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Highlights—September 4, 2010

  • ComputerWorld: As IBM cuts jobs in Vermont, others hire. Burlington officials, tech execs explain a shifting employment landscape. By Patrick Thibodeau. Excerpt: The shrinking of IBM's U.S. workforce is particularly worrisome in Burlington Vt., which has long counted on the company to provide many good jobs for area residents. A decade ago, IBM employed about 8,000 people in the region; city officials believe the IBM workforce has since declined to approximately 5,000.
  • When Fridays Were Fridays: The Great Job Heist... Offshoring. Excerpts: It started with the call center. Corporations learned that they could take advantage of cheap labor pools overseas for lower skilled jobs. Before we knew it, it was rare to call a customer support number that didn’t land us in India.

    It made sense. With constant pressure to improve profitability, companies needed to reduce expenses, and labor is a top expense. Having the ability to leverage cheaper skills gives the company flexibility and options in a tough economy.

    But it didn’t stop with the call center. In the past few years we have seen more highly skilled jobs moving overseas. Computer programmers, engineers, and accountants are just some of the professionals who have lost their jobs to offshoring. Some employees have even had the unenviable task of having to document their roles in detail, just so their jobs can be eliminated. Worse yet, some employees have had to train the overseas organizations that were taking over their roles, getting the pink slip upon completion.

    Jobs in the IT industry appear to be among the most at risk. The Times of India recently reported that IBM was now the country’s second largest employer. In 2007, IBM had 73,000 employees in India, a 43% increase from 2006. The Wall Street Journal estimates that IBM’s workforce in India could be as high as 100,000 today.

    Earlier this year, IBM stopped reporting the number of employees by country, making it extremely difficult to know how many jobs are left in the United States. Nevertheless, data as recent as last fall suggests that of IBM’s reported 400,000 workforce at the end of 2009, only 105,000 jobs remained in the United States. It appears that soon – possibly very soon – IBM will employ fewer people in the US than in India.

  • LinkedIn: The Greater IBM Connection. Performance Reviews - a Beef with the Baloney What's your take on performance reviews. Are they dishonest? Selected comments follow:
    • I do think the PBC system is broken. I'm not sure what other groups are like but in the Global Services area we are given our goals, not allowed to delete any of them even if they don't apply to our position and then told to add a couple specific to ourselves. I don't see how this is at all a valuable system for anything. We fill out our results with nebulous 'achievements' based on the mandatory goals, wordsmithing the words already given to us and adding our own real achievements and successes. It's certainly not a two way street that invites communication up stream.
    • I agree with you Jordan. I have seen many managers in GBS India who don't interact much with their team members throughout the year and at the end of it they rate them based on only one persons feedback (usually PM and don't even care to discuss member's achievements and improvements with them). In GBS India your career growth is very much dependent on your manager and it'll never grow if your manager doesn't think highly of you even though you might have worked very hard and showed good results etc. I have seen many people quit IBM because of this very reason.
    • For those who remember it, PPC&E was a system used in years past. In my opinion, it was a much more objective approach to performance reviews and, thus, a much better tool. Alas, things changed...
    • As a former IBMer, and one with other "big company" experience, I can tell you that the PBC is very broken without an open and honest relationship with your manager. I have always said and will continue to say that as an employee of IBM, I would rate it as the worst company I ever worked for in terms of interaction with leadership, yearly evaluations, career path, compensation, etc. On the other side though, I never was as challenged intellectually and learned as much as I did at IBM, hence the dilemma about making it a career.

      I finally made the choice to leave because I could not get over how broken the employee systems were. If you had a good manager, you got the care and feeding to allow you to grow as a person and an employee of the company. If you had a long distance relationship with your manager, chances are you suffered because they did not spend the time to figure out who you were and the points of value you brought to the organization along with the improvement opportunities.

      Also, the system was severely broken to me. I got a raise when I was rated a 3, (the 3 times I changed jobs and had less than a year in the role, an IBM standard I was told) and no raise when I was a 2 (old system) or 2+ or 1 (new system). It did not line up at all for me and finally that dissatisfaction, along with no direction on career path and what I felt was employee apathy from the management team, I left.

      I bring this up to say that while I loved the intellectual environment, the revolving door of resources and the constant switching around of managers (I had 19 in 9 years) led me to look outside and find something I felt would provide a more personal relationship. I consider it a shame as I loved the people I had the opportunity to work with and again, the terrific environment that fostered creativity and intellectual growth.

    • Oh my gosh, I was laughing out loud when I read John's comment -- new system -- old system -- 2's, 2+'s, etc. Arrrggggh. Can you make things more complicated? I remember when we added the 2+ -- because all of the 2's were unhappy. But when it was one big bucket everyone could believe they were in the top of the 2's. When they split it it was a nightmare.
    • The change from old 4 to 3, old 3 to 2, and old 2 to 2+ was idiotic. They did not change the forced ranking. They wanted around 20% of the workforce as 2+, just like they wanted 20% as 2 under the old numbering. In my previous comment, I mentioned any system had to be honest. Shallow changes like those from 2 to 2+ are dishonest attempts at manipulation and the employees know it. I agree it was funny (but funny strange, not funny ha ha!)
    • John and Stephen, I am also a former IBMer and your notes hit the nail on the head. Your stories made me laugh and also I now remember the disappointments. Before IBM I had always worked for medium sized companies. I was part of an acquisition and the transaction to IBM was long and confusing. During my 10 years at IBM I worked for 11 managers. One manager who was very good, I had the chance to work for in three different roles across the years. I never did get the hang of the scoring system. As a 3, I was awarded by management numerous paper awards and significant cash rewards. As a 2, or 2+ there was no funding for a raise. In the end I am glad for the experience but am very glad to be out and running my own company.
  • Yahoo! IBM Employee Issues message board: "Separation agreement question" by "VS". Full excerpt: Yesterday I received a "Minimized Separation" package from my manager. The package provides 13 weeks of Separation Allowance (I have over 25 years with the company), Transitional Medical Benefits, Career Transition Services and a Retirement Bridge Leave of Absence (which I am also eligible for).

    The question I have concerns the wording. On the summary page they call this a "Mutual Agreement" Separation. It is far from mutual as I had no plans on leaving IBM, but obviously they want me out.

    My question is, am I eligible to collect unemployment even though this is supposedly "mutual" and I am taking the Retirement Bridge LOA? Also, does anyone know of a good labor attorney in the Poughkeepsie area as IBM suggests I get a lawyer prior to signing the agreement. Thanks in advance for any help.

