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Highlights—June 1, 2013

  • Rude Baguette: How IBM plans to lay off 13% of its workforce in France by the end of 2014. By LiamBoogar. Excerpts: Yet another blow for French president François Hollande today as IBM announces it will lay off 689 employees by the end of 2013, and a total of 1,226 by the end of 2014, 12.6% percent of its 9,730 staff in France. The president, who ran on a campaign of lowering the unemployment rate, has been surrounded by company layoffs in his first year in office, as the economic crisis begins to chip away at the French economy, which just re-entered recession this past quarter.

    Laying off employees is quite tough in France – we’ve all heard horror stories about employees that just can’t be fired but refuse to work – namely because any amount of mass layoffs must first be declared and approved by a court that oversees enterprises. I won’t go into details about the dozens of different types of layoffs that exist – it’s all quite complicated, and my cofounder Trista knows much more about this than I – but needless to say that it takes a fair amount of well-paid employees to craft an optimal layoff plan, namely one that will be approved and will permit the company to lower operating costs the most with minimal suffering to revenue.

  • Le Nouvel Observateur (France): IBM will remove 7% of its workforce in France this year. (Translation from French courtesy of Google Translate). Excerpts: The U.S. computer giant IBM announced Monday, May 27 removing 689 positions by the end of 2013 to 9700 that has the group in France, via a backup plan of employment (PSE ), it was learned from the unions. After announcing the end of April a draft cuts 1226 jobs by the end of 2014, management informed the elected staff details of the plan during a Central Works Council (CEC) extraordinary.

    "They decided to eliminate 689 jobs by September via a backup plan of employment (PSE). Added to this are 129 posts subject to an obligation of mobility, that is to say People who are in Marseille, for example, who will be asked to go to Lille, "he told AFP Gerard Camel central CFDT delegate. He believes there is a "high risk of refusal on the part of these employees, which inevitably lead to layoffs." The businesses most affected by it are those "core business" consultants and project managers, and support functions (finance, human resources, marketing, purchasing).

  • Net(net): IBM CEO Ginni Rometty: Failing Fast. By Steven Zolman. Excerpts: As most of you know, IBM missed its quarterly numbers again, much like Oracle, blaming the performance miss on a lack of hustle and execution from their sales organization and citing sales that slipped into the next quarter. What’s interesting about that, is that it’s the second quarter in a row that IBM has used the same tired excuse. This makes me wonder what happened to those sales that slipped from Q1 to Q2 last quarter. Why didn’t they show up in Q2? If anything, Q2 should have experienced some over-performance as a result of missed sales from Q1. So, the explanation doesn’t seem to hold water unless there were significantly more slips in Q2 than there were in Q1. Either way, it seems to be a wonky excuse.

    What (in my humble opinion) may even be worse than the fact that IBM has missed expectations for 2 quarters in a row, is the fact that IBM CEO Ginni Rometty doesn’t even bother to show up to make the lame excuses anymore. You heard me right. On the last earnings call to discuss IBM results with shareholders, Ginni was noticeably absent. This must be an outrage to many key IBM stakeholders. Ginni earns $6.1M in pay (not including her very lucrative stock option package). It would seem as the top executive at IBM, she might feel compelled to explain the company’s poor performance for two consecutive quarters under her leadership. ...

    Due to missed targets, and poor performance results, IBM will now “reposition” the business, which undoubtedly means IBM will more aggressively lay off its employees. In the Rometty era, it appears misaligned, clueless executives and sales people with no technical prowess reside in the safest bastions, while super smart, US based customer support people, and technology heavy product innovators and developers are the ones most likely to be let go. IBM is much like a desperate housewife, clinging to more glorious days gone by and trying to hold on to the past by getting plastic surgery to improve surface appearance, avoiding at all costs a seemingly declining future, and losing its soul in the process. Ginni is now the plastic surgeon that keeps performing the procedures to strip the company of more of its soul, while trying in vain to improve its shallow appearance. In the end, soul matters, and health is not just skin deep, and it seems that the signs now indicate that the market feels the same way.

    Selected reader comments follow:

    • Debra says: June 5, 2013 at 12:29 pm. This again is so typical of IBM. I had 8 years at IBM, promoted to run the PLM business unit. I was extremely successful in making our numbers only to find out on a conference call that IBM sold this business unit back to Dassault Systems. All 262 employees were told they no longer had a job with IBM and was offered “A comparable job with Dassault Systems.” I kept the letter offering me a job, however once on board, the job description rapidly changed. We were all told we could not come back to IBM for 3 years. This is how IBM operates, no consideration for it’s employees, just a hike in quarter results… What a disgrace, Mr. Watson is turning over in his grave many times over with how the company has changed, no respect for anyone anymore.
    • Joseph Coombs says: May 31, 2013 at 3:01 pm. The answer is not to keep cutting staff number, or more jobs to cheaper countries, which seems to be the current position of “very” senior management in IBM. Skills are being lost, in fact I would say lost for good. People in Brazil, India, Eastern Europe etc are OK, but what they lack is the historical knowledge. You cannot just lose 30 years experience and say that a resource being paid less in India is now able to deliver the same service. The only people that are going to win are Rometty and very high level management on 7 figure wages. IBM, mark my words, is going to give way and implode at some point. Once people realise the terrible way in which it is managed.
    • Steven Zolman says: May 31, 2013 at 3:12 pm. This is a major concern shared by most of our clients as well. It seems like IBM’s strong primary focus is EPS, not customer value, not customer success, but their own, inward focus on stock price.

    LinkedIn comments about the article:

    • The adage 'speed of the leader, determines the rate of the pack' was a quote in IBM's Think magazine years ago. Without a cohesive vision and strategy from the top, aligned with respect for the individual, the company will slowly erode. ...similar to Blockbuster who failed to recognize the impact of online movies to their hardcopy DVD business...or USPS...it's a shame that a company that was once ranked as a great company to work for no longer makes the list.
    • It would be hard to not agree with Gunter's view. I have similar observation and many messages when meeting active employees. From the clients perspective I have seen many low quality engagements and a rush to close the deal.
    • It is hopefully not too late to save the great inherent qualities that made IBM preeminent...the scale, speed, deep knowledge, intelligence and creativity aligned with superb products and wonderful people....The rush to please investors before or indeed to the exclusion of all other stakeholders has has blinded the leaders of their complex responsibility to balance the interests of all stakeholders without whom the company cannot reap the financial rewards on which they now seem to exclusively focus.

      Lets hope that Ginni can clearly articulate the point of IBM in the next wave of innovation and restore the pride of the wonderful people who have in so many cases proudly dedicated their working lives to helping to make a difference and allow customers, employers, suppliers, communities as well as stockholders to unequivocally answer the question... Why IBM?

    • Not sure about bringing Sam back. My belief is he started the slide we see now. They really need another Lou as he really turned this thing back into a core belief we could and should be the best. I left in '09 because I could see the bean counters taking over and IBM losing sight of the customer. Now it is strictly a numbers game and especially in GBS, no long view on anything and a complete lack of leadership that is more focussed on quarter end than doing what is right for the client.

      I long espoused the thought of working on a client's buying cycle, not your selling cycle and that opportunities did not magically start at the beginning of the quarter and end at the end of the quarter. IBM has become too obsessed with wall street and have gotten away from selling is STILL a relationship business. You cannot make inroads when you continually swap out your reps accounts. No time to build relationships, much less partner with your clients.

