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Highlights—September 19, 2009

  • I Cringely: Logan’s Run. Full excerpt: The heyday of Artificial Intelligence (AI) was in the 1970s and 1980s. Here was the logical evolution of office and industrial automation that would put an expert into every computer and by doing so both replace and augment employees, changing forever the world of work. Only it turned out not to function that way because we underestimated the effort involved. It was easy to imagine putting intelligence into a computer but very difficult to do so in practice. There wasn’t enough processing power available for one thing, nor were there even enough experts, since it seemed to require having one on-hand to keep the machine in tune. Now IBM appears to have a plan to do it all again, though with a twist. And this time, thanks to Moore’s Law and high costs for employee health care and pensions, it might even work. God help us.

    Today’s computers are smaller and thousands of times more powerful than the ones we worked with during the AI boom, but the problem is still one of programming — getting knowledge into the system in an efficient and usable manner. For that matter, it is hard to envision computers other than robots performing many of these workplace functions, and robots aren’t ready. The better solution then, according to a just-published IBM patent filing (US29228426A1), might be to find a way to suck knowledge out of the experts then inject it into younger, stronger, cheaper employees, possibly even in other countries.

    IBM’s proposed Platform for Capturing Knowledge describes how to use an immersive gaming environment to transfer expert knowledge held by employees “aged 50 and older” to 18-25 year-old trainees who find manuals “difficult to read and understand.”

    IBM also discusses how its invention could be made available for customers’ use in return for “payment from the customer(s) under a subscription and/or fee agreement.” What we’re talking about, then, is a possible revolution in workplace training, one where a lifetime of experience would ideally be sucked from the mind of an experienced worker to be injected into a trainee and then the older worker discarded.

    There are several thoughts that came to mind as I read this patent application. Could IBM really be serious about such a plan? Then I imagined how enthusiastically the idea must have been received at IBM intergalactic HQ in Armonk. What a great idea! Transfer knowledge from old to young, American to Argentinean, or even just hold it in machine storage for later use, disposing of the expert in the meantime.

    To see it this way you have to understand one recent IBM mindset, which is that culturally IBM does not believe in job specialization. Anyone can manage anything. Anyone should be able to perform any job. For a company whose motto used to be “think,” IBM is trying to reduce it to “do as instructed.”

    This patent is a natural extension of that culture. Though part of being an expert is the ability to figure out new stuff and master it. But when you get rid of the real experts, who is going to figure out the new stuff?That doesn’t automatically fall out of this computer gaming scenario, which teaches functions and techniques, not intuition or actual experience.

    Then I thought about that moment late in the tenure of IBM CEO John Opel when someone came up with the bright idea of urging companies that leased IBM mainframes to buy them, creating a huge revenue bubble that grew the company to more than 400,000 employees, setting it up for its 1990s crash. Converting the leases was not, in itself, a bad idea. What was bad was assuming that such huge, essentially one-time, revenue would continue perpetually, which is exactly how IBM saw it. Really. Isn’t this the same thing, only now they are converting employees into some more disposable form? What happens when there are no more experts to convert?

    IBM’s greatest threat is its ability to stifle innovation. The way the company is off-shoring jobs and minimizing the value of its support workers demonstrates this. The threat will be when a group of smart folks in China or India realize how things could be done better, then starts taking work away from IBM. They will have access to an army of IBM foreign workers, too, who will bring customer contacts with them.

    On the other hand, this application is also typical of an IBM patent. There are many aspects to implementing such a training process — data gathering, information management, software, hardware, etc. — and IBM has patented every part. So if anyone makes a something similar, IBM could sue. If you create gaming software to teach almost anything to almost anyone, this patent may trump you.

    In the end it may not matter then whether IBM runs out of experts or not. Just so long as they don’t run out of lawyers.

  • Forbes: A 'More With Less' America. By Michael Maiello. Excerpts: Happy Labor Day, hope you got the day off because chances are, you've really earned it. Productivity, the amount of output per hours worked is at a six-year high in America--it was up 6.6% in the second quarter and shows no signs of abating. It's the direct result of all the cost-cutting that brought the pleasant earnings news and helped fuel the summer's low-volume stock rally. Profits are up because companies have cut jobs, and for those who remain employed, wages have fallen.

    Sometimes productivity comes from technology, and sometimes it comes from clever new management techniques that help people produce more and better products with less time and effort. This time it's the result of an ancient Viking management technique called "whipping the galley slaves." Step one, whip galley slaves. Step two, imply further whipping of galley slaves. Step three, boat goes faster.

    The problem with the Viking method is that galley slaves eventually pass out or die and need to be replaced or the boat stops. The modern American manager has a more sinister technique: Fire some workers and give their work to whomever remains. The truly clever modern Viking will give the left-over worker a fancy new title so that the whole exchange seems like a promotion and hey, promotions usually come with added responsibilities, don't they? They also usually come with raises, but those are off the table as unemployment approaches 10%, and those with jobs rightly feel lucky to have them. "That Viking must think I'm very good at rowing," the contemporary oarsman thinks, "Why else would he dump four people into the frigid ocean while leaving me in charge of the whole side of the ship?" ...

    Last week I spoke with Johan Norberg, a senior fellow at the CATO Institute and one of the sunniest of libertarian economic thinkers. He joked that the great tragedy of 2009 is that it's only the second most productive year in human civilization and that years before we had projected that it would be a record setter. The same is true for the U.S. gross domestic product--it will likely come in at $13.8 trillion in 2009, down from $14.3 trillion the year before. Declines are always bad, but $13.8 trillion is still a lot of output. The American worker should be proud.

    But I don't see much pride this Labor Day. Rather than being praised for hard work, the typical American has taken it on the chin during this recession. First, the hardworking American has been blamed for our current troubles. They borrowed too much, bought too much, wanted too much and they continue to consume too much. We're now told that the great lesson of the financial crisis is that people should simplify their lives and sublimate their desires.

    But nobody at the very top does that. A recent study by the Institute For Policy Studies revealed that in 2008 the top 20 recipients of bank bailout funds paid $3.2 billion to their top five executives. In Wall Street's worst post-Depression year, the average bailed-out bank CEO earned $13.2 million while the average S&P 500 CEO got $10 million. As bank stocks cratered, some execs like Vikram Pandit of Citigroup took $1 salaries, but most executives will make out well in the long-run, getting options with strikes at incredibly low prices. If they can stick it out, Ken Lewis at Bank of America and John Mack at Morgan Stanley could make vast fortunes because of the crisis. ...

    Our tax code favors investment over work. That's a simple fact, and even those who believe that dividend and capital-gains income should be taxed at a lower rate than wages will agree. Investment creates jobs, they say. But so does working. Besides, investment requires adequate capital, which lies in the hands of the very few. The United Nations says that as the decade started, 10% of the world's population controlled 85% of the world's assets. While most everyone can offer their labor to society, very few can offer meaningful assets, and the former should be treated as well by the government as those who have money to invest.

  • Associated Press, courtesy of Forbes: Good news at Big Blue: IBM Essex Junction hiring. Excerpts: Some good news from the IBM plant in Essex Junction: After years of cutbacks, the plant is hiring hundreds of new workers. Since June the company has hired 126 new workers and is planning to hire another 114 before the end of the year. ...

    In 2001 the Essex Junction plant employed about 8,500 people. In January that number dipped below 5,000. IBM officials say the jobs are only guaranteed for one to three years, but they could last longer, depending on the economy.

  • Yahoo! IBM Employee Issues message board: "IBM terminates COBRA coverage prematurely because of clerical error" By ibm_alum_022609. Full excerpt: Has anybody else had problems with IBM terminating their COBRA coverage prematurely? I filed for COBRA at the correct time and, during the same call, arranged for the premiums to automatically be taken directly from my bank account. I then went off on a 3-month trip confident in the knowledge that my coverage would be continued.

    However, when I returned and went through my accumulated mail, I found a series of invoices with unpaid balances brought forward and, ultimately, notification that my coverage had been canceled due to non-payment.

    I have appealed this, citing the name of the person with whom I spoke as well as providing a copy of my notes from that conversation. However, IBM's response/denial did not address my claim of clerical error on their reply. It was simply a form letter informing me that I could appeal to the Plan Administrator....which is what I had just done!

