IBM encountered a number of issues with the development of the application, including ensuring that the downloadable software would work on Linux and Mac. In an executive report on the outstanding issues released in August 2007, the ATO was also concerned that the Workplace Forms system would not be able to handle 20,000 users accessing the online E-tax application at the same time. ...
The initial contract was worth AU$769,999.59 to IBM. The documents have been censored to remove the amount proposed for the ATO to pay IBM for the work it had done up until the end of the contract. ZDNet has asked the Australian Taxation Office for additional detail on how much IBM was ultimately paid for this failed contract.
In the UK, IBM will continue to work directly with just 23 to 27 accounts, Stephen Leonard, general manager global markets for IBM's Systems and Technology Group, is understood to have told the 50 or so assembled partners. ...
While IBM will not force all other UK customers to buy direct, its sales staff will no longer bag any commission unless they work with resellers on these accounts. A programme that will see dedicated sales and technical headcount sell with each partner is also being launched.
The handover should slash IBM's cost of sale at a time when the vendor juggernaut is looking to reduce its wage bill.
After 39 years and 40 days, it's Findlay's final day at IBM. It's the only career he's ever known in a job he loved, working as an electrical engineer. He was laid off 30 days ago.
That would have been unheard of in my 30 years at the company. We did everything management asked of us. Perhaps management isn’t asking or leading the way it should. A complaint to the president, the chairman of the board or the CEO all goes to the same person — the one who decided the best way forward is to continue laying off more employees.
What degree of loyalty is she entitled to from those remaining behind?
How the mighty have fallen — with a $17 million paycheck to show for it and very little to complain about too. Bob Ulrich, Poughkeepsie.
(Note: The web is crawling with posts and news about the latest IBM bloodbath and what it all means for the tech biz, not to mention "a smarter planet." This is not one of those posts. Rather it is a snapshot of a boomer's initial reaction to it. )
This week, after almost 15 years masquerading as an IT marketer and good corporate citizen, happily reaping the financial benefit, I was "resourced" (IBM parlance for "laid off"), along with 12,000 others around the globe. And even though working for a giant corporation requires more patience and endurance than skill, to get the axe at 58 does not exactly feel like that golden opportunity to go do what I've always wanted to do. Truth is, thanks to the stability provided by the corporate gig, I used my down time to do exactly what I've wanted to do for many years. ...
Becoming another boomer stat today may be better than having been a boomer stat on the Mekong in 1969, but it still doesn't feel very good. Ageism is not only real, it's natural. If I were to sit across a desk and tell a 30-something interviewer that I cut my teeth on SEO, they would know that the term wasn't even invented until I was in my fifties. And when I pulled out my best Travis Bickle and asked my interviewer "Are you talkin' to me?" and they responded with an "of course, who else would I be talking to?" I might shake my head: it IS an old movie, right? Then, just for the fun of it, since I would know that the next stop was the lobby, I might lean forward over the desk, adjust my dentures, clean my glasses, cup my ear, say "Speak up, will ya sonny?", then fart as only a 58-year old male can, and head home to my La-Z-Boy.
Within months of Jetter's arrival, IBM Japan fired a group of workers deemed to be underperforming in the kind of restructuring common in many Western countries but rare in Japan, where the most sought-after jobs have carried a promise of lifetime employment.
International Business Machines is now being sued for wrongful termination in what is shaping up as a legal test case in one of the most divisive and politically charged issues facing Prime Minister Shinzo Abe - whether to make it easier for companies operating in Japan to fire workers. ...
Jetter, a German national and the first foreigner to head IBM Japan in nearly six decades, pushed ahead with a restructuring that led to the firing of more than two dozen IBM employees who were judged to be underperforming, union officials say. Five workers are suing IBM for wrongful termination.
IBM declined to comment specifically on the court case or make Jetter available for an interview. But in a statement, it said that as a company investing in growth areas, such as big data and cloud computing, "we need to remix our skills within the context of a high performance work culture". ...
The IBM case has garnered attention in part because union officials say the company is targeting union members who have received below-average appraisals and giving them short notice to chose between resigning with a payout or being fired.
While it is not uncommon for companies in Japan to manage out poorly performing staff, it is rare to do so in groups at the same time. According to JMIU, IBM has fired 26 union members since Jetter took the helm, including a dozen last month.
The new Morocco Global Delivery Center will offer IBM clients in the region high value application development, application maintenance and systems integration services. It will address the increasing demand for flexible software capability to harness the benefits of emerging technologies such as big data, cloud and mobile. IBM is working closely with the Moroccan government and local universities, and the Center is expected to help stimulate economic activity in the country.
It seems, to me at least, with 31 years @ IBM, that getting the axe is much more financially lucrative(severance package, unemployment, COBRA, etc.), although I'd lose control of the when, but still get the pension and FHA.
Am I missing something, or is this the case ? Appreciate any insight. Thank you.
Yes. I got the severance, I got 4 more years of salary minus the 'adjusted for additional compensation' which never materialized, and best of all, I got to tell off my horrific manager.
It takes a strong stomach and an iron will, bill. If you have both, if your job isn't hell and if IBM doesn't change the rules as they've done so many times before, then by all means, stick it out. Good luck.
IBM can't force retirement on you.
Don't believe them when they say you worked your 30+ years and are retired in their eyes. Take the RA package, severance, and if you can look for another job, and collect your unemployment, if you are entitled to it. Forget any IBM advice or pressure.
If you do what IBM wants you to do to save them even a $.01. LIFE IS NOT GOOD for you. Believe me. That $.01 will go to the EPS or find its way to some IBM executive's pocket.
Maybe if USA state's see they are burdened with increased unemployment benefits because of IBM inane RA actions they might ask IBM what is really going on? The state's should charge IBM more for UI insurance premiums.
The more people a company fires, the worse their experience rating becomes and the higher their premiums go.
Whatever the state pays out to a person receiving UI benefits, the state recovers rather quickly - typically within a year or two - through higher premiums.
If you are fired from IBM and decide not to sign up for UI, you are doing IBM a favor by helping to keep their rates down!
You have to write a letter (I didn't craft mine, a good friend did) telling them that dear old sweet IBM stopped pension contributions, yada yada, and bob's your uncle, you get your UI.
IBM would LIKE people to just go away quietly after the first 'no you can't'. Hah.
If not you may as well wait to get tossed out - but keep your eyes out for new employment opportunities in case you need to keep working if you left soon. Keep your resume polished up and have a plan in place in case you get the ax. Will you have to sell your house ? Keep it in reasonable selling condition.
Prepare your spouse for the possible changes. Explain what may play out if you have 6 months severance.
If you are over 55 - you can withdraw from your IBM 401K without penalty; remember that. You still are taxed on the money but no penalty if you can retire from IBM and have it in the IBM plan still.
Your mileage may vary. In my case, my mental health was at such a low level I'm not sure I could have held out much longer. (I was just short of 35 years when I left.) The difference in the pension is negligible, since you're no longer earning any pension credits. (I'm assuming you're a "second choicer", as was I.) In fact the early retirement incentive actually makes it better if you retire as soon as you can. But then, the year's worth of medical and half-year's salary with an RA makes it worth waiting.
In my last few years, I took on an attitude of "I really don't give a s*** about IBM...ignoring things like billable hours targets and the like. That was liberating. I still cared deeply about my clients, which, of course, IBM GBS generally didn't...they were interested only in the money. And, I had the luxury of having management that knew exactly how I felt, and didn't give me crap about it.
I have no idea whether IBM will allow us to use FHA money to buy insurance from an exchange (which is heavily subsidized for moderate and low income people) or whether they will allow you to buy it only from them. I figure that if they won't allow us to use FHA money to by ACA insurance that I'll save it for supplemental Medicare insurance when I'm eligible for Medicare. (I'm 58 now.)
The "I've got mine" set of older IBM retirees that are under the "old plan" are paying a lot more for insurance now, but nothing like the $1,500 to $1,800 per month for a couple that we second choicers are faced with. (And, we future hell account people are in better shape than the "you don't get anything" crowd.)
The ACA makes it possible to retire early, before Medicare eligibility. It makes it possible for someone that wants to become an entrepreneur to leave a corporate job. It angers me to see the disinformation campaign waged against it. The ACA was a major factor in my decision to get out of IBM while still fairly young.
Another option is to try to get permanent residency in Canada. My son went to university in British Columbia and stayed there to work. He was required to pay into the B.C. health plan while going to college (as area all residents, whether citizens or not), and has now been working in B.C. for the past three years. He pays $60 per month, sees any doctor he wants, never fills out a form, never sees a bill, never pays a deductible. It's the same cost for someone my age as it is for my son, who is in his twenties. I have a lot of Canadian friends and acquaintances. I've never met anyone that would trade their medical system for ours. They all think we're crazy. I agree with them.
A well-placed source whispered the news to The Register that Monshaw's departed IBM within the last fortnight. Monshaw's LinkedIn profile also reflects the departure, noting his employment at IBM under the "Previous" category, and his most recent IBM position as ending July 2013 - instead of being listed as "Present".
