workers to replace U.S. employees, and even asking American workers to train their replacements. Intel's Barrett writes an op-ed piece about the shortage of U.S. workers even when his own company is in the process of major layoffs, shedding 14% of its workforce over the past two years.

  • Wall Street Journal: Sprint CEO Plans More Job Cuts. A Decision Looms On Consolidation Of Headquarters. By Amol Sharma. Excerpt: Sprint Nextel Corp. plans extensive layoffs as newly installed Chief Executive Officer Dan Hesse seeks to show investors a new commitment to efficiency and cost discipline, people familiar with the matter say. The scale of the layoffs isn't clear, but they are likely to be in the range of a few thousand, the people say. The company, which has about 60,000 employees, let 5,000 workers go last year.
  • Employee Benefit News: Preaching retirement realities helps workers appreciate DB plans. By Lydell C. Bridgeford. Excerpts: New employees should hear the career reward plan provides a lifetime income when their career ends. For example, a manager can say, "Using today's value of money and your salary of $45,000, assuming your pay and the plan remains unchanged, your annual payout would be $16,875. Therefore, from age 65 to 90, you would receive $421,875. As your pay goes up, so does the benefit amount."

    Additionally, to get participants to say "wow" about their DB plans, employers should not shy away from drawing distinctions between DB and defined contribution plans. "Tell your employees, We have a DB plan because we believe loyalty matters, and we have a work environment and agreement where productive members can prosper.' A 401(k) plan says, We know some of you will leave, so we've made it easier,'" he joked.

  • Washington Post: It Might Take 10 to 12 Times Salary for Retirement. By Martha M. Hamilton. Excerpts: One group, the Retirement Solutions Foundation, says you have to put away 10 to 12 times your salary at retirement to have financial security after your working days are over. But I don't know that there is a single right answer to the question. It depends on how much you spend, how long you live and how much you have. The grimmest fact, however, is that most of us, my daughter included, are a long way away from having enough set aside for a secure retirement.

    As many as 35 percent of all workers have less than $10,000 in total savings and investments, excluding the value of their homes and any traditional pension, and 48 percent have less than $25,000 socked away, according to most recent assessment from the Employee Benefit Research Institute. The numbers are worse for young workers -- 50 percent of those age 25 to 34 have less than $10,000 put aside. At least they still have time to catch up. That's the good news for my 31-year-old kid.

  • USA Today: Older baby boomers caught all the breaks. By John Waggoner. Excerpts: In a generation as sprawling as the baby boomers, you're bound to notice some big differences. And the main difference is probably this: The older boomers, exemplified by the 62-year-olds who will start retiring this year, occupy a demographic sweet spot that most younger boomers can't match. ...

    Early boomers are more likely to have a traditional "defined-benefit" pension from their employer than younger boomers are, notes Ron Gebhardtsbauer, senior pension fellow for the American Academy of Actuaries. Unlike 401(k) plans, traditional pensions require no contributions from the employee; all money comes from their employer. Older boomers qualified for "great pensions at a young age," he says, in addition to 401(k) accounts, which arrived later.

  • USA Today: Boomers' eagerness to retire could cost them. By Sandra Block. Excerpts: They're known as one of the most rebellious generations in U.S. history, not to mention the largest. This year, the oldest of the 79 million baby boomers born from 1946 through 1964 turn 62, which means they become eligible for Social Security. The boomers — projected to live longer than any previous generation of Americans — will have the longest retirements, too.

    Can they afford to retire? How far will their Social Security checks go? The reality is this: Many of those who retire early will accept reduced benefits — and in doing so will risk falling short of their financial needs. ...

    Yet even if retirees are convinced their benefits are safe, most of them, Certner predicts, will continue to file claims before full retirement age. Many who are in poor health or have been pushed into early retirement don't have the option of waiting until 66 to file for benefits, he notes. "For millions, (Social Security) is basically their only source of income," Certner says. "We don't see that changing much." And even though many analysts say boomers could bolster their financial security by working longer, employers don't always comply. Some companies dangle incentives to induce older employees to leave.

  • Fort Worth Star-Telegram, courtesy of the Charlotte News & Observer: The cost of benefits puts U.S. retirees in fix. Excerpts: The federal government certainly has a flair for timing. The Equal Employment Opportunity Commission did its best Ebenezer Scrooge imitation the day after Christmas, announcing that it would allow employers to cut retiree health benefits. The ruling essentially codifies age discrimination, allowing employers to create two classes of retirees - those younger than 65 and those 65 or older - and offer different benefits to each group.

    Labor unions and employers told the EEOC that if they had to provide equal benefits for both classes of retirees, they would drop health benefits for both groups. AARP, the most powerful advocate for elderly Americans, plans to petition the U.S. Supreme Court to overturn the EEOC.

    Apparently just to prove that it was not totally void of holiday humor, the agency stuck this punch line into the regulation's preamble: "The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide."

    This ruling will do just that, although the trend is quite clear without it. Only about 21 percent of U.S. companies have health benefits for Medicare-eligible retirees, down from 40 percent in 1993.

  • USA Today: Early retirees try to fill gap in health coverage. By Sandra Block. Excerpts: Denny Brown, a computer analyst in West Chester, Ohio, will turn 62 in August and hopes to retire by the end of the year. Financially, he's in good shape: He has a pension from a previous employer, profit-sharing through his current job and substantial savings. An amateur photographer, avid traveler and Civil War buff, he's eager to start the next chapter in his life. "I have a lot of interests," he says, "and I'm tired of working."