    It seems clear to me that IBM won't miss an opportunity to lop someone off of the roster of COBRA beneficiaries and is just going to try and wear claimants down. Has anyone else experienced or heard of similar problems? Many thanks, Rob

  • Yahoo! IBM Employee Issues message board: "Re: IBM terminates COBRA coverage prematurely because of clerical error ... at IBM!" by "ol_pops". Full excerpt: I had a similar experience, but I was home to catch it. As I remember, it took a couple of months for the automatic deduction to kick it. In the meantime, the bills arrived. Luckily, I was home to pay them. Good luck with your appeal. I know "they" don't tell you these things which is really sucky.
  • eWeek: Readers React on How Offshoring May Be Hurting IT Workers. By Don Sears. Excerpt: Readers of the recent eWEEK article "How Offshoring May Be Hurting U.S. Technology Workers" has garnered many comments expressing a wide of range of emotional and economic anger, frustration and confusion. Selected reader comments follow:
    • Indian firms are using new graduates in IT jobs for $22.00 per hour. The average US IT worker makes far less than $80.00 per hour, more like $40-50 per hour and this rate is falling fast. US workers are called lazy as an excuse by those who can't explain what is really happening. US workers are near the tops when measured by actual productivity. And Indians who work here indicate the work environment in the US is quite hostile thanks to all of the job slashing and carnage in the works, and the job environment is much more humane in India though lower paying. They will tell you they are here for the money and that's it. The US job market will continue to be brutal until the carnage is over and there is nothing left.
    • While Globalization and Free Trade are here to stay - along with the potential to outsource Call Center functions to offshore, low-labor cost locations such as India - I think it's important to consider the difference between "Fair Trade" and "Free Trade". As currently practiced, "Free Trade" means that offshore Business Process Outsourcers (BPOs) pay substantially less in taxes to compete and do business in the U.S. and Canada than North American companies do. It also means that offshore-based BPOs are free to ignore the most basic aspects of US & CDN Labor Law - for example, India's labor standards are low or non-existent. Indian Call Center Agents are treated as 21st Century 'cyber-coolies'. They work graveyard shifts - under high pressure - in work environments where liberal attitudes to sex and club drugs are encouraged and thriving. "Blacklist" data bases - containing the details of all those employed in the Indian Call Center industry have been set up - so that "negative insider elements" can be detected by employers at the recruitment stage. Workers in their hundreds are fired without so much as one cent in severance pay.
    • Offshoring does not save one single broken penny to the companies that sends the work overseas. Between the umpteen layers of intermediaries that are inserted into the development chain, and the "broken telephone" syndrome where what gets produced is a vast distortion of the original work, the reduced hourly cost is wasted ten fold by having to rework and repair the terrible product arriving from India, China, Russia or the Ukraine. What I completed with a team of onshore engineers using less than 80,000 hours has taken the equivalent offshored engineers 1,600,000 hours to complete. So their "blended hourly rate" of $60/hr compared to ours $120/hr resulted in an expenditure of nearly $100 million to do the same thing that we did onshore for 1/10th of the price. Offshoring is a buzz that all the ignoramuses at the CIO level and above are caught in, not an economically justifiable direction, and in the process it depletes our capabilities as a nation to remain the technology leaders of the world. Soon all the jobs that will remain here are in road construction, built from prefabricated components from China.
    • New York Times editorial: A Long Way Down. Excerpts: It is sadly predictable that in a recession, the poor get poorer and the middle class loses ground. But even a downturn as deep and prolonged as this one cannot fully account for the desperate straits of so many Americans. ..

      As is now painfully evident, the economic growth of the Bush era was largely an illusion. Poverty worsened during most of the boom years and middle-class pay stagnated, as most gains flowed to the top. In a recent update of their groundbreaking series on income trends, the economists Thomas Piketty and Emmanuel Saez found that from 2002 to 2007, the top 1 percent of households — those making more than $400,000 a year — received two-thirds of the nation’s total income gains, their largest share of the spoils since the 1920s. Because many if not most Americans gained little to nothing from the Bush “growth” years, they have found themselves especially vulnerable to the recession. ...

      Policy makers must also resist the reassuring but false notion that renewed economic growth can, by itself, raise living standards broadly. Government policies are needed to ensure that growth is shared. Reforming health care so that illness is not bankrupting — for families or for the federal budget — would be a major step in the right direction.

  • The Street: IBM: Best in Class. By James Rogers. Excerpts: IBM CEO Sam Palmisano may not be a rock-star executive in the mold of Apple's Steve Jobs or Microsoft's Steve Ballmer, but he has been earning applause for successfully guiding the tech giant through the economic downturn. The Armonk, N.Y.-based firm has been one of the success stories of the recession. Margins have fattened despite falling revenue, as Palmisano has zeroed in on fertile parts of the company. The 58-year-old, who played backup sax for the Temptations when he was in high school, now is leading the band at IBM. ...

    Palmisano, a 36-year IBM veteran who succeeded Lou Gerstner as CEO in 2003, has done a good job of building on his predecessor's work. In the last six years, Palmisano has shifted IBM's focus further from its hardware roots into higher-margin businesses such as services and software. "They have done a great job of expanding the operating margin," said Marshall, adding that this is expected to grow to 18.5% in 2009 from 16.1% last year. "I think they have the right plan and they are executing very well." Ron Gruia, principal analyst at Frost & Sullivan, agrees, citing Palmisano's recent crusade to control expenses.

  • The Register: IBM tries to patent teleconference sound effects. By Austin Modine. Turn your business calls into wacky morning radio show. Excerpts: The patent describes a device for "enlivening conference calls" by injecting novelty recorded sounds should the conversation fall into an awkward pause or silent boredom.The device would use noise detectors to monitor phone lines for pre-determined periods of silence to play audio gags properly on cue. It could also make sounds at the request of participants, or even based on a certain noises associated with a selected individual. "Depending on the context of the conference call, the participants of the conference call may experience boredom," the application warns. "As a result, the conference call may exhibit a considerable amount of silence or 'dead air' due to the lack of interest from participants. If interjections (e.g., laugh, cheers, or jingles), and the like, could be made during the conference call at times of boredom, the conference call may be enlivened and more interesting for the participants."

    The patent application is credited to inventors Travis Grigsby, Steven Michael Miller, and Lisa Anne Seacat, on behalf of IBM. Alas, we were unable to reach the authors to see if the markedly sober company has ever put such a device into practice. (Although this journalist can testify, having been subjected to many-a IBM teleconference call, never once experiencing any effort from the Big Blue to arouse me from the inevitable conversational coma.)

New on the Alliance@IBM Site
  • Job Cuts Status & Comments page
    • Comment 09/14/09: Well, the Bench Management Program is ramping up. I just got notified that I have four weeks to get off the bench. No firm indication as to the consequences of not doing so, but I think we all know where this is leading... -anon-
    • Comment 09/17/09: IBM just announced hiring of 240 employees at the Essex Plant in VT. Of course they'll be brand new hires at the bottom of the pay scale. There should be a law that makes IBM offer new jobs to the people that were laid off first. They've had multiple layoff at the VT plant over the year and now hiring. Makes sense: get rid of higher paid workers and hire fresh recruits at the bottom of the scale. Also note: IBM is quick to announce 240 new hires. However when it comes to layoffs, they don't have those numbers. I don't think they can go much lower now. -Anonymous-
    • Comment 09/17/09: GBS Division - witch hunt for layoff candidates has started. Reports being disseminated for those not 100% billable at present. This is in addition to Bench Mgt Program. -anonymous-
    • Comment 09/18/09: Friends, Romans and Countrymen, hate to tell you this but the number of 17,000 RA'd by end of 2009 is confirmed again - this time by FOUR direct level 2 and 3 people, these will happen and plan on it for the 10Q release.

      Additionally to match job savings IBM has had such horrible performance from the Bangalore site to US customers, they are trying to hire back PM's especially. But don't get your hopes up - the main sources for this are going to be contractors and especially ones out of India (Artech comes to mind).