      Finally, IBM must realize their people are their core. They have for years neglected things like career path and listening to the street level. IT has come back on them in spades now and it will take someone like a Lou Gerstner to pull them out of this ugly ditch they allowed themselves to get back to.

    • John's comment touches on a sensitive subject. Before Mr Gerstner came IBM was a family. When he came and faced an impossible task we all thought; he'll destroy the family. In fact, considering his task (very successful) he held the family together. He dismantled the hopeless Business Area numbers game. We had a new IBM. When Mr Palmisano took over we all thought; old IBMer we'll go back to an even stronger family. Alas what we got was a new numbers game based upon getting more speed out of the old engine. What Mrs Rommetti has to do now is to get the family sitting round the same family table and redesign the engine based upon technology excellence not numerical analysis. Give her time she's got the leadership qualities. Let's hope that she can find a table to sit at. History tells us that a round one is often of the right architecture.
    • I, too, saw the cultural change with Mr. Palmisano. I don't think it was him in particular, although he certainly had something to do with it. I was there from 2007 to 2010, and things were much better in 2007-2008 than from 2009 onward.

      In 2009 (my last full year with IBM) Mr. Palmisano and the board announced what amounted to Google's "You have 10% of your work time to pursue your own projects, provided they help the company." While not as open as Google's idea, Mr. Palmisano stated (I will look for my blog entry on this to get the exact quotes) it was encouraged, company-wide, to contribute to other areas as long as your own work got done, and this was IBM's culture across the board. My blog entry, written about half-way through 2009, essentially said, "Well, it's true across the board except it's not true in GBS", because my directorship actively discouraged any work outside our immediate responsibilities.

      All I really know for sure is, beginning with 2010, the culture changed for the worse. IBM dropped a lot of its cross-pollination projects, along with many highly productive and intelligent people, in the name of the bottom line.

      Again, I'll try to look up my blog entry on this to get exact quotes and my view of it.

      Come to think of it, it did not occur to me until just now... Mr. Donofrio retired in 2008, and just after that is when the culture turned. Gunter and Maurice, you may have hit something there.

    • The business world, especially in the US, would be much improved if stock (or bond) ownership by officers and employees of a corporation was OUTLAWED. If the decision makers did not have such an incentive to watch the stock price and do whatever is necessary in the SHORT term to keep it high, they could guide a company to LONG term growth and profit. As it is, they will do anything, including eating the seed corn, to support near term stock prices. If you want to provide incentives to do well, beyond a straight salary, some sort of long term profit sharing could work (to be determined and paid /years/ after the decisions were made, even if they've left the company in the meantime).
    • IBM began to slide when it began the regular and frequent layoffs of it's most experienced talent (those over 55) which tend to be more expensive and end up on their complicated layoff spreadsheet. While they claim it is not age discrimination, it's likely anyone over 55 and has many years there, they tend to end up on that layoff list regardless of performance ratings.

      As they rid themselves of more experienced talent, they somehow thought younger workers could do the same thing. Well, in sales you have to have the history and the expertise to guide the customer into trusting you as an adviser versus a sales rep. Younger sales people don't have the experience and talent yet to be able to do that usually. It would be rare for a 50+ year old CIO/CEO to think of a 25 year old sales rep as a trusted adviser. Maybe some can but usually the maturity and historical career is important to the relationship. All that comes with age.

      I've worked for some companies that are taking the opposite position and only hiring older experienced sales talent and having great success beating IBM sales teams. One day IBM will wake up and realize it's layoff strategy was a huge mistake. Why work for a company that openly talks about laying off workers nearly every year? Sort of dumb really!!!

    • Layoff strategies are an easy management option when costs are exceeding revenue. The spreadsheet jockeys (or is it jokers?) take over and can't see anything deeper than the employee costs and numbers in a cell of the spreadsheet. They have continually failed to see real asset values in the skills and experiences of people. It's a bit like one of those old movies in which there's a plane & it's losing height. The pilot says: throw-out the seats etc.. In the case of the layoff jokies they throw out the engine. The technical talent and marketing experience of IBM is a massive asset. Alas the accountants can't figure this out. Oh dear.
    • In addition IBM has got to stop the blood letting and bring back the functions they outsourced. re hire the assets they let go over the last six years. Hire new the thousands of smart IT graduates we have out there looking for jobs. Big Data expand and innovate. Watson expand by leaps and bounds. That resource has potential to change the world. Overall IBM has lost site if what is WAS good at doing only to concentrate on offloading to 3rd world countries to save a buck.
    • It's a lot about emotion ties. Still in touch with many IBMers today, the 1900s company pride is no longer there. The newbies by & large just have a place to work, granted a nice place to work but the passion is missing
  • Rochester (MN) Post-Bulletin: Legislature trashes tax break despite IBM's pleas. By Heather J. Carlson. Excerpts: Despite stiff opposition from IBM, the DFL-led Legislature approved scrapping a tax break some local Republicans fear could further discourage the company from investing in Rochester. ...

    Lawmakers voted to get rid of the Foreign Royalty Deduction, which allowed companies such as IBM to enjoy a sizable tax break on revenue generated by royalties at its foreign subsidiaries. It's not unusual for high-tech companies to license a Minnesota invention to one of these related foreign companies. State law had exempted 80 percent of the royalties generated by such an invention.

    Throughout the session, local lawmakers said, IBM lobbied hard to keep the tax break. That included IBM Vice President Walt Ling contacting DFL Gov. Mark Dayton's office, asking Dayton to reconsider his support for the plan, according to Sen. Dave Senjem, R-Rochester. The measure was part of a tax bill that raises $2 billion in new revenue. The governor signed the bill on Thursday. ...

    The tax increase comes on the heels of an IBM announcement in March that it would be moving the bulk of its manufacturing operations off its Rochester campus to Mexico and New York.

    Critics of the Foreign Royalty Deduction have called it a corporate loophole that allows companies to avoid paying Minnesota taxes while taking advantage of countries with little or no taxes. Its elimination is expected to generate an estimated $189 million in state tax revenue over the next two-year budget cycle.

    Dayton has long supported eliminating the tax break. Minnesota Department of Revenue Commissioner Myron Frans said the tax law change is intended to make sure that all businesses in the state, whether they are Minnesota-based or multinational corporations such as IBM, are treated the same. It's also about investing in key areas to make sure the state has a world class, well-trained workforce, he said. ...

    Frans said he met with IBM representatives a number of times to talk about their concerns. Ultimately, he said, the administration believes it makes more sense to provide across-the-board tax cuts benefiting all businesses rather than continuing to allow deductions that only benefit a select few. ...

    Rep. Kim Norton, DFL-Rochester, said she also heard from IBM representatives concerned about losing the tax break. But she said IBM had a tough time convincing lawmakers that the deduction would lead to job losses after the company announced layoffs in March. She said it appears the company wants to blame the tax change for cutting jobs in Rochester even though it's been steadily cutting its local workforce for years.

    "You are already leaving, so don't say this is the reason," Norton said. "Their concern would have been more justified if they had not just made the announcement they were leaving."

  • WCAX-TV (Vermont): Will IBM cut workers in Essex? By Gina Bullard. Excerpts: A stream of employees pours into IBM's Essex plant every day. "Somebody needs to speak out because a lot of people feel the way I do," Earl Mongeon said. Workers like Earl Mongeon-- who's been in manufacturing here for 35 years-- are bracing for possible layoffs after an unexpectedly low first quarter earnings report. He's part of Alliance@IBM, an employee organization supported by the Communications Workers of America union. ...