  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "madinpok". Full excerpt: If you are not being fired "for cause" (i.e. you stole something from the company or violated company rules), then you should be eligible for unemployment benefits.

    In NY, the key to collecting unemployment is to make sure that you make it clear that IBM did NOT contribute to the pension plan since 12/31/2007, and that working during that time did not increase your pension. Receiving the retirement bridge LOA and severance pay will not affect your eligibility for unemployment.

    If, for some reason, you are initially denied unemployment benefits, be sure to appeal the decision. Many folks have had this happen and the decision is reversed once they appeal.

    I think the reason that the paperwork calls it a "mutual" agreement is because IBM doesn't have to give you any sort of package with severance pay, medical benefits, etc. By accepting the items they are offering, you are agreeing to the offer and the terms and conditions that go with it. You may not be thrilled by it, but you are the one making the choice to take it, so in that respect, it is considered "mutual."

    Although I have no personal experience with this firm, I know several people who have used McCabe and Mack in Poughkeepsie and were very satisfied. They have several lawyers who specialize in labor law and should be just fine for looking over the agreement. You can also search for lawyers on the lawyers.com web site. That can help you find a firm that specializes in labor law, but is not as good as a recommendation from someone you know.

  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "VS". Full excerpt: Yes, I am not not being fired for gross misconduct, I am being fired because, according to my manager, of my performance. I did receive a 3 appraisal last year and in her opinion, was headed for another 3 this year. The fact that I've received 2 Outstanding Technical Achievement Awards and 12 patents, including one rated the 10 most valuable patents for IBM in 2005, over the course of my career, counts for nothing.

    The "summary page" that calls this a "mutual agreement" is not included in the package, but a separate "unofficial" page that summarizes and outlines the benefits of my accepting the package. The actual package discusses two kinds of separations: a) Separation Allowance which is 1 week of pay for each six months of service up to a maximum of 26 weeks of pay. b) Minimized Separation Allowance which is 1 week of pay for every year of service up to a maximum of 13 weeks.

    The Minimized Separation Allowance is used when management determines an employee's performance is declining towards and unsatisfactory level. The Separation Allowance, I am guessing, is used during resource actions.

    I have heard favorable things about McCabe and Mack in the past concerning non-labor issues, so I will call them regarding this situation. Many thanks to you and everyone who has responded. If anyone has any additional opinions, I'd be very happy to hear them as well.

  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by Susan Crane. Full excerpt: This is not relevant to your separation pay, but I just wanted to let you know that you have been a victim of an IBM strategy to get rid of employees for economic reasons. First, they decide you have to go. Then, they "manage you out" by giving you a 3, and then deciding that your work for the next year is tending toward a 3. It happened to me, and to many other people. This has nothing to do with your performance -- IBM has to make it seem that way because it shields them from lawsuits.
  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "nyjints5". Full excerpt: VS, I'm very sorry to read about the abuse you are currently receiving from IBM. I'm sure you are not now, nor were you ever a 3 performer.

    I'm located in Poughkeepsie, currently collecting my IBM pension, and have also been receiving NYS Unemployment Insurance of $430 per week since the first week of May in 2009. I'm expecting to receive a total of 93 weeks of UI the way things stand as of today's date. I was in the very first group of employees that was eligible to collect BOTH their pensions and UI. That's because I was notified I was being RA'ed on March 26, 2009, but retired from IBM on April 30, 2009.

    The New York State Department of Labor uses the previous 5 quarters of your work history prior to your actual last day of employment with IBM to determine the amount of your weekly UI benefit. Because IBM was not contributing to anyone's pension during the 5 quarters between 1/1/2008 and 3/31/2009, collecting a pension did not offset any amount of UI the employees RA'ed in March of 2009 were eligible to receive. Since you have worked for IBM for many more than 5 quarters since IBM froze everyone's pension on 1/1/2008, you are definitely eligible to collect both your pension and full UI benefit at the same time.

    Good luck to you. I believe you will find life out of IBM to be great!

  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by Scott Storms. Full excerpt: Every separation package I saw as an IBM manager always included 2 weeks of pay per year of service up to 26 weeks maximum. If this isn't mutual, you should hold out for that. As far as the unemployment insurance goes; I am fairly certain it depends upon your state. In my state, since it was a lump sum, I was still able to collect unemployment benefits.
  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "madinpok." Full excerpt: In recent years, 2 weeks pay per year of service with a maximum of 26 weeks, has only been used for layoffs (RAs). When someone is let go outside of a RA, then IBM has only been offering 1 week per year of service with a max of 13 weeks. I can't say that there aren't any exceptions to this, but with the folks I have talked to, that's the way it has worked. It certainly wouldn't hurt to ask, but it is unlikely that IBM will increase the offer. As an individual, one has no leverage in this situation. If you don't accept the agreement, they will fire you and give you nothing.
  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "teamb562". Full excerpt: "If you don't accept the agreement, they will fire you and give you nothing." True, but if you don't accept the agreement, you don't have to "sign" which opens other possibilities and additional worries for IBM. Ask your attorney which path may be more lucrative.
  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "bk2006pc." Full excerpt: Interesting, what is the difference between these two? In both cases you are asked to leave IBM involuntary and by no fault of yours! Remember firing some one on performance issue is very difficult to prove in court.
  • Yahoo! IBM Employee Issues message board: "Re: Separation agreement question" by "madinpok." Full excerpt: The only difference is that IBM chose to create two different rules for different situations. IBM documents say that the enhanced separation pay is at "management discretion." Also, remember that IBM is an at-will employer. They don't need any reason at all to fire you. All they have to do is say "we don't need you anymore."

    The law says that they can not fire you for certain specific reasons, such as race, religion, color, sex or national origin. To win your case, you would have to prove that they violated one of these protected categories.

    If IBM claimed that they were not giving 2 weeks severance pay rather than 1 week because of performance reasons, you might have a case to sue over. You would need some pretty strong evidence to counter IBM's performance appraisals of you. And you would have to decide if the legal costs are worth the amount of money you are fighting over. That is something a lawyer can help you decide.

  • San Francisco Chronicle: CEOs who cut jobs got paid more, study says. By Tom Abate. Excerpts: The CEOs who cut the most jobs during the recession earned more than their peers, according to a study being released today by a liberal think tank in Washington. "When CEOs slash jobs they are often very richly rewarded," said Sarah Anderson, lead author of the Institute for Policy Studies' report, "CEO Pay and the Great Recession."