A selected reader comment follows:
That XIV abomination was the only smart thing IBM has done in enterprise storage since the 70's. It was a real chance to be relevant again and they completely blew it. The DS dinosaurs managed to finally kill it after years of sabotage, duplicity and out right unethical behavior. IBM Senior Management also assisted by ignoring their own consultants and their own recent success and re-created the model that failed for 30 years. They delivered the final blow by systematically squeezing compensation, changing agreements or flat out refusing to pay anyone related to XIV.
The facts are the facts and the numbers speak for themselves; significant gains in real market share in accounts they had not seen for decades. Winning deals against the market leaders in real accounts on the merits of the technology. But a not invented here bias and the realization that they could not compete with the talent levels of real storage professionals caused their cowardly and shameful reaction. So now they have placed the blame on Andy Monshaw. How perfectly played Tuscon, perfectly played.
In the downgrade report Goldman Sachs analyst Bill Shope comments, "Our Buy rating on IBM has been largely based on our view that the company's business model provides a unique source of counter-cyclicality during periods of volatile IT spending. Unfortunately, we believe that pressures on IBM’s growth markets and higher-margin revenue streams may intensify in the near term, weakening some of the key sources of IBM's earnings and cash flow resiliency in coming quarters."
Selected reader comments follow:
"Unfortunately, we believe IBM's growth markets have a reached a period of stagnation, with constant currency (revenue) growth of only 1% in Q1, 2013. ... Our concern is that the weakness may persist through much of 2013," Shope wrote.
Under the 10-year contract, IBM will provide contact centre and back-office services for the airline's 11 lines of business such as domestic and international reservations, Jet Privilege program, cargo, refunds and helpdesk services. The arrangement is an extension of their three-year relationship under which Jet says the IBM helped transform its core IT Infrastructure.
This whole happy world came to an end about 20 years ago when 'outsourcing' to places where things could be made cheaper or software written cheaper upset the whole system in EVERY country. Factories were closed and work outsourced as easily in Scotland as in Poughkeepsie ( perhaps more quickly in Scotland, or France - while somebody buying IBM products in Italy now found they came from the US or Mexico - at least for a few years while IBM kept jobs going there).
A backlash for people like me was that IBM in the US also decided that 'what we do in the US is what we'll do world wide so, for example, pension funds which were 50% built up by employee contributions in UK (normal UK practice) were 'raided and transferred into IBM's bottom line - when it wasn't even their money! (The legal shenanigans are complicated and ongoing, but we'll never get OUR money back). In the US the pension funds WERE built with IBM's money but they don't want to recognise that distinction.
To answer the question 'how many jobs should a country have?' my answer would be ' as many as the market in that country supports - i.e. sell $300M of kit - then make $300M of kit in that country OR 'contribute 20% of IBM's design work'- have 20% of the design jobs.
If, in today's world India contributed 50% of IBM's revenues then it could be argued that 50% of IBM's jobs should be there - but sadly that is not the way it works any more. And IBM's bean counters have changed many other practices too, with sleight of hand that is not seen by many.
For example, had I become a teacher or a civil servant in the UK, or even an employee of a leading UK company, instead of giving half my life to IBM, I would have an inflation-proofed pension and be benefiting from all those years of contributing 5% or 6% of my income to a a 'pot' which in my case, IBM stole and I'd be at least 50% better off today. (Yes we had contributory pensions - not the non-contributory arrangement that US IBM-ers had - and no IBM health coverage in old age - we paid for health coverage through taxed contributions called 'National Insurance')
We used to say we did it all for 'The widows of America' (the stockholders) but increasingly it's also obvious that what we did benefited the US IBM top brass even more than those widows.
Several of my U.K. friends were deeply impacted by these changes and had the same reaction as we did in the U.S. Pete.
PayScale, a company based in Seattle, has determined that the median age of workers at many of the most successful companies in the technology industry, along with information on gender and years of experience.
Just six of the 32 companies it looked at had a median age greater than 35 years old. Eight of the companies, the study said, had median employee age of 30 or younger. Women were generally less than 30 percent of the work force, and in fields like semiconductors, represented much less than that.
While the results may affirm a widely held hunch, they are nonetheless striking: According to the Bureau of Labor Statistics, the overall median age of American workers is 42.3 years old. The company with the oldest workers on the PayScale list, Hewlett – Packard, came in at 41 years.
The other five companies with older workers, in descending order of median age, were I.B.M. Global Services (38 years old), Oracle (38), Nokia (36), Dell (37) and Sony (36).
The seven companies with the youngest workers, ranked from youngest to highest in median age, were Epic Games (26); Facebook (28); Zynga (28); Google (29); and AOL, Blizzard Entertainment, InfoSys, and Monster.com (all 30). According to the Bureau of Labor Statistics, only shoe stores and restaurants have workers with a median age less than 30.
Cons: * The pay is significantly lower than market. * No raises. * For every single person who's actually doing work, there are 30 managers studying charts and graphs of their performance. * No career growth opportunities (unless you want to be a manager). * I make less money every year; I know this sounds like hyperbole...I actually make LESS every year. * They monitor their employees' email, chats, web browsing, and social networking activity. * No loyalty to their staff. If they can find someone (anywhere in the world) willing to do your job for a dollar less, they will cut you lose without a second thought. * The only thing management seems to care about is the stock price. They care very deeply about the stock price.
Advice to Senior Management: Retain talent. All your skilled employees leave because (a) pay cuts; (b) benefit cuts; (c) constant threat of mass layoffs; (d) constant threat of off-shoring. You have an army of managers. Do you really need so many managers? No, I would not recommend this company to a friend.
Cons: Ridiculous policies for performance reviews (PBCs). Perfectly good people get low reviews and great people get passed over for top ratings because they follow an algorithm instead of honestly rating work. Top execs do not value their employees. Very little training/investment in employees. Changed the 401K match to yearly matching so they can freely lay off people and save $$. Do not allow much transfer between departments.
Advice to Senior Management: Stop trying to boost your profits by laying people off, instead try growing business. Stop the sneaky practices like finding ways to deny raises, 401Ks, and bonuses. Just do away with the bonus and give fair reviews if the money is something you do not want to spend. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: Benefits decrease as work load increases, and pay grade stays the same. Sink or swim attitude—top management does not give good direction or positive motivation. "Figure it out yourself, because I don't know the answer either. " - Direct Manager
Advice to Senior Management: The most successful leaders know how to do the jobs themselves but delegate to improve all aspects of productivity and team work. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: Often times IBM is their own worst obstacle to success. Frequent layoffs mean increased work loads in a depressing atmosphere. Too many layers of upper management. Employees not valued for their contributions. C-level executives often more focused on their own career than the health of the company.
Advice to Senior Management: IBM was once a company who understood, long term profitability and value is not achieved by hiring a bunch of Harvard MBAs to maximize next quarter's profits, but is based on the common sense formula of: keeping expenses low, putting the customer first by fulfilling their needs with best in class products, and exceeding their expectations with world-class service. An organization that realizes good things happen when they maximize their employee's productivity, commitment, and loyalty through clear goals and objectives, honest and honorable dealings, trust and autonomy to take risks and make decisions, respect, fair wages, good healthcare and benefits, and continuing education and development.
Since Lou Gerstner, who arguably saved the company, the culture of Think and Respect for the Individual has dwindled to a shadow of what it once was. The current CEO Virginia Rometty and most C-level execs are out-of-touch salesmen, focused solely on next quarter's sales numbers, and understanding little of what it takes to create great products and services. In a recent conference call to employees, Ms. Rometty blamed IBM's 1Q13 drop in earnings on employees for being "too slow". Ironic, when you consider IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The plan which assumes the primary method for accomplishing this feat is reducing the US employee head count by 78 percent. In my opinion, this is the mark of the poorest kind of leader, and does not bode well for IBM's future.
My advice, decide what kind of company do you want to be: a top heavy, minimally staffed organization, focused on solely share price, or an innovator and leader in creating products and services, who cares for the contributions of their employees and is focused on long term steady growth. No, I would not recommend this company to a friend.
Cons: There appears to be little if any balance between long term growth and quarterly results. With the recent Resource Action (i.e., layoff) many essential people and roles were eliminated. One of the most extreme and ludicrous examples was the recent elimination of its Small Business Program Office in the IBM US Federal Organization—at a time that the US Government has declared its increased and expanded focus on small business content in federal acquisitions of solutions (products and services). Not exactly the right message to the government and even more negative to the small businesses who could think about working with IBM ... "the baby went out with the bathwater with this decision".
Advice to Senior Management: With the self proclaimed clout that IBM has, it should attempt to rise above the quarterly death march for numbers and take a world leadership position changing the measure of what a successful organization for the future should be like. Beating on people to sell things vs. solving problems is not the formula for success. No, I would not recommend this company to a friend.
Cons: No rewards, no recognition, constant paranoia about future layoffs, lack of strategic direction, too many conference calls, work overload, short term focus, no career management except for the very few elite.
When I started at IBM 15 years ago it was a decent place to work. I have always thought that IBM does not focus on training employees enough and the pressure is placed on the individual to get up to speed, whether it be on software applications, internal systems or IBM's products and services. Fortunately I am a quick study so I always muddled through the learning curves.
