Update: IBM withdraws its application, calling it an error.
In their application to patent a "method and system for strategic global resource sourcing," five Hudson Valley IBMers describe how it weighs such plans as "50 percent of resources in China by 2010," against such factors as labor costs, infrastructure and the "minimum head count to qualify for incentives."
The five Westchester County inventors, Ching-hua Chen-ritzo, Daniel Patrick Connors, Markus Ettl, Mayank Sharma, and Karthik Sourirajan, submitted the application to the patent office in September 2007, but it took a year and a half for that patent to be published online. None could be reached by telephone Sunday except Ching-hua Chen-ritzo of Mahopac, who declined to comment, and attempts to reach IBM were unsuccessful.
Lee Conrad, national coordinator for Alliance@IBM, a group trying to unionize Big Blue, was stunned to learn of the application. "This is obviously outrageous — a patent on how to offshore U.S. jobs," Conrad said. "IBM is obviously doing all it can to decimate the U.S. work force, and it is all the more reason why IBM should not get any tax breaks or stimulus money. They clearly are abandoning the U.S. work force."
In short, IBM is attempting to reduce offshoring considerations to a mathematic model — or, in the words of the application, "a robust and reusable sourcing template" for identifying and analyzing "global resource pools." ...
In the patent application, IBM said the described methodology "allows decision-makers to conveniently trade off one or more qualitatively defined levels between one or more factors in terms of quantifiable, direct, costs."
The methodology also looks at some scary assumptions as part of its mathematical models — scary, that is, if you're a U.S.-based IT worker. In a hypothetical assessment, the application sets up an example that includes a company having "50% of resources in China by 2010."
Some 17 months ago, IBM abruptly withdrew a similar application immediately after it was made public. "A method for identifying human-resource work content to outsource offshore of an organization," was submitted for a patent in January 2006. IBM withdrew the application in October 2007, saying it lacked "substantial technical content." ...
Lee Conrad, national coordinator for union-backed Alliance@IBM, said the patent filing was further proof that IBM was "abandoning the U.S. workforce." Rep. John Hall, D-Dover Plains, who received $11,995 last year from IBM, his fourth-largest contributor, lambasted the company as "downright unpatriotic and un-American." Malkiewicz said the filing would be withdrawn because it "is contrary to our patent policy on business methods."
Hall is asking the U.S. Government Accountability Office to investigate whether federal funds were involved in developing the software. He also urged the U.S. Patent and Trademark Office to reject IBM's application, a point that is now moot.
Ball will join ex-IBM employees at 12:30 p.m. Thursday to discuss IBM's severance benefits, which do not provide basic health coverage to ex-employees age 65 or older, he said in a press release. Ball will also call for an official hearing into the $45 million in state aid given to IBM by the Empire State Development Corporation.
Yes, we live in a global economy but the US is still the economic engine that fuels the world economy. IBM will pay the price by being so anti-American towards its North American' workforce. Those ditched workers who were dissed twice, first by being laid off and then by losing their jobs to overseas workers, will remember IBM's actions towards them in their next IT positions. The political climate for blatant off shoring is also less favorable, and IBM faces a less favorable and negative viewing by US lawmakers, taxpayers and customers.
IBM claims its a "globally integrated enterprise" and as such it "continues to rebalance its workforce globally to improve its global reach and competitiveness and to reflect the changing geographic mix of business". Well, rebalance this IBM. Lets hope the American IT manager "rebalances" her look at IBM and re-evaluates the type of strategic partners she chooses to align with.
The pendulum of outsourcing everything offshore is well on its swing back from nirvana. IT groups now know that not everything makes sense to offshore, and for those things where it can work, there's a lot of hard work on this side of the pond involved in making it a success. And who's going to work hard on this end to make it a success, that recently laid off IBMer whose job was offshored? ...
I give Microsoft a lot more credit. They are shifting a portion of their workforce through their announced layoffs, moving up to 5,000 out of jobs no longer needed and hiring back in 2-3,000 in new jobs, without just shipping them overseas, to better align the company's resources around its new product and market strategies. IBM’s missed something that Microsoft figured out. With all of the layoffs our economy is experiencing, there’s a wealth of extremely talented workers here in the US. Now that talent pool is now longer available to IBM. What a very stupid move on IBM’s part.
There are those who say the I.B.M. approach lacks candor, and that companies should be required to report sizable job cuts, even if the layoffs are scattered widely across the country. I.B.M. replies that it remains the largest technology company employer in the United States, that it reports its American payroll numbers yearly, and that it discloses the related costs to Wall Street.