    Separately, the report estimated that the CEOs of the nation's largest publicly traded companies make an average of 263 times more the typical U.S. production worker. ...

    The institute calculated that the 50 CEOs - who together cut 531,363 jobs - averaged $12 million in salary, bonuses, stock options and other perks, 42 percent more than the average compensation for all of the CEOs on the Standard & Poor's 500. The report said 7 out of 10 of these top job-cutters laid off workers even though their companies ended the year profitably.

  • CNN: Slashing jobs pays off ... if you're sitting in the executive suite. By Cheryl Castro. Excerpts: According to the report "CEO Pay and the Great Recession," chief executive officers of the 50 firms that laid off the most workers since the start of the economic crisis earned nearly $12 million on average in 2009. That's 42 percent more than the average pay of CEOs at S&P 500 firms as a whole.

    "I think that really shows a really perverse incentive system in this country," said Sarah Anderson, lead author of the Institute for Policy Studies' 17th Annual Executive Compensation Survey. "You are handsomely rewarded for slashing jobs in the middle of the worst economic crisis in 80 years," she said. ...

    So how do they get away with it? Anderson said you have to look at the make-up of many companies' executive boards. She said they're often made up of CEOs and high level executives from other companies "who really don't want to question this ridiculous pay system we have in this country that continues to pay people these absurd amounts of money when they're really not performing well for their company or the overall economy."

    Another disconcerting finding of the report: 72 percent of layoff-leading firms announced mass layoffs while delivering positive earnings reports. Anderson explained layoffs are really driven by efforts "to boost short-term profits even higher and also just to continue to have such high CEO pay levels." She said these mass cuts are often bad for business over the long-term because they impact worker morale, which can lead to lower productivity. She said they also result in additional costs related to hiring and training new workers down the road.

  • ZD-Net: Is the American tech industry oiling its own guillotine? By Jason Hiner. Excerpts: In the future, will Andy Grove be viewed as a prophetic visionary or a misguided agitator? The U.S. better hope that it’s the latter — or change its current economic policies — because when Grove looks into the future he sees a U.S. tech industry that is likely to be severely diminished. Grove, the former head of Intel, is best known for his quote, “Only the paranoid survive.” His paranoia was once aimed at staying a step ahead of competitors in the PC wars of the 1980s and 90s, but in recent years Grove has expanded his purview to focus on the future of the larger tech industry and he is deeply concerned by what he sees in the U.S.

    Grove has been telling anyone who will listen the last couple years that the American technology sector is in decline and he has proven himself eager to diagnose its ailments. Unlike other tech leaders, these days you won’t hear Grove calling for a bunch of extra H1B Visas or other short-term tactics to buoy the tech sector. Instead, Grove has turned idealist, some would even say, “protectionist.” ...

    In a guest column for Bloomberg, Grove recently stated:

    “Americans love the idea of the guys in the garage inventing something that changes the world… Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter. The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.”

    He pointed out that Apple has 25,000 employees but it outsources its manufacturing to a Foxxconn facility in southern China that employs 250,000 workers to build Apple products. And this 10-to-1 ratio is essentially the same for Dell and other high-tech companies that use Foxconn, a company that now employs 800,000 workers — more than Apple, Dell, HP, Intel, Microsoft, and Sony combined.

    The common refrain in the U.S. in recent decades has been to devalue and dismiss manufacturing jobs and hang our hats on the fact that most of the high-end knowledge workers remain in the U.S. for these tech companies, and that those jobs are much more valuable and much less commoditized. Grove challenges that line of thinking, saying:

    “Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution… abandoning today’s ‘commodity’ manufacturing can lock you out of tomorrow’s emerging industry… Transferring manufacturing and a great deal of engineering out of the country has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs — we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”

    The example that Grove uses to illustrate this is batteries. The U.S. makes a fraction of the Lithion-Ion batteries used to power the world’s computers and electronic devices. The U.S. lost the battery race a couple decades ago when it started shipping the manufacturing processes for consumer electronics to Asia. But now, Lithion-Ion batteries are going to be used to power electronic automobiles and that market could quickly dwarf the electronics industry and the U.S. is out of the game before it even begins. ...

    Grove’s solution You can find a lot of people who agree with Grove’s assessment of the state of the American technology industry. However, where the real controversy is over his prescribed remedy. Grove concludes:

    “Long term, we need a job-centric economic theory — and job-centric political leadership — to guide our plans and actions… The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars — fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability — and stability — we may have taken for granted… If what I’m suggesting sounds protectionist, so be it.”
  • Huffington Post: The 10 Highest-Paid CEOs Who Laid Off The Most Workers: Institute For Policy Studies. By Nathaniel Cahners Hindman. Excerpts: #5, Samuel Palmisano -- IBM. Total Compensation 2009: $21,159,289. Announced Annual Layoffs (11/1/08-4/1/10): 7,800.
  • Bloomberg BusinessWeek: Why Companies Need Less Innovation. Businesses need most of their workers to carry out their primary duties with enthusiasm and consistency, writes Pat Lencioni. Excerpts: Perhaps the most popular—and misunderstood—term of the first decade of the new millennium is "innovation." A new stack of books and articles is produced every year asserting the critical importance of innovation for organizations that want to survive, especially during these challenging times. And to a large extent, I agree with that assertion. Unfortunately, most organizations in search of innovation seem to be generating as much cynicism as they are new thinking.

    The problem isn't so much that we're overstating the importance of innovation; it's more about what so many leaders are doing with it. Too many of them are exhorting all of their employees to be more innovative, providing classes and workshops designed to teach everyone how to think outside the box. They're also doing their best to include innovation on a list of core values, emblazoning the word on annual reports and hallway posters, hoping that this will inspire people to come up with new ideas that will revolutionize the long-term strategic and financial prospects of the company.

    Even well-intentioned and dedicated employees are bound to respond cynically to these efforts, frustrated by what they see as hypocrisy. They just don't perceive a genuine eagerness among leaders to embrace the new ideas of rank-and-file employees, and they're mostly accurate in that perception. For all the talk about innovation, most executives don't really like the prospect of their people generating new ways to do things, hoping instead that they'll simply do what they're being asked to do in the most enthusiastic, professional way possible. And so it is no surprise when they get pounded for preaching innovation without really valuing it.