Over the past 3 years IBM has become an intolerable place to work. Upper management is focused on quarterly results and does not outline any strategic vision or direction. It is left to the senior individual contributors to try to figure out what to do and how to prioritize the dizzying workload. There is a constant paranoia over future layoffs and management almost seems to "enjoy" the power that the fear creates. Unfortunately for my co-workers and IBM customers the fear creates a very inefficient and unproductive work environment.
The company is run via SameTIme (instant messaging) and conference calls. It is not unusual to be on 8+ hours of conference calls a day and it is frowned upon if you decline a conference call. Rarely are agendas sent out in advance or conference calls summarized with action items, so everyone spends all day on the phone and on email/SameTime without much meaningful work getting done.
This "ADD" culture seems to be encouraged while thoughtful problem solving seems to be discouraged. At a company whose slogan for many years was "THINK" I can tell you that there isn't much thinking going on except about how to cut costs and move jobs overseas.
Advice to Senior Management: Focus more on people and not just on quarterly result. The brain drain will catch up to you eventually. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: Exasperating organizational infighting and agendas are to be expected within this vast company, despite a facade of collaboration. I wish it seemed genuine. Workload increasing too steadily to work on career advancement. Seeing I will have to sell my work-life balance to reach the next level. Fear I'll be politely shuffled out the door in 10 years anyway, for costing too much.
Advice to Senior Management: Open your eyes to what's going on among your areas. It might not be beneficial to the company as a whole. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
Cons: Benefits are overpriced, lack of raises, bonuses declining, morale is bad. Healthcare insurance exposes employees families to $24,000+ risk(s) a year!
Ask IBM how much healthcare+dental/plus+vision will cost you and your family each year! (And pray your family doesn't get sick while working for IBM.)
The IBM PPO family (2 adults + 4 kids) (80/20) healthcare+dental+vision cost me over $10,144 a year with individual $1.1K deductible, $7.4K max in-network and $13.5K out network! (such a deal!)
I've easily paid IBM (self-insured) over $50K in healthcare premiums in the last ten years, not to mention thousands to doctors and hospitals copays. Sure if your spouse works you can put the family on the spouse's plan.
IBM hasn't given the employee(s) a "bone" in over 10 years! You won't find IBM on any 100 best lists for the employee.
Advice to Senior Management: Get a backbone and stand up to the IBM execs making IBM a dreadful place to work! I'm so glad to have escaped! No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: I have seen these phenomenally intelligent and driven people quit and get laid off by the scores in accordance with the 2015 roadmap. The onset of “matrix management” and other fad management procedures cripple the innovative foundations of the microelectronics group. IBM does not want to “produce” competitive microelectronics anymore. They are focusing on software and services. However, I believe that this is still a great company for software engineers, and project managers. I would warn against IBM for electronic/chemical engineers (USA).
Advice to Senior Management: You need to establish what market you want to be in, and pursue it to dominate. Leverage your resources and people. Half-in is a waste of money and time. You can get much more value from the employees with effective, efficient management rather than move the poor management techniques offshore to confuse a low cost center.
Read “Out of the Crisis” by Demings, and maybe some of Robert Suttons books on management.
No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
The consultants are extremely nice, helpful, and intelligent people. At a project site, you're likely to really enjoy the team that you've been designated to work with. There are many higher level consultants that are happy to mentor and help your career. In other words, anyone who is a worker bee for IBM will be helpful and kind.
The diversity of clients is great and the range of work from one client to another is incredible. You will have the opportunity to work with a lot of different people, doing a lot of different things.
Cons: It is a generally ubiquitous notion amongst all of the consultants that we're all subjected to administrative torture here at IBM. There are long, tedious, and extremely confusing administrative processes that every employee has to undergo every year. It takes a severe cut of time out of your work week just to understand how to follow these processes according to protocol. If you don't comply, you'll be in trouble. The deployment managers, the people who are designated to help you through these confusing processes, form a band of unhelpful, condescending, self-important, administrative police officers who slap you on the wrist if you have any "stupid" questions. They assume that you should already know how to navigate the system and are rude if you ever ask for help.
There is completely no respect for the worker bees. It is simply not good enough to just work long hours at the client site and make sure your client is happy. You are expected to put in your personal time on weekends as well to bring more value to the company. During year end reviews, if you have not put in this extra effort, you will not be given a higher rating.
The level of technology that we work with on a day-to-day basis is stuck in the 2000s. This should be a source of embarrassment for IBM, a once leading technology company. Expect to still work with programs like Microsoft Office 2003.
Advice to Senior Management: There should be more respect for the lower level consultants. The deployment managers are very condescending and disrespectful. They treat us like they're herding a bunch of children.
The rating system is completely inaccurate at capturing a consultant's true productivity. Employees are being penalized at no fault of their own.
Overall, the company behaves like a stereotypical large corporation. Cold, no contact from upper management who make large bonuses off of the time that we bill at the client site, a sea of bureaucracy, and slow to change and upgrade technology.
No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: - People don't generally speak their mind and keep their head down hoping to avoid being cut. - I've noticed a lot of areas of the business are understaffed and the now remaining staff are really under-appreciated. - Incredibly secretive around a lot of organizational moves and not sure why? If all these cuts and moves are such great strategies and a win for the company then why would they not be discussed openly? Are they trying to stem a brain drain after endless North American cuts? When you try to keep a secret, trust always suffers. - There is some focus on inflexible and burdensome processes that will kill this company. - The morale seems to be at an all time low as the perception is that most people in North America are marking time waiting for their Business Unit to be off-shored and/or heavily downsized. - Most technical work is contracted out and there seems to be endless amounts of process people such as PMs, Architects, DPEs and liaisons, lawyers, and relationship managers.
Advice to Senior Management: The small things are missing: staff appreciation, communications from management about important issues like layoffs and even a simple thank you for jobs well done or being helpful. Courtesy costs nothing.
As you jettison a lot of legacy knowledge in some of the more specialized BUs, management fails to arrange proper succession planning to pass on some vital info. Major fail.
I'm not sure you can run a company that is a long-term success where the attitude of a lot of execs and management seems to be 'Hey, you should just be happy to have a job, that should be reward enough. Now shut up and get back to work!' Don't you think that workers see how staff are treated at other companies in the area of the various offices in the GTA? It's a stark contrast.
The EPS Roadmap to 2015 may be a management focus, but most employees just don't care and it seems strangely demoralizing. People will only really discuss what's going in hushed tones in their trusted cliques. They want to work in an environment that isn't toxic—you need to fix that. The community of technical workers isn't really as big as most people think and word of mouth can be a powerful thing.
No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
Cons: In the past we didn't loose good people over a single bad quarter. The company simply isn't what it used to be there is little consideration for loyalty. The action they are taking will irreparably damage the IBM brand because it will be impossible for those of who are left to handle the work that is required to keep our product viable in the market place.
Advice to Senior Management: I am seeing people who I've worked with and relied on for years let go. I drop by their offices and they are no longer there and their expertise is required. So something that I could get the answer to in a 5 minute chat will now take me several days to research myself. I think this is very unproductive because the person(s) who now takes over that role just does not have the experience or the expertise to do the job in a timely manner. The management team needs to make sure the executives understand this.
Cons: Mediocre middle-managers. Some major, expensive technical decisions made to advance personal careers at the expense of the company. If you are not in a 'hot' area (currently anything with 'analytics' in the title) then it's challenging to get funding, and without money, life becomes grim, even if the area is profitable or essential for other areas. In the last 8 years it has increasingly felt like the Soviet Union, where fear becomes a primary motivational tool. Managers are easily fooled by ambitious employees. Your time is better spent working on some minor (and typically low-value) project that helps the manager than actually improving the product, or fixing customer problems.
Advice to Senior Management: Apply the same rigor to yourselves as is applied in PBC period to the developers. When someone declares victory over an expensive project, actually dig in and see if the emperor is wearing any clothes. No, I would not recommend this company to a friend.
So I thought perhaps California police officers, teachers, firefighters, and other public employees could finally exhale. I hoped we could finally enjoy relief from daily attacks for the modest pensions we count on for retirement security.
Unfortunately, that’s not the case. Far from it.
For more than five years, pensions have been used by critics as the scapegoat for all of government’s budget problems. But now that the California Public Employees’ Retirement System (CalPERS) and other pension systems are healthy and yielding double-digit returns, they’re not getting an equal share of positive attention.
In fact, the same wealthy and extremist factions who categorically have attacked public employees are regrouping, poised to step up the battle on our retirement security. Texas hedge fund manager John Arnold, a billionaire who began his climb to the 1 percent at Enron, is leading the charge, offering support and funding to anti-pension soldiers in California. ...
Public workers have saved taxpayers hundreds of millions of dollars by agreeing to concessions in more than 300 California counties, cities, and local districts. These savings have been achieved at the bargaining table, not in the pages of newspapers. We have foregone raises, accepted pink slips, and dealt with increased workloads using fewer resources. We have faced unemployment, organizational reshuffling, and, in some cases, local bankruptcy charges.
The statewide pension changes approved by lawmakers in the fall have eliminated many of the headline-grabbing problems with pensions. The fact remains that 98 percent of retirees earn far less than pension critics would like the public to believe. The vast majority earn $30,000 or less. ...