    There's just one obstacle on the road to Brown's retirement adventure: health insurance. Brown, along with 2.8 million of the oldest boomers, will be eligible for Social Security benefits this year, but he won't be eligible for Medicare until he turns 65. Finding a way to bridge that gap — eligible for Social Security but not for Medicare — will be the hardest and costliest challenge for many of the boomers who want to retire early or are forced out of their jobs. For Brown and his wife, Judy, who's already retired, figuring out how to pay for medical coverage "is absolutely our biggest concern." ...

    In the past, retirees could often count on their employers to provide health insurance until Medicare kicked in, or sometimes even after they were eligible for Medicare. But in 2007, only a third of large employers offered retiree health insurance, down from 66% in 1988, according to a survey by the Kaiser Family Foundation and the Health Research & Education Trust. Only 5% of employers with fewer than 200 employees offered retiree health insurance last year. ...

    The millions who will retire early without company-provided health insurance may need to buy a health care policy to last them until Medicare kicks in at age 65. Unfortunately, individual policies for people in their 60s can be hugely expensive, with premiums topping $900 a month for family coverage. And those in poor health might be unable to find a policy at any price. ...

    Guy Colson, 61, of Hudson, Fla., confronted the health care coverage gap after he took a buyout package from IBM 2½ years ago. Colson, a retired chief petty officer for the Navy Reserves, says his "saving grace" was the Defense Department's Tricare plan, available for active-duty and retired service members. The plan, which provides coverage for Colson and his wife, costs $460 a year. That compares with more than $940 a month if he'd bought IBM's retiree health insurance. Retiring before age 65, he says, "can be a great challenge if you don't have a medical option."

  • USA Today: Husbands should consider delaying Social Security benefits. By Sandra Block. Excerpt: Here's some advice for married men who will turn 62 this year: If you want to make up for all the times you came home with beer on your breath, left your socks on the bathroom floor or gave your wife a DustBuster for Valentine's Day, hold off on filing for your Social Security benefits. Many men who are eager to retire may chafe at this suggestion. This year, the oldest baby boomers are turning 62, making them eligible for Social Security. About half of those boomers are expected to claim their benefits as soon as they're eligible, even though that means a permanent 25% reduction in benefits.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: USA Today: Husbands should consider delaying Social Security benefits" by Dave Finlay. Full excerpt: The article is wrong. Several years ago I looked through the entire SSA website to find out how to compute the various benefits for a spreadsheet I was writing. The SSA used to provide example calculations for spouse and survivor benefits, but I can no longer find them. So now I'm beginning to think that SSA has a campaign to convince people to delay taking social security by having other people write misleading articles and not provide the correct technical information on their website.

    I used the detailed benefit calculator from SSA called ANYPIA to verify that what I wrote was correct. The age you begin your social security benefits has no effect on your spouses benefit.

  • Yahoo! IBM Pension and Retirement Issues message board: "spouse social security benefit vs. survivor benefit" by "sold_to_hitachi". Full excerpt: There is a difference between how to calculate spouse benefit and survivor benefit, depending on your ability to breath. While you are alive, a spouse may receive one-half of the retired worker's full benefit at full retirement age, if spouse benefit is higher than own benefit. The age you begin your social security benefit makes no difference to the spouse benefit.

    On the other hand, a widow or widower, full retirement age or older, gets 100 percent of your benefit amount, if it is higher than own benefit. http://www.ssa.gov/survivorplan/onyourown5.htm

    The age you begin your social security benefits seems have an effect on the amount of "survivor" benefit.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: USA Today: Husbands should consider delaying Social Security benefits" by "fstephens". Full excerpt: Dave, you missed the point of the document. It is saying that the SPOUSE who will live longer will USUALLY benefit by having the other spouse take their benefits at 72. This is because the surviving spouse can convert to the others SS benefits (which should be higher because they waited until 72 to collect). Lots of assumptions are made though (amount high enough to offset unclollected amounts, for example). NO single answer fits every situation, so you have to do some "due diligence" to evaluate the numbers, as you have done.
  • Business Standard (India): Silverline to provide desk support to IBM. Excerpts: Mumbai-based Silverline Technologies has won a contract from global IT major IBM, under which the company would provide desk support to 5,000 IBM users. However, the financial terms of the deal were not disclosed. ...

    Silverline Technologies, chairman, Ravi Subramanian said: "We are delighted with these latest developments for multiple reasons (a) we have bagged a multi-million, multi-year contract for providing our core competency services to another world leader; (b) winning this contract strengthens our laim to be an emerging leader in providing service management solutions to technology sector, worldwide; (c) the project will be demonstrate our ITIL expertise leveraging 3rd party tools, and, (d) It further strengthens our long-standing strategic relationship with our business partner, IBM Global Services. The latest achievements will significantly deliver revenue growth in the next quarter. We will strive to not only deliver on this initiative but also grow this practice across new markets. We continue to be committed to deliver value to our clients, employees and our shareholders".

  • New York Times Letter to the Editor: Europe’s Social Safety Net, and America’s. By Harpriye A. Juneja. Excerpt: Paul Krugman calls Europe the “comeback continent” because of its resurging economy, yet repeats another stereotype — Americans pay less in taxes than Europeans. The situation actually is more complex.

