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Bigger doesn't imply better. Bigger often is a sign of obesity, of lost control, of overcomplexity, of cancerous cells

IT Offshoring Skeptic

(Critique of excessive enthusiasm in "software development offshorism" and research materials to the paper
A Slightly Skeptical View on IT Offshoring)

News See also Introductory Article Other IT Myths Recommended Links Obscurantism  Outsourcing and IT security IT Obscurantism
Outsourcing and Cronyism Capability Maturity (CMM) ISO-9000 Certification fraud Mongol horde approach to software development Demoralization Loss of speed and flexibility Outsourcing and creation of greedy middlemen Sweetshop mentality and problems with retention
The Danger of  Micromanagement Understanding Micromanagers Survival under Micromanagers Ten Commandments of the  IT Slackers Manifest of  IT Slackers Society Maryfran Johnson Humor Loss of critical mass of knowledge and talentEtc
The truth is rarely pure and never simple

Oscar Wilde

Hell is truth seen too late

Anatole France
 

16 years ago at conference in Washington D.C  I told Sen. Dorgan that advocates of free trade in the United States were just racists. Most people thought I had lost my marbles,  but I went on to say that the conventional thinking was that the US could keep the high paying jobs while transferring the low paying jobs overseas what makes you think that the India's of this world will be content with just the low paying jobs and that they won't come after the high paying jobs as well?

To believe that wasn't going to happen was pure racism. I don't think most people got it but a few did. Unfortunately I have been proven right. and as long we continue to believe in "American exceptionalism" at the expense of a hard look at our competitive situation, we are going to get screwed.
 

This is a page that contains research materials to the article: A Slightly Skeptical View on IT Offshoring

Offshore software development and, to lesser extent, moving to software maintenance oversees creates complex and expensive to resolve and contain problems that are usually swiped under the floor in the quest for quick buck. In all cases, but especially in "Total Offshoring" cases, those problems tend to increase with the age of the relationship.

The key observation is that when you outsource everything on a marginal cost basis, you create an inherently unstable operating regime. This is classic “race to the bottom” problem. In case of IT outsourcing the costs you had not even acknowledged to exist at all – might come later, and they tend to  arrive all at once and by surprise.

When you outsource everything on a marginal cost basis,
you create an inherently unstable operating regime.

If we outsource IT in the interests of lowing labor costs, we must be mature and acknowledge that there are no free lunches. As you will see evaluating the actual risks/rewards of unbridled globalization of workforce is not an easy task.

NEWS CONTENTS

Outsourced News ;-)

"First you destroy those who create values. Then you destroy those who know what values are, and who also know that those who have already been destroyed were in fact the creators of values.

But real barbarism begins when no one can judge or know that what they are doing is barbaric."

-- Ryszard Kapuscinski

[Nov 07, 2018] Stuxnet 2.0? Iran claims Israel launched new cyber attacks

Nov 07, 2018 | arstechnica.com

President Rouhani's phone "bugged," attacks against network infrastructure claimed.

Sean Gallagher - 11/5/2018, 5:10 PM

reader comments

Last week, Iran's chief of civil defense claimed that the Iranian government had fought off Israeli attempts to infect computer systems with what he described as a new version of Stuxnet -- the malware reportedly developed jointly by the US and Israel that targeted Iran's uranium-enrichment program. Gholamreza Jalali, chief of the National Passive Defense Organization (NPDO), told Iran's IRNA news service, "Recently, we discovered a new generation of Stuxnet which consisted of several parts... and was trying to enter our systems."

On November 5, Iran Telecommunications Minister Mohammad-Javad Azari Jahromi accused Israel of being behind the attack, and he said that the malware was intended to "harm the country's communication infrastructures." Jahromi praised "technical teams" for shutting down the attack, saying that the attackers "returned empty-handed." A report from Iran's Tasnim news agency quoted Deputy Telecommunications Minister Hamid Fattahi as stating that more details of the cyber attacks would be made public soon.

Jahromi said that Iran would sue Israel over the attack through the International Court of Justice. The Iranian government has also said it would sue the US in the ICJ over the reinstatement of sanctions. Israel has remained silent regarding the accusations .

The claims come a week after the NPDO's Jalali announced that President Hassan Rouhani's cell phone had been "tapped" and was being replaced with a new, more secure device. This led to a statement by Iranian Supreme Leader Ayatollah Ali Khamenei, exhorting Iran's security apparatus to "confront infiltration through scientific, accurate, and up-to-date action."

While Iran protests the alleged attacks -- about which the Israeli government has been silent -- Iranian hackers have continued to conduct their own cyber attacks. A recent report from security tools company Carbon Black based on data from the company's incident-response partners found that Iran had been a significant source of attacks in the third quarter of this year, with one incident-response professional noting, "We've seen a lot of destructive actions from Iran and North Korea lately, where they've effectively wiped machines they suspect of being forensically analyzed."


SymmetricChaos </> , 2018-11-05T17:16:46-05:00 I feel like governments still think of cyber warfare as something that doesn't really count and are willing to be dangerously provocative in their use of it. ihatewinter , 2018-11-05T17:27:06-05:00 Another day in international politics. Beats lobbing bombs at each other. +13 ( +16 / -3 ) fahrenheit_ak </> , 2018-11-05T17:46:44-05:00

corey_1967 wrote:
The twin pillars of Iran's foreign policy - America is evil and Wipe Israel off the map - do not appear to be serving the country very well.

They serve Iran very well, America is an easy target to gather support against, and Israel is more than willing to play the bad guy (for a bunch of reasons including Israels' policy of nuclear hegemony in the region and historical antagonism against Arab states).
revision0 , 2018-11-05T17:48:22-05:00 Israeli hackers?

Go on!

Quote:

Israeli hackers offered Cambridge Analytica, the data collection firm that worked on U.S. President Donald Trump's election campaign, material on two politicians who are heads of state, the Guardian reported Wednesday, citing witnesses.

https://www.haaretz.com/israel-news/isr ... -1.5933977

Quote:

For $20M, These Israeli Hackers Will Spy On Any Phone On The Planet

https://www.forbes.com/sites/thomasbrew ... -ulin-ss7/

Quote:

While Israelis are not necessarily number one in technical skills -- that award goes to Russian hackers -- Israelis are probably the best at thinking on their feet and adjusting to changing situations on the fly, a trait essential for success in a wide range of areas, including cyber-security, said Forzieri. "In modern attacks, the human factor -- for example, getting someone to click on a link that will install malware -- constitutes as much as 85% of a successful attack," he said.

http://www.timesofisrael.com/israeli-ha ... ty-expert/

+5 ( +9 / -4 )
ihatewinter </> , 2018-11-05T17:52:15-05:00
dramamoose wrote:
thorpe wrote:
The pro-Israel trolls out in front of this comment section...

You don't have to be pro-Israel to be anti-Iran. Far from it. I think many of Israel's actions in Palestine are reprehensible, but I also know to (rightly) fear an Islamic dictatorship who is actively funding terrorism groups and is likely a few years away from having a working nuclear bomb, should they resume research (which the US actions seem likely to cause).

The US created the Islamic Republic of Iran by holding a cruel dictator in power rather than risking a slide into communism. We should be engaging diplomatically, rather than trying sanctions which clearly don't work. But I don't think that the original Stuxnet was a bad idea, nor do I think that intense surveillance of what could be a potentially very dangerous country is a bad one either.

If the Israelis (slash US) did in fact target civilian infrastructure, that's a problem. Unless, of course, they were bugging them for espionage purposes.

Agree. While Israel is not about to win Humanitarian Nation of the year Award any time soon, I don't see it going to Iran in a close vote tally either.

[Nov 03, 2018] Is Red Hat IBM's 'Hail Mary' pass

Notable quotes:
"... if those employees become unhappy, they can effectively go anywhere they want. ..."
"... IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing. ..."
"... I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words. ..."
"... Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right. ..."
"... Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years. ..."
"... The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. ..."
"... As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers. ..."
"... As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using. ..."
"... And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things. ..."
Nov 03, 2018 | www.zdnet.com
Brain drain is a real risk

IBM has not had a particularly great track record when it comes to integrating the cultures of other companies into its own, and brain drain with a company like Red Hat is a real risk because if those employees become unhappy, they can effectively go anywhere they want. They have the skills to command very high salaries at any of the top companies in the industry.

The other issue is that IBM hasn't figured out how to capture revenue from SMBs -- and that has always been elusive for them. Unless a deal is worth at least $1 million, and realistically $10 million, sales guys at IBM don't tend to get motivated.

Also: Red Hat changes its open-source licensing rules

The 5,000-seat and below market segment has traditionally been partner territory, and when it comes to reseller partners for its cloud, IBM is way, way behind AWS, Microsoft, Google, or even (gasp) Oracle, which is now offering serious margins to partners that land workloads on the Oracle cloud.

IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing.

... ... ...

But I think that it is very unlikely the IBM Cloud, even when juiced on Red Hat steroids, will become anything more ambitious than a boutique business for hybrid workloads when compared with AWS or Azure. Realistically, it has to be the kind of cloud platform that interoperates well with the others or nobody will want it.


geek49203_z , Wednesday, April 26, 2017 10:27 AM

Ex-IBM contractor here...

1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
Shmeg , Wednesday, April 26, 2017 10:41 AM
I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
geek49203_z , Wednesday, April 26, 2017 10:27 AM
Ex-IBM contractor here...

1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
Shmeg , Wednesday, April 26, 2017 10:41 AM
I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
cavman , Wednesday, April 26, 2017 3:58 PM
In the 1970's 80's and 90's I was working in tech support for a company called ROLM. We were doing communications , voice and data and did many systems for Fortune 500 companies along with 911 systems and the secure system at the White House. My job was to fly all over North America to solve problems with customers and integration of our equipment into their business model. I also did BETA trials and documented systems so others would understand what it took to make it run fine under all conditions.

In 84 IBM bought a percentage of the company and the next year they bought out the company. When someone said to me "IBM just bought you out , you must thing you died and went to heaven." My response was "Think of them as being like the Federal Government but making a profit". They were so heavily structured and hide bound that it was a constant battle working with them. Their response to any comments was "We are IBM"

I was working on an equipment project in Colorado Springs and IBM took control. I was immediately advised that I could only talk to the people in my assigned group and if I had a question outside of my group I had to put it in writing and give it to my manager and if he thought it was relevant it would be forwarded up the ladder of management until it reached a level of a manager that had control of both groups and at that time if he thought it was relevant it would be sent to that group who would send the answer back up the ladder.

I'm a Vietnam Veteran and I used my military training to get things done just like I did out in the field. I went looking for the person I could get an answer from.

At first others were nervous about doing that but within a month I had connections all over the facility and started introducing people at the cafeteria. Things moved quickly as people started working together as a unit. I finished my part of the work which was figuring all the spares technicians would need plus the costs for packaging and service contract estimates. I submitted it to all the people that needed it. I was then hauled into a meeting room by the IBM management and advised that I was a disruptive influence and would be removed. Just then the final contracts that vendors had to sign showed up and it used all my info. The IBM people were livid that they were not involved.

By the way a couple months later the IBM THINK magazine came out with a new story about a radical concept they had tried. A cover would not fit on a component and under the old system both the component and the cover would be thrown out and they would start from scratch doing it over. They decided to have the two groups sit together and figure out why it would not fit and correct it on the spot.

Another great example of IBM people is we had a sales contract to install a multi node voice mail system at WANG computers but we lost it because the IBM people insisted on bundling in AS0400 systems into the sale to WANG computer. Instead we lost a multi million dollar contract.

Eventually Siemens bought 50% of the company and eventually full control. Now all we heard was "That is how we do it in Germany" Our response was "How did that WW II thing work out".

Stockholder , Wednesday, April 26, 2017 7:20 PM
The author may have more loyalty to Microsoft than he confides, is the first thing noticeable about this article. The second thing is that in terms of getting rid of those aged IBM workers, I think he may have completely missed the mark, in fairness, that may be the product of his IBM experience, The sheer hubris of tech-talking from the middle of the story and missing the global misstep that is today's IBM is noticeable. As a stockholder, the first question is, "Where is the investigation to the breach of fiduciary duty by a board that owes its loyalty to stockholders who are scratching their heads at the 'positive' spin the likes of Ginni Rometty is putting on 20 quarters of dead losses?" Got that, 20 quarters of losses.

Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right.

IBM's been run into the ground by Ginni, I'll use her first name, since apparently my money is now used to prop up this sham of a leader, who from her uncomfortable public announcement with Tim Cook of Apple, which HAS gone up, by the way, has embraced every political trend, not cause but trend from hiring more women to marginalizing all those old-time white males...You know the ones who produced for the company based on merit, sweat, expertise, all those non-feeling based skills that ultimately are what a shareholder is interested in and replaced them with young, and apparently "social" experts who are pasting some phony "modernity" on a company that under Ginni's leadership has become more of a pet cause than a company.

Finally, regarding ageism and the author's advocacy for the same, IBM's been there, done that as they lost an age discrimination lawsuit decades ago. IBM gave up on doing what it had the ability to do as an enormous business and instead under Rometty's leadership has tried to compete with the scrappy startups where any halfwit knows IBM cannot compete.

The company has rendered itself ridiculous under Rometty, a board that collects paychecks and breaches any notion of fiduciary duty to shareholders, an attempt at partnering with a "mod" company like Apple that simply bolstered Apple and left IBM languishing and a rejection of what has a track record of working, excellence, rewarding effort of employees and the steady plod of performance. Dump the board and dump Rometty.

jperlow Stockholder , Wednesday, April 26, 2017 8:36 PM
Stockholder Your comments regarding any inclination towards age discrimination are duly noted, so I added a qualifier in the piece.
Gravyboat McGee , Wednesday, April 26, 2017 9:00 PM
Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years.

The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. I went from a multi-disciplinary team of engineers working across technologies to support corporate needs in the IT environment to being siloed into a single-function organization.

My first year of on-boarding with IBM was spent deconstructing application integration and cross-organizational structures of support and interwork that I had spent 6 years building and maintaining. Handing off different chunks of work (again, before the outsourcing, an Enterprise solution supported by one multi-disciplinary team) to different IBM GTS work silos that had no physical spacial relationship and no interworking history or habits. What we're talking about here is the notion of "left hand not knowing what the right hand is doing" ...

THAT was the IBM way of doing things, and nothing I've read about them over the past decade or so tells me it has changed.

As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers.

As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using.

And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things.

The "not invented here" ideology was embedded deeply in the souls of all senior IBMers I ever met or worked with ... if you come on board with any outside knowledge or experience, you must not dare to say "this way works better" because you'd be shut down before you could blink. The phrase "best practices" to them means "the way we've always done it".

IBM gave up on innovation long ago. Since the 90's the vast majority of their software has been bought, not built. Buy a small company, strip out the innovation, slap an IBM label on it, sell it as the next coming of Jesus even though they refuse to expend any R&D to push the product to the next level ... damn near everything IBM sold was gentrified, never cutting edge.

And don't get me started on sales practices ... tell the customer how product XYZ is a guaranteed moonshot, they'll be living on lunar real estate in no time at all, and after all the contracts are signed hand the customer a box of nuts & bolts and a letter telling them where they can look up instructions on how to build their own moon rocket. Or for XX dollars more a year, hire a Professional Services IBMer to build it for them.

I have no sympathy for IBM. They need a clean sweep throughout upper management, especially any of the old True Blue hard-core IBMers.

billa201 , Thursday, April 27, 2017 11:24 AM
You obviously have been gone from IBM as they do not treat their employees well anymore and get rid of good talent not keep it a sad state.
ClearCreek , Tuesday, May 9, 2017 7:04 PM
We tried our best to be SMB partners with IBM & Arrow in the early 2000s ... but could never get any traction. I personally needed a mentor, but never found one. I still have/wear some of their swag, and I write this right now on a re-purposed IBM 1U server that is 10 years old, but ... I can't see any way our small company can make $ with them.

Watson is impressive, but you can't build a company on just Watson. This author has some great ideas, yet the phrase that keeps coming to me is internal politics. That corrosive reality has & will kill companies, and it will kill IBM unless it is dealt with.

Turn-arounds are possible (look at MS), but they are hard and dangerous. Hope IBM can figure it out...

[Nov 03, 2018] The evaluation system in which there was ALWAYS a "top 10 percent" and a "bottom ten percent" is sociopathic in it's nature

Notable quotes:
"... Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years. ..."
"... The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. ..."
"... As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers. ..."
"... As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using. ..."
"... And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things. ..."
Nov 03, 2018 | www.zdnet.com

Gravyboat McGee , Wednesday, April 26, 2017 9:00 PM

Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years.

The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. I went from a multi-disciplinary team of engineers working across technologies to support corporate needs in the IT environment to being siloed into a single-function organization.

My first year of on-boarding with IBM was spent deconstructing application integration and cross-organizational structures of support and interwork that I had spent 6 years building and maintaining. Handing off different chunks of work (again, before the outsourcing, an Enterprise solution supported by one multi-disciplinary team) to different IBM GTS work silos that had no physical special relationship and no interworking history or habits. What we're talking about here is the notion of "left hand not knowing what the right hand is doing" ...

THAT was the IBM way of doing things, and nothing I've read about them over the past decade or so tells me it has changed.

As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers.

As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using.

And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things.

The "not invented here" ideology was embedded deeply in the souls of all senior IBMers I ever met or worked with ... if you come on board with any outside knowledge or experience, you must not dare to say "this way works better" because you'd be shut down before you could blink. The phrase "best practices" to them means "the way we've always done it".

IBM gave up on innovation long ago. Since the 90's the vast majority of their software has been bought, not built. Buy a small company, strip out the innovation, slap an IBM label on it, sell it as the next coming of Jesus even though they refuse to expend any R&D to push the product to the next level ... damn near everything IBM sold was gentrified, never cutting edge.

And don't get me started on sales practices ... tell the customer how product XYZ is a guaranteed moonshot, they'll be living on lunar real estate in no time at all, and after all the contracts are signed hand the customer a box of nuts & bolts and a letter telling them where they can look up instructions on how to build their own moon rocket. Or for XX dollars more a year, hire a Professional Services IBMer to build it for them.

I have no sympathy for IBM. They need a clean sweep throughout upper management, especially any of the old True Blue hard-core IBMers.

[Oct 30, 2018] I have worked at IBM 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions

Notable quotes:
"... Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. ..."
Oct 30, 2018 | features.propublica.org

Buzz , Friday, March 23, 2018 12:00 PM

I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years.

Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks.

We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc.

The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague.

I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.

[Oct 30, 2018] Sam Palmisano now infamous Roadmap 2015 ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

Oct 30, 2018 | features.propublica.org

GoingGone , Friday, April 13, 2018 6:06 PM

As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service.

All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done.

The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.

People (and companies) who have nothing to hide, hide nothing. People (and companies) who are proud of their actions, share it proudly. IBM believes it is being clever and outsmarting employment discrimination laws and saving the company money while retooling its workforce. That may end up being so (but probably won't), but it's irrelevant. Through its practices, IBM has lost the trust of its employees, customers, and ironically, stockholders (just ask Warren Buffett), who are the very(/only) audience IBM was trying to impress. It's just a huge shame.

HiJinks , Sunday, March 25, 2018 3:07 AM
I agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months. However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference. They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers). After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".
ArnieTracey , Saturday, March 24, 2018 7:15 PM
IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."

From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."

Jr Jr , Saturday, March 24, 2018 4:37 PM
Corporate loyalty has been gone for 25 years. This isnt surprising. But this age discrimination is blatantly illegal.

[Oct 30, 2018] This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

Oct 30, 2018 | arstechnica.com

afidel, 2018-10-29T13:17:22-04:00

tipoo wrote:
Kilroy420 wrote:
Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

Honestly, why would Red Hat have said no?

You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.

A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

[Oct 30, 2018] The insttuinaliuzed stupidity of IBM brass is connected with the desire to get bonuses

Oct 30, 2018 | arstechnica.com

3 hours ago afidel wrote: show nested quotes Kilroy420 wrote: Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

Honestly, why would Red Hat have said no?

You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.
A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

OK. I did 10 years at IBM Boulder..

The problem isn't the purchase price or the probable write-down later.

The problem is going to be with the executives above it. One thing I noticed at IBM is that the executives needed to put their own stamp on operations to justify their bonuses. We were on a 2 year cycle of execs coming in and saying "Whoa.. things are too centralized, we need to decentralize", then the next exec coming in and saying "things are too decentralized, we need to centralize".

No IBM exec will get a bonus if they are over RedHat and exercise no authority over it. "We left it alone" generates nothing for the PBC. If they are in the middle of a re-org, then the specific metrics used to calculate their bonus can get waived. (Well, we took an unexpected hit this year on sales because we are re-orging to better optimize our resources). With that P/E, no IBM exec is going to get a bonus based on metrics. IBM execs do *not* care about what is good for IBM's business. They are all about gaming the bonuses. Customers aren't even on the list of things they care about.

I am reminded of a coworker who quit in frustration back in the early 2000's due to just plain bad management. At the time, IBM was working on Project Monterey. This was supposed to be a Unix system across multiple architectures. My coworker sent his resignation out to all hands basically saying "This is stupid. we should just be porting Linux". He even broke down the relative costs. Billions for Project Monterey vs thousands for a Linux port. Six months later, we get an email from on-high announcing this great new idea that upper management had come up with. It would be far cheaper to just support Linux than write a new OS.. you'd think that would be a great thing, but the reality is that all it did was create the AIX 5L family, which was AIX 5 with an additional CD called Linux ToolBox, which was loaded with a few Linux programs ported to a specific version of AIX, but never kept current. IBM can make even great decisions into bad decisions.

In May 2007, IBM announced the transition to LEAN. Sounds great, but this LEAN was not on the manufacturing side of the equation. It was in e-Business under Global Services. The new procedures were basically call center operations. Now, prior to this, IBM would have specific engineers for specific accounts. So, Major Bank would have that AIX admin, that Sun admin, that windows admin, etc. They knew who to call and those engineers would have docs and institutional knowledge of that account. During the LEAN announcement, Bob Moffat described the process. Accounts would now call an 800 number and the person calling would open a ticket. This would apply to *any* work request as all the engineers would be pooled and whoever had time would get the ticket. So, reset a password - ticket. So, load a tape - ticket. Install 20 servers - ticket.

Now, the kicker to this was that the change was announced at 8AM and went live at noon. IBM gave their customers who represented over $12 Billion in contracts 4 *hours* notice that they were going to strip their support teams and treat them like a call center. (I will leave it as an exercise to the reader to determine if they would accept that kind of support after spending hundreds of millions on a support contract).

(The pilot program for the LEAN process had its call center outsourced overseas, if that helps you try to figure out why IBM wanted to get rid of dedicated engineers and move to a call-center operation).

[Oct 30, 2018] Arbitrators overwhelmingly favor employers

Oct 30, 2018 | features.propublica.org

When it comes to employment claims, studies have found that arbitrators overwhelmingly favor employers. Research by Cornell University law and labor relations specialist Alexander Colvin found that workers win only 19 percent of the time when their cases are arbitrated. By contrast, they win 36 percent of the time when they go to federal court, and 57 percent in state courts. Average payouts when an employee wins follow a similar pattern.

Given those odds, and having signed away their rights to go to court, some laid-off IBM workers have chosen the one independent forum companies can't deny them: the U.S. Equal Employment Opportunity Commission. That's where Moos, the Long Beach systems security specialist, and several of her colleagues, turned for help when they were laid off. In their complaints to the agency, they said they'd suffered age discrimination because of the company's effort to "drastically change the IBM employee age mix to be seen as a startup."

In its formal reply to the EEOC, IBM said that age couldn't have been a factor in their dismissals. Among the reasons it cited: The managers who decided on the layoffs were in their 40s and therefore older too.

[Oct 30, 2018] I see the Performance Improvement Plan (PIP) problem as its nearly impossible to take the fact that we know PIP is a scam to court. IBM will say its an issue with you, your performance nose dived and your manager tried to fix that. You have to not only fight those simple statements, but prove that PIP is actually systematic worker abuse.

Notable quotes:
"... It is in fact a modern corporate horror story; it's also life at a modern corporation, period. ..."
Oct 30, 2018 | features.propublica.org

Cindy Gallop , Thursday, March 22, 2018 10:24 AM

This makes for absolutely horrifying, chills-down-your-spine reading. A modern corporate horror story - worthy of a 'Black Mirror' episode. Phenomenal reporting by Ariana Tobin and Peter Gosselin. Thank you for exposing this. I hope this puts an end to this at IBM and makes every other company and industry doing this in covert and illegal ways think twice about continuing.
Daisy S Cindy Gallop , in reply to" aria-label="in reply to"> •
Agree..a well written expose'. I've been a victim of IBM's "PIP" (Performance Improvement Plan) strategy, not because of my real performance mind you, but rather, I wasn't billing hours between projects and it was hurting my unit's bottom line. The way IBM instructs management to structure the PIP, it's almost impossible to dig your way out, and it's intentional. If you have a PIP on your record, nobody in IBM wants to touch you, so in effect you're already gone.
Paul Brinker Daisy S , in reply to" aria-label="in reply to"> •
I see the PIP problem as its nearly impossible to take the fact that we know PIP is a scam to court. IBM will say its an issue with you, your performance nose dived and your manager tried to fix that. You have to not only fight those simple statements, but prove that PIP is actually systematic worker abuse.
dragonflap Cindy Gallop , in reply to" aria-label="in reply to"> •
Cindy, they've been doing this for at least 15-20 years, or even longer according to some of the previous comments. It is in fact a modern corporate horror story; it's also life at a modern corporation, period.
Maria Stone dragonflap , in reply to" aria-label="in reply to"> •
This started happening in the 1990's when they added 5 years to your age and years of service and ASKED you to retire.
Matt_Z , Thursday, March 22, 2018 6:01 PM
After over 35 years working there, 19 of them as a manager sending out more of those notification letters than I care to remember, I can vouch for the accuracy of this investigative work. It's an incredibly toxic and hostile environment and has been for the last 5 or so years. One of the items I was appraised on annually was how many US jobs I moved offshore. It was a relief when I received my notification letter after a two minute phone call telling me it was on the way. Sleeping at night and looking myself in the mirror aren't as hard as they were when I worked there.
IBM will never regain any semblance of their former glory (or profit) until they begin to treat employees well again.
With all the offshoring and resource actions with no backfill over the last 10 years, so much is broken. Customers suffer almost as much as the employees.
I don't know how in the world they ended up on that LinkedIn list. Based on my fairly recent experience there are a half dozen happy employees in the US, and most of them are C level.
Jennifer , Thursday, March 22, 2018 9:42 AM
Well done. It squares well with my 18 years at IBM, watching resource action after resource action and hearing what my (unusually honest) manager told me. Things got progressively worse from 2012 onward. I never realized how stressful it was to live under the shadow of impending layoffs until I finally found the courage to leave in 2015. Best decision I've made.

IBM answers to its shareholders, period. Employees are an afterthought - simply a means to an end. It's shameful. (That's not to say that individual people managers feel that way. I'm speaking about IBM executives.)

Herb Jennifer , in reply to" aria-label="in reply to"> •
Well, they almost answer to their shareholders, but that's after the IBM executives take their share. Ginni's compensation is tied to stock price (apparently not earnings) and buy backs maintain the stock price.
Ribit , Thursday, March 22, 2018 8:17 AM
If the criteria for layoff is being allegedly overpaid and allegedly a poor performer, then it follows that Grinnin' Jenny should have been let go long ago.
Mr. Hand Ribit , in reply to" aria-label="in reply to"> •
Yes! After the 4th of those 22 consecutive quarters of declining revenues. And she's no spring chicken either. ;-)
DDRLSGC Ribit ,
Especially these CEOs who have ran their companies into the ground for the last 38 years.
owswitch , Thursday, March 22, 2018 8:58 AM
Just another fine example of how people become disposable.
And, when it comes to cost containment and profit maximization, there is no place for ethics in American business.
Businesses can lie just as well as politicians.

Millennials are smart to avoid this kind of problem by remaining loyal only to themselves. Companies certainly define anyone as replaceable - even their over-paid CEO's.

DDRLSGC owswitch

The millennials saw what happen to their parents and grandparents getting screwed over after a life time of work and loyalty. You can't blame them for not caring about so called traditional American work ethics and then they are attacked for not having them when the business leaders threw away all those value decades ago.

Some of these IBM people have themselves to blame for cutting their own economic throats for fighting against unions, putting in politicians who are pro-business and thinking that their education and high paying white collar STEM jobs will give them economic immunity.

If America was more of a free market and free enterprise instead of being more of a close market of oligarchies and monopolies, and strong government regulations, companies would think twice about treating their workforce badly because they know their workforce would leave for other companies or start up their own companies without too much of a hassle.

HiJinks DDRLSGC

Under the old IBM you could not get a union as workers were treated with dignity and respect - see the 3 core beliefs. Back then a union would not have accomplished anything.

DDRLSGC HiJinks
Doesn't matter if it was the old IBM or new IBM, you wonder how many still actually voted against their economic interests in the political elections that in the long run undermine labor rights in this country.
HiJinks DDRLSGC
So one shouldn't vote? Neither party cares about the average voter except at election time. Both sell out to Big Business - after all, that's where the big campaign donations come from. If you believe only one party favors Big Business, then you have been watching to much "fake news". Even the unions know they have been sold out by both and are wising up. How many of those jobs were shipped overseas the past 25 years.
DDRLSGC HiJinks ,
No, they should have been more active in voting for politicians who would look after the workers' rights in this country for the last 38 years plus ensuring that Congressional people and the president would not be packing the court system with pro-business judges. Sorry, but it is the Big Business that have been favoring the Republican Party for a long, long time and the jobs have been shipped out for the last 38 years.

[Oct 30, 2018] The women who run large US companies are as shallow and ruthless as the sociopathic men.

Oct 30, 2018 | features.propublica.org

Bob Gort , Saturday, March 31, 2018 9:49 PM

Age discrimination has been standard operating procedure in IT for at least 30 years. And there are no significant consequences, if any consequences at all, for doing it in a blatant fashion. The companies just need to make sure the quota of H1B visas is increased when they are doing this on an IBM scale!
900DeadWomen Bob Gort , in reply to" aria-label="in reply to">
Age discrimination and a myriad other forms of discrimination have been standard operating procedure in the US. Period. Full stop. No need to equivocate.
Anon , Friday, March 30, 2018 12:49 PM
Wait for a few years and we can see the same happening to "millenials".

And the women who run these companies are as shallow and ruthless as the sociopathic men.

[Oct 30, 2018] Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

Oct 30, 2018 | features.propublica.org

Al Romig , Wednesday, April 18, 2018 5:20 AM

As a new engineering graduate, I joined a similar-sized multinational US-based company in the early '70s. Their recruiting pitch was, "Come to work here, kid. Do your job, keep your nose clean, and you will enjoy great, secure work until you retire on easy street".

Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

GoingGone , Friday, April 13, 2018 6:06 PM
As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally. Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service. All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done. The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.
Paul V Sutera , Tuesday, April 3, 2018 7:33 PM
In 1994, I saved my job at IBM for the first time, and survived. But I was 36 years old. I sat down at the desk of a man in his 50s, and found a few odds and ends left for me in the desk. Almost 20 years later, it was my turn to go. My health and well-being is much better now. Less money but better health. The sins committed by management will always be: "I was just following orders".

[Oct 30, 2018] Verizon is making similar moves, only sending them to third-party outsourcers instead of laying off.

Oct 30, 2018 | arstechnica.com

atomic.banjo , Smack-Fu Master, in training et Subscriptor 5 hours ago New Poster

Legatum_of_Kain wrote:
It is not a good thing towards employees that are getting fired before retirenment.

https://features.propublica.org/ibm/ibm ... n-workers/

Verizon is making similar moves, only sending them to third-party outsourcers instead of laying off.

[Oct 30, 2018] IBM age discrimination

Notable quotes:
"... Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story. ..."
Oct 30, 2018 | features.propublica.org

Consider, for example, a planning presentation that former IBM executives said was drafted by heads of a business unit carved out of IBM's once-giant software group and charged with pursuing the "C," or cloud, portion of the company's CAMS strategy.

The presentation laid out plans for substantially altering the unit's workforce. It was shown to company leaders including Diane Gherson, the senior vice president for human resources, and James Kavanaugh, recently elevated to chief financial officer. Its language was couched in the argot of "resources," IBM's term for employees, and "EP's," its shorthand for early professionals or recent college graduates.

Among the goals: "Shift headcount mix towards greater % of Early Professional hires." Among the means: "[D]rive a more aggressive performance management approach to enable us to hire and replace where needed, and fund an influx of EPs to correct seniority mix." Among the expected results: "[A] significant reduction in our workforce of 2,500 resources."

A slide from a similar presentation prepared last spring for the same leaders called for "re-profiling current talent" to "create room for new talent." Presentations for 2015 and 2016 for the 50,000-employee software group also included plans for "aggressive performance management" and emphasized the need to "maintain steady attrition to offset hiring."

IBM declined to answer questions about whether either presentation was turned into company policy. The description of the planned moves matches what hundreds of older ex-employees told ProPublica they believe happened to them: They were ousted because of their age. The company used their exits to hire replacements, many of them young; to ship their work overseas; or to cut its overall headcount.

Ed Alpern, now 65, of Austin, started his 39-year run with IBM as a Selectric typewriter repairman. He ended as a project manager in October of 2016 when, he said, his manager told him he could either leave with severance and other parting benefits or be given a bad job review -- something he said he'd never previously received -- and risk being fired without them.