This year, I.B.M. has said that shedding workers — “work force rebalancing” is the company’s phrase — will cost $300 million to $400 million. Really?
The total costs of laying off a well-paid high-technology worker, including severance payments, extended medical coverage and outplacement services, can average up to $100,000 a worker, by some estimates. That sort of calculation would put the total for layoffs in the first quarter alone at $960 million.
I feel like I’m watching a much-loved great-aunt being dragged under by Alzheimers. The patient is still breathing, but I know the IBM I loved is gone forever. And in it’s place I see a grotesquely sociopathic circus. A “World Class” one, to boot.
Oh, and those who take IBM’s so-called generous severance must sign a covenant not to sue for age discrimination…no matter how blatant.
IBM had a clever way of not disclosing it was a mass layoff because it had many employees work from home (there was no attachment to a particular office location). That, combined with matrixed management, made it quite easy for them to be fuzzy with numbers and provide the minimum of separation benefits. COBRA, of course, was prohibitively expensive. Fun stuff…
Well done politicians and big biz! Another American career path down the toilet. Hey NY Times - how about an article on all the companies that fire US workers and illegally replace them with H1B’s? Why do we need all the H1B’s when there are so many qualified US applicants anyway? I too have trained my Indian replacement more than once.
I am not sure there is sympathy on both sides of the aisle right now but there is sympathy towards this type of action among key congressional leaders. I suggest people start writing the congressional representatives.
The numbers in this article are grossly overstated. IBM is taking every opportunity to cut the severance packages down to a pittance.
The worst part of all of this is that IBM is using the downturn in the economy to do this yet it is abundantly clear that IBM is not suffering financially and their forecasts are rosy and all this really is is IBM moving work offshore and blaming it on the economic downturn.
The customers out there need to remember that you get what you pay for. The lost efficiencies of having to work with people half way around the world, who don’t communicate well and have a high rate of rework because of inability to interpret specifications ultimately results in higher costs to the customer. It is an absolute outrage!
Lee Conrad, national coordinator of the Alliance@IBM, said the organization expects job cuts in the range of 4,000 to 5,000. If IBM hits that larger number, the company will have cut almost 10,000 positions since the beginning of 2009.
What mystifies I.B. (a fictitious name to protect the vet’s identity) beyond losing a job with a very profitable company is how fellow Big Blue workers are reacting. Is there a sense of outrage? Frustration? “Yes, on both counts, but amazingly (at least to me), they aren't doing anything about it!!” I.B. told The Skinny. “Just waiting for it to happen to them!! “It's kinda like sheep going to the slaughter!!” ...
The fear is that more cuts are coming that will make previous U.S. cuts look small. “Everybody assumes there's more to come,” I.B. says. “The main rumor going around is that IBM wants to drastically lower the population in the U.S. I've seen numbers like down to 70,000 from last year’s 115,000. “This is how IBM is coping with the downturn in the economy, by cutting the population in the U.S. and sending the work to low cost countries like the BRIC countries [Brazil, India, Russia, China], and Poland I've also heard about.”
The IBM offer hints at a future where it’s not just skilled Indians who might have to travel halfway around the globe for a job. It’s likely that more American job seekers will have to think globally, say analysts, and the experiences of Americans who have taken jobs with companies here say it’s not something to fear.
“I was making six figures when I left the States. I’m making six figures here – in rupees,” laughs Jeanne Heydecker, a marketing executive now living outside of Delhi and working at her third Indian company. The salary for this single mother actually translates to roughly $50,000 a year. But it would be a mistake to suppose her quality of life has gone down.
Most everything she could want is available in Delhi. The healthcare, she says, has been top-notch and bottom-dollar. And like most Westerners and wealthy Indians here, she is able to hire people to cook, clean, and drive for her. “You can come home from work and focus on your family, not on maintaining the car and the housework,” she says. ...
In IBM’s case, fewer than 20 people have taken up the offer for help in locating a new IBM job overseas, estimated company spokesman Doug Shelton, speaking Monday before the latest layoffs. He declined to make any employees available for interviews. But the jobs in places like India are worth considering, Mr. Shelton suggested, saying that the cost of living is lower and international experience is highly prized in a global marketplace.
