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Highlights—August 16, 2008

• ZD-Net: IBM Australia faces strike action. By Suzanne Tindal. Excerpts: IBM's Australian operation is facing the possibility of strike action among its workforce after a secret ballot opened yesterday for employees in a Baulkham Hills facility. A section of under 100 employees who work in the "Flightdeck" at Baulkam Hills want a collective agreement granting them better pay and work conditions. So-called "Flightdeck" due to the rows of computers and big screens, which looks like a flight deck.

  According to statements published by the Australian Services Union (ASU), after IBM Flightdeck employee meetings in June, the 46 Flightdeck employees in the union voted to apply for a protected action ballot with the Australian Industrial Relations Commission (AIRC) which would decide whether to take legal industrial action.

  The aim of the negotiations was to achieve rights for all Flightdeck employees including regular pay rises, pay equity, travel allowance, fair redundancy and retrenchment provisions, paid shift handover periods, fair access to leave entitlements and time off in lieu, shift penalties and the option to work from home.

• The Register (United Kingdom): Union takes IBM outsourcing case to employment tribunal. Excerpts: A £400m outsourcing deal between local authorities and IBM was unfair because the full details of the transfer of staff to a private company were not revealed, workers' union Unison has said. It has lodged a claim with an employment tribunal over the deal, which it says led to the local authorities and IBM breaking a Transfer of Undertakings agreement.

  The deal, announced in October 2007 as a £400m shared services agreement spanning 10 years, created a new private company to which 1,500 council workers will transfer. It was set up by IBM, Somerset County Council, Taunton Deane Borough Council and the Avon and Somerset Police Authority. The new company was called Southwest One. Unison claims that neither it nor staff were given enough details of the outsourcing deal, and that only parts of the deal were revealed to them.

• The Register: Reader comments on ‘Union takes IBM outsourcing case to employment tribunal’. A few sample comments follow:
  • Re: Staff are our Greatest Asset... by "Mark": What about "we must remain competitive with salaries" to mean "paycut or we sack you". This jars with "we must pay competitive rates to get the right people" to mean "wodge of wonga for the executives".
  • Unions... by "JimC": The trouble is in this sort of situation, where the people making the management decisions are utterly divorced from the effects of the crap decisions they make, the unions are about the only protection the staff have...
  • Staff our our greatest assets... by "Neil Barnes": right after paper clips and carbon paper...
  • "some sort of confidentiality protocol" by "RW": What ever happened to the concepts "freedom of information", "openness", and "transparency". Oh. I see. They got in the way of underhanded deals to screw employees. Somebody needs to remind those public bodies that they are paid out of taxes and they are public servants, so goddamned well serve the public instead of pretending to be their Overlords. Sorry for the invective, o divine Moderatrix, but this kind of thing gets me really steamed. As you may have noted.
  • looks bad by "P. Lee": Forget the confidentiality agreement, when I saw a new company had been formed to take on the staff rather than the outsourcer taking on staff directly, I thought the outsourcer was trying to distance themselves from the new staff. A separate company can be left to twist in the wind. Once a company is failing financially, all bets are off! Of course, its also possible that the current staff are a bit rubbish and need management to help them find new, more productive, roles... Mines the one with the P45 in the pocket.
• Yahoo! IBM Employee Issues message board: "Early retiree comment" by "panpeeker1". Full excerpt: It's been over a year now since my job disappeared (Bangalore) and, after searching unsuccessfully for more than 6 months for another internal position, I was forced to take early retirement. This after 29 years of consistently high performance evaluations working in IT. For what it's worth, over those 29 years I reported to 47 (count 'em) different managers, only a handful of which were related to change of assignments.

  My IBM pension amounts to roughly 25% of my annual salary.

  In the interim since I left IBM, I have applied to over 1000 jobs but, this having failed to produce a job, I now work as a proofreader making 15/hr and I'm finding it impossible to make ends meet.

  I hope that Sam P (for whom I provided technical support & account planning prior to his coronation) experiences a period of personal suffering equivalent to the suffering he has brought down on so many who gave so much for the privilege of working for "such a great company".