    Gina Bullard: What's the mood right now at IBM? Earl Mongeon: It's dismal. Morale is low. People don't know what to do. Are they going to be cut? There's that fear factor.

    Under federal law IBM must give notice to the U.S. Department of Labor if 500 or more employees lose their jobs. Since 2003, IBM in Vermont has had several layoffs. Each time the number of job cuts was less than 500-- not triggering government notification. But there is no state law requiring IBM give advance notice to state officials. Instead, IBM has 24 hours after a layoff of more than 25 employees to notify the state.

  • Yahoo! IBM Employee Issues message board: "History of IBM" by "netmouser". Full excerpt: This is an interesting article about Rochester MN and the whole IBM history. The company that used to be, and now.
  • Yahoo! IBM Employee Issues message board: "Re: History of IBM" by "orsonbear". Full excerpt: "No subject occupies more executive time at IBM than the well-being of our employees and their families," Watson Jr. is quoted as saying in 1958. Ah, yes. Those were the days. I started with IBM when Watson Jr. was the boss. I am sure that today's executives would be laughing their asses off upon reading stuff like this.
  • Yahoo! IBM Employee Issues message board: "Re: History of IBM" by "orsonbear". Excerpt: Excerpt from Father Son & Co. by Tom Watson Jr. "I considered taking even more radical steps to increase IBM's commitment to its employees. Those at the top were doing fantastically well on stock options -- despite the fact that Williams (Al Williams, then IBM President) and I stopped taking options in 1958, after Williams said, "We don't want to look like pigs." While IBM's workers were making good money, they couldn't look forward to the rich capital gains that executives with options had. I asked myself, "How much more am I worth to IBM than that guy down at the bottom of the pay scale? Twice as much? Sure. Ten times as much? Maybe. Twenty times as much? Probably not."
  • Yahoo! IBM Employee Issues message board: "Re: History of IBM" by "mikeha_ca". Full excerpt: IBM doesn't respect any individual except the executives. In AMS we are required to work off any vacation time (99% utilization expected) and now they are making us work on the weekends at their whim (so far twice a year, but eventually we all know we will work every weekend) to overbill our clients in order to make our targets. Oh, they may say this will allow us to get our work done faster, more efficiently, but really the Quality and Innovation Summit is a crass exercise in extra billing the client. We are slaves in this company. The executives are the slave masters who expect more profits every year ad infinitum.

    If everyone just works the required weekends and says nothing, they will continue to ratchet up the slavery, until we are working 7 days a week, on call 24 hours a day.

  • Yahoo! IBM Employee Issues message board: "Re: History of IBM" by "lifeisacrapshoot". Full excerpt: One of the Happiest Days of my Life was the day I was told I was going to be laid-off from IBM due to "My Performance against expectations was lower than my peers" after 30 years and 4 months at Big Blue.

    We were scheduled to have a "Work Weekend" the following weekend, which I didn't have to participate since I was on my way out. IBM's latest invention getting employees to work weekends to bill customers.

    It wasn't enough for me to work from 7:30am Friday morning until 7:30pm on Saturday night straight without sleep. That is 36 hours straight. Oh did I mention I was on "Vacation" at the time. My brother would go to bed at night and when he got up in the morning I was still in the same spot. Then he went to work and when he got home from work I was still in the same spot. But "My Performance against expectations was lower than my peers".

    Yes, one of the happiest days of my life was the day I was laid-off from IBM. Because I would still be working 12, 16, 36 hours days, and working weekends and Holidays. I worked all of Thanksgiving weekend in 2011 and Christmas Eve 2011 and I still received a "3" performance rating.

    So FUCKING glad to be gone!

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Is this Group still active?" by "nowwicked". Excerpts: When I was a local branch I had management that rewarded me when I went out on a limb, put in 70-80 hour weeks.

    When I worked at an above region level I had management that flew my family to me for weekends so I didn't need to leave the critical situation on Fridays lose time in front of the customer.

    When I did some work for development labs around the world and was gone the better part of 2 years my wife saw multiple bonus checks and large pay raises show up in the bank account.

    All of these things showed me that IBM was willing to give me what was important to me if I gave them what was important to them.

    The past 10-15 years have moved away from that model. Working extra, being the dedicated employee who thinks of IBM above everything else nets me nothing, doesn't increase my pay, doesn't help my PBC or show up as bonuses or commissions. It means IBM no longer values the extra I was willing to give, so I no longer give it.

    I travel "on company time" not nights and weekends, I do email "on company time", not at night in the hotel. If I work outside of the 8:30 to 5:15 Monday to Friday it is because it is easier for me, not because IBM needs it to be done. If I put in a late night during the week, you can bet that by noon on Friday I'm home and not checking email.

    IBM no longer considers what is important to me, I can no longer consider what is important to them. They have made it obvious that I am nothing more than a mercenary, to be kept for as long as my weapon is sharp and worth what they pay. Outside of that they believe they owe me nothing and I of course cannot consider that I owe them anything either.

    It does go hand in hand with the other comment I made earlier in the week about how society has changed, we are no longer interested in society, we are interested in the individual above all else. We may use words to the contrary but it is a sham.

  • Fox News: Why Pension Funds are Eating Your 401(k)'s Lunch. By Linda Ster. Excerpts: Pension funds - those old guaranteed-benefit retirement plans your grandma might have told you about - outperform those in 401(k) plans year after year, according to new research from consulting company Towers Watson.

    In 2011, the last year studied, defined-benefit plans had median returns of 2.74%, while 401(k)s and other defined-contribution plans lost 0.22%. It was the widest margin since the mid-1990s, the company said. ...

    The bigger the pool, the better the returns. Pension funds, which invest for large groups of people, can use economies of scale several ways. They can buy investments cheaper and can take bigger and different risks because not everyone in the pool will retire at the same time. While 401(k) participants have to manage money so it is ready for their own retirement date, pension fund managers can always be investing for the long haul, as younger participants balance older ones. ...

    Fees matter. Companies that offer pension funds tend to pay the cost of the fund and not count those fees when reporting investment returns. But 401(k) administrative expenses are often buried in the fees that participants pay, and that lowers returns. That difference alone gave pension plans a 0.66% annual advantage over the last 17 years, Towers Watson reported. You probably can't talk your boss into paying the whole cost of the 401(k) plan, though that would be nice. But you can at least make sure the funds you pick within your plan are the low-fee alternatives. ...

    The bottom line of the Towers Watson research is this, in Suchsland's words: "For a plan sponsor to provide a certain level of benefit, it is cheaper to finance through the defined-benefit plan." Even though traditional pensions present more accounting challenges(because they are carried on company balance sheets), Suchsland says he believes some employers who switched to defined-contribution plans in the past few decades may switch back because of pension efficiencies and "workforce issues."

  • Glassdoor IBM reviews. Selected reviews follow:
    • Going down the tubes” Senior (Current Employee). Pros: challenging assignments, lots of resources, good people in some divisions, work at home, access to IBM's Research teams, ability to move internally...but becoming increasingly harder. Cons: too many empty suit executives. excessive layers of management that add little value (e.g., change type font of power point...). increasingly caustic environment. everybody is an expert syndrome. Advice to Senior Management: cut excess layers of VP's and Directors.

      No, I would not recommend this company to a friend.