      Additionally the subject of many HR/tier 1 discussions has been the notice that many people were laid off over a year ago and the benefits for UI are up so people are more desperate - guess what IBM has figured out to do? Cut the rates by half, NOT KIDDING - across many positions the funding for positions are cut and the vendors are out trying to get $25 -35 hr for certified Project Managers with PMP certificates. Two people shared their emails with me on this and heard it is going to be bad for anyone who goes back to big Blue as well as for other companies are starting to notice the spike of pay dropping.

      Glad I am employed right now and just led an effort to dump Tivoli Maximo in favor of HP, giving them a $2M contract. Don't they even realize that people they get are going to jump the second an offer is a bit higher or the HR costs for getting people who obviously WILL NOT BE HAPPY to be there and show it? This is reading like a copy of Ayn Rand right now and scary... Another note, IBM has now become the largest vendor in Indian IT services Market, guess the 6B site helped with the push to get employees recruited on site. -IBM UC'd-

    • Comment 09/18/09: Here we go again, end of month RA's. I just got the call from my manager. I am on the line and will see if I make the cut this time. I am a US PM in SO -Still Ducking-
    • Comment 09/18/09: Just some anecdotal evidence that supports IBM UC'd comments - I've seen on many job boards postings looking for PMs based in India, and on further reading, can see that they are for US (and other not-just-in-India) projects, and the rates are pretty low. Nothing scientific in this study, nor do I have numbers, but looking at LinkedIn groups and other jobs sites, and Yahoo industry groups where people will post for applicants, it is very obvious that UC'd's comments are spot on. In the bigger picture, be afraid; be very afraid - not just for IBM or you in IBM, but the global marketplace and jobs in general in the near future. -RAed in Jan-
    • Comment 09/18/09: Open warning to IBM execs - I am an ex-employee of 13 years - client consulting and internal projects. I know how you'll work - and you'll are bidding for a contract at my current company - you watch how I undermine your efforts and swing this Accenture's way. This is Karma. Not monetarily, maybe, but there are thousands Americans whose life's who have ruined - and these people wish upon you the sheer frustration of being helpless. Had the sheeple had any brain, they would have organized against you - but what goes around - does come around. Can't defy universal laws of nature. Sheeple - fill out skill assessments and participate in the butchering - ha ha - chicken in a coop participating in who gets picked first - ah the irony of it. Lee - watch this one happen - 9/24/2009. -MN-
  • General Visitor's Comment page
    • Comment 09/13/09: "Anyone else on Linkedin actually see our fellow IBM people from India publicly asking how do simple technical tasks! -DM-" When you have companies paying 100k in India now, if you don't believe me then look at Intuit and others who are willing to pay 100k for engineers, the main question needs to be asked, who the hell is IBM hiring....SAM will get his EPS gor 2010 and move on we all know that. Too bad IBM the company will die after that once the customers start to realize what has happened. Its all about near term profit. -Anonymous-
    • Comment 09/14/09: In answer to -anonymouse-, I was a bit of a rare bird. I was a Band 10 employee in the IBM Executive Resource (ER) program, and when I was finally moved to a position where my next step would be a Band D level (the first executive level) I found myself in an organization where the employee stress levels were so high that many were reporting cardiac arrhythmias (irregular heart rates), insomnia, skin rashes, and other ill effects. Unfortunately, it was the norm for IBMers within and from without the organization to (no joke) scream at each other on conference calls.

      I had never in my IBM career seen anything like it, and even had to call down a colleague manager in a sister organization for his and his employee’s outbursts. When I advised him that if he and his team didn’t take a more civil tone I would order my employees to NOT have any more conference calls with his team and we would only do business with his group by email, that toned him down and we were able to move forward with a more professional relationship.

      Unfortunately (for me), after a few months in the job I realized (because I deeply respected my employees) I could not be an effective executive in that organization, so in spite of being warned against it by my mentors I passed the word up the executive food chain that I was no longer interested in the Band D position. I'd have been happy to be an IBM executive and put forward positive changes, just not there (there was no hope I could change that organization as a Band D executive -- I'd only light myself on fire with my employee-focused posture). Before I could blink I was pulled from the IBM Executive Resource program, rated a “3” performer, and found myself struggling to find any manager in IBM who would hire me (as a manager or non-manager) because I was now seen as a “bottom dragger.”

      It took me 18 months to get out of the organization because of my (by then two in a row) “poor appraisals.” I had only been out of the organization and in my new job for six months when I was advised that I had been “selected” as part of the January / February round of “resource actions.”

      Although I am still unemployed and have to sell my home to survive, I count it a blessing to have been let go by IBM. Why? Because I did not “fit in,” and because the IBM I joined in 1984, where respect for the individual was a “basic belief,” had long since died and given way to a machine that puts stockholders (and executive compensation) first, customers second, and employees dead last.

      Was I a “good” manager? That depends on who you ask. My upline executive team seemed to think I was overly focused on my team, yet my employees would generally tell you they enjoyed working for me. Actually, less than a week ago a former employee of mine wrote me an email message in which he said, “honest engine, I think I would move to Afghanistan if I had the opportunity to work with/for you. Thank you so much for being a treasured friend.” That really touched my heart, because my goal was to make life for my employees as pleasant as I could in an environment where life can be quite difficult.

      My current goal now is to move to a company that shares my values -- a company where I can hold my head high and be proud to be an “employee focused” leader. To give you an idea of my thinking, in a recent blog post I wrote: “Great leaders realize that their organization’s best customers will be treated no better than how they treat their employees — and with that in mind they ensure employees are treated as the valuable assets they are.

      Even in my last few years at IBM I knew many other really good managers, managers who did respect their employees and were frustrated as h*** at what they were seeing all around them. In answer to -anon-, even good managers have NO choice when it comes to resource actions. My own manager (one of the really good ones who remains) was near tears when she told me she had to let two of seven people go, and that I was one of the people selected because (yep) of my band level. I knew she had no choice, and actually (no joke) gave her a big, warm hug the day I picked up my separation check. I would gladly work for her any time -- at some other company. -Former IBM Manager-

    • Comment 09/14/09: To "Former IBM Manager": I think I speak for the majority when I say that you represent the "old" IBM, the one run by the Watsons. Back then, managers were by and large respected and the Opinion Survey was there to weed out the bad ones. Remember the "morale index"? No wonder they no longer measure it today... If they did, they'd have to get the Glomar Explorer out of mothballs to find it (for those who don't know the story, please Google "Glomar Explorer"). BTW, I wrote the comment below about our esteemed CIO Pat Toole. He and I started out in the same IBM location in the same year. Most of the folks who worked in our group back then (I still keep in touch with quite a few) agree that while he's a nice guy, he doesn't have the mental horsepower to be a CIO, let alone the CIO of IBM. But we live in strange times... I got RAed in Feb 2009, and am glad I'm out. -Anonymous-
    • Comment 09/15/09: Thank you for sharing, -Former IBM Manager-. Managing according to the original precepts of the old IBM, how refreshing. You sound like the managers I had prior to 2007. They had deteriorated even by then, but never in all my career would I have believed the manner in which I was treated during the last two years of my career and especially the two months of my being fired. As you said, it's a good thing to be out of IBM -anonymouse-
    • Comment 09/15/09: I have a question for for -Former IBM Manager- . Strictly for my own curiosity. When did you hear about this site? Was it from upper management ? Did you read it as part of your job as a manager? I wonder because former managers seem to know all about this site yet former employees do not. Its just strikes me as backwards. Was the Alliance discussed in management meetings in any way?? I'm wondering if we are a thorn or not even an annoyance. Hope you land on your feet and look forward to the day you can make a donation to the cause. -Exodus2007-
    • Comment 09/15/09: To all the manager type comments: Managers, especially first line which most of us see have no power. If they stand up for us they will be fired out of a cannon out the door so fast they won't know what happened. Their job is to do as they are told, keep people in line and get rid of them when the executives tell them to. They know if they rock the boat their job will be gone so they in fact just do as they are told. I have never actually seen a "good" manager in IBM. All the ones I had were morons. Puppets. If you want protection, you have to organize everyone and Unionize. That is the ONLY way. -gone_in_07-
    • Comment 09/15/09: -Exodus2007- asked, "Strictly for my own curiosity. When did you hear about this site? Was it from upper management?" Well, certainly not from upper management :-) I found the Alliance when IBM decided to dump the original pension plan (old plan) in favor of the new "cash balance" plan -- and I began searching for thoughts / comments from other IBMers who felt IBM had gone back on a promise they had made to us when we originally hired on. It was a bit of a cheap shot, and only after a major uproar did they agree to re-institute the old plan for IBMers with 15+ years of service who were at least 40 years of age. I remember that day, because my manager, who was just 3 months shy of his 40th birthday yet had 18 years with IBM was pissed (and still is). He's now a Director, and still with IBM.