• American Public Media's Word for Word: How the rich get richer. Introduction: You may have heard there's no such thing as a free lunch, but David Cay Johnston says there is — and wealthy Americans do get richer because of it. In an April 14, 2008 speech at the Commonwealth Club of California, Johnston, a Pulitzer Prize-winning reporter and author of "Free Lunch," outlines how government-private sector collusion affects the middle class and the poor.
  • In a Yahoo! IBM Employee Issues message board post, "finitewisdom" comments on the "How the rich get richer" broadcast. Full excerpt: This program is mind-boggling. Listen to it if you want to know more about who *really* benefits when your tax dollars are used to subsidize business. Or stick your head in the sand and continue to believe that corporate hand-outs are good for the economy.
• New York Times: Study Tallies Corporations Not Paying Income Tax. By Lynnley Browning. Excerpt: Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress. The study, which is likely to add to a growing debate among politicians and policy experts over the contribution of businesses to Treasury coffers, did not identify the corporations or analyze why they had paid no taxes. It also did not say whether they had been operating properly within the tax code or illegally evading it.
• Yahoo! IBM Employee Issues message board: "Re: After deal to retain jobs, IBM opts to cut pay" by "jwrenna". Full excerpt: I have been a hard working employee of IBM for almost 13 years and can honestly say, I never thought I (and thousands like me) would ever have been treated so badly in the face of record earnings. Early in 2008, I had to take a 15% pay cut, because over the years, IBM refused to pay me for overtime, and, after a law suit forced them to agree to a settlement, they now had a change of policy. Now I was going to be paid for overtime. Well, so far so good, right.

  Wrong! IBM just told me that overtime is being cut out. In fact, the several days a year I must work Saturdays and/or Sundays (every quarterly close) my manager says I should adjust my work week, so that I do not get overtime, but instead, get two days off. Clearly in violation of IBM HR policy on overtime. Am I getting my 15% pay cut back. What do you think?

• Yahoo! IBM Employee Issues message board: "Re: After deal to retain jobs, IBM opts to cut pay" by "Barbara". Full excerpt: I did the 12 hour shift for a little while in the late 90's. There is no way on God's green earth I'd do that shift without that premium. Right after they announce this fleecing of the state they fleece the workers too..Like I said before. They got a set the size of church bells. Oh well. This sounds selfish but I'm glad I'm out of there and I don't have to worry anymore where the next shoe is going to drop. Good luck to all of you who are still there.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Retirement gifts..." by "w2uhabud". Full excerpt: What ever happened to IBM? I retired over 24 years ago. I had one choice early or age 65. Early meant 55+, we had no 30 year thing, no bridge, no cash balance or anything like I hear about on this site,I don't know the meaning of "second choice," "FHA," or some of the other terms Ii hear about, and not being able to talk to current employees, I am at a loss.

  Things were good in the 50's. I remember family outings, large dinners with excellent entertainment, fun in the sun days, IBM means service awards, silver spoons when a new arrival came along, managers required to visit retirees once a year to see how they were doing, flowers and manager's visit when someone in the family died, I could go on an on.

  My retirement was OK in the early years. good medical coverage etc. I took leveling so I retired at 55 and had a little extra income until I turned 65, but along came the "cookie monster" and the world changed. Now with UHC and paying for premiums, my health care is actually non-existent from IBM. I think the most significant change for me is not being able to get info on almost any subject from anyone in IBM. I learned more from sites like this.

  Current employees and recent retirees must be going through an agonizing time with the changes that have taken place and I believe you have one person who started these changes which have continued through the years to blame. Sorry for the ranting and raving but I had to get this off my mind. Things were good once. Maybe they will return some day.

• Yahoo! IBM Pension and Retirement Issues message board: "Whatever happened to IBM..." by "Adrian Rice". Full excerpt: You retired at a good time, where you could feel good for the rest of your life about the company you worked for. I started with IBM in 1982 and remember those days fondly. A few years after you retired (in 1992 to be exact), IBM was in trouble due to bad management -- and too much management -- and Lou Gerstner was brought in to save the company.

  Some changes were good -- removing excessive layers of management, for example. Some changes were bad, such as layoffs without retraining or redeploying. Then things just started going downhill, and by 1995 I noticed that IBM could be any company at all.

  The death blow as far as I can tell was with the acquisition of Price Waterhouse Cooper, because IBM brought in many of their managers as IBM managers with no training or IBM indoctrination at all. Those managers sucked beyond belief and have taken over IBM completely.