    • Good opportunity to grow as a consultant” Managing Consultant (Former Employee), Canberra (Australia). I worked at IBM full-time for more than 3 years. Pros: Variety of work, excellent re-usable resources (and learning opportunities); get to work with some really knowledgable experts from different verticals. Cons: Depending on what contracts have been won, you might end up on the bench or on a dead-end project which makes career progression (and even billable hours targets) difficult to achieve. Experience can vary greatly depending on your people manager. Advice to Senior Management: Review the resource management aspect of the business—some inefficiency there (both shipping people around the country & matching people's projects to their career goals).

      Yes, I would recommend this company to a friend.

    • IBM: Ibm Bought Me” Anonymous Employee (Current Employee). Pros: There are a lot of career opportunities inside IBM. You might have to switch team or roles to find them, but they're there. If you're willing to push yourself there are lots of opportunities to proceed. Cons: The "high-performance culture" means that it's not enough to merely do your job—you need to find the opportunities to do extra things if you want to get anywhere. Advice to Senior Management: Realise that the "high-performance culture" is counter-productive to teamwork and collaboration. It still allows some destructive people to be rewarded and some good workers to be managed out of the company.

      Yes, I would recommend this company to a friend.

    • “Too much bureaucratic regarding career promotion” Customer Service Representative (Former Employee), Brno (Czech Republic). I worked at IBM full-time for more than a year. Pros: Multicultural environment, 5 days extra for vacation, extra hours mostly paid, several online training, events and certifications will help you gain knowledge and motivation. Free access to garage, bike cage, shower facilities.

      Cons: Low salary compared to other roles, if you are promoted salary stays the same or little raise, only yearly bonus, plenty of bullying from higher levels, if you are top performer in one role and you want to try something new do not count with any change.

      Easy promotion if you are very well dressed, even if you have low knowledge. Complete opposite if you are very good and always dress casual, plenty of promises but always postponed, even when you resign and give the mandatory 2 months to the company. Non creative colleagues try to take advantage of your ideas and discoveries and try to gain other colleagues credits for show off.

      Advice to Senior Management: Reward people properly, keep your promises, do not "lock" the workers in the same role for several months and do not promote colleagues because of the dress code. Promote them according to their results. (This review only applies to Brno, management does not follow global IBM standards).

      No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Smart people. Poor management” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 7 years. Pros: IBM is a really flexible place to work. As long as you get your work done no one cares where you are. There are a lot of smart people around to learn from and if you can get on the right project you will learn all the latest cutting edge technology. Cons: Career development is an afterthought. Unless you are really motivated you will be doing the same type of job forever.

      Yes, I would recommend this company to a friend.

    • Not what you think” I/T Specialist (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Good camaraderie among co-workers despite management. Vacation days. Cons: Income has reduced by 33% in past two years. Tremendous outsourcing overseas (China, Brazil, India, Eastern Europe). Very low morale. Family health insurance premium increases by $1200 every year while coverage diminishes. 401K matching balloon payment is at end of year only if you're still employed. High employee turnover due to diminishing salary pay. Fewer IBM employees and more contractors. "Competitive pay" is calculated with China and India in mind. Advice to Senior Management: Better pay for happier employees.

      No, I would not recommend this company to a friend – I'm not optimistic about the outlook for this company.

    • Great technology and history. No work life balance.” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 8 years. Pros: Great company history and in-depth technical knowledge from people with decades of service. You can also work remotely and take vacation time as needed. Cons: Limited growth and below average pay. It is all about the "Blue Dollars vs. Green Dollars" If IBM does not make money then they will eliminate your job and ship it overseas. It's better to have dissatisfied customers and make money. That's the moto! Advice to Senior Management: It's time to give back to your employees and acknowledge their hard work. Enough of the roadblocks and countless process to tell the customer you cannot do something.

      No, I would not recommend this company to a friend.

    • Low Pay” Marketing Manager (Former Employee), Singapore (Singapore). I worked at IBM full-time for more than 7 years. Pros: Lots of opportunity to try diff roles. Cons: Highly bureaucratic, very low-risk taking as everybody wants to play it safe; overly process driven, highly 'stacked' - to many headcounts. A cumbersome company. Need to streamline resources, empower employee, remove the layers of processes, give employees the space to do what is right for the company. IBM will, at best, maintain a steady and very low growth, but not likely to accelerate or bring real transformational change. Advice to Senior Management: Time for a change—get new blood and new thinking, too much dead wood.

      No, I would not recommend this company to a friend – I'm not optimistic about the outlook for this company.

    • Smart, hard-working people. Bottom line more important than people.” User Experience Designer (Current Employee), Durham, NC. I have been working at IBM full-time for more than 10 years. Pros: Cutting edge technology allows for flexible schedule. Cons: Outsourcing of US jobs. Move to contractors to avoid cost of benefits. No security. Advice to Senior Management: Employ the ethics and values you claim to support.

      No, I would not recommend this company to a friend – I'm optimistic about the outlook for this company.

    • Don't touch it with a bargepole” Senior Consultant (Current Employee), Manchester, England (UK). I have been working at IBM full-time for more than 8 years. Pros: The people are often very good, the mobile working can be nice. Not much else these days. Some training available this year.

      Cons: With redundancies (resource actions, culling, downsizing, resource balancing; call it what you will) becoming an annual tradition. With Senior Executives taking MASSIVE pay even after they leave while employees see years go by between rises. With a review system (PBC) that is definitely not part of IBM's Smarter Planet systems. Morale has no financial value and therefore is unimportant. Customers are to be stitched up like kippers rather than given decent service. Even recent promises of training have been diluted to on-line dross.

      This once great company was self-satisfied and arrogant; but in fairness it had something to be proud of. Now it is living on dreams, hot air and marketing hype. When even its employees want to see it get its comeuppance you know it is a dead man walking.

      Advice to Senior Management: Middle Managers—show some spine and side with your employees so the company can be improved. Upper Managers—turn out the lights, close the door and leave. Nobody will even notice you are gone except that the burden of stupid initiatives, processes, lies and deceit would disappear.

      No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Good for experience, neglects employee” Systems Administrator (Former Employee), Brno (Czech Republic). I worked at IBM full-time for more than 7 years. Pros: Working with new technologies. Relative freedom to manage one's own projects. Stress free. Good education courses. Job stability. Cons: Long process and bureaucracy. No motivation for employee. Career depends on personal relationship with management rather than competency. Small or no salary raise. Difficulty to communicate with management/different entities. Wooden language in official communication, doesn't seem to target the reader.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Trustees Reports: Social Security Steady, Medicare Financial Outlook Improved
    • Immigrants are Helping Medicare’s Solvency
    • UMWA Speaks Out Against Bankruptcy Ruling That Cuts Off Retiree Health Care
    • Report Ranks States Based on Measures of Senior Health
    • Alliance Observes Memorial Day
    • Obituary: NARA Member Janice Ayres
  • Calpensions: A state-run retirement plan for private sector? By Ed Mendel. Excerpts: A new state law drawing national attention could give most of the estimated 6.3 million California workers with no employer retirement plan an “automatic IRA,” a paycheck deduction that goes into tax-deferred investments.

    Retirement savings would get a big boost, some experts say, if a small part of pay, perhaps 3 percent, is diverted before workers face the hard choice between daily spending pressures and providing for the future.

    Social Security falls short. Nearly two-thirds of California private-sector workers have no employer retirement plan, and nearly half of all workers are on track to retire with “serious economic hardship,” said a UC Berkeley labor center study.