      -gone_in_07- got it right when he said first line managers have no power and if they have any gumption and are willing to take unpopular stands they can find themselves shot out of a cannon. IBM HR keeps a close eye on IBM managers, and know which ones don't toe the line.

      To -Anonymous-, I surely do remember the former, annual opinion survey and morale index -- and it was clear to me when IBM canned that many years ago that the executive team no longer cared about employee morale or employee satisfaction. Finally, for those of you who are either still with or once were with IBM and who would like to warn others about the "working conditions" and "treatment" you experienced -- please (as I have done) take a moment to go over to the Glassdoor website at http://glassdoor.com and sign up (it's easy and free) to can enter your own review of IBM. You can see a few good examples here:

    • Comment 09/15/09: Since leaving IBM I have moved into banking. I was in a pub in London with some colleagues, and it does seem Palmisano's "mismanagement" is starting to worry the banks. At one level there is a loss of confidence in the technology which is being under-invested in, but more interestingly this is being coupled with worries about UK and US skills being lost which will impact future performance and profits. Essentially the analysts with us were concerned that IBM is not investing enough in technology and is becoming yet another body shopping outfit. It may hit the short term goals, but the CEO is doing long term damage. -BIG Z-
    • Comment 09/16/09: IBM left me in 2006 when I was outsourced to Qualxserv. Strangely all of us outsourced tended to be 45 and greater in age. Then in 2008 IBM pulled the contracts from them and moved them to a cheaper company leaving Qualxserv to to the dirty work and get rid of former IBMers. I had been looking and two days later had a much better position with a company who cares about its employees and also pays 50% more than I was making with IBM.

      The last few years at Big Blue were hell with the company playing manager roulette and us having to get used to a new manager every 12-18 months, many who were just a voice on the phone in a distant city. It's hard to get to know management style and individual hot buttons that way. The manager who hired me was by far the best, he had a personal stake in my success. Many of the other ones were very good but towards the end we began to get the dregs from the bottom of the barrel. The worst ones were ex printer service division managers who were being deployed to the server/high availability divisions to keep their jobs and who had no clue as to why we had callouts around the clock since large printer service tends to be first shift activity.

      A contract would stop this nonsense but I feel it's too late, the damage has been done. Management has seen what it can get away with and will continue its evil practices. The large problem is that many IT people tend to be modern day cowboys and don't see the need to organize. They need to remember that the rugged Marlboro man died of lung cancer. -Gladimgone-

    • Comment 09/16/09: I have been a dues paying member here for a long time and have a question. Has ANYONE ever won or even settled a "wrongful termination" case against IBM in NY ?? I was fired (RA'd) while on medical leave for fabricated reasons and have spoken to a couple attorney's but have not been warmly received by them. I was just curious if ANYONE has ever been successful in pursuing legal action for this ??? I know if you settled you can't reveal any details, but I'd love to find out if anyone has been successful with this and also find an attorney in the Poughkeepsie area that has had some success with this... Thanks in advance for any help you can provide... -blue fan- Alliance reply: We have sent you a reply (to your email) and a recommendation; because you are a dues paying member. Helping our members any way we can, is our first priority.
    • Comment 09/16/09: Question for "Former IBM Manager" - I was reading your first write up, where you were on a fast track up the management chain then spoke up about the verbal abuse on the telecons and was suddenly rated poorly and ultimately RA'd. If you are FEMALE then this is my question....if you witnessed or somehow alluded to harassment or discrimination to HR about this organization that you were in, we need to talk. This is EXACTLY what IBM did to me... I too was on a fast track, such a good Project Leader that they gave me two teams... I complained about discrimination and harassment and suddenly, almost immediately, I was the problem. Removed from my leadership position (backfilled by 2 male team leads), moved from an office to a cubicle with the vendors.

      I won't go into many more details... but in a completely new organization and division a few years later, I discussed what I saw as a problem with being shut out of meetings that affected my job responsibilities and career growth.... as well as a few "blond jokes" I had to endure. I quickly heard the same script, VERBATIM..... "we have spoken with ALL the team members and EVERYONE had a complaint."

      Funny how informal feedback sessions were ALL fine, nothing mentioned to me only WEEKS earlier. And when do managers suddenly round up all the members of a team and ask them about "how things are going" ? No, I don't know if everyone provided 10 good things and 1 bad thing (to improve)... just that they all had at least 1 bad thing to say. I have it ALL documented if you want to compare notes or write a book.

      Net net..... if you complain to IBM about discrimination, unfair treatment, retaliation, etc. they come after YOU very aggressively. Speak Up / Open Door? Just a way for HR to see what info you have (call over to EEOC, that's exactly what they will tell you).

      IBM can get away with this because no one has the money and the resources to sue and take them on. I think if we have enough of us who can corroborate this treatment we can at LEAST get it out there in the press (I was finally RA'd took the money and can't sue, you too probably). I'll always wonder if the RA "target" was sitting on my back all these years, just waiting for the right situation where they could easily let me go while I was still a 2 and 2+ performer (was I a litigation risk because my past cases were so strong? it was probably only a matter of time before some new chauvinist manager messed up again.) Something has to be done, like the banks and auto companies who are "too big to fail", IBM is "too big" to be sued by an individual. -gotta-b-invisible-

