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Highlights for week ending November 29, 2003
- Forbes: IBM says cuts about
200 software jobs. Excerpt: International Business Machines Corp. , the world's largest computer
company, said Thursday that it cut about 200 jobs in its software division as part of its
efforts to revamp its work force to match the skills it is seeking.
- Workforce Management: They've
Got the Gold Watch Blues Companies are cutting back or eliminating formal recognition for
and risking goodwill in the process.
Excerpt: Gary Brennecke attended plenty of retirement functions during his 36 years as
a salesman for one of the world’s largest pharmaceutical companies. From the start, he was
impressed that a retiree’s spouse and children were always present for the festivities.
Even spouses of other sales reps were included, and the sales reps were encouraged to say a few
their departing colleague. By the time Brennecke retired in 2000, though, the hoopla was
gone. ... Part of the reason that recognition in general has been de-emphasized is the focus that
companies now have on quarter-to-quarter earnings. Fifteen years ago a huge number of firms
were run by people
with a sales-and-marketing background who knew the benefit of motivating employees, says
Chuck Davis, president of the C.A. Short Co., a performance recognition and award firm in Charlotte,
Now, Fortune 1000 companies are steered primarily by accountants who view employees as
As soon as quarterly earnings dip, the quick solution is to whack off a third of the workforce.
In that kind of environment, experts say, service and retirement recognition is diminished.
... "If you are five years from retirement and see that the company has treated retiring
employees like horses going to the glue factory,
why would you pour your heart and soul into the company for the
next five years?
- San Francisco Chronicle: Judge
refuses to erase IBM nurse testimony. Excerpt:
The judge at the IBM toxics trial denied Monday a motion by the company to strike from the record
the testimony of a nurse who said Big Blue had a policy to ignore worker injuries possibly
caused by chemical exposure. ... In sometimes passionate testimony, Crouch had said that IBM
had an unwritten policy instructing its medical staff to link worker complaints to other factors,
such as alcoholism or allergies, but never to possible exposure to chemicals in the workplace.
... Powers pressed Crouch on why she did not report worker complaints that she felt may have
been due to chemical exposure. Crouch shot back that the company simply ignored such problems
and added that she would have lost her job had she kept on complaining. At one point, Crouch
said, "Ma'am, I wish today I never worked for IBM."
- AFL-CIO News for Working Families: Bush
Succeeds in Stopping Congress from Protecting Overtime Pay. Excerpt: Despite bipartisan
Congressional support for an amendment to block overtime pay cuts sought by the White House,
the Bush administration strong-armed U.S. House and Senate
leaders into removing the amendment from a conference appropriations bill. The amendment,
which Congress removed on Nov. 21, would have prohibited proposed rules to the federal
Fair Labor Standards Act (FLSA) taking away overtime pay protections for some 8 million
workers. ... In September, the Senate approved an amendment to H.R. 2660 by Sen. Tom Harkin
(D-Iowa) that blocked any new rules to take away overtime pay from workers. The House voted
in October to instruct its members who were merging House and Senate versions to accept
overtime guarantee. “What did middle-class Americans do to so anger this president that
he is intent on punishing them by taking away their access to overtime pay when they work
40 hours a week?” asked Rep. George Miller (D-Calif.). “Schoolteachers, nurses,
paramedics, firefighters, construction workers, office workers—people who are trying
to buy cars, put their children in college, pay their medical bills or pay the mortgage
by working long hours.”
- Financial Times: IBM
shakes up software ahead of upturn. Excerpt: IBM is preparing a shake-up
of its $13.1bn software business, the world's second largest, in a bid to boost sales within
a maturing software market and position itself for an expected upturn in corporate technology
markets. The world's largest computer company will announce a series of strategic shifts
early January, which will reorganise its software development and its sales force along
12 vertical industry segments. It will also spend hundreds of millions of dollars in a
campaign to lure
third-party software application companies to support its e-business infrastructure software.
- Business Week: Revenge
Of The Overworked Nerds.
They're suing for overtime pay -- and the outcome could change the tech industry.