Albert Poggi, now 70, was a three-decade IBM veteran and ran the company's Palisades, New York, technical center where clients can test new products. When notified in November of 2016 he was losing his job to layoff, he asked his bosses why, given what he said was a history of high job ratings. "They told me," he said, "they needed to fill it with someone newer."

The presentations from the software group, as well as the stories of ex-employees like Alpern and Poggi, square with internal documents from two other major IBM business units. The documents for all three cover some or all of the years from 2013 through the beginning of 2018 and deal with job assessments, hiring, firing and layoffs.

The documents detail practices that appear at odds with how IBM says it treats its employees. In many instances, the practices in effect, if not intent, tilt against the company's older U.S. workers.

For example, IBM spokespeople and lawyers have said the company never considers a worker's age in making decisions about layoffs or firings.

But one 2014 document reviewed by ProPublica includes dates of birth. An ex-IBM employee familiar with the process said executives from one business unit used it to decide about layoffs or other job changes for nearly a thousand workers, almost two-thirds of them over 50.

Documents from subsequent years show that young workers are protected from cuts for at least a limited period of time. A 2016 slide presentation prepared by the company's global technology services unit, titled "U.S. Resource Action Process" and used to guide managers in layoff procedures, includes bullets for categories considered "ineligible" for layoff. Among them: "early professional hires," meaning recent college graduates.

In responding to age-discrimination complaints that ex-employees file with the EEOC, lawyers for IBM say that front-line managers make all decisions about who gets laid off, and that their decisions are based strictly on skills and job performance, not age.

But ProPublica reviewed spreadsheets that indicate front-line managers hardly acted alone in making layoff calls. Former IBM managers said the spreadsheets were prepared for upper-level executives and kept continuously updated. They list hundreds of employees together with codes like "lift and shift," indicating that their jobs were to be lifted from them and shifted overseas, and details such as whether IBM's clients had approved the change.

An examination of several of the spreadsheets suggests that, whatever the criteria for assembling them, the resulting list of those marked for layoff was skewed toward older workers. A 2016 spreadsheet listed more than 400 full-time U.S. employees under the heading "REBAL," which refers to "rebalancing," the process that can lead to laying off workers and either replacing them or shifting the jobs overseas. Using the job search site LinkedIn, ProPublica was able to locate about 100 of these employees and then obtain their ages through public records. Ninety percent of those found were 40 or older. Seventy percent were over 50.

IBM frequently cites its history of encouraging diversity in its responses to EEOC complaints about age discrimination. "IBM has been a leader in taking positive actions to ensure its business opportunities are made available to individuals without regard to age, race, color, gender, sexual orientation and other categories," a lawyer for the company wrote in a May 2017 letter. "This policy of non-discrimination is reflected in all IBM business activities."

But ProPublica found at least one company business unit using a point system that disadvantaged older workers. The system awarded points for attributes valued by the company. The more points a person garnered, according to the former employee, the more protected she or he was from layoff or other negative job change; the fewer points, the more vulnerable.

The arrangement appears on its face to favor younger newcomers over older veterans. Employees were awarded points for being relatively new at a job level or in a particular role. Those who worked for IBM for fewer years got more points than those who'd been there a long time.

The ex-employee familiar with the process said a 2014 spreadsheet from that business unit, labeled "IBM Confidential," was assembled to assess the job prospects of more than 600 high-level employees, two-thirds of them from the U.S. It included employees' years of service with IBM, which the former employee said was used internally as a proxy for age. Also listed was an assessment by their bosses of their career trajectories as measured by the highest job level they were likely to attain if they remained at the company, as well as their point scores.

The tilt against older workers is evident when employees' years of service are compared with their point scores. Those with no points and therefore most vulnerable to layoff had worked at IBM an average of more than 30 years; those with a high number of points averaged half that.

Perhaps even more striking is the comparison between employees' service years and point scores on the one hand and their superiors' assessments of their career trajectories on the other.

Along with many American employers, IBM has argued it needs to shed older workers because they're no longer at the top of their games or lack "contemporary" skills.

But among those sized up in the confidential spreadsheet, fully 80 percent of older employees -- those with the most years of service but no points and therefore most vulnerable to layoff -- were rated by superiors as good enough to stay at their current job levels or be promoted. By contrast, only a small percentage of younger employees with a high number of points were similarly rated.

"No major company would use tools to conduct a layoff where a disproportionate share of those let go were African Americans or women," said Cathy Ventrell-Monsees, senior attorney adviser with the EEOC and former director of age litigation for the senior lobbying giant AARP. "There's no difference if the tools result in a disproportionate share being older workers."

In addition to the point system that disadvantaged older workers in layoffs, other documents suggest that IBM has made increasingly aggressive use of its job-rating machinery to pave the way for straight-out firings, or what the company calls "management-initiated separations." Internal documents suggest that older workers were especially targets.

Like in many companies, IBM employees sit down with their managers at the start of each year and set goals for themselves. IBM graded on a scale of 1 to 4, with 1 being top-ranked.

Those rated as 3 or 4 were given formal short-term goals known as personal improvement plans, or PIPs. Historically many managers were lenient, especially toward those with 3s whose ratings had dropped because of forces beyond their control, such as a weakness in the overall economy, ex-employees said.

But within the past couple of years, IBM appears to have decided the time for leniency was over. For example, a software group planning document for 2015 said that, over and above layoffs, the unit should seek to fire about 3,000 of the unit's 50,000-plus workers.

To make such deep cuts, the document said, executives should strike an "aggressive performance management posture." They needed to double the share of employees given low 3 and 4 ratings to at least 6.6 percent of the division's workforce. And because layoffs cost the company more than outright dismissals or resignations, the document said, executives should make sure that more than 80 percent of those with low ratings get fired or forced to quit.

Finally, the 2015 document said the division should work "to attract the best and brightest early professionals" to replace up to two-thirds of those sent packing. A more recent planning document -- the presentation to top executives Gherson and Kavanaugh for a business unit carved out of the software group -- recommended using similar techniques to free up money by cutting current employees to fund an "influx" of young workers.

In a recent interview, Poggi said he was resigned to being laid off. "Everybody at IBM has a bullet with their name on it," he said. Alpern wasn't nearly as accepting of being threatened with a poor job rating and then fired.

Alpern had a particular reason for wanting to stay on at IBM, at least until the end of last year. His younger son, Justin, then a high school senior, had been named a National Merit semifinalist. Alpern wanted him to be able to apply for one of the company's Watson scholarships. But IBM had recently narrowed eligibility so only the children of current employees could apply, not also retirees as it was until 2014.

Alpern had to make it through December for his son to be eligible.

But in August, he said, his manager ordered him to retire. He sought to buy time by appealing to superiors. But he said the manager's response was to threaten him with a bad job review that, he was told, would land him on a PIP, where his work would be scrutinized weekly. If he failed to hit his targets -- and his managers would be the judges of that -- he'd be fired and lose his benefits.

Alpern couldn't risk it; he retired on Oct. 31. His son, now a freshman on the dean's list at Texas A&M University, didn't get to apply.

"I can think of only a couple regrets or disappointments over my 39 years at IBM,"" he said, "and that's one of them."

'Congratulations on Your Retirement!'

Like any company in the U.S., IBM faces few legal constraints to reducing the size of its workforce. And with its no-disclosure strategy, it eliminated one of the last regular sources of information about its employment practices and the changing size of its American workforce.

But there remained the question of whether recent cutbacks were big enough to trigger state and federal requirements for disclosure of layoffs. And internal documents, such as a slide in a 2016 presentation titled "Transforming to Next Generation Digital Talent," suggest executives worried that "winning the talent war" for new young workers required IBM to improve the "attractiveness of (its) culture and work environment," a tall order in the face of layoffs and firings.

So the company apparently has sought to put a softer face on its cutbacks by recasting many as voluntary rather than the result of decisions by the firm. One way it has done this is by converting many layoffs to retirements.

Some ex-employees told ProPublica that, faced with a layoff notice, they were just as happy to retire. Others said they felt forced to accept a retirement package and leave. Several actively objected to the company treating their ouster as a retirement. The company nevertheless processed their exits as such.

Project manager Ed Alpern's departure was treated in company paperwork as a voluntary retirement. He didn't see it that way, because the alternative he said he was offered was being fired outright.

Lorilynn King, a 55-year-old IT specialist who worked from her home in Loveland, Colorado, had been with IBM almost as long as Alpern by May 2016 when her manager called to tell her the company was conducting a layoff and her name was on the list.

King said the manager told her to report to a meeting in Building 1 on IBM's Boulder campus the following day. There, she said, she found herself in a group of other older employees being told by an IBM human resources representative that they'd all be retiring. "I have NO intention of retiring," she remembers responding. "I'm being laid off."

ProPublica has collected documents from 15 ex-IBM employees who got layoff notices followed by a retirement package and has talked with many others who said they received similar paperwork. Critics say the sequence doesn't square well with the law.

"This country has banned mandatory retirement," said Seiner, the University of South Carolina law professor and former EEOC appellate lawyer. "The law says taking a retirement package has to be voluntary. If you tell somebody 'Retire or we'll lay you off or fire you,' that's not voluntary."

Until recently, the company's retirement paperwork included a letter from Rometty, the CEO, that read, in part, "I wanted to take this opportunity to wish you well on your retirement While you may be retiring to embark on the next phase of your personal journey, you will always remain a valued and appreciated member of the IBM family." Ex-employees said IBM stopped sending the letter last year.

IBM has also embraced another practice that leads workers, especially older ones, to quit on what appears to be a voluntary basis. It substantially reversed its pioneering support for telecommuting, telling people who've been working from home for years to begin reporting to certain, often distant, offices. Their other choice: Resign.

David Harlan had worked as an IBM marketing strategist from his home in Moscow, Idaho, for 15 years when a manager told him last year of orders to reduce the performance ratings of everybody at his pay grade. Then in February last year, when he was 50, came an internal video from IBM's new senior vice president, Michelle Peluso, which announced plans to improve the work of marketing employees by ordering them to work "shoulder to shoulder." Those who wanted to stay on would need to "co-locate" to offices in one of six cities.

Early last year, Harlan received an email congratulating him on "the opportunity to join your team in Raleigh, North Carolina." He had 30 days to decide on the 2,600-mile move. He resigned in June.

David Harlan worked for IBM for 15 years from his home in Moscow, Idaho, where he also runs a drama company. Early last year, IBM offered him a choice: Move 2,600 miles to Raleigh-Durham to begin working at an office, or resign. He left in June. (Rajah Bose for ProPublica)

After the Peluso video was leaked to the press, an IBM spokeswoman told the Wall Street Journal that the " vast majority " of people ordered to change locations and begin reporting to offices did so. IBM Vice President Ed Barbini said in an initial email exchange with ProPublica in July that the new policy affected only about 2,000 U.S. employees and that "most" of those had agreed to move.

But employees across a wide range of company operations, from the systems and technology group to analytics, told ProPublica they've also been ordered to co-locate in recent years. Many IBMers with long service said that they quit rather than sell their homes, pull children from school and desert aging parents. IBM declined to say how many older employees were swept up in the co-location initiative.

"They basically knew older employees weren't going to do it," said Eileen Maroney, a 63-year-old IBM product manager from Aiken, South Carolina, who, like Harlan, was ordered to move to Raleigh or resign. "Older people aren't going to move. It just doesn't make any sense." Like Harlan, Maroney left IBM last June.

Having people quit rather than being laid off may help IBM avoid disclosing how much it is shrinking its U.S. workforce and where the reductions are occurring.

Under the federal WARN Act , adopted in the wake of huge job cuts and factory shutdowns during the 1980s, companies laying off 50 or more employees who constitute at least one-third of an employer's workforce at a site have to give advance notice of layoffs to the workers, public agencies and local elected officials.

Similar laws in some states where IBM has a substantial presence are even stricter. California, for example, requires advanced notice for layoffs of 50 or more employees, no matter what the share of the workforce. New York requires notice for 25 employees who make up a third.

Because the laws were drafted to deal with abrupt job cuts at individual plants, they can miss reductions that occur over long periods among a workforce like IBM's that was, at least until recently, widely dispersed because of the company's work-from-home policy.

IBM's training sessions to prepare managers for layoffs suggest the company was aware of WARN thresholds, especially in states with strict notification laws such as California. A 2016 document entitled "Employee Separation Processing" and labeled "IBM Confidential" cautions managers about the "unique steps that must be taken when processing separations for California employees."

A ProPublica review of five years of WARN disclosures for a dozen states where the company had large facilities that shed workers found no disclosures in nine. In the other three, the company alerted authorities of just under 1,000 job cuts -- 380 in California, 369 in New York and 200 in Minnesota. IBM's reported figures are well below the actual number of jobs the company eliminated in these states, where in recent years it has shuttered, sold off or leveled plants that once employed vast numbers.

By contrast, other employers in the same 12 states reported layoffs last year alone totaling 215,000 people. They ranged from giant Walmart to Ostrom's Mushroom Farms in Washington state.

Whether IBM operated within the rules of the WARN act, which are notoriously fungible, could not be determined because the company declined to provide ProPublica with details on its layoffs.

A Second Act, But Poorer

W ith 35 years at IBM under his belt, Ed Miyoshi had plenty of experience being pushed to take buyouts, or early retirement packages, and refusing them. But he hadn't expected to be pushed last fall.

Miyoshi, of Hopewell Junction, New York, had some years earlier launched a pilot program to improve IBM's technical troubleshooting. With the blessing of an IBM vice president, he was busily interviewing applicants in India and Brazil to staff teams to roll the program out to clients worldwide.

The interviews may have been why IBM mistakenly assumed Miyoshi was a manager, and so emailed him to eliminate the one U.S.-based employee still left in his group.

"That was me," Miyoshi realized.

In his sign-off email to colleagues shortly before Christmas 2016, Miyoshi, then 57, wrote: "I am too young and too poor to stop working yet, so while this is good-bye to my IBM career, I fully expect to cross paths with some of you very near in the future."

He did, and perhaps sooner than his colleagues had expected; he started as a subcontractor to IBM about two weeks later, on Jan. 3.

Miyoshi is an example of older workers who've lost their regular IBM jobs and been brought back as contractors. Some of them -- not Miyoshi -- became contract workers after IBM told them their skills were out of date and no longer needed.

Employment law experts said that hiring ex-employees as contractors can be legally dicey. It raises the possibility that the layoff of the employee was not for the stated reason but perhaps because they were targeted for their age, race or gender.

IBM appears to recognize the problem. Ex-employees say the company has repeatedly told managers -- most recently earlier this year -- not to contract with former employees or sign on with third-party contracting firms staffed by ex-IBMers. But ProPublica turned up dozens of instances where the company did just that.

Only two weeks after IBM laid him off in December 2016, Ed Miyoshi of Hopewell Junction, New York, started work as a subcontractor to the company. But he took a $20,000-a-year pay cut. "I'm not a millionaire, so that's a lot of money to me," he says. (Demetrius Freeman for ProPublica)

Responding to a question in a confidential questionnaire from ProPublica, one 35-year company veteran from New York said he knew exactly what happened to the job he left behind when he was laid off. "I'M STILL DOING IT. I got a new gig eight days after departure, working for a third-party company under contract to IBM doing the exact same thing."

In many cases, of course, ex-employees are happy to have another job, even if it is connected with the company that laid them off.

Henry, the Columbus-based sales and technical specialist who'd been with IBM's "resiliency services" unit, discovered that he'd lost his regular IBM job because the company had purchased an Indian firm that provided the same services. But after a year out of work, he wasn't going to turn down the offer of a temporary position as a subcontractor for IBM, relocating data centers. It got money flowing back into his household and got him back where he liked to be, on the road traveling for business.

The compensation most ex-IBM employees make as contractors isn't comparable. While Henry said he collected the same dollar amount, it didn't include health insurance, which cost him $1,325 a month. Miyoshi said his paycheck is 20 percent less than what he made as an IBM regular.

"I took an over $20,000 hit by becoming a contractor. I'm not a millionaire, so that's a lot of money to me," Miyoshi said.

And lower pay isn't the only problem ex-IBM employees-now-subcontractors face. This year, Miyoshi's payable hours have been cut by an extra 10 "furlough days." Internal documents show that IBM repeatedly furloughs subcontractors without pay, often for two, three or more weeks a quarter. In some instances, the furloughs occur with little advance notice and at financially difficult moments. In one document, for example, it appears IBM managers, trying to cope with a cost overrun spotted in mid-November, planned to dump dozens of subcontractors through the end of the year, the middle of the holiday season.

Former IBM employees now on contract said the company controls costs by notifying contractors in the midst of projects they have to take pay cuts or lose the work. Miyoshi said that he originally started working for his third-party contracting firm for 10 percent less than at IBM, but ended up with an additional 10 percent cut in the middle of 2017, when IBM notified the contractor it was slashing what it would pay.

For many ex-employees, there are few ways out. Henry, for example, sought to improve his chances of landing a new full-time job by seeking assistance to finish a college degree through a federal program designed to retrain workers hurt by offshoring of jobs.

But when he contacted the Ohio state agency that administers the Trade Adjustment Assistance, or TAA, program, which provides assistance to workers who lose their jobs for trade-related reasons, he was told IBM hadn't submitted necessary paperwork. State officials said Henry could apply if he could find other IBM employees who were laid off with him, information that the company doesn't provide.

TAA is overseen by the Labor Department but is operated by states under individual agreements with Washington, so the rules can vary from state to state. But generally employers, unions, state agencies and groups of employers can petition for training help and cash assistance. Labor Department data compiled by the advocacy group Global Trade Watch shows that employers apply in about 40 percent of cases. Some groups of IBM workers have obtained retraining funds when they or their state have applied, but records dating back to the early 1990s show IBM itself has applied for and won taxpayer assistance only once, in 2008, for three Chicago-area workers whose jobs were being moved to India.

Teasing New Jobs

A s IBM eliminated thousands of jobs in 2016, David Carroll, a 52-year-old Austin software engineer, thought he was safe.

His job was in mobile development, the "M" in the company's CAMS strategy. And if that didn't protect him, he figured he was only four months shy of qualifying for a program that gives employees who leave within a year of their three-decade mark access to retiree medical coverage and other benefits.

But the layoff notice Carroll received March 2 gave him three months -- not four -- to come up with another job. Having been a manager, he said he knew the gantlet he'd have to run to land a new position inside IBM.

Still, he went at it hard, applying for more than 50 IBM jobs, including one for a job he'd successfully done only a few years earlier. For his effort, he got one offer -- the week after he'd been forced to depart. He got severance pay but lost access to what would have been more generous benefits.

Edward Kishkill, then 60, of Hillsdale, New Jersey, had made a similar calculation.

A senior systems engineer, Kishkill recognized the danger of layoffs, but assumed he was immune because he was working in systems security, the "S" in CAMS and another hot area at the company.

The precaution did him no more good than it had Carroll. Kishkill received a layoff notice the same day, along with 17 of the 22 people on his systems security team, including Diane Moos. The notice said that Kishkill could look for other jobs internally. But if he hadn't landed anything by the end of May, he was out.

With a daughter who was a senior in high school headed to Boston University, he scrambled to apply, but came up dry. His last day was May 31, 2016.

For many, the fruitless search for jobs within IBM is the last straw, a final break with the values the company still says it embraces. Combined with the company's increasingly frequent request that departing employees train their overseas replacements, it has left many people bitter. Scores of ex-employees interviewed by ProPublica said that managers with job openings told them they weren't allowed to hire from layoff lists without getting prior, high-level clearance, something that's almost never given.

ProPublica reviewed documents that show that a substantial share of recent IBM layoffs have involved what the company calls "lift and shift," lifting the work of specific U.S. employees and shifting it to specific workers in countries such as India and Brazil. For example, a document summarizing U.S. employment in part of the company's global technology services division for 2015 lists nearly a thousand people as layoff candidates, with the jobs of almost half coded for lift and shift.

Ex-employees interviewed by ProPublica said the lift-and-shift process required their extensive involvement. For example, shortly after being notified she'd be laid off, Kishkill's colleague, Moos, was told to help prepare a "knowledge transfer" document and begin a round of conference calls and email exchanges with two Indian IBM employees who'd be taking over her work. Moos said the interactions consumed much of her last three months at IBM.

Next Chapters

W hile IBM has managed to keep the scale and nature of its recent U.S. employment cuts largely under the public's radar, the company drew some unwanted attention during the 2016 presidential campaign, when then-candidate Donald Trump lambasted it for eliminating 500 jobs in Minnesota, where the company has had a presence for a half century, and shifting the work abroad.

The company also has caught flak -- in places like Buffalo, New York ; Dubuque, Iowa ; Columbia, Missouri , and Baton Rouge, Louisiana -- for promising jobs in return for state and local incentives, then failing to deliver. In all, according to public officials in those and other places, IBM promised to bring on 3,400 workers in exchange for as much as $250 million in taxpayer financing but has hired only about half as many.

After Trump's victory, Rometty, in a move at least partly aimed at courting the president-elect, pledged to hire 25,000 new U.S. employees by 2020. Spokesmen said the hiring would increase IBM's U.S. employment total, although, given its continuing job cuts, the addition is unlikely to approach the promised hiring total.

When The New York Times ran a story last fall saying IBM now has more employees in India than the U.S., Barbini, the corporate spokesman, rushed to declare, "The U.S. has always been and remains IBM's center of gravity." But his stream of accompanying tweets and graphics focused as much on the company's record for racking up patents as hiring people.

IBM has long been aware of the damage its job cuts can do to people. In a series of internal training documents to prepare managers for layoffs in recent years, the company has included this warning: "Loss of a job often triggers a grief reaction similar to what occurs after a death."

Most, though not all, of the ex-IBM employees with whom ProPublica spoke have weathered the loss and re-invented themselves.

Marjorie Madfis, the digital marketing strategist, couldn't land another tech job after her 2013 layoff, so she headed in a different direction. She started a nonprofit called Yes She Can Inc. that provides job skills development for young autistic women, including her 21-year-old daughter.

After almost two years of looking and desperate for useful work, Brian Paulson, the widely traveled IBM senior manager, applied for and landed a position as a part-time rural letter carrier in Plano, Texas. He now works as a contract project manager for a Las Vegas gaming and lottery firm.

Ed Alpern, who started at IBM as a Selectric typewriter repairman, watched his son go on to become a National Merit Scholar at Texas A&M University, but not a Watson scholarship recipient.

Lori King, the IT specialist and 33-year IBM veteran who's now 56, got in a parting shot. She added an addendum to the retirement papers the firm gave her that read in part: "It was never my plan to retire earlier than at least age 60 and I am not committing to retire. I have been informed that I am impacted by a resource action effective on 2016-08-22, which is my last day at IBM, but I am NOT retiring."

King has aced more than a year of government-funded coding boot camps and university computer courses, but has yet to land a new job.

David Harlan still lives in Moscow, Idaho, after refusing IBM's "invitation" to move to North Carolina, and is artistic director of the Moscow Art Theatre (Too).

Ed Miyoshi is still a technical troubleshooter working as a subcontractor for IBM.

Ed Kishkill, the senior systems engineer, works part time at a local tech startup, but pays his bills as an associate at a suburban New Jersey Staples store.

This year, Paul Henry was back on the road, working as an IBM subcontractor in Detroit, about 200 miles from where he lived in Columbus. On Jan. 8, he put in a 14-hour day and said he planned to call home before turning in. He died in his sleep.

Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story.

Do you have information about age discrimination at IBM?

Let us know.

Peter Gosselin joined ProPublica as a contributing reporter in January 2017 to cover aging. He has covered the U.S. and global economies for, among others, the Los Angeles Times and The Boston Globe, focusing on the lived experiences of working people. He is the author of "High Wire: The Precarious Financial Lives of American Families."

Ariana Tobin is an engagement reporter at ProPublica, where she works to cultivate communities to inform our coverage. She was previously at The Guardian and WNYC. Ariana has also worked as digital producer for APM's Marketplace and contributed to outlets including The New Republic , On Being , the St. Louis Beacon and Bustle .

Production by Joanna Brenner and Hannah Birch . Art direction by David Sleight . Illustrations by Richard Borge .

[Oct 30, 2018] Cutting 'Old Heads' at IBM

Notable quotes:
"... I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful. ..."
"... Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters! ..."
"... I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding. ..."
Oct 30, 2018 | features.propublica.org

I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful.

They actually did a presentation of their interim results - but it was a 52 slide package that they had presented to me in my previous job but with the names and numbers changed. see more

DarthVaderMentor dauwkus , Thursday, April 5, 2018 4:43 PM

Intellectual Capital Re-Use! LOL! Not many people realize in IBM that many, if not all of the original IBM Consulting Group materials were made under the Type 2 Materials clause of the IBM Contract, which means the customers actually owned the IP rights of the documents. Can you imagine the mess if just one customer demands to get paid for every re-use of the IP that was developed for them and then re-used over and over again?
NoGattaca dauwkus , Monday, May 7, 2018 5:37 PM
Beautiful! Yea, these companies so fast to push experienced people who have dedicated their lives to the firm - how can you not...all the hours and commitment it takes - way underestimate the power of the network of those left for dead and their influence in that next career gig. Memories are long...very long when it comes to experiences like this.
davosil North_40 , Sunday, March 25, 2018 5:19 PM
True dat! Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters!
Playing Defense North_40 , Tuesday, April 3, 2018 4:41 PM
I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding.

[Oct 30, 2018] It s all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte

Notable quotes:
"... It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon. ..."
"... I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers". ..."
"... 1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans. ..."
"... Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce. ..."
"... It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster ..."
"... Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's. ..."
"... Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed. ..."
"... Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month. ..."
"... You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee. ..."
Oct 30, 2018 | disqus.com

dragonflap• 7 months ago I'm a 49-year-old SW engineer who started at IBM as part of an acquisition in 2000. I got laid off in 2002 when IBM started sending reqs to Bangalore in batches of thousands. After various adventures, I rejoined IBM in 2015 as part of the "C" organization referenced in the article.

It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon.

Stewart Dean • 7 months ago ,

The lead-in to this piece makes it sound like IBM was forced into these practices by inescapable forces. I'd say not, rather that it pursued them because a) the management was clueless about how to lead IBM in the new environment and new challenges so b) it started to play with numbers to keep the (apparent) profits up....to keep the bonuses coming. I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers".

And then there's the Pig with the Wooden Leg shaggy dog story that ends with the punch line, "A pig like that you don't eat all at once", which has a lot of the flavor of how many of us saw our jobs as IBM die a slow death.

IBM is about to fall out of the sky, much as General Motors did. How could that happen? By endlessly beating the cow to get more milk.

IBM was hiring right through the Great Depression such that It Did Not Pay Unemployment Insurance. Because it never laid people off, Because until about 1990, your manager was responsible for making sure you had everything you needed to excel and grow....and you would find people that had started on the loading dock and had become Senior Programmers. But then about 1990, IBM starting paying unemployment insurance....just out of the goodness of its heart. Right.

CRAW Stewart Dean • 7 months ago ,

1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans.

DDRLSGC Stewart Dean • 7 months ago ,

Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce.

Georgann Putintsev Stewart Dean • 7 months ago ,

I found that other Ex-IBMer's respect other Ex-IBMer's work ethics, knowledge and initiative.

Other companies are happy to get them as a valueable resource. In '89 when our Palo Alto Datacenter moved, we were given two options: 1.) to become a Programmer (w/training) 2.) move to Boulder or 3.) to leave.

I got my training with programming experience and left IBM in '92, when for 4 yrs IBM offerred really good incentives for leaving the company. The Executives thought that the IBM Mainframe/MVS z/OS+ was on the way out and the Laptop (Small but Increasing Capacity) Computer would take over everything.

It didn't. It did allow many skilled IBMers to succeed outside of IBM and help built up our customer skill sets. And like many, when the opportunity arose to return I did. In '91 I was accidentally given a male co-workers paycheck and that was one of the reasons for leaving. During my various Contract work outside, I bumped into other male IBMer's that had left too, some I had trained, and when they disclosed that it was their salary (which was 20-40%) higher than mine was the reason they left, I knew I had made the right decision.

Women tend to under-value themselves and their capabilities. Contracting also taught me that companies that had 70% employees and 30% contractors, meant that contractors would be let go if they exceeded their quarterly expenditures.

I first contracted with IBM in '98 and when I decided to re-join IBM '01, I had (3) job offers and I took the most lucrative exciting one to focus on fixing & improving DB2z Qry Parallelism. I developed a targeted L3 Technical Change Team to help L2 Support reduce Customer problems reported and improve our product. The instability within IBM remained and I saw IBM try to eliminate aging, salaried, benefited employees. The 1.) find a job within IBM ... to 2.) to leave ... was now standard.

While my salary had more than doubled since I left IBM the first time, it still wasn't near other male counterparts. The continual rating competition based on salary ranged titles and timing a title raise after a round of layoffs, not before. I had another advantage going and that was that my changed reduced retirement benefits helped me stay there. It all comes down to the numbers that Mgmt is told to cut & save IBM. While much of this article implies others were hired, at our Silicon Valley Location and other locations, they had no intent to backfill. So the already burdened employees were laden with more workloads & stress.

In the early to mid 2000's IBM setup a counter lab in China where they were paying 1/4th U.S. salaries and many SVL IBMers went to CSDL to train our new world 24x7 support employees. But many were not IBM loyal and their attrition rates were very high, so it fell to a wave of new-hires at SVL to help address it.

Stewart Dean Georgann Putintsev • 7 months ago ,

It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster

IBM32_retiree • 7 months ago ,

Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's.

Dan Yurman • 7 months ago ,

Bravo ProPublica for another "sock it to them" article - journalism in honor of the spirit of great newspapers everywhere that the refuge of justice in hard times is with the press.

Felix Domestica • 7 months ago ,

Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed.

RonF Felix Domestica • 7 months ago ,

Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month.

mjmadfis RonF • 7 months ago ,

When I was let go in June 2013 it was 6 months severance.

Terry Taylor • 7 months ago ,

You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee.

weelittlepeople Terry Taylor • 7 months ago ,

Good Ol Ma Bell is following the IBM playbook to a Tee

emnyc • 7 months ago ,

ProPublica deserves a Pulitzer for this article and all the extensive research that went into this investigation.

Incredible job! Congrats.

On a separate note, IBM should be ashamed of themselves and the executive team that enabled all of this should be fired.

WmBlake • 7 months ago ,

As a permanent old contractor and free-enterprise defender myself, I don't blame IBM a bit for wanting to cut the fat. But for the outright *lies, deception and fraud* that they use to break laws, weasel out of obligations... really just makes me want to shoot them... and I never even worked for them.

Michael Woiwood • 7 months ago ,

Great Article.

Where I worked, In Rochester,MN, people have known what is happening for years. My last years with IBM were the most depressing time in my life.

I hear a rumor that IBM would love to close plants they no longer use but they are so environmentally polluted that it is cheaper to maintain than to clean up and sell.

scorcher14 • 7 months ago ,

One of the biggest driving factors in age discrimination is health insurance costs, not salary. It can cost 4-5x as much to insure and older employee vs. a younger one, and employers know this. THE #1 THING WE CAN DO TO STOP AGE DISCRIMINATION IS TO MOVE AWAY FROM OUR EMPLOYER-PROVIDED INSURANCE SYSTEM. It could be single-payer, but it could also be a robust individual market with enough pool diversification to make it viable. Freeing employers from this cost burden would allow them to pick the right talent regardless of age.

DDRLSGC scorcher14 • 7 months ago ,

The American business have constantly fought against single payer since the end of World War II and why should I feel sorry for them when all of a sudden, they are complaining about health care costs? It is outrageous that workers have to face age discrimination; however, the CEOs don't have to deal with that issue since they belong to a tiny group of people who can land a job anywhere else.

pieinthesky scorcher14 • 7 months ago ,

Single payer won't help. We have single payer in Canada and just as much age discrimination in employment. Society in general does not like older people so unless you're a doctor, judge or pharmacist you will face age bias. It's even worse in popular culture never mind in employment.

OrangeGina scorcher14 • 7 months ago ,

I agree. Yet, a determined company will find other methods, explanations and excuses.

JohnCordCutter • 7 months ago ,

Thanks for the great article. I left IBM last year. USA based. 49. Product Manager in one of IBMs strategic initiatives, however got told to relocate or leave. I found another job and left. I came to IBM from an acquisition. My only regret is, I wish I had left this toxic environment earlier. It truely is a dreadful place to work.

60 Soon • 7 months ago ,

The methodology has trickled down to smaller companies pursuing the same net results for headcount reduction. The similarities to my experience were painful to read. The grief I felt after my job was "eliminated" 10 years ago while the Recession was at its worst and shortly after my 50th birthday was coming back. I never have recovered financially but have started writing a murder mystery. The first victim? The CEO who let me go. It's true. Revenge is best served cold.

donttreadonme9 • 7 months ago ,

Well written . people like me have experienced exactly what you wrote. IBM is a shadow of it's former greatness and I have advised my children to stay away from IBM and companies like it as they start their careers. IBM is a corrupt company. Shame on them !

annapurna • 7 months ago ,

I hope they find some way to bring a class action lawsuit against these assholes.