“It didn’t go down very well,” says Lee Conrad, a national coordinator with the Communication Workers of America who is trying to unionize IBM. “It was like people felt they were seeing not only their jobs offshored but their citizenship offshored. “It’s definitely a huge loss in wages to the American worker,” he adds. “I think that’s why it isn’t being so readily accepted. In years past, IBM would transfer an employee to another country, but they would stay with their US wages. That’s changed.” Mr. Conrad adds that IBM workers are upset at having to train Indians to do their jobs, only then to be laid off.
Given IBM and Sun's similar mix of servers, storage and software businesses, IBM could lay off as much as a third of Sun's staff to eliminate redundancies--a total of more than 10,000 employees--or the equivalent in combined Sun and IBM job cuts, according to Forrester Research analyst James Staten.
"This deal is definitely going to lead to a lot of combined layoffs," predicts Staten. "And it wouldn’t be a surprise if most of that bloodletting happened on the Sun side." ...
IBM certainly hasn't been timid about laying off its own employees, even as it has consistently outperformed earnings projections through quarter after quarter of the recession. According to Alliance@IBM, an IBM employees union group, the company has cut more than 10,000 jobs since the beginning of 2009, outsourcing many of those positions abroad. IBM hasn't publicly reported the precise number of those job cuts; Given that the company has more than 400,000 employees, the layoffs don't represent a significant portions of its expenses.
That cost-cutting is a sign that IBM will likely share pink slips with Sun employees, too. "There's going to be pressure on IBM to make this acquisition accretive as quickly as possible," says Revolution Partners' Falvey. "Laying off people here while you spend there and don't do layoffs ... It doesn't go over very well on Wall Street. So they'll definitely take a hard look at Sun's costs."
IBM has taken criticism for its aggressive layoffs while simultaneously seeking stimulus money from the Obama administration. Just as the first rumors of layoffs at the tech giant began to spread in January, IBM Chief Executive Sam Palmisano briefed the president-elect's transition team on a report from the Information Technology and Innovation Foundation, predicting that $30 billion in spending on high tech could create 950,000 jobs. (See: "The Tech Solution to the Recession")
First, they have a higher purpose than simply making money. Let me give you a couple of examples.
Southwest Airlines, from its beginning, has expressed the conviction that it is in the freedom business. The freedom of all Americans to be with friends and relatives during good times and bad times--thus, their low price structure. Herb Kelleher, who co-founded Southwest, not only wanted to give his customers the lowest possible price, he also wanted to give them the best possible service. As a result, Southwest is set up to empower everyone, right down to its frontline employees--to make decisions, use their brains and be customer maniacs so they can create raving fan customers. ...
Second, companies that engender trust democratize the decision-making process by soliciting input and sharing the decision-making itself with as many people as possible. In his primetime address to Congress in February, President Barack Obama acknowledged "difficult and trying times" but sought to rally the nation with an upbeat vow that by working together "we will rebuild, we will recover." How do you do that in business organizations?
It isn't complicated. When leaders treat their people as their business partners and involve them in making important decisions, those people feel respected, and respect leads to trust. If you respect your people and they trust you as a leader, they will give their all to get the best results they can for your organization. ...
Unlike many companies today, where the top managers are locked behind closed doors, cutting costs while holding everybody's fate in their hands, these two great businesses open their books to everyone so they can know what's happening and go right to work cutting costs and increasing revenue.
To clarify about the recent terminations (they're not layoffs if there are no plans to rehire); at least 2 different divisions were impacted, Global Business Services and IBM Global Services. Both employees and contractors were impacted, but it sounds like most were employees. If you look at the staff counts, most positions are being transitioned to contractors - even if the positions remain in GDF locations in the USA.
Face it, if you're a USA employee you won't be working for IBM for more than a couple years. As termination victims point out here; skills, education, performance, overtime, etc. have no factor on whether you get the axe. Don't waste time trying to improve your situation at IBM. Working more overtime, applying for internal jobs, etc. are a waste of time. Either get a job with another company now or keep cashing the paychecks and doing as little work as possible.