• Yahoo! IBM Pension and Retirement Issues message board: "Retirement gifts..." by "Adrian Rice". Full excerpt: I thought some of you who retired 20 years ago would get a kick out of knowing the kinds of career milestone gifts that IBM employees are getting these days.

  My father, who retired nearly 20 years ago, was given a choice of really nice gifts which were worth about $1000. For his Quarter Century Club gift he got a Rolex watch and a check for $1000.

  I just retired at 55 and got to choose both my QCC gift and my retirement gift at the same time. The QCC gifts are really pretty decent, and can be bought on Amazon for around $900. I chose a 32" Sharp Aquos HD LCDTV, and had lots of other cool choices in jewelry, housewares and electronics. However, the retirement gifts were pretty chintzy -- and I was so underwhelmed with the first gift I chose that I sent it back and chose a different one.

  All the gifts can be bought on Amazon for $200 or less, and I had a hard time finding anything I even wanted. (The jewelry choices include tiny little freshwater pearl necklaces or rings set in birthstone gems like garnets and blue quartz, and department store watches. Houseware items are things like small Waterford lamps and beverage sets.)

  But the thing that nearly killed my father when I told him was that my retirement letter from Sam P misspelled my first name. He said both of the Watsons must be spinning like tops in their graves!

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Retirement gifts..." by "Adrian Rice". Full excerpt: What? You got a frame? My letter was just placed in the package that contained the retirement gift catalog. No frame, no separate envelope -- nothing. If things keep going downhill at this rate, people who retire next year won't even get a letter!
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Retirement shaft" by "collbbfan". Full excerpt: I'm sure my father made out much better than my brother and I will ever think of at retirement. My father retired from Tampa, with around 36 years in 1985. Received wonderful parting gifts, and a nice pension.

  Me? They cut me short 30 days in 2006, with 28 Y 11 M, making me ineligible to bridge 1 lousy year to get my pension in 2008. My manager did jack to help me. I was only 52 at the time. (Maybe I should have been laid off in 1993). I will hopefully start receiving a pension in 2010.

  My brother? Missed the old pension plan by 30 days, and figured out he must work 8 more years to be able to think of any kind of health benefits, which will cost him anyway.

  I was on COBRA for about 12 months, at employee price of $328 month. I stopped it before they had a chance to kill me with monthly premiums over $1000. Now I have benefits thru a state job, and will have a pension in 9 years, if I live that long.

  My brother will be too old to get another high paying job, and has no college. He better have a hefty 401k. So, yea my father is spinning with the Watsons.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Retirement gifts..." by "Bob". Full excerpt: You had a choice in retirement gifts? I had none. They gave me a pewter plate (not even engraved). It still sits in its box on my closet shelf. I had considered donating to the Olympics for use in the discus competition. I'd rather they had given me a pewter mug - at least I could have used it for ice tea or coffee or even wine (I'm not a beer drinker). At least when I joined the QCC, I had a choice and took the Atmos clock (plus the one grand - almost $600 after taxes).
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Whatcha gonna do when you retire?" by "Adrian Rice". Full excerpt: Even though I did not expect to retire at 55 and had not made any specific plans, by accident I ended up starting a business in accounting services and business management, which morphed into income tax planning and preparation for small businesses and self-employed individuals. So I started taking accounting classes at a local community college which will allow me to sit for the CPA exam. (Good use of the tuition reimbursement part of the Separation Agreement!)

  I volunteer at the IRS-sponsored tax assistance centers from January - April, and again from August-October. Preparing income tax returns for lower income people is a real eye-opener after spending my whole life working and being around people whose incomes put them in the upper middle class range. Although I hated being kicked out of my job, I am definitely much happier now!

• MarketWatch: SPEEA Demands Boeing Disclose Funding of Executive Pensions. Excerpts: To ensure the pension program relied on by 21,400 technical employees at The Boeing Company is not being secretly used to fund executive retirement benefits, the union representing the employees is demanding the company immediately disclose the extent and funding source of its executive pension plans.