    • Comment 09/16/09: This site is read by management more often than we may think. I was talking to my 1st line mgr and he mentioned he looks at the info on this site for job cut info. Can it be true that the first lines don't know anything until the very last moment? -dun-4-
    • Comment 09/16/09: In an earlier post I encouraged others who worked for or are currently employed by IBM to post their thoughts on http://glassdoor.com (it's free, painless, and easy -- and posting a review opens the site up to you at no cost for your own research on what the culture and pay are like at other companies). In my earlier posting (scroll down to see) I linked to several "choice" reviews -- and felt I should go ahead and pass along a link to the review I posted not long after being advised on 1/22/09 that I had been "selected" to take part in the IBM's January resource action. You'll see "current employee" at the top of the review because I was still with IBM at the time I posted the review. Here's the link to my Glassdoor.com write-up: http://www.glassdoor.com/Reviews/Employee-Review-IBM-RVW170006.htm So please, if you have any IBM experience, post a review of your own -- since others who are thinking of joining the IBM of today need to know what they're getting into. -Former IBM Manager-
    • Comment 09/17/09: I just read the comments on glassdoor.com for IBM India... It would be comical if it weren't so depressing: the folks in India have exactly the same perceptions and concerns as we do: a top-heavy company with incompetent and greedy management, an appraisal process that does not work, etc. It may be time to start an IBM-Alliance site in India! -Anonymous-
    • Comment 09/17/09: I guess the motto has changed. From "THINK" to "SUBMIT!". -Neal Watkins-
    • Comment 09/18/09: Thanks for the info -ophelya paine-. -Former IBM Manager - are you female and if so, how do these stories match up with your situation? Alliance - maybe we should consider creating a comments section on Discrimination and Retaliation ? We need to get the word out, until there's a union, women and minorities should NOT complain to IBM, they should make sure they have solid proof (that would hold up in court) and take that to EEOC. Then...document, document, document because IBM for sure will try to fire or retaliate against them. -gotta-b-invisible- Alliance reply: Yes we do need to get the word out. But as for setting up another comments section; we have to tell all of you that if we do not get more dues paying members to support this web site and the Alliance, this site will not be around. In recent discussions with our officers, our members are not happy that too many that come here to this site, do so for free. We have said before that if we do not build membership; then many of the features of this web site, like the comments sections, maybe be restricted to only those that pay dues. Yes, we realize it will decrease comments; but we are facing some tough financial times. We are only getting a handful of new members each month and also losing some due to job cuts. If you believe the comments section and this organization and web site are valuable; then we encourage those that are not members to become members.
    • Comment 09/18/09: IBM HR monitors the union site. A few years back I had to set up a network printer at an HR site in lower Westchester. It was a war room where they monitored the union site. They watched me like a hawk but I could see what they are doing -inside-
    • Comment 09/18/09: Sorry, I don't think Sam Palmisano cares about the limited press coverage about IBM policies and practices. I do think that many ill-informed americans believe that our president is responsible for their job loss. That's to say, i/you/they lost my/your/their job(s), because OH - Barack Obama was elected in November 2008, and OH OH OH - Barack Obama is the president now. So, of course, he is responsible. Create your poster-board signs now, and go picket some town hall meetings. Look like an idiot? Priceless. -Sorry-
    • Comment 09/18/09: IBM is still hiring non-immigrant workers instead of hiring or retaining USA computer programmers. It is posted in IBM Southbury.. What R U going to do about it? -sby_willie-
    • Comment 09/18/09: Getting ready to head back to IBM after a prolonged break. I heard that there's been many changes meant to suck the life out of you. We'll see how it goes when I arrive. Maybe I can fire things up, some. Why returning some of you may say? I have some personal reasons to get all that I can out of IBM before going elsewhere. I'm using the system to benefit me & cost IBM money (legally & ethically too). Hopefully I'll stay upbeat. -returning_IBM_slave-
  • Pension Comments page
  • Raise and Salary Comments IBM CEO Sam Palmisano: "I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways."
    • Comment 09/11/09: Salary = $27,456 Per Hour (yes, per hour); #Yrs Since Raise = 0; %Raise = 16%; Band Level = Top; This Yr-PBC = 1+; Job Title = Pres, Ceo, Big Guy; Years Service = I serve nobody; Hours/Week = 60 on the golf course; Div Name = HQ; Location = In the Clouds; Message = I'm really not satisfied with my salary. We've got to get rid of more dead wood and get the EPS way up there. Got to figure out a way to get more of the retirement funds into vapor profits. -Sammy-
  • PBC Comments
    • Comment 09/17/09: Had my 'mid-year' review with my manager and the whole purpose was to let me know unless I can write a convincing write-up about my contributions for this year, I stand a good chance of being a 2 performer (of course he didn't say those exact words). He was just doing a CYA. Gawd, this company sucks. Shouldn't managers know what their employees do? This company is so flawed now, it would take MAJOR change in the top executive ranks to make any real change - - that and a union. -anon-
    • Comment 09/18/09: Years Service = 13; Prior Yr PBC = 2+; This Yr Bonus = SFA; Prior Yr Bonus = SFA; Message = Well it is typical that during the mid year appraisal it always seems to be the same old negative points, Unfortunately the PBC process is so biased towards your image in the company and not the actual work or level of commitment you have done that counts for Diddly. Only now I have been told a solid 2+ performer because of a major project completion but reduced to a 3 and a mediocre performance because the PBC credentials were not met. Unfortunately due to a management decision these milestones were changed 4 weeks after the agreed PBC targets were published, but do you think for one minute the manager accepts this even with documented proof? I have more chance of seeing a Michael Jackson duet with Elvis than I have of these guys giving a fair evaluation with a fair wage. -Anonymous-
    • Comment 09/18/09: Band Level = 9; Years Service = 11; Prior Yr PBC = 2+; This Yr PBC = 2+; Message = Why is no one talkin' about how PWC guys are doing a 'cartel system' @ PBC discussion time? It's not 'bout ibm. You pay dues to PWC managers...else you're a goner. -Anonymous-
    • Comment 09/18/09: forget the bonus pay for your PBC this year. It is going away since the competition doesn't do "growth driven pay" anymore. PBC is only one of the intimidation and weeding out tools IBM is using now. And like Porky Pig says: "...and that's all folks.." -d_d_d_that's_all_folks-
  • International Comments
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Kaiser Family Foundation: Simple Arithmetic. By Drew Altman. Excerpts: This week we put out our annual benchmark survey of employer health coverage and costs. Two numbers jumped off the pages. The first number was the average cost of a family health insurance policy in 2009: $13,375. To put that number in context, if you are an employer, you can hire an employee at the minimum wage for about $15,000 per year. If you are a consumer, you can rent an average two-bedroom apartment nationwide for $11,136 per year (though it is quite a bit more here in Menlo Park, California where our Foundation is based). You can also buy a new Chevy Aveo for $12,000, and it gets 35 miles per gallon on the highway.

    The other result that jumped off the page was the stark contrast between increases in health insurance premiums and overall inflation in the general economy. Premiums went up 5% and prices overall fell 0.7% (mainly driven by a big drop-off in energy prices). The 5% increase we found in premiums is moderate by long-term historical standards. For example, two different times during the last decade premiums increased by 13% a year, in 2002 and 2003. This year's increase continues a multi-year period of relative moderation in premium increases. Still, over the last ten years premiums have increased by 131%, while wages have grown 38% and inflation has grown 28%. Consider this: If people (and businesses) are as concerned as they are now about rising health care costs in a period when they are actually moderating, how much more concerned will they be when rates of increase return to historic averages?

    Let's do some very simple arithmetic. Start with a fairly conservative assumption: If we assume that premium increases over the next ten years will average what they did over the last five (about 6.1% per year), the average premium for a family policy in 2019 will be $24,180. That's a big number. On the other hand, if we assume increases revert to the average of the last ten years—an average annual increase of about 8.7% and a very plausible scenario—premiums in 2019 will average a whopping $30,803, a very scary number

  • Washington Post: The extreme Republican Party. By Neal Gabler. Excerpts: et’s not mince words here: We now have an entire political party that is not only dedicated to the mediocre. It is dedicated to the nearly deranged. We are long past the time when we can pretend there are two serious political parties in this country - one right of center and one left of center. That is the situation in virtually every other industrialized country. England has its Tories and Labor, France its Gaullists and its Socialists, Germany its Christian Democrats and its Social Democrats. These parties generally don’t agree on policy; they are, after all, political adversaries. But they are all serious, they all represent large constituencies and interests, and they all operate from a set of shared values, not least of which is that the other side is not treasonous or evil or ill-intentioned; it just has different prescriptions for solving problems. Typically, the differences between right and left in these countries are fairly small because in most democracies most people agree on the really big stuff. Even Tory leader David Cameron has vigorously defended England’s National Health Service. ...

    But that is not the case here. We have one party that is severely compromised by its ties to big money, and another party that is just plain nuts. There is no other way to parse it. According to recent polls, a majority of its followers either believe that President Obama was born in Kenya or aren’t sure, believe there is no such thing as global warming, believe that the House health care bill calls for death panels to euthanize senior citizens, and believe that Obama is responsible for our economic woes (61 percent!). The only bright side is that according to a recent Pew poll, only 23 percent of Americans identify themselves as Republicans, which makes them not only a fringe in beliefs but also, thankfully, in numbers.

    Republicans haven’t always been like this. For most of our history, America was pretty much like our European allies. We had two sensible parties with different traditions, constituencies, and orientations. The Democrats were the party of Jefferson, Jackson, and Franklin Roosevelt. They saw themselves as representing the common man against larger economic interests, favoring, in the now-common characterization, equality over liberty. Republicans were the party of Hamilton, Lincoln, and McKinley. They saw themselves as representing business interests that would unleash the nation’s entrepreneurial energies, favoring liberty over equality. It was a nice balance, and it served the country surprisingly well for nearly two centuries

  • New York Times: Thousands Rally in Minnesota Behind Obama’s Call for Health Care Overhaul. By Sheryl Gay Stolberg. Excerpts: Thousands of roaring supporters turned out Saturday to rally behind President Obama’s call to overhaul the nation’s health care system, packing a basketball arena here as Mr. Obama warned that nearly half of all Americans under 65 could lose their insurance at some point during the next decade. “It can happen to anyone,” the president said. ...

    Mr. Obama opened his 40-minute speech with what he called “disturbing news”: a report from the Treasury Department that, he said, “found that nearly half of all Americans under 65 will lose their health coverage at some point over the next 10 years” and that “more than one-third will go without coverage for longer than one year.”