    For their taxes, Europeans receive many benefits for which most Americans must pay additional fees and payments out of pocket. Many Americans, if they have health care at all, are paying for escalating premiums and deductibles. Other Americans are saving $100,000 for each of their children’s college education, yet European children attend for free or nearly free.

    Millions of Americans are scraping to save the amount they will need for retirement beyond Social Security, but the European retirement system is much more generous. Many Americans pay extra for child care, or self-finance their own sick leave or parental leave after a birth, but Europeans receive all of these (and more) from their taxes.

    When all these differences are added up, it turns out that many Americans are paying out as much as Europeans — we just receive a lot less for our money. The “overtaxed European” is another stereotype used to scare Americans away from the European model, so it’s unfortunate that Mr. Krugman reinforced that stereotype.

  • Financial Week, courtesy of Investment News: Hefty bonuses for troubled Street. Excerpts: Despite the market freefall over the past few months, investment bankers made out just fine last year. According to an estimate from New York State Comptroller Thomas DiNapoli, the average Wall Street bonus was $180,420 in 2007.

    "The securities industry rewarded employees who performed well in 2007 even though the credit crunch battered profits," Mr. DiNapoli said. The take for 2007 was about 5 percent less than what investment bankers received last year. It still wasn't bad: bonuses for 2006 reached record levels.

  • Washington Post: IBM Retirees to Test the Waters at Treasury. By Stephen Barr. Excerpts: Maybe it's no longer a young person's game. The government, which has traditionally hired college graduates and mid-career professionals, signaled yesterday that it is interested in hiring mature workers -- those older Americans who are retired or face retirement in the private sector but want to keep working.

    The nonprofit Partnership for Public Service, IBM and the Treasury Department announced a pilot project to help IBM employees and retirees navigate the federal hiring process and land jobs in the government. The Treasury Department agreed to serve as the test case for the project, in part because many veteran IBM employees have skills in technology, accounting and law that are needed by Treasury.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Health Affairs, courtesy of Physicians for a National Health Program: High burden hits middle-income America. The same affordability issues that low-income families experienced a decade ago have begun to affect middle-income families today. By Jessica S. Banthin, Peter Cunningham and Didem M. Bernard. Excerpts: The increase in families' financial burdens was driven entirely by people with private (employer-sponsored) insurance: 17 percent (or twenty-nine million people) faced high burdens in 2004, an increase of 2.3 percentage points from 2001. Together, out-of-pocket spending for premiums and services rose $553 to $3,211, a 21 percent increase over the period.

    Although relatively small in number, people covered by private policies purchased in the nongroup market were much more likely than those in any other insurance group to bear high financial burdens during 2001-2004. This was because people with private nongroup insurance must pay the entire premium, and benefits in such plans are often less generous than those in employer-sponsored plans. Moreover, the percentage of people with nongroup plans experiencing high out-of-pocket burdens rose dramatically, from 39 percent in 2001 to 52.7 percent in 2004. ...

    Comment: By Don McCanne, MD The policy lesson? One-fifth of privately insured, middle-income people are already classified as “high-burden individuals” because they live in families that spend more than ten percent of their family income on health care, “and this number is likely to increase in future years as health care costs continue to outpace growth in family incomes.”

    The failure of private insurance to provide affordable health care has already become a crisis for middle-income America. Current proposals to provide us with even more deteriorating private insurance plans amount to no more than a cruel joke by the policy/political community. But who’s laughing? Listen carefully. It sounds like sobbing to me.

  • Philadelphia Inquirer: When a health insurer says it won't pay. Ethicists and economists say a 17-year-old girl's case points up complex questions on rationing resources. By Stacey Burling. Excerpts: That a for-profit health insurance company - Philadelphia-based Cigna Corp. - said no last month to a dying 17-year-old girl in California, then changed its mind after bad publicity, has made for a compelling, highly emotional story. Mark Geragos, the attorney for the girl's parents, and presidential candidate John Edwards have blamed Cigna for her death.

    But health-care ethicists and economists say it is not that simple. Nataline Sarkisyan's case raises complex questions about how we ration resources - money and, in this case, transplantable livers - and how we make medical decisions in what one ethicist called "last-chance" situations. While doctors are the experts on medical care, ethicists said, insurance companies have a responsibility to steward subscribers' money.

  • injuryboard.com: Mark Geragos is wasting his time: only the United States Congress can correct the injustice. By Brent Adams. Excerpts: The tragic story of Nataline Sarkisyan has been widely publicized. The facts are sad indeed. Young Miss Sarkisyan was diagnosed with leukemia at age 14. The cancer went into remission for two years when the leukemia relapsed.

    Just before Thanksgiving, Nataline's brother donated bone marrow for a transplant that was at first successful in putting her cancer back into remission. Unfortunately, Nataline's liver failed from a blood-clotting complication and she was put on life support.

    Four members of the organ-transplant department and the University of California - Los Angeles recommended a liver transplant and clearly indicate that she would die without such a transplant. These doctors urged CIGNA, the administrator of her family's health benefit plan, to pay for the liver transplant.

    Her family said that a liver had become available that day. However, a CIGNA employed physician, who is nothing more than a lackey of the huge insurance company, decreed that CIGNA would not pay for the transplant procedure and claimed that the young cancer victim was too sick for the surgery to work.

    Even though four imminently qualified specialists at the University of California - Los Angeles strongly recommended the surgery, CIGNA continued to say no. These four doctors immediately appealed CIGNA's decision and strongly argued that the chances of success warranted the procedure.