We have sacrificed to do our part, all while listening to right-wing politicians and Wall Street insiders claim that we are the root of the state’s fiscal problems. Ironically, now that the stock market is booming again, Wall Street executives continue to get richer while working-class people do not. ...
Meanwhile, pension critics, including San Jose Mayor Chuck Reed, are telling only half of the story about pension changes. Shrinking benefits for public workers is bad for the economy, will force more Californians to turn to other taxpayer-funded social services, and will result in untold short-term costs with no guarantee of saving taxpayers in the long run. This is beginning to play out in places that have passed so-called pension reform. In Reed’s San Jose, the city was forced to scramble for new police recruits as officers fled because of politically motivated pay and benefit cuts.
Under a buy-out, an insurer is paid to take on the burden of paying the final-salary (or defined-benefit) pensions of current and future retirees, absolving the sponsoring company of all its obligations. British companies have been getting rid of their pension schemes for several years but the trend has also spread to America. Both General Motors and Verizon offloaded part of their schemes last year.
Buy-outs appeal to sponsors for several reasons. Faced with the high cost of paying final-salary pensions, many firms have closed their schemes to new members; some have switched current workers into stingier defined-contribution schemes. “The defined-benefit plan tends to become more and more remote from the company,” says Ian Aley of Towers Watson, a consultancy that advised on the EMI deal. ...
A buy-out may allow a company to put its pension responsibilities behind it but what happens to the 20,000 members of EMI’s scheme should the insurance company go bust? In Britain their pensions would be covered by the Financial Services Compensation Scheme, which guarantees 90% of all benefits. That is almost certainly still a better deal for workers than a defined-contribution pension.
First Quarter lobbying report for American Benefits Council: http://soprweb.senate.gov/index.cfm?event=getFilingDetails&filingID=fe4adcd3-cdd\ 2-4c8f-9609-e4a1991b1bb5&filingTypeID=51
Specific lobbying issues: Pension Funding/Stabilization and related plan issues - de-risking defined benefit (DB) plan; Nondiscrimination rules applicable to defined benefit (DB) plans
Also included in the same report: Hybrid retirement plan designs implementation of the Pension Protection Act (PPA), finalization of proposed regulations.
I wish I was a fly on the wall.
Pension De-Risking Through Lump Sum: In this discussion, four Towers Watson experts explain why lump sum offerings are an increasingly attractive strategy for de-risking pension plans and discuss the factors required for successful execution.
For years, many plan sponsors have considered lump sum offerings. But it wasn't until the Pension Protection Act (PPA) of 2006 changed the basis for calculating lump sums that the offerings became viable solutions for many organizations. Prior to the PPA's enactment, plan sponsors often had difficulty offering lump sums, because they had to calculate them using a 30-year Treasury-rate basis, which made lump sums more expensive than funding or accounting liabilities. Under the PPA rules, lump sums now are calculated on a corporate-bond basis that's more closely aligned with the funding and accounting measures of pension obligations. This new lump sum basis was phased in over a five-year period starting in 2008, meaning that 2012 was the first year the new basis was fully in effect.
Which de-risking strategy is IBM more likely to use? And will it affect those already retired, future retirees or both? Is it better for retirees to receive a lump sum (calculated to benefit the company, obviously) or to have an annuity set up to yield the promised benefit?
There is also a fair amount of anger directed towards CEO Rometty and other executives. Why? Because since the resource action began none of the IBM executives have sent out messages of regret or explanation to workers terminated in their divisions.
Whether it is a new hire or someone with long service, these workers deserve a response. These workers deserve respect. One worker put it this way:
"Where are all those executives that celebrate our product releases? Now when the situation is less convenient they run away and hide. No comments, no statements. No communication with the infantry. Enough low level folks left to remove the collateral damage where as Queen Ginny and Grandpa Sam are in their palace and eat caviar for $10 million each day. IBM promoted great leadership in the last decades. The senior leadership team obviously did not attend these leadership classes. Instead they attended the class 'how to become a perfect coward'."
We couldn't agree more. The leadership only cares about money. In the drive to reach the goals of Roadmap/Roadkill 2015 CEO Rometty has neglected and disrespected IBM's greatest asset--its employees.
There is a growing employee "vote of no confidence" in the running of the Company by CEO Rometty. Some say Rometty should be fired.
We are at a crossroads. Do we allow CEO Rometty and others to continue abusing employees or do we fight back. It is your choice. The Alliance@IBM team -Alliance-
Alliance Reply: Thank you for the information and your analysis. We are fighting the fight and won't give up. Thank you for the good wishes on the 4th, too. It is high respect, indeed coming from the country we won our independence from, some 237 years ago. We will be sharing your comments on the IBM Global Union Alliance comments page as well. Cheers to the good guys!
Most of you wouldn't spend 15 bucks a month to join the union but you consider wasting thousands suing IBM. The logic of trying to collect after your out the door rather then protect your job while still employed escapes me. For those who have not realized it, the planning for todays RA's went all the way back to 1999 when Management started driving up their incomes by taking things away from employees. Your particular release was just finalized recently. It has been planned all along. Get the big picture here folks. Its bigger then just you. Its all of you. -Exodus2007-
Here is the wake up call for the IBM execs: the customer can be supported 100% without any FLM's, team leads or dispatchers. That's the truth peeps. You want to save money IBM? Then drop the SO ITD centers, drop the red tape GDF BS and get back to the basics of technical support. Have the support staff work from home and have the account teams (who already work from home) dispatch the work out to the admins. $$$ saver without a doubt. -really?-
Thanks to the Alliance, we now know that more than 3,000 Employees comprising at least 5% of the North American IBM workforce was fired on June 12th, 2013, with many more thousands fired outside North America in Australia, Europe, and elsewhere. This is just further proof that, as Benjamin Franklin said at the signing of the Declaration of Independence, "We must, indeed, all hang together or, most assuredly, we shall all hang separately." Join the Alliance today! -Voting Alliance Member-
Alliance Reply: You're half right. A layoff is not the same as being fired. However, an IBM Resource Action IS a firing. A layoff is dictionary defined as losing your job "temporarily" for an unspecified period of time. Layoff comes from a time in the late 19th century and came to mean being dismissed from work until the company had more work to offer the employees; such as within a union contractual agreement. Union employees were called back from a layoff when the company had enough work for them to do. IBM is an At Will employer. Their "Resource Action" is a fancy word for firing. You are correct in advising that the employee apply for Unemployment. This issue is different though, state to state.
In one of the largest campaigns of its kind, Americans for Prosperity, a conservative advocacy group financed in part by Charles and David Koch, will begin running television commercials this week asserting that the law will limit Americans’ health care choices.
The group is spending more than $1 million on the campaign, which will initially include television advertising in Ohio and Virginia, along with online ads asking people to test their “Obamacare risk factors. ...
The Campaign Media Analysis Group at Kantar Media estimates that from 2010, when the law was signed, to 2015, $1 billion will be spent on ads that criticize or defend it. That includes ads for candidates who oppose the law. Half of the $1 billion has already been spent, the group said.
So they are going after their moms.
They put up Web ads on Facebook and Allrecipes.com alongside slogans such as “Moms know best: ‘Get yourself health insurance.’ ” They have enlisted the help of parent-activist groups such as Moms Rising, which has already begun mobilizing its vast network of more than 1 million members and 3 million e-mail subscribers on behalf of the health-care law. ...
The share of 19- through 25-year-olds who lack coverage has dwindled since the passage of the law, which requires insurers to cover children up to age 26. But 41 percent were still uninsured in 2012, according to the Commonwealth Fund.
I asked around. Peter Orszag, who helped design Obamacare from his perch as head of the Office of Management and Budget, disagreed with Rubin. “Delaying the employer mandate makes successful implementation more likely, not less likely,” he told me.
Larry Levitt, vice president of the nonpartisan Kaiser Family Foundation, agreed. “There’s nothing about the delay in the employer requirement that suggests Obamacare can’t still be implemented,” he said. “If anything the delay removes some potential administrative complexities from the plates of the implementers, and avoids the problem of some employers reducing the hours of part-time workers to get around the requirement.”
Timothy Jost, a health law expert at Washington and Lee University’s School of Law, was even blunter. “Implementation just got easier rather than harder,” he said. ...
The poorly designed employer mandate was perhaps the most serious threat the law faced in its first year. Only about 10,000 of the economy’s 5.7 million firms were expected to face the mandate, but that’s still a lot of angry business owners. And while some of those business owners would respond by grudgingly offering insurance, others would respond by cutting back on hours for their employees, or even firing some of their employees. ...
Obamacare’s critics appear to be enjoying something of a Pyrrhic victory right now: They get to (rightly) criticize the administration for unilaterally delaying unpopular and ill-drafted elements of the law. But they seem to be assuming that the bad media coverage now can be extrapolated into bad implementation next year.
That misses the choice the White House actually made: Bad press now, and higher costs in 2014, in return for an easier roll out. Whether you think the White House is making the right policy call will depend on whether you prefer slightly lower costs to a smoother rollout. But so far as Obamacare’s implementation goes, it just got easier, not harder.