Mark annapurna • 7 months ago ,

I suspect someone will end up hunt them down with an axe at some point. That's the only way they'll probably learn. I don't know about IBM specifically, but when Carly Fiorina ran HP, she travelled with and even went into engineering labs with an armed security detail.

OrangeGina Mark • 7 months ago ,

all the bigwig CEOs have these black SUV security details now.

Sarahw • 7 months ago ,

IBM has been using these tactics at least since the 1980s, when my father was let go for similar 'reasons.'

Vin • 7 months ago ,

Was let go after 34 years of service. Mine Resource Action latter had additional lines after '...unless you are offered ... position within IBM before that date.' , implying don't even try to look for a position. They lines were ' Additional business controls are in effect to manage the business objectives of this resource action, therefore, job offers within (the name of division) will be highly unlikely.'.

Mark Vin • 7 months ago ,

Absolutely and utterly disgusting.

Greybeard • 7 months ago ,

I've worked for a series of vendors for over thirty years. A job at IBM used to be the brass ring; nowadays, not so much.

I've heard persistent rumors from IBMers that U.S. headcount is below 25,000 nowadays. Given events like the recent downtime of the internal systems used to order parts (5 or so days--website down because staff who maintained it were let go without replacements), it's hard not to see the spiral continue down the drain.

What I can't figure out is whether Rometty and cronies know what they're doing or are just clueless. Either way, the result is the same: destruction of a once-great company and brand. Tragic.

ManOnTheHill Greybeard • 7 months ago ,

Well, none of these layoffs/ageist RIFs affect the execs, so they don't see the effects, or they see the effects but attribute them to some other cause.

(I'm surprised the article doesn't address this part of the story; how many affected by layoffs are exec/senior management? My bet is very few.)

ExIBMExec ManOnTheHill • 7 months ago ,

I was a D-banded exec (Director-level) who was impacted and I know even some VPs who were affected as well, so they do spread the pain, even in the exec ranks.

ManOnTheHill ExIBMExec • 7 months ago ,

That's different than I have seen in companies I have worked for (like HP). There RIFs (Reduction In Force, their acronym for layoff) went to the director level and no further up.

[Oct 30, 2018] Anyone working at IBM after 1993 should have had no expectation of a lifetime career

Under neoliberlaism the idea of loyalty between a corporation and an employee makes no more sense than loyalty between a motel and its guests.
Notable quotes:
"... Any expectation of "loyalty", that two-way relationship of employee/company from an earlier time, was wishful thinking ..."
"... With all the automation going on around the world, these business leaders better worry about people not having money to buy their goods and services plus what are they going to do with the surplus of labor ..."
"... This is the nail in the coffin. As an IT manager responsible for selecting and purchasing software, I will never again recommend IBM products ..."
"... The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The idea of loyalty between a corporation and an at-will employee makes no more sense than loyalty between a motel and its guests. ..."
"... The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980. ..."
Oct 30, 2018 | features.propublica.org
Jeff Russell , Thursday, March 22, 2018 4:31 PM
I started at IBM 3 days out of college in 1979 and retired in 2017. I was satisfied with my choice and never felt mistreated because I had no expectation of lifetime employment, especially after the pivotal period in the 1990's when IBM almost went out of business. The company survived that period by dramatically restructuring both manufacturing costs and sales expense including the firing of tens of thousands of employees. These actions were well documented in the business news of the time, the obvious alternative was bankruptcy.

I told the authors that anyone working at IBM after 1993 should have had no expectation of a lifetime career. Downsizing, outsourcing, movement of work around the globe was already commonplace at all such international companies. Any expectation of "loyalty", that two-way relationship of employee/company from an earlier time, was wishful thinking .

I was always prepared to be sent packing, without cause, at any time and always had my resume up-to-date. I stayed because of interesting work, respectful supervisors, and adequate compensation.

The "resource action" that forced my decision to retire was no surprise, the company that hired me had been gone for decades.

DDRLSGC Jeff Russell , in reply to" aria-label="in reply to"> •
With all the automation going on around the world, these business leaders better worry about people not having money to buy their goods and services plus what are they going to do with the surplus of labor
John Kauai Jeff Russell , in reply to" aria-label="in reply to"> •
I had, more or less, the same experience at Cisco. They paid me to quit. Luckily, I was ready for it.

The article mentions IBMs 3 failures. So who was it that was responsible for not anticipating the transitions? It is hard enough doing what you already know. Perhaps companies should be spending more on figuring out "what's next" and not continually playing catch-up by dumping the older workers for the new.

MichiganRefugee , Friday, March 23, 2018 9:52 AM
I was laid off by IBM after 29 years and 4 months. I had received a division award in previous year, and my last PBC appraisal was 2+ (high performer.) The company I left was not the company I started with. Top management--starting with Gerstner--has steadily made IBM a less desirable place to work. They now treat employees as interchangeable assets and nothing more. I cannot/would not recommend IBM as an employer to any young programmer.
George Purcell , Friday, March 23, 2018 7:41 AM
Truly awesome work. I do want to add one thing, however--the entire rhetoric about "too many old white guys" that has become so common absolutely contributes to the notion that this sort of behavior is not just acceptable but in some twisted way admirable as well.
Bob Fritz , Thursday, March 22, 2018 7:35 PM
I read the article and all the comments.

Is anyone surprised that so many young people don't think capitalism is a good system any more?

I ran a high technology electronic systems company for years. We ran it "the old way." If you worked hard, and tried, we would bend over backwards to keep you. If technology or business conditions eliminated your job, we would try to train you for a new one. Our people were loyal, not like IBMers today. I honestly think that's the best way to be profitable.

People afraid of being unjustly RIFFed will always lack vitality.

petervonstackelberg , Thursday, March 22, 2018 2:00 PM
I'm glad someone is finally paying attention to age discrimination. IBM apparently is just one of many organizations that discriminate.

I'm in the middle of my own fight with the State University of New York (SUNY) over age discrimination. I was terminated by a one of the technical colleges in the SUNY System. The EEOC/New York State Division of Human Rights (NYDHR) found that "PROBABLE CAUSE (NYDHR's emphasis) exists to believe that the Respondent (Alfred State College - SUNY) has engaged in or is engaging in the unlawful discriminatory practice complained of." Investigators for NYDHR interviewed several witnesses, who testified that representatives of the college made statements such as "we need new faces", "three old men" attending a meeting, an older faculty member described as an "albatross", and "we ought to get rid of the old white guys". Witnesses said these statements were made by the Vice President of Academic Affairs and a dean at the college.

davosil , Sunday, March 25, 2018 5:00 PM
This saga at IBM is simply a microcosm of our overall economy. Older workers get ousted in favor of younger, cheaper workers; way too many jobs get outsourced; and so many workers today [young and old] can barely land a full-time job.
This is the behavior that our system incentivises (and gets away with) in this post Reagan Revolution era where deregulation is lauded and unions have been undermined & demonized. We need to seriously re-work 'work', and in order to do this we need to purge Republicans at every level, as they CLEARLY only serve corporate bottom-lines - not workers - by championing tax codes that reward outsourcing, fight a livable minimum wage, eliminate pensions, bust unions, fight pay equity for women & family leave, stack the Supreme Court with radical ideologues who blatantly rule for corporations over people all the time, etc. etc. ~35 years of basically uninterrupted Conservative economic policy & ideology has proven disastrous for workers and our quality of life. As goes your middle class, so goes your country.
ThinkingAloud , Friday, March 23, 2018 7:18 AM
The last five words are chilling... This is an award-winning piece....
RetiredIBM.manager , Thursday, March 22, 2018 7:39 PM
I am a retired IBM manager having had to execute many of these resource reduction programs.. too many.. as a matter of fact. ProPUBLICA....You nailed it!
David , Thursday, March 22, 2018 3:22 PM
IBM has always treated its customer-facing roles like Disney -- as cast members who need to match a part in a play. In the 60s and 70s, it was the white-shirt, blue-suit white men whom IBM leaders thought looked like mainframe salesmen. Now, rather than actually build a credible cloud to compete with Amazon and Microsoft, IBM changes the cast to look like cloud salespeople. (I work for Microsoft. Commenting for myself alone.)
CRAW David ,

Now IBM still treats their employees like Disney - by replacing them with H-1B workers.

MHV IBMer , Friday, March 23, 2018 10:35 PM
I am a survivor, the rare employee who has been at IBM for over 35 years. I have seen many, many layoff programs over 20 years now. I have seen tens of thousands people let go from the Hudson Valley of N.Y. Those of us who have survived, know and lived through what this article so accurately described. I currently work with 3 laid off/retired and rehired contractors. I have seen age discrimination daily for over 15 years. It is not only limited to layoffs, it is rampant throughout the company. Promotions, bonuses, transfers for opportunities, good reviews, etc... are gone if you are over 45. I have seen people under 30 given promotions to levels that many people worked 25 years for. IBM knows that these younger employees see how they treat us so they think they can buy them off. Come to think of it, I guess they actually are! They are ageist, there is no doubt, it is about time everyone knew. Excellent article.
Goldie Romero , Friday, March 23, 2018 2:31 PM
Nice article, but seriously this is old news. IBM has been at this for ...oh twenty years or more.
I don't really have a problem with it in terms of a corporation trying to make money. But I do have a problem with how IBM also likes to avoid layoffs by giving folks over 40 intentionally poor reviews, essentially trying to drive people out. Just have the guts to tell people, we don't need you anymore, bye. But to string people along as the overseas workers come in...c'mon just be honest with your workers.
High tech over 40 is not easy...I suggest folks prep for a career change before 50. Then you can have the last laugh on a company like IBM.
jblog , Friday, March 23, 2018 10:37 AM
From pages 190-191 of my novel, Ordinary Man (Amazon):

Throughout it all, layoffs became common, impacting mostly older employees with many years of service. These job cuts were dribbled out in small numbers to conceal them from the outside world, but employees could plainly see what was going on.

The laid off employees were supplanted by offshoring work to low-costs countries and hiring younger employees, often only on temporary contracts that offered low pay and no benefits – a process pejoratively referred to by veteran employees as "downsourcing." The recruitment of these younger workers was done under the guise of bringing in fresh skills, but while many of the new hires brought new abilities and vitality, they lacked the knowledge and perspective that comes with experience.

Frequently, an older more experienced worker would be asked to help educate newer employees, only to be terminated shortly after completing the task. And the new hires weren't fooled by what they witnessed and experienced at OpenSwitch, perceiving very quickly that the company had no real interest in investing in them for the long term. To the contrary, the objective was clearly to grind as much work out of them as possible, without offering any hope of increased reward or opportunity.

Most of the young recruits left after only a year or two – which, again, was part of the true agenda at the company. Senior management viewed employees not as talent, but simply as cost, and didn't want anyone sticking around long enough to move up the pay scale.

turquoisewaters , Thursday, March 22, 2018 10:19 PM
This is why you need unions.
Aaron Stackpole , Thursday, March 22, 2018 5:23 PM
This is the nail in the coffin. As an IT manager responsible for selecting and purchasing software, I will never again recommend IBM products. I love AIX and have worked with a lot if IBM products but not anymore. Good luck with the millennials though...
awb22 , Thursday, March 22, 2018 12:14 PM
The same thing has been going on at other companies, since the end of WWII. It's unethical, whether the illegality can be proven or not.

In the RTP area, where I live, I know many, many current and former employees. Times have changed, but the distinction between right and wrong hasn't.

Dave Allen , Thursday, March 22, 2018 1:07 PM
I worked for four major corporations (HP, Intel, Control Data Corporation, and Micron Semiconductor) before I was hired by IBM as a rare (at that time) experienced new hire.

Even though I ended up working for IBM for 21 years, and retired in 2013, because of my experiences at those other companies, I never considered IBM my "family."

The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The idea of loyalty between a corporation and an at-will employee makes no more sense than loyalty between a motel and its guests.

It is a business arrangement, not a love affair. Every individual needs to continually assess their skills and their value to their employer. If they are not commensurate, it is the employee's responsibility to either acquire new skills or seek a new employer.

Your employer will not hesitate to lay you off if your skills are no longer needed, or if they can hire someone who can do your job just as well for less pay. That is free enterprise, and it works for people willing to take advantage of it.

sometimestheyaresomewhatright Dave Allen , in reply to" aria-label="in reply to"> •
I basically agree. But why should it be OK for a company to fire you just to replace you with a younger you? If all that they accomplish is lowering their health care costs (which is what this is really about). If the company is paying about the same for the same work, why is firing older workers for being older OK?
Dave Allen sometimestheyaresomewhatright , in reply to" aria-label="in reply to"> •
Good question. The point I was trying to make is that people need to watch out for themselves and not expect their employer to do what is "best" for the employee. I think that is true whatever age the employee happens to be.

Whether employers should be able to discriminate against (treat differently) their employees based on age, gender, race, religion, etc. is a political question. Morally, I don't think they should discriminate. Politically, I think it is a slippery slope when the government starts imposing regulations on free enterprise. Government almost always creates more problems than they fix.

DDRLSGC Dave Allen , in reply to" aria-label="in reply to"> •
Sorry, but when you deregulate the free enterprise, it created more problems than it fixes and that is a fact that has been proven for the last 38 years.
Danllo DDRLSGC , in reply to" aria-label="in reply to"> •
That's just plain false. Deregulation creates competiiton. Competition for talented and skilled workers creates opportunities for those that wish to be employed and for those that wish to start new ventures. For example, when Ma Bell was regulated and had a monopoly on telecommunications there was no innovation in the telecom inudstry. However, when it was deregulated, cell phones, internet, etc exploded ... creating billionaires and millionaires while also improving the quality of life.
DDRLSGC Danllo , in reply to" aria-label="in reply to"> •
No, it happens to be true. When Reagan deregulate the economy, a lot of those corporate raiders just took over the companies, sold off the assets, and pocketed the money. What quality of life? Half of American lived near the poverty level and the wages for the workers have been stagnant for the last 38 years compared to a well-regulated economy in places like Germany and the Scandinavian countries where the workers have good wages and a far better standard of living than in the USA. Why do you think the Norwegians told Trump that they will not be immigrating to the USA anytime soon?
NotSure DDRLSGC , in reply to" aria-label="in reply to"> •
What were the economic conditions before Regan? It was a nightmare before Regan.

The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980.
DDRLSGC NotSure , in reply to" aria-label="in reply to"> •
At least we had a manufacturing base in the USA, strong regulations of corporations, corporate scandals were far and few, businesses did not go under so quickly, prices of goods and services did not go through the roof, people had pensions and could reasonably live off them, and recessions did not last so long or go so deep until Reagan came into office. In Under Reagan, the jobs were allowed to be send overseas, unions were busted up, pensions were reduced or eliminated, wages except those of the CEOs were staganent, and the economic conditions under Bush, Senior and Bush, Jr. were no better except that Bush, Jr, was the first president to have a net minus below zero growth, so every time we get a Republican Administration, the economy really turns into a nightmare. That is a fact.

You have the Republicans in Kansas, Oklahoma, and Wisconsin using Reaganomics and they are economic disaster areas.

DDRLSGC NotSure , in reply to" aria-label="in reply to"> •
You had an industrial base in the USA, lots of banks and savings and loans to choose from, lots of mom and pop stores, strong government regulation of the economy, able to live off your pensions, strong unions and employment laws along with the court system to back you up against corporate malfeasance. All that was gone when Reagan and the two Bushes came into office.
james Foster , Thursday, March 29, 2018 8:37 PM
Amazingly accurate article. The once great IBM now a dishonest and unscrupulous corporation concerned more about earnings per share than employees, customers, or social responsibility. In Global Services most likely 75% or more jobs are no longer in the US - can't believe a word coming out of Armonk.
Philip Meyer james Foster , in reply to" aria-label="in reply to"> •
I'm not sure there was ever a paradise in employment. Yeah, you can say there was more job stability 50 or 60 years ago, but that applied to a much smaller workforce than today (mostly white men). It is a drag, but there are also lot more of us old farts than there used to be and we live a lot longer in retirement as well. I don't see any magic bullet fix either.
George A , Tuesday, March 27, 2018 6:12 PM
Warning to Google/Facebook/Apple etc. All you young people will get old. It's inevitable. Do you think those companies will take care of you?
econdataus , Sunday, March 25, 2018 3:01 PM
Great article. What's especially infuriating is that the industry continues to claim that there is a shortage of STEM workers. For example, google "claim of 1.4 million computer science jobs with only 400,000 computer science graduates to fill them". If companies would openly say, "we have plenty of young STEM workers and prefer them to most older STEM workers", we could at least start addressing the problem. But they continue to promote the lie of there being a STEM shortage. They just want as big a labor pool as possible, unemployed workers be damned.
Buzz , Friday, March 23, 2018 12:00 PM
I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years. Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc. The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague. I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.
OrangeGina , Friday, March 23, 2018 11:41 AM
Make no mistake. The three and four letter acronyms and other mushy corporate speak may differ from firm to firm, but this is going on in every large tech company old enough to have a large population of workers over 50. I hope others will now be exposed.
JeffMo , Friday, March 23, 2018 10:23 AM
This article hits the nail right on the head, as I come up on my 1 year anniversary from being....ahem....'retired' from 23 years at IBM....and I'll be damned if I give them the satisfaction of thinking this was like a 'death' to me. It was the greatest thing that could have ever happened. Ginny and the board should be ashamed of themselves, but they won't be.
Frankie , Friday, March 23, 2018 1:00 AM
Starting around age 40 you start to see age discrimination. I think this is largely due to economics, like increased vacation times, higher wages, but most of all the perception that older workers will run up the medical costs. You can pass all the age related discrimination laws you want, but look how ineffective that has been.

If you contrast this with the German workforce, you see that they have more older workers with the skills and younger workers without are having a difficult time getting in. So what's the difference? There are laws about how many vacation weeks that are given and there is a national medical system that everyone pays, so discrimination isn't seen in the same light.

The US is the only hold out maybe with South Africa that doesn't have a good national medical insurance program for everyone. Not only do we pay more than the rest of the world, but we also have discrimination because of it.

Rick Gundlach , Thursday, March 22, 2018 11:38 PM
This is very good, and this is IBM. I know. I was plaintiff in Gundlach v. IBM Japan, 983 F.Supp.2d 389, which involved their violating Japanese labor law when I worked in Japan. The New York federal judge purposely ignored key points of Japanese labor law, and also refused to apply Title VII and Age Discrimination in Employment to the parent company in Westchester County. It is a huge, self-described "global" company with little demonstrated loyalty to America and Americans. Pennsylvania is suing them for $170 million on a botched upgrade of the state's unemployment system.
Jeff , Thursday, March 22, 2018 2:05 PM
In early 2013 I was given a 3 PBC rating for my 2012 performance, the main reason cited by my manager being that my team lead thought I "seemed distracted". Five months later I was included in a "resource action", and was gone by July. I was 20 months shy of 55. Younger coworkers were retained. That was about two years after the product I worked on for over a decade was off-shored.

Through a fluke of someone from the old, disbanded team remembering me, I was rehired two years later - ironically in a customer support position for the very product I helped develop.

While I appreciated my years of service, previous salary, and previous benefits being reinstated, a couple years into it I realized I just wasn't cut out for the demands of the job - especially the significant 24x7 pager duty. Last June I received email describing a "Transition to Retirement" plan I was eligible for, took it, and my last day will be June 30. I still dislike the job, but that plan reclassified me as part time, thus ending pager duty for me. The job still sucks, but at least I no longer have to despair over numerous week long 24x7 stints throughout the year.

A significant disappointment occurred a couple weeks ago. I was discussing healthcare options with another person leaving the company who hadn't been resource-actioned as I had, and learned the hard way I lost over $30,000 in some sort of future medical benefit account the company had established and funded at some point. I'm not sure I was ever even aware of it. That would have funded several years of healthcare insurance during the 8 years until I'm eligible for Medicare. I wouldn't be surprised if their not having to give me that had something to do with my seeming "distracted" to them. <rolls eyes="">

What's really painful is the history of that former account can still be viewed at Fidelity, where it associates my departure date in 2013 with my having "forfeited" that money. Um, no. I did not forfeit that money, nor would I have. I had absolutely no choice in the matter. I find the use of the word 'forfeited' to describe what happened as both disingenuous and offensive. That said, I don't know whether's that's IBM's or Fidelity's terminology, though.

Herb Jeff , in reply to" aria-label="in reply to"> •
Jeff, You should call Fidelity. I recently received a letter from the US Department of Labor that they discovered that IBM was "holding" funds that belonged to me that I was never told about. This might be similar or same story .

[Oct 30, 2018] There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered within their span of control. As they grew older corporations threw them out like an empty can

Notable quotes:
"... The other alternative is a market-based life that, for many, will be cruel, brutish, and short. ..."
Oct 30, 2018 | features.propublica.org

Lorilynn King

Step back and think about this for a minute. There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered (within their span of control... I'm not going to get into a discussion of how IBM pulls the rug out from underneath contracts after they've been signed).

These people were, and still are, high performers, they are committed to the job and the purpose that has been communicated to them by their peers, management, and customers; and they take the time (their OWN time) to pick up new skills and make sure that they are still current and marketable. They do this because they are committed to doing the job to the best of their ability.... it's what makes them who they are.

IBM (and other companies) are firing these very people ***for one reason and one reason ONLY***: their AGE. They have the skills and they're doing their jobs. If the same person was 30 you can bet that they'd still be there. Most of the time it has NOTHING to do with performance or lack of concurrency. Once the employee is fired, the job is done by someone else. The work is still there, but it's being done by someone younger and/or of a different nationality.

The money that is being saved by these companies has to come from somewhere. People that are having to withdraw their retirement savings 20 or so years earlier than planned are going to run out of funds.... and when they're in nursing homes, guess who is going to be supporting them? Social security will be long gone, their kids have their own monetary challenges.... so it will be government programs.... maybe.

This is not just a problem that impacts the 40 and over crowd. This is going to impact our entire society for generations to come.

NoPolitician
The business reality you speak of can be tempered via government actions. A few things:

The other alternative is a market-based life that, for many, will be cruel, brutish, and short.

[Oct 30, 2018] Elimination of loyalty: what corporations cloak as weeding out the low performers tranparantly reveals catching the older workers in the net as well.

Oct 30, 2018 | features.propublica.org

Great White North, Thursday, March 22, 2018 11:29 PM

There's not a word of truth quoted in this article. That is, quoted from IBM spokespeople. It's the culture there now. They don't even realize that most of their customers have become deaf to the same crap from their Sales and Marketing BS, which is even worse than their HR speak.

The sad truth is that IBM became incapable of taking its innovation (IBM is indeed a world beating, patent generating machine) to market a long time ago. It has also lost the ability (if it ever really had it) to acquire other companies and foster their innovation either - they ran most into the ground. As a result, for nearly a decade revenues have declined and resource actions grown. The resource actions may seem to be the ugly problem, but they're only the symptom of a fat greedy and pompous bureaucracy that's lost its ability to grow and stay relevant in a very competitive and changing industry. What they have been able to perfect and grow is their ability to downsize and return savings as dividends (Big Sam Palmisano's "innovation"). Oh, and for senior management to line their pockets.

Nothing IBM is currently doing is sustainable.

If you're still employed there, listen to the pain in the words of your fallen comrades and don't knock yourself out trying to stay afloat. Perhaps learn some BS of your own and milk your job (career? not...) until you find freedom and better pastures.

If you own stock, do like Warren Buffett, and sell it while it still has some value.

Danllo , Thursday, March 22, 2018 10:43 PM
This is NOTHING NEW! All major corporations have and will do this at some point in their existence. Another industry that does this regularly every 3 to 5 years is the pharamaceutical industry. They'll decimate their sales forces in order to, as they like to put it, "right size" the company.

They'll cloak it as weeding out the low performers, but they'll try to catch the "older" workers in the net as well.

[Oct 30, 2018] American companies pay health insurance premiums based on their specific employee profiles

Notable quotes:
"... As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. ..."
"... The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts. ..."
Oct 30, 2018 | features.propublica.org

sometimestheyaresomewhatright , Thursday, March 22, 2018 4:13 PM

American companies pay health insurance premiums based on their specific employee profiles. Insurance companies compete with each other for the business, but costs are actual. And based on the profile of the pool of employees. So American companies fire older workers just to lower the average age of their employees. Statistically this is going to lower their health care costs.

As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. They have an incentive to fire sick employees and employees with genetic risks. Those are harder to implement as ways to lower costs. Firing older employees is simple to do, just look up their ages.

The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts.

By the way, most tech companies are actually run by older people. The goal is to broom out mid-level people based on age. Nobody is going to suggest to a sixty year old president that they should self fire, for the good of the company.

[Oct 30, 2018] If I were a Red Hat employee over 40, I'd be sweating right now.

Oct 30, 2018 | arstechnica.com

Morley Dotes , Ars Centurion et Subscriptor 4 hours ago

jandrese wrote:
IMHO this is perilous for RHEL. It would be very easy for IBM to fire most of the developers and just latch on to the enterprise services stuff to milk it till its dry.

Why would you say that? IBM is renowned for their wonderful employee relations. </s>

If I were a Red Hat employee over 40, I'd be sweating right now.

Unless I had equity.

NeghVar1 , Wise, Aged Ars Veteran 4 hours ago
Reminds me of when Oracle bought Sun
sviola , Ars Scholae Palatinae 4 hours ago
Peevester wrote:
Muon wrote:
blockquote> We run just about everything on CentOS around here, downstream of RHEL. Should we be worried?

I don't think so, at least no more than you should have already been. IBM has adopted RHEL as their standard platform for a lot of things, all the way up to big-iron mainframes. Not to mention, over the two decades, they've done a hell of a lot of enhancements to Linux that are a big part of why it scales so well (Darl Mcbride just felt like someone walked over his grave. Hey, let's jump on it a bit too!).

Say what you like about IBM (like they've turned into a super-shitty place to work for or be a customer of), but they've been a damn good friend to Linux. If I actually worked for Red Hat though, I would be really unhappy because you can bet that "independence" will last a few quarters before everyone gets outsourced to Brazil.

Brazil is too expensive. Last time I heard, they were outsourcing from Brazil to chapear LA countries...

informationsuperhighway , Wise, Aged Ars Veteran et Subscriptor 2 hours ago
CousinSven wrote:
IBM are paying around 12x annual revenue for Red Hat which is a significant multiple so they will have to squeeze more money out of the business somehow. Either they grow customers or they increase margins or both.

IBM had little choice but to do something like this. They are in a terminal spiral thanks to years of bad leadership. The confused billing of the purchase smacks of rush, so far I have seen Red Hat described as a cloud company, an info sec company, an open source company...

So IBM are buying Red Hat as a last chance bid to avoid being put through the PE threshing machine. Red Hat get a ludicrous premium so will take the money.

And RH customers will want to check their contracts...

They will lay off Redhat staff to cut costs and replace them with remote programmers living in Calcutta. To big corporations a programmer is a fungible item, if you can swap programmer A woth programmer B at 1/4 the cost its a big win and you beat earnings estimate by a penny.

Rotoars , Ars Centurion 2 hours ago
bolomkxxviii wrote:
No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

This will kill both companies. Red has trouble making money and IBM has trouble not messing up what good their is and trouble making money. They both die, but a slow, possibly accelerating, death.

[Oct 30, 2018] Cutting Old Heads at IBM by Peter Gosselin and Ariana Tobin

Mar 22, 2018 | features.propublica.org

This story was co-published with Mother Jones.

F or nearly a half century, IBM came as close as any company to bearing the torch for the American Dream.

As the world's dominant technology firm, payrolls at International Business Machines Corp. swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty.

How the Crowd Led Us to Investigate IBM

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But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees.

The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years.

In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.

Among ProPublica's findings, IBM:

Denied older workers information the law says they need in order to decide whether they've been victims of age bias, and required them to sign away the right to go to court or join with others to seek redress. Targeted people for layoffs and firings with techniques that tilted against older workers, even when the company rated them high performers. In some instances, the money saved from the departures went toward hiring young replacements. Converted job cuts into retirements and took steps to boost resignations and firings. The moves reduced the number of employees counted as layoffs, where high numbers can trigger public disclosure requirements. Encouraged employees targeted for layoff to apply for other IBM positions, while quietly advising managers not to hire them and requiring many of the workers to train their replacements. Told some older employees being laid off that their skills were out of date, but then brought them back as contract workers, often for the same work at lower pay and fewer benefits.

IBM declined requests for the numbers or age breakdown of its job cuts. ProPublica provided the company with a 10-page summary of its findings and the evidence on which they were based. IBM spokesman Edward Barbini said that to respond the company needed to see copies of all documents cited in the story, a request ProPublica could not fulfill without breaking faith with its sources. Instead, ProPublica provided IBM with detailed descriptions of the paperwork. Barbini declined to address the documents or answer specific questions about the firm's policies and practices, and instead issued the following statement:

"We are proud of our company and our employees' ability to reinvent themselves era after era, while always complying with the law. Our ability to do this is why we are the only tech company that has not only survived but thrived for more than 100 years."

With nearly 400,000 people worldwide, and tens of thousands still in the U.S., IBM remains a corporate giant. How it handles the shift from its veteran baby-boom workforce to younger generations will likely influence what other employers do. And the way it treats its experienced workers will eventually affect younger IBM employees as they too age.

Fifty years ago, Congress made it illegal with the Age Discrimination in Employment Act , or ADEA, to treat older workers differently than younger ones with only a few exceptions, such as jobs that require special physical qualifications. And for years, judges and policymakers treated the law as essentially on a par with prohibitions against discrimination on the basis of race, gender, sexual orientation and other categories.

In recent decades, however, the courts have responded to corporate pleas for greater leeway to meet global competition and satisfy investor demands for rising profits by expanding the exceptions and shrinking the protections against age bias .

"Age discrimination is an open secret like sexual harassment was until recently," said Victoria Lipnic, the acting chair of the Equal Employment Opportunity Commission, or EEOC, the independent federal agency that administers the nation's workplace anti-discrimination laws.

"Everybody knows it's happening, but often these cases are difficult to prove" because courts have weakened the law, Lipnic said. "The fact remains it's an unfair and illegal way to treat people that can be economically devastating."

Many companies have sought to take advantage of the court rulings. But the story of IBM's downsizing provides an unusually detailed portrait of how a major American corporation systematically identified employees to coax or force out of work in their 40s, 50s and 60s, a time when many are still productive and need a paycheck, but face huge hurdles finding anything like comparable jobs.

The dislocation caused by IBM's cuts has been especially great because until recently the company encouraged its employees to think of themselves as "IBMers" and many operated under the assumption that they had career-long employment.

When the ax suddenly fell, IBM provided almost no information about why an employee was cut or who else was departing, leaving people to piece together what had happened through websites, listservs and Facebook groups such as "Watching IBM" or "Geographically Undesirable IBM Marketers," as well as informal support groups.

Marjorie Madfis, at the time 57, was a New York-based digital marketing strategist and 17-year IBM employee when she and six other members of her nine-person team -- all women in their 40s and 50s -- were laid off in July 2013. The two who remained were younger men.

Since her specialty was one that IBM had said it was expanding, she asked for a written explanation of why she was let go. The company declined to provide it.

"They got rid of a group of highly skilled, highly effective, highly respected women, including me, for a reason nobody knows," Madfis said in an interview. "The only explanation is our age."

Brian Paulson, also 57, a senior manager with 18 years at IBM, had been on the road for more than a year overseeing hundreds of workers across two continents as well as hitting his sales targets for new services, when he got a phone call in October 2015 telling him he was out. He said the caller, an executive who was not among his immediate managers, cited "performance" as the reason, but refused to explain what specific aspects of his work might have fallen short.

It took Paulson two years to land another job, even though he was equipped with an advanced degree, continuously employed at high-level technical jobs for more than three decades and ready to move anywhere from his Fairview, Texas, home.

"It's tough when you've worked your whole life," he said. "The company doesn't tell you anything. And once you get to a certain age, you don't hear a word from the places you apply."

Paul Henry, a 61-year-old IBM sales and technical specialist who loved being on the road, had just returned to his Columbus home from a business trip in August 2016 when he learned he'd been let go. When he asked why, he said an executive told him to "keep your mouth shut and go quietly."

Henry was jobless more than a year, ran through much of his savings to cover the mortgage and health insurance and applied for more than 150 jobs before he found a temporary slot.

"If you're over 55, forget about preparing for retirement," he said in an interview. "You have to prepare for losing your job and burning through every cent you've saved just to get to retirement."

IBM's latest actions aren't anything like what most ex-employees with whom ProPublica talked expected from their years of service, or what today's young workers think awaits them -- or are prepared to deal with -- later in their careers.

"In a fast-moving economy, employers are always going to be tempted to replace older workers with younger ones, more expensive workers with cheaper ones, those who've performed steadily with ones who seem to be up on the latest thing," said Joseph Seiner, an employment law professor at the University of South Carolina and former appellate attorney for the EEOC.

"But it's not good for society," he added. "We have rules to try to maintain some fairness in our lives, our age-discrimination laws among them. You can't just disregard them."

[Oct 30, 2018] The Watson family held integrity, equality, and knowledge share as a formidable synthesis of company ethics. With them gone old IBM was gone...