    CIGNA then hired another lackey, an oncologist and transplant surgeon to review the appeal but its decision to refuse to pay for the procedure did not change.

    The California Nurse's Association got involved and began picketing on behalf of the family. This activity created a huge outcry all across the nation and strong criticism of CIGNA. Based upon this huge outpouring of public opinion, CIGNA reversed its decision and said that the company now would pay for the transplant. CIGNA's reaction to strong public opinion was too little and too late. Sadly, Nataline died the very day that CIGNA tried to put on the white hat by agreeing to pay for the transplant.

    Although the facts in Nataline's case are absolutely horrible, they are just one of thousands of examples of how insurance companies can evade their responsibility to their insureds. This is just one example of the grisly fact that insurance companies will always put their profits ahead of the health, life and welfare of their insureds. This is especially true when the law of the land and the judges who are supposed to enforce that law let the insurance companies get away with these shenanigans.

  • Houston Chronicle: How employers save on health care: auditing workers. By Katherine Reynolds Lewis, Newhouse News Service. Excerpt: Ever thought of sending your boss your marriage certificate? Your tax return? Meet the insurance audit. Increasing numbers of employers are requesting personal documents to ensure that all the dependents in their health care plans are entitled to coverage.
  • The Commonwealth Fund: The Public's Views on Health Care Reform in the 2008 Presidential Election. By Sara R. Collins, PhD., and Jennifer L. Kriss. Excerpt: A Commonwealth Fund survey of adults age 19 and older, conducted from June 2007 to October 2007, finds that large majorities of the public, regardless of political affiliation or income level, say that the candidates' views on health care reform will be very important or somewhat important in their voting decision. Moreover, they believe employers—long the cornerstone of the health insurance system—should retain responsibility for providing health insurance, or at least contribute financially to covering the country's working families. A majority of adults would also favor a requirement that everyone have health insurance, with the government helping those who are unable to afford it; support for such a requirement, however, is not strong and varies by political affiliation, geographic region, and income. There is overwhelming agreement that financing for health insurance coverage for all Americans should be a responsibility shared by employers, government, and individuals.
  • San Francisco Bay Area Independent Media Center, courtesy of Physicians for a National Health Program: ABX1 1: Universal health insurance without health care. By Claudia Chaufan. Excerpts: The “Health Care Security and Cost Reduction Act”, also known as ABX1 1, and described by New York Times reporter Kevin Sack as a “bipartisan blueprint” conceived by Republican governor Arnold Schwarzenegger and Democratic Assembly speaker Fabian Nunez to bring “near-universal coverage to the country’s most populous state”, will neither provide health care security nor reduce costs of medical care. This article explains why. ...

    All of the above gives us reason to believe that an individual mandate such as the one proposed by ABX1 1 will no more protect individuals from financial ruin due to medical expenses than bare bones drivers’ insurance protects anybody from the the costs of a car accident. We do not count on those policies to get our cars back in shape, but we need them to comply with the law and protect ourselves against the claims of others. So for now, no reason to raise our glasses. And yet, some Californians are surely celebrating: among them are high level executives and shareholders in the private health insurance sector, which, if ABX1 1 becomes law, will count on a captive pool of clients for years to come. Indeed, Blue Shield California and colleagues must be following closely the smashing success of the Massachusetts plan. They must be particularly excited about the surplus of $1 million a day that Blue Cross Massachusetts is collecting. Or about the $16.4 million retirement bonus recently awarded its chairman, even as he continues to draw a $3 million dollar salary.

    Which is why we do not need to think too hard to understand why this marriage of Republicans and Democrats must already be celebrated in so many places. We can only speculate, however, why health care reporters insist on calling ABX1 1 and similarly ill-conceived legislation “near-universal” or “universal” health coverage. Or why they are dismissing single payer, the only viable option for controlling costs and securing health care, as having “limited political support”, as editors in the New York Times recently did, despite evidence to the contrary among the public and even among physicians. Or why the same editors refer to single payer as “no panacea” as “indicated” by the “problems” of Medicare, clearly confusing the symptom — Medicare’s financial struggles — with the disease — the irrationalities forced upon Medicare by business-friendly legislation, which include, yet are not limited to, the generous subsidies Medicare has to pay to private insurers to “encourage” them to “compete”, at the same time that this legislation forbids Medicare itself to bargain for best prices of drugs for seniors.

  • Jim Hightower: Bush's Health Care Ideology. Full excerpt: George W, a devout worshipper at the alter of corporate ideology, believes it is sinful for modest-income families to get health coverage through the government.

    Thus, he is now telling state officials in Ohio, Oklahoma, Louisiana, and elsewhere that they cannot expand their Medicaid programs to reach millions of uninsured folks. Technically, these families are not poor, yet their limited paychecks are eaten up by the basics of rent, utilities, food, clothing, and gasoline – so they don't have private insurance. Tough luck, George declares, piously insisting that any expansion of Medicaid to meet the needs of these people would "crowd out" private insurance corporations, and we can't have that. In his mind, market ideology trumps human need.

    Astonishingly, the Bushites insist that this ban on state action "demonstrates the president's compassion." Say what? Well, declares a White House PR flack, Bush "wants to direct scarce tax dollars to those with the greatest needs."