The policy consensus, though, is that the status quo is actually the problem, and that it deserves to be threatened, undermined and replaced as expeditiously as possible. Wonks of the left and right disagree on what that replacement should look like. But they’re united in regarding employer-provided coverage as an unsustainable relic: a burden on businesses, a source of perverse incentives for the health care market and an obstacle to more efficient, affordable and universal coverage.
Yet woe betide the politician who dares to publicly agree. That’s what John McCain discovered in 2008, when he proposed a sweeping reform that would have eliminated the tax incentives that undergird employer-provided coverage. Conservative policy types loved the idea (as well they should, being responsible for it), but it cost McCain dearly: the Obama campaign used it to attack him, relentlessly and effectively, as an enemy of the way most middle-class people get health insurance, and thus of the middle class itself.
These attacks, in turn, constrained the Obama White House when it came time to design its own health care reform. Obamacare has an unwieldy, Frankenstein’s monster quality in part because the law is trying to serve both consensuses at once. The core of the bill, the subsidies for the uninsured and the exchanges where they can purchase plans, is designed to offer a center-left alternative to the existing system. But much of the surrounding architecture is designed to prop up existing arrangements — and in the process, protect Obama from exactly the kind of criticisms he once leveled against McCain. ...
Right now, both parties are still pretending that H.R. departments will go on doubling as welfare states forever. If it dropped the employer mandate, the Obama White House would be fully committed to a more disruptive future, in which exchanges and subsidies gradually replaced the employer-based system. And since those exchanges and subsidies are going to be implemented by this administration no matter what — barring a Martian invasion or a zombie apocalypse, at least — the sooner we find out if they really work and what they really cost the better. ...
Either way, the White House’s decision is a step toward honesty in policy-making. It takes us a little closer to a world where politicians of both parties actually level with the public, and acknowledge that employer-provided health insurance is an idea whose time has passed.
What if my mom wouldn’t have had health coverage available, though? What if his employment and lifestyle options were limited because of a pre-existing condition and availability and affordability of health coverage? That is the world that currently exists until January 1, 2014. On January 1, 2014, the idea of pre-existing conditions in denying health coverage or premium rating disappears. Along with it, state Marketplaces (or Exchanges) open to offer individuals (and soon small businesses) health insurance options available for purchase (along with possible subsidy/tax credits).
This finding was part of a report by NerdWallet Health, a division of a price-comparison website NerdWallet. The report said unpaid medical bills are the biggest cause of U.S. bankruptcies, affecting 1.7 million people this year. Three in five bankruptcies are due to medical bills, according to NerdWallet.
The report predicted that about 20% of adults — 56 million under 65 — will have problems with health care bills this year. NerdWallet based its report on data from the U.S. Census, the Centers for Disease Control and Prevention, a Commonwealth Fund report and academic studies.
NerdWallet's conclusion that the ACA might not make a big dent in that number comes from the fact that about 10 million adults with year-round health insurance coverage are expected to have medical bills that they can't pay off in 2013. Many of the 14 million newly insured patients expected in 2014 as part of the ACA could struggle, because health plans continue to raise premiums and deductibles. For example, the American Medical Association's National Health Insurance Report Card, released in June, found that 23.6% of the amount of pay for doctors, as set by insurers, was paid out of pocket by patients. ...
High-deductible plans can have an out-of-pocket maximum of $5,000 to $10,000 per year, which for an average family of four living on about $50,000 per year can be difficult to absorb financially, LaMontagne said. Patients are forced to choose between competing interests of their health and other day-to-day expenses. “Insurance is no silver bullet,” she added. ...
Generally, patients with major illnesses are the ones who generate the kind of debt that leads to bankruptcy, Dr. Bagley said. In a study in the May issue of Health Affairs, researchers at the University of Washington looked at personal bankruptcies filed in federal court in Seattle between 1995 and 2009. They found that cancer patients were 2.65 times more likely to go bankrupt than those without a cancer diagnosis.
But the Affordable Care Act also established another type of financial assistance for people who buy plans on the marketplaces, also known as exchanges. Cost-sharing subsidies can substantially reduce the deductibles, copayments, coinsurance and total out-of-pocket spending limits for people with incomes up to 250 percent of the federal poverty level ($58,875 for a family of four in 2013). Those reductions could be an important consideration for lower-income consumers when choosing their coverage.
"Particularly for people who have to utilize a high amount of services, the reduction in total out-of-pocket costs" can be important, says Dana Dzwonkowski, an expert on ACA implementation at the American Cancer Society’s Cancer Action Network.
Cost-sharing reductions will be applied automatically for consumers who qualify based on their income, but only if they buy a silver-level plan, considered the benchmark under the law. ...
The federal cost-sharing subsidies essentially increase the insurance company's share of covered benefits, resulting in reduced out-of-pocket spending for lower-income consumers. A family of four whose income is between 100 and 150 percent of the federal poverty level ($23,550 to $35,325) will be responsible for paying 6 percent of covered expenses out-of-pocket compared with the 30 percent that a family not getting subsidized coverage would owe in a silver plan. A family with an income between 150 and 200 percent of the poverty level ($35,325 to $47,100) will be responsible for 13 percent of expenses, and one with an income between 200 and 250 percent of the poverty level will be responsible for 27 percent ($47,100 to $58,875).
These gaps arise because of the phenomenon known as churning, the term for repeatedly gaining and losing health insurance coverage. Churning is particularly acute in the population covered by Medicaid and the Children’s Health Insurance Program (CHIP), where minor changes in family income (a dollar raise or a few more hours worked), changes in life circumstances (becoming pregnant or turning 19 and becoming an adult), or failing to keep up with the programs’ often frequent and onerous demands for paperwork to prove eligibility, can mean the difference between having coverage, or not.
Losing coverage puts low-income people especially at risk for falling into medical debt or for delaying or skipping needed care altogether because of the cost. In addition to poor health outcomes, this can ultimately result in greater expenditures for public health insurance programs because patients may be sicker by the time they re-enroll. While frequent eligibility determinations can reduce the number of beneficiaries on the Medicaid and CHIP rolls, they also jack up the programs’ administrative costs. ...
The Commonwealth Fund and other organizations have been calling attention to the negative consequences of churning for nearly two decades. In 1996, as welfare and Medicaid reform were debated across the country, Pamela Farley Short, Ph.D., then a senior economist at the RAND Corporation, conducted a Commonwealth Fund–supported study that found—contrary to a common public perception—low-income women didn’t stay on Medicaid for very long. More than a quarter of the women who were enrolled in the program at a point in time between 1989 and 1992 had been enrolled for 12 months or less. And of those currently on the rolls in Short’s study, more than a quarter would leave within two years. Nearly two-thirds of those women would become uninsured.
Yet there’s no other way to view the latest Republican assault on Obamacare. The GOP sees blood in the water because the White House (sensibly) put off the employer mandate for a year. The truth is there shouldn’t have been an employer mandate at all — a point to which we’ll return in a future column — but Republicans have seized on the hook of this supposed “snafu” to hang their latest faux outrage. ...
“We agree with you that the burden was overwhelming for employers,” Republican leaders wrote to the president Tuesday, “but we also believe American families need the same relief.”
The same relief? How dumb do they think Americans are? “Relief” from the certainty that they’ll have access to group health coverage no matter their health status? “Relief” from income-based subsidies if they need help to buy a private health plan? “Relief” from finally knowing that they can never go broke from serious illness in one of the richest countries on earth? “Relief” from the job lock that binds countless Americans to large employers when they’d rather start a business or work on their own, but fear that if their family has any health issues they’d be left to fend for themselves? “Relief” from at last joining the community of advanced nations that view health coverage for all as an essential feature of a decent society, a view embraced decades ago even by conservative icons such as Margaret Thatcher?
War is peace. Freedom is slavery. Barack Obama is a tool of big business and an enemy of the people.
To listen to Boehner and Cantor, you’d have no idea that Obamacare’s design has a thoroughly conservative pedigree. The line clearly goes from the Heritage Foundation to that group’s collaborations with the Democratic Leadership Council to Romneycare to Obamacare. Republicans may be tired of hearing this truth, but if it isn’t repeated at moments like this, the extent of the GOP’s doublespeak will go unpoliced. ...
As conservatives have long taught us, the only way to move toward universal coverage via private insurers is to require that everyone has coverage (and to subsidize lower-income folks who need help buying it). Otherwise, healthy folks opt out, and the insurance pool is destabilized. What’s more, if the GOP really cares about “relief,” there’s already relief written into health reform that exempts people from the mandate to carry coverage if they have to spend more than 8 percent of their income to do it. ...
As I’ve long argued, I’d be happy to repeal Obamacare on one condition:The GOP offers a plan that the Congressional Budget Office certifies will cover today’s 50 million uninsured. Basic catastrophic coverage with special funding for preventive care and wellness would be fine by me for starters. If Messrs. Boehner and Cantor would offer up such a plan and fund it honestly, I’d take that deal tomorrow.
It ain’t happening — and honest observers of all stripes should ask why.