Another way to voice your displeasure with IBM is to comment on glassdoor.com. They have company reviews (and salary reports) for companies. The IBM opinion there is close to here, but the more the better. Maybe we can drive the IBM rating down so low that no one will want to work for or hire IBM. If they have no staff and no customers the company won't be viable. It won't happen overnight but we can eat this elephant one bite at a time and enjoy the final day when the blue beast dies. They believe in capitalism, let's give it to them; survival of the fittest. Finally, thank you to the staff here at Alliance@IBM. This is the best source of information I have for what's going to happen at IBM. I can recall at least 4 job cut and/or policy changes over the past year which I learned about here. This is NOT a rumor mill. Time after time the "rumors" leaked here prove to be true. Is ibmleaks.org available? It might be a good domain alias for the union to buy. -IBMer-
To counter this nonsense I propose that we all engage in a bit of "passive aggression". When you are called up at 10pm with an urgent crisis go into the office and take your time to get dressed and have a snack first, then drive to the office as safely as you can by observing the speed limits. In my case my 42 mile commute to my GDF site will take about an hour and a half. I expect a minimum of 2 to 3 hours time to respond to any crisis!
If you don't want to drive to the office fire up a 14.4 modem and watch those Sametime conversations slow to a c r a w l! Oh, you need to join a swat call, fine, disconnect the computer and join he call, oh you need to check the server, drop off the swat call, go have a snack, tuck the kids into bed, fire up the modem and log in, check the server, disconnect the modem, use the bathroom, then rejoin the swat call a half hour or so later. If we all engage in this form of "passive aggression", then perhaps the jerks running (or is it "ruining"?) this company will gain a little bit more respect for their "most valuable asset" - the employees! LOL -Anonymous-
You get back with them a week or two later to walk through some of their code to verify they followed the instructions. They give you convoluted reasons why they did not follow the instructions you gave. But having worked with the same code for several years, you know that what they did will simply not work. So you tell them exactly what needs to be done again and hope they will follow your expert advice this time. And this scene repeats on and on again. Now code freeze is a week away and you have 10 projects that several different Indian developers were working on.
Unfortunately the majority of them followed this same pattern throughout the entire development cycle. 9 out of the 10 projects are incomplete and totally off track - due to the Indian developers' inability to come up with solutions on their own and even worse their inability to follow simple instructions. During all of this time you have been telling management on the development and customer support sides of the house about the developer issues. And during all of that time it seemed like you were talking to a deaf audience.
Now that it has become obvious that promises made to customers regarding a delivery date are going to be broken, management starts threatening with their usual nonsense - and claiming ignorance to all of the red flags you have been raising for several weeks now. They imply that you can somehow cast a magic spell or something so that the Indian developers suddenly get it and make up within a week what they could not do over the past couple months. You ask them in a polite manner to join the real world and to face the reality they have brought upon themselves.
I feel for some of those in management. After they finish firing (er, RA'ing) the few remaining US team members (i.e., the people with the expertise to provide real solutions for real customers), then they may finally come to realize that they were being dealt the same raw deal as the rest of us. I guess the higher up the food chain; the more blinded one tends to be one's own misguided sense of importance. All I can say to them is, "Have fun after we're all gone!" You'll never get us back again. -Looking forward to the day-
From what I've heard from my friends in the IBM Real Estate division, it costs IBM, on average, around $150 per month to provide an IBMer with office space in the U.S. So why would they stop paying for your Internet access to force you to move into an IBM office? Below are my thoughts on what brought this about.
When I moved to a home office 18 months prior to my layoff, IBM did (at that time) save around that $100 per month. I can say that because in my case the office I gave up in Somers to work from home was re-used by IBMers who had to vacate the closed White Plains facility. In addition, IBM reportedly made $76 Million on the deal when they sold the White Plains office space (see http://www.allbusiness.com/operations/facilities-commercial-real-estate/4419933-1.html), so it made good sense to have me working from home and pay for my Internet access.
I can only imagine that IBM is doing a bit of an about face now, and is asking IBMers to take up $150 per month office space (and telling them they won't pay $50 per month toward their home-based Internet access) because they have laid off so many IBMers at most locations that they have boatloads of vacant offices that they finally realized are becoming a big drain on the bottom line (and believe me, any drain on the bottom line will impact senior executives bonuses, and must be eliminated). So I suspect the IBM Real Estate folks helped cook up this scheme as a clever means of greatly reducing the amount of wasted space that is just costing IBM money.
I can hear the corporate staff meeting now: "Hey, guys we can put all this unused and costly office space to good use, now that we've laid off so many IBMers, by telling our work-at-home employees that we'll no longer pay for their home office expenses. That way we can force them to drive in to the closest IBM office, and we'll save money on the deal because they'll be using internet access, lights, and heating and cooling, and cleaning services we're already paying for, whether the offices are used or not. Better yet, if they don't come into the office, we can just book the $50 per month savings and work toward eventually closing the whole site, just like we did White Plains, and are planning to do with Southbury."