It not Watson family gone it is New Deal Capitalism was replaced with the neoliberalism
Notable quotes:
"... Except when your employer is the one preaching associate loyalty and "we are family" your entire career. Then they decide you've been too loyal and no longer want to pay your salary and start fabricating reasons to get rid of you. ADP is guilty of these same practices and eliminating their tenured associates. Meanwhile, the millennials hired play ping pong and text all day, rather than actually working. ..."
Oct 30, 2018 | features.propublica.org

Zytor-LordoftheSkies , Thursday, March 22, 2018 11:55 AM

A quick search of the article doesn't find the word "buy backs" but this is a big part of the story. IBM spent over $110 BILLION on stock buy backs between 2000 and 2016. That's the number I found, but it hasn't stopped since. If anything it has escalated.

This is very common among large corporations. Rather than spend on their people, they funnel billions into stock buy backs which raises or at least maintains the stock value so execs can keep cashing in. It's really pretty disgraceful. This was only legalized in 1982, which not-so-coincidentally is not long after real wages stalled, and have stalled ever since.

Suzan Zytor-LordoftheSkies ,
Thanks for this bit of insanely true reporting. When laid off from Westinghouse after 14 years of stellar performance evaluations I was flummoxed by the execs getting million-dollar bonuses as we were told the company wasn't profitable enough to maintain its senior engineering staff. It sold off every division eventually as the execs (many of them newly hired) reaped even more bonuses.
Georgann Putintsev Suzan ,
Thank you ... very insightful of you. As an IBMer and lover of Spreadsheets / Statistics / Data Specalist ... I like reading Annual Reports. Researching these Top Execs, BOD and compare them to other Companies across-the-board and industry sectors. You'll find a Large Umbrella there.
There is a direct tie and inter-changeable pieces of these elites over the past 55 yrs. Whenever some Corp/ Political/ Government shill (wannbe) needs a payoff, they get placed into high ranking top positions for a orchestrating a predescribed dark nwo agenda. Some may come up the ranks like Ginny, but ALL belong to Council for Foreign Relations and other such high level private clubs or organizations. When IBM sells off their Mainframe Manufacturing (Poughkeepsie) to an elite Saudi, under an American Co. sounding name of course, ... and the U.S. Government ... doesn't balk ... that has me worried for our 1984 future.
Carol Van Linda Suzan ,
Sears is doing this also
Suzan Carol Van Linda ,
Details? Thanks!
vibert Zytor-LordoftheSkies ,
True in every large corporation. They use almost free money from the US Government to do it. (Taxpayer's money)
DDRLSGC vibert ,
Yeah, it is amazing how they stated that they don't need help from the government when in reality they do need government to pass laws that favor them, pack the court system where judges rule in their favor and use their private police and the public sector police to keep the workers down.
Johnny Player DDRLSGC ,
Why do you put disqus in your name? . Is that so you can see if they sell your info and you know where it originated from?
Theo Geauxvan Zytor-LordoftheSkies ,
I wonder how many billions (trillions?) have been funneled from corporate workers pockets this way? It seems all corporations are doing it these days. Large-scale transfer of wealth from the middle class to the wealthy.
Stevie Ponders Theo Geauxvan ,
It's called asset stripping. Basically corporate raiding (as in pillage) from the inside.
R. J. Smith , Thursday, March 22, 2018 9:06 AM
"Member of the IBM family" -- BS. Your employer is not your family.
Randall Smith R. J. Smith
Not anymore. With most large companies, you've never been able to say they are "family." Loyalty used to be a thing though. I worked at a company where I saw loyalty vanish over a 10 year period.
marsto R. J. Smith
Except when your employer is the one preaching associate loyalty and "we are family" your entire career. Then they decide you've been too loyal and no longer want to pay your salary and start fabricating reasons to get rid of you. ADP is guilty of these same practices and eliminating their tenured associates. Meanwhile, the millennials hired play ping pong and text all day, rather than actually working.
DDRLSGC marsto
Yeah, and how many CEOs actually work to make their companies great instead of running them into the ground, thinking about their next job move, and playing golf
Mary Malley R. J. Smith ,
I have to disagree with you. I started with IBM on their rise up in those earlier days, and we WERE valued and shown that we were valued over and over through those glorious years. It did feel like we were in a family, our families mattered to them, our well-being. They gave me a month to find a perfect babysitter when they hired me before I had to go to work!

They helped me find a house in a good school district for my children. They bought my house when I was moving to a new job/location when it didn't sell within 30 days.

They paid the difference in the interest rate of my loan for my new house from the old one. I can't even begin to list all the myriad of things that made us love IBM and the people we worked with and for, and made us feel a part of that big IBM family.

Did they change, yes, but the dedication we gave was freely given and we mutually respected each other. I was lucky to work for them for decades before that shift when they changed to be just like every other large corporation.

Georgann Putintsev Mary Malley ,
The Watson family held integrity, equality, and knowledge share as a formidable synthesis of company ethics moving a Quality based business forward in the 20th to 21st century. They also promoted an (volunteer) IBM Club to help promote employee and family activities inside/outside of work which they by-en-large paid for. This allowed employees to meet and see other employees/families as 'Real' & "Common-Interest" human beings. I participated, created, and organized events and documented how-to-do-events for other volunteers. These brought IBMers together inside or outside of their 'working' environment to have fun, to associate, to realize those innate qualities that are in all of us. I believe it allowed for better communication and cooperation in the work place.

To me it was family. Some old IBMers might remember when Music, Song, Skits were part of IBM Branch Office meetings. As President of the IBM Clubs Palo Alto branch (7 yrs.), I used our Volunteer Club Votes to spend ALL that IBM donated money, because they <administratively> gave it back to IBM if we didn't.

Without a strong IBM Club presence, it gets whittled down to 2-3 events a year. For a time WE WERE a FAMILY.

bookmama3 Georgann Putintsev , in reply to" aria-label="in reply to">
Absolutely! Back when white shirts/black suits were a requirement. There was a country club in Poughkeepsie, softball teams, Sunday brunch, Halloween parties in the fall, Christmas parties in December where thousands of age appropriate Fisher Price toys were given out to employee's kids. Today "IBMer" is used by execs as a term of derision. Employees are overworked and under appreciated and shortsighted, overpaid executives rule the roost. The real irony is that talented, vital employees are being retired for "costing too much" while dysfunctional top level folk are rewarded with bonuses and stock when they are let go. And it's all legal. It's disgraceful.
OrangeGina R. J. Smith , in reply to" aria-label="in reply to">
very true, however for many of us, our co-workers of a very long time ARE family. Corporations are NOT people, but they are comprised of them.
HiJinks R. J. Smith , in reply to" aria-label="in reply to">
It was true at one time, but no more.
Herb Tarlick R. J. Smith , in reply to" aria-label="in reply to">
This one was until the mid eighties.

[Oct 30, 2018] I love how IBM says everything remains the same.

Oct 30, 2018 | arstechnica.com

Danathar , Ars Scholae Palatinae et Subscriptor 5 hours ago

I love how IBM says everything remains the same.

If that were the case....then why buy them? The whole POINT of acquiring a company is so that you can leverage what the acquired company has to improve your business.

As time moves on, it's going to be obvious that some of the things RH does (partnerships, etc) compete with some of IBM's partnerships and/or products.

At some point management will look at where there is crossover and kill the ones not making money or hurting existing products.

Point is, over time RH is NOT going to just continue on as an independent entity with no effect from it's parent or vice versa.

And....let's remember this is a ACQUISITION! Not a merger.

[Oct 30, 2018] How do you say "Red Hat" in Hindi??

Oct 30, 2018 | theregister.co.uk

christie23356 , 14 hrs

Re: How do you say "Red Hat" in Hindi??

Hello)

[Oct 30, 2018] Eventually all the people who I worked with that were outsourced to IBM were packaged off and all of our jobs were sent offshore.

Oct 30, 2018 | features.propublica.org

Joe Harkins , Saturday, March 24, 2018 12:12 PM

I recall, back in the mid-1960s, encountering employees of major major corporations like IBM, US Steel, the Big Three in Detroit, etc, There was a certain smugness there. I recall hearing bragging about the awesome retirement incomes. Yes, I was jealous. But I also had a clear eye as to the nature of the beast they were working for, and I kept thinking of the famous limerick:

There was a young lady of Niger
Who smiled as she rode on a Tiger;
They came back from the ride
With the lady inside,
And the smile on the face of the Tiger.

JoeJoe , Friday, March 23, 2018 10:25 AM
As an ex-IBM employee, I was given a package ( 6 months pay and a "transition" course) because I was getting paid too much or so I was told. I was part of a company (oil industry) that outsourced it's IT infrastructure support personnel and on several occasions was told by my IBM management that they just don't know what to do with employees who make the kind of money I do when we can do it much cheaper somewhere else (meaning offshore).

Eventually all the people who I worked with that were outsourced to IBM were packaged off and all of our jobs were sent offshore. I just turned 40 and found work back in the oil industry. In the short time I was with IBM I found their benefits very restricted, their work policies very bureaucratic and the office culture very old boys club.

If you weren't part of IBM and were an outsourced employee, you didn't fit in. At the time I thought IBM was the glory company in IT to work for, but quickly found out they are just a dinosaur. It's just a matter of time for them.

[Oct 30, 2018] My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, outsourcing is just a huge PITA and slows things down

Oct 30, 2018 | arstechnica.com

Drizzt321 , Ars Legatus Legionis et Subscriptor an hour ago

I think a lot of the dislike for Indian developers is it's usually the outsourced, cheap as possible code monkey developers. Which can be a problem anywhere, for sure, but at least seem exacerbated by US companies outsourcing there. In my limited experience, they're either intelligent and can work up to working reasonably independently and expanding on a ticket intelligently. Or they're copy a pasta code monkey and need pretty good supervision of the code that's produced.

Add in the problem if timezones and folks who may not understand English that great, or us not understanding their English, and it all gives them a bad name. Yet I agree, I know some quite good developers. Ones that didn't go to a US college.

My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, it's just a huge PITA and slows things down.

Personally I'd rather hire a couple of seemingly competent 3 years out of college on their 2nd job (because they rarely stay very long at their first one, right?) and pay from there.

[Oct 30, 2018] To a bean counter a developer in a RH office in North America or Europe who s been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college

Notable quotes:
"... There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of bad companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. ..."
"... A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill. ..."
"... I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? ..."
"... I have dealt with this far too much these VPs rarely do much work and simply are hit on bottom line ( you are talking about 250k+), but management in US doesn't want to sit off hours and work with India office so they basically turn a blind eye on them. ..."
Oct 30, 2018 | arstechnica.com

dmoan, 2018-10-30T07:32:29-04:00

Drizzt321 wrote: show nested quotes

A.Felix wrote:

Drizzt321 wrote:

Dilbert wrote:

motytrah wrote:

bolomkxxviii wrote:

No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

I agree. Redhat has dev offices all over. A lot of them in higher cost areas of the US and Europe. There's no way IBM doesn't consolidate and offshore a bunch of that work.

This. To a bean counter a developer in a RH office in North America or Europe who's been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college. For various definitions of word 'graduated'.

I'm just waiting until some major company decides that some of the nicer parts of middle America/Appalachia can be a LOT cheaper, still nice, and let them pay less in total while keeping some highly skilled employees.

I don't know about that. Cities can be expensive but part of the reason is that a lot of people want to live there, and supply/demand laws start acting. You'll be able to get some talent no doubt, but a lot of people who live nearby big cities wouldn't like to leave all the quality of life elements you have there, like entertainment, cultural events, shopping, culinary variety, social events, bigger dating scene, assorted array of bars and night clubs, theatre, opera, symphonies, international airports... you get the drift.

I understand everyone is different, but you would actually need to pay me more to move to a smaller town in middle America. I also work with people who would take the offer without hesitation, but in my admittedly anecdotal experience, more tech people prefer the cities than small towns. Finally, if you do manage to get some traction in getting the people and providing the comforts, then you're just going to get the same increase in cost of living wherever you are because now you're just in one more big city.

Costs of life are a problem, but we need to figure out how to properly manage them, instead of just saying "lets move them somewhere else". Also we shouldn't discount the capability of others, because going by that cost argument outsourcing becomes attractive. The comment you're replying to tries to diminish Indian engineers, but the reverse can still be true. A developer in India who has been working for 10 years costs even less than an American who just graduated, for various definitions of graduated. There's over a billion people over there, and the Indian Institutes of Technology are nothing to scoff at.

There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of bad companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. It's just that there are a lot more in general over there and they would come for cheap, so in raw numbers it seems overwhelming, but that sword cuts both ways, the raw number of competent ones is also a lot.

About 5% of the American workforce are scientists and engineers, which make a bit over 7 million people. The same calculation in India brings you to almost 44 million people.

A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill.

I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? Especially when we then move to a discussion about how costly it is to pay salaries in America. Sounds a bit counterproductive if you ask me.

I think a lot of the dislike for Indian developers is that they usually are the outsourced to cheap as possible code monkey developers. Which can be a problem anywhere, for sure, but at least seem exacerbated by US companies outsourcing there. In my limited experience, they're either intelligent and can work up to working reasonably independently and expanding on a ticket intelligently. Or they're copy a pasta code monkey and need pretty good supervision of the code that's produced. Add in the problem if timezones and folks who may not understand English that great, or us not understanding their English, and it all gives them a bad name. Yet I agree, I know some quite good developers. Ones that didn't go to a US college.

My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, it's just a huge PITA and slows things down. Personally I'd rather hire a couple of seemingly competent 3 years out of college on their 2nd job (because they rarely stay very long at their first one, right?) and pay from there.

Companies/management offshore because it keep revenue per employee and allows them to be promoted by inflating their direct report allowing them to build another "cheap" pyramid hierarchy. A manager in US can become a director or VP easily by having few managers report to him from India. Even better this person can go to India ( they are most often Indian) and claim to lead the India office and improve outsourcing while getting paid US salary.

I have dealt with this far too much these VPs rarely do much work and simply are hit on bottom line ( you are talking about 250k+), but management in US doesn't want to sit off hours and work with India office so they basically turn a blind eye on them.

[Oct 30, 2018] IBM is bad, but it s just the tip of the iceberg. I worked for a major international company that dumped almost the entire IT workforce and replaced them with managed services , almost exclusively H-1B workers from almost exclusively India.

Oct 30, 2018 | features.propublica.org
netmouse , Saturday, March 24, 2018 10:49 AM
Outstanding. I had to train people in IBM India to do my job when (early) "retired". I actually found a new internal job in IBM, the hiring manager wrote/chat that I was a fit. I was denied the job because my current group said I had to transfer and the receiving group said I had to be on a contract, stalemate! I appealed and group HR said sorry, can't do and gave me one reason after another, that I could easily refute, then they finally said the job was to be moved overseas. Note most open jobs posted were categorized for global resources. I appealed to Randy (former HR SVP) and no change. At least I foced them to finally tell the truth. I had also found another job locally near home and received an email from the HR IBM person responsible for the account saying no, they were considering foreigners first, if they found no one suitable they would then consider Americans. I appealed to my IBM manager who basically said sorry, that is how things are now. All in writing, so no more pretending it is a skill issue. People, it is and always has been about cheap labor. I recall when a new IBM technology began, Websphere, and I was sent for a month's training. Then in mid-2000's training and raises pretty much stopped and that was when resource actions were stepped up.
TVGizmo , Friday, March 23, 2018 10:36 PM
IBM started downhill as a result of many factors.

But the single most cause was when.....Respect for the Individual (the first Basic Belief) was ignored. Everything else was collateral damage.

Former 'Manager of the Year' in the old Field Engineering Division.

CRAW , Friday, March 23, 2018 9:51 AM
IBM is bad, but it's just the tip of the iceberg. I worked for a major international company that dumped almost the entire IT workforce and replaced them with "managed services", almost exclusively H-1B workers from almost exclusively India. This has been occurring for decades in many, MANY businesses around the country large and small. Even this article seems to make a special effort to assure us that "some" workers laid off in America were replaced with "younger, less experienced, lower-paid American workers and moving many other jobs overseas." How many were replaced with H-1B, H-4 EAD, OPT, L-1, etc? It's by abusing these work visa programs that companies facilitate moving the work overseas in the first place. I appreciate this article, but I think it's disingenuous for ProPublica to ignore the elephant in the room - work visa abuse. Why not add a question or two to your polls about that? It wouldn't be hard. For example, "Do you feel that America's work visa programs had an impact on your employment at IBM? Do you feel it has had an impact on your ability to regain employment after leaving IBM?" I'd like to see the answer to THOSE questions.

[Oct 30, 2018] Neoliberal way of screwing up people is via HR

Notable quotes:
"... I too was a victim of IBM's underhanded trickery to get rid of people...39 years with IBM, a top performer. ..."
Oct 30, 2018 | features.propublica.org
xn0 , Monday, April 2, 2018 1:44 PM
These practices are "interesting". And people still wonder why there are so many deadly amok runs at US companies? What do they expect when they replace old and experienced workers with inexperienced millenials, who often lack basic knowledge about their job? Better performance?

This will run US tech companies into the ground. This sort of "American" HR management is gaining ground here in Germany as well, its troubling. And on top they have to compete against foreign tech immigrants from middle eastern and asian companies. Sure fire recipe for social unrest and people voting for right-wing parties.

nottigerwoods , Friday, March 30, 2018 1:39 PM
I too was a victim of IBM's underhanded trickery to get rid of people...39 years with IBM, a top performer. I never got a letter telling me to move to Raleigh. All i got was a phone call asking me if i wanted to take the 6 month exception to consider it. Yet, after taking the 6 month exception, I was told I could no longer move, the colocation was closed. Either I find another job, not in Marketing support (not even Marketing) or leave the company. I received no letter from Ginni, nothing. I was under the impression I could show up in Raleigh after the exception period. Not so. It was never explained....After 3 months I will begin contracting with IBM. Not because I like them, because I need the money...thanks for the article.
doncanard , Friday, March 30, 2018 1:33 PM
dropped in 2013 after 22 years. IBM stopped leading in the late 1980's, afterwards it implemented "market driven quality" which meant listen for the latest trends, see what other people were doing, and then buy the competition or drive them out of business. "Innovation that matters": it's only interesting if an IBM manager can see a way to monetize it.

That's a low standard. It's OK, there are other places that are doing better. In fact, the best of the old experienced people went to work there. Newsflash: quality doesn't change with generations, you either create it or you don't.

Sounds like IBM is building its product portfolio to match its desired workforce. And of course, on every round of layoffs, the clear criterion was people who were compliant and pliable - who's ready to follow orders ? Best of luck.

[Oct 30, 2018] In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it).

Oct 30, 2018 | features.propublica.org

HiJinks , Sunday, March 25, 2018 3:07 AM

I agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months.

However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference.

They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers).

After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".

Chris S. HiJinks

could be true... but i thought Watson was the IBM data analytics computer thingy... beat two human players at Jeopardy on live tv a year or two or so back.. featured on 60 Minutes just around last year.... :

ArnieTracey , Saturday, March 24, 2018 7:15 PM
IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."

From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."

Jr Jr , Saturday, March 24, 2018 4:37 PM
Corporate loyalty has been gone for 25 years. This isnt surprising. But this age discrimination is blatantly illegal.

[Oct 30, 2018] Neoliberal IT working place is really a minefield for older workers

Notable quotes:
"... The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980. ..."
Oct 30, 2018 | features.propublica.org

disqus_qN55ZbK3Ce , Friday, March 23, 2018 3:09 PM

If anything, IBM is behind the curve. I was terminated along with my entire department from a major IBM subcontractor, with all affected employees "coincidentally" being over 50. By "eliminating the department" and forcing me to sign a waiver to receive my meager severance, they avoided any legal repercussions. 18 months later on the dot (the minimum legal time period), my workload was assigned to three new hires, all young. Interestingly, their combined salaries are more than mine, and I could have picked up all their work for about $200 in training (in social media posting, something I picked up on my own last year and am doing quite well, thank you).

And my former colleagues are not alone. A lot of friends of mine have had similar outcomes, and as the article states, no one will hire people my age willingly in my old capacity. Luckily again, I've pivoted into copywriting--a discipline where age is still associated with quality ("dang kids can't spell anymore!"). But I'm doing it freelance, with the commensurate loss of security, benefits, and predictability of income.

So if IBM is doing this now, they are laggards. But because they're so big, there's a much more obvious paper trail.

Stephen McConnell , Friday, March 23, 2018 10:44 AM
One of the most in-depth, thoughtful and enlightening pieces of journalism I've seen. Having worked on Capitol Hill during the early 1980's for the House and Senate Aging Committees, we worked hard to abolish the remnants of mandatory retirement and to strengthen the protections under the ADEA. Sadly, the EEOC has become a toothless bureaucracy when it comes to age discrimination cases and the employers, as evidenced by the IBM case, have become sophisticated in hiding what they're doing to older workers. Peter's incredibly well researched article lays the case out for all to see. Now the question is whether the government will step up to its responsibilities and protect older workers from this kind of discrimination in the future. Peter has done a great service in any case.
Mark , Friday, March 23, 2018 1:05 AM
The US tech sector has mostly ignored US citizen applicants, of all ages, since the early 2000s. Instead, preferring to hire foreign nationals. The applications of top US citizen grads are literally thrown in the garbage (or its electronic equivalent) while companies like IBM have their hiring processes dominated by Indian nationals. IBM is absolutely a poster-child for H-1B, L-1, and OPT visa abuse.
CRAW Mark , in reply to" aria-label="in reply to">
EXACTLY. Work visas are the enabler of this discrimination. We are overrun.
Warren Stiles , Thursday, March 22, 2018 7:17 PM
Bottom line is we have entered an era when there are only two classes who are protected in our economy; the Investor Class and the Executive Class. With Wall Street's constant demand for higher profits and increased shareholder value over all other business imperatives, rank and file workers have been relegated to the class of expendable resource. I propose that all of us over fifty who have been riffed out of Corporate America band together for the specific purpose of beating the pants off them in the marketplace. The best revenge is whooping their youngster butts at the customer negotiating table. By demonstrating we are still flexible and nimble, yet with the experience to avoid the missteps of misspent youth, we prove we can deliver value well beyond what narrow-minded bean counters can achieve.
DDRLSGC Warren Stiles , in reply to" aria-label="in reply to">
or whipping the butts of the older managers who thought that their older workers were over the hill.
Warren Stiles DDRLSGC , in reply to" aria-label="in reply to">
Just like they are...
Jeff Russell , Thursday, March 22, 2018 4:31 PM
I started at IBM 3 days out of college in 1979 and retired in 2017. I was satisfied with my choice and never felt mistreated because I had no expectation of lifetime employment, especially after the pivotal period in the 1990's when IBM almost went out of business. The company survived that period by dramatically restructuring both manufacturing costs and sales expense including the firing of tens of thousands of employees. These actions were well documented in the business news of the time, the obvious alternative was bankruptcy.

I told the authors that anyone working at IBM after 1993 should have had no expectation of a lifetime career. Downsizing, outsourcing, movement of work around the globe was already commonplace at all such international companies. Any expectation of "loyalty", that two-way relationship of employee/company from an earlier time, was wishful thinking. I was always prepared to be sent packing, without cause, at any time and always had my resume up-to-date. I stayed because of interesting work, respectful supervisors, and adequate compensation. The "resource action" that forced my decision to retire was no surprise, the company that hired me had been gone for decades.

DDRLSGC Jeff Russell , in reply to" aria-label="in reply to">
With all the automation going on around the world, these business leaders better worry about people not having money to buy their goods and services plus what are they going to do with the surplus of labor
John Kauai Jeff Russell , in reply to" aria-label="in reply to">
I had, more or less, the same experience at Cisco. They paid me to quit. Luckily, I was ready for it.

The article mentions IBMs 3 failures. So who was it that was responsible for not anticipating the transitions? It is hard enough doing what you already know. Perhaps companies should be spending more on figuring out "what's next" and not continually playing catch-up by dumping the older workers for the new.

MichiganRefugee , Friday, March 23, 2018 9:52 AM
I was laid off by IBM after 29 years and 4 months. I had received a division award in previous year, and my last PBC appraisal was 2+ (high performer.) The company I left was not the company I started with. Top management--starting with Gerstner--has steadily made IBM a less desirable place to work. They now treat employees as interchangeable assets and nothing more. I cannot/would not recommend IBM as an employer to any young programmer.
George Purcell , Friday, March 23, 2018 7:41 AM
Truly awesome work. I do want to add one thing, however--the entire rhetoric about "too many old white guys" that has become so common absolutely contributes to the notion that this sort of behavior is not just acceptable but in some twisted way admirable as well.
Bob Fritz , Thursday, March 22, 2018 7:35 PM
I read the article and all the comments.

Is anyone surprised that so many young people don't think capitalism is a good system any more?

I ran a high technology electronic systems company for years. We ran it "the old way." If you worked hard, and tried, we would bend over backwards to keep you. If technology or business conditions eliminated your job, we would try to train you for a new one. Our people were loyal, not like IBMers today. I honestly think that's the best way to be profitable.

People afraid of being unjustly RIFFed will always lack vitality.

petervonstackelberg , Thursday, March 22, 2018 2:00 PM
I'm glad someone is finally paying attention to age discrimination. IBM apparently is just one of many organizations that discriminate.

I'm in the middle of my own fight with the State University of New York (SUNY) over age discrimination. I was terminated by a one of the technical colleges in the SUNY System. The EEOC/New York State Division of Human Rights (NYDHR) found that "PROBABLE CAUSE (NYDHR's emphasis) exists to believe that the Respondent (Alfred State College - SUNY) has engaged in or is engaging in the unlawful discriminatory practice complained of." Investigators for NYDHR interviewed several witnesses, who testified that representatives of the college made statements such as "we need new faces", "three old men" attending a meeting, an older faculty member described as an "albatross", and "we ought to get rid of the old white guys". Witnesses said these statements were made by the Vice President of Academic Affairs and a dean at the college.

davosil , Sunday, March 25, 2018 5:00 PM
This saga at IBM is simply a microcosm of our overall economy. Older workers get ousted in favor of younger, cheaper workers; way too many jobs get outsourced; and so many workers today [young and old] can barely land a full-time job.
This is the behavior that our system incentivises (and gets away with) in this post Reagan Revolution era where deregulation is lauded and unions have been undermined & demonized. We need to seriously re-work 'work', and in order to do this we need to purge Republicans at every level, as they CLEARLY only serve corporate bottom-lines - not workers - by championing tax codes that reward outsourcing, fight a livable minimum wage, eliminate pensions, bust unions, fight pay equity for women & family leave, stack the Supreme Court with radical ideologues who blatantly rule for corporations over people all the time, etc. etc. ~35 years of basically uninterrupted Conservative economic policy & ideology has proven disastrous for workers and our quality of life. As goes your middle class, so goes your country.
ThinkingAloud , Friday, March 23, 2018 7:18 AM
The last five words are chilling... This is an award-winning piece....
RetiredIBM.manager , Thursday, March 22, 2018 7:39 PM
I am a retired IBM manager having had to execute many of these resource reduction programs.. too many.. as a matter of fact. ProPUBLICA....You nailed it!
David , Thursday, March 22, 2018 3:22 PM
IBM has always treated its customer-facing roles like Disney -- as cast members who need to match a part in a play. In the 60s and 70s, it was the white-shirt, blue-suit white men whom IBM leaders thought looked like mainframe salesmen. Now, rather than actually build a credible cloud to compete with Amazon and Microsoft, IBM changes the cast to look like cloud salespeople. (I work for Microsoft. Commenting for myself alone.)
CRAW David , in reply to" aria-label="in reply to">
Now IBM still treats their employees like Disney - by replacing them with H-1B workers.
MHV IBMer , Friday, March 23, 2018 10:35 PM
I am a survivor, the rare employee who has been at IBM for over 35 years. I have seen many, many layoff programs over 20 years now. I have seen tens of thousands people let go from the Hudson Valley of N.Y. Those of us who have survived, know and lived through what this article so accurately described. I currently work with 3 laid off/retired and rehired contractors. I have seen age discrimination daily for over 15 years. It is not only limited to layoffs, it is rampant throughout the company. Promotions, bonuses, transfers for opportunities, good reviews, etc... are gone if you are over 45. I have seen people under 30 given promotions to levels that many people worked 25 years for. IBM knows that these younger employees see how they treat us so they think they can buy them off. Come to think of it, I guess they actually are! They are ageist, there is no doubt, it is about time everyone knew. Excellent article.
Goldie Romero , Friday, March 23, 2018 2:31 PM
Nice article, but seriously this is old news. IBM has been at this for ...oh twenty years or more.
I don't really have a problem with it in terms of a corporation trying to make money. But I do have a problem with how IBM also likes to avoid layoffs by giving folks over 40 intentionally poor reviews, essentially trying to drive people out. Just have the guts to tell people, we don't need you anymore, bye. But to string people along as the overseas workers come in...c'mon just be honest with your workers.
High tech over 40 is not easy...I suggest folks prep for a career change before 50. Then you can have the last laugh on a company like IBM.
jblog , Friday, March 23, 2018 10:37 AM
From pages 190-191 of my novel, Ordinary Man (Amazon):

Throughout
it all, layoffs became common, impacting mostly older employees with many years
of service. These job cuts were dribbled out in small numbers to conceal them
from the outside world, but employees could plainly see what was going on.

The laid off
employees were supplanted by offshoring work to low-costs countries and hiring
younger employees, often only on temporary contracts that offered low pay and
no benefits – a process pejoratively referred to by veteran employees as
"downsourcing." The recruitment of these younger workers was done under the
guise of bringing in fresh skills, but while many of the new hires brought new
abilities and vitality, they lacked the knowledge and perspective that comes
with experience.

Frequently,
an older more experienced worker would be asked to help educate newer
employees, only to be terminated shortly after completing the task. And the new
hires weren't fooled by what they witnessed and experienced at OpenSwitch,
perceiving very quickly that the company had no real interest in investing in
them for the long term. To the contrary, the objective was clearly to grind as
much work out of them as possible, without offering any hope of increased
reward or opportunity.

Most of the
young recruits left after only a year or two – which, again, was part of the
true agenda at the company. Senior management viewed employees not as talent,
but simply as cost, and didn't want anyone sticking around long enough to move
up the pay scale.

turquoisewaters , Thursday, March 22, 2018 10:19 PM
This is why you need unions.
Aaron Stackpole , Thursday, March 22, 2018 5:23 PM
This is the nail in the coffin. As an IT manager responsible for selecting and purchasing software, I will never again recommend IBM products. I love AIX and have worked with a lot if IBM products but not anymore. Good luck with the millennials though...
awb22 , Thursday, March 22, 2018 12:14 PM
The same thing has been going on at other companies, since the end of WWII. It's unethical, whether the illegality can be proven or not.

In the RTP area, where I live, I know many, many current and former employees. Times have changed, but the distinction between right and wrong hasn't.

Suzan awb22 , in reply to" aria-label="in reply to">
I was hired by one of the government agencies in RTP last year and then never given a start date after I submitted my SS number & birth certificate.

Anyone familiar with this situation?

Dave Allen , Thursday, March 22, 2018 1:07 PM
I worked for four major corporations (HP, Intel, Control Data Corporation, and Micron Semiconductor) before I was hired by IBM as a rare (at that time) experienced new hire. Even though I ended up working for IBM for 21 years, and retired in 2013, because of my experiences at those other companies, I never considered IBM my "family." The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The idea of loyalty between a corporation and an at-will employee makes no more sense than loyalty between a motel and its guests. It is a business arrangement, not a love affair. Every individual needs to continually assess their skills and their value to their employer. If they are not commensurate, it is the employee's responsibility to either acquire new skills or seek a new employer. Your employer will not hesitate to lay you off if your skills are no longer needed, or if they can hire someone who can do your job just as well for less pay. That is free enterprise, and it works for people willing to take advantage of it.
sometimestheyaresomewhatright Dave Allen , in reply to" aria-label="in reply to">
I basically agree. But why should it be OK for a company to fire you just to replace you with a younger you? If all that they accomplish is lowering their health care costs (which is what this is really about). If the company is paying about the same for the same work, why is firing older workers for being older OK?
Dave Allen sometimestheyaresomewhatright , in reply to" aria-label="in reply to">
Good question. The point I was trying to make is that people need to watch out for themselves and not expect their employer to do what is "best" for the employee. I think that is true whatever age the employee happens to be.

Whether employers should be able to discriminate against (treat differently) their employees based on age, gender, race, religion, etc. is a political question. Morally, I don't think they should discriminate. Politically, I think it is a slippery slope when the government starts imposing regulations on free enterprise. Government almost always creates more problems than they fix.

DDRLSGC Dave Allen , in reply to" aria-label="in reply to">
Sorry, but when you deregulate the free enterprise, it created more problems than it fixes and that is a fact that has been proven for the last 38 years.
Danllo DDRLSGC , in reply to" aria-label="in reply to">
That's just plain false. Deregulation creates competiiton. Competition for talented and skilled workers creates opportunities for those that wish to be employed and for those that wish to start new ventures. For example, when Ma Bell was regulated and had a monopoly on telecommunications there was no innovation in the telecom inudstry. However, when it was deregulated, cell phones, internet, etc exploded ... creating billionaires and millionaires while also improving the quality of life.
DDRLSGC Danllo , in reply to" aria-label="in reply to">
No, it happens to be true. When Reagan deregulate the economy, a lot of those corporate raiders just took over the companies, sold off the assets, and pocketed the money. What quality of life? Half of American lived near the poverty level and the wages for the workers have been stagnant for the last 38 years compared to a well-regulated economy in places like Germany and the Scandinavian countries where the workers have good wages and a far better standard of living than in the USA. Why do you think the Norwegians told Trump that they will not be immigrating to the USA anytime soon?
NotSure DDRLSGC , in reply to" aria-label="in reply to">
What were the economic conditions before Regan? It was a nightmare before Regan.