    Selected reader comments follow:

    • TE Aug 27, 2010 9:14 PM GMT It looks like the Asian model of top down management is making its way to America. The raised nail gets hammered. Egotistical top managers soon to feel that only they have been chosen by God to innovate. This is a recipe for disaster.
    • Greg Parker Sep 4, 2010 7:28 AM GMT There must be a distinction between true innovation and faddishness. TQM, 6 Sigma, Lean+ -- yada yada. Been there. Done that. In spite of management by buzzword dictionary, sometimes ideas do bubble up from the bottom. We try them. Every once in a while, quality actually does improve. True innovation can not be imposed by a quality dictatorship. It also lends a note of credibility if companies stick with the tried and true prophets of business like Carnegie and Demming, and let the other "flavor of the day" book sellers go on their merry way.

  • Reuters: Study says most corporations pay no U.S. income taxes. Excerpts: Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said. The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005. More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said. ...

    With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues. Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

  • Forbes: Lessons From A 60-Year-Old Intern. By Mary Kearl. How to start a new career mid-life with an internship. Excerpts: In February 2009 Julie Allstrom, 60, an executive assistant with four decades' worth of office experience, lost her full-time job with a professional sports team in Virginia where she earned $60,000 a year. With sixth months' pay and insurance coverage included in her severance package, her husband and their five grown daughters encouraged her to finally finish her college degree that was tabled when she got married. By fall 2009 she was enrolled at George Mason University, studying a mix of workplace and organizational communications, human resources and women's studies. During her second semester, she found her next job: an unpaid internship at a national non-profit advocacy organization in Washington, D.C. ...

    Bob Edelman, founder of and director of Interns Over 40, a job-listings and employment-search-tips site that launched in July 2009 that now reaches 40,000 monthly visitors ages 45 to 55, paints a broader picture: "With unemployment at near 10% ... the over-40 category [has seen] so many well-established industries demolished, resulting in long-term structural unemployment." Affected workers are literally forced to seek new careers. ...

    For those curious in pursuing an internship, large companies like Hewlett Packard, IBM or Morgan Stanley might be more adjusted to the idea of hiring older adults, says Edelman, but small and mid-sized companies have an economic incentive to recruit to unpaid workers regardless of age. While opportunities vary, he can pinpoint one area of growth: "Clearly, in social media and social media marketing there are openings for older interns ... who have experience with marketing."

  • New York Times editorial: A Million Women vs. Wal-Mart. Excerpts: For nine years, Wal-Mart has fought to stave off a class-action lawsuit alleging that the company has long discriminated against its female workers in pay and promotions. So far it has avoided a trial on the merits of the issue. The battleground instead is whether the million or so women who have worked for Wal-Mart since 2001 really constitute a class, which the company vigorously disputes. In 2004, a federal district court judge said they did, and in April the Ninth Circuit Court of Appeals agreed, ruling the case could proceed.

    Now Wal-Mart has taken the class issue to the Supreme Court. It is probably a smart legal move, given the court’s clear tendency to rule in favor of corporations, particularly when big classes or discrimination claims are involved. We hope the court resists the temptation to toss out the case, which would force women to file lawsuits one by one. Wal-Mart’s employment practices deserve a full hearing. ...