    The new plan puts the payroll deduction into tax-deferred investments with a guaranteed minimum return, backed by insurance. The state and the employer have no liability.

  • AARP: Why Are Boomers Retiring So Early? By Carole Fleck. Excerpt: So much for boomers’ predictions that they’ll be working until they drop. A new study finds that more than half of the nation’s oldest boomers — those turning 67 this year — are now retired and not working at all.

    Most of them say they were ready to leave the working world for good. But one in six say they retired because of health problems, and one in 10 blamed a job loss.

  • Washington Post: Plan by Google’s Motorola to open Tex. factory signals shift as tech firms look to add U.S. jobs. By Craig Timberg. Excerpts: Motorola Mobility, once a pioneer in shifting manufacturing to China, is opening a smartphone factory in Texas, the company said Wednesday, joining a small but growing movement toward bringing technology jobs to the United States.

    The decision follows announcements by major tech firms, including Apple and Lenovo , planning to add U.S. manufacturing capacity after more than a decade in which the flow was almost exclusively in the other direction — with millions of jobs going to East Asian factories known for low wages and minimal labor protections. ...

    But Motorola Mobility officials said they see significant business logic to having a factory close to the engineers who are designing a new flagship smartphone and the customers they hope will buy it. Officials say it aids innovation while allowing for leaner inventories and lower shipping costs.