The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980.
DDRLSGC NotSure , in reply to" aria-label="in reply to">
At least we had a manufacturing base in the USA, strong regulations of corporations, corporate scandals were far and few, businesses did not go under so quickly, prices of goods and services did not go through the roof, people had pensions and could reasonably live off them, and recessions did not last so long or go so deep until Reagan came into office. In Under Reagan, the jobs were allowed to be send overseas, unions were busted up, pensions were reduced or eliminated, wages except those of the CEOs were staganent, and the economic conditions under Bush, Senior and Bush, Jr. were no better except that Bush, Jr, was the first president to have a net minus below zero growth, so every time we get a Republican Administration, the economy really turns into a nightmare. That is a fact.

You have the Republicans in Kansas, Oklahoma, and Wisconsin using Reaganomics and they are economic disaster areas.

DDRLSGC NotSure , in reply to" aria-label="in reply to">
You had an industrial base in the USA, lots of banks and savings and loans to choose from, lots of mom and pop stores, strong government regulation of the economy, able to live off your pensions, strong unions and employment laws along with the court system to back you up against corporate malfeasance. All that was gone when Reagan and the two Bushes came into office.
james Foster , Thursday, March 29, 2018 8:37 PM
Amazingly accurate article. The once great IBM now a dishonest and unscrupulous corporation concerned more about earnings per share than employees, customers, or social responsibility. In Global Services most likely 75% or more jobs are no longer in the US - can't believe a word coming out of Armonk.
Philip Meyer james Foster , in reply to" aria-label="in reply to">
I'm not sure there was ever a paradise in employment. Yeah, you can say there was more job stability 50 or 60 years ago, but that applied to a much smaller workforce than today (mostly white men). It is a drag, but there are also lot more of us old farts than there used to be and we live a lot longer in retirement as well. I don't see any magic bullet fix either.
George A , Tuesday, March 27, 2018 6:12 PM
Warning to Google/Facebook/Apple etc. All you young people will get old. It's inevitable. Do you think those companies will take care of you?
econdataus , Sunday, March 25, 2018 3:01 PM
Great article. What's especially infuriating is that the industry continues to claim that there is a shortage of STEM workers. For example, google "claim of 1.4 million computer science jobs with only 400,000 computer science graduates to fill them". If companies would openly say, "we have plenty of young STEM workers and prefer them to most older STEM workers", we could at least start addressing the problem. But they continue to promote the lie of there being a STEM shortage. They just want as big a labor pool as possible, unemployed workers be damned.
Buzz , Friday, March 23, 2018 12:00 PM
I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years. Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc. The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague. I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.
OrangeGina , Friday, March 23, 2018 11:41 AM
Make no mistake. The three and four letter acronyms and other mushy corporate speak may differ from firm to firm, but this is going on in every large tech company old enough to have a large population of workers over 50. I hope others will now be exposed.
JeffMo , Friday, March 23, 2018 10:23 AM
This article hits the nail right on the head, as I come up on my 1 year anniversary from being....ahem....'retired' from 23 years at IBM....and I'll be damned if I give them the satisfaction of thinking this was like a 'death' to me. It was the greatest thing that could have ever happened. Ginny and the board should be ashamed of themselves, but they won't be.
Frankie , Friday, March 23, 2018 1:00 AM
Starting around age 40 you start to see age discrimination. I think this is largely due to economics, like increased vacation times, higher wages, but most of all the perception that older workers will run up the medical costs. You can pass all the age related discrimination laws you want, but look how ineffective that has been.

If you contrast this with the German workforce, you see that they have more older workers with the skills and younger workers without are having a difficult time getting in. So what's the difference? There are laws about how many vacation weeks that are given and there is a national medical system that everyone pays, so discrimination isn't seen in the same light.

The US is the only hold out maybe with South Africa that doesn't have a good national medical insurance program for everyone. Not only do we pay more than the rest of the world, but we also have discrimination because of it.

Rick Gundlach , Thursday, March 22, 2018 11:38 PM
This is very good, and this is IBM. I know. I was plaintiff in Gundlach v. IBM Japan, 983 F.Supp.2d 389, which involved their violating Japanese labor law when I worked in Japan. The New York federal judge purposely ignored key points of Japanese labor law, and also refused to apply Title VII and Age Discrimination in Employment to the parent company in Westchester County. It is a huge, self-described "global" company with little demonstrated loyalty to America and Americans. Pennsylvania is suing them for $170 million on a botched upgrade of the state's unemployment system.
Jeff , Thursday, March 22, 2018 2:05 PM
In early 2013 I was given a 3 PBC rating for my 2012 performance, the main reason cited by my manager being that my team lead thought I "seemed distracted". Five months later I was included in a "resource action", and was gone by July. I was 20 months shy of 55. Younger coworkers were retained. That was about two years after the product I worked on for over a decade was off-shored.

Through a fluke of someone from the old, disbanded team remembering me, I was rehired two years later - ironically in a customer support position for the very product I helped develop.

While I appreciated my years of service, previous salary, and previous benefits being reinstated, a couple years into it I realized I just wasn't cut out for the demands of the job - especially the significant 24x7 pager duty. Last June I received email describing a "Transition to Retirement" plan I was eligible for, took it, and my last day will be June 30. I still dislike the job, but that plan reclassified me as part time, thus ending pager duty for me. The job still sucks, but at least I no longer have to despair over numerous week long 24x7 stints throughout the year.

A significant disappointment occurred a couple weeks ago. I was discussing healthcare options with another person leaving the company who hadn't been resource-actioned as I had, and learned the hard way I lost over $30,000 in some sort of future medical benefit account the company had established and funded at some point. I'm not sure I was ever even aware of it. That would have funded several years of healthcare insurance during the 8 years until I'm eligible for Medicare. I wouldn't be surprised if their not having to give me that had something to do with my seeming "distracted" to them. <rolls eyes="">

What's really painful is the history of that former account can still be viewed at Fidelity, where it associates my departure date in 2013 with my having "forfeited" that money. Um, no. I did not forfeit that money, nor would I have. I had absolutely no choice in the matter. I find the use of the word 'forfeited' to describe what happened as both disingenuous and offensive. That said, I don't know whether's that's IBM's or Fidelity's terminology, though.

Herb Jeff , in reply to" aria-label="in reply to">
Jeff, You should call Fidelity. I recently received a letter from the US Department of Labor that they discovered that IBM was "holding" funds that belonged to me that I was never told about. This might be similar or same story.
AlmostNative , Sunday, April 1, 2018 4:27 PM
Great article. And so so close to home. I worked at IBM for 23 years until I became yet another statistic -- caught up in one of their many "RA's" -- Resource Actions. I also can identify with the point about being encouraged to find a job internally yet hiring managers told to not hire. We were encouraged to apply for jobs outside the US -- Europe mainly -- as long as we were willing to move and work at the prevailing local wage rate. I was totally fine with that as my wife had been itching for some time for a chance to live abroad. I applied for several jobs across Europe using an internal system IBM set up just for that purpose. Never heard a word. Phone calls and internal e-mails to managers posting jobs in the internal system went unanswered. It turned out to be a total sham as far as I was concerned.

IBM has laid off hundreds of thousands in the last few decades. Think of the MILLIONS of children, spouses, brothers/sisters, aunts/uncles, and other family members of laid-off people that were affected. Those people are or will be business owners and in positions to make technology decisions. How many of them will think "Yeah, right, hire IBM. They're the company that screwed daddy/mommy". I fully expect -- and I fully hope -- that I live to see IBM go out of business. Which they will, sooner or later, as they are living off of past laurels -- billions in the bank, a big fat patent portfolio, and real estate that they continue to sell off or rent out. If you do hire IBM, you should fully expect that they'll send some 20-something out to your company a few weeks after you hire them, that person will be reading "XYZ for Dummys" on the plane on the way to your offices and will show up as your IBM 'expert'.

[Oct 29, 2018] A nasty but subtle practice of diminishing employee status and compensation that encourages the employee to prematurely consider retirement or employment elsewhere

Oct 29, 2018 | features.propublica.org

John Mamuscia , Monday, March 26, 2018 3:08 PM

> I was given the choice, retire or get a bad review and get fired, no severance. I retired and have not been employed since because of my age. Got news for these business people, experience trumps inexperience. Recently, I have developed several commercial Web sites using cloud technology. In your face IBM.
Stimpy , Friday, March 23, 2018 11:17 PM
> This could well have been written about Honeywell. Same tactics exactly. I laid myself off and called it retirement after years of shoddy treatment and phonied up employee evaluations. I took it personally until I realized that this is just American Management in action. I don't know how they look themselves in the mirror in the morning.
sukibarnstorm , Thursday, March 22, 2018 6:38 PM
> As an HR professional, I get sick when I hear of these tactics. Although this is not the first company to use this strategy to make a "paradigm shift". Where are the geniuses at Harvard, Yale, or the Wharton school of business (where our genius POTUS attended)? Can't they come up with a better model of how to make these changes in an organization without setting up the corp for a major lawsuit or God forbid ......they treat their employees with dignity and respect.
DDRLSGC , in reply to">
> They are not trained at our business schools to think long-term or look for solutions to problems or turn to the workforce for solutions. They are trained to maximizes the profits and let society subsidies their losses and costs.
John Kauai , in reply to">
> Isn't it interesting that you are the first one (here or anywhere else that I've seen) to talk about the complicity of Harvard and Yale in the rise of the Oligarchs.

Perhaps we should consider reevaluation of their lofty perch in American Education. Now if we could only think of a way to expose the fraud.

[Oct 29, 2018] My employer outsourced a lot of our IT to IBM and Cognizant in India. The experience has been terrible and 4 years into a 5 year contract, we are finally realizing the error and insourcing rapidly.

Oct 29, 2018 | features.propublica.org

Alex , Sunday, April 22, 2018 7:27 AM

My employer outsourced a lot of our IT to IBM and Cognizant in India. The experience has been terrible and 4 years into a 5 year contract, we are finally realizing the error and insourcing rapidly.
srichey321 , in reply to">
Don't worry. A small group of people made some money in the short-term while degrading the long term performance of your employer.
Johnny Player , Saturday, April 21, 2018 11:16 AM
Great investigative work.

Back in 1999 ATT moved about 4000 of us tech folks working on mainframe computers to IBM. We got pretty screwed on retirement benefits from ATT. After we moved over, IBM started slowly moving all of our workload overseas. Brazil and Argentina mainly.

It started with just tier 1 help desk. Then small IBM accounts started to go over there. They were trained by 'unwilling' US based people. Unwilling in the sense that if you didn't comply, you weren't a team player and it would show on your performance review.

Eventually the overseas units took on more and more of the workload. I ended up leaving in 2012 at the age of 56 for personal reasons.

Our time at ATT was suppose to be bridged to IBM but the only thing bridged was vacation days. A lawsuit ensued and IBM/ATT won. I'm guessing it was some of that 'ingenious' paperwork that we signed that allowed them to rip us off like that. Thanks again for some great investigation.

[Oct 29, 2018] In the early 1980's President Regan fired the striking air traffic controllers. This sent the message to management around the USA that it was OK to abuse employees in the workplace.

Notable quotes:
"... In the early 1980's President Regan fired the striking air traffic controllers. This sent the message to management around the USA that it was OK to abuse employees in the workplace. By the end of the 1980's unions were totally emasculated and you had workers "going postal" in an abusive workplace. When unions were at their peak of power, they could appeal to the courts and actually stop a factory from moving out of the country by enforcing a labor contact. ..."
"... The American workplace is a nuthouse. Each and every individual workplace environment is like a cult. ..."
"... The American workplace is just a byproduct of the militarization of everyday life. ..."
"... Silicon Valley and Wall Street handed billions of dollars to this arrogant, ignorant Millennial Elizabeth Holmes. She abused any employee that questioned her. This should sound familiar to any employee who has had an overbearing know-it-all, bully boss in the workplace. Hopefully she will go to jail and a message will be sent that any young agist bully will not be given the power of god in the workplace. ..."
Oct 29, 2018 | features.propublica.org

Stauffenberg , Thursday, March 22, 2018 6:21 PM

In the early 1980's President Regan fired the striking air traffic controllers. This sent the message to management around the USA that it was OK to abuse employees in the workplace. By the end of the 1980's unions were totally emasculated and you had workers "going postal" in an abusive workplace. When unions were at their peak of power, they could appeal to the courts and actually stop a factory from moving out of the country by enforcing a labor contact.

Today we have a President in the White House who was elected on a platform of "YOU'RE FIRED." Not surprisingly, Trump was elected by the vast majority of selfish lowlives in this country. The American workplace is a nuthouse. Each and every individual workplace environment is like a cult.

That is not good for someone like me who hates taking orders from people. But I have seen it all. Ten years ago a Manhattan law firm fired every lawyer in a litigation unit except an ex-playboy playmate. Look it up it was in the papers. I was fired from a job where many of my bosses went to federal prison and then I was invited to the Christmas Party.

What are the salaries of these IBM employees and how much are their replacements making? The workplace becomes a surrogate family. Who knows why some people get along and others don't. My theory on agism in the workplace is that younger employees don't want to be around their surrogate mother or father in the workplace after just leaving the real home under the rules of their real parents.

The American workplace is just a byproduct of the militarization of everyday life. In the 1800's, Herman Melville wrote in his beautiful book "White Jacket" that one of the most humiliating aspects of the military is taking orders from a younger military officer. I read that book when I was 20. I didn't feel the sting of that wisdom until I was 40 and had a 30 year old appointed as my supervisor who had 10 years less experience than me.

By the way, the executive that made her my supervisor was one of the sleaziest bosses I have ever had in my career. Look at the tech giant Theranos. Silicon Valley and Wall Street handed billions of dollars to this arrogant, ignorant Millennial Elizabeth Holmes. She abused any employee that questioned her. This should sound familiar to any employee who has had an overbearing know-it-all, bully boss in the workplace. Hopefully she will go to jail and a message will be sent that any young agist bully will not be given the power of god in the workplace.

[Apr 02, 2018] How Many Opioid Overdoses Are Suicides

Notable quotes:
"... By Martha Bebinger of WBUR. Originally published at Kaiser Health News ..."
"... The National Suicide Prevention Lifeline is 800-273-8255. ..."
"... This story is part of a partnership that includes WBUR , NPR and Kaiser Health News. ..."
Apr 02, 2018 | www.nakedcapitalism.com

Posted on March 30, 2018 by Yves Smith Yves here. See also this related Kaiser Health News story: Omissions On Death Certificates Lead To Undercounting Of Opioid Overdoses .

It takes a lot of courage for an addict to recover and stay clean. And it is sadly not news that drug addiction and high levels of prescription drug use are signs that something is deeply broken in our society. There are always some people afflicted with deep personal pain but our system is doing a very good job of generating unnecessary pain and desperation.

By Martha Bebinger of WBUR. Originally published at Kaiser Health News

Mady Ohlman was 22 on the evening some years ago when she stood in a friend's bathroom looking down at the sink.

"I had set up a bunch of needles filled with heroin because I wanted to just do them back-to-back-to-back," Ohlman recalled. She doesn't remember how many she injected before collapsing, or how long she lay drugged-out on the floor.

"But I remember being pissed because I could still get up, you know?"

She wanted to be dead, she said, glancing down, a wisp of straight brown hair slipping from behind an ear across her thin face.

At that point, said Ohlman, she'd been addicted to opioids -- controlled by the drugs -- for more than three years.

"And doing all these things you don't want to do that are horrible -- you know, selling my body, stealing from my mom, sleeping in my car," Ohlman said. "How could I not be suicidal?"

For this young woman, whose weight had dropped to about 90 pounds, who was shooting heroin just to avoid feeling violently ill, suicide seemed a painless way out.

"You realize getting clean would be a lot of work," Ohlman said, her voice rising. "And you realize dying would be a lot less painful. You also feel like you'll be doing everyone else a favor if you die."

Ohlman, who has now been sober for more than four years, said many drug users hit the same point, when the disease and the pursuit of illegal drugs crushes their will to live. Ohlman is among at least 40 percent of active drug users who wrestle with depression, anxiety or another mental health issue that increases the risk of suicide.

Measuring Suicide Among Patients Addicted To Opioids

Massachusetts, where Ohlman lives, began formally recognizing in May 2017 that some opioid overdose deaths are suicides. The state confirmed only about 2 percent of all overdose deaths as suicides, but Dr. Monica Bhare l, head of the Massachusetts Department of Public Health, said it's difficult to determine a person's true intent.

"For one thing, medical examiners use different criteria for whether suicide was involved or not," Bharel said, and the "tremendous amount of stigma surrounding both overdose deaths and suicide sometimes makes it extremely challenging to piece everything together and figure out unintentional and intentional."

Research on drug addiction and suicide suggests much higher numbers.

"[Based on the literature that's available], it looks like it's anywhere between 25 and 45 percent of deaths by overdose that may be actual suicides," said Dr. Maria Oquendo , immediate past president of the American Psychiatric Association.

Oquendo pointed to one study of overdoses from prescription opioids that found nearly 54 percent were unintentional. The rest were either suicide attempts or undetermined.

Several large studies show an increased risk of suicide among drug users addicted to opioids, especially women. In a study of about 5 million veterans, women were eight times as likely as others to be at risk for suicide, while men faced a twofold risk.

The opioid epidemic is occurring at the same time suicides have hit a 30-year high , but Oquendo said few doctors look for a connection.

"They are not monitoring it," said Oquendo, who chairs the department of psychiatry at the University of Pennsylvania. "They are probably not assessing it in the kinds of depths they would need to prevent some of the deaths."

That's starting to change. A few hospitals in Boston, for example, aim to ask every patient admitted about substance use, as well as about whether they've considered hurting themselves.

"No one has answered the chicken and egg [problem]," said Dr. Kiame Mahaniah , a family physician who runs the Lynn Community Health Center in Lynn, Mass. Is it that patients "have mental health issues that lead to addiction, or did a life of addiction then trigger mental health problems?"

With so little data to go on, "it's so important to provide treatment that covers all those bases," Mahaniah said.

'Deaths Of Despair'

When doctors do look deeper into the reasons patients addicted to opioids become suicidal, some economists predict they'll find deep reservoirs of depression and pain.

In a seminal paper published in 2015, Princeton economists Angus Deaton and Anne Case tracked falling marriage rates, the loss of stable middle-class jobs and rising rates of self-reported pain. The authors say opioid overdoses, suicides and diseases related to alcoholism are all often "deaths of despair."

"We think of opioids as something that's thrown petrol on the flames and made things infinitely worse," Deaton said, "but the underlying deep malaise would be there even without the opioids."

Many economists agree on remedies for that deep malaise. Harvard economics professor David Cutle r said solutions include a good education, a steady job that pays a decent wage, secure housing, food and health care.

"And also thinking about a sense of purpose in life," Cutler said. "That is, even if one is doing well financially, is there a sense that one is contributing in a meaningful way?"

Tackling Despair In The Addiction Community

"I know firsthand the sense of hopelessness that people can feel in the throes of addiction," said Michael Botticelli , executive director of the Grayken Center for Addiction at Boston Medical Center; he is in recovery for an addiction to alcohol.

Botticelli said recovery programs must help patients come out of isolation and create or recreate bonds with family and friends.

"The vast majority of people I know who are in recovery often talk about this profound sense of re-establishing -- and sometimes establishing for the first time -- a connection to a much larger community," Botticelli said.

Ohlman said she isn't sure why her attempted suicide, with multiple injections of heroin, didn't work.

"I just got really lucky," Ohlman said. "I don't know how."

A big part of her recovery strategy involves building a supportive community, she said.

"Meetings; 12-step; sponsorship and networking; being involved with people doing what I'm doing," said Ohlman, ticking through a list of her priorities.

There's a fatal overdose at least once a week within her Cape Cod community, she said. Some are accidental, others not. Ohlman said she's convinced that telling her story, of losing and then finding hope, will help bring those numbers down.

The National Suicide Prevention Lifeline is 800-273-8255.

This story is part of a partnership that includes WBUR , NPR and Kaiser Health News.

[Mar 27, 2018] Cutting 'Old Heads' at IBM

Mar 27, 2018 | news.slashdot.org

(propublica.org) As the world's dominant technology firm, payrolls at International Business Machines swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty. But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees .

The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years. In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.

[Dec 25, 2017] American Carnage by Brad Griffin

Notable quotes:
"... It tells me that the bottom line is that Christmas has become a harder season for White families. We are worse off because of BOTH social and economic liberalism which has only benefited an elite few. The bottom half of the White population is now in total disarray – drug addiction, demoralization, divorce, suicide, abortion, atomization, stagnant wages, declining household income and investments – and this dysfunction is creeping up the social ladder. The worst thing we can do is step on the accelerator. ..."
Dec 24, 2017 | www.unz.com

As we move into 2018, I am swinging away from the Republicans. I don't support the Paul Ryan "Better Way" agenda. I don't support neoliberal economics. I think we have been going in the wrong direction since the 1970s and don't want to continue going down this road.

  1. Opioid Deaths: As we all know, the opioid epidemic has become a national crisis and the White working class has been hit the hardest by it. It is a "sea of despair" out there.
  2. White Mortality: As the family crumbles, religion recedes in his life, and his job prospects dwindle, the middle aged White working class man is turning to drugs, alcohol and suicide: The White suicide rate has soared since 2000:
  3. Median Household Income: The average household in the United States is poorer in 2017 than it was in 1997:
  4. Real GDP: Since the late 1990s, real GDP and real median household income have parted ways:
  5. Productivity and Real Wages: Since the 1970s, the minimum wage has parted ways with productivity gains in the US economy:
  6. Stock Market: Since 2000, the stock market has soared, but 10% of Americans own 80% of stocks. The top 1% owns 38% of stocks. In 2007, 3/4th of middle class households were invested in the stock market, but now only 50% are investors. Overall, 52% of Americans now own stocks, which is down from 65%. The average American has less than $1,000 in their combined checking and savings accounts.

Do you know what this tells me?

It tells me that the bottom line is that Christmas has become a harder season for White families. We are worse off because of BOTH social and economic liberalism which has only benefited an elite few. The bottom half of the White population is now in total disarray – drug addiction, demoralization, divorce, suicide, abortion, atomization, stagnant wages, declining household income and investments – and this dysfunction is creeping up the social ladder. The worst thing we can do is step on the accelerator.

Paul Ryan and his fellow conservatives look at this and conclude we need MORE freedom. We need lower taxes, more free trade, more deregulation, weaker unions, more immigration and less social safety net spending. He wants to follow up tax reform with entitlement reform in 2018. I can't but see how this is going to make an already bad situation for the White working class even worse.

I'm not rightwing in the sense that these people are. I think their policies are harmful to the nation. I don't think they feel any sense of duty and obligation to the working class like we do. They believe in liberal abstractions and make an Ayn Rand fetish out of freedom whereas we feel a sense of solidarity with them grounded in race, ethnicity and culture which tempers class division. We recoil at the evisceration of the social fabric whereas conservatives celebrate this blind march toward plutocracy.

Do the wealthy need to own a greater share of the stock market? Do they need to own a greater share of our national wealth? Do we need to loosen up morals and the labor market? Do we need more White children growing up in financially stressed, broken homes on Christmas? Is the greatest problem facing the nation spending on anti-poverty programs? Paul Ryan and the True Cons think so.

Yeah, I don't think so. I also think it is a good thing right now that we aren't associated with the mainstream Right. In the long run, I bet this will pay off for us. I predict this platform they have been standing on for decades now, which they call the conservative base, is going to implode on them. Donald Trump was only the first sign that Atlas is about to shrug.

(Republished from Occidental Dissent by permission of author or representative)

[Dec 15, 2017] The Crisis Ahead The U.S. Is No Country for Older Men and Women

Notable quotes:
"... The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse. ..."
"... It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been quick to vote for far-right Republicans antagonistic to the social safety net. ..."
"... Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does. ..."
"... As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill." ..."
"... Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would also imperil Americans 65 and over by cutting $25 billion from Medicare . ..."
"... Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones. ..."
"... Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s for freelance work. ..."
"... The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington, D.C. Median rents for one-bedroom apartments are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha, according to ApartmentList.com. ..."
"... yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can. ..."
"... Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue. ..."
"... Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services, social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent counterpoint enemy. ..."
"... The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the idea that the physical possession of material things is all that matters. Sheeple, yes. ..."
"... Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies. 19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not can, but will) become wealthy. Most Americans can't find France on a map. ..."
"... I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see just how flawed America is from the inside but when you step outside and have some perspective, it's frightening. ..."
"... Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much of their investment included creating the right wing media apparatus. ..."
"... The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits the rich financially, and by extension enhances their power politically. ..."
"... "Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125 ..."
"... yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me. ..."
"... As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly suspect not. ..."
"... This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because, you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others about what opinion to have, is about the limit of what they are willing, or know how to do. ..."
Dec 14, 2017 | www.nakedcapitalism.com

Yves here. I imagine many readers are acutely aware of the problems outlined in this article, if not beset by them already. By any rational standard, I should move now to a much cheaper country that will have me. I know individuals who live most of the year in third-world and near-third world countries, but they have very cheap ways of still having a toehold in the US and not (yet or maybe ever) getting a long-term residence visa. Ecuador is very accommodating regarding retirement visas, and a Social Security level income goes far there, but yours truly isn't retiring any time soon. And another barrier to an international move (which recall I did once, so I have some appreciation for what it takes), is that one ought to check out possible destinations but if you are already time and money and energy stressed, how do you muster the resources to do that at all, let alone properly?

Aside from the potential to greatly reduce fixed costs, a second impetus for me is Medicare. I know for most people, getting on Medicare is a big plus. I have a very rare good, very old insurance policy. When you include the cost of drug plans, Medicare is no cheaper than what I have now, and considerably narrows my network. Moreover, I expect it to be thoroughly crapified by ten years from now (when I am 70), which argues for getting out of Dodge sooner rather than later.

And that's before you get to another wee problem Lambert points out that I would probably not be happy in a third world or high end second world country. But the only bargain "world city" I know of is Montreal. I'm not sure it would represent enough of an all-in cost saving to justify the hassle of an international move and the attendant tax compliance burdens .and that charitably assumes I could even find a way to get permanent residence. Ugh.

By Alex Henderson, who has written for the L.A. Weekly, Billboard, Spin, Creem, the Pasadena Weekly and many other publications. Follow him on Twitter @alexvhenderson. Originally published at Alternet

Millions can no longer afford to retire, and may never be able when the GOP passes its tax bill.

The news is not good for millions of aging Baby Boomers and Gen Xers in the United States who are moving closer to retirement age. According to the Employee Benefit Research Institute's annual report on retirement preparedness for 2017, only 18 percent of U.S.-based workers feel "very confident" about their ability to retire comfortably ; Craig Copeland, senior research associate for EBRI and the report's co-author, cited "debt, lack of a retirement plan at work, and low savings" as "key factors" in workers' retirement-related anxiety. The Insured Retirement Institute finds a mere 23 percent of Baby Boomers and 24 percent of Gen Xers are confident that their savings will last in retirement. To make matters worse, more than 40 percent of Boomers and over 30 percent of Gen Xers report having no retirement savings whatsoever .

The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse.

It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been quick to vote for far-right Republicans antagonistic to the social safety net.

In the 2016 presidential election, 55 percent of voters 50 and older cast their ballots for Donald Trump against just 44 percent for Hillary Clinton. (This was especially true of older white voters; 90 percent of black voters 45 and older, as well as 67 percent of Latino voters in the same age range voted Democratic.)

Sen. Bernie Sanders' (I-VT) economic proposals may have been wildly popular with millennials, but no demographic has a greater incentive to vote progressive than Americans facing retirement. According to research conducted by the American Association of Retired Persons, the three greatest concerns of Americans 50 and older are Social Security, health care costs and caregiving for loved ones -- all areas that have been targeted by Republicans.

House of Representatives Speaker Paul Ryan, a devotee of social Darwinist Ayn Rand , has made no secret of his desire to privatize Social Security and replace traditional Medicare with a voucher program. Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless.

Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does.

The GOP's obsession with abolishing the Affordable Care Act is the most glaring example of its disdain for aging Americans. Yet Obamacare has been a blessing for Boomers and Gen Xers who have preexisting conditions. The ACA's guaranteed issue plans make no distinction between a 52-year-old American with diabetes, heart disease or asthma and a 52-year-old who has never had any of those illnesses. And AARP notes that under the ACA, the uninsured rate for Americans 50 and older decreased from 15 percent in 2013 to 9 percent in 2016.

According to the Congressional Budget Office, the replacement bills Donald Trump hoped to ram through Congress this year would have resulted in staggering premium hikes for Americans over 50. The CBO's analysis of the American Health Care Act, one of the earlier versions of Trumpcare, showed that a 64-year-old American making $26,500 per year could have gone from paying $1,700 annually in premiums to just over $16,000. The CBO also estimated that the GOP's American Health Care Act would have deprived 23 million Americans of health insurance by 2026.

As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill."

The CBO estimates that the bill will cause premiums to spike an average of 10 percent overall, with average premiums increasing $890 per year for a 50-year-old, $1,100 per year for a 55-year-old, $1,350 per year for a 60-year-old and $1,490 per year for a 64-year-old. Premium increases, according to the CBO, would vary from state to state; in Maine, average premiums for a 64-year-old would rise as much as $1,750 per year.

Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would also imperil Americans 65 and over by cutting $25 billion from Medicare .

As morally reprehensible as the GOP's tax legislation may be, it is merely an acceleration of the redistribution of wealth from the bottom to the top that America has undergone since the mid-1970s. (President Richard Nixon may have been a paranoid right-winger with authoritarian tendencies, but he expanded Medicare and supported universal health care.) Between the decline of labor unions, age discrimination, stagnant wages, an ever-rising cost of living, low interest rates, and a shortage of retirement accounts, millions of Gen Xers and Baby Boomers may never be able to retire.

Traditional defined-benefit pensions were once a mainstay of American labor, especially among unionized workers. But according to Pew Charitable Trusts, only 13 percent of Baby Boomers still have them (among millennials, the number falls to 6 percent). In recent decades, 401(k) plans have become much more prominent, yet a majority of American workers don't have them either.

Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones.

Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s for freelance work. Tax-deferred SEP-IRAs were once a great, low-risk way for freelancers to save for retirement without relying exclusively on Social Security, but times have changed since the 1980s and '90s when interest rates were considerably higher for certificates of deposit and savings accounts. According to Bankrate.com, average rates for one-year CDs dropped from 11.27 percent in 1984 to 8.1 percent in 1990 to 5.22 percent in 1995 to under 1 percent in 2010, where it currently remains.

The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington, D.C. Median rents for one-bedroom apartments are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha, according to ApartmentList.com.

That so many older Americans are renting at all is ominous in its own right. FDR made home ownership a primary goal of the New Deal, considering it a key component of a thriving middle class. But last year, the Urban Institute found that 19 million Americans who previously owned a home are now renting, 31 percent between the ages of 36 and 45. Laurie Goodman, one of the study's authors, contends the Great Recession has "permanently raised the number of renters," and that the explosion of foreclosures has hit Gen Xers especially hard.

The severity of the U.S. retirement crisis is further addressed in journalist Jessica Bruder's new book "Nomadland: Surviving America in the 21st Century," which follows Americans in their 50s, 60s and even 70s living in RVs or vans , barely eking out a living doing physically demanding, seasonal temp work from harvesting sugar beets to cleaning toilets at campgrounds. Several had high-paying jobs before their lives were blown apart by the layoffs, foreclosures and corporate downsizing of the Great Recession. Bruder speaks with former college professors and software professionals who now find themselves destitute, teetering on the brink of homelessness and forced to do backbreaking work for next to nothing. Unlike the big banks, they never received a bailout.

These neo-nomads recall the transients of the 1930s, themselves victims of Wall Street's recklessness. But whereas FDR won in a landslide in 1932 and aggressively pursued a program of progressive economic reforms, Republicans in Congress have set out to shred what little remains of the social safety net, giving huge tax breaks to millionaires and billionaires . The older voters who swept Trump into office may have signed their own death warrants.

If aging Americans are going to be saved from this dystopian future, the U.S. will have to forge a new Great Society. Programs like Social Security, Medicare and Medicaid will need to be strengthened, universal health care must become a reality and age discrimination in the workplace will have to be punished as a civil rights violation like racial and gender-based discrimination. If not, millions of Gen Xers and Boomers will spend their golden years scraping for pennies.

Expat , , December 14, 2017 at 6:29 am

I certainly will never go back to the States for these and other reasons. I have a friend, also an American citizen, who travels frequently back to California to visit his son. He is truly worried about getting sick or having an accident when he is there since he knows it might bankrupt him. As he jokes, he would be happy to have another heart attack here in France since it's free!

For those of you who have traveled the world and talked to people, you probably know that most foreigners are perplexed by America's attitude to health care and social services. The richest nation in the world thinks that health and social security (in the larger sense of not being forced into the street) are not rights at all. Europeans scratch their heads at this.

The only solution is education and information, but they are appalling in America. America remains the most ignorant and worst educated of the developed nations and is probably beaten by many developing nations. It is this ignorance and stupidity that gets Americans to vote for the likes of Trump or any of the other rapacious millionaires they send to office every year.