    If this goes forward it would be the largest employment discrimination lawsuit in American history. Wal-Mart could face more than $1 billion in damages if the case proceeds and the company loses. Wal-Mart is the world’s largest private employer, and as the Ninth Circuit wrote, “mere size does not render a case unmanageable.” The Supreme Court should give the women of Wal-Mart a chance to make their case together.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Business Analyst: (Current Employee) “Great career booster as long as you only stay for three years...” Pros: Prestigious Fortune 500 company. Process-Oriented. Resume Booster. Decent Benefits. Results Driven. Cons: Administrivia. Constant changing of Service Area Managers. Utilization requires you to make up your vacation hours - Unwritten rule. HR is disconnected. Advice to Senior Management: Service area managers should not change constantly.
    • IBM Anonymous: (Current Employee) “Impersonal, unemotional profits machine. watson's IBM is dead.” Pros: Smart colleagues. Plenty of internal education available. Frequent new acquisitions to challenge the mind. Present in almost every imaginable customer and environment from the mundane to the cutting edge. Cons: Employment cost reduction has become so intrusive that employees now feel like encumbrances, not useful assets to IBM. Zero job security outside the executive ranks. Arcane and undefendable internal processes. Profound lack of mutuality in the incentives of different IBMers even on the same team. Advice to Senior Management: Take a look at the $16bn in the locker. realize that IBM has enough money to buy another planet. spend some of it in making life better for hardworking IBMers. Tear up the unfair and divisive PBC process,
    • IBM SSR in New York, NY: (Current Employee) “IBM SSR New York.” Pros: flexible, easy, the training is good, day go by quickly, mobile offices, as long as you do your job well you will not be bothered, interview was easy. Cons: growth opportunity in the SSR position is practically nonexistent, raises nonexistent, bonus nonexistent, increased vacation nonexistent, the people you work with sometimes can talk a lot behind your back and can be quite rude to your face. unfair practices such as overtime and distinguishing the hard workers from the slackers. unchallenging. Advice to Senior Management: better means for acknowledging the hardworking individuals and a better effort to retain talent and either train those that are slackers or bring them up to speed. otherwise, hiring better and more capable people from the get go, for positions being filled at ibm, should be reevaluated and scrutinized closely. equal compensation for those that are barely contributing to the the growth and reputation of ibm is unreasonable and the lack of workload / equal pay as their colleagues unjustifiable. the work just gets passed onto those others that are paid the same & capable & willing of doing the work.
    • IBM Software Engineer in San Jose, CA: (Current Employee) “Good starting point, but don't stay long unless you want to be manager or product manager.” Pros: Lab is quiet and remote. Flexible working hours, working from home. IBM's external recognition is still somewhat good, so it has some value on a resume. If you are starting fresh from school, it can be a good place to learn and gain some experience. Decent benefits. Many locations around the world for relocation. Cons: A lot. Low pay, no transparency at all about company decisions, bureaucracy at its best. It has to be the workplace in the world with most meetings per capita, where most of the workforce career goal is to to reach some (people or project) management position. The quality of the technical workforce has been aggressively depreciating with the top performers regularly leaving as they cannot stand the management hypocrisy and all the politics anymore. As a result, IBM is today one of the last places where recent grads and tech workers apply for jobs in the Bay Area. Most of the fresh-out-of-school hires come from San Jose State Univ, as IBM cannot capture the interest of students from top schools. This then reflects in the lower quality of work and software development practices. Definitely not a place to stay long after you get your first 2-3 years of experience, unless your goal is to be in management. Advice to Senior Management: Think about the long term goals and not just about your next promotion. If you keep rewarding the employees that kiss up instead of the ones being productive, eventually your product will collapse and you too will be outsourced or let go.
    • IBM Consultant in London, England (United Kingdom): (Current Employee) “Treat all graduates the same.” Pros: If you are a motivated, career orientated individual and want to be in the same place for many years - IBM is perfect. It provides the clear ladder to the top and has an obvious and simple promotion structure. Cons: I entered as a graduate hire a couple of years ago. My training was poor to say the least. I was not given any training which was aimed at my particular role but instead I was trained with a group of fellow grads from across IBM (Sales, marketing, HR functions etc...) therefore the training had to be of a "lowest common denominator" type standard where we learnt how to shake hands and answer a telephone. While I had almost 2 years of work experience and 2 degrees I was treated like a child for the first two years of work. Pay is also poor and the work life balance is fine unless you want to be promoted. Advice to Senior Management: Pay more and train better. Realise that high utilisation targets may bring short term profitability but do not create an environment in which people want to remain.
    • IBM Advisory IT Consultant in Markham, IL: (Current Employee) “Not what it used to be.” Pros: flexible work hours, good work-life balance IBM courses and education are abundant and free in many cases recognition in the industry as a pioneer. Cons: no longer any growth opportunities mismatched upper management direction and lack of vision first line managers have no clue of where the company is headed lack of recognition very little opportunity to showcase skills and ideas strategic direction is flawed. Advice to Senior Management: Refocus efforts to recognize employees for their efforts, no matter how big or small Open up your eyes to what is going on in the industry, get an ear to the ground again !
    • IBM Technical Services Professional: (Current Employee) “Its an ok company to work.” Pros: good flexibility of work from home option, some good projects to work upon. good work culture, no interference from your manager. Cons: poor band structure and poor salary .unfortunately for me it was only night shift and no project change at all. Advice to Senior Management: please have a look at the engineers who are actually working to make this company grow to its height. top mgmt should once come down and have meeting with the team members
    • IBM Consultant: (Current Employee) “IBM Consultant.” Pros: Flexible...well known branded company. Cons: Too Big...company is so big its hard to talk to anyone or feel special. Advice to Senior Management: n/a
    • IBM Awful Environment in Boulder, CO: (Past Employee - 2008) “Don't work here and if you're here now, leave asap.” Pros: There really are none, unless you can't find a job anywhere else, in which case, they'll hire you and probably keep you as long as you kiss-up to the right people. Cons: Wow, where do I begin? Bumbling, disrespectful managers, horrible hours, no chance for advancement, flat wages that actually result in pay cuts over years since they don't keep up with inflation, threats that you'll lose your job at the drop of a hat. Advice to Senior Management: Promote from within people that actually deserve it, not just people who will go along with anything you say and suck-up to you.
    • IBM IT Specialist in Greenock, Scotland (United Kingdom): (Current Employee) “Quick Review.” Pros: Wealth of expertise and knowledge to call on when designing solutions for clients. Ability to work from home. Prestige of working for a global brand. Cons: Below average salary. Too much focus on setting personal business commitments. Lack of training. Low workforce morale. Advice to Senior Management: Think less of the share price, and more of the employees. Spend less time messing around with divisional structural changes and more time on doing business.
    • IBM Anonymous in Research Triangle Park, NC: (Past Employee - 2008) “Not what it used to be.” Pros: Opportunities to learn. Exposure to unique hardware. Nice people most of the time. Cons: Salaries way too low. Huge time demands, nights and weekends - no family time. No opportunity to move up, especially for contractors. Employees under appreciated. Advice to Senior Management: Be more realistic about release times. Stop expecting people to work 70 hour weeks to make up for short release times and not enough personnel.
New on the Alliance@IBM Site
  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Job Cut Reports
    • Comment 8/27/10: I have just been offered a full-time IT/developer position at a Global Delivery Center in the midwest U.S. Pay will be about $85K. Should I be concerned with all this talk about cuts and layoffs, when my recruiter even said they are looking to HIRE over 100 people at my location? This seems like a good opportunity to me, with good pay, stability and comprehensive benefits... -Confused-
    • Comment 8/28/10: IBM is going to break soon. Too many bad stories out there. Finding someone with any real authority is like looking for the ghost of Elvis. SVP's need to approve the most mundane requests known to man; all the while I remember Sammy-boy saying he wanted to lower the center of gravity and get more authority to the 1st line managers. What a farce. It will take 2 more years of this charade before people see what is going on. -Anonymous-
    • Comment 8/28/10: IBM isn't admitting this but the USA headcount is definitely less than 100,000 now according to COLIS data, unless some data is missing. The number of IBM employees in USA is 93,458 as of last week, unless some data is not present or my REXX skill with COLIS is faulty. I know I could get in trouble for doing this but then IBM will probably lose a good old, veteran programmer! -VMbmer-
    • Comment 8/30/10: Confused, if a job with IBM is your best opportunity then take it, but don't quit looking for another job. Our technical team likes to tell us we are unqualified and too unskilled to get a job anyplace else. They do have a few young people who they training for minor code changes. I see no new development. That means that there is no need to support new development. Its a very short term future. Its unlikely you will learn anything on the job that you can use on a resume. A few young people are being given jobs covering areas that employed 200+ people at one time. They are not expected to understand the technology, and they need to sound sure of themselves. Its a nice paycheck for low skill work, but don't expect job security or benefits. I think its possible that working closely with large account might have some security if you are good at it. You didn't say how old you were or what type of work you would be doing. -DungeonDweller-
    • Comment 8/30/10: A pal of mine was just offered a position at the GDC in Iowa, with a decent salary, not quite up to par with the market though. He is a hell of an Exchange technician and used to work for IBM, on an account they recently lost. Anyway, they want him to go in and save the other accounts they are losing. Of course that would entail him re-training the people there. He checked the position out with a few internal IBM folks and turned it down. -Anonymous-
    • Comment 8/30/10: IBM needs to pull the remaining trigger and incorporate in Bangalore, India. IBM is no longer a US company and it's executives should leave the USA and go live and rule in their new glorious Indian kingdom. They deserve no US tax breaks or incentives. They are not good citizens and hide the truth behind non-disclosure of their unseemly and employee-hostile actions. They deserve not to be your friend, neighbor, or countrymen. These greedy traitors lust only for short-term personal profit and should leave the country now, as soon as possible to prevent any further destruction of the US economy. Good luck training your replacements. IBM is abandoning the USA. -Joe Punchclock-
    • Comment 9/01/10: Anyone able to confirm hourly workers time cards are being scrutinized by states because the hourly workers are working more than what they are reporting on the time cards and management seems to be encouraging this? --- Short Changed ---
    • Comment 9/01/10: No job cuts here, but there have been 4 people leave for other jobs recently. Jobs are starting to boom in Canada and people are getting sick of IBM's changing policies every year. IBM has actually started to ask the people who leave, what would it take to keep you here. Economy is starting to rumble/roar slowly and IBM is going to be on the wrong side of employee loyalty when jobs are plentiful. -IBMer-Canada-
    • Comment 9/02/10: "5 IBM Samuel Palmisano $21.1M 7,800" I just got my pocket calculator out. Sammy earned $2,705 for each and every one of the 7,800 jobs he slashed. Not bad earnings. I wonder if Sammy will put this on his resume as a significant accomplishment? How pathetic. I despise working for this crook. -IBMer-
    • Comment 9/02/10: IBM paid Samuel Palmisano $21.1M, laid off 7,800 . Sam does not care about the employees. He will make sure his family get well taken care, while IBMers continue to loose their jobs to India and China so he can have a bigger bonus next year. -ana- Alliance reply: The Alliance data shows at least 10,400 cut in 2009. That number is probably low. This number is based on RA packages we received. IBM also cut about 3000 this year.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times: Employers Push Costs for Health on Workers. By Reed Abelson. Excerpts: As health care costs continue their relentless climb, companies are increasingly passing on higher premium costs to workers. The shift is occurring, policy analysts and others say, as employers feel more pressure from the weak economy and the threat of even more expensive coverage under the new health care law.