Excerpt: When Gary R. Oberholtz signed on as a salaried network engineer for Computer
Sciences Corp. (CSC ) in 2000, he thought he'd found the ideal job. Especially appealing:
He says he was
promised a 40-hour workweek. But soon Oberholtz was routinely working 48-hour weeks and
many weekends, he says. When he asked about overtime, his bosses at the El Segundo (Calif.)-based
tech services told him he wasn't eligible under state and federal employment laws. ...
four months after being laid off, Oberholtz is suing. He joined a class action filed on
Nov. 12, alleging that CSC dodged paying overtime to some of its employees by improperly
as exempt. "I want to send a message," Oberholtz says. "If you're going to make
us work all these hours, you have to compensate us."
- Dave Finlay: I've put new versions of the Social Security calculator in the files
section of this group. They include all
the SS changes for 2004. (Editor's note: You may need to join the Yahoo! IBM Retiree group
to access its files section).
- PBS NOW with Bill Moyers: Downward
Mobility. Excerpt: NOW often looks at the flip-side of the American dream, as in its profile
of the struggles of low-wage workers in "Downward Mobility". NOW also keeps track of
the high end of the income spectrum. Recently we updated viewers on the fate the past years'
corporate scandals. It seems that all the bad press and shareholder outrage, executive
pay keeps on rising.
According to a August 2003 report by THE ECONOMIST, median senior total pay among America's
top 350 companies rose by 10 percent last year, even as median total shareholder returns
in those companies fell by more than 5 percent. Turns out that American executive compensation
rates are quite different from those of the rest of the developed world. In Japan a typical
makes eleven times what a typical worker brings home; in Britain, 22 times. In America...
According to recent studies, the top one percent — the wealthiest among us — are
getting richer and richer. The Organisation for Economic Cooperation and Development (OCED)
has found the United States to be the most unequal society of all industrialized nations.
The U.S. ranks last among OECD nations in terms of income equality, yet in 1993 the poorest
of the U.S. population was still wealthier than two-thirds of the rest of the world. In
its recent report "The State of Working America 2002-03," the Economic Policy
Institute estimated that the bottom 80 percent of American households control only about
17 percent of the nation's wealth. Meanwhile, wages, benefits, and working conditions for
workers at the bottom continue to decrease.
| Coverage on the Medicare Bill
- Chicago Sun-Times: GOP
pulled no punches in struggle for Medicare bill. Excerpt: During 14
years in the Michigan Legislature and 11 years in Congress, Rep. Nick Smith had never experienced
anything like it. House Speaker Dennis Hastert and Health and Human Services Secretary
Tommy Thompson, in the wee hours last Saturday morning, pressed him to vote for the Medicare
But Smith refused. Then things got personal. Smith, self term-limited, is leaving Congress.
His lawyer son Brad is one of five Republicans seeking to replace him from a GOP district
in Michigan's southern tier. On the House floor,
Nick Smith was told business interests would give his son $100,000 in return for his
father's vote. When he still declined, fellow Republican House members told him they would
Brad Smith never came to Congress. After Nick Smith voted no and the bill passed, Duke
Cunningham of California and other Republicans taunted him that his son was dead meat.
- New York Times: Some
Experts Foresee Revolt by Elderly Over Drug Benefits. Excerpt: Experts
fiercely debate whether employers will react to the legislation by dropping retiree care.
The Congressional Budget Office estimates that 23 percent of employees — or 2.7 million
people — who
are now receiving drug benefits from their employers will lose those benefits after the
Medicare drug program is instituted in 2006. Richard Evans, an analyst with Bernstein Research,
said that most employers would view
the Medicare legislation as a heaven-sent opportunity to reduce expenses. The legislation
offers employers tax incentives to continue paying for retiree health expenses that amount
to 28 percent of drug costs, from $250 to $5,000 a retiree a year. But Mr. Evans estimated
that employers would save, on average, $1,000 a retiree if they refused the tax incentives
and dropped coverage.
- New York Times: Florida
Elderly Feel Let Down by Drug Benefit. Excerpt: Hollywood, Fla., Nov.
29 — In the condominiums and on the palm-shaded beaches here, where Medicare is a frequent
topic of conversation, few people expect to get much help from the new drug benefit just
approved by Congress. They express disappointment but little surprise because, they say,
they never had high hopes. They say they feel they were sold out, by Republicans and AARP,
which endorsed a Medicare bill
drafted mainly by Republicans. But the Democrats, they say, did not fight hard enough
for a better drug benefit.