The answer — the heart of darkness on health care, so to speak — goes back to Bill Kristol’s argument in 1993-94. If Democrats are allowed to show that government can help assure basic health security, Kristol preached, it will boost the party’s political fortunes for decades. Republicans have felt bound ever since to kill the thing in its cradle before Americans come to appreciate how vital such protections are in an insecure era.
That’s one big difference between tax credits and subsidies, both of which are intended to help people with lower incomes pay for health insurance through the new health care law.
People with incomes between 100 and 400 percent of the federal poverty level ($11,490 to $45,960 for individuals in 2013) may be eligible for tax credits to reduce the cost of their monthly health insurance premiums.
In addition, people with incomes between 100 and 250 percent of the poverty level ($11,490 to $28,725) may qualify for cost-sharing subsidies that will bring down their deductibles, copayments and coinsurance. The subsidies also reduce the maximum amount they can be required to pay out of pocket annually for medical care.
Critics of the Affordable Care Act spent at least $385 million from March 2010, when Congress enacted the sweeping health care measure, through the end of last month, according to an analysis of TV advertising nationwide by Kantar Media.
The biggest spender among opponents: Crossroads GPS, a political advocacy group affiliated with Republican strategist Karl Rove. It pumped at least $40 million into advertising that mentioned the law. Backers, led by the U.S. Department of Health and Human Services, spent roughly $78 million. ...
A new round of advertising hit the airwaves this week. Americans for Prosperity, a non-profit advocacy group co-founded by billionaire industrialist David Koch, launched a $700,000 TV advertising campaign, largely in Virginia and Ohio, that features a pregnant mother worried that the law will restrict her family's health care choices and drive up premiums.
"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.
Introduced by Republicans Rob Portman and Susan Collins and Democrat Mark Warner, the measure, if enacted, would scotch any remaining hope for putting the Dodd-Frank financial reform law fully into practice anytime soon — if ever. In the long run, it would benefit powerful corporate interests over investor protection, consumer health and safety and basic fairness. ...
Subjecting independent agencies to executive regulatory review would not improve the rule-making process, but it would ensure that ostensibly regulated industries are as unregulated and deregulated as possible.
Even the bill’s Senate proponents admit as much, though not intentionally. In June, Mr. Portman posted a supportive letter on his Web site from 10 “current and former” top officials of independent regulatory agencies. Several of the signatories are now lobbyists or lawyers for corporate clients that are regulated by the independent agencies. The only signatory who is a current official is Nancy Nord, a Bush appointee to the Consumer Product Safety Commission, who has been a defender of industry and is set to leave the office in October.
WJLA took in $33 million in election-related and issue advocacy advertising last year. Only three stations in the United States earned more for political ads, and two of those were also in Washington. That’s because the stations’ signals reach citizens in a crucial battleground state, Virginia, as well as the political power brokers in the nation’s capital. If Allbritton were to sell WJLA by itself, it could fetch $300 million.
That math helps explain why Gannett paid $1.5 billion for 20 stations last month, why the Tribune Company agreed last week to pay $2.7 billion for 19 stations — and why more consolidation in the marketplace is forecast for later this year.
The increasingly expensive elections that play out across the country every two years are making stations look like a smart investment, with the revenue piling up each time a candidate says, “I approve this message.” ...
...WBNS, the highest-rated station in Columbus, Ohio, grossed about $50 million in advertising last year, of which at least $20 million was attributed to campaign spending. Columbus is the nation’s 32nd largest TV market. ...
The influx of ad spending has also left stations vulnerable to criticism that they are not doing nearly enough to fact-check all the ads they are profiting from. Timothy Karr, a senior director of strategy at Free Press, a public interest group, studied Cleveland, Milwaukee and four other local markets last August and September and found what he said was “a near-complete station blackout on local reporting about the political ads they aired.” Denver was the best of the six, he said, and even there, 2,880 ads from five PACs and outside groups were countered by just five fact-checking news segments.
“This profiteering may explain newsrooms’ reluctance to investigate the sources of political ad spending, or to vet the ads they air for accuracy,” Mr. Karr said. “It’s clear that they don’t want to bite the hands that feed them.”
On Monday, the company providing these investors with that lucrative edge, Thomson Reuters, is expected to announce that it will suspend the practice, yielding to pressure from the New York attorney general, according to a person with direct knowledge of the matter.
Eric T. Schneiderman, the attorney general, and his staff have been investigating the unusual arrangement that Thomson Reuters has with the University of Michigan. On two Fridays a month at 10 a.m. Eastern time, the widely cited and often market-moving economic survey known as the consumer confidence index is posted by the university on a Web site.
Thomson Reuters pays the university at least $1 million a year to distribute that data early to its money management customers on an exclusive basis. The company offers clients of its news service the opportunity to pay to receive the information on a conference call at 9:55 a.m.
But an elite group of about a dozen clients, which includes some of the world’s most powerful money managers, pays Thomson Reuters an additional fee to receive it at 9:54:58 — two seconds before everyone else. Some of the clients pay the company more than $6,000 a month for this early release.
The company packages the information for these clients in a format that allows their high-speed, computer-driven trading systems to exploit the data, making rapid-fire trades in stocks and futures before others gain access to it. ...
The controversy over the Thomson Reuters practice highlights the prevalence of high-speed trading in the nation’s financial markets. More than half of all American stock trades are now executed by firms that rely on computer algorithms to execute thousands of orders a second. These traders can get an edge by obtaining market data even milliseconds before their rivals.
Selected reader comments follow:
This class of trading is not favoring investment in the long-term interests of the American people, it favors speculation of the worst kind rather than putting our savings in renewing the American economic engine.
I am beginning to understand why this recovery is so slow and the gap between income classes and between compensation and productivity continues to widen.
This practice is obviously not a "free market" mechanism nor is it "fair and open competition" for opportunities to invest. This kind of practice is why nations fail.
Those 2 seconds of "private" access given to approximate dozen clients - the "dirty dozen" - before anyone else has the information subverts the market system and calls into question the level playing field.
In other words, this allowed the playing field to be tilted in favor of a select few while the rest of us got left in the locker room.
For the most part, federal securities regulators have been comfortable with these arrangements. But the New York attorney general, Eric T. Schneiderman, is potentially in a position to throw them into question. The attorney general has broad powers to crack down on Wall Street because of the Martin Act, a 1921 New York law that allows him to bring fraud cases against a company without proving the company’s intent. ...
In the trading world, though, speed has taken on a particular importance over the last decade as an increasing proportion of traders in the financial markets have come to rely on a time advantage. Such superfast computer-programmed trading means that just two seconds — the advantage that Thomson Reuters was giving its clients for early access to the University of Michigan consumer confidence survey — can make all the difference in trading millions of dollars’ worth of stocks or bonds or other investments. High-frequency trading now accounts for more than half of all trading in American stocks. ...
One recent example is a service that the Nasdaq market and Chicago Mercantile Exchange introduced in May, which promises to get Nasdaq’s market data to customers in Chicago — and Chicago data to the East coast — 2 milliseconds faster than it is otherwise available thanks to the use of microwave transmission. The cost for the advantage is a reported $20,000 a month. ...
Representatives for the exchanges declined to comment for this article. But in the past, exchange executives have said that they offered their products equally to anyone who pays, much like an airline offers equal access to first-class airline tickets.
Selected reader comments follow:
But wait. Hasn’t Germany been one of the most outspoken advocates of fiscal austerity after the financial crisis? Yes, and that’s not a contradiction. Fiscally responsible businesses routinely borrow to invest, and so, until recently, did most governments.
Lately, however, fears about growing public debt have caused wholesale cuts in American public investment. The Germans, of course, yield to no one in their distaste for indebtedness. But they also understand the distinction between consumption and investment. By borrowing, they’ve made investments whose future benefits will far outweigh repayment costs. There’s nothing foolhardy about that.
The German experience suggests how we might move past our own stalled debate about economic stimulus policy. In the aftermath of the economic crisis, the policy discussion began with economists in broad agreement that unemployment remained high because total spending was too low. Keynesian stimulus proponents argued that temporary tax cuts and additional government spending would bolster hiring. Austerity advocates countered that additional government spending would merely displace private spending and that we already had too much debt in any event. And the debate has languished there.
A preponderance of evidence suggests that Keynes was right. But as the German experience illustrates, progress is possible without settling that question. The Germans are investing in infrastructure not to provide short-term economic stimulus, but because those investments promise high returns. Yet their undeniable side effect has been to bolster employment substantially in the short run. ...
The Germans didn’t become bogged down in debate over stimulus policy, and they didn’t explicitly portray their infrastructure push as stimulus. But that didn’t hamper their strategy’s remarkable effectiveness at putting people to work. The unemployment rate in Germany, at 5.3 percent and falling, is now substantially lower than in the United States, where it ticked up to 7.6 percent last month. (By contrast, in March 2007, before the financial crisis, the rate in Germany was 9.2 percent, about five percentage points higher than in the United States.)
A prudent investment is one whose future returns exceed its costs — including interest cost if the money is borrowed. Opportunities meeting that standard abound in the infrastructure domain. According to the American Society of Civil Engineers, the nation has a backlog of some $3.6 trillion in overdue infrastructure maintenance. No one in Congress seriously proposes that we just abandon our crumbling roads and bridges, and everyone agrees that the repair cost will grow sharply the longer we wait. ...