    In contrast to past practices of absorbing higher prices, some companies chose this year to keep their costs the same by passing the entire increase in premiums for family coverage onto their workers, according to a new survey released on Thursday by the Kaiser Family Foundation, a nonprofit research group.

    Workers’ share of the cost of a family policy jumped an average of 14 percent, an increase of about $500 a year. The cost of a policy rose just 3 percent, to an average of $13,770. Workers are now paying nearly $4,000 for family coverage, according to the survey, and their costs have increased much faster than those of employers. Since 2005, while wages have increased just 18 percent, workers’ contributions to premiums have jumped 47 percent, almost twice as fast as the rise in the policy’s overall cost.

    Workers also increasingly face higher deductibles, forcing them to pay a larger share of their overall medical bills. “The long-term trend is pretty clear,” said Drew E. Altman, the chief executive of the Kaiser foundation, which conducted the survey this year with the Health Research and Educational Trust, a research organization affiliated with the American Hospital Association. “Insurance is getting stingier and less comprehensive.”

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.

  • New York Times op-ed: The Billionaires Bankrolling the Tea Party. By Frank Rich. Excerpts: There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer. Three heavy hitters rule. You’ve heard of one of them, Rupert Murdoch. The other two, the brothers David and Charles Koch, are even richer, with a combined wealth exceeded only by that of Bill Gates and Warren Buffett among Americans. But even those carrying the Kochs’ banner may not know who these brothers are. ...

    All three tycoons are the latest incarnation of what the historian Kim Phillips-Fein labeled “Invisible Hands” in her prescient 2009 book of that title: those corporate players who have financed the far right ever since the du Pont brothers spawned the American Liberty League in 1934 to bring down F.D.R. You can draw a straight line from the Liberty League’s crusade against the New Deal “socialism” of Social Security, the Securities and Exchange Commission and child labor laws to the John Birch Society-Barry Goldwater assault on J.F.K. and Medicare to the Koch-Murdoch-backed juggernaut against our “socialist” president.

    Only the fat cats change — not their methods and not their pet bugaboos (taxes, corporate regulation, organized labor, and government “handouts” to the poor, unemployed, ill and elderly). Even the sources of their fortunes remain fairly constant. Koch Industries began with oil in the 1930s and now also spews an array of industrial products, from Dixie cups to Lycra, not unlike DuPont’s portfolio of paint and plastics. Sometimes the biological DNA persists as well. The Koch brothers’ father, Fred, was among the select group chosen to serve on the Birch Society’s top governing body. In a recorded 1963 speech that survives in a University of Michigan archive, he can be heard warning of “a takeover” of America in which Communists would “infiltrate the highest offices of government in the U.S. until the president is a Communist, unknown to the rest of us.” That rant could be delivered as is at any Tea Party rally today. ...

    When David Koch ran to the right of Reagan as vice president on the 1980 Libertarian ticket (it polled 1 percent), his campaign called for the abolition not just of Social Security, federal regulatory agencies and welfare but also of the F.B.I., the C.I.A., and public schools — in other words, any government enterprise that would either inhibit his business profits or increase his taxes. ...

    Tea Partiers may share the Kochs’ detestation of taxes, big government and Obama. But there’s a difference between mainstream conservatism and a fringe agenda that tilts completely toward big business, whether on Wall Street or in the Gulf of Mexico, while dismantling fundamental government safety nets designed to protect the unemployed, public health, workplace safety and the subsistence of the elderly. ...

    Yet inexorably the Koch agenda is morphing into the G.O.P. agenda, as articulated by current Republican members of Congress, including the putative next speaker of the House, John Boehner, and Tea Party Senate candidates like Rand Paul, Sharron Angle, and the new kid on the block, Alaska’s anti-Medicaid, anti-unemployment insurance Palin protégé, Joe Miller. Their program opposes a federal deficit, but has no objection to running up trillions in red ink in tax cuts to corporations and the superrich; apologizes to corporate malefactors like BP and derides money put in escrow for oil spill victims as a “slush fund”; opposes the extension of unemployment benefits; and calls for a freeze on federal regulations in an era when abuses in the oil, financial, mining, pharmaceutical and even egg industries (among others) have been outrageous.

    The Koch brothers must be laughing all the way to the bank knowing that working Americans are aiding and abetting their selfish interests. And surely Murdoch is snickering at those protesting the “ground zero mosque.” Last week on “Fox and Friends,” the Bush administration flacks Dan Senor and Dana Perino attacked a supposedly terrorism-tainted Saudi prince whose foundation might contribute to the Islamic center. But as “The Daily Show” keeps pointing out, these Fox bloviators never acknowledge that the evil prince they’re bashing, Walid bin Talal, is not only the biggest non-Murdoch shareholder in Fox News’s parent company (he owns 7 percent of News Corporation) and the recipient of Murdoch mammoth investments in Saudi Arabia but also the subject of lionization elsewhere on Fox. ...