- New York Times: AARP
Support for Medicare Bill Came as Group Grew 'Younger'. Excerpt: William
D. Novelli, the chief executive of AARP, sat in his downtown Washington office on Tuesday,
still glowing from the Senate's passage of prescription-drug legislation that his group
had endorsed, and slid a copy of the glossy AARP magazine across a mahogany table. The actress
was on the cover, along with blurbs for stories about "where to find love" and "amazing
new sex drugs." The message was clear. "Boomers," Mr. Novelli declared, "are
the future of the AARP." Indeed, baby boomers are a big reason AARP, the retiree lobby,
decided to endorse the Republican-backed Medicare bill, a move that people on both sides of the
aisle say ensured its passage.
- Molly Ivins (courtesy of the Miami Herald): Bills
benefit drug, insurance, oil barons. Excerpt:
Oh, and as for you, senior citizens, who believed that amusing little claim that you all would
benefit from this bill -- suckers! According to Public Citizen, pharmaceutical companies have
given $44 million since 1999 -- 78 percent to Republicans, 22 percent to Democrats -- and spent
millions more hiring an army of lobbyists that physically outnumbers the 535 members of Congress.
The Health Reform Program of Boston University estimates that of the bill's $400 billion price
tag, $139 billion will go to increase drug-company profits over eight years, a 38 percent increase
in what is already the world's most profitable industry.
- Watson-Wyatt: Medicare
Reform Legislation Update - Summary and Next Steps. Watson Wyatt is
modeling and analyzing the effects on employer-sponsored retiree health plans, and it is clear
the act could present significant cost savings opportunities
for many employers. As a result of the act, employers will need to make important decisions
about their retiree health plans. Now is the time for employers to start reviewing the
final details, analyze the alternatives
and decide how your organization will respond to these important changes. Specifically,
employers will need to decide whether to maintain drug benefits as a “qualified” plan
and whether to send retirees to stand-alone prescription drug plans or integrated Medicare
Advantage plans. Perhaps different approaches for different groups of retirees will be
your best option.
- Watson-Wyatt: Retiree
Medical and Medicare+Choice Plans: Planning for an Uncertain Future.
Excerpt: As time goes by, many more new and innovative ways to provide retiree health benefits
at an acceptable employer cost will emerge. For many retirees, health care is their single
biggest expense and their single biggest worry. Given the growing number of workers nearing
retirement, retiree health care will become an increasingly compelling issue for employers
- Associated Press: Medicare
Drug Costs Will Rise. Excerpt: Seniors will face annual increases
in premiums and deductibles — and a growing gap in coverage — for the prescription
drugs they buy under the new Medicare law, budget analysts say. For example, the $250
annual deductible at the start of the program in 2006 is projected to rise to $445 by 2013.
- Associated Press: AARP
Faces Rebellion Within on Medicare. Excerpt: The bill "destroys one of the most successful
programs in the history of this country," Isaac Ben Ezra, president of the Massachusetts
Senior Action Council, said as he led a demonstration of about 40 people here against the
bill Monday. "Shame, AARP."
- The Foundation for Taxpayer and Consumer Rights: Corporateering
of the Year Award Goes to Medicare Profiteering Protections. Excerpt: Not allowing the government to use its bulk purchasing
power to get the cheapest price for prescription drugs is a Congressional and Presidential
blank check to the pharmaceutical industry to charge as much as they like, " said Court. "This
corporateering eclipses even Enron, Worldcom, and Tyco because it is the biggest public
giveaway on Capitol Hill since the S&L bailout. Congress and the President have socialized
costs and privatized gain for industries that are the most prolific campaign givers on
the hill." ... "Any prescription plan that ties the hands of the federal government
from using its market clout to negotiate cheaper drugs is absolutely unacceptable. This is bill
is a thanksgiving
feast for the nation's most powerful special interests: the pharmaceutical industry,
health insurers and hospitals," said Jerry Flanagan of FTCR. "Seniors will likely pay
more for prescriptions under the new plan, not less."