    How touching. However, there are several flaws in the president's ideological stand. First, helping the near-poor would not take any dollars from the poor – it's an expansion of the program. Second, how ironic that the Bushites would mention "scarce" tax dollars, since they're the ones who've made them scarce with their misbegotten Iraq occupation and their tax giveaways to the super-rich. Third, leaving people without health coverage is a proven tax drain, since they must resort to expensive emergency rooms when their families fall ill.

    Besides, Bush's ideological purity is nothing but bovine excrement. Notice that while he is denying government-financed health care to hard-hit working families, he finds no sin in using scarce tax dollars to provide-platinum level health care for his own family, even though he's a multi-millionaire with no need for government support.

  • National Public Radio (NPR) News Blog: Presidential Candidates and Their Health Care. Excerpts: Health care is a key issue for most Americans this campaign. In fact, some surveys show that it ranks as a more important issue that the wars in Iraq and Afghanistan. So after we received an e-mail from a listener about what kind of health care the candidates themselves had, NPR's Julie Rovner decided to find out.

    Many of the Republicans and Democrats running for president are sitting members of the U.S. House or Senate - and are thus eligible for taxpayer-subsidized coverage through the Federal Employee Health Benefits Plan. Marilyn Moon, director of the health program for the American Institutes for Research, says the plan is OK, but not "gold-plated."

  • San Francisco Chronicle: Hospitals charge 'whatever the market will bear,' study finds. By Victoria Collive. Excerpts: The prices that California hospitals charge private insurers and patients vary dramatically - even after factors like the number of uninsured and the severity of illnesses are considered, according to a study released Tuesday.

    Sponsors of the study, which include the California Public Employees' Retirement System and the Pacific Business Group on Health, say hospital consolidation - or a lack of competition within a region - appears to be a major factor in determining how much a hospital will charge for its services.

New on the Alliance@IBM Site:
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  • Spotlight: IBM to cut pay and reband job family 24A! Are you next? Join the fight back! Send us your name, home e-mail and location to: endicottalliance@stny.rr.com. Be sure to Join The Alliance! Say NO to pay cuts and job cuts!
  • From the Job Cuts Status & Comments page
    • Comment 1/12/08: I hear several NS commercial accounts refused to allow the AT&T deal and those network folks may be excluded from the deal. Lucky bastards! IBM blows -Outsourced again...-
    • Comment 1/12/08: I am an in-scope employee who declined the job offer from AT&T. I got an e-mail from AT&T saying they received my notice saying that I am not accepting their job offer. Now, we'll see what IBM does next. -In Scope Employee-
    • Comment 1/14/08: Hearing word of some people in Boulder getting laid off today. Application support but don't know any numbers yet - was hoping someone else might have more info ? -Boulder cuts-
    • Comment 1/14/08: Operators in building 330 line told they have 30 days to find a job. Do not have number yet. At least one person was told summers in Vermont are nice. Meaning nobody will be kept in NY. -In EFK-
    • Comment 1/15/08: Lexington Operations staff, take note of your brothers in EFK. Organize while you have something to organize for. -Anonymous-
    • Comment 1/15/08: -Ex-RochBeamer- You are right on the money with IP and IP theft. That country has built its foundation off of theft of IP. Sam and crew will continue on the same path of spinning off NA employees and divisions. I would bet my bottom dollar that we will see an indian company taking over a large chunk of GS within 2008. -Screwedbysam-
    • Comment 1/15/08: Looks like job cuts in Boulder and Poughkeepsie coming up. I've also heard from several sources that many of us are getting switched from salary to straight pay with a 15% reduction in pay. 24A job family. Server admins etc. Gotta love this place. -SOS-
    • Comment 1/16/08: To Alliance@IBM members and supporters in North Carolina: The following is an IBM e-mail in regards to a forum at Central Piedmont Community College on "Succeeding in the Global Economy: A new policy agenda for the American Worker". The forum speakers are primarily Corporate and Academic. So far none are from Labor or workers who have lost their jobs due to offshoring. To say that the forum is screwed towards the pro-globalization viewpoint is an understatement to say the least. The panel and IBM wants to put a positive spin on globalization. We see a need to show another view.

      We encourage Alliance members/supporters in North Carolina to attend this forum and engage the panel in the Q and A section and tell the stories of the real impact on the jobs of workers and the loss of jobs in the USA. The Alliance@IBM team.

      The IBM email note: Succeeding in the Global Economy Forum with Marc Lautenbach, GM IBM America and Wachovia CEO Ken Thompson.

      On January 28, 2008, 9:00 a.m. - 11:30 a.m. at Central Piedmont Community College, a town hall discussion will take place on: Succeeding in the Global Economy. The forum will be hosted by Wachovia CEO , Ken Thompson and co-hosted by Congressman Mel Watt. Also, Marc Lautenbach, GM, IBM America and a host of others, will discuss the effects of globalization, and how communities, governments, and firms can help more Americans adapt to the 21st century workforce.

      Background: The Washington, D.C. business and lobbying community that deals with free trade issues has been tasked with developing positive stories of the benefits of free trade and globalization to use in our messaging to the Congress. The anti-trade/globalization community has been very active and successful in showcasing the negative aspects of trade, such as pictures of abandoned factories, laid off workers, etc. Their messages tug at the heart strings. When the pro-trade community lobbies for free trade and open markets, we have had a tendency to speak about the benefits in generic, economic terms, which fall on deaf ears. Thus, we are now trying to personalize our messaging.