  • New York Times: The Body Count at Home. By Nicholas D. Kristof. Excerpts: In the debate over health care, here’s an inequity to ponder: Nikki White would have been far better off if only she had been a convicted bank robber. Nikki was a slim and athletic college graduate who had health insurance, had worked in health care and knew the system. But she had systemic lupus erythematosus, a chronic inflammatory disease that was diagnosed when she was 21 and gradually left her too sick to work. And once she lost her job, she lost her health insurance.

    In any other rich country, Nikki probably would have been fine, notes T. R. Reid in his important and powerful new book, “The Healing of America.” Some 80 percent of lupus patients in the United States live a normal life span. Under a doctor’s care, lupus should be manageable. Indeed, if Nikki had been a felon, the problem could have been averted, because courts have ruled that prisoners are entitled to medical care.

    As Mr. Reid recounts, Nikki tried everything to get medical care, but no insurance company would accept someone with her pre-existing condition. She spent months painfully writing letters to anyone she thought might be able to help. She fought tenaciously for her life. Finally, Nikki collapsed at her home in Tennessee and was rushed to a hospital emergency room, which was then required to treat her without payment until her condition stabilized. Since money was no longer an issue, the hospital performed 25 emergency surgeries on Nikki, and she spent six months in critical care.

    “When Nikki showed up at the emergency room, she received the best of care, and the hospital spent hundreds of thousands of dollars on her,” her step-father, Tony Deal, told me. “But that’s not when she needed the care.

    By then it was too late. In 2006, Nikki White died at age 32. “Nikki didn’t die from lupus,” her doctor, Amylyn Crawford, told Mr. Reid. “Nikki died from complications of the failing American health care system.” ...

    We now have a chance to reform this cruel and capricious system. If we let that chance slip away, there will be another Nikki dying every half-hour. That’s how often someone dies in America because of a lack of insurance, according to a study by a branch of the National Academy of Sciences. Over a year, that amounts to 18,000 American deaths. After Al Qaeda killed nearly 3,000 Americans, eight years ago on Friday, we went to war and spent hundreds of billions of dollars ensuring that this would not happen again. Yet every two months, that many people die because of our failure to provide universal insurance — and yet many members of Congress want us to do nothing?

  • Robert Reich's Blog: The Final Sprint for Health Care Has Now Begun, and Where the White House is Placing Its Bets. Excerpts: The real political race for health care has just begun. The significance of the President's speech to Washington insiders was its signal about where the White House is placing its bets and its support. More on this in a moment. First, let's be clear about who's racing and why. Think of the speech as the starting gate of a two-month sprint between two competitors -- and they're not Democrats and Republicans.

    On one side are America's biggest private insurers and Big Pharma. They're drooling over the prospect of tens of millions more Americans buying insurance and drugs because the pending legislation will require them to, or require employers to cover them. The pending expansion of Medicaid will also be a bonanza. Amerigroup Corp., UnitedHealth Group Inc. and other companies that administer Medicaid are looking at 10 million more customers. Healthcare Inc.’s Medicaid enrollment is expected to jump by 43 percent, according to its CEO. WellPoint Inc., the largest U.S. insurer, is also looking at big gains.

    But the big insurers hate the idea of a public option because it will squeeze their profits. A true public option will force private insurers to compete in markets where there's now very little competition, and also have the bargaining power to force drug companies to offer lower prices. Big Pharma also wants to prevent Medicare and Medicaid from having the power to negotiate lower prices, for the same reason. Private insurers and Big Pharma would rather fudge the question of where the savings will come from or how all this will be paid for. They certainly don't want to pay for wider coverage with a surtax on the rich, because, hey, their executives and shareholders are mainly rich. ...

    Private insurers and Big Pharma are being represented in this race by Max Baucus and his Senate Finance Committee. Senate Finance is on the verge of reporting out a bill that requires that just about every American have health insurance and just about every business provide it (or else pay a fee). But the bill will not include a public option. Nor will it change current law to allow Medicare to negotiate low drug prices. Nor will it include a surtax on the wealthy. The Committee's only real nod to cost containment is a small tax on expensive insurance policies, which doesn't worry the private insurers because its cost is so easily passed on to the beneficiaries.

  • Newsweek: The Private Option. Employment-based health insurance is in big trouble, but don't blame Obama. By Daniel Gross. Excerpts: Americans who have health insurance, we are told, are largely satisfied with it and terrified of losing it. Many of them assume that employment-based insurance—for all its flaws—is preferable to any other system. President Obama has gone out of his way to tell people who get their insurance from employers that they had nothing to fear: If you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: Nothing in our plan requires you to change what you have.

    That's true. But powerful trends in the broader economy will. Even without reform, lots of people with employer-provided insurance are losing it. And those who still have it may find they'll be less satisfied with it in the future. ...

    Economists have correctly noted that wages haven't risen more in this decade in part because companies are paying more for benefits like health insurance. True. But employers have also been passing on rising costs to employees. And according to a new report by Mercer Consulting, companies are planning on doing a lot of that in 2010. If employers simply re-upped existing plans, Mercer's survey finds, costs would rise by 9 percent. But according to preliminary findings, "respondents plan to shave three percentage points off their annual renewal rates through a variety of cost-saving actions, holding overall cost growth to 5.9 percent next year." How? The "first line of defense" is "shifting costs to employees." Mercer notes that between 2004 and 2008, the median family deductible for in-network services in the type of plan offered by the largest number of employers soared from $1,000 to $1,850. Translation: Employees who used their insurance plans with any frequency saw their wages reduced by $850 in that period. And it looks like there are more such "cuts" coming. Next year, Mercer reports, "nearly two-thirds of all respondents (63 percent) will again ask employees to pay a greater share of health plan costs." Forty percent say they'll ask employees to pay a bigger chunk of the monthly premium, and 39 percent will boost deductibles or increase co-payments. Oh, and 18 percent say they plan to get rid of "more generous health plan options" as a way to move into cheaper ones like consumer-directed health plans. The upshot: Most people who receive employer-based health insurance will either be paying more for the same plan or be offered a plan that shifts more costs on to them.

    It's understandable that those who have insurance from their employers are concerned about reform and what they might lose. But those who expect to hold on to the same employer-provided health benefits at the same cost are living on a prayer.

  • New York Times op-ed: Get Real on Health Care. By Roger Cohen. Excerpts: Some of my summer in France was spent listening to indignant outbursts about U.S. health care reform. The tone: “You must be kidding! What’s there to debate if 46.3 million Americans have no health insurance?” I think the French are right. I don’t think there’s much to debate when France spends 11 percent of its gross domestic product on health care and insures everyone and the United States spends 16.5 percent of G.D.P. and leaves 20 percent of adults under 65 uninsured. The numbers don’t lie: The U.S. system is wasteful and unjust.

    It’s not just the numbers. It’s the intangibles. Two of my children were born in Paris — a breeze. One of them got very sick on arrival in the United States — and my wife fainted in a doctor’s office from the anxiety of finding the appropriate care (when we did, at the eleventh hour, it was excellent). The American health system is an insidious stress-multiplier whose hassles, big and small, permeate already harried lives. ...

    The French health system uses a mixture of public and private funding, guaranteeing basic coverage through national insurance funds to which employees and employers make contributions. Most French people supplement these benefits by buying private insurance. The distinctions from the single-payer British system are significant, the results better. So beyond all the hectoring, the main French-American difference on health care is not ideological but a question of efficiency. Both countries use a mixture of public and private. France is at a very far remove from “socialism.” The United States has already “socialized” a significant portion of its medicine. (Nothing illustrates right-wing ideological madness in the United States better than calls from some to “keep the government out of my Medicare!”)

    The real difference is that the French state mandates health coverage for everyone, picks up the tab where necessary (as for the unemployed), holds down costs through a national fee system, and uses mainly nonprofit mutual insurers even for supplemental private coverage. The profit motive is outweighed by the principle of universal health care, with a corresponding effect on doctors’ salaries.

    These are real distinctions. But the “socialism sucks” Republican broadside on Obama’s reform plans — with its overtone that the “cosmopolitan” president wants to “Europeanize” American medicine — is nonsense. It’s nonsense because the free market is vigorous in France (and Europe), because there are all sorts of European approaches to health (within the compulsory coverage), and because the United States has already “socialized” aplenty without turning its capitalism pink.