You can bet someone is a hero (and will likely get a substantial corporate award) for coming up with the idea. I would also expect that no one in the meeting batted an eye at the thought that a crass move like this would lead to a further decline in the morale of an already demoralized work force. I mean, really, who cares about morale when you've decided your people, who Tom Watson (Senior) felt were IBM's greatest asset, are just another "resource" to be moved around wherever you need it -Left 2/23-
With each of the prior cuts, we absorbed the work. The shock reverberated when our colleagues in other groups learned of these latest cuts. This is not the IBM I joined and not the IBM my Dad joined. He would be very sad to see IBM as it is now. The brain drain in IBM is incredible, and I cannot believe how much knowledge is walking out the door. I’m talking about knowledge IBM paid for, nurtured, and counted on to make critical decisions. So things have changed, LoveMyRIM. That’s terrific that you love your job. I still care about mine and will long after I am tapped to go. I care about the excellent workers who are leaving. Your implication hit a nerve with this “lifer”! -Lifer and proud of it-
It does not matter how badly the service will suffer in the future. It does not matter how much they have destroyed the potential for future innovation. The reaction of the day-traders rules the market and the direction of corporations today. Research and development have been jettisoned and quality of service has been replaced by the drive to lower the costs for the moment.
IBM has acquired a number of companies over the past few years in an effort to expand their portfolio. They have not integrated their products with IBM, but instead have tossed aside the developers and support staff. There are plenty of examples from hardware and software that are enumerated here and elsewhere, just look up some of them over the past few years (and don't miss smaller players such as Transarc and Datapower).
Sun is larger, but it will be no different. The Sparc processor could be tossed aside in favor of the struggling Power chips. Storage, application software, sales, training, etc. will be redundant to IBM and will be dropped over time. Support contracts (phone and field engineers) will be migrated into IBM's model, though it may take time. Eventually, there will be a lot of people on the street looking for jobs. Sun utilizes a lot of partners in hardware support, training, etc. and they will all be in jeopardy as they are annexed by the "empire" that IBM has become.
The frightening thing is that those who have no affiliation with IBM should be very worried as well. As technical support that was once considered to be paid at Band 6, 7, and 8 is moved to a GDF and paid at a Band 3, 4, and 5 level, it is only going to devalue the work that is done in the IT industry regardless of the company for which you are working. IBM's direction is going to turn the skilled and intellectually valued positions that we occupy into minimum wage jobs of tomorrow. The clients' environments will suffer, the perception of our skills will suffer, and our country's labor force will suffer.
What can you do? Fight it now. You can join the CWA union now, while you still have a chance. If you are with Sun, join now and be ready to fight. If you are still with IBM and have survived until the next round of arbitrary firings, sign up. You can also speak up. Talk to your coworkers. Believe me, too many of them are unaware of what is actually happening. They may have drank the Kool-Aid that the corporations are handing them or they have on their blinders to the activity around them.
Post comments to the stories you come across on internet new sites. Send letters to your local media and politicians. Not all of this will matter or make a difference, but enough actions will add up to the point that they cannot be ignored, Together we can all make sure that we matter. The NBC new mention of IBM on 4/3 shows that the situation is at least gaining some recognition. Those who have been RA\'d: do not give up. If you do not make your voice heard, the travesties that have been implemented at IBM will only spread to other areas of our industry. IBM is large enough that its decisions will have an effect on how we are treated regardless of who may employ us in the future.
Do not let IBM's devaluation of its professional staff reach beyond its borders. We need to make certain that our skills and knowledge are valued, that quality of service is valued at least as much as cost. This should not only be a revolution in the way that IBM employees are treated, but throughout the industry before it reaches everyone out there to the extent that it has within the range of IBM. It is tough to equate having the skills and knowledge that we do with the need to organize or fight in the way that the assembly line workers in the industrial revolution needed to do, but the time is now. You need to recognize that corporations do not have your best interests in mind. But they also do not have the best technology, service, or long-term strategies in mind, either. The goal has become short-term gains, and the workers need to stand for what they know to be the best course for themselves and the industry. Don't sit quietly and let it happen on your watch. -SickOfItAll-
I waited 13 years to buy a house, saved and put every penny into it, and now may not be able to keep it. I support my parents, who are old, live in India, now I can't. My father had to bring his sister who is very sick - back from the hospital, they can't afford to keep her there (one of their sisters died on March 5).