  The Society of Professional Engineering Employees in Aerospace (SPEEA), IFPTE Local 2001, formally requested the information from Boeing after a recent investigative news report by The Wall Street Journal uncovered U.S. corporations funding executive pensions by funneling funds through regular employee plans. This practice weakens employees' pensions while allowing corporations to take advantage of huge tax benefits not normally available for executive pension plans.

  In the Aug. 4, page-one, report, The Wall Street Journal called the pension maneuvers by corporations a "dubious use of tax law" that "risks harming regular workers."

• San Diego Union-Tribune: With no paid sick leave, workers face grim choices. By Dean Calbreath. Excerpts: In every war there is collateral damage, and in the legislative battle to pass the long-delayed state budget, one of the casualties last week was a bill that would have provided paid sick leave to workers. What that means is that for the next year, at least, millions of California workers will face two choices when they're sick: go to work and risk spreading their disease to their co-workers, or stay home and risk losing their pay or even their jobs. It's not a pretty choice.

  Nearly 40 percent of California's work force, totaling 5.4 million workers, do not have the right to take paid time off work when they are sick, according to data from the Institute for Women's Policy Research, or IWPR, in Washington, D.C. “People are losing their pay, losing their jobs or being penalized in some other way because they had to stay home sick or to take care of a sick child,” said Vicky Lovell, acting director of research at the IWPR.

  As with so many other things regarding worker health and safety, the United States stands virtually alone in not guaranteeing workers paid leave when they get sick. In 145 other countries – including Japan and the top economies of Western Europe – employers are legally required to provide paid sick days or short-or long-term leave for illnesses. In 127 countries, employers must provide at least one week of paid sick leave per year. In contrast, outside of San Francisco – which recently passed its own law on paid sick leave – there is no such requirement in the United States.

• New York Times: Cost-Cutting in New York, but a Boom in India. By Heather Timmons. Excerpts: Wall Street’s losses are fast becoming India’s gain. After outsourcing much of their back-office work to India, banks are now exporting data-intensive jobs from higher up the food chain to cities that cost less than New York, London and Hong Kong, either at their own offices or to third parties. Bank executives call this shift “knowledge process outsourcing,” “off-shoring” or “high-value outsourcing.” It is affecting just about everyone, including Goldman Sachs, Morgan Stanley, JPMorgan, Credit Suisse and Citibank — to name a few. ...

  Cost-cutting in New York and London has already been brutal thus far this year, and there is more to come in the next few months. New York City financial firms expect to hand out some $18 billion less in pay and benefits this year than 2007, the largest one-year drop ever. Over all, United States banks will cut 200,000 employees by 2009, the banking consultancy Celent said in April. The work these bankers were doing is not necessarily going away, though. Instead, jobs are popping up in places like India and Eastern Europe, often where healthier local markets exist. ...

  Proponents of the change say Wall Street’s wary embrace of the activity may signal the beginning of a profound shift in the way investment banks are structured, with everyone but the top deal makers, client representatives and the bank management permanently relocated to cheaper locales like India, the Philippines and Eastern Europe. In the future, executives in India like to joke, the only function for highly paid bankers in New York or London will be to greet clients and shake hands when the deals close.

• Yahoo! IBM Pension and Retirement Issues message board: "Questions on retirement medical options etc" by "majorninth24". Full excerpt: I've been with the company for 35+ years, am one of those rare birds that actually enjoys my current job for the most part. However, my husband just took ill and it appears we may have some serious medical procedures and hospitalizations in front of us. At this point it looks like I'll need to retire as quickly as possible to give him the kind of day-to-day care that he requires. I'm only now beginning the process of investigating the retirement medical options... currently we're both covered under the IBM medical plan; even though he's over 65 we had opted to stick with this rather than choose the Medicare part B for him. Not sure what our best options are at this point, lots of research to do in the next few days/weeks. Any words of advice on what we should be considering, cautions, pitfalls?