  • New York Times: Public Option Fades From Debate Over Health Care. By Robert Pear. Excerpt: It was just one line in a campaign manifesto, and it hardly seemed the most significant or contentious. As a presidential candidate, Barack Obama said he would “establish a new public insurance program” alongside private health care plans. That proposal took on a life of its own, but it now appears to be dying, a victim of an ineffectual White House strategy, the president’s failure to argue passionately for the “public option” and all-out opposition by the insurance industry and much of the health care industry.
  • Kaiser Health News: Workers Face Higher Costs for Employer-Sponsored Insurance. Deductibles Soar While Premiums Outstrip Inflation, Survey Shows. By Phil Galewitz and Andrew Villegas. Excerpts: Employers struggling with the steady rise of health insurance costs – which in 2009 increased 5 percent to an average of $13,375 for family coverage -- are passing on more of the expense to their workers through higher deductibles and co-payments, according to survey released today. The average deductible for an individual in a preferred provider organization, the most common type of health plan, rose to $634 this year from $560 last year, the survey by the Kaiser Family Foundation and the Health Research & Educational Trust found. ...

    Since 1999, health insurance premiums have soared 131 percent -- more than triple the rise in workers' wages and four times the overall inflation rate, the report said. Paul Fronstin, senior research associate at the Employee Benefit Research Institute, said that "employers see raising deductibles as the easiest way to control costs." The higher deductibles are one reason why premiums have been going up more slowly in recent years. "It’s a crude instrument, but it does the job," he said.

  • The Huffington Post: The Public Plan Option and the Big Government Conservatives. By Dean Baker. Excerpts: We all know that there are basic philosophical differences between liberals and conservatives. Liberals believe that the government can be used to improve the lives of ordinary people. Conservatives, on the other hand, believe that the government should redistribute money to the wealthy. This philosophical difference has come through very clearly in the debate over giving people the option to buy into a publicly run health insurance plan.

    Since the conservatives are not honest enough to own up to their true principles in this case, it is worth briefly recapping the argument they put up as a cover. The conservatives claim that if people are given the option to buy into a public plan, then so many people will choose to do so, that it will drive the private plans out of business. The country will then be stuck with only a government-run insurer and patients will have no choice. This will be bad news, because the government can't do a good job providing the American people with health insurance.

    The logic of this one is more than a bit difficult to follow. We are supposed to be worried because people will freely choose to go with a government-run insurance system that is badly run and inefficient rather than private insurers. Do the conservatives think that we cannot trust people to make their own choices about health insurance? Is this yet another case of nanny-state conservatives who want to step in to prevent people from making choices that they think are bad for them? ...

    Of course, at this point, we are dealing with something entirely fictional that has nothing to do with any proposal currently being debated. The bottom line is that the conservative position is that there are people getting rich running private insurance companies and they want to protect this situation long into the future.

  • The Hill: Reform debate draws eyes to lawmakers’ own blue-chip health insurance options. By Molly K. Hooper. Excerpt: A key Democrat said he is open to changing healthcare reform legislation amid complaints of the disparity between benefits enjoyed by members of Congress and proposed coverage options for average Americans. House Energy and Commerce Committee Chairman Henry Waxman (Calif.) told The Hill last week that he would consider adding an amendment that would give members the option of choosing to participate in a government-run plan.
  • Washington Post: Many Employers to Raise Cost of Health Benefits, Survey Finds. By David S. Hilzenrath. Excerpts: Though Americans who already have medical coverage may be wary of change, a new survey indicates that they may be hard-pressed to escape it -- even in the absence of health-care reform. As businesses contend with rising costs, many workers face an erosion of health benefits next year, according to an annual survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. ...

    A major business lobby weighed in Tuesday, saying that if current trends continue, annual health-care costs for employers will rise 166 percent over the next decade -- to $28,530 per employee. "Maintaining the status quo is simply not an option," said Antonio M. Perez, chief executive of Eastman Kodak and a leader of the Business Roundtable. "These costs are unsustainable and would put millions of workers at risk," Perez said in a statement.

  • Los Angeles Times: Disney, union workers clash over healthcare. The company's cost-sharing proposal is at the center of a labor dispute, which broke out into a protest at the D23 Expo in Anaheim last week. By Patrick J. McDonnell. Excerpts; Jean Bustamante views the nation's raging healthcare debate in very personal terms. Her 8-year-old son, Ethan, is confined to a wheelchair with cerebral palsy, she says, and his medications alone would cost her $1,000 a month if she were uninsured. "My job and the health insurance are a lifeline," said Bustamante, a single mother of two who works as a waitress at the Steakhouse 55 restaurant at the Disneyland Hotel in Anaheim. "If that goes, I would lose everything."

    She was among dozens of Disney workers participating in a noisy protest at the doors of the Anaheim Convention Center last week, on the first day of Disney's D23 Expo for the studio's fans. The employees are at the center of a nasty labor dispute focusing on health benefits that is jolting the self-proclaimed "happiest place on earth." The clash pits image-conscious Walt Disney Co. against Unite Here Local 11, an aggressive union known for its street-theater militancy. On Thursday, union supporters dressed as Snow White, Mickey Mouse and other Disney characters staged a mass "sick-in" while Disney Chief Executive Bob Iger was scheduled to speak inside the convention center.

  • New York Times: How Much Should Older Americans Pay for Insurance? By Michelle Andrews. Excerpts: Should older people pay more for health insurance than younger people, and if so, how much more? The issue has long been on the radar of health policy analysts and consumer advocates weighing the fairness and affordability of health care costs. But it’s likely to receive more scrutiny now. The health reform “framework” put forward by the Senate Finance Committee’s chairman, Max Baucus, Democrat of Montana, proposed a new standard that would permit older people to be charged significantly higher premiums than would be the case under any of the other health care reform bills.

    Under Senator Baucus’s plan, insurers would be permitted to charge older people five times more for their health insurance premiums than younger people. That proposal, first circulated in a Finance Committee policy options paper last spring, is a significant departure from the approaches put forth by three House committees and the Senate Health, Education, Labor and Pensions Committee. Those bills would only allow insurers to charge older people twice as much as younger ones.

    “A lot turns on whether it’s a 5:1 ratio or a 2:1 ratio,” said Drew Altman, president and C.E.O. of the Kaiser Family Foundation. “It makes a big difference as to whether a 55-year-old worker will be able to afford health insurance.” ...

    Currently, people who get health insurance through their employer generally can’t be charged higher premiums because of their age. But in the individual insurance market, “age-rating,” as it’s called, is common, and only eight states place limits on how much more insurers can charge older people, according to a report by the National Women’s Law Center. In all other states, insurers can — and do — charge older policyholders more, though insurance industry representatives say they can’t pinpoint exactly how much more on average. ...

    But some health policy experts argue that allowing insurers to charge older people five times more than younger ones would be a giveaway to the insurance industry, which already stands to benefit handsomely from millions of new customers if, as proposed, everyone is required to have insurance. Proposed health care legislation would forbid insurers from charging sick people more or rejecting them outright. But by allowing insurers to charge so much more for older, often sicker people, “You’re just using age as a proxy for health status,” said Uwe Reinhardt, an economics professor at Princeton University. He estimates that Senator Baucus’s age-rating plan would allow insurers to cover roughly 70 percent of the additional risk they’d take on by being required to accept all comers, regardless of health.

  • USA Today: Mexico's health care lures Americans. By Chris Hawley. Excerpts: It sounds almost too good to be true: a health care plan with no limits, no deductibles, free medicines, tests, X-rays, eyeglasses, even dental work — all for a flat fee of $250 or less a year. To get it, you just have to move to Mexico. As the United States debates an overhaul of its health care system, thousands of American retirees in Mexico have quietly found a solution of their own, signing up for the health care plan run by the Mexican Social Security Institute. ...

    "It was one of the primary reasons I moved here," said Judy Harvey of Prescott Valley, who now lives in Alamos, Sonora. "I couldn't afford health care in the United States. … To me, this is the best system that there is." It's unclear how many Americans use IMSS, but with between 40,000 and 80,000 U.S. retirees living in Mexico, the number probably runs "well into the thousands," said David Warner, a public policy professor at the University of Texas. "They take very good care of us," said Jessica Moyal, 59, of Hollywood, Fla., who now lives in San Miguel de Allende, Mexico, a popular retirement enclave for Americans. ...