Sure it is business, but then why should IBM get ANY of my money as a tax-payer sir ? Why should IBM get ANY business from companies that got money out of TARP ? Why sir ? Why should my money, go to create jobs in India ? I have nothing against Indians, I am an Indian American, but, if it is about business, let is be about business. I have the right to refuse IBM get any of my tax payer money. Please sir, if I may say, I beg of you, do something. I want to see justice done. -MD-
Teachers, carpenters, farm workers, custodial workers, retail, nurses, sheet metal, letter carriers, air traffic controllers. NFL Players Association, musicians, steel workers, auto workers, office workers….and many, many more. Who is standing up for you? -boiled frog-
I'm available at firstname.lastname@example.org, 00919920543869, or rworange (skype) Cheers and good luck, -Richard-
Mr. Schreiner is what’s known in the health care world as a “medical tourist.” No longer covered under his former employer’s insurance and too young to qualify for Medicare, Mr. Schreiner has a private health insurance policy with a steep $10,000 deductible. Not wanting to spend all of that on the $14,000 his operation would have cost stateside, he paid only $3,900 in hospital and doctor’s bills in Costa Rica. ...
At the moment, however, the bulk of medical tourism candidates are uninsured and underinsured people paying their own bills and looking for low-cost alternatives to American care. Medical tourism advocates argue that the quality of care overseas is often equal to or better than that in the United States. Many countries have high success rates, American-trained English-speaking doctors and the newest facilities, often built specifically to attract foreign patients.
Medicare Part D, the prescription benefit that went into effect three years ago, was supposed to let the elderly get their medicines more cheaply by creating competition between private insurers. Yes, the program has undeniably improved access to prescriptions. But the cost to taxpayers has been 3.5 times the market value of those prescriptions, according to a study in the journal Health Affairs.
Part of the problem was that insurance analysts saw a chance to double the size of the managed care industry. Drug companies stood to collect $30 billion in windfalls over the coming decade. So legislation was pushed, paid for and effectively drafted by thousands of lobbyists. Proposals requiring the government to use the buying power of 40 million Medicare patients to negotiate prescription prices were defeated. Pharmaceutical lobbyists fought for direct federal subsidy of drug benefits, knowing plans would be reimbursed no matter how much prices were inflated. Lobbyists also prevented identical but less expensive drugs from Canada and other countries from coming here. After arm-twisting that reduced at least one member of the House of Representatives to tears, the bill to expand Medicare passed at 5:53 a.m. on a November morning in 2003.
When the program went live in 2006, a fragmented market of 80 insurers — with 1,400 prescription drug plans — lacked the purchasing power to negotiate drug prices. Nor did those insurers have much reason to bargain, since Part D subsidized the most costly patients at 80 percent. So prices under Medicare private insurance plans for the top 10 medications shot up, and in 2006 the five largest drug firms notched a 45 percent spike in profits over the previous year. After insurers rushed to sign as many retirees as possible at attractive rates, they raised premiums 13 percent. Medicare patients in private plans cost taxpayers about 15 percent more than those covered under traditional government programs. ...
This year, total Medicare and Medicaid spending will probably account for nearly a quarter of all federal spending, and by 2016 it could rise to almost a third. Enlisting real competition will be crucial to containing costs. So before offering a new universal benefit for the millions of Americans who lack health insurance, Congress should put an end to manipulative profiteering in Medicare. As challenging as the program’s problems may be, they do not prove that a market-based approach can’t work.
About 20.7 million workers were uninsured in the mid-1990s. A decade later, it was 26.9 million, an increase of about 6 million, the study found. In the 1990s, there were eight states with 20 percent or more of the working-age population uninsured. Now there are 14: Alaska, Arizona, Arkansas, California, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina and Texas.
The Census survey counts people as uninsured if they were without health coverage for the whole calendar year. But many people are uninsured for several months, although not the whole year. Someone might even be uninsured from, say, March, 2007 to October, 2008, or a year and a half - but wouldn't count as uninsured in the Census numbers for either 2007 or 2008, since they had coverage for part of each year.
If you counted everyone who was without coverage for a month or more over 2007 and 2008, you'd get 86.7 million - or one American in three, according to the Families USA study, which draws on the same Census survey and two other federal government data sets. Of those, three-quarters went without coverage for six months or more. ...
There are so many uninsured, the report said, because "job-based health insurance is becoming increasingly scarce" as employers cut back, because rising premiums mean "more and more working families are being priced out of job-based insurance" and because safety-net programs don't cover all the people who need coverage.