A first step would be for Americans to insist that Congress eliminate its incredibly generous and life-long healthcare plans for elected officials. They should have to do what the rest of Americans do. Of course, since about 95% of Congress are millionaires, it might not be effective. But it's a start.

vidimi , , December 14, 2017 at 6:40 am

France has its share of problems, but boy do they pale next to the problems in America or even Canada. Life here is overall quite pleasant and I have no desire to go back to N.A.

Marco , , December 14, 2017 at 6:46 am

Canada has problems?

WobblyTelomeres , , December 14, 2017 at 7:47 am

Was in Yellowknife a couple of years ago. The First Nations people have a rough life. From what I've read, such extends across the country.

vidimi , , December 14, 2017 at 8:03 am

yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can.

JEHR , , December 14, 2017 at 1:46 pm

The newest neoliberal effort in Canada was put forward by our Minister of Finance (a millionaire) who is touting a bill that will get rid of defined benefit pension plans given to public employees for so-called target benefit pension plans. The risk for target plans is taken by the recipient. Morneau's former firm promotes target benefit pension plans and the change could benefit Morneau himself as he did not put his assets from his firm in a blind trust. At the very least, he has a conflict of interest and should probably resign.

There is always an insidious group of wealthy people here who would like to re-make the world in their own image. I fear for the future.

JEHR , , December 14, 2017 at 1:55 pm

Yes, I agree. There is an effort to "simplify" the financial system of the EU to take into account the business cycle and the financial cycle .

Dita , , December 14, 2017 at 8:25 am

Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue.

jefemt , , December 14, 2017 at 10:02 am

We really should be able to turn this around, and have an obligation to ourselves and our 'nation state' , IF there were a group of folks running on a fairness, one-for-all, all-for-one platform. That sure isn't the present two-sides-of-the-same-coin Democraps and Republicrunts.

Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services, social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent counterpoint enemy.

Check it out, and be vigilant in dispelling his message and mission. Thanks for running this article.

Running away: the almost-haves run to another nation state, the uber-wealthy want to leave the earth, or live in their private Idaho in the Rockies or on the Ocean. What's left for the least among us? Whatever we create?
https://www.pgpf.org/

Scramjett , , December 14, 2017 at 1:43 pm

I think pathologically optimistic is a better term than complacent. Every time someone dumps on them, their response is usually along the lines of "Don't worry, it'll get better," "Everything works itself out in the end," "maybe we'll win the lottery," my personal favorite "things will get better, just give it time" (honestly it's been 40 years of this neoliberal bullcrap, how much more time are we supposed to give it?), "this is just a phase" or "we can always bring it back later and better than ever." The last one is most troubling because after 20 years of witnessing things in the public sphere disappearing, I've yet to see a single thing return in any form at all.

I'm not sure where this annoying optimism came from but I sure wish it would go away.

sierra7 , , December 14, 2017 at 8:45 pm

The "optimism" comes from having a lack of historical memory. So many social protections that we have/had is seen as somehow coming out of the ether benevolently given without any social struggles. The lack of historical education on this subject in particular is appalling. Now, most would probably look for an "APP" on their "dumbphones" to solve the problem.

The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the idea that the physical possession of material things is all that matters. Sheeple, yes.

Jeremy Grimm , , December 14, 2017 at 4:44 pm

WOW! You must have been outside the U.S. for a long time. Your comment seems to suggest we still have some kind of democracy here. We don't get to pick which rapacious millionaires we get to vote for and it doesn't matter any way since whichever one we pick from the sad offerings ends up with policies dictated from elsewhere.

Expat , , December 14, 2017 at 6:10 pm

Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies. 19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not can, but will) become wealthy. Most Americans can't find France on a map.

So, yes, you DO get to pick your rapacious millionaire. You send the same scumbags back to Washington every year because it's not him, it the other guys who are the problem. One third of Americans support Trump! Really, really support him. They think he is Jesus, MacArthur and Adam Smith all rolled up into one.

I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see just how flawed America is from the inside but when you step outside and have some perspective, it's frightening.

Disturbed Voter , , December 14, 2017 at 6:29 am

The Democrat party isn't a reform party. Thinking it is so, is because of the "No Other Choice" meme. Not saying that the Republican party works in my favor. They don't. Political reform goes deeper than reforming either main party. It means going to a European plurality system (with its own downside). That way growing Third parties will be viable, if they have popular, as opposed to millionaire, support. I don't see this happening, because of Citizens United, but if all you have is hope, then you have to go with that.

Carolinian , , December 14, 2017 at 8:05 am

Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless.

Substitute Bill Clinton for George Bush in that sentence and it works just as well. Neoliberalism is a bipartisan project.

And many of the potential and actual horrors described above arise from the price distortions of the US medical system with Democratic acquiescence in said system making things worse. The above article reads like a DNC press release.

And finally while Washington politicians of both parties have been threatening Social Security for years that doesn't mean its third rail status has been repealed. The populist tremors of the last election -- which have caused our elites to lose their collective mind -- could be a mere prelude to what will happen in the event of a full scale assault on the safety net.

KYrocky , , December 14, 2017 at 12:05 pm

Substitute Obama's quest for a Grand Bargain as well.

Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much of their investment included creating the right wing media apparatus.

The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits the rich financially, and by extension enhances their power politically.

If retirees flee our country that will certainly please the Conservatives as that will be fewer critics (enemies). Also less need or demand for social programs.

rps , , December 14, 2017 at 5:01 pm

"Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125

tegnost , , December 14, 2017 at 8:59 am

yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me.

Marco , , December 14, 2017 at 6:55 am

"President Richard Nixon may have been a paranoid right-winger with authoritarian tendencies, but he expanded Medicare and supported universal health care."

"Gimme that old time Republican!"

One of the reasons I love NC is that most political economic analysis is often more harsh on the Democrats than the Repubs so I am a bit dismayed how this article is way too easy on Team D. How many little (and not so little) knives in the back from Clinton and Obama? Is a knife in the chest that much worse?

OpenThePodBayDoorsHAL , December 14, 2017 at 3:57 pm

This entire thread is simply heartbreaking, Americans have had their money, their freedom, their privacy, their health, and sometimes their very lives taken away from them by the State. But the heartbreaking part is that they feel they are powerless to do anything at all about it so are just trying to leave.

But "People should not fear the government; the government should fear the people"

tagio , December 14, 2017 at 4:39 pm

It's more than a feeling, HAL. https://www.newyorker.com/news/john-cassidy/is-america-an-oligarchy Link to the academic paper embedded in article.

As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly suspect not.

This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because, you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others about what opinion to have, is about the limit of what they are willing, or know how to do.

[Dec 13, 2017] A stunning 33% of job seekers ages 55 and older are long-term unemployed, according to the AARP Public Policy Institute

Notable quotes:
"... And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder it becomes to get a job offer. ..."
Dec 13, 2017 | www.nakedcapitalism.com

Livius Drusus , December 13, 2017 at 2:44 pm

I thought this was an interesting article. Apologies if this has been posted on NC already.

A stunning 33% of job seekers ages 55 and older are long-term unemployed, according to the AARP Public Policy Institute. The average length of unemployment for the roughly 1.2 million people 55+ who are out of work: seven to nine months. "It's emotionally devastating for them," said Carl Van Horn, director of Rutgers University's John J. Heldrich Center for Workforce Development, at a Town Hall his center and the nonprofit WorkingNation held earlier this year in New Brunswick, N.J.

... ... ...

The fight faced by the long-term unemployed

And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder it becomes to get a job offer.

The job-finding rate declines by roughly 50% within eight months of unemployment, according to a 2016 paper by economists Gregor Jarosch of Stanford University and Laura Pilossoph of the Federal Reserve Bank of New York. "Unemployment duration has a strongly negative effect on the likelihood of subsequent employment," wrote researchers from the University of Maryland and the U.S. Census Bureau in another 2016 paper.

"Once upon a time, you could take that first job and it would lead to the next job and the job after that," said Town Hall panelist John Colborn, chief operating officer at the nonprofit JEVS Human Services, of Philadelphia. "The notion of a career ladder offered some hope of getting back into the labor market. The rungs of the ladder are getting harder and harder to find and some of them are broken."

In inner cities, said Kimberly McClain, CEO of The Newark Alliance, "there's an extra layer beyond being older and out of work. There are issues of race and poverty and being defined by your ZIP Code. There's an incredible sense of urgency."

... ... ...

Filling a work gap

If you are over 50, unemployed and have a work gap right now, the Town Hall speakers said, fill it by volunteering, getting an internship, doing project work, job-shadowing someone in a field you want to be in or taking a class to re-skill. These kind of things "make a candidate a lot more attractive," said Colborn. Be sure to note them in your cover letter and rιsumι.

Town Hall panelist Amanda Mullan, senior vice president and chief human resources officer of the New Jersey Resources Corp. (a utility company based in Wall, N.J.), said that when her company is interviewing someone who has been out of work lately, "we will ask: 'What have you done during that time frame?' If we get 'Nuthin,' that shows something about the individual, from a motivational perspective."

... ... ...

The relief of working again

Finally finding work when you're over 50 and unemployed for a stretch can be a relief for far more than financial reasons.

"Once I landed my job, the thing I most looked forward to was the weekend," said Konopka. "Not to relax, but because I didn't have to think about finding a job anymore. That's 24/7 in your head. You're always thinking on a Saturday: 'If I'm not doing something to find a job, will there be a posting out there?'"

Full article: https://www.marketwatch.com/story/jobs-are-everywhere-just-not-for-people-over-55-2017-12-08

[Dec 13, 2017] Stress of long-term unemployment takes a toll on thousands of Jerseyans who are out of work by Leslie Kwoh

Notable quotes:
"... Leslie Kwoh may be reached at lkwoh@starledger.com or (973) 392-4147. ..."
Jun 13, 2010 | www.nj.com

At 5:30 every morning, Tony Gwiazdowski rolls out of bed, brews a pot of coffee and carefully arranges his laptop, cell phone and notepad like silverware across the kitchen table.

And then he waits.

Gwiazdowski, 57, has been waiting for 16 months. Since losing his job as a transportation sales manager in February 2009, he wakes each morning to the sobering reminder that, yes, he is still unemployed. So he pushes aside the fatigue, throws on some clothes and sends out another flurry of resumes and cheery cover letters.

But most days go by without a single phone call. And around sundown, when he hears his neighbors returning home from work, Gwiazdowski -- the former mayor of Hillsborough -- can't help but allow himself one tiny sigh of resignation.

"You sit there and you wonder, 'What am I doing wrong?'" said Gwiazdowski, who finds companionship in his 2-year-old golden retriever, Charlie, until his wife returns from work.

"The worst moment is at the end of the day when it's 4:30 and you did everything you could, and the phone hasn't rung, the e-mails haven't come through."

Gwiazdowski is one of a growing number of chronically unemployed workers in New Jersey and across the country who are struggling to get through what is becoming one long, jobless nightmare -- even as the rest of the economy has begun to show signs of recovery.

Nationwide, 46 percent of the unemployed -- 6.7 million Americans -- have been without work for at least half a year, by far the highest percentage recorded since the U.S. Labor Department began tracking the data in 1948.

In New Jersey, nearly 40 percent of the 416,000 unemployed workers last year fit that profile, up from about 20 percent in previous years, according to the department, which provides only annual breakdowns for individual states. Most of them were unemployed for more than a year.

But the repercussions of chronic unemployment go beyond the loss of a paycheck or the realization that one might never find the same kind of job again. For many, the sinking feeling of joblessness -- with no end in sight -- can take a psychological toll, experts say.

Across the state, mental health crisis units saw a 20 percent increase in demand last year as more residents reported suffering from unemployment-related stress, according to the New Jersey Association of Mental Health Agencies.

"The longer the unemployment continues, the more impact it will have on their personal lives and mental health," said Shauna Moses, the association's associate executive director. "There's stress in the marriage, with the kids, other family members, with friends."

And while a few continue to cling to optimism, even the toughest admit there are moments of despair: Fear of never finding work, envy of employed friends and embarassment at having to tell acquaintances that, nope, still no luck.

"When they say, 'Hi Mayor,' I don't tell a lot of people I'm out of work -- I say I'm semi-retired," said Gwiazdowski, who maxed out on unemployment benefits several months ago.

"They might think, 'Gee, what's wrong with him? Why can't he get a job?' It's a long story and maybe people really don't care and now they want to get away from you."


SECOND TIME AROUND

Lynn Kafalas has been there before, too. After losing her computer training job in 2000, the East Hanover resident took four agonizing years to find new work -- by then, she had refashioned herself into a web designer.

That not-too-distant experience is why Kafalas, 52, who was laid off again eight months ago, grows uneasier with each passing day. Already, some of her old demons have returned, like loneliness, self-doubt and, worst of all, insomnia. At night, her mind races to dissect the latest interview: What went wrong? What else should she be doing? And why won't even Barnes & Noble hire her?

"It's like putting a stopper on my life -- I can't move on," said Kafalas, who has given up karate lessons, vacations and regular outings with friends. "Everything is about the interviews."

And while most of her friends have been supportive, a few have hinted to her that she is doing something wrong, or not doing enough. The remarks always hit Kafalas with a pang.

In a recent study, researchers at Rutgers University found that the chronically unemployed are prone to high levels of stress, anxiety, depression, loneliness and even substance abuse, which take a toll on their self-esteem and personal relationships.

"They're the forgotten group," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers, and a co-author of the report. "And the longer you are unemployed, the less likely you are to get a job."

Of the 900 unemployed workers first interviewed last August for the study, only one in 10 landed full-time work by March of this year, and only half of those lucky few expressed satisfaction with their new jobs. Another one in 10 simply gave up searching.

Among those who were still unemployed, many struggled to make ends meet by borrowing from friends or family, turning to government food stamps and forgoing health care, according to the study.

More than half said they avoided all social contact, while slightly less than half said they had lost touch with close friends. Six in 10 said they had problems sleeping.

Kafalas says she deals with her chronic insomnia by hitting the gym for two hours almost every evening, lifting weights and pounding the treadmill until she feels tired enough to fall asleep.

"Sometimes I forget what day it is. Is it Tuesday? And then I'll think of what TV show ran the night before," she said. "Waiting is the toughest part."


AGE A FACTOR

Generally, the likelihood of long-term unemployment increases with age, experts say. A report by the National Employment Law Project this month found that nearly half of those who were unemployed for six months or longer were at least 45 years old. Those between 16 and 24 made up just 14 percent.

Tell that to Adam Blank, 24, who has been living with his girlfriend and her parents at their Martinsville home since losing his sales job at Best Buy a year and half ago.

Blank, who graduated from Rutgers with a major in communications, says he feels like a burden sometimes, especially since his girlfriend, Tracy Rosen, 24, works full-time at a local nonprofit. He shows her family gratitude with small chores, like taking out the garbage, washing dishes, sweeping floors and doing laundry.

Still, he often feels inadequate.

"All I'm doing on an almost daily basis is sitting around the house trying to keep myself from going stir-crazy," said Blank, who dreams of starting a social media company.

When he is feeling particularly low, Blank said he turns to a tactic employed by prisoners of war in Vietnam: "They used to build dream houses in their head to help keep their sanity. It's really just imagining a place I can call my own."


LESSONS LEARNED

Meanwhile, Gwiazdowski, ever the optimist, says unemployment has taught him a few things.

He has learned, for example, how to quickly assess an interviewer's age and play up or down his work experience accordingly -- he doesn't want to appear "threatening" to a potential employer who is younger. He has learned that by occasionally deleting and reuploading his resume to job sites, his entry appears fresh.

"It's almost like a game," he said, laughing. "You are desperate, but you can't show it."

But there are days when he just can't find any humor in his predicament -- like when he finishes a great interview but receives no offer, or when he hears a fellow job seeker finally found work and feels a slight twinge of jealousy.

"That's what I'm missing -- putting on that shirt and tie in the morning and going to work," he said.

The memory of getting dressed for work is still so vivid, Gwiazdowski says, that he has to believe another job is just around the corner.

"You always have to hope that that morning when you get up, it's going to be the day," he said.

"Today is going to be the day that something is going to happen."

Leslie Kwoh may be reached at lkwoh@starledger.com or (973) 392-4147.

DrBuzzard Jun 13, 2010

I collect from the state of iowa, was on tier I and when the gov't recessed without passing extension, iowa stopped paying tier I claims that were already open, i was scheduled to be on tier I until july 15th, and its gone now, as a surprise, when i tried to claim my week this week i was notified. SURPRISE, talk about stress.

berganliz Jun 13, 2010

This is terrible....just wait until RIF'd teachers hit the unemployment offices....but then, this is what NJ wanted...fired teachers who are to blame for the worst recession our country has seen in 150 years...thanks GWB.....thanks Donald Rumsfeld......thanks Dick Cheney....thanks Karl "Miss Piggy" Rove...and thank you Mr. Big Boy himself...Gov Krispy Kreame!

rp121 Jun 13, 2010

For readers who care about this nation's unemployed- Call your Senators to pass HR 4213, the "Extenders" bill. Unfortunately, it does not add UI benefits weeks, however it DOES continue the emergency federal tiers of UI. If it does not pass this week many of us are cut off at 26 wks. No tier 1, 2 -nothing.

[Dec 13, 2017] Unemployment health hazard and stress

The longer you are unemployed, the more you are effected by those factors.
Notable quotes:
"... The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they suffer few, and minor, ill effects. ..."
"... Worries about income, domestic problems, whatever, the list is as long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation over time. The chemistry of stress is complex, but it can be rough on the hormonal system. ..."
"... Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress. Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those affected, these are by now, at this stage, real crises. ..."
"... Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these conditions. Even that comes at a cost, and although under control, the stress remains a problem. ..."
"... One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress over the last decade. This is a common situation, and help is available. ..."
"... Depression is universally hated by anyone who's ever had it. ..."
"... Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either. ..."
"... You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic exercises, you're talking about 30-45 minutes a day. It's not hard. ..."
Dec 13, 2017 | www.cvtips.com

It's almost impossible to describe the various psychological impacts, because there are so many. There are sometimes serious consequences, including suicide, and, some would say worse, chronic depression.

There's not really a single cause and effect. It's a compound effect, and unemployment, by adding stress, affects people, often badly.

The world doesn't need any more untrained psychologists, and we're not pretending to give medical advice. That's for professionals. Everybody is different, and their problems are different. What we can do is give you an outline of the common problems, and what you can do about them.

The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they suffer few, and minor, ill effects.

For others, there are a series of issues, and the big three are:

Stress

Stress is Stage One. It's a natural result of the situation. Worries about income, domestic problems, whatever, the list is as long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation over time. The chemistry of stress is complex, but it can be rough on the hormonal system.

Over an extended period, the body's natural hormonal balances are affected, and this can lead to problems. These are actually physical issues, but the effects are mental, and the first obvious effects are, naturally, emotional.

Anger, and other negative emotions

Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress. Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those affected, these are by now, at this stage, real crises.

If the actual situation was already bad, this mental state makes it a lot worse. Constant aggravation doesn't help people to keep a sense of perspective. Clear thinking isn't easy when under constant stress.

Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these conditions. Even that comes at a cost, and although under control, the stress remains a problem.

One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress over the last decade. This is a common situation, and help is available.

If you have reservations about seeking help, bear in mind it can't possibly be any worse than the problem.

Depression

Depression is universally hated by anyone who's ever had it. This is the next stage, and it's caused by hormonal imbalances which affect serotonin. It's actually a physical problem, but it has mental effects which are sometimes devastating, and potentially life threatening.

The common symptoms are:

It's a disgusting experience. No level of obscenity could possibly describe it. Depression is misery on a level people wouldn't conceive in a nightmare. At this stage the patient needs help, and getting it is actually relatively easy. It's convincing the person they need to do something about it that's difficult. Again, the mental state is working against the person. Even admitting there's a problem is hard for many people in this condition.

Generally speaking, a person who is trusted is the best person to tell anyone experiencing the onset of depression to seek help. Important: If you're experiencing any of those symptoms:

Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either.

Alcohol, in particular, makes depression much worse. Alcohol is a depressant, itself, and it's also a nasty chemical mix with all those stress hormones.

If you've ever had alcohol problems, or seen someone with alcohol wrecking their lives, depression makes things about a million times worse.

Just don't do it. Steer clear of any so-called stimulants, because they don't mix with antidepressants, either.

Unemployment and staying healthy

The above is what you need to know about the risks of unemployment to your health and mental well being.

These situations are avoidable.

Your best defense against the mental stresses and strains of unemployment, and their related problems is staying healthy.

We can promise you that is nothing less than the truth. The healthier you are, the better your defenses against stress, and the more strength you have to cope with situations.

Basic health is actually pretty easy to achieve:

Diet

Eat real food, not junk, and make sure you're getting enough food. Your body can't work with resources it doesn't have. Good food is a real asset, and you'll find you don't get tired as easily. You need the energy reserves.

Give yourself a good selection of food that you like, that's also worth eating.

The good news is that plain food is also reasonably cheap, and you can eat as much as you need. Basic meals are easy enough to prepare, and as long as you're getting all the protein veg and minerals you need, you're pretty much covered.

You can also use a multivitamin cap, or broad spectrum supplements, to make sure you're getting all your trace elements. Also make sure you're getting the benefits of your food by taking acidophilus or eating yogurt regularly.

Exercise

You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic exercises, you're talking about 30-45 minutes a day. It's not hard.

Don't just sit and suffer

If anything's wrong, check it out when it starts, not six months later. Most medical conditions become serious when they're allowed to get worse.

For unemployed people the added risk is also that they may prevent you getting that job, or going for interviews. If something's causing you problems, get rid of it.

Nobody who's been through the blender of unemployment thinks it's fun.

Anyone who's really done it tough will tell you one thing:

Don't be a victim. Beat the problem, and you'll really appreciate the feeling.

[Dec 13, 2017] Being homeless is better than working for Amazon by Nichole Gracely

Notable quotes:
"... According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine, and my pace would accelerate throughout the course of a shift. What they didn't know was that I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion ..."
"... toiling in some remote corner of the warehouse, alone for 10 hours, with my every move being monitored by management on a computer screen. ..."
"... ISS could simply deactivate a worker's badge and they would suddenly be out of work. They treated us like beggars because we needed their jobs. Even worse, more than two years later, all I see is: Jeff Bezos is hiring. ..."
"... I have never felt more alone than when I was working there. I worked in isolation and lived under constant surveillance ..."
"... That was 2012 and Amazon's labor and business practices were only beginning to fall under scrutiny. ..."
"... I received $200 a week for the following six months and I haven't had any source of regular income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for food stamps. ..."
Nov 28, 2014 | theguardian.com

wa8dzp:

Nichole Gracely has a master's degree and was one of Amazon's best order pickers. Now, after protesting the company, she's homeless.

I am homeless. My worst days now are better than my best days working at Amazon.

According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine, and my pace would accelerate throughout the course of a shift. What they didn't know was that I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion.

During peak season, I trained incoming temps regularly. When that was over, I'd be an ordinary order picker once again, toiling in some remote corner of the warehouse, alone for 10 hours, with my every move being monitored by management on a computer screen.

Superb performance did not guarantee job security. ISS is the temp agency that provides warehouse labor for Amazon and they are at the center of the SCOTUS case Integrity Staffing Solutions vs. Busk. ISS could simply deactivate a worker's badge and they would suddenly be out of work. They treated us like beggars because we needed their jobs. Even worse, more than two years later, all I see is: Jeff Bezos is hiring.

I have never felt more alone than when I was working there. I worked in isolation and lived under constant surveillance. Amazon could mandate overtime and I would have to comply with any schedule change they deemed necessary, and if there was not any work, they would send us home early without pay. I started to fall behind on my bills.

At some point, I lost all fear. I had already been through hell. I protested Amazon. The gag order was lifted and I was free to speak. I spent my last days in a lovely apartment constructing arguments on discussion boards, writing articles and talking to reporters. That was 2012 and Amazon's labor and business practices were only beginning to fall under scrutiny. I walked away from Amazon's warehouse and didn't have any other source of income lined up.

I cashed in on my excellent credit, took out cards, and used them to pay rent and buy food because it would be six months before I could receive my first unemployment compensation check.

I received $200 a week for the following six months and I haven't had any source of regular income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for food stamps.

I furthered my Amazon protest while homeless in Seattle. When the Hachette dispute flared up I "flew a sign," street parlance for panhandling with a piece of cardboard: "I was an order picker at amazon.com. Earned degrees. Been published. Now, I'm homeless, writing and doing this. Anything helps."

I have made more money per word with my signs than I will probably ever earn writing, and I make more money per hour than I will probably ever be paid for my work. People give me money and offer well wishes and I walk away with a restored faith in humanity.

I flew my protest sign outside Whole Foods while Amazon corporate employees were on lunch break, and they gawked. I went to my usual flying spots around Seattle and made more money per hour protesting Amazon with my sign than I did while I worked with them. And that was in Seattle. One woman asked, "What are you writing?" I told her about the descent from working poor to homeless, income inequality, my personal experience. She mentioned Thomas Piketty's book, we chatted a little, she handed me $10 and wished me luck. Another guy said, "Damn, that's a great story! I'd read it," and handed me a few bucks.

[snip]

[Dec 12, 2017] Can Uber Ever Deliver Part Eleven Annual Uber Losses Now Approaching $5 Billion

Notable quotes:
"... Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. ..."
"... Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins. ..."
"... In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week. ..."
"... An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8] ..."
"... Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017. ..."
"... Socialize the losses, privatize the gains, VC-ize the subsidies. ..."
"... The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. ..."
"... "Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs ..."
Dec 12, 2017 | www.nakedcapitalism.com

Uber lost $2.5 billion in 2015, probably lost $4 billion in 2016, and is on track to lose $5 billion in 2017.

The top line on the table below shows is total passenger payments, which must be split between Uber corporate and its drivers. Driver gross earnings are substantially higher than actual take home pay, as gross earning must cover all the expenses drivers bear, including fuel, vehicle ownership, insurance and maintenance.

Most of the "profit" data released by Uber over time and discussed in the press is not true GAAP (generally accepted accounting principles) profit comparable to the net income numbers public companies publish but is EBIDTAR contribution. Companies have significant leeway as to how they calculate EBIDTAR (although it would exclude interest, taxes, depreciation, amortization) and the percentage of total costs excluded from EBIDTAR can vary significantly from quarter to quarter, given the impact of one-time expenses such as legal settlements and stock compensation. We only have true GAAP net profit results for 2014, 2015 and the 2nd/3rd quarters of 2017, but have EBIDTAR contribution numbers for all other periods. [5]

Uber had GAAP net income of negative $2.6 billion in 2015, and a negative profit margin of 132%. This is consistent with the negative $2.0 billion loss and (143%) margin for the year ending September 2015 presented in part one of the NC Uber series over a year ago.

No GAAP profit results for 2016 have been disclosed, but actual losses likely exceed $4 billion given the EBIDTAR contribution of negative $3.2 billion. Uber's GAAP losses for the 2nd and 3rd quarters of 2017 were over $2.5 billion, suggesting annual losses of roughly $5 billion.

While many Silicon Valley funded startups suffered large initial losses, none of them lost anything remotely close to $2.6 billion in their sixth year of operation and then doubled their losses to $5 billion in year eight. Reversing losses of this magnitude would require the greatest corporate financial turnaround in history.

No evidence of significant efficiency/scale gains; 2015 and 2016 margin improvements entirely explained by unilateral cuts in driver compensation, but losses soared when Uber had to reverse these cuts in 2017.

Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. These driver compensation cuts improved Uber's EBIDTAR margin, but Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins.

In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week.

An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8]

A business model where profit improvement is hugely dependent on wage cuts is unsustainable, especially when take home wages fall to (or below) minimum wage levels. Uber's primary focus has always been the rate of growth in gross passenger revenue, as this has been a major justification for its $68 billion valuation. This growth rate came under enormous pressure in 2017 given Uber efforts to raise fares, major increases in driver turnover as wages fell, [9] and the avalanche of adverse publicity it was facing.

Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

MKS , December 12, 2017 at 6:19 am

"Uber's business model can never produce sustainable profits"

Two words not in my vocabulary are "Never" and "Always", that is a pretty absolute statement in an non-absolute environment. The same environment that has produced the "Silicon Valley Growth Model", with 15x earnings companies like NVIDA, FB and Tesla (Average earnings/stock price ratio in dot com bubble was 10x) will people pay ridiculous amounts of money for a company with no underlying fundamentals you damn right they will! Please stop with the I know all no body knows anything, especially the psychology and irrationality of markets which are made up of irrational people/investors/traders.

JohnnySacks , December 12, 2017 at 7:34 am

My thoughts exactly. Seems the only possible recovery for the investors is a perfectly engineered legendary pump and dump IPO scheme. Risky, but there's a lot of fools out there and many who would also like to get on board early in the ride in fear of missing out on all the money to be hoovered up from the greater fools. Count me out.

SoCal Rhino , December 12, 2017 at 8:30 am

The author clearly distinguishes between GAAP profitability and valuations, which is after all rather the point of the series. And he makes a more nuanced point than the half sentence you have quoted without context or with an indication that you omitted a portion. Did you miss the part about how Uber would have a strong incentive to share the evidence of a network effect or other financial story that pointed the way to eventual profit? Otherwise (my words) it is the classic sell at a loss, make it up with volume path to liquidation.

tegnost , December 12, 2017 at 9:52 am

apples and oranges comparison, nvidia has lots and lots of patented tech that produces revenue, facebook has a kajillion admittedly irrational users, but those users drive massive ad sales (as just one example of how that company capitalizes itself) and tesla makes an actual car, using technology that inspires it's buyers (the put your money where your mouth is crowd and it can't be denied that tesla, whatever it's faults are, battery tech is not one of them and that intellectual property is worth a lot, and tesla's investors are in on that real business, profitable or otherwise)

Uber is an iphone app. They lose money and have no path to profitability (unless it's the theory you espouse that people are unintelligent so even unintelligent ideas work to fleece them). This article touches on one of the great things about the time we now inhabit, uber drivers could bail en masse, there are two sides to the low attachment employees who you can get rid of easily. The drivers can delete the uber app as soon as another iphone app comes along that gets them a better return

allan , December 12, 2017 at 6:52 am

Yet another source (unintended) of subsidies for Uber, Lyft, etc., which might or might not have been mentioned earlier in the series:

Airports Are Losing Money as Ride-Hailing Services Grow [NYT]

For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?

Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.

But that's not the case for airports. Travelers' changing habits, in fact, have begun to shake the airports' financial underpinnings. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.

At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals,
there's more congestion.

Socialize the losses, privatize the gains, VC-ize the subsidies.

Thuto , December 12, 2017 at 6:55 am

The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. The only question is how long can they keep the show going before the lights go out, slick marketing and propaganda can only take you so far, and one assumes the dumb money has a finite supply of patience and will at some point begin asking the tough questions.

Louis Fyne , December 12, 2017 at 8:35 am

The irony is that Uber would have been a perfectly fine, very profitable mid-sized company if Uber stuck with its initial model -- sticking to dense cities with limited parking, limiting driver supply, and charging a premium price for door-to-door delivery, whether by livery or a regular sedan. And then perhaps branching into robo-cars.

But somehow Uber/board/Travis got suckered into the siren call of self-driving cars, triple-digit user growth, and being in the top 100 US cities and on every continent.

Thuto , December 12, 2017 at 11:30 am

I've shared a similar sentiment in one of the previous posts about Uber. But operating profitably in decent sized niche doesn't fit well with ambitions of global domination. For Uber to be "right-sized", an admission of folly would have to be made, its managers and investors would have to transcend the sunk cost fallacy in their strategic decision making, and said investors would have to accept massive hits on their invested capital. The cold, hard reality of being blindsided and kicked to the curb in the smartphone business forced RIM/Blackberry to right-size, and they may yet have a profitable future as an enterprise facing software and services company. Uber would benefit from that form of sober mindedness, but I wouldn't hold my breath.

David Carl Grimes , December 12, 2017 at 6:57 am

The question is: Why did Softbank invest in Uber?

Michael Fiorillo , December 12, 2017 at 9:33 am

I know nothing about Softbank or its management, but I do know that the Japanese were the dumb money rubes in the late '80's, overpaying for trophy real estate they lost billions on.

Until informed otherwise, that's my default assumption

JimTan , December 12, 2017 at 10:50 am

Softbank possibly looking to buy more Uber shares at a 30% discount is very odd. Uber had a Series G funding round in June 2016 where a $3.5 billion investment from Saudi Arabia's Public Investment Fund resulted in its current $68 billion valuation. Now apparently Softbank wants to lead a new $6 billion funding round to buy the shares of Uber employees and early investors at a 30% discount from this last "valuation". It's odd because Saudi Arabia's Public Investment Fund has pledged $45 billion to SoftBank's Vision Fund , an amount which was supposed to come from the proceeds of its pending Aramco IPO. If the Uber bid is linked to SoftBank's Vision Fund, or KSA money, then its not clear why this investor might be looking to literally 'double down' from $3.5 billion o $6 billion on a declining investment.

Yves Smith Post author , December 12, 2017 at 11:38 am

SoftBank has not yet invested. Its tender is still open. If it does not get enough shares at a price it likes, it won't invest.

As to why, I have no idea.