      Action: Governmental Programs is trying to find examples of jobs at IBM that are U.S. based and support our international operations ? i.e.. jobs that support globalization and free trade ? where the IBMer would be able to say something along the lines of: My job at IBM depends upon the company having access to foreign markets. If you meet the above criteria, Government Programs would like for you to attend the Forum and be recognized by Marc Lautenbach as part of his panel discussion. We would also like to identify IBMers that came into their current job at IBM due to the shifting North Carolina economy - someone that was in the industrial/manufacturing sector, saw that the job landscape was changing, and decided to get re-trained in order to be able to join the high tech sector.

    • Comment 1/17/08: IBM France has delayed the transfer of NSD to ATT. -alliance-
    • Comment 1/17/08: I got rated a 3 recently. Now a phone call meeting is being set up to discuss PBC with 2nd line manager. Do you think a RA date will be given to me? -Anonymous- Alliance Reply: The possibility looms. Make sure you prepare yourself. Especially, if you have objected to the 3 appraisal. Document the conversation between your 2nd line and you. Record it, if you can. Keep us informed.
    • Comment 1/17/08: I am going to AT&T, but I hear that many who are "left behind" will be re-banded and effectively demoted to hourly. If that doesn't get you to organize, I don't know what will.. -headin2att-
    • Comment 1/17/08: I have been told that management will be provided samples of astroglide to employees this year before pay discussions versus afterwards.. -screw blue-
    • Comment 1/17/08: It's best to escape while you can before your health and skills deteriorate! There are trillions of companies today that hire people with IT skills. Escaping from the Gestapo/ Bullies was the best thing I did for myself. I have quality of life and more pay! I can spend time with my family at night and weekends. Who wants to be part of Hitler's Army? India and China will go through this phase of slavery and may regret it in years to come. Perhaps they will be smart and use IP to their advantage. -Anonymous-
    • Comment 1/18/08: Question on the exit process for those going to at&t. Next week they start processing the exit paperwork just like any other exit situation. But in this case, what would happen if we refused to sign off on the exit forms? Since there's no severance pay involved, what could IBM do to us, seeing that we've already accepted the at&t offer? What's to gain by signing? -Anonymous-
    • Comment 1/18/08: Does anyone know when the job family 24A switch to hourly with the 15% pay cut will occur? Thanks in advance. -what a joke.. on us that is...- Alliance reply: We are hearing it will be Feb 15. We also have contacted the law firm that handled the OT lawsuit and they do not believe this is in response to the suit. The Alliance is encouraging all employees affected by this to contact us at endicottalliance@stny.rr.com so we can start a campaign against these cuts.
  • General Visitor's Comment page:
    • Comment 1/16/08: To LowlySA - I hadn't heard this rumour yet. Is that job 24A you're talking about? I was in Ops and incorrectly banded as exempt from overtime many years ago. There was a lawsuit and a lot of us got back pay for all the unpaid overtime in a lump sum, then we were re-banded to a 4 and non-exempt. In Ops we had a required 12hr rotation which included 8hrs o/t minimum every other week and, after re-banding, many of us were actually better off. We were finally getting paid for all the required o/t. I lost a bundle when I moved to a different job and band, now o/t exempt again but I couldn't take the 12hr rotation shifts anymore so it was an okay trade-off for me despite the effective pay cut. I know there was another class action lawsuit settled recently so I wouldn't be surprised at all to see another re-banding. Has anyone else heard about this? -WAH-
    • Comment 1/16/08: WAH, yes, this does all relate back to the latest overtime lawsuit. Unfortunately, I got very, very little from the lawsuit. I'm currently in a different job family, but it sounds like I'm going to get transferred to 24A as soon as the transfers are un-frozen. From the people that I have talked to locally, we will probably be getting re-banded (downward, of course), and a pretty good-sized pay cut as well. I figured out my pay after the cut, and it will put me back to my 2001 base pay levels. Of course, I am one of the lucky ones who got pay raises every single year. For those that didn't, this pay cut will probably be much worse. I would imagine that we won't be allowed to work overtime unless it is pre-approved, as there appear to be plans to use QualxServ for anything after-hours. Well, we should be hearing more about this (officially) before the end of this month, as I hear that it goes into effect on Feb. 1st. On the good side, at least I might be able to get to know my family again! And being able to turn off the pager would be really nice, too. It hasn't been turned off in about 18 months (yes, I've had to be on pager duty even during holidays and my "vacations"). -LowlySA-
    • Comment 1/16/08: Now here's management at it's worst: we outsource support overseas frequently to "save" costs. We lose the PC battle to Asia (Lenovo), BUT on Lenovo's support page they brag "Completely U.S. based technical support" (http://shop.lenovo.com/us/landing_pages/programs/2007/2007_04_techbuddy). So Lenovo can make US based support work when our management could not? Maybe Lenovo can do this because their management does not get outrageous compensation! -Anon -
    • Comment 1/16/08: The word is out: stealing pensions, fleecing widows of their retirement, cheating workers out of overtime, off shoring US jobs, replacing American workers with temporary low paid visa worker and selling out America isn’t enough to satisfy the overarching greed of the filth in Armonk. Next on the agenda is debanding of IT workers in IGS that were part of the overtime class action settlement so that they never see another raise for the rest of their careers. Since the major revenue increase in quarterly revenues we’re enough to excite the market for executives to unload their acquired under priced shares at the massive profit ratio they desire, stealing from employees must be taken to satisfy the executives greed. Current estimates are that the cuts will come near the start of the second quarter. Get ready to feel the greed of executives once again, ‘at will’ workers, what will it take to get you to join the Alliance? -sams-stealing-again-
    • Comment 1/16/08: Yes, there are strong indications there is going to be"rebanding/debanding" of exempt level I/T folks (e.g. I/T Specialists) to non-exempt. IBM is in serious damage control mode since they decided to settle the O/T lawsuit. No matter how IBM wants to spin this or show it they have broken USA state and federal compensation/labor laws and now they are trying to do their CYA. So much for IBM's initial stance on the o/T lawsuit that "IT HAD NO MERIT". So much for IBM saying they settled and admit no wrongdoing. -Anonymous-
    • Comment 1/17/08: Just so that you know...IBM is now cutting the pay of a group of PSA's 15% to alleviate costs from a lawsuit that they lost last year. so that if you got any money out of that settlement...they are taking it out of your pay this year (????) -IBM PSA-
    • Comment 1/17/08: To sams-stealing-again: They can't target and selectively re-band only the folks who got some compensation from the overtime lawsuit. It would cause another lawsuit. I wonder if the re-banding is actually a requirement of the settlement? Now that IBM got their hand slapped they probably have to re-band to be in compliance with labour laws. -WAH- Alliance reply: Alliance@IBM will contact the law firm that brought the case, to see if any of your questions are valid. We'll let you know when we find out.
    • Comment 1/17/08: Rebanding of the 24A group will happen. They did it to all of the deskside folks. They are getting rid of deskside folk to another company, slowly but surely. There will also be a "market" adjustment downward when reassigned to the lower band of 4. 15% is the low side and the high side is ugly..30% They are aligning wages to what the indian companies are paying and getting folks to work for them in the USA.