But the insurance industry and others wary of too much government intervention vehemently oppose the idea. They say the heavy hand of the government will eventually push out the private insurers, leaving the government option as the only option. That is why the industry seems unwilling to give ground on the issue, even while making other concessions to national health reform — like the industry’s announcement on Tuesday that it might be willing to stop charging sick people higher rates than healthy customers. ...
But supporters of a public plan say that its low price would impose greater discipline on insurers by forcing them to keep costs in check and make their policies affordable — something they say commercial insurers have seemed especially unable to do in providing coverage to small businesses and individuals. “It would transform the market for private insurance,” said Karen Davis, the president of the Commonwealth Fund, a health policy research group. She estimates the average premium for a family of four would run around $9,000 a year under a public plan, in contrast to nearly $11,000 for a typical private alternative. The savings to the nation’s health care bill over the next decade could run into the trillions of dollars, she said.
t just how much risk are insurers taking on? Laszewski’s answer: not much.
He explains: “Underwriting rules are meant to protect [the insurer] against people buying insurance on the barn after it burns down.” By the same token, you don’t want people waiting until they are sick before buying health insurance. “But if everyone is required to buy the insurance from the start, you don’t have the problem of people putting off or buying insurance when it is advantageous for him or her and not for the insurer. ...
And that is why insurers are making this second offer. They are desperate to block that public sector alternative that we at HealthBeat have decided to call Medicare E (Medicare for Everyone—hat tip to reader Pat S. for suggesting this label.) Both the insurance industry and conservatives are adamant on this point. Will the Obama administration give up the idea of forcing private insurers to compete with a public sector plan? I don’t think so. As the president said at the health summit, many think we need the public-sector option to give people “choice” and to “keep the private insurers honest.”
Insurers loathe the idea because they realize that if they are competing with Medicare E, it will serve as a benchmark for regulation. In order to protect Medicare E from unfair competition, the government will have to lay down very strict rules, requiring that private insurers offer at least as much coverage as the public plan (so that they don’t “cherry-pick” younger healthier customers looking for a less comprehensive, cheaper plan.) For the same reason, private insurers probably would not be allowed to offer low-premium, high-deductible plans. And they wouldn’t be able to sell Swiss Cheese policies filled with hidden holes.
Yet today, this is how many for-profit insurers make their money. And they know that if the government is not trying to protect a public-sector plan, it is much less likely to issue tight regulations, and much more likely to let companies “compete” with each other however they like—even if consumers end up buying plans that really don’t deserve to be called “insurance.”
Predictably, rising costs now threaten the viability of the Massachusetts plan, leaving Gov. Deval Patrick and his Legislature to play catch-up. Mr. Patrick has warned he might try to regulate insurance premiums if insurers and hospitals do not demonstrate self-discipline. And lawmakers are awaiting recommendations from a state commission charged with reinventing the payment system so doctors and hospitals are rewarded for preventive care rather than the quantity of treatment they provide.
Health policy experts differ about how much one state can do. However, they agree that misplaced financial incentives are responsible for tremendous waste in American medicine, contributing to premiums that have grown this decade at four times the rate of inflation.
Sandra Foertsch, who sells individual policies, says the fundamental concern of insurers is clear: ''They don't want to buy a claim,'' meaning that they would start to collect $500 monthly premiums from a person and quickly pay out more than that to doctors and other providers. Foertsch said she was surprised that any of the guides could be found on the Web. ``I'd guess someone made a mistake.''
The Miami Herald asked several other major Florida insurers -- Aetna, Humana and Blue Cross Blue Shield of Florida -- for copies of their underwriting guides. All refused, saying they contained propriety information and were confidential. Searching the Web, The Miami Herald found underwriting guidelines for Coventry Health Care, which owns Vista; Wellpoint; Assurant Health; and Blue Cross Blue Shield of Nebraska. Among the health problems that the guides say should be rejected: diabetes, hepatitis C, multiple sclerosis, schizophrenia, quadriplegia, Parkinson's disease and AIDS/HIV.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
President Obama and others have asked that we act responsibly and reward those who work hard and achieve success. But that rule appears to have been turned on its head as far as the oligarchy on Wall Street. What the White House doesn't appear to understand is that you can't have one standard for 99% of America -- sacrifice, work hard, do your job right -- and another for the "Masters of the Universe" who run our financial system -- be greedy, screw up, and receive millions of dollars in "compensation" from the taxpayers. ...