Robert McGregor , December 12, 2017 at 7:04 am

"Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs of efficiency, and hopes of greater efficiency, and make most people just overlook the essential fact that Uber is the most unprofitable company of all time!

divadab , December 12, 2017 at 7:19 am

What comprises "Uber Expenses"? 2014 – $1.06 billion; 2015 $3.33 billion; 2016 $9.65 billion; forecast 2017 $11.418 billion!!!!!! To me this is the big question – what are they spending $10 billion per year on?

ALso – why did driver share go from 68% in 2016 to 80% in 2017? If you use 68% as in 2016, 2017 Uber revenue is $11.808 billion, which means a bit better than break-even EBITDA, assuming Uber expenses are as stated $11.428 billion.

Perhaps not so bleak as the article presents, although I would not invest in this thing.

Phil in Kansas City , December 12, 2017 at 7:55 am

I have the same question: What comprises over 11 billion dollars in expenses in 2017? Could it be they are paying out dividends to the early investors? Which would mean they are cannibalizing their own company for the sake of the VC! How long can this go on before they'll need a new infusion of cash?

lyman alpha blob , December 12, 2017 at 2:37 pm

The Saudis have thrown a few billion Uber's way and they aren't necessarily known as the smart money.

Maybe the pole dancers have started chipping in too as they are for bitcoin .

Vedant Desai , December 12, 2017 at 10:37 am

Oh article does answer your 2nd question. Read this paragraph:-

Since mass driver defections would cause passenger volume growth to collapse completely , Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

As for the 1st, read this line in the article:-

There are undoubtedly a number of things Uber could do to reduce losses at the margin, but it is difficult to imagine it could suddenly find the $4-5 billion in profit improvement needed merely to reach breakeven.

Louis Fyne , December 12, 2017 at 8:44 am

in addition to all the points listed in the article/comments, the absolute biggest flaw with Uber is that Uber HQ conditioned its customers on (a) cheap fares and (b) that a car is available within minutes (1-5 if in a big city).

Those two are not mutually compatible in the long-term.

Alfred , December 12, 2017 at 9:49 am

Thus (a) "We cost less" and (b) "We're more convenient" -- aren't those also the advantages that Walmart claims and feeds as a steady diet to its ever hungry consumers? Often if not always, disruption may repose upon delusion.

Martin Finnucane , December 12, 2017 at 11:06 am

Uber's business model could never produce sustainable profits unless it was able to exploit significant anti-competitive market power.

Upon that dependent clause hangs the future of capitalism, and – dare I say it? – its inevitable demise.

Altandmain , December 12, 2017 at 11:09 am

When this Uber madness blows up, I wonder if people will finally begin to discuss the brutal reality of Silicon Valley's so called "disruption".

It is heavily built in around the idea of economic exploitation. Uber drivers are often, especially when the true costs to operate an Uber including the vehicle depreciation are factored in, making not very much per hour driven, especially if they don't get the surge money.

Instacart is another example. They are paying the deliver operators very little.

Jim A. , December 12, 2017 at 12:21 pm

At a fundamental level, I think that the Silicon Valley "disruption" model only works for markets (like software) where the marginal cost for production is de minimus and the products can be protected by IP laws. Volume and market power really work in those cases. But out here in meat-space, where actual material and labor are big inputs to each item sold, you can never just sit back on your laurels and rake in the money. Somebody else will always be able to come and and make an equivalent product. If they can do it more cheaply, you are in trouble.

Altandmain , December 12, 2017 at 5:40 pm

There aren't that many areas in goods and services where the marginal costs are very low.

Software is actually quite unique in that regard, costing merely the bandwidth and permanent storage space to store.

Let's see:

1. From the article, they cannot go public and have limited ways to raise more money. An IPO with its more stringent disclosure requirements would expose them.

2. They tried lowering driver compensation and found that model unsustainable.

3. There are no benefits to expanding in terms of economies of scale.

From where I am standing, it looks like a lot of industries gave similar barriers. Silicon Valley is not going to be able to disrupt those.

Tesla, another Silicon Valley company seems to be struggling to mass produce its Model 3 and deliver an electric car that breaks even, is reliable, while disrupting the industry in the ways that Elon Musk attempted to hype up.

So that basically leaves services and manufacturing out for Silicon Valley disruption.

Joe Bentzel , December 12, 2017 at 2:19 pm

UBER has become a "too big to fail" startup because of all the different tentacles of capital from various Tier 1 VCs and investment bankers.

VCs have admitted openly that UBER is a subsidized business, meaning it's product is sold below market value, and the losses reflect that subsidization. The whole "2 sided platform" argument is just marketecture to hustle more investors. It's a form of service "dumping" that puts legacy businesses into bankruptcy. Back during the dotcom bubble one popular investment banker (Paul Deninger) characterized this model as "Terrorist Competition", i.e. coffers full of invested cash to commoditize the market and drive out competition.

UBER is an absolute disaster that has forked the startup model in Silicon Valley in order to drive total dependence on venture capital by founders. And its current diversification into "autonomous vehicles", food delivery, et al are simply more evidence that the company will never be profitable due to its whacky "blitzscaling" approach of layering on new "businesses" prior to achieving "fit" in its current one.

It's economic model has also metastasized into a form of startup cancer that is killing Silicon Valley as a "technology" innovator. Now it's all cargo cult marketing BS tied to "strategic capital".

UBER is the victory of venture capital and user subsidized startups over creativity by real entrepreneurs.

It's shadow is long and that's why this company should be ..wait for it UNBUNDLED (the new silicon valley word attached to that other BS religion called "disruption"). Call it a great unbundling and you can break up this monster corp any way you want.

Naked Capitalism is a great website.

Phil in KC , December 12, 2017 at 3:20 pm

1. I Agree with your last point.

2. The elevator pitch for Uber: subsidize rides to attract customers, put the competition out of business, and then enjoy an unregulated monopoly, all while exploiting economically ignorant drivers–ahem–"partners."

3. But more than one can play that game, and

4. Cab and livery companies are finding ways to survive!

Phil in KC , December 12, 2017 at 3:10 pm

If subsidizing rides is counted as an expense, (not being an accountant, I would guess it so), then whether the subsidy goes to the driver or the passenger, that would account for the ballooning expenses, to answer my own question. Otherwise, the overhead for operating what Uber describes as a tech company should be minimal: A billion should fund a decent headquarters with staff, plus field offices in, say, 100 U.S. cities. However, their global pretensions are probably burning cash like crazy. On top of that, I wonder what the exec compensation is like?

After reading HH's initial series, I made a crude, back-of-the-envelope calculation that Uber would run out of money sometime in the third fiscal quarter of 2018, but that was based on assuming losses were stabilizing in the range of 3 billion a year. Not so, according to the article. I think crunch time is rapidly approaching. If so, then SoftBank's tender offer may look quite appetizing to VC firms and to any Uber employee able to cash in their options. I think there is a way to make a re-envisioned Uber profitable, and with a more independent board, they may be able to restructure the company to show a pathway to profitability before the IPO. But time is running out.

A not insignificant question is the recruitment and retention of the front line "partners." It would seem to me that at some point, Uber will run out of economically ignorant drivers with good manners and nice cars. I would be very interested to know how many drivers give up Uber and other ride-sharing gigs once the 1099's start flying at the beginning of the year. One of the harsh realities of owning a business or being an contractor is the humble fact that you get paid LAST!

Jan Stickle , December 12, 2017 at 5:00 pm

We became instant Uber riders while spending holidays with relatives in San Diego. While their model is indeed unique from a rider perspective, it was the driver pool that fascinates me. These are not professional livery drivers, but rather freebooters of all stripes driving for various reasons. The remuneration they receive cannot possibly generate much income after expenses, never mind the problems associated with IRS filing as independent contractors.

One guy was just cruising listening to music; cooler to get paid for it than just sitting home! A young lady was babbling and gesticulating non stop about nothing coherent and appeared to be on some sort of stimulant. A foreign gentleman, very professional, drove for extra money when not at his regular job. He was the only one who had actually bought a new Prius for this gig, hoping to pay it off in two years.

This is indeed a brave new world. There was a period in Nicaragua just after the Contra war ended when citizens emerged from their homes and hit the streets in large numbers, desperately looking for income. Every car was a taxi and there was a bipedal mini Walmart at every city intersection as individuals sold everything and anything in a sort of euphoric optimism towards the future. Reality just hadn't caught up with them yet .

[Dec 03, 2017] Business Has Killed IT With Overspecialization by Charlie Schluting

Highly recommended!
Notable quotes:
"... What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. ..."
"... Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye. ..."
"... Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is. ..."
"... The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue. ..."
Apr 07, 2010 | Enterprise Networking Planet

What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these people could save a business in times of disaster.

Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye.

Specialization

You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is run by people who specialize in those elements. Everything is taken care of.

Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.

If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get. Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they indicate specialization or compensation for lack of experience.

Resource Competition

Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is.

The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue.

Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT groups.

With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction. Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing groups, a viable option.

Blamestorming

The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality. Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time, so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone else to blame when things get delayed makes it all too easy to simply stop working for a while.

More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system outage.

Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose the problem. The server team doesn't even know how the application runs.

See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care of all the other pieces.

I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge and also get to know other people, which should lessen the propensity to view them as outsiders

[Dec 03, 2017] Nokia Shareholders Fight Back

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.
Notable quotes:
"... On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not. ..."
Slashdot

noc007 (633443)

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.

The first is a golden rule of sorts on doing anything:

You can only pick two; NO exceptions. I've encountered so many upper management types that foolishly think they can get away with having all three. In my experience 9/10 of the time it turns out a lack of quality bites them in the butt sometime down the road when they assumed they somehow managed to achieve all three.

The second is communication. Mostly everyone in at least the US has experienced the pain of being subjected to some company's outsourced customer service and/or tech support that can't effectively communicate with both parties on the same page of understanding one another. I really shouldn't need to explain why communication, understanding one another is so important. Sadly this is something I have to constantly explain to my current boss with events like today where my non-outsourced colleague rebooted a number of production critical servers when he was asked to reboot just one secondary server.

Third is the employee's skill in doing the job. Again, another obvious one, but I've observed that it isn't always on the hiring menu. Additionally I've seen some people that interview well, but couldn't create a "Hello World" HTML page for a web developer position as an example. There's no point in hiring or keeping a hired individual to do a job that they lack the skill to do; even if it's an entry-level position with training, that person should be willing to put for the effort to learn and take notes. I accept that everyone has their own unique skills that can aide or hinder their ability to learn and be proficient with a particular task. However, I firmly believe anyone can learn to do anything as long as they put their mind to it. I barely have any artistic ability and my drawing skills are stick figures at best (XKCD is miles ahead of me); if I were to put forth the effort to learn how to draw and paint, I could become a good artist. I taught an A+ technician certification class at a tech school a while back and I had a retired Marine that served in the Vietnam War as one of my students. One could argue his best skill was killing and blowing stuff up. He worked hard and learned to be a technician and passed CompTIA's certification test without a problem. That leads me to the next point.

Lastly is attitude of the end employee doing the actual work. It boggles my mind how so many managers loose the plot when it comes to employee morale and motivation. Productivity generally is improved when those two are improved and it usually doesn't have to involve spending a bunch of money. The employee's attitude should be getting the work done correctly in a reasonable amount of time. Demanding it is a poor approach. Poisoning an employee will result in poisoning the company in a small manner all the way up to the failure of the company. Employees should be encouraged through actual morale improvements, positive motivation, and incentives for doing more work at the same and/or better quality level.

Outsourcing or keeping things in house can be successful and possibly economical if approached correctly with the appropriate support of upper management.

Max Littlemore (1001285)

How dramatic? Isn't outsourcing done (like it or not) to reduce costs?

Outsourcing is done to reduce the projected costs that PHBs see. In reality, outsourcing can lead to increased costs and delays due to time zone differences and language/cultural barriers.

I have seen it work reasonably well, but only when the extra effort and delays caused by the increased need for rework that comes from complex software projects. If you are working with others on software, it is so much quicker to produce quality software if the person who knows the business requirements is sitting right next to the person doing design and the person cutting code and the person doing the testing, etc, etc.

If these people or groups are scattered around the world with different cultures and native languages, communication can suffer, increasing misunderstanding and reducing the quality. I have personally seen this lead to massive increase in code defects in a project that went from in house development to outsourced.

Also, time zone differences cause problems. I have noticed that the further west people live, the less likely they are to take into account how far behind they are. Working with people who fail to realise that their Monday morning is the next day for someone else, or that by the time they are halfway through Friday, others are already on their weekend is not only frustrating, it leads to slow turn around of bug fixes, etc.

Yeah, I'm told outsourcing keeps costs down, but I am yet to see conclusive evidence of that in the real world. At least in complex development. YMMV for support/call centre stuff.

-- I don't therefore I'm not.

[Dec 03, 2017] IT workers voices heard in the Senate, confidentially

The resentment against outsourcing was brewing for a long time.
Notable quotes:
"... Much of the frustration focused on the IT layoffs at Southern California Edison , which is cutting 500 IT workers after hiring two offshore outsourcing firms. This has become the latest example for critics of the visa program's capacity for abuse. ..."
"... Infosys whistleblower Jay Palmer, who testified, and is familiar with the displacement process, told Sessions said these workers will get sued if they speak out. "That's the fear and intimidation that these people go through - they're blindsided," said Palmer. ..."
"... Moreover, if IT workers refuse to train their foreign replacement, "they are going to be terminated with cause, which means they won't even get their unemployment insurance," said Ron Hira, an associate professor at Howard University, who also testified. Affected tech workers who speak out publicly and use their names, "will be blackballed from the industry," he said. ..."
"... Hatch, who is leading the effort to increase the H-1B cap, suggested a willingness to raise wage levels for H-1B dependent employers. They are exempt from U.S. worker protection rules if the H-1B worker is paid at least $60,000 or has a master's degree, a figure that was set in law in 1998. Hatch suggested a wage level of $95,000. ..."
"... Sen. Dick Durbin, (Dem-Ill.), who has joined with Grassley on legislation to impose some restrictions on H-1B visa use -- particularly in offshoring -- has argued for a rule that would keep large firms from having more than 50% of their workers on the visa. This so-called 50/50 rule, as Durbin has noted, has drawn much criticism from India, where most of the affected companies are located. ..."
"... "I want to put the H-1B factories out of business," said Durbin. ..."
"... Hal Salzman, a Rutgers University professor who studies STEM (Science, Technology, Engineering and Math) workforce issues, told the committee that the IT industry now fills about two-thirds of its entry-level positions with guest workers. "At the same time, IT wages have stagnated for over a decade," he said. ..."
"... H-1B supporters use demand for the visa - which will exceed the 85,000 cap -- as proof of economic demand. But Salzman argues that U.S. colleges already graduate more scientists and engineers than find employment in those fields, about 200,000 more. ..."
Mar 18, 2015 | Network World

A Senate Judiciary Committee hearing today on the H-1B visa offered up a stew of policy arguments, positioning and frustration.

Much of the frustration focused on the IT layoffs at Southern California Edison, which is cutting 500 IT workers after hiring two offshore outsourcing firms. This has become the latest example for critics of the visa program's capacity for abuse.

Sen. Charles Grassley (R-Iowa), the committee chair who has long sought H-1B reforms, said he invited Southern California Edison officials "to join us today" and testify. "I thought they would want to defend their actions and explain why U.S. workers have been left high and dry," said Grassley. "Unfortunately, they declined my invitation."

The hearing, by the people picked to testify, was weighted toward critics of the program, prompting a response by industry groups.

Compete America, the Consumer Electronics Association, FWD.us, the U.S. Chamber of Commerce and many others submitted a letter to the committee to rebut the "flawed studies" and "non-representative anecdotes used to create myths that suggest immigration harms American and American workers."

The claim that H-1B critics are using "anecdotes" to make their points (which include layoff reports at firms such as Edison) is a naked example of the pot calling the kettle black. The industry musters anecdotal stories in support of its positions readily and often. It makes available to the press and congressional committees people who came to the U.S. on an H-1B visa who started a business or took on a critical role in a start-up. These people are free to share their often compelling and admirable stories.

The voices of the displaced, who may be in fear of losing their homes, are thwarted by severance agreements.

The committee did hear from displaced workers, including some at Southern California Edison. But the communications with these workers are being kept confidential.

"I got the letters here from people, without the names," said Sen. Jeff Sessions (R-Ala.). "If they say what they know and think about this, they will lose the buy-outs."

Infosys whistleblower Jay Palmer, who testified, and is familiar with the displacement process, told Sessions said these workers will get sued if they speak out. "That's the fear and intimidation that these people go through - they're blindsided," said Palmer.

Moreover, if IT workers refuse to train their foreign replacement, "they are going to be terminated with cause, which means they won't even get their unemployment insurance," said Ron Hira, an associate professor at Howard University, who also testified. Affected tech workers who speak out publicly and use their names, "will be blackballed from the industry," he said.

While lawmakers voiced either strong support or criticism of the program, there was interest in crafting legislation that impose some restrictions on H-1B use.

"America and American companies need more high-skilled workers - this is an undeniable fact," said Sen. Orrin Hatch (R-Utah). "America's high-skilled worker shortage has become a crisis."

Hatch, who is leading the effort to increase the H-1B cap, suggested a willingness to raise wage levels for H-1B dependent employers. They are exempt from U.S. worker protection rules if the H-1B worker is paid at least $60,000 or has a master's degree, a figure that was set in law in 1998. Hatch suggested a wage level of $95,000.

Sen. Dick Durbin, (Dem-Ill.), who has joined with Grassley on legislation to impose some restrictions on H-1B visa use -- particularly in offshoring -- has argued for a rule that would keep large firms from having more than 50% of their workers on the visa. This so-called 50/50 rule, as Durbin has noted, has drawn much criticism from India, where most of the affected companies are located.

"I want to put the H-1B factories out of business," said Durbin.

Durbin got some support for the 50/50 rule from one person testifying in support of expanding the cap, Bjorn Billhardt, the founder and president of Enspire Learning, an Austin-based company. Enspire creates learning development tools; Billhardt came to the U.S. as an exchange student and went from an H-1B visa to a green card to, eventually, citizenship.

"I actually think that's a reasonable provision," said Billhardt of the 50% visa limit. He said it could help, "quite a bit." At the same time, he urged lawmakers to raise the cap to end the lottery system now used to distribute visas once that cap is reached.

Today's hearing went well beyond the impact of H-1B use by outsourcing firms to the displacement of workers overall.

Hal Salzman, a Rutgers University professor who studies STEM (Science, Technology, Engineering and Math) workforce issues, told the committee that the IT industry now fills about two-thirds of its entry-level positions with guest workers. "At the same time, IT wages have stagnated for over a decade," he said.

H-1B supporters use demand for the visa - which will exceed the 85,000 cap -- as proof of economic demand. But Salzman argues that U.S. colleges already graduate more scientists and engineers than find employment in those fields, about 200,000 more.

"Asking domestic graduates, both native-born and immigrant, to compete with guest workers on wages is not a winning strategy for strengthening U.S. science, technology and innovation," said Salzman.

See also

[Nov 28, 2017] The Stigmatization of the Unemployed

"This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" . In the IT job markets such postings are often called purple squirrels
Notable quotes:
"... In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero ..."
"... That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population. ..."
"... The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is. ..."
Mar 20, 2011 | naked capitalism

Spencer Thomas:

Very good post. Thank you.

Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."

The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.

perfect stranger:

"Religion is just as vulnerable to corporate capture as is the government or the academy."

This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.

Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.

DownSouth:

perfect stranger,

Religion, just like human nature, is not that easy to put in a box.

For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.

Examples:

•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King

Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?

perfect stranger:

Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.

You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.

Matt:

This link may provide some context:

http://en.wikipedia.org/wiki/Prosperity_theology

In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero

DownSouth:

Rex,

I agree.

Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."

That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.

The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.

The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."

JTFaraday:

Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.

This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.

That's where I see this blame the unemployed finger pointing really getting traction these days.

attempter:

I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.

I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.

The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.

psychohistorian:

I am one of those long term unemployed.

I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.

I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.

Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.

I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.

So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????

One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.

Ishmael:

Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.

  1. First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
  2. Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
  3. Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
  4. Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
  5. Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."

With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.

Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.

I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.

Lidia:

Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.

Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).

Hosswire

Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.

I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.

Ishmael:

Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.

I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.

Mannwich:

As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?

Ishmael:

Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.

The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).

Ishmael:

Birch:

The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.

This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.

On the other hand, govt is not the answer. Govt is too large and accomplishes too little.

kevin de bruxelles:

The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.

On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.

davver:

Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?

Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?

Escariot:

I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.

We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.

Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.

Mickey Marzick:

Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.

Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too

In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.

As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.

It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.

Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.

White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.

Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!

FULL and GAINFUL EMPLOYMENT are the ultimate labor power.

Eric:

It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!

James:

Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"

In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.

Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.

http://www.economist.com/node/17723223

This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.

The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.

The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)

http://pipeline.corante.com/archives/2011/03/03/a_postdocs_lament.php

Abe, NYC:

I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does

damien:

It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.

You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.

youniquelikeme:

You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.

This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.

Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.

down and out in Slicon Valley:

This is the response I got from a recruiter:

"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "

I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?

Litton Graft :

"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.

Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.

I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.

Hosswire:

I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.

So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.

Francois T :

The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"

Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.

And guess what: qualified workers cost money, qualified workers urgently needed cost much more.

This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.

Kit:

If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.

I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.

At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.

Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.

I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.

Ming:

Thank you Yves for your excellent post, and for bringing to light this crucial issue.

Thank you to all the bloggers, who add to the richness of the this discussion.

I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.

Thank you. No rush of course.

Nexus:

There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.

In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.

It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).

The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.

For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.

The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.

It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.

S P:

Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.

It also treats the printing press as a necessary means to fight "deflation."

So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.

The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.

There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.

The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.

Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.

So this whole experiment called America will fail.

[Nov 22, 2017] Unemployment is Miserable and Doesn't Spawn an Upsurge in Personal Creativity

Notable quotes:
"... By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog ..."
"... The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. ..."
"... The pattern of human concerns ..."
"... The pattern of human concerns ..."
"... Journal of Happiness Studies ..."
"... The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states). ..."
"... Psychological Bulletin ..."
"... 1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment". ..."
"... 2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale". ..."
"... in the light of the structure of our society where the job one holds is the prime indicator of status and prestige. ..."
"... Psychological Bulletin ..."
"... Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance". ..."
"... In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point. ..."
"... The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. ..."
"... I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points. ..."
"... This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. ..."
"... When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it. ..."
"... When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. ..."
"... Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work . ..."
Nov 22, 2017 | www.nakedcapitalism.com

Posted on November 21, 2017 by Yves Smith Yves here. Reader UserFriendly sent this post with the message, "I can confirm this." I can too. And before you try to attribute our reactions to being Americans, note that the study very clearly points out that its finding have been confirmed in "all of the world's regions".

By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog

Here is a summary of another interesting study I read last week (published March 30, 2017) – Happiness at Work – from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the relationship between happiness and labour force status, including whether an individual is employed or not and the types of jobs they are doing. The results reinforce a long literature, which emphatically concludes that people are devastated when they lose their jobs and do not adapt to unemployment as its duration increases. The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. Further, they do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support. The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures. Being employed leads to much higher evaluations of the quality of life relative to being unemployed. And, nothing much has changed in this regard over the last 80 or so years. These results were well-known in the 1930s, for example. They have a strong bearing on the debate between income guarantees versus employment guarantees. The UBI proponents have produced no robust literature to refute these long-held findings.

While the 'Happiness Study' notes that "the relationship between happiness and employment is a complex and dynamic interaction that runs in both directions" the authors are unequivocal:

The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. The importance of having a job extends far beyond the salary attached to it, with non-pecuniary aspects of employment such as social status, social relations, daily structure, and goals all exerting a strong influence on people's happiness.

And, the inverse:

The importance of employment for people's subjective wellbeing shines a spotlight on the misery and unhappiness associated with being unemployed.

There is a burgeoning literature on 'happiness', which the authors aim to contribute to.

They define happiness as "subjective well-being", which is "measured along multiple dimensions":

life evaluation (by way of the Cantril "ladder of life"), positive and negative affect to measure respondents' experienced positive and negative wellbeing, as well as the more domain-specific items of job satisfaction and employee engagement. We find that these diverse measures of subjective wellbeing correlate strongly with each other

Cantril's 'Ladder of Life Scale' (or "Cantril Ladder") is used by polling organisations to assess well-being. It was developed by social researcher Hadley Cantril (1965) and documented in his book The pattern of human concerns .

You can learn more about the use of the 'Cantril Ladder' HERE .

As we read, the "Cantril Self-Anchoring Scale consists of the following":

Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? (ladder-present) On which step do you think you will stand about five years from now? (ladder-future)

[Reference: Cantril, H. (1965) The pattern of human concerns , New Brunswick, Rutgers University Press.]

Christian Bjørnskov's 2010 article – How Comparable are the Gallup World Poll Life Satisfaction Data? – also describes how it works.

[Reference: Bjørnskov, C. (2010) 'How Comparable are the Gallup World Poll Life Satisfaction Data?', Journal of Happiness Studies , 11 (1), 41-60.]

The Cantril scale is usually reported as values between 0 and 10.

The authors in the happiness study use poll data from 150 nations which they say "is representative of 98% of the world's population". This survey data is available on a mostly annual basis since 2006.

The following graph (Figure 1 from the Study) shows "the self-reported wellbeing of individuals around the world according to whether or not they are employed."

The "bars measure the subjective wellbeing of individuals of working age" by employment status .

The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states).

People employed "evaluate the quality of their lives around 0.6 points higher on average as compared to the unemployed on a scale from 0 to 10."

The authors also conduct more sophisticated (and searching) statistical analysis (multivariate regression) which control for a range of characteristics (gender, age, education, marital status, composition of household) as well as to "account for the many political, economic, and cultural differences between countries as well as year-to-year variation".

The conclusion they reach is simple:

the unemployed evaluate the overall state of their lives less highly on the Cantril ladder and experience more negative emotions in their day-to-day lives as well as fewer positive ones. These are among the most widely accepted and replicated findings in the science of happiness Here, income is being held constant along with a number of other relevant covariates, showing that these unemployment effects go well beyond the income loss associated with losing one's job.

These results are not surprising. The earliest study of this sort of outcome was from the famous study published by Philip Eisenberg and Paul Lazersfeld in 1938. [Reference: Eisenberg, P. and Lazarsfeld, P. (1938) 'The psychological effects of unemployment', Psychological Bulletin , 35(6), 358-390.]

They explore four dimensions of unemployment:

I. The Effects of Unemployment on Personality.

II. Socio-Political Attitudes Affected by Unemployment.

III. Differing Attitudes Produced by Unemployment and Related Factors.

IV. The Effects of Unemployment on Children and Youth.

On the first dimension, they conclude that:

1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment".

2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale".

Devastation, in other words. They were not surprised because they note that:

in the light of the structure of our society where the job one holds is the prime indicator of status and prestige.

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938.

It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions. Eisenberg and Lazarsfeld also considered an earlier 1937 study by Cantril who explored whether "the unemployed tend to evolve more imaginative schemes than the employed".

[Reference: Cantril, H. (1934) 'The Social Psychology of Everyday Life', Psychological Bulletin , 31, 297-330.]

The proposition was (is) that once unemployed, do people then explore new options that were not possible while working, which deliver them with the satisfaction that they lose when they become jobless. The specific question asked in the research was: "Have there been any changes of interests and habits among the unemployed?" Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance".

On the third dimension, Eisenberg and Lazersfeld examine the questions – "Are there unemployed who don't want to work? Is the relief situation likely to increase this number?", which are still a central issue today – the bludger being subsidized by income support.

They concluded that:

the number is few. In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point.

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn. The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. The happiness paper did explore "how short-lived is the misery associated with being out of work" in the current cultural settings.

The proposition examined was that:

If the pain is only fleeting and people quickly get used to being unemployed, then we might see joblessness as less of a key public policy priority in terms of happiness.

They conclude that:

a number of studies have demonstrated that people do not adapt much, if at all, to being unemployed there is a large initial shock to becoming unemployed, and then as people stay unemployed over time their levels of life satisfaction remain low . several studies have shown that even once a person becomes re-employed, the prior experience of unemployment leaves a mark on his or her happiness.

So there is no sudden or even medium-term realisation that being jobless endows the individual with a new sense of freedom to become their creative selves, freed from the yoke of work. To bloom into musicians, artists, or whatever.

The reality is that there is an on-going malaise – a deeply entrenched sense of failure is overwhelming, which stifles happiness and creativity, even after the individual is able to return to work.

This negativity, borne heavily by the individual, however, also impacts on society in general.

The paper recognises that:

A further canonical finding in the literature on unemployment and subjective wellbeing is that there are so-called "spillover" effects.

High levels of unemployment "increase fear and heighten the sense of job insecurity". Who will lose their job next type questions?

The researchers found in their data that the higher is the unemployment rate the greater the anxiety among those who remain employed.

Conclusion

The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures.

Being employed leads to much higher evaluations of the quality of life relative to being unemployed.

The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. They do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose.

The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support.

Modern Monetary Theory (MMT) allows us to understand that it is the government that chooses the unemployment rate – it is a political choice.

For currency-issuing governments it means their deficits are too low relative to the spending and saving decisions of the non-government sector.

For Eurozone-type nations, it means that in surrendering their currencies and adopting a foreign currency, they are unable to guarantee sufficient work in the face of negative shifts in non-government spending. Again, a political choice.

The Job Guarantee can be used as a vehicle to not only ensure their are sufficient jobs available at all times but also to start a process of wiping out the worst jobs in the non-government sector.

That can be done by using the JG wage to ensure low-paid private employers have to restructure their workplaces and pay higher wages and achieve higher productivity in order to attract labour from the Job Guarantee pool.

The Series So Far

This is a further part of a series I am writing as background to my next book with Joan Muysken analysing the Future of Work . More instalments will come as the research process unfolds.

The series so far:

  1. When Austrians ate dogs .
  2. Employment as a human right .
  3. The rise of the "private government .
  4. The evolution of full employment legislation in the US .
  5. Automation and full employment – back to the 1960s .
  6. Countering the march of the robots narrative .
  7. Unemployment is miserable and does not spawn an upsurge in personal creativity .

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2018. The book will likely be published by Edward Elgar (UK).

That is enough for today!

divadab , November 21, 2017 at 6:11 am

Perhaps I'm utterly depressed but I haven't had a job job for over 5 years. Plenty of work, however, more than I can handle and it requires priorisation. But I am deliberately not part of the organized herd. I stay away from big cities – it's scary how managed the herd is in large groups – and I suppose that unemployment for a herd animal is rather distressing as it is effectively being kicked out of the herd.

Anyway my advice, worth what you pay for it but let he who has ears, etc. – is to go local, very local, grow your own food, be part of a community, manage your own work, and renounce the energy feast herd dynamics. "Unemployment", like "recession", is a mechanism of control. Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

The Rev Kev , November 21, 2017 at 6:35 am

I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points.

Worse, there is a deliberate stigma attached with being long term unemployed. In that article you have seen the word bludger being used. In parts of the US I have read of the shame of 'living off the county'. And yes, I have been there, seen that, and got the t-shirt. It's going to be interesting as mechanization and computers turn large portions of the population from workers to 'gig' workers. Expect mass demoralization.

nonclassical , November 21, 2017 at 10:24 am

yes the lives many of us have lived, no longer exist though we appear not notice, as we "can" live in many of same "ways" ..rather well known psychologist defined some 40 years ago, best to "drop through cracks"

jrs , November 21, 2017 at 12:13 pm

Well, you also lose money, maybe you become homeless etc. as you have nowhere else to turn (if there are kids involved to support it gets even scarier though there are some programs). Or maybe you become dependent on another person(s) to support you which is of course degrading as you know you must rely on them to live, whether it's a spouse or lover when you want to work and bring in money, or mom and dads basement, or the kindest friend ever who lets you sleep on their couch. I mean these are the things that really matter.

Privileged people whose main worry in unemployment would be losing identity, wow out of touch much? Who cares about some identity for parties, but the ability to have a stable decent life (gig work hardly counts) is what is needed.

sgt_doom , November 21, 2017 at 2:20 pm

I believe your comment sums up the situation the best -- and most realistically.

jgordon , November 21, 2017 at 7:08 pm

I normally wouldn't comment like this, but you have brought up some extremely important points about identity that I would like to address.

Recently I had the most intense mushroom experience of my entire life–so intense that my identity had been completely stripped and I was left in a formless state, at the level of seeing my bare, unvarnished animal neural circuitry in operation. Suddenly with a flash of inspiration I realized that the identity of everyone, all of us, is inextricably tied up in what we do and what we do for other people.

Following from that, I understood that if we passively rely on others for survival, whether it be relying on friends, family, or government, then we do not have an identity or reason for existing. And the inner self, the animal core of who we are, will realise this lack of identity (even if the concious mind denies it), and will continually generate feelings of profound depression and intense nihilism that will inevitably destroy us if the root cause is not addressed.

Before this experience I was somewhat ambivalent about my politics, but immediately after I knew that the political right was correct on everything important, from attitudes on sex to economic philosophy. People need a core of cultural stability and hard work to grow and become actualized. The alternative is rudderless dissatisfaction and envy that leads nowhere.

On the topic of giving "out of kindnes and goodwill", giving without demanding anything in return is a form of abuse, as it deprives those who receive our feel-good generosity the motivation to form a coherent identity. If the parents of a basement-dweller were truly good people, instead of supporting said dweller they'd drag her out by the ear and make her grow food in the yard or some such. Likewise, those who have supported you without also giving concrete demands and expecations in return have been unkind, and for your own good I hope that you will immediately remove yourself from their support. On the other hand, if you have been thoughtlessly giving because it warms the cockles of your heart, then stop it now. You are ruining other people this way, and if your voting habits are informed by this kind of malevolence I'd encourage you to change those as well.