Austerity advocates object that more deficit spending now will burden our grandchildren with crushing debt. That might be true if the proposal were to build bigger houses and stage more lavish parties with borrowed money — as Americans, in fact, were doing in the first half of the last decade. But the objection makes no sense when applied to long-overdue infrastructure repairs. A failure to undertake that spending will gratuitously burden our grandchildren. ...
Austerity advocates, who have been wrong at virtually every turn, are unlikely to change their minds about stimulus policy. But with continued slow growth in the outlook, it’s time to reframe the debate. Our best available option, by far, is to rebuild our tattered infrastructure at fire-sale prices. If the austerity crowd disagrees, it should explain why in plain English.
But since individual investors have few advocates in Washington, no one has bothered to ask how much money the existing, non-fiduciary system costs millions of naïve Americans annually.
The Securities Industry and Financial Marketing Association (SIFMA), a powerful lobbying groups claiming that real transparency and disclosing conflicts-of-interest will be expensive to implement, told the SEC that it will cost their member firms $5 million annually to upgrade their compliance, supervision and training systems. ...
Of course, the job of Washington lobbying groups is to protect the status quo. That’s why the fundamental changes to the existing brokerage business model that would be significantly changed by the proposed fiduciary standard are clearly disruptive.
But what’s missing are some number showing the negative effect on millions of naïve American investors who unknowingly pay up to 17 separate fees when they buy a mutual fund. These lobbying groups also fail to note that 401(k) participants pay about $164 million a day in fees to the financial services industry.
Even worse, revenue sharing and 12b-1 fees, which would come into the light if a fiduciary standard, were enacted, cost investors about $9.5 billion annually.
These fees paid by unsuspecting investors—in revenue sharing, 12b-1, and in 401(k)s—dwarf anything SIFMA and other financial services lobbying groups have offered as a way to attract sympathy.
But the fact is that the lack of transparency, and the lack of a fiduciary standard, is very profitable. One academic study from 2007 found that when fund companies make it difficult for investors to choose between the 8,029 mutual funds and 21,631 different share classes that were available in 2007, fund companies stand to profit. ...
While industry lobbyists are paid to protect industry interests, only a handful of groups advocate for individual investors. The best known is the Consumer Federation whose director of investor protection, has diligently waived the flag for individuals. The problem is that the Consumer Federation is vastly out-gunned in this battle in terms of money and influence. ...
Someone in Washington should point out that the existing system costs unsuspecting investors millions of dollars daily. This outweighs any costs that could be paid by brokers. So, it is simple math: transparency and a fiduciary standard benefits millions of investors. Maybe it’s time the SEC did the math. Otherwise, they should just admit they work for the lobbyists.
Republicans in Congress have been pressuring regulators for years to exempt derivatives that U.S. companies sell overseas from the new rules set by the 2010 Dodd-Frank financial reform law. For much of 2013, the deregulatory drive enjoyed bipartisan support in the House, with lawmakers casting their efforts as an attempt to harmonize U.S. law with international regulations. But financial reform advocates have attacked the initiative for padding Wall Street profits at the expense of important public protections, and Democratic support has eroded.
In June, the House passed a bill that would completely exempt from U.S. oversight derivatives sold through the nine most popular foreign derivatives jurisdictions. The legislation is occasionally derided as the "London Whale Loophole Act" on Capitol Hill -- a reference to the overseas trades that cost JPMorgan Chase more than $6 billion in 2012. London was the epicenter of much of the derivatives trading by U.S. financial firms leading up the 2008 crash, including AIG's infamous Financial Products division. If banks can simply route trades through loosely regulated overseas affiliates, financial reform advocates warn, the most critical aspects of Dodd-Frank will be effectively nullified. ...
This type of arrangement was common in the years leading up to the 2008 crash. Citigroup held nearly $50 billion in complex derivatives off its official balance sheet in so-called structured investment vehicles, and Bear Stearns operated risky hedge funds that it officially had no financial obligations to. The financial crisis began in August 2007 when two such Bear Stearns funds failed, and the company decided to pay off its investors rather than take the damage to its reputation from leaving clients out to dry. By the fall of 2008, Citi had decided to suck up its losses on structured investment vehicles, rather than signal to the market it was incapable of doing so.
"A U.S.-based firm should not be able to escape U.S.-mandated swaps oversight simply because its swaps trading is conducted through an offshore affiliate or branch," the letter from the Democratic senators reads. "It is likely that, if your agencies’ current proposals were adopted, foreign firms doing business with the foreign affiliate of a U.S.-based derivatives dealer would opt to forego an explicit guarantee from the U.S.-based entity in return for: (1) more favorable pricing, and (2) the ability to avoid U.S. trading regulations and any attendant costs."
Media Matters research revealed significant media selection bias in the Social Security debate. Through the first six months of 2013, the three largest broadcast and cable news networks dedicated nearly 300 segments to discussions of Social Security. More than two-thirds of those segments framed the entire Social Security debate as a problem of long-term solvency and the national debt, which can only be solved through drastic cuts to beneficiaries.
Media's heavy focus on "fixing" the solvency of the program belies the fact that Social Security is funded for at least the next two decades. ...
The Economic Policy Institute argued, contrary to most news coverage, that the challenges facing Social Security are "modest and manageable." Nobel Prize-winning economist Paul Krugman had a similar reaction to the latest Social Security report, noting "the system will be able to pay most of its scheduled benefits as far as the eye can see." Krugman also recognized the irrationality of arguments made by those who claim to want to save Social Security from eventual collapse:
The risk is that we might, at some point in the future, have to cut benefits; to avoid this risk of future benefit cuts, we are supposed to act pre-emptively by...cutting future benefits. What problem, exactly, are we solving here? ...
In January 2013, the National Academy of Social Insurance conducted a comprehensive survey of American attitudes toward various Social Security reform proposals. The data revealed overwhelming support for lifting or raising the payroll tax cap, while respondents reported significant opposition to benefit cuts, including raising the retirement age and decreasing cost of living adjustments through chained CPI. ...
News segments devoted to the alleged demise of Social Security and other benefit programs consistently overlook these alternative proposals aimed at strengthening -- rather than cutting -- the program for beneficiaries.
The response to the banking failure of 2008 continues to sound tough but risks missing the mark in changing the culture for individuals within financial institutions. ...
Parliament has a long history of passing new laws that sound tough but are then rarely used. Criminal penalties for bankers will capture the foolish – the trader boasting about the next binge on bottles of Bollinger – but few senior executives of top banks are likely to be so reckless in their emails. The top bosses will instead hide behind denials, saying they were unaware of bad practice. ...
Those in any doubt about the failure of individual fines against bankers need only look at the two biggest individual fines against bankers linked to the 2008 crisis. In both cases their fines were less than the same executives received in their bonus the previous year. It is not surprising that those employed in financial services to assess risk judge the risk of firstly getting caught and then paying a fine of less than one year’s previous bonus to be a risk worth taking.
One of the Barclays executives – Rich Ricci – recently named one of his many racehorses “Fat Cat in the Hat”. Clearly naming and shaming executives who have failed is ineffective, as many have no shame. Nor does fining their companies hurt them, as most leave when trouble arises and it is the shareholder who pays. ...
The writer is Conservative MP for North East Cambridgeshire. He was previously a regulator at the Financial Services Authority and head of anti-money laundering and sanctions at Barclays retail bank
But if there really is a missing-white-voter issue — and I’d like to see some more analysis by serious political scientists before I completely buy in — what will it take to bring these people back out to play? Sean Trende, who has been making the missing-whites case, describes the missing as “downscale, rural, Northern whites”. What can the GOP offer them?
Well, the trendy answer now is “libertarian populism” — but the question is what that means. And for a lot of Republicans, as Mike Konczal notes, it seems to mean lower tax rates on the wealthy, tight money, and deregulation. And this is supposed to appeal to downscale whites because, um, because.
True believers will say that this kind of agenda is actually great for low-income workers because it would lead to wonderful economic growth. This happens to be a view contradicted by all the evidence, but more to the point, what on earth would make anyone think that it’s a workable political strategy? Yelling even more loudly about the wonders of sound money and supply-side economics isn’t going to persuade anyone who hasn’t been persuaded already.
But wait, it gets worse. As a practical matter, the current GOP agenda isn’t so much about hard money or even lower top marginal rates as it is about slashing safety-net programs. There has been a highly successful attack on unemployment benefits, and the party has worked itself into a lather about food stamps too. ...
In short, the idea behind libertarian populism seems to be to bring back disaffected whites by preaching, even more forcefully, the virtues of the pro-wealthy policies the GOP has been following all along, and meanwhile destroying the safety net programs many of those disaffected whites depend on. Sounds like a winner.
As for the rest of us … well, about that.
The money for our bosses has to come from somewhere, doesn't it? Here's one place it likely originated: us.
According to the Department of Labor Statistics, hourly wages plunged by a record-breaking 3.8% in the first quarter of 2013.