...on Wall Street -- and the oligarchy -- a different standard applies: wreck our economic system to the brink of a total implosion out of greed, and not only will we keep you in your job, we will make the case (i.e., the White House and Geithner) that your "expertise" is essential to saving our economic system from disaster, although you are the ones that created the catastrophe.
But one particular aspect of it hasn’t received enough attention, and it really rubs me raw. It’s the rationalization that was made by AIG’s CEO, and then docilely accepted as truth by Obama’s top economic team. Their claim is that, since the bonuses were part of the employment contracts of the executives, everyone must now bow down and meekly pay up. Treasury Secretary Tim Geithner says he’ll prevent future AIG bonuses, but, alas, he shrugged, the sanctity of the existing contracts must be honored. “It would be legally difficult to prevent these contractually mandated payments,” he whimpered.
Come on, there are amoebas with more backbone than this! There is nothing sacred about a corporate contract – just ask union members and other workers. CEOs routinely abrogate legal contracts on wages, health care, and pensions for working folks. In fact, just last December, Washington demanded that car companies simply tear up their contracts with the United Auto Workers. Yet, suddenly we’re to believe that AIG’s contracts with these rich, incompetent investment bankers are so sacrosanct that even the President of the United States must stand impotently aside while they rob our public treasury?
Let’s be clear. At a time when many Americans in the collapsing middle class use credit cards for groceries, gas and college expenses, what Wall Street and credit card companies are doing is not much different from what gangsters and loan sharks do when they make predatory loans. While the bankers wear three-piece suits and don’t break the knee caps of those who can’t pay back, they are still destroying people's lives.
And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.
It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.
After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale. The new system was much bigger than the old regime: On the eve of the current crisis, finance and insurance accounted for 8 percent of G.D.P., more than twice their share in the 1960s. By early last year, the Dow contained five financial companies — giants like A.I.G., Citigroup and Bank of America. ...
Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.
But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.
"During this period, profit was primary; analytics were secondary," Raiter tells NOW Senior Correspondent Maria Hinojosa. Who was watching the watchers? Surprising new revelations about the economic debacle, this week on NOW.
The two senators plan to propose an amendment to deeply cut estate taxes for the fraction of the top 1 percent of the population still subject to those levies.
The proverbial millionaires next door — the plumbers, contractors and accountants who amass substantial wealth through hard work and modest living — are not the intended beneficiaries of the proposed cut. The Obama budget already takes care of them, because it retains today’s law, which imposes the estate tax only on couples with property worth more than $7 million, or individuals with property worth more than $3.5 million. That means 99.8 percent of estates will never — ever — pay a penny of estate tax.
The heirs of the remaining 0.2 percent of estates are who Ms. Lincoln and Mr. Kyl are so worried about. Their amendment would increase to $10 million the level at which the estate tax kicks in. It would also lower the top estate-tax rate to 35 percent from 45 percent....
In addition to creating the false impression that the estate tax eventually hits everyone — by mislabeling it a “death tax” — opponents routinely denounce the 45 percent top tax rate as confiscatory. In fact, the rate applies only to the portion of the estate that exceeds the exemption. As a result, even estates worth more than $20 million end up paying only about 20 percent in taxes.
It turned out that they were not.
But nobody seems to have told the marketers at I.B.M.
In a television commercial running on the NCAA basketball broadcasts this weekend, I.B.M. proudly proclaims that “math can do anything.” Among the things it can do, I.B.M. says, is predict financial markets.
Could somebody please tell I.B.M. that it looks really stupid?
IBM sees the future, and has concluded that the future ain’t in the US.
Did I hear the Chinese are proposing a new global currency to replace the Dollar, the current de facto global currency?
Not only is the IBM corporation indifferent to the plight of its workers or US citizens, the IBM corporation has no respect or fear of any laws or any government, including the US government.
Sam the Butcher knows, like Bush the Third, that when you are powerful enough you can do whatever you want and nobody can stop you.
Sure, blogs are full of people harrumphing and tut-tutting but IBM keeps doing what IBM does and nobody can stop them. IBM doesn’t even need to pretend to care anymore.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
Too bad these bean counters never took any sort of medical training, or were a collegiate athlete. I hate to be the one to tell them that once you get to a certain amount of minimal body fat, your body burns muscle. If you get to a certain point, your health is in jeopardy. This can be said as an analogy for the corporate health of IBM. But hey! After Sam checks out for retirement, who's gonna clean up the mess?
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