- Washington Post: Alarms
Sounded On Cost of GOP Bills. Lawmakers Increase Spending to Win Votes. Excerpt: Maya
MacGuineas, executive director of the Committee for a Responsible Federal Budget, said
the biggest impact of the new legislation will come toward the end of the decade, when
baby boomers begin
to retire. The true cost of the Medicare bill, for instance, would not begin until 2007,
but it would escalate rapidly from there. In 2007, the Congressional Budget Office estimated,
would cost $40.2 billion. By 2013, that price tag would be $65.2 billion. CBO Director
Douglas Holtz-Eakin has told members of Congress that the bill's cost in its second 10
reach between $1.7 trillion and $2 trillion. Likewise, analysts said, the cost of the
energy bill is understated by unrealistic "sunsets" that
would eliminate nearly half of the legislation's 46 tax cuts well before the bill's overall
expiration date of 2013. If all those tax cuts were extended the full decade, the bill's
cost would roughly double, according to the liberal Center on Budget and Policy Priorities.
- Boston Globe: Undermining
the Rx benefit. Excerpt: Republican Senator John McCain of Arizona, one of the few conservatives
to stick to his principles in opposition to the creation of a major new entitlement program,
added that the subsidies to "special interests" like insurance and drug companies
stand in stark contrast to the absence of any means of keeping costs from skyrocketing.
In particular, he noted (as did many progressives) a truly bizarre section of the legislation
literally prohibits the government from bargaining over price with the drug companies
and other suppliers to beneficiaries. He also noted that this is precisely what enables
the Veterans Administration and the core of the Medicare bureaucracy that deals with hospitalization
to keep drug prices below what they are in pharmacies for veterans and retired people
It is no accident, McCain said, that the profits of drug companies are officially expected
to grow by $9 billion as a result of this protection from having to negotiate with the
biggest bulk purchaser of them all.
- Baltimore Sun: Health
reform losers, winners. Excerpt: The $400 billion drug benefit Congress voted to add to
Medicare is a brand-new entitlement for 40 million elderly and disabled people. But while
some will do better with the new coverage, others will not. And some will likely do worse.
Drug companies and providers, insurers and doctors and hospitals that treat Medicare patients
stand to reap a windfall. But there are pluses and minuses for those players, too. Politically,
as well, the measure will yield winners and losers.
- New York Times: Medicare
Plan for Competition Faces Hurdles. Excerpt: The most politically
charged feature of the Medicare legislation passed by Congress — its attempt to make the
federal Medicare program compete with private managed-care plans — is also the least likely
to come to fruition on the seven-year schedule set in the bill, according to health policy
experts. Similar plans, the experts say, have failed to find support among patients, doctors
and hospitals, or even some insurers. Even people who favor the idea say the potential
for trouble this time
is formidable. "There is really no political constituency for competition," said
Robert D. Reischauer, a health policy expert and a former director of the Congressional Budget
| Coverage on H1-B and L1 Visa and Outsourcing Issues
- Reuters: US tech giants persist
According to economists, IBM could move 200,000 jobs annually overseas in the next decade;
look to tap English-speaking professionals from India.
Excerpt: U.S. technology services giants such as IBM could move as many as 200,000 engineering
jobs annually overseas in the next decade as they trim white collar workforces in the
United States, according to industry groups and economists. The loss of these jobs --
with median annual salaries exceeding $100,000 -- is expected to
boost the unemployment rate among U.S. engineers above the 6.7 percent rate today, which
is already five times greater than in 2000.
- Washington Post: Europe's
Cheap U.S. Labor. Excerpt: The irony is that these European-based global enterprises
are the kind of model corporate citizen over there that has all but vanished over here.
In Europe, they pay their workers decently, tend to health and safety concerns and actually
encourage their employees to unionize. When they cross the Atlantic, however, they find
themselves in a brave new world where wages have eroded (a new Russell Sage Foundation
study concludes that 24 percent of U.S.
workers make less than $8.70 an hour) and employees' rights to unionize have been effectively
abolished. And rather than bring their Euro standards with them, the companies go native.
... So it's come to this: When European employers look to the United States, they see roughly
the same thing that U.S. employers see when they look to China: millions of low-wage workers
who have all but lost the right to organize and a government intent on keeping things just
the way they are. The erosion of worker power and the growth of employer supremacy here
have transformed the bottom half of the U.S. workforce into a vast exploitable mass worthy
of a colonial
backwater. Something to chew on as we give thanks for the marvel that once was America.
- Sunday Herald (Scotland): Wake-Up Call for the
West. Excerpt: Concern is growing at the exodus
of British jobs to call centres in India ... but we have seen nothing yet. Political
Editor Douglas Fraser visits Bangalore for a glimpse of the future.