    The program has helped people such as Ron and Jemmy Miller of Shawano, Wis. They decided to retire early, but knew affording health care was going to be a problem. Ron was a self-employed contractor, and Jemmy was a loan officer at a bank. At ages 61 and 52, respectively, they were too young to qualify for Medicare, but too old to risk not having health insurance. "We knew that we couldn't retire without Medicare," Jemmy Miller said. "We're pretty much in Mexico now because we can't afford health care in the States." The couple learned about IMSS from Mexico guidebooks and the Internet. They moved to the central city of Irapuato in 2006, got residency visas as foreign retirees, and then enrolled in IMSS.

  • USA Today: Average family health insurance policy: $13,375, up 5%. By John Fritze. Excerpts: An average family health insurance policy now costs more than some compact cars, and four in 10 companies will likely pass more of that expense on to workers, according to a closely watched survey of businesses released Tuesday. The average cost of a family policy offered by employers was $13,375 this year, up 5% from 2008, the Kaiser Family Foundation and the Health Research & Educational Trust survey found. By comparison, wages rose 3% over that period, the study said. ...

    Since 1999, health insurance premiums for families rose 131%, the report found, far more than the general rate of inflation, which increased 28% over the same period. Overall, health care in the United States is expected to cost $2.6 trillion this year, or 17% of the nation's economy, according to the non-partisan Congressional Budget Office. ...

    As insurance costs increase, workers are also picking up a larger share, the survey found. The average employee with family coverage paid 26% of the premium, the study found, but 41% of companies said they are "very likely" or "somewhat likely" to increase the amount employees pay for coverage in the next year.

  • New York Times op-ed: Baucus and the Threshold. By Paul Krugman. Excerpts: Third, the plan doesn’t create real competition in the insurance market. The right way to create competition is to offer a public option, a government-run insurance plan individuals can buy into as an alternative to private insurance. The Baucus plan instead proposes a fake alternative, nonprofit insurance cooperatives — and it places so many restrictions on these cooperatives that, according to the Congressional Budget Office, they “seem unlikely to establish a significant market presence in many areas of the country.”

    The insurance industry, of course, loves the Baucus plan. Need we say more?

  • Bloomberg: Canadian Health Care, Even With Queues, Bests U.S. By Pat Wechsler. Excerpts: Opponents of overhauling U.S. health care argue that Canada shows what happens when government gets involved in medicine, saying the country is plagued by inferior treatment, rationing and months-long queues. The allegations are wrong by almost every measure, according to research by the Organization for Economic Cooperation and Development and other independent studies published during the past five years. While delays do occur for non-emergency procedures, data indicate that Canada’s system of universal health coverage provides care as good as in the U.S., at a cost 47 percent less for each person.

    “There is an image of Canadians flooding across the border to get care,” said Donald Berwick, a Harvard University health- policy specialist and pediatrician who heads the Boston-based nonprofit Institute for Healthcare Improvement. “That’s just not the case. The public in Canada is far more satisfied with the system than they are in the U.S. and health care is at least as good, with much more contained costs.”

    Canadians live two to three years longer than Americans and are as likely to survive heart attacks, childhood leukemia, and breast and cervical cancer, according to the OECD, the Paris- based coalition of 30 industrialized nations. Deaths considered preventable through health care are less frequent in Canada than in the U.S., according to a January 2008 report in the journal Health Affairs. In the study by British researchers, Canada placed sixth among 19 countries surveyed, with 77 deaths for every 100,000 people. That compared with the last-place finish of the U.S., with 110 deaths. ...

    Private insurers, the pharmaceutical industry and the medical profession fear the “market power” of a public plan, Reinhardt said. They “deployed certain think tanks to find horror stories around the world that can be used to persuade Americans a public health plan in the U.S. would bring rationing.” Given that Congress is likely to pass a mandate to cover the uninsured, Americans forced to buy policies will be left with no alternative to coping with “double-digit rate increases” on commercial premiums, Reinhardt said. ...

    As the price of health care in the U.S. has risen three to four times faster than the rate of inflation, surveys show that Americans have become concerned they won’t be able to pay medical bills. Forty-three percent of consumers in a June poll by the University of Michigan in Ann Arbor said they worried they might not be able to afford care, even with insurance.

    “Canadians value fairness, and they cannot conceive of a system in which someone can’t get health care,” said Wendy Levinson, a Canadian who runs the department of medicine at the University of Toronto and worked in the U.S. from 1979 to 2001.

    The U.S. spent $7,290 on health care for each person in 2007, 87 percent more than Canada’s $3,895, according to the latest OECD data. The U.S. also devoted the highest percentage of gross domestic product to health care, 16 percent, OECD numbers show. Canada’s expenditure was 10.1 percent. ...

    In both the U.S. and Canada, 26 percent of people interviewed told the Commonwealth Fund survey of chronically ill adults they got a same-day appointment with a doctor when they were sick -- the lowest number in any of the eight countries polled by the foundation. Thirty-four percent of the Canadians said they had to wait six days or more, compared with 23 percent of the Americans. Canadians visited their doctors more frequently: 5.9 visits per person compared with four for those in the U.S., according to 2005 OECD data.

  • CNN: Medical bills prompt more than 60 percent of U.S. bankruptcies. By Theresa Tamkins. Excerpts: This year, an estimated 1.5 million Americans will declare bankruptcy. Many people may chalk up that misfortune to overspending or a lavish lifestyle, but a new study suggests that more than 60 percent of people who go bankrupt are actually capsized by medical bills. Bankruptcies due to medical bills increased by nearly 50 percent in a six-year period, from 46 percent in 2001 to 62 percent in 2007, and most of those who filed for bankruptcy were middle-class, well-educated homeowners, according to a report that will be published in the August issue of The American Journal of Medicine.

    "Unless you're a Warren Buffett or Bill Gates, you're one illness away from financial ruin in this country," says lead author Steffie Woolhandler, M.D., of the Harvard Medical School, in Cambridge, Mass. "If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that's the major finding in our study." ...

    Overall, three-quarters of the people with a medically-related bankruptcy had health insurance, they say. "That was actually the predominant problem in patients in our study -- 78 percent of them had health insurance, but many of them were bankrupted anyway because there were gaps in their coverage like co-payments and deductibles and uncovered services," says Woolhandler. "Other people had private insurance but got so sick that they lost their job and lost their insurance."

  • Yahoo! IBM Employee Issues message board post: "Re: Senator Jim Demint on the Baucus Plan" by "cybertramp66". Full excerpt: Yup. The Baucus Plan is a wet dream come true for Big Insurance and all but guarantees that medical bankruptcies will increase dramatically. Howard Dean, former Democratic National Committee chairman, minced no words. "The Baucus bill is the worst piece of healthcare legislation I've seen in 30 years," Dean said. "In fact, it's a $60 billion giveaway to the health insurance industry every year," he said. "It was written by healthcare lobbyists, so that's not a surprise. It's an outrage." Max Baucus stood alone at a press conference to announce the bill. None of the other "Gang of Six", a supposedly bi-partisan group that collaborated on the bill, would appear to express their backing for it.
  • FactCheck.org: Twenty-six Lies About H.R. 3200. A notorious analysis of the House health care bill contains 48 claims. Twenty-six of them are false and the rest mostly misleading. Only four are true.
News and Opinion Concerning the U.S. Financial Crisis
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • Wall Street Journal: Obama Calls for Finance Reform. By Darrel A. Hughes. Excerpt: U.S. President Barack Obama, in his weekly radio address Saturday, focused on the need for a consumer protection agency and continued his push for more Wall Street reforms. The rules governing financial firms and markets have to be retooled to align with the 21st century, Mr. Obama said. "We cannot allow the thirst for reckless schemes that produce quick profits and fat executive bonuses to override the security of our entire financial system and leave taxpayers on the hook for cleaning up the mess," he said. Mr. Obama maintained that his proposed Consumer Financial Protection Agency is key to achieving consumer protection initiatives and retooling how Wall Street conducts business. "While many folks took on more than they knew they could afford, too often folks signed contracts they didn't fully understand, offered by lenders who didn't always tell the truth. That's why we need clear rules, clearly enforced," he said.
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