    When wolves of Murdoch’s ingenuity and the Kochs’ stealth have been at the door of our democracy in the past, Democrats have fought back fiercely. Franklin Roosevelt’s triumphant 1936 re-election campaign pummeled the Liberty League as a Republican ally eager to “squeeze the worker dry in his old age and cast him like an orange rind into the refuse pail.” When John Kennedy’s patriotism was assailed by Birchers calling for impeachment, he gave a major speech denouncing their “crusades of suspicion.” And Obama? So far, sadly, this question answers itself.

  • New York Times op-ed: Why We Need a Second Stimulus. By Laura Tyson. Excerpt: Our national debate about fiscal policy has become skewed, with far too much focus on the deficit and far too little on unemployment. There is too much worry about the size of government, and too little appreciation for how stimulus spending has helped stabilize the economy and how more of the right kind of government spending could boost job creation and economic growth. By focusing on the wrong things, we are in serious danger of failing to do the right things to help the economy recover from its worst labor market crisis since the Great Depression.
  • Washington Post: The Color of Money: It's unfair to call Social Security a Ponzi scheme. By Michelle Singletary. Excerpts: Perhaps nothing gets some people madder than if you trash their mama or dare to talk about Social Security. I frequently get mail from folks who think Social Security is just a government-sanctioned Ponzi scheme, a con game in which money from new investors is used to pay earlier investors. Eventually, the con collapses when not enough new money comes in to settle with existing participants.

    Critics of Social Security say the explanation fits because as the U.S. population grows older, the cost of running the entitlement program will outpace revenue coming in. Under current law, dedicated resources are projected to become insufficient to pay full benefits in 2039, the Congressional Budget Office says. ...

    President Franklin Roosevelt signed the Social Security Act on Aug. 14, 1935. Since then, it has unquestionably kept millions of people -- most importantly, the elderly and disabled -- from the depths of poverty. Social Security is not a Ponzi scheme. Nor are people milking the program to live the high life. How many people could live richly off $1,000 a month, which is the current average monthly benefit for all beneficiaries? ...

    Social Security has some major funding issues, but it's not a con. It is a social insurance program that was never intended to be any individual's personal savings or investment account. This remarkable social safety net is the cost we bear as a civilized society.

  • Jim Hightower: The Expletives of Wall Street. Full excerpt: Wall Street is a bizarre place. It masquerades as a sober center of finance, but it operates as a wide-open bazaar of anything-goes gambling games. Recently, the biggest casino player of them all, Goldman Sachs, made a bizarre effort to strike a sober public pose by imposing a new ethical standard on its bankers/gamblers. Were they instructed to stop rigging the game to profit themselves at the expense of everyone else? No, no, Nanette – Goldman never lets ethics get in the way of raking in more money. Rather, the bank's sudden outburst of morality was directed at the language used by its bankers. Henceforth, decreed the higher-ups, Goldman employees must refrain from using profanity in their emails.

    Sheesh – like it was expletive-filled emails that crashed our economy, not Wall Street banksters gaming the system!

    Meanwhile, Goldman's pious moralists have already plotted an end run around new regulatory reforms that Congress passed in July. One of the most important reforms was a ban on what's called "proprietary trading," a convoluted form of casino gambling by bankers that led to Wall Street's meltdown and America's ongoing economic catastrophe. Goldman has simply had these proprietary traders change hats, moving them into its "asset management" division, which does not come under the new regulation. So – Hocus-Pocus! – The reckless gamblers slip through a definitional loophole and keep playing the same old game. This slick perversion of the law will be hugely profitable for the bank, and hugely risky for our economy.

    But at least we can take comfort in the fact that no profane emails were exchanged by Goldman's ethically-impaired bankers as they conspired to put themselves above the law. And they wonder why the phrase "Wall Street Banker" is now an expletive in our country.

  • Jim Hightower: Wall Street's Connected Lobbyists. Full excerpt: Old Congress critters never die, they just fade away. Into lobbying firms, that is. Take former House speaker Dennis Hastert, former House majority leaders Dick Armey and Dick Gephardt, and former Senate leaders Bob Dole and Trent Lott. The names of these one-time legislative powerhouses aren't mentioned in the news anymore, so perhaps you would assume that they've retired back to the old home place, or even passed away. But, no – they're very much alive and still plying the legislative arts. Only they now do it for million-dollar paychecks as lobbyists for Wall Street financial giants and other corporate interests.

    Hastert, Armey, Gephardt, Dole, and Lott are among a cadre of 73 former members of congress who've been working in recent months to weaken or kill new regulations to rein in the gouging and reckless gambling of the big financial firms. They are not the only former public servants who're now using their insider knowledge and personal connections in Washington to serve the bankers. For example, at least 66 staffers for the House or Senate banking committees have moved from Capitol Hill to the K-Street lobbying corridor, and another 82 staffers for members of those committees also are now lobbyists for the finance industry. Adding even more firepower to this special-interest army of influence peddlers are 42 former officials from the treasury department.

    In an effort to slow down this shameless cashing-in on public service, the watchdog group, Public Citizen, contacted 47 current lawmakers who are retiring this year. The group asked them to pledge not to take a lobbying job for two years with any corporation that had lobbied them. Not a single one took the pledge. To see who the 47 are, and to get behind stricter lobbying rules, contact Public Citizen at www.citizen.org/revolvingdoor.

  • Hightower Lowdown: How corporate money took over Washington--and created the mobs who rant against reform. By Jim Hightower. Excerpts: Despite a constant racket from the forces of the far-out right (Fox television's yackety-yackers, just-say-no GOP know-nothings, tea-bag howlers, Sarah Palinistas, et al.), the great majority of Americans support a bold progressive agenda for our country, ranging from Medicare for all to the decentralization and re-regulation of Wall Street. Indeed, in the elections of 2006 and 2008, people voted for a fundamental break from Washington's 30-year push to enthrone a corporate kleptocracy.