  One other thing, I haven't yet said anything to my management about retirement, but feel I probably own them a heads-up as soon as I get my act together. What are the unofficial rules on family medical emergencies, etc? Should I use up all my vacation days in taking my husband for blood tests, Dr appointments, hospital stays? My boss is brand new to management, but so far has been supportive in "taking all the time I need" to get through last week's emergencies. Thanks in advance for any insight that you can give.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Whatcha gonna do when you retire?" by Jon Maguire. Full excerpts: I just got RA'd yesterday. Got the package from UPS this morning. 58 with 30 years 4 months. Ahh, I love the smell of retirement in the morning :-)
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Whatcha gonna do when you retire?" by "rsd1955". Full excerpt: Reading about all you happy retirees makes me depressed. I was let go in February after 28 years with IBM. Since I was only 52 I couldn't retire and lost quite a bit. The SOB's gave me back to back 3 ratings and canned me. In 26 years I was never a 3 once, and was actually a 1 many times and was even part of the executive resources program. IBM screwed me, but I'm glad to know so many of you got what you worked all those years for.
• CNN/Money: How to lure Gen Y workers? Do good Recruiters highlight their community and environmental projects to draw civic-minded youth. Efforts are window onto corporate culture and give firms a leg up with top students. By Tami Luhby. Excerpts: When it comes to recruiting the Millennial Generation, it isn't only about salary ... it's about community service. Young people entering the job market today want to work for companies that care about the world, and employers are picking up on this trend. As recruiters prepare to descend on college campuses next month, many are revamping their brochures and banners to highlight their community service and environmental initiatives. They are drawing attention both to their corporate responsibility efforts and to the volunteer opportunities they provide their workers as a way to lure top students to their firms. ...

  Even the giveaways send a message. Instead of post-it notes and highlighters, some companies are handing out tree seedlings and recycled bags, said Laura Bochenek Klein, an associate director in Rice University's career services center. Some employers are taking it a step farther. IBM, for instance, is debuting a new recruiting campaign with the tagline "Work for the World. Start @ IBM."

  IBM's brochures highlight the company's involvement in green technology and innovations in helping the blind experience streaming video and animation. It tells prospective employees: "You will make a difference...you might contribute on a grand scale or perhaps influence the life of a single individual." Recruiters, meanwhile, will further explain the tech giant's efforts in cleaning up rivers around the world or aiding employees who volunteer in their local schools. The company hopes that showcasing such initiatives will lure top college talent.

• Arizona Daily Star: Raytheon is ordered to restore health aid. Judge's ruling affects 1,000 early retirees, dependents. By Jack Gillum. Excerpts: In a decision that a union group says may set an important legal precedent, a federal judge has ruled that Raytheon Missile Systems must restore health-care benefits to its employees who took early retirement. The ruling, in U.S. District Court for Arizona, was called on Thursday a "major victory for Raytheon retirees" by the International Association of Machinists Local 933, the AFL-CIO-affiliated union that represents Raytheon's hourly employees.

  The decision effectively restores about 1,000 retirees' and dependents' health-care benefits to levels before July 1, 2004, an attorney for the union retirees said. It requires the company to compensate the class members for premiums they paid since then — which the plaintiffs' attorney estimated were between $6 million and $12 million. ...

  "This is a great victory for our retirees," James Watson, the union's local directing business representative, said in a prepared statement. "They deserve the benefits they fought for during their years with the company, and a dignified retirement without the worry of skyrocketing medical premiums on a fixed income." ...

  At issue in the lawsuit was whether Raytheon could decide to cut benefits to its employees between the time they retired early and the standard retirement age of 65. In granting summary judgment for the workers on Monday, U.S. District Judge David C. Bury said the collective-bargaining agreements established between 1990 and 1999 "unambiguously provide vested medical benefits for retirees until age 65 at no cost."

• Workforce Management: Retiree Health Care May Live On. Employers who want to extend retiree health care fall into two camps. One believes that continuing to offer such a benefit is key in giving them an edge in recruiting. The other camp is made up of organizations that want to continue to offer retiree coverage to encourage older workers to retire, rather than continue working just to have health benefits. By Jessica Marquez. Excerpt: Traditionally, employers used defined-benefit pension plans to nudge workers into retirement. With those plans, as soon as employees became eligible to start taking payouts from their pensions, many would retire. But since employers have switched to defined-contribution plans, there is no longer a clear-cut time when employees feel ready to retire, says Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute. And with health care costs increasing, many older workers are postponing retirement because they’re concerned about how they will pay for their care. "As soon as they take away retiree health benefits, they have essentially lost their tool to manage the retirement process at their organizations," Fronstin says of employers. "It makes it harder to get those workers to retire on a voluntary basis."
• National Institute on Retirement Security: A Better Bang for the Buck: The Economic Efficiencies of DB Plans. Excerpt: Worries about retirement security abound. Families fear that they won’t have enough to support an adequate retirement income as home values and financial markets plummet. Dwindling profit margins have employers looking to cut costs.