    “Doing that work of actually assembling the phone close to home will allow us to fix things faster, innovate faster,” said Dennis Woodside, chief executive of Motorola Mobility, a division that was bought by Google last year for $12.5 billion.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 06/01/13: According to Doug Shelton, IBM communications: "IBM doesn't comment on speculation and rumor". So why did the CFO say the bulk of workforce rebalancing would take place in the 2ndQTR when the 30 day window has passed before end of 2ndQTR on June 30th? So the CFO did SPECULATE that the RA would happen on April 18 2013 and it hasn't happened. The CFO can be said to have started the rumor mill by his April 18 comment when the RAs have not materialized. You can't have it both ways, Shelton and IBM. -Cuando-
    • Comment 06/01/13: No SIP. cost cuts RAs travel cuts withholding expenses..all to ensure that Ginni does not get into a 3 strikes out situation. This is nuts. Amazon and gang are killing us out there and execs are playing golf. Even if q2 is saved...what happens to q3. -nutty-
    • Comment 05/31/13: To say "I am asking my manager to be RAed" is trying to negotiate with IBM and management. IBM does not negotiate with employees. Employees that who are not even serfs, they are widgets (a.k.a."resources", even Walmart treats their employees as "associates"). You cannot negotiate with greedy, self-absorbed thugs who only care about their well being only and an artificial financial number called EPS. IBM does negotiate with executives, but they have employment agreements, contracts. The ONLY way employees can negotiate with IBM is to join the Alliance and use collective bargaining rights. -da_facts-
    • Comment 05/31/13: Heard software groups with IBM veteran employees (management and non-management) are just leaving now. So IBM's threat of a RA by end of today for 2nd QTR has "apparently" worked to some degree. IBM even saves not giving out RA packages to those that leave for another gig. -liquid_software-
    • Comment 05/31/13: It still amazes me about some of these posts. To think that IBM HR or their executives care about employee's is a joke. To also think they fear the alliance is also a joke. If you want fear then you need 50,000 voting members. If you want them to pay attention you need maybe 5000 members. Some staff grunt is looking at the site periodically but not enough action to excite the exec's.You are all just numbers or assets without a face or family. So either join up or take what you get. IBM is a powerful company who continues to make money. The few comments here won't impact that unless you join. They all sleep well at night and they all have BOD jobs lined up after the retire from IBM. What have you got!! -benthere-
    • Comment 05/31/13: I find it sad that there are still IBM workers who question whether or not there will be an RA or if the Alliance was right in raising the warning flag. Are you friggin kidding me? IBM has been slashing jobs every year for many years and you can bet another is coming. Get your heads out of the sand. -anon-
    • Comment 05/31/13: As everyone expected, the layoffs were to be by the end of May. It has not happened. One possibility of that is due to the changes to Unemployment that goes into effect on July 1st. Starting July 1, unemployment benefits will be capped at $300 per week for 26 weeks maximum. Until then, it is based on current salaries and capped much higher. All I can say is morale is beneath the dirt. Everyone is stuck wondering. On top of that, the new salary plan will be announced shortly and it is another way to stick it to the employee. -Possibility-
    • Comment 05/31/13: There have been talks of layoffs since last September and the days just come and go with no real answers. The employees are left guessing everyday they show up for work if todays the day. The morale is so low that it is depressing to have to remain in this enviornment while we wait for the company to take action. Never getting a raise or a promotion was easier to deal with than being strung along to my dismissal. If you treated your spouse this way any therapist would recommend serious counseling. Apparently values are seriously misaligned here. -POK IBM-
    • Comment 05/31/13: It seems a lot of you never had any business education or you would not be stuck on a single date. The monies have been allocated to get rid of quite a few existing IBMers in the USA; most will not make it to 12/15/2013. They have a reserve to cover thru the end of the year; the RA exempt who will be gone on 12/31. X-Series will be gone soon: either a Sale or a Spin-Off. When the axe falls it will be very sharp and will affect all divisions. It should also be very soon. -Huggie-
    • Comment 05/31/13: I totally agree - give me 24 mos. severance, and I'd bolt out of this demoralizing cesspool of doom like a bat out of hell. How did the Dutch get so lucky? Oh yeah, that's right. The Dutch government actually protects their people. The US government protects their corporations. -Anonymous-
    • Comment 05/30/13: so all the stuff about a RA and it didn't happen (again). -annon- Alliance reply: Remember: IBM are the ones playing games with people's lives. The RA's will happen sooner or later.
    • Comment 05/30/13: Had heard today that police in fishkill and poughkeepsie and burlington have been notified there will be resource actions next week. Good luck -benthere-
    • Comment 05/30/13: Rumor has it that IBM is going to delay most of the planned RAs to 3Q. This makes sense as the X86 deal is not completed, or never will be. The 5-6 Billion from the sale would certainly fund the 1 Billion RA cost. But with the buyer only offering 2.5 billion or less and a capital value of 3.5 – 4 billion the difference is too great. Maybe the sale can be closed in the next quarter. Good luck to all. -A non mouse from 1999-
    • Comment 05/30/13: Got RAd today. So much for 10 years of work and 2+ ratings over the last 3 years. Back on the job search sites I go. Gotta feed the 3 kids. -JoeBlowInFishkill- Alliance reply: Were there others? Please send us your RA pack so we can validate numbers.
    • Comment 05/30/13: Geez, if they offered 24 months here in the US a lot of people would leave. -Anonymous-
    • Comment 05/30/13: Here in the Netherlands project mercury is started, layoff of about 140 persons this quarter. Luckly the works councel has a social paragraph signed with IBM that gives employees, depending on years of service and age, a severance package up to 24 months -dutch ibm-
    • Comment 05/30/13: Rumor has it that IBM is going to delay most of the planned RAs to 3Q, presumably because 2Q isnt looking on par and can't afford to take the serverance hit. Also, managers have started to tell employees that SIP is delayed to October. IBM using SIP savings to fund the massive RA. Great time to be an IBMer! -Ibmer- Alliance reply: IBM management certainly knows the plan and chooses to keep workers uniformed and on edge. Contract anyone?
    • Comment 05/30/13: Word in BTV is wait until 2Q results are in before announcing job cuts. With contractors gone and people retiring, that might be enough to not have layoffs right now. -anon-
    • Comment 05/30/13: Today is 30th.... and the silence is deafening. Were we all wrong about RA by May 30, giving 30 days notice for June 30 and end of 2nd quarter? Or are they giving less than 30 days notice? -15yearsandcounting-
    • Comment 05/30/13: so far so good...have not heard of any RA's in my group. I know it is supposed to happen this week. Just keeping my fingers crossed. We are already down to a skeleton crew! Will check in again at end of week. Thank you Alliance for having this board where we can share information and plan to organize. I do appreciate your efforts! -Alliance_Member-
    • Comment 05/29/13: "I asked to be RA'ed" I agree with DoNotDoIt. When I was RA'd in 2007, I learned a lot about the process. I had team members who wished it was them and one of them asked our loser manager if it could be him instead of me (speaks volumes). Anyway, what I found out during the process is that if you make it known you want to be RA'd, IBM can and will let you go without a severance package. Even though they can still layoff people without a severance if they want to, showing your cards gives them a justification to let you loose with nothing. So, bottom line, keep it to yourself, do what you can to survive or find another job. AND maybe consider joining the Alliance. -beenalongtime-
    • Comment 05/29/13: @anonymouscontractor, if you really want your stuff back, drive to your office and ask for it. I doubt your desk will be used soon, but they will consider it abandoned if you don't speak up. -be-aggressive-
    • Comment 05/28/13: we just had another talented guy quit today.. that is 3 in 4 days.. we are losing our best and brightest who say, "I'll never work there again!". Keep it up Ginni. After your 3rd bad quarter...maybe someone will get smart and fire you -anonymous-
    • Comment 05/27/13: To anonymouscontractor, First, truly sorry to hear you are going through this. Unfortunately, if you kept any personal items in a desk at a client or IBM site, you might not have access to them now. Perhaps you can ask a former colleague to retrieve them. However, you did turn in that desk key. Best wishes. -former ibmer-
    • Comment 05/26/13: I've mentioned this before, but I'll repeat it now for all the thousands who come to this web site only when RA rumors start flying... If you're angry at IBM, or if you'd like to make IBM's execs lose some sleep like they do to you, join the Alliance. IBM is completely paranoid about the formation of an IBM union in the United States. Nothing would be more upsetting to IBM execs than seeing a huge uptick in Alliance membership. -flabbergasted-
    • Comment 05/26/13: I left IBM on my own in 2007 and I am a paying member to this day. To those of you that come here and whine, how much cheese do you want ? Stop posting and be serious about not only yourself and job, but think about your family as well. I guarantee that your Manager or his or her manager doesn't give a squat about you or your family. Enough said. Stand up and be counted. -Steve Dunn-
    • Comment 05/25/13: IBM is cutting jobs again! I'm shocked! The best protection against that is a certified trade union and a collective agreement containing strict rules around downsizing. Look at the collective agreement at this link to see what an IBM Company (subsidiary) has agreed to in case of downsizing. See Article 10. http://www.cep911.org/siteimages/CBA-2011-06-20-booklet-size%20FINAL.pdf -Gary Schoenfeldt-
    • Comment 05/25/13: Recently terminated contractor here. IBM asked for their laptop, contractor badge, and desk key. I sent all that back to IBM. What do I have to do to get my personal stuff out of my former desk back to me? Will IBM have the decency to pack it up and sent it to me? I'll pay for the shipping. So far IBM has not even tried to contact me even through the contracting company. -anonymouscontractor-
    • Comment 05/25/13: IBM is failing to execute but a 1% drop in profits is about equal to Ginny's combined compensation. It makes sense that revenues are down a bit given the situation in Europe. But for a mere shortfall of 30M in a company that makes 1 billion in 30 days, the entire company is about to be turned upside-down in about 5 days, with thousands of careers coming to an end. It's not that hardware isn't profitable, it's still profitable. It's just that if profits don't grow indefinitely, Upper Management will adopt slash and burn tactics - we could all organize and see that we're all in this together. Any hiccup in profits and the company will now start burning furniture to heat the cabin. There's nothing sane happening now. But it's not too late for Joe and Jane Beemer to see the light. -Anonymous-
    • Comment 05/25/13: @ been there - oh yes, I know that my manager had a role (however small) in who gets on the RA list. As you said, he ranked his employees and did not fight hard enough when the rankings were merged with our peer departments', at the second-line level. But leaving this cesspool is something I've considered for some time anyway... -SWG vet-
    • Comment 05/25/13: Who gets tapped for RA and who actually "selected you to participate in an RA" is an "IBM secret". It is not discussed. No one will tell you who made the decision. Just like IBM salaries are. No one tells you why you make the salary or hourly pay that you do. It's all about IBM being the master of FUD. The Alliance has been with you since 1999. Tirelessly working for your benefit. When are you going to help them? It is never too late to join them. -fed_up_yet?-
    • Comment 05/25/13: "Managers don't have any input into how many are cut but they sure do have input into WHO gets cut. I heard this from my 2nd line when I got hit" .Your 2nd line has a big impact on who gets cut when your manager can't decide or agree that their employee(s) are to be cut. Your 2nd line might have actually cut you! Even 3rd lines have a say. No manager will admit who made the FINAL decision of "who stays; who goes". If you ask WHO they say it is none of your business even though you are the one being RAed as part of the business and losing a job. -da_facts-
    • Comment 05/24/13: For far too many years I have watched RA's, Rumors of RA's . Division sell offs and the like roll through this website. With the rumors folks ask lots of questions about what severance etc. With the RA's and Selloffs people scream and rant if they are affected and those that are left duck down a little lower and try to squeeze out another year. Those that are let go or decide enough already and quit come back to smugly let everyone know how good they are doing now and how everyone should just leave. Some of us have been advocating organizing since 1999. The only voices that remain consistently are the advocates of a union. Isn't it time those that are left listen to us? So far not listening has not helped you any has it? You would not be here reading every post and sweating every call from the boss if it did. Your lot in life is already cast in with your co workers. You just have not realized it yet. Why not band together with those who you are already banded together with for your own good? Otherwise I'll see you here next time sweating bullets and hoping to hang on one more time. -Exodus2007-
    • Comment 05/25/13: Anyone that works at IBM, no matter how talented, no matter how important, should always have a B, C, and D plan. I've seen far too many good people get let go over the recent years. The comments on here about the strategy of cutting to achieve growth are correct. A"good" company, regardless of its brand and people, cannot continue to cut to make the numbers. IBM hit bone with cuts a long time ago.

      Tough decisions will need to be made - will IBM dump STG for example? There is a lot of executive talk that shows ignorance -- be more like Google. Well, Google is an ad company, nothing more, and they give away free stuff. IBM isn't a consumer company. IBM isn't a bunch of nerdy kids, but a professional company that can handle professional and government contracts. It tried the whole consumer thing with PCs, OS/2 and other ventures, but failed. They are, however, good at enterprise systems. But, if the leaders of the company don't understand the difference between Google (and similar companies) and IBM, then it is indeed the Titantic heading for the iceberg. IBM will never be Google, nor should it.