      Keep in mind that the push towards remote management will continue since its much cheaper to manage 100 servers to 1 in BRIC than in the USA. Its forced attrition time again. Its cheaper to put the screws to us and have us leave then it is to have us wait around till the final sale to ? (wipro - tata - ?) Once the 24A family has been squeezed.. look to the other families.

      Remember sam's promise to the street about increasing revenue and profits over the next 5 plus years.. the easiest place management can go to is the workers. It's over folks.. its just a matter of time. The board doesn't want services.. the profits are not there for their investment. Sorry to be blunt, but folks need to know what is going on. Big changes (not positive) beginning of 2nd quarter continue -Sam screwed us yet again-

    • Comment 1/17/08: Concerning rebanding of ITS employees: Could it be prep work to effect a Wipro deal. It is easy to imagine that Wipro would absolutely require there be no gray areas with IBM's compliance to labor law before they took on the resources that would accompany a deal. I've asked this question a couple times before: What prevents Sys Admins and Ops Analysts from going after IBM again since they continue to work overtime with no over time pay? -Anonymous-
    • Comment 1/17/08: I am still in shock that IBM has the kahunas to demote (A.K.A. Re-band) us and cut our pay. We are working for an online sweat shop. I decided I have no right to complain if I am not willing to do anything about it. I live in RTP and joined the Alliance today. Please join the Alliance so we can work together and fight for our rights. How much more are you willing to lose before you stand up for YOUR rights? IBM will continue to crush us until we become a unified voice that takes a stand against the good ole boys club at the top of old big blue. -Global Services Slave-
    • Comment 1/17/08: Let's all have a sickout on Feb.1 when IBM officially announces the "rebanding" or 15% downward adjustment to those folks in bands 6,7,8. Show some solidarity folks NOW! Hey, they can't fire us all! I'm game and have the guts to do it. Do you??? -IBM_union_yes_NOW!-
    • Comment 1/17/08: Hmmm...my manager had asked me if I had received a settlement check for the overtime lawsuit. It sounds like he probably shouldn't have done that. Too bad I don't have a recording of that! Global Services Slave...welcome to the union! Thanks for joining. Please be sure to tell your coworkers about this site and urge them to join as well. I used a meager pay raise back in 2002 to fund my joining of the union. I consider it money well spent. And don't forget that you can often use your union dues as a tax deduction. -LowlySA-
  • Pension Comments page
    • Comment 1/13/08: QUESTION : When IBM sold the PC division to Lenovo did the employees get their FHA dollars or did they lose them? Thanks -Poisoned in Endicott- Alliance reply: The FHA dollars are vapor, unless you retire as an IBMer and are able to actually collect them. Our guess here is, that when the company sold to Lenovo, that the FHA dollars evaporated. They are/were 'funny money' anyway...blue dollars, not green, from what we have seen. Read more of this comments section and the archives section to find out more.
  • Raise and Salary Comments
    • Comment 1/13/08: After receiving a 1 on my PBC review last year, I was told that a promotion to band 7 submitted. When I asked my 3rd line manager about the progress of the promotion she stated that IBM froze promotions across the board. I'm curious to see what happens now since I earned another 1 this year. -Tired of the lies-
    • Comment 1/13/08: Salary = 78000; Band Level = 7; Job Title = TECHNICAL SERVICES PROF - ADV; Years Service = 4; Hours/Week = 60+; Div Name = 07; Location = PA; Message = So after reviewing my claim hours against salary I figure I make about $23.00 dollars an hour. -going_going_gone-
    • Comment 1/13/08: Salary = 71500; Band Level = 7; Job Title = Adv System Integrator (unix); Years Service = 7.5; Hours/Week = 50; Div Name = 07; Location = USA; Message = Considering moving into a FTSS position, does anyone have any base pay/bonus/commission information? -want out of DIV07-
    • Comment 1/14/08: Div Name = 07; Message = Hey tired-of-the-lies, I also got a pbc 1 in 2006, but unlike you my promotion to band 7 came through in June 2007 along with a 4% bump. Promos during the summer were not frozen, least not in my area. Glad I got it in before the at&t migration. -Anonymous-
    • Comment 1/14/08: Salary = 30000; Band Level = 6; Job Title = Software Engineer; Years Service = 8; Hours/Week = 45; Location = Ireland; Message = Consistent PBC 2+ performer. Stuck with IBM while they put me through college. Moved into LCS after graduating, but had been 7 years in IBM manufacturing. Earning less money now than this time last year (due to loss of OT). Sticking it out for experience only - obviously not for the money ;-) -Mr. A Nony Mouse-