- Sunday Herald (Scotland): Call Centre Kings.
Excerpt: Karnik talks of India’s advantage
not only in English language, but in hundreds of thousands of accountancy and law graduates,
all of whom can adjust to British and American requirements with a moderate amount
of training, because sub-continental accounting and law is based on Anglo-Saxon models. “These
guys know accountancy, they have computer skills, they speak English, they’re ready and
willing to do the job, and that combination is a killer. “We’re looking at moving
up and getting more sophisticated, not just in transactions, but analysis of balance
sheets, so we
have chartered accountants. And now at the higher end,
there is equities analysis, not so much from the UK yet, but from the US where equity
research firms on Wall Street have begun to move here and recruit MBAs.”
- Sunday Herald (Scotland): If the rich nations
really wanted these jobs why didn’t they
value them? Excerpt: But when you consider that 500,000 American jobs have been “offshored”,
many to the Philippines and India and with many more forecast to leave, that is either
a reason to be grateful we’re not American or a reason to be very scared that the same
scale of transition is about to happen to UK plc. The academic economists who reported
this week on
the future of Scotland’s call centres said there could be a flood of offshoring, or it
could be a gentler growth, as they detailed the problems of managing staff 6000 miles
away. Indians are confident it will be more of a flood. They know they can continue
to pick off call centre jobs by the thousand, but for them, that’s yesterday’s
news, just as the cutting edge of Indian software programming is also well established
with their pioneering role working in and for Silicon Valley through its boom years.
They are now eyeing a massive sector of Western economies, which basically includes
anyone who works
on-screen. That starts with the back office, dealing with data entry,
account reconciliation and transaction reporting. It is now continuing through travel
and expenses departments, order processing and even human resources, then into professional
services and some of the top-earning jobs. If a process is digitised in Scotland
or the City of London, it can be done in India, and more cheaply. Pay rates can be
one-tenth of those in Britain, and once other costs are factored in, overall savings
tend to come out between 40-60%.
- Forbes: US state weighs
response to high-tech outsourcing. Excerpt: An Indiana senate committee
on Monday will look into why the state awarded a computer contract to an Indian company
that planned to import workers to do the job. "We're supposed to be helping unemployed
and underemployed Hoosiers," said State
Sen. Jeff Drozda, referring to the popular name for people who live in Indiana. "This
is clearly contrary to our mission." While the $15.2 million contract to a subsidiary
of Tata Consultancy Services, India's biggest software company, has been canceled,
the controversy over outsourcing high-tech work overseas
- Computerworld: Job
agency hires foreign help. An Indiana unemployment agency has hired a company that's
bringing in up to 65 programmers from India. Excerpt: New York-based Tata America International
Corp. will send up to 65 IT staffers from India to work alongside 18 state employees
over the next two years at a government facility in Indianapolis. The team will replace
a tax and unemployment
claims processing system that runs on Unisys Corp. mainframes with a client/server
application written in Java, said Patrick Murphy, a deputy commissioner at the Indiana Department
of Workforce Development. The DWD awarded Tata a $15.2 million contract last summer,
and development work began Nov.
4. But the contract has infuriated some state legislators and Indiana residents,
because of the nature of the work done by the DWD. "This is such an egregious example,
and many policy-makers find it baffling," said Jeff Drozda, a Republican state senator.
- Computerworld: State
agency cancels controversial outsourcing deal. Excerpt: The Indiana
Department of Workforce Development (DWD) has canceled a controversial $15.2 million
IT development contract with TCS America that would have brought up to 65 Indian contract
workers to overhaul
a system used to process unemployment claims and taxes.
- New York Times: Tech
Workers' Losing Fight to Match Overseas Wages. Excerpt: Atul Vashistha,
the chief executive of neoIT, a California-based company that specializes in advising
companies on moving work overseas, and whose clients include Siemens and Lucent Technologies,
most of the jobs being outsourced overseas are "lower end" positions in data processing
and programming. But Marcus Courtney, president of the Washington Alliance of Technology
Workers, a union affiliated with the Communications Workers of America, said high-level
were just as endangered as anyone else. "Any job can be exported, irrespective of skills," he
goes beyond training and education. Employees shouldn't snow themselves into believing
that if they have
an advanced certification or an M.B.A., their job can't be sent overseas."