    Yet the economic and political thievery continues, as the White House, Congress, both parties, the courts, the media, much of academia, and other national institutions that shape our public policies reflexively shy away from any structural change. Instead, the first instinct of these entities is to soothe the fevered brow of corporate power by insisting that corporate primacy be the starting point of any "reform." Thus, when Washington began its widely ballyhooed effort last year to reform our health-care system, step number one was to announce publicly that the monopolistic, bureaucratic insurance behemoths that cost us so much and deliver so little would retain their controlling position in the structure. Likewise, Wall Street barons who crashed America's financial system were allowed to oversee the system's remake--and (Big Surprise!) the same top-heavy structure and shaky practices that caused the crash are being kept in place.

    In other words, the foxes who ate the chickens keep being put in charge of designing the new hen house--so nothing really changes.

    This is more than frustrating, it's infuriating --and it's debilitating for our democracy. As a fellow said to me about the lack of real changes in national policy during the Clinton presidency, "I don't mind losing when we lose, but I hate losing when we win." Why does this keep happening to us, and who's doing it? It's not merely a matter of too many fickle and pusillanimous politicians--they're the on-stage actors in this drama, but not the producers, not the ones behind the scenes plotting to thwart the people's democratic will. Who, specifically, are these plotters, and how do they impose their narrow agenda of self-interest over the public interest?

    These crucial questions for our democratic republic are the focus of this Lowdown, and they'll be a recurring topic in future issues. After all, to achieve genuine grassroots power, we have to know the full dimensions of the plutocratic powers we're up against. Most Americans are totally unaware of these interests, which have attained a dangerous reach by quietly embedding themselves (and their self-centered worldview) much more deeply in our society's governing institutions than they want us to realize. So let's take a peek at them, beginning with a look at the intricate web of power woven by a huge corporation you've probably never heard of, even though your consumer dollars are financing its right-wing political agenda. Read more...

  • USA Today: Mickey Mouse, the estate tax and me. By By Abigail Disney. Excerpts: Taxes are on everyone's mind lately for good reason. Not only will Congress have to make some tough decisions about the Bush tax cuts soon, but if lawmakers do nothing, the estate tax will automatically be reinstated after a year's hiatus — in its 2001 form. A great deal of misinformation is flying around out there about this, but most agree that the tax is flawed and needs to be modified.

    One thing I do know is this: In a far stricter tax environment, my grandfather still managed to accumulate and pass on ample funds to make three subsequent generations very comfortable indeed. And as an inheritor I am here to tell you, the estate tax is not as much of a bogeyman as you've been led to believe.

    The truth in numbers Let's start with the facts:

    • First, the estate tax is not a double tax. Have you met a multimillionaire who earned that much money pulling down a weekly paycheck? People who make enough to be affected by the estate tax — fewer than 1% of Americans who die in any given year — amass their fortunes by investing. Investment income is taxed differently from earned income, often not at all until it's sold. People like me, who inherit assets such as Disney stock, can spend our lives watching those assets grow, and when we pass them along to our children, they have not been touched or diminished at all by the tax system. The only thing I have paid taxes on is the interest from these assets, not their increased value.
    • Second, opponents of the estate tax claim family farms will have to be broken up to pay the tax, but good luck finding an example of this. Further, if the exemption is kept at $3.5 million (where it stood last year) and indexed for inflation, the likelihood of this ever happening is reduced to nil.
    • Third, the estate tax incentivizes people like me to do good with our wealth because there is no estate tax on donations to charity. My filmmaking and foundations rely on a tax code that supports a vigorous non-profit sector, a vital part of our society that is bigger and stronger because of the many millions of dollars that flow into it as a result of the estate tax and other tax provisions.

    To those who believe the estate tax is unfair, I say that there is no tax more fair than this one. I recently signed the Call to Preserve the Estate Tax organized by United for a Fair Economy because the estate tax is an expression of our deepest American values: that we live in a meritocracy, not an aristocracy; that every generation is a fresh start; and that we choose to build a society in which wealth and opportunity do not accrue to people simply for being born wealthy. ...

    Here at home, I have watched the gap between rich and poor driven to historic highs by a tax policy that has exacerbated our deficit and eviscerated our basic capacity to provide schooling, emergency services, and clean water and air for one and all. The estate tax is the cornerstone of a progressive system that leaves wealthy heirs with ample funds while providing the government with the resources it needs to build an environment for the common good. By preserving it, we not only restore billions in revenue to the national treasury — we also restore our most cherished collective ideals as a nation. "Tax me" may be the least popular sentence in America, but it's what I am asking, and I hope that our leaders are listening.

  • AlterNet: Treasury Makes Shocking Admission: Program for Struggling Homeowners Just a Ploy to Enrich Big Banks. The Treasury Dept.'s mortgage relief program isn't just failing, it's actively funneling money from homeowners to bankers, and Treasury likes it that way. By Zach Carter. Excerpts: The Treasury Department's plan to help struggling homeowners has been failing miserably for months. The program is poorly designed, has been poorly implemented and only a tiny percentage of borrowers eligible for help have actually received any meaningful assistance. The initiative lowers monthly payments for borrowers, but fails to reduce their overall debt burden, often increasing that burden, funneling money to banks that borrowers could have saved by simply renting a different home. But according to recent startling admissions from top Treasury officials, the mortgage plan was actually not really about helping borrowers at all. Instead, it was simply one element of a broader effort to pump money into big banks and shield them from losses on bad loans. That's right: Treasury openly admitted that its only serious program purporting to help ordinary citizens was actually a cynical move to help Wall Street megabanks.

    Treasury Secretary Timothy Geithner has long made it clear his financial repair plan was based on allowing large banks to "earn" their way back to health. By creating conditions where banks could make easy profits, Geithner and top officials at the Federal Reserve hoped to limit the amount of money taxpayers would have to directly inject into the banks. This was never the best strategy for fixing the financial sector, but it wasn't outright predation, either. But now the Treasury Department is making explicit that it was—and remains—willing to let those so-called "earnings" come directly at the expense of people hit hardest by the recession: struggling borrowers trying to stay in their homes.

  • New York Times op-ed: How to End the Great Recession. By Robert B. Reich. Excerpts: The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working: near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package and tax credits for small businesses that hire the long-term unemployed have all failed to do enough. That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them.

    This crisis began decades ago when a new wave of technology — things like satellite communications, container ships, computers and eventually the Internet — made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago. ...

    Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income. It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.

    The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.

    What’s more, the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns — sometimes that’s here, but often it’s the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result. ...

    In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America’s middle class shared more of the economy’s gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs. Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures — Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage — leveled the playing field. ...

    What else could be done to raise wages and thereby spur the economy? We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. Or exempting the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000. ...

    Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth — and that’s good for everyone. The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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