      IBM still has tremendous assets and people. If the industry loses IBM, who exactly will create the hardware innovation? Non-US countries are certainly cheap at building systems, but where is the true innovation? Will we all be stuck with the horrible x86 architecture? Everyday, I walk into work not knowing whether I'll have a job or not. And, I'm actually fine with that. I do like my job, I work with brilliant people, but I'm ready. I encourage others to be ready too. It will indeed be a hardship for most of us... Moving, etc. But, the IBMers in the US I work with are among the brightest people of any company I know. People should support Alliance. I don't know that creating a union will solve the problems, but the dues are cheap and this site and the people here are doing good work. Think of it as Public Radio. Do you come here to get info? If so, you should contribute. I wish everyone the best of luck. -Anon-

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • AlterNet: How's Obamacare Turning Out? Great If You Live in a Blue State, and 'Screw You' If You Have a Republican Governor. Coverage for uninsured is cheaper than expected for millions, but red-state residents in poverty are facing pain. Excerpts: The latest sign of the Republican Party’s increasingly secessionist tendencies comes as Obamacare passed a major milestone in California, which late last week announced lower-than-expected healthcare premiums for its 5.3 million uninsured, less than many small businesses now pay in group plans. ...

    In contrast, the refusal by red-state America to create these health exchanges, which would be more local control—a supposed Republican value—and to accept federal funds to expand state-run Medicaid programs for the poor, means that about half the states are turning their backs on their residents, especially millions of the poorest people.

    The federal government plans to step in later this summer and offer uninsured people in recalcitrant red states the option of buying plans via federally run heath care exchanges. But the poorest people can’t afford that, meaning the refusal to expand Medicaid programs will leave them in the cold. They will see ads selling new federal healthcare options that will be unaffordable for them.

    TheNew York Times reports that local healthcare advocates in red states are predicting a backlash once Obamacare is rolled out and the poor realize that they cannot take advantage of it because Republicans are blocking it. However, that does not change the bottom line in state-run Medicaid programs: the GOP is again penalizing the poor.

  • Washington Post: Everything you know about employers and Obamacare is wrong. By Ezra Klein. Excerpts: For all the speculating in Washington about how the Affordable Care Act will work — much of it, I admit, from me — there’s been too little attention given to the best evidence we have on the subject: How the extremely similar reforms in Massachusetts have worked.

    Take employers. There’s real concern that companies will see the Affordable Care Act as an opportunity to drop health insurance for their employees and let taxpayers pick up the tab. For those with more than 50 full-time workers, that’ll mean paying a $2,000 to $3,000 penalty for each one, but that’s a whole lot cheaper than paying for health insurance.

    The Massachusetts reforms, if anything, were even friendlier to this sort of dumping. The penalty for employers was a paltry $295 per worker. Compared to the average cost of an employer-provided health plan in the Northeast — $17,099, according to the Kaiser Family Foundation’s 2012 Employer Health Benefits Survey — that’s a pittance. It seemed almost irrational for employers to keep offering coverage.

    “The benefits we were giving guys who left employer-sponsored insurance were way more generous than what the federal plan gives them,” says MIT’s Jonathan Gruber, a health economist who helped design the Massachusetts reforms. “And we didn’t have much of an employer penalty. I predicted employers would drop coverage.”

    But they didn’t. To Gruber — and everyone else’s — surprise, employers expanded coverage. “In the seven years since Massachusetts enacted its law,” says a new report from PricewaterhouseCoopers, “the number of people covered by insurance through the workplace increased by about 1 percentage point, running counter to the rest of the nation, which saw employer-based insurance decline by 5.7 percentage points.” ...

    Employers offer health insurance because employees demand it. If you’re an employer who doesn’t offer insurance and your competitors do, you’ll lose out on the most talented workers. An employer who stopped offering health benefits would see his best employees immediately start looking for other jobs. That was true before the Massachusetts health reforms. And it turned out to be even truer after them.

    PricewaterhouseCoopers found that Massachusetts’s individual mandate had two unexpected effects. First, it led to a lot of employees signing up for employer-based coverage they’d previously rejected. “About a quarter of the uninsured are offered employer-sponsored insurance and don’t take it,” Gruber says. “If the mandate will affect anyone, it will affect those guys.”

    Second, it led some workers to march into their boss’s office and ask for insurance. The study notes that “the percentage of small employers offering coverage in Massachusetts rose from 45 percent to 59 percent between 2005–2011,” even though insurance premiums actually rose for small employers.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"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.

  • Alternet, courtesy of Smirking Chimp: How America's Retirement Crisis Is Crushing the Hopes of a Generation of Young People. By Joshua Holland. Excerpts: The crucially important but largely missing context of today's debate over so-called “entitlement reform” (read: slashing Social Security benefits and shifting more healthcare costs onto seniors) is that we stand at the early stages of what's shaping up to be a massively painful retirement crisis.

    And while there has been a longterm project among granny-bashing “entitlement reformers” to fuel a sort of intergenerational class warfare by accusing "greedy geezers" of hurting young people's prospects, the reality is that this growing retirement crisis is hurting not only older workers and retirees, but also the newest entrants into the workforce, a generation of young Americans whose prospects are far bleaker than those enjoyed by their parents. ...

    How does this hurt younger workers? As it becomes more and more difficult to retire after busting one's ass in the American workforce for 40 years, an increasing number of older people have no choice but to remain in the workforce. Some work part-time; because of age discrimination, others take whatever jobs they can get, even if they're wildly overqualified. According to the Social Security Administration, “the labor force participation rates of men and women aged 62–79 have notably increased since the mid-1990s.” ...

    Today, the unemployment rate stands at 7.5 percent, but almost 23 percent of 18- and 19 year-olds and more than 13 percent of 20- to 24-year-olds who want to work can't land a job. (The unemployment rate for those aged 55 and up is 5.5 percent.)

    Again, this is the context that's largely missing from our endless debates about fiscal policy. It points to a rather obvious conclusion: we should be increasing Social Security benefits, decreasing the out-of-pocket healthcare costs seniors have to shoulder, and lowering the minimum age for retirement. In short, we should be focusing on policies that make it possible for older workers who have put in their time to kick back and let some younger workers find jobs. It wouldn't be a magic bullet for young people; it wouldn't deflate the student debt bubble or address our crushing level of income inequality, but it would be a darn good start.

  • The Fiscal Times: Even Reagan Couldn’t Pass GOP Purity Test, Says Dole. By Eric Pianin. Excerpts: “Reagan couldn’t have made it,” Dole said during an interview on “Fox News Sunday,” adding that he, too, would probably be deemed too moderate and unacceptable by today’s Tea-Party conservative standards. “Certainly, Nixon couldn’t have made it, ’cause he had ideas,” said (Bob) Dole, a decorated World War II veteran who overcame serious wounds to go on to a highly successful career in politics.

    Dole said partly leaders and activists need to take a breather and rethink their whole strategy for rebuilding the GOP. “I think they ought to put a sign on the national committee doors that says, ‘closed for repairs’ until New Year’s Day next year. Spend that time going over ideas and positive agendas,” Dole said.

  • New York Times opinion: The Wisdom of Bob Dole. Excerpts: Bob Dole no longer recognizes the Republican Party that he helped lead for years. Speaking over the weekend on “Fox News Sunday,” he said his party should hang a “closed for repairs” sign on its doors until it comes up with a few positive ideas, because neither he nor Ronald Reagan would now feel comfortable in its membership. ...