    • Comment 1/14/08: Salary = 120000; Band Level = 9; Job Title = Senior IT Spec; Years Service = 28; Hours/Week = 50+ or -; Div Name = Sales; Message = Pay is base. 2008 plan is looking very grim. IBM will 'increase the expected pay investment from 2007 to 2008', per their presentation, but don't forget they are hiring more people this year, so the increase will mainly come from new additions to the plan.... -Tom-
    • Comment 1/17/08: Hey guys.. I'm hearing around that IBM will be changing a lot of exempt workers to non-exempt status (hourly).. Anyone hear the same? -Rumormill-
    • Comment 1/17/08: Rumormill - It's not rumor now. Yes, for those in some I/T technical job classifications IBM is instituting -15% pay "adjustment" as part of"pay and compensation remix" for bands 6,7,8. These affected employees are now non-exempt and now hourly. IBM says they have to do this to better try to comply with"ambiguous" FLSA and state labor laws and also to ensure they position themselves "competitively" in this regard. What a load of bunk, huh? See General Comments section here as well. -FactNow-
    • Comment 1/17/08: Job Title = 24A - Technical Services; Years Service = 25+; Hours/Week = enough; Message = I have heard that bands 6, 7, & 8 will be reclassified as non-exempt codes for 'Job Family' 24A for various 'Position' codes! Also, these employees (me being one) will have a 15% reduction in salary starting in the Feb 15th pay check. They said that most exempt employees work 10% overtime, and if you continue to do so, this will make up the difference. I'm sure this is the result of the overtime lawsuit against IBM for not paying certain job families overtime! Another THANKS to the leaders of the new IBM!! -Earsonly-
  • PBC Comments
    • Comment 1/12/08: Prior Yr PBC = 2+; This Yr PBC = 3; This Yr Bonus = 0; Prior Yr Bonus = 0; Message = 2% salary increase last yr. Dead Man walking in 2008.. -Dead Man walking-
    • Comment 1/13/08: Dead Man walking: What a despicable appraisal you got from your manager! If I was you I would make sure I have all my documentation in order and fire an Open Door against your manager and second line regarding your recent PBC. What do you have to lose now? You were a 2+ in 2006 and dropped to a 3? Did your manager give you any warning or a midterm grade and hints on what improvement is necessary? At the very least your manager failed miserably in people management here and should be taken to task because of it. Your manager should be the "3" or "4". I guess it just goes to prove to all you PBC "2+" performers this year out there you are not safe either! I wouldn't doubt PBC "1" are that much safe either. -opendoorthis-
    • Comment 1/14/08: Prior Yr PBC = N/A; This Yr PBC = 2; Message = What is the average PBC ranking a new hire can expect to receive? I've been with the company for less than a year, was told that I should be happy that I got a 2 instead of a 3. -Anon- Alliance reply: What you were told is probably accurate. Read all of the comments on this page and the archives. You will soon understand that you have no bargaining power and should not expect a fair PBC or evaluation. The thing to do is to organize and fight for a union contract; that could be constructed with a better performance evaluation system. One that is agreed to by all the union members.
    • Comment 1/18/08: This is how I am going to comment on my PBC when I get it for my review and "signature" if I receive at least a PBC "2" appraisal and when I find out I am affected by the exempt to non-exempt reclassify action: "I do not agree that IBM through it's PBC or appraisal process differentiates pay correctly or fairly as they state in IBM Human Resources documentation based on job classification. If IBM differentiate fairly then why I am moving closer to my band's minpoint (lowest pay for band) due to a -15% yearly pay adjustment by acknowledging this appraisal". I advise all IBMers regardless or whether they are in the Alliance to strongly consider adding this reply to their upcoming appraisal before 1/31/2007. -anonymous-
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Vault Message Board Posts:
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Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.

  • "Borrowing staff from SO (Strategic Outsourcing)", by "phooey69". Full excerpt: As I've mentioned before at various times, I work in the SO branch of IGS (Longseth organization). In general, people in SO work on outsourcing and e-business hosting deals...planning, implementation, etc. However, we're now seeing requests from ITS for basic assistance...short-term AIX system administration engagements at customer sites, for example. Now, staff sharing between SO and other groups is nothing new...the management has always wanted to share skills and experience, and rightly so. But seeing these sorts of requests is something new. It not only implies that SO is short on work (so it has staff to spare), but it also implies that ITS is short on really basic skills.
  • "IBM India is firing people" by "willowisp". Full excerpt: Its confirmed now.. IBM India fired over 300 fresh college hires in India over the last week.. the primary reason stated is this people are not up to Big Blue standards.
If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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