  And governments are concerned about delivering on the promises that they have made to their citizens and to their employees as tax revenues shrink amid a weakening economy. In this environment, some have proposed replacing traditional defined benefit (DB) pensions with 401(k)-type defined contribution (DC) retirement savings plans in an effort to save money.

  But decision-makers would be wise to look before they leap. To deliver the same level of retirement benefits, a DB plan can do the job at almost half the cost of a DC plan. Hence, DB plans should remain an integral part of retirement income security in an increasingly uncertain world because they offer employers and employees the best bang for the buck.

• Economic Policy Institute: Social Security: Here today, still here tomorrow. Why today’s young workers should be confident about the program’s future. By Alexander Hertel. Excerpts: This August 14th Social Security will celebrate its 73rd anniversary, a good time to reflect upon a program that allows us to retire after a lifetime of work and keeps millions of people out of poverty. But advocates for privatization continue to paint a bleak picture of Social Security’s future, and the message has reached young adults in particular: 73% born between 1977 and 1994 believe the program will no longer exist when they retire. The reality is far more optimistic.

  Since the early 1980s, Social Security has been taking in more in worker contributions than it has been paying out in benefits. This has resulted in a growing trust fund of more than $2 trillion. These reserves are projected to grow for another decade, and then will decline and run out in 2041. If no action is taken, benefits will have to be cut by about 25%, as they will be funded entirely from current contributions. Even if lawmakers allowed this to happen, future retirees will receive benefits that are more generous than those received by previous generations. Retiring at 65, the typical young adult born between 1980 and 1990 will receive retirement benefits valued at $188,000 in 2007 dollars, up from $181,000 for retirees born between 1960 and 1970.

  The bottom line is that Social Security is in good shape—we should all be so lucky at age 73. Changes to shore up the program’s financing and make it more progressive are warranted, but there is no crisis, and certainly no need to rush to dramatic reform.

• Taking Note: Happy Sweet 73. By Bernard Wasow. Excerpts: Social Security has survived another year. In at least one important policy area, good sense has triumphed over ideology. We have not shredded the safety net in a celebration of rugged individualism. We have not promised to transfer resources from the poor to the rich, from women to men, from the old to the young.

  In a curiously American drama, “liberal” commitment to tried and true policy has beaten back the “conservative” drive for radical change. We can only hope that this liberal caution will mark the next president’s policy not only toward Social Security but toward taxation, spending, and military adventures as well. ...

  Social Security is something of a bureaucratic miracle; it is good government, getting the job done. At a cost vastly lower than the cost of running a private insurance company or bank, the Social Security system tracks 197 million accounts, delivers checks on time every month to more than 49 million beneficiaries. Like a rock in the wild sea of economic change and uncertainty, Social Security stands prepared to anchor the lives of the old, the disabled, and families whose breadwinner has died.

• CNN/Money: This time, wage slaves can't revolt. The Fed is banking on a weak labor market to keep employees from demanding wage hikes that could boost inflation. But consumers are feeling pinched. By Colin Barr. Excerpts: With the price of practically everything jumping, you probably wouldn't mind getting a bigger paycheck. But your employer isn't the only one who's unenthusiastic about that idea. Fed chief Ben Bernanke is counting on a weak labor market to keep employees from demanding wage hikes, which could in turn boost inflation. With unemployment rising and jobs moving overseas, you're probably not in the mood to push it anyway.

  So the good news is that the Fed's probably right when it says that we're not headed for a replay of the stagflation of the 1970s, replete with its so-called wage-price spiral. Unfortunately, that means Americans are going to be feeling poorer - with no end in sight.

  On Thursday, the government said consumer prices soared 5.6% from a year ago in July, the biggest year-over-year rise in 17 years. Much of that increase was driven by the soaring costs of food and energy, though Bank of America economist Lynn Reaser notes that prices were sharply higher across the board. "This number was a shocker," Reaser says, adding that practically "the only benign increase was in health care," where prices - after years of strong growth - were a modest 3.5% above year-ago levels.