    The difference between the current crop of Tea Party lawmakers and Mr. Dole’s generation is not simply one of ideology. While the Tea Partiers are undoubtedly more extreme, Mr. Dole spent years pushing big tax cuts, railing at regulations and blocking international treaties. His party actively courted the religious right in the 1980s and relied on racial innuendo to win elections. But when the time came to actually govern, Republicans used to set aside their grandstanding, recognize that a two-party system requires compromise and make deals to keep the government working on the people’s behalf.

    The current generation refuses to do that. Its members want to dismantle government, using whatever crowbar happens to be handy, and they don’t particularly care what traditions of mutual respect get smashed at the same time. “I’m not all that interested in the way things have always been done around here,” Senator Marco Rubio of Florida told The Times last week.

    This corrosive mentality has been standard procedure in the House since 2011, but now it has seeped over to the Senate. Mr. Rubio is one of several senators who have blocked a basic function of government: a conference committee to work out budget differences between the House and Senate so that Congress can start passing appropriations bills. They say they are afraid the committee will agree to raise the debt ceiling without extorting the spending cuts they seek. One of them, Ted Cruz of Texas, admitted that he didn’t even trust House Republicans to practice blackmail properly. They have been backed by Mitch McConnell, the minority leader, who wants extremist credentials for his re-election. ...

    Already, the mulish behavior of Congressional Republicans has led to the creation of the sequester, blocked action on economic growth and climate change, prevented reasonable checks on gun purchases and threatens to blow up a hard-fought compromise on immigration. Mr. Dole’s words should remind his party that it is not only abandoning its past, but damaging the country’s future.

  • Washington Post: U.S. trails Europe on paid vacation time. By Howard Schneider. Excerpts: Oh, to be Austrian. On a weekend when thoughts officially turn to summer, fruity cocktails and ways to skip work, it is an apt time to remember: Not everyone is able to laze around on Memorial Day. Or looking forward to a vacation at all. Or getting paid for whatever time off they do receive.

    In its latest update on vacation and holiday rules among developed countries, the Center for Economic Policy and Research notes that the United States remains alone as the only rich nation without legally mandated vacations for employees, and with no requirement that official holidays come with extra pay and a compensating day off.

    The closest (miserly) competitor is Japan, where workers are guaranteed at least 10 days off with pay. The Austrians may be all about northern European frugality, but their paid time off tops the heap: 22 vacation days, 13 holidays, and a month’s pay to help with vacation expenses. And if you hang around a place for six years, you can swing 49 days off with pay. If you count weekends, that’s 153 days off vs. 212 days of work in a year – or a goof-off-to-work ratio of .72.

  • Salon, courtesy of AlterNet: Do CEOs Have Any Shame? They're Firing Workers and Giving Themselves Raises. Author George Packer's "The Unwinding: An Inner History of the New America" gets to the bottom of the question. By Dan Oppenheimer. Excerpt: “If you were born around 1960 or afterwards, you spent your adult life in the vertigo of that unwinding,” writes Packer in his prologue. “You watched structures that had been in place before your birth collapse like pillars of salt across the vast visible landscape — the farms of the Carolina Piedmont, the factories of the Mahoning Valley, Florida subdivisions, California schools. And other things, harder to see but no less vital in supporting the order of everyday life, changed beyond recognition — ways and means in Washington caucus rooms, taboos on New York trading desks, manners and morals everywhere. When the norms that made the old institutions useful began to unwind, and the leaders abandoned their posts, the Roosevelt Republic that had reigned for almost half a century came undone. The void was filled by the default force in American life, organized money.”
  • Reuters: Top U.S. tax breaks to cost $12 trillion over decade, benefit wealthy: CBO. By David Lawder. Excerpt: The top ten tax deductions, credits and exclusions will keep $12 trillion out of federal government coffers over the next decade, and several of them mainly benefit the wealthiest Americans, a new study from the Congressional Budget Office shows.

    The top 20 percent of income earners will reap more than half of the $900 billion in benefits from these tax breaks that will accrue in 2013, the non-partisan CBO said on Wednesday.

    Further, 17 percent of the total benefits would go to the top 1 percent of income earners -- families earning roughly $450,000 or more. The same group that was hit with a tax rate hike in January.

  • Smirking Chimp: A Vision for Social Security. By Richard Eskow. Excerpts: Social Security benefits lag far behind those of other developed countries. A new analysis of census data shows that elder poverty is much higher than we first realized. And yet the discussion in Washington is of cutting, not expanding, it. The number of impoverished seniors would rise sharply if that happened, or if the Medicare cuts currently under discussion became law.

    The numbers say that Social Security should be increased, not cut, and most Americans agree.

    But the Social Security cutters, financed by billions and aided by their network of powerful friends in government and the media, are appealing to the human heart. That's a bitter irony for a policy prescription that even their own consciences must recognize is heartless. ...

    The Social Security Cutters are funded by hedge fund billionaires, major Wall Street bankers, and defense contractor CEOs. Their spokespeople include a handful of economists whose views get disproportionate attention, thanks to the money behind them, along with a hefty chunk of Democratic "centrists" whose policy prescriptions on Social Security are to the right of most Republicans.

    The funders' motives are clear: Cutting Social Security would lead to more funds under Wall Street's management. It would also lead to less public pressure to tax ultra-wealthy individuals like themselves.

  • The American Prospect, courtesy of AlterNet: Want the American Dream? Get Rich Parents or Move to Canada. In a tough economy with dwindling social supports, children of privilege have a bigger head start than ever. By Chuck Collins. Excerpts: Two 21-year-old college students sit down in a coffee shop to study for an upcoming test. Behind the counter, a barista whips up their double-shot lattes. In the back kitchen, another young adult washes the dishes and empties the trash.

    These four young adults have a lot in common. They are the same age and race, each has two parents, and all grew up in the same metropolitan area. They were all strong students in their respective high schools. But as they enter their third decade, their work futures and life trajectories are radically different—and largely determined at this point.

    The culprit is the growing role of inherited advantage, as affluent families make investments that give their children a leg up. Combined with the 2008 economic meltdown and budget cuts in public investments that foster opportunity, we are witnessing accelerating advantages for the wealthy and compounding disadvantages for everyone else.

    One of the college students, Miranda, will graduate without any student-loan debt and will have completed three summers of unpaid internships at businesses that will advance her career path. Her parents stand ready to subsidize her lodging with a security deposit and co-signed apartment lease and will give her a no-interest loan to buy a car. They also have a network of family and professional contacts that can help her. While she waits for a job with benefits, she will remain on her parents’ health insurance.

    Ten years later, Miranda will have a high-paying job, be engaged to another professional, and will buy a home in a neighborhood with other college-educated professionals, a property that will steadily appreciate over time because of its location. The “parental down-payment assistance program” will subsidize the purchase.

    The other collegiate, Marcus, will graduate with more than $55,000 in college debt, a maxed-out credit card, and an extensive résumé of part-time food-service jobs that he has taken to pay for school, both during summers and while in college, reducing the hours he can study. Though he will obtain a degree, he will graduate with almost no work experience in his field of study, lose his health insurance, and begin working two part-time jobs to pay back his student loans and to afford rent in a shared apartment.

    Ten years later, Marcus will still be working in low-paying jobs and renting an apartment. He will feel occupationally stuck and frustrated in his attempts to network in the area of his degree. He will take on additional debt—to deal with various health and financial problems—and watch his hope of buying a home slip away, in large part because of a credit history damaged during his early twenties.

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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