- Computerworld: India
hits back on outsourcing job fears. 'We are cheaper and better,' says
India's external affairs minister. Excerpt: The Indian government went on the offensive
last week on the contentious issue of the loss of U.S. and European jobs to India due
to outsourcing. Offshore outsourcing from the U.S. and Europe to India is the result
of barriers to free movement of Indian professionals to these countries, Indian Prime Minister
told a business summit of the European Union and India on Saturday in Delhi.
This week on the Alliance@IBM
- Age Discrimination Lawsuit Against
IBM - Informational Meetings. Excerpt: Informational meetings will be held in Poughkeepsie
at the Best Western Conference Center 2170 South Street (Rt 9). The meetings are intended
to provide a forum for participants who may want to join the lawsuit to get answers to
- Australian IT: Stronger
union move on Big Blue. Excerpt: Unions have opened another door at
IBM, extracting concessions from Big Blue for unionised employees who will be shifted over
to the company following the termination of IBM's Global Services Australia joint venture
and Lend Lease. IBM has told the Community and Public Sector Union that the workers, employed
by Telstra before being shifted to the joint venture, will be covered by a special workplace
agreement that carries
over their Telstra employment conditions. Some 6000 IBM GSA employees are being moved
to IBM Australia and 92 per cent have signed up with the company. Those employees are expected
to begin working at IBM Australia in the first
week of January. The prospect of a bloc of unionised workers at IBM would have been unimaginable
just a few years ago. IBM employees traditionally have not been strong unionists.
- Burlington Free Press: Health
care costs irk ex-IBMers. Excerpt: About 200 IBM retirees complained
their former employer was gouging them by raising insurance premiums more than 10 times
the rising cost of health care at a Monday evening meeting. Rep. Bernie Sanders, I-Vt.,
said he called the meeting after hearing from retired IBM workers
worried about the sharp increase in insurance premiums. "We heard reports from some people
that they are seeing increases of 250 percent in one year, and over 500 percent during
a two-year period," Sanders said. "What people
were extremely disturbed about was that these huge increases are much, much higher
than the increase in health care that Vermont is experiencing." ... Al Maitner, who worked
in the personnel department, said he owed the employees an apology. "When I recruited people,
I told them IBM was a company that cared about people, they have unparalleled job security and
they had outstanding job benefits now and when you retire," he
said. "I apologize. I was wrong."
- IBM spouse speaks out on benefit
changes. Excerpt: I am the wife of an IBM employee. I depend upon my husband for health
benefits. Needless to say, I am outraged at the prices IBM is charging for spouses and
for healthcare next year. Many retirees will be priced out of coverage. And the sad part
about all this is that the people who will suffer most are women like myself who stayed
the kids, and expected to have decent health care benefits in their old age. Why will we
suffer the most? Chances are we will outlive our husbands.
week on the TechsUnite site:
- AT&T Wireless
Blocks Employees’ Access to News Stories About Offshoring. Excerpt: AT&T Wireless
is now tracking all Internet browsing by its employees, at one point last week even blocking
access to online media stories that were perceived by company officials as critical of
its offshoring activities. Employees reported last Thursday that when they attempted to
read online news reports about AT&T Wireless offshoring activities on The Seattle Times
and the Seattle Post-Intelligencer Web sites, a blocking alert appeared on their Web browsers
warning them that access to
those stories was blocked. "Warning Notice," the alert reads. "You have
attempted to access a site that has been deemed inappropriate by our business and blocked
from ALL internal access.
A record of this request has been logged and will be provided to Business Security upon
- Seattle Forum Addresses
Offshoring of White-Collar Jobs. Excerpt: Alan Tonelson has seen the
future—and it is bleak. Bleak, at least, for the American middle class, as it continues
to witness high numbers of well-paying jobs disappear, either through steadily declining
wages or the disappearance of
white-collar jobs altogether. Tonelson, a research fellow at the U.S. Business and
Industry Educational Foundation, based in Washington, D.C., announced his gloomy verdict before
50 audience members at a forum
entitled, "Exporting Washington’s White Collar Jobs." The Nov. 20 forum was
sponsored by the Washington Alliance of Technology Workers (WashTech) at the University