These are more than just numbers. This pay disparity is having an increasingly corrosive effect, leaving us governed by and lectured to by an elite that seems out-of-touch with the lives of everyone else.
No wonder you can turn on Bloomberg Radio, like I did last week, and hear this advice: flying on a private jet was extolled as a budget-conscious option for parties of ten or more who were otherwise planning to fly first-class. According to the good folks at XOJET, if the plane is $20,000 for the trip and the average first class ticket about $2,000 … well, you do the math!
Millennials hanging around their parents' basement, looking for a job online, can remember that "today is the golden age of private jets," as I heard the guest say in that segment. The economics are unbeatable: students can rent a jet for the day for less than their total student debt bill, which averages about $27,000.
Besides, there are other budget benefits too. Just listen to Suze Orman who, when tough times came after the 2008 crash, told Forbes she was cutting back by only flying private planes for work purposes, using commercial airliner Jet Blue for personal travel. "I don't care about money," she said. ...
Life wasn't always like this. According to the Economic Policy Institute, in the 1960s, when I was born, the average CEO earned a mere 20 times more than his employees. Today, that number is more like 273 to 1.
You might want to think about it this way: median household income in the United States is $51,400. A CEO earns that amount of money with a little bit more than a day's work.
Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government. Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.
And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice - the wealthiest and most privileged among us. But those who are suffering seem strangely passive. ...
Interestingly, the "change = political pressure" theory helps explain the rage of the "radical rich" who - despite their almost unprecedented lives of wealth and privilege - are articulating an anger which seems at first to be inexplicable. But they, unlike the vast majority, are experiencing perceptible (if minor) changes.
No current policy proposals would substantially affect their historic levels of wealth and privilege. But some Democratic policies would slightly discommode the ultra-wealthy, and conservative forces have been shrewd enough to trumpet that fact far and wide in a tone of barely suppressed hysteria.
The wealthy have already seen a cultural change, as the Occupy movement led to previously-unheard public criticisms of their riches and political influence. That helps explain today's seemingly paradoxical political situation, in which the beleaguered majority accepts the injustices heaped upon them while coddled and ultra-wealthy Americans erupt in fury.
But right then their priorities were clear, as a bare majority rushed to provide $195.6 billion over 10 years to Big Agriculture. Most of the money went to subsidies for crop insurance and commodities, demanded by the corn, rice and sugar barons who fill campaign coffers.
The choice made by the House in cutting apart the farm bill was one of the most brutal, even in the short history of the House’s domination by the Tea Party. Last month, the chamber failed to pass a farm bill that cut $20.5 billion from food stamps because that was still too generous for the most extreme Republican lawmakers. So, in the name of getting something — anything — done, Mr. Boehner decided to push through just the agriculture part of the bill.
For decades, farm subsidies and food stamps have been combined for simple reasons of political expediency. Farm-state lawmakers went along with food stamps to keep the crop subsidies flowing; urban lawmakers did the reverse. The coalition may have been an uneasy one, and it cost the taxpayers untold billions in wasteful payments to growers, but that was the price for helping the hungry.
As the Center on Budget and Policy Priorities has repeatedly showed, the food stamp program (now known as the Supplemental Nutrition Assistance Program, or SNAP) has long been one of the most effective and efficient anti-poverty programs ever devised. When counted as income, SNAP benefits cut extreme poverty nearly in half, a new study shows. Most families who get the aid have an adult who is working.
So the farm bill got divided. The two parts were not equally tidy. As Ron Nixon reported in The Times, the rate of error and fraud in the agricultural crop insurance program is significantly higher than in the food stamp program. Also, the agriculture part has a lot of eyebrow-raising provisions, like the $147 million a year in reparations we send to Brazil to make up for the fact that it won a World Trade Organization complaint about the market-distorting effects of our cotton subsidies.
And while food stamps go to poor people, most of the farm aid goes to wealthy corporations.
So House Republicans passed the farm part and left food stamps hanging. ...
Crop insurance gets bigger under the new plan. Here’s how: You, the taxpayer, fork over the majority of the cost of the farmers’ policy premiums. (Up to 80 percent in the case of cotton.) Also, you spend about $1.3 billion a year to compensate the insurance agents for the fact that they have to sell coverage to any eligible farmer, whatever his prospects for success. Plus, if yields actually do drop, you have to compensate the insurance companies for part of the cost of claims.
Is this beginning to sound a little like Obamacare? No! No way! The House Republicans hatehatehate Obamacare! They vote to repeal it as often as they change their socks! Because Obamacare will, you know, distort the natural operation of the markets. ...
The larding of benefits to farmers didn’t come up during the House debate. It was all about food stamps, and Democrats asking to know why their colleagues wanted to cut aid to hungry children and old people. During an Agriculture Committee meeting on the bill, Representative Juan Vargas of California quoted Jesus’ lesson that “whatever you did for one of the least of these brothers and sisters of mine, you did for me.”
That raised Representative Fincher’s hackles. “Man, I really got bent out of shape,” he told that Memphis audience, proudly reporting that he countered with Thessalonians: “The one who is unwilling to work shall not eat.”
By now, you must be wondering why I keep bringing up this guy. Fincher is a farmer who has, over the years, received $3.5 million in federal agricultural subsidies, much of it for — yes! — cotton.
We have the most unequal distribution of wealth and income in this country since the 1920's.
Right now, the wealthiest 400 Americans own more wealth than the entire bottom-half of the country, and the six heirs to the great Wal-Mart fortune own more wealth than the bottom 30 percent of Americans.
The top 1 percent of Americans own 40 percent of the entire nation's wealth, while the bottom 60 percent owns less than 2 percent, and the bottom 40 percent of all Americans own just .3 percent of the nation's wealth.
Since 1979, after-tax income for the top 1% of Americans is up 281%, while it's only up 16% and 25% for the bottom-fifth and middle-fifth of Americans respectively. ...
It's clear that income inequality is a major problem in America, and that something needs to be done right now to fix it. That's where Koch comes in.
The conservative mogul who is worth over $43 billion says that eliminating the minimum wage is a solution to America's poverty woes.
On Wednesday, the Charles Koch Foundation launched a $200,000 media blitz in Wichita, Kansas, Koch's home state, saying that the minimum wage is THE major obstacle to economic growth in America.
There is no credible information or data that backs up Koch's claims that the minimum wage impedes economic growth, and that doing away with it would solve any of our problems. In fact, the data says otherwise. ...
Charles Koch inherited much of his money from his daddy, Fred. He's never known what it's like to run a household budget on the minimum wage. Taking wage policy advice from Charles Koch is like taking advice on how to run a neighborhood watch program from George Zimmerman.
Sen. Sanders is not friend of big corporations and he is never afraid to say it like it is when it comes to the fact that the corporations are not paying their fair share. He recently stated “I agree that our current tax code is too complex and must be simplified,” Sanders said. “But at a time when the American population is aging and investments in our crumbling infrastructure are desperately needed, we must not provide more tax breaks to profitable corporations and wealthiest Americans who already are doing phenomenally well and in some cases pay nothing in federal income taxes,” added Sanders, a member of the Senate Budget Committee and Joint Economic Committee. ...
“Stop large corporations from stashing their profits in the Cayman Islands and other offshore tax havens to avoid paying U.S. taxes. Legislation already introduced by Sanders would raise more than $590 billion over the next decade.”
Raising $590 billion in 10 years is not a ‘little’ amount. This would help cover the costs of SNAP. As of 2012, the total cost of the SNAP program was $78,436,790. So, over a decade (if this cost stays the same or about the same) SNAP will cost 790 million. Yes, million, not billion. So just not allowing the corporations to harbor their money overseas will help feed the needy with tons of money left over. ...
“Establish a Wall Street speculation fee to ensure that large financial institutions pay their fair share in taxes. A speculation fee of 0.03 percent on the sale of credit default swaps, derivatives, options, futures, and large amounts of stock would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and reduce the deficit by $352 billion over 10 years.”
This will help create regulation on Wall St. and hold them responsible if they gamble away our hard earned money. In the stock market, so many people are suckered into this notion that “the higher the risk, the greater the reward.” So, when they get their 401K plans, they invest into a stock that is a high risk in order to hopefully make a huge profit. The problem is, when Wall St. sets the tone and decides to create these high risk stocks; they are expecting a profit for themselves, not the person who is investing. Sure, it works out sometimes, but because Wall St. is not regulated like it should be, they are creating an environment for their bankers and brokers to profit, not the average “Joe Schmoe”. Forcing Wall St. to invest their profits into the economy is a no brainer really. If they invest in the economy, the American people will make out in the long run. ...
“Tax capital gains and dividends the same as work. Taxing capital gains and dividends the same way that we tax work would raise more than $500 billion over the next decade. The top marginal income tax for working is 39.6 percent, but the top tax rate on corporate dividends and capital gains is only 20.”
Raising the capital gains tax on corporations creates more incentive for them to hire more people. Yes, you read that right. When you raise the capital gains tax, the company must figure out a way to make that money back. So, they must gain more customers in order to make a profit. Getting more customers means they will need more workers to compensate for the work being done. Plus, companies get a tax break when they hire and train a new employee. According to the IRS “Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.”
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.