Anyway the original poster is right about everything. Working and having a purpose in life is an entirely different animal from making money and being "successful" in the government-sponsored commercial economy. Society and government deliberately try to conflate the two for various reasons, primarily graft of labor and genius, but that is only a deliberate mis-framing that needlessly harms people when the mainstream economic system is in catastrophic decline, as ours is today. You should try to clear up this misconception within yourself as a way of getting better.

Well, I hope this message can give you a few different thoughts and help you find your way out of the existential angst you're caught in. Don't wallow in helplessness. Think of something useful to do, anything, whether it earns you money or not, and go out and start doing it. You'll be surprised at how much better you feel about yourself in no time.

skippy , November 22, 2017 at 12:45 am

The problem is you said – I – had an extreme experience [burning bush], the truth was reviled to – I – and I alone during this extreme chemically altered state. Which by the way just happens to conform to a heap of environmental biases I collected. This is why sound methodology demands peer review. disheveled some people think Mister Toads Wild ride at Disneyland on psychotropics is an excellent adventure too.

Jeremy Grimm , November 21, 2017 at 12:33 pm

I think your observation about the importance of work to identity is most perceptive. This post makes too little distinction between work and a job and glosses over the place of work in defining who we are to ourselves and to others. I recall the scene in the movie "About a Boy" when the hero meets someone he cares about and she asks him what he does for a living.

I believe there's another aspect of work -- related to identity -- missing in the analysis of this post. Work can offer a sense of mission -- of acting as part of an effort toward a larger goal no individual could achieve alone. However you may regard the value in putting man on the moon there is no mistaking the sense of mission deeply felt by the engineers and technicians working on the project. What jobs today can claim service to a mission someone might value?

Henry Moon Pie , November 21, 2017 at 7:00 am

Agreed on your points. Wage slavery is nothing to aspire to. Self-determination within a context of an interdependent community is a much better way to live. We do our thing in the city, however.

ambrit , November 21, 2017 at 8:29 am

Finding that "interdependent community" is the hard part. My experience has been that this endeavour is almost chance based; Serendipity if you will.
Here Down South, the churches still seem to have a stranglehold on small and mid scale social organization. One of the big effects of 'churching' is the requirement that the individual gave up personal critical thinking. Thus, the status quo is reinforced. One big happy 'Holy Circlejerk.'

UserFriendly , November 21, 2017 at 10:10 am

from the article

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings.

That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938. It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions.

FelicityT , November 21, 2017 at 3:07 pm

I would agree about the entenched cultural norms, etc. But not the pessimism and timeline for change. An individual can communicate a complex idea to millions in seconds, things move fast these days.

For me, it seems that what we (we being UBI/radical change proponents) are lacking is a compelling easily accessible story. Not just regarding UBI (as that is but one part of the trully revolutionary transformations that must occur) but encompassing everything.

We have countless think pieces, bits of academic writing, books, etc that focus on individual pieces and changes in isolation. But we've largely abandoned the all-encompassing narrative, which at their heart is precisely what religion offers and why it can be so seductive, successful, and resilient for so long.

The status quo has this type of story, it's not all that compelling but given the fact that it is the status quo and has inertia and tradition on its side (along with the news media, political, entertainment, etc) it doesn't have to be.

We need to abandon the single narrow issue activism that has become so prominent over the years and get back to engaging with issues as unseparable and intimately interconnected.

Tinkering around the edges will do nothing, a new political religion is what is required.

Yves Smith Post author , November 21, 2017 at 4:23 pm

Sorry, I disagree vehemently. Deeply held cultural attitudes are very slow to change and the study found that work being critical to happiness examined a large number of societies.

Look at feminism. I was a half-generation after the time when women were starting to get a shot at real jobs. IIRC, the first class that accepted women at Harvard Law School was in the 1950 and at Harvard Business School, 1965. And the number of first attendees was puny. The 1965 class at HBS had 10 8 women out of a graduating class of over 800; my class in 1981 had only 11% women.

In the 1980s, you saw a shift from the belief that women could do what men could do to promotion of the idea that women could/should be feminine as well as successful. This looked like seriously mixed messages, in that IMHO the earlier tendency to de-emphasize gender roles in the workplace looked like a positive development.

Women make less than 80% of what men do in the US. Even female doctors in the same specialities make 80% of their male peers.

The Speenhamland in the UK had what amounted to an income guarantee from the 1790s to 1832. Most people didn't want to be on it and preferred to work. Two generations and being on the support of local governments was still seen as carrying a stigma.

More generally, social animals have strongly ingrained tendencies to resent situations they see as unfair. Having someone who is capable of working not work elicits resentment from many, which is why most people don't want to be in that position. You aren't going to change that.

And people need a sense of purpose. There are tons of cases of rich heirs falling into drug addiction or alcoholism and despair because they have no sense of purpose in life. Work provides that, even if it's mundane work to support a family. That is one of the great dissservices the Democrats have done to the citizenry at large: sneering at ordinary work when blue-collar men were the anchors of families and able to take pride in that.

FelicityT , November 21, 2017 at 5:11 pm

So a few points.

Regarding the large number of societies, we often like to think we're more different than we actually are focusing on a few glaringly obvious differences and generalizing from there. Even going back a few hundred years when ideas travelled slower we were still (especially the "west" though the "east" wasn't all that much more different either) quite similar. So I'm less inclined to see the large number of societies as evidence.

Generally on societal changes and movements: The issue here is that the leadership has not changed, they may soften some edges here or there (only to resharpen them again when we're looking elsewhere) but their underlying ideologies are largely unchanged. A good mass of any population will go along to survive, whether they agree or not (and we find increasing evidence that many do not agree, though certainly that they do not agree on a single alternative).

It may be impossible to implement such changes in who controls the levers of power in a democratic fashion but it also may be immoral not implement such changes. Of course this is also clearly a similar path to that walked by many a demonized (in most cases rightfully so) dictator and despot. 'Tread carefully' are wise words to keep in mind.

Today we have a situation which reflects your example re: social animals and resentment of unfairness: the elite (who falls into this category is of course debatable, some individuals moreso than others). But they have intelligently, for their benefit, redirected that resentment towards those that have little. Is there really any logical connection between not engaging in wage labor (note: NOT equivalent to not working) and unfairness? Or is it a myth crafted by those who currently benefit the most?

That resentment is also precisely why it is key that a Basic income be universal with no means testing, everyone gets the same.

I think we should not extrapolate too much from the relatively small segment of the population falling into the the inherited money category. Correlation is not causation and all that.

It also seems that so often individuals jump to the hollywood crafted image of the layabout stoner sitting on the couch giggling at cartoons (or something similarly negative) when the concept of less wage labor is brought up. A reduction of wage labor does not equate to lack of work being done, it simply means doing much of that work for different reasons and rewards and incentives.

As I said in the Links thread today, we produce too much, we consume too much, we grow too much. More wage labor overall as a requirement for survival is certainly not the solution to any real problem that we face, its a massively inefficient use of resources and a massive strain on the ecosystems.

Yves Smith Post author , November 21, 2017 at 8:34 pm

I am really gobsmacked at the sense of entitlement on display here. Why are people entitled to an income with no work? Being an adult means toil: cleaning up after yourself, cleaning up after your kids if you have them, if you are subsistence farmer, tending your crops and livestock, if you are a modern society denizen, paying your bills and your taxes on time. The idea that people are entitled to a life of leisure is bollocks. Yet you promote that.

Society means we have obligations to each other. That means work. In rejecting work you reject society.

And the touting of "creativity" is a top 10% trope that Thomas Frank called out in Listen, Liberal. It's a way of devaluing what the bottom 90% do.

WobblyTelomeres , November 21, 2017 at 8:53 pm

My argument with the article is that, to me, it smacks of Taylorism. A follow-on study would analyze how many hours a laborer must work before the acquired sense of purpose and dignity and associated happiness began to decline. Would it be 30 hours a week of backbreaking labor before dignity found itself eroded? 40? 50? 60? When does the worker break? Just how far can we push the mule before it collapses?

The author alludes to this: "The overwhelming proportion relate their social status and life happiness to gaining a job"

Work equals happiness. Got it.

But, as a former robotics instructor, and as one who watches the industry (and former students), I see an automated future as damn near inevitable. Massive job displacement is coming, life as a minimum wage burger flipper will cease, with no future employment prospects short of government intervention (WPA and CCC for all, I say). I'm not a Luddite, obviously, but there are going to be a lot of people, billions, worldwide, with no prospect of employment. Saying, "You're lazy and entitled" is a bit presumptuous, Yves. Not everyone has your ability, not everyone has my ability. When the burger flipping jobs are gone, where do they go? When roombas mop the floors, where do the floor moppers go?

flora , November 21, 2017 at 9:38 pm

"WPA and CCC for all, I say. "

+1

We could use a new Civilian Conservation Corps and and a Works Progress Administration. There's lots of work that needs doing that isn't getting done by private corporations.

nihil obstet , November 21, 2017 at 10:05 pm

The outrage at non-work wealth and income would be more convincing if it were aimed also at owners of capital. About 30% of national income is passive -- interest, rents, dividends. Why are the owners of capital "entitled to an income with no work?" It's all about the morality that underlies the returns to capital while sugaring over a devaluation of labor. As a moral issue, everyone should share the returns on capital or we should tax away the interest, rents, and dividends. If it's an economic issue, berating people for their beliefs isn't a reason.

WobblyTelomeres , November 21, 2017 at 10:14 pm

Why are the owners of capital "entitled to an income with no work?"

THIS!!!! So much, THIS!!!! But, what else is a Wobbly to say, eh?

Yves Smith Post author , November 22, 2017 at 2:27 am

The overwhelming majority do work. The top 0.1% is almost entirely private equity managers who are able to classify labor income as capital gains through the carried interest loophole. Go look at the Forbes 400.

The 1% are mainly CEOs, plus elite professionals, like partners at top law and consulting firms and specialty surgeons (heart, brain, oncology). The CEOs similarly should be seen as getting labor income but have a lot of stock incentive pay (that is how they get seriously rich) which again gets capital gains treatment.

You are mistaking clever taking advantage of the tax code for where the income actually comes from. Even the kids of rich people are under pressure to act like entrepreneurs from their families and peers. Look at Paris Hilton and Ivanka as examples. They both could have sat back and enjoyed their inheritance, but both went and launched businesses. I'm not saying the kids of the rich succeed, or would have succeed to the extent they do without parental string-pulling, but the point is very few hand their fortune over to a money manager and go sailing or play the cello.

IsotopeC14 , November 22, 2017 at 2:58 am

Isn't the brother of the infamous Koch duo doing exactly that? Actually, if all the .001%ers were like him, we'd all be better off

IsotopeC14 , November 22, 2017 at 1:34 am

What's your take on Rutger Bergman's ted talk? i think most jobs aren't real jobs at all, like marketing and ceo's. why can't we do 20 hour work weeks so we don't have huge amounts of unemployment? Note, I was "unemployed" for years since "markets" decide not to fund science in the US. Yay Germany At least I was fortunate enough to not be forced to work at Walmart or McDonalds like the majority of people with absolutely no life choices. Ah the sweet coercion of capitalism.

flora , November 21, 2017 at 9:09 pm

Your hopes for a UBI are undone by some of the real world observations I've made over many years, with regard to how a guaranteed income increase, of any measure, for a whole population of an area, affects prices. Shorter: income going up means prices are raised by merchants to capture the new income.

Your assumption that any UBI would not be instantly captured by raised prices is naive, at best. It's also naive to assume companies would continue to pay wages at the same level to people still employed, instead of reducing wages and letting UBI fill in the rest. Some corporations already underpay their workers, then encourage the workers to apply for food stamps and other public supports to make up for the reduced wage.

The point of the paper is the importance of paid employment to a person's sense of well being. I agree with the paper.

Andrew Dodds , November 22, 2017 at 2:48 am

For the vast majority, a UBI would be income-neutral – it would have to be, to avoid massive inflation. So people would receive a UBI, but pay more tax to compensate. The effect on prices would be zero.

The advantage of a UBI is mostly felt at the lower end, where insecure/seasonal work does now pay. At the moment, a person who went from farm labourer to Christmas work to summer resort work in the UK would certainly be working hard, but also relentlessly hounded by the DWP over universal credit. A UBI would make this sort of lifestyle possible.

jsn , November 21, 2017 at 11:28 am

Davidab, Good for you, but your perspicacity is not scalable. People are social animals and your attitude toward "the herd", at least as expressed here, is that of a predator, even if your taste doesn't run toward predation. Social solutions will necessarily be scalable or they won't be solutions for long.

Lambert Strether , November 22, 2017 at 1:44 am

> the organized herd a herd animal trapped in the herd

I don't think throwing 80% to 90% of the population into the "prey" bucket is especially perspicacious politically (except, of course, for predators or parasites). I also don't think it's especially perspicacious morally. You write:

Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

Let me translate that: "Trapped in the herd as many are to support spouses and children." In other words, taking the cares of the world on themselves in order to care for others.

BJ , November 21, 2017 at 6:37 am

Unemployed stay at home dad here. My children are now old enough to no longer need a stay at home dad. Things I have done: picked up two musical instruments and last year dug a natural swimming pond by hand. Further, one would need to refute all the increased happiness in retirement (NBER). Why social security but not UBI? I get being part of the precariat is painful and this is a reality for most the unemployed no matter where you live in the world. A UBI is unworkable because it will never be large enough to make people's lives unprecarious. Having said that, I am almost positive if you gave every unemployed person 24 k a year and health benefits, there would be a mass of non working happy creative folks.

divadab , November 21, 2017 at 7:41 am

UBI seems to me to encourage non-virtuous behavior – sloth, irresponsibility, fecklessness, and spendthriftness. I like the Finnish model – unemployment insurance is not limited – except if you refuse work provided by the local job center. Lots of work is not being done all over America – we could guarantee honest work to all with some imagination. Start with not spraying roundup and rather using human labor to control weeds and invasive species.

I do agree that universal health insurance is necessary and sadly Obamacare is not that.

ambrit , November 21, 2017 at 8:34 am

The crux of this problem is the definition used for "non-virtuous behaviour." A new CCC is a good place to start though. (Your Tax Dollars At Work! [For some definition of tax dollars.]) As for BJ above, I would suppose that child rearing was his "employment" for years. good so far, but his follow-up is untypical. The 'Empty Nester' mother is a well known meme.

a different chris , November 21, 2017 at 9:19 am

Spendthriftness on 24K a year? Seriously? If we are disgorging unprofessional opinions, I will add my own: sloth and irresponsibility are more signs of depression rather than freedom from having to work. In fact, I believe (and I think much of the stuff here) supports the idea that people want to be seen as useful in some way. Doesn't include me! :) .. unfortunately, I have the charmingly named "dependents" so there you have it.

BJ , November 21, 2017 at 11:18 am

I lived 6 years as a grad student on 24k a year and would say it was easy. Only thing I would have to had worried about was awful health insurance. A two household each with 24k would be even easier, especially if you could do it in a low cost area. So I am not sure what you mean by spendthrift. But again it will never happen, so we will be stuck with what we have or most likely an even more sinister system. I guess I am advocating for a JG with unlimited number of home makers per household.

roadrider , November 21, 2017 at 9:23 am

except if you refuse work provided by the local job center

And who's to say that the local "job center" has work that would be appropriate for every person's specific talents and interests? This is no better than saying that you should be willing to go work for some minimum-wage retail job with unpredictable scheduling and other forms of employer abuses after you lose a high-paying job requiring special talents. I have to call bullshit on this model. I went through a two-year stretch if unemployment in no small part because the vast majority of the available jobs for my skill set were associated with the MIC, surveillance state or the parasitic FIRE sector. I was able to do this because I had saved up enough FY money and had no debts or family to support.

I can also attest to the negative aspects of unemployment that the post describes. Its all true and I can't really say that I'e recovered even now, 2.5 years after finding another suitable job.

Jesper , November 21, 2017 at 10:55 am

The job center in the neighbouring Sweden had the same function. Had is the important word. My guess is that the last time someone lost their unemployment insurance payout due to not accepting a job was in the early 1980s. Prior to that companies might, maybe, possibly have considered hiring someone assigned to them – full employment forced companies to accept what was offered. Companies did not like the situation and the situation has since changed.

Now, when full employment is a thing of the past, the way to lose unemployment insurance payouts is by not applying to enough jobs. An easily gamed system by people not wanting to work: just apply to completely unsuitable positions and the number of applications will be high. Many companies are therefore overwhelmed by applications and are therefore often forced to hire more people in HR to filter out the unsuitable candidates.
People in HR tend not to know much about qualifications and or personalities for the job so they tend to filter out too many. We're all familiar with the skills-shortage .
Next step of this is that the companies who do want to hire have to use recruitment agencies. Basically outsourcing the HR to another company whose people are working on commission. Recruiters sometimes know how to find 'talent', often they are the same kind of people with the same skills and backgrounds as people working in HR.

To even get to the hiring manager a candidate has to go through two almost identical and often meaningless interviews. Recruiter and then HR. Good for the GDP I suppose, not sure if it is good for anything else.

But back on topic again, there is a second way of losing unemployment insurance payout: Time. Once the period covered has passed there is no more payouts of insurance. After that it it is time to live on savings, then sell all assets, and then once that is done finally go to the welfare office and prove that savings are gone and all assets are sold and maybe welfare might be paid out. People on welfare in Sweden are poor and the indignities they are being put through are many. Forget about hobbies and forget about volunteering as the money for either of those activities simply aren't available. Am I surprised by a report saying unemployed in Sweden are unhappy? Nope.

nonclassical , November 21, 2017 at 10:42 am

meanwhile NYTimes testimonials Friday, show average family of 4 healthprofit costs (tripled, due to trump demise ACA) to be $30,000. per year, with around $10,000. deductible end of any semblance of affordable access, "murKa"

https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.html

Jeremy Grimm , November 21, 2017 at 1:53 pm

What do you mean by virtuous behavior?

Where does a character like Bertie Wooster in "Jeeves" fit in your notions of virtuous behavior? Would you consider him more virtuous working in the management of a firm, controlling the lives and labor of others -- and humorously helped by his his brilliant valet, Jeeves, getting him out of trouble?

For contrast -- in class and social status -- take a beer-soaked trailer trash gentleman of leisure -- and for sake of argument blessed with less than average intelligence -- where would you put him to work where you'd feel pleased with his product or his service? Would you feel better about this fellow enjoying a six-pack after working 8 hours a day 5 days a week virtuously digging and then filling a hole in the ground while carefully watched and goaded by an overseer? [Actually -- how different is that from "using human labor to control weeds and invasive species"? I take it you're a fan of chain-gangs and making the poor pick up trash on the highways?]

What about some of our engineers and scientists virtuously serving the MIC? Is their behavior virtuous because they're not guilty of sloth, irresponsibility [in executing their work], fecklessness, and spendthriftness? On this last quality how do you feel about our government who pay the salaries for all these jobs building better ways to kill and maim?

Bill Smith , November 21, 2017 at 8:01 am

How big is the swimming pool and how long did it take? Where did you put the dirt?

BJ , November 21, 2017 at 11:07 am

It is a design by David Pagan Butler. It is his plunge pool design, deepend is 14 by 8 by 7 deep. I used the dirt to make swales around some trees. Win win all around.

tegnost , November 21, 2017 at 9:32 am

curious to know whether you are married to someone with a job?

BJ , November 21, 2017 at 11:25 am

The answer is yes my spouse works. So I do have a schedule of waking up to make her lunch everyday, meeting her at lunch to walk, and making dinner when she gets home, but we do all those things on her days off so .

But again we would need to explain away, why people who are retired are happier? Just because they think they payed into social security? Try explaining to someone on the SS dole how the government spends money into existence and is not paid by taxes or that the government never saved their tax money, so there are not entitled to this money.

David Kane Miller , November 21, 2017 at 6:55 am

I hated working for other people and doing what they wanted. I began to feel some happiness when I had a half acre on which I could create my own projects. Things improved even more when I could assure myself of some small guaranteed income by claiming Social Security at age 62. To arise in the morning when I feel rested, with interesting projects like gardens, fences, small buildings ahead and work at my own pace is the essence of delight for me. I've been following your arguments against UBI for years and disagree vehemently.

a different chris , November 21, 2017 at 9:23 am

I feel I would behave the same as you, if I had the chance. *But* no statements about human beings are absolute, and because UBI would work for either of us does not mean it would work for the majority. Nothing devised by man is perfect.

Mel , November 21, 2017 at 9:42 am

It's not you; it's not me. It's those deplorable people.

tegnost , November 21, 2017 at 9:37 am

first you had to buy the half acre in a suitable location, then you had to work many years to qualify for social security, the availability of which you paid for and feel you deserve. You also have to buy stuff for fences gardens and small buildings. At most that rhymes with a ubi but is significantly different in it's make up.

Lambert Strether , November 22, 2017 at 1:56 am

> when I had a half acre on which I could create my own projects

That is, when you acquired the half acre, which not everyone can do. It seems to me there's a good deal of projecting going on with this thread from people who are, in essence, statistical outliers. But Mitchell summarizes the literature:

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn.

If the solution that works for you is going to scale, that implies that millions more will have to own land. If UBI depends on that, how does that happen? (Of course, in a post-collapse scenario, the land might be taken , but that same scenario makes the existence of institutions required to convey the UBI highly unlikely. )

Carla , November 21, 2017 at 7:16 am

Very glad to hear that Bill Mitchell is working on the "Future of Work" book, and to have this post, and the links to the other segments. Thank you, Yves!

Andrew , November 21, 2017 at 7:25 am

I don't agree with this statement. Never will. I'm the complete opposite. Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy. I recall back to when I was a student, I relished in the free time I got (believe me University gave me a lot of free time) between lectures, meaning I could enjoy this time pursuing creative activities. Sure I might be different than most people but I know countless people who are the same.

My own opinion is that root problem lies in the pathology of the working mentality, that 'work' and having a 'job' is so engrained into our society and mindset that once you give most people the time to enjoy other things, they simply can't. They don't know what to do with themselves and they eventually become unhappy, watching daytime TV sat on the sofa.

I recall back to a conversation with my mother about my father, she said to me, 'I don't know how your father is going to cope once he retires and has nothing to do' and it's that very example of where work for so many people becomes so engrained in their mindset, that they are almost scared of having 'nothing to do' as they say. It's a shame, it's this systemic working mentality that has led to this mindset. I'm glad I'm the opposite of this and proud by mother brought me up to be this way. Work, and job are not in my vocabulary. I work to live, not live to work.

I_Agree , November 21, 2017 at 11:26 am

I agree with Andrew. I think this data on the negative effects says more about how being employed fundamentally breaks the human psyche and turns them into chattel, incapable of thinking for themselves and destroying their natural creativity. The more a human is molded into a "good worker" the less they become a full fledged human being. The happiest people are those that have never placed importance on work, that have always lived by the maxim "work to live, not live to work". From my own experience every assertion in this article is the opposite of reality. It is working that makes me apathethic, uncreative, and miserable. The constant knowing that you're wasting your life, day after day, engaged in an activity merely to build revenue streams for the rich, instead of doing things that help society or that please you on a personal level, is what I find misery inducing.

nycTerrierist , November 21, 2017 at 12:18 pm

I agree. If financial insecurity is removed from the equation -- free time can be used creatively for self-actualization, whatever form that may take: cultivating the arts, hobbies, community activities, worthy causes and projects. The ideology wafting from Mitchell's post smells to me like a rationale for wage slavery (market driven living, neo-liberalism, etc.)

jrs , November 21, 2017 at 12:48 pm

Besides how are people supposed to spend their time "exploring other opportunities" when unemployed anyway? To collect unemployment which isn't exactly paying that much anyway, they have to show they are applying to jobs. To go to the movies the example given costs money, which one may tend to be short on when unemployed. They probably are looking for work regardless (for the income). There may still be some free time. But they could go back to school? Uh in case one just woke up from a rock they were under for 100 years, that costs money, which one may tend to be short on when unemployed, plus there is no guarantee the new career will pan out either, no guarantee someone is just chomping at the bit to hire a newly trained 50 year old or something. I have always taken classes when unemployed, and paid for it and it's not cheap.

Yes to use one's time wisely in unemployment in the existing system requires a kind of deep psychological maturity that few have, a kind of Surrender To Fate, to the uncertainty of whether one will have an income again or not (either that or a sugar daddy or a trust fund). Because it's not easy to deal with that uncertainty. And uncertainty is the name of the game in unemployment, that and not having an income may be the pain in it's entirety.

FelicityT , November 21, 2017 at 3:18 pm

Sadly this breaking down into a "good worker" begins for most shortly after they begin school. This type of education harms society in a myriad of ways including instilling a dislike of learning, deference to authority (no matter how irrational and unjust), and a destruction of a child's natural curiosity.

Yves Smith Post author , November 21, 2017 at 5:21 pm

I don't buy your premise that people are "creative". The overwhelming majority do not have creative projects they'd be pursuing if they had leisure and income. Go look at retirees, ones that have just retired, are healthy, and have money.

Yves Smith Post author , November 21, 2017 at 4:29 pm

You are really misconstruing what the studies have found and misapplied it to your situation. Leisure time when you have a job or a role (being a student) is not at all the same as having time when you are unemployed, with or without a social safety net.

Summer , November 21, 2017 at 6:25 pm
jrs , November 21, 2017 at 6:37 pm

one often has a role when unemployed: finding work. But it's not a very fulfilling one! But if one is trying to find work, it's not exactly the absence of a role either even if it still leaves significantly more free time than otherwise, maybe winning the lottery is the absence of a role.

But then it's also not like we give people a UBI even for a few years (at any time in adult life) to get an education. Only if they take out a student loan approaching the size of a mortgage or have parents willing to pony up are they allowed that (to pay not just for the education but to live because having a roof over one's head etc. is never free, a UBI via debt it might be called).

Lambert Strether , November 22, 2017 at 2:00 am

> Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy.
Nothing to breed resentment of "the creative class" here! Blowback from Speenhamland brought on the workhouses, so be careful what you wish for.

Jesper , November 21, 2017 at 7:47 am

Again the UBI vs JG debate .

UBI won't happen and JG has been tried (and failed).

The argument that JG would allow the public sector to hire more people is demeaning to people already employed in the public sector and demonstrably false – people are hired into the public sector without there being a JG. It is most certainly possible to be against a JG while wanting more people working in the public sector.

The way forward is to have a government acting for people instead of for corporations. Increase the amount of paid vacations, reduce the pension age and stop with the Soviet style worship of work: While some people are apparently proud of their friends and relatives who died while at work it is also possible to feel sad about that.

diptherio , November 21, 2017 at 10:00 am

JG has been tried (and failed).

When and where? The NCCC seemed to work pretty good here in the Western US.

Jesper , November 21, 2017 at 10:27 am

The JG was tried in Communist countries in Europe, Asia and Americas. The arguments then and there were the same as here and now, made by the same type of social 'scientists' (economists).

Would a JG be different here and now as the Republicans and Democrats are representing the best interests of the people? Or are they representing the same kind of interests as the Communist parties did?

Yves Smith Post author , November 21, 2017 at 4:39 pm

Data, please. The USSR fell because it was spending on its military to keep up with the US, a much larger economy. Countering your assertion we have this:

tegnost , November 21, 2017 at 10:00 am

As long as people argue that "it's not fair" to fix the inequality issue and employ things like debt jubilee or student loan forgiveness, or if we fix the ridiculous cost of health care what will all those insurance agents do then we will wind up with the real kind of class warfare, rather than the current punching from the top down, the punching will come from the bottom, because the situation is not fair now, it's just TINA according to those who profit from it. In my own life there is a balance of creativity and work, and I find work enables my creativity by putting some pressure on my time, i.e., I get up earlier, I practice at 8:30 am instead of sleeping til 10 and winding up with S.A..D., I go to bed rather than watch tv or drink to excess.. in other words i have some kind of weird schedule, I have days off sort of When I've been unemployed I feel the way s described in the article. I find the arguments in favor of ubi tend to come from people who already have assets, or jobs, or family who they take care of which is actually a job although uncommonly described as such. The only truth I see in real life is that the unemployed I am intimately familiar with first are mentally oppressed by the notion that to repair their situation will require they work every waking hour at substandard wages for the rest of their life and that is a major barrier to getting started, and that is a policy choice the gov't and elite classes purposefully made which created the precariat and will be their undoing if they are unable to see this.

tegnost , November 21, 2017 at 10:15 am

Hey look, even the msm is looking at it
https://www.seattletimes.com/seattle-news/is-uprising-the-only-way-out-of-gross-inequality-maybe-so/

j84ustin , November 21, 2017 at 10:08 am

As someone who works in the public sector I never quite thought of it like that, thanks.

hunkerdown , November 21, 2017 at 7:53 am

Disappointing that there's no analysis in this context of less employment, as in shorter work weeks and/or days, as opposed to merely all or none.

nonclassical , November 21, 2017 at 10:45 am

see – hear

(but no possibility without healthcare access, rather than healthtprofit)

Vatch , November 21, 2017 at 11:31 am

Interesting point. I read a science fiction story in which the protagonist arrives for work at his full time job at 10:00 AM, and he's finished for the day at 4:00 PM. I can't remember the name of the story or novel, unfortunately.

jrs , November 21, 2017 at 1:04 pm

Agreed. And they already have it in places like Denmark. Why don't we talk about that? It actually exists unlike utopian schemes for either total UBI or total work guarantee (government job creation is not utopian, but imagining it will employ everyone is, and I would like the UBI to be more widely tried, but in this country we are nowhere close). Funny how utopia becomes more interesting to people than actual existing arrangements, even though of course those could be improved on too.

The Danish work arrangement is less than a 40 hour week, and mothers especially often work part-time but both sexes can. It's here in this country where work is either impossibly grueling or you are not working. No other choice. In countries with more flexible work arrangements more women actually work, but it's flexible and flexible for men who choose to do the parenting as well. I'm not saying this should be for parents only of course.

Lambert Strether , November 22, 2017 at 2:02 am

Because the JG sets the baseline for employment, which private companies must meet, the JG (unlike the UBI) can do this.

Otis B Driftwood , November 21, 2017 at 7:58 am

My own situation is that I am unhappy in my well-paying job and would like nothing more than to devote myself to other interests. I'm thirty years on in a relationship with someone who grew up in bad financial circumstances and panics whenever I talk about leaving my job. I tell her that we have 2 years of living expenses in the bank but I can't guarantee making the same amount of money if I do leave my job. She has a job that she loves and is important and pays barely 1/2 of my own income. So she worries about her future with me. She worries about losing her home. I suppose that makes me the definition of a wage slave. And it makes for an increasingly unhappy marriage. I admire those who have faced similar circumstances and found a way through this. Sorry to vent, but this topic and the comments hit a nerve with me and I'm still trying to figure this out.

ambrit , November 21, 2017 at 8:38 am

Otis; We are presently going through a period where that "two year cushion" has evaporated, for various reasons. We are seeing our way through this, straight into penury and privation. Take nothing for granted in todays' economy.

jrs , November 21, 2017 at 1:11 pm

yes find the lower paying job that you like more first. If you just quit for nothing in the hopes of finding one it might not happen. Of course unemployment also happens sometimes, whether we want it or not.

bronco , November 21, 2017 at 12:47 pm

The newer generations are worse when it comes to lifestyle. Those of that are older can at least remember a time without cellphones internet streaming services leasing a new car every 2 years etc.

What about the young? My niece and her husband should be all set , his mom sunk money into a home on the condition she moved into a mother in law apartment. So far so good right? 2 years in they are imploding even with the free child care she provides. Combined their wireless bill a month is over $300. The sit on the couch side by side and stream netflix shows to dueling iphones in front of a 65 inch tv that is not even turned on. Wearing headphones in silence.

Both driving new vehicles , both have gym memberships they don't use . They buy lattes 3 or 4 times a day which is probably another 500 a month.

My uncle passed away recently and my niece asked if she was in the will. It was literally her only communication on the subject. They are going under and could easily trim a few thousand a month from the budget but simply won't. No one in the family is going to lift a finger for them at this point they burned every possible bridge already. I have seen people living in cars plenty lately but I think these will be the first I see to living in brand new cars .

Somewhere along the line they got the impression that the american dream was a leased car a starbucks in one hand and an iphone in the other .

Confront them with the concept of living within a paycheck and they react like a patient hearing he has 3 months to live.

Lambert Strether , November 22, 2017 at 2:03 am

Ah. Reagan's "welfare queens" updated. Kids these days!

JBird , November 22, 2017 at 3:00 am

Yeah being poor, never mind growing up poor, just well and truly sucks and it can really @@@@ you up. Gives people all sorts of issues. I'm rather like her, but I have had the joy of multi-hour commutes to unexciting soul crushing work. Happy, happy, joy, joy! However don't forget that with the current political economy things are likely to go bad in all sorts of ways. This whole site is devoted to that. My suggestion is to keep the job unless you have something lined up. Not being able to rent has it own stresses too. Take my word for it.

Thuto , November 21, 2017 at 8:00 am

I may be engaging in semantics but I think conflating work and jobs makes this article a bit of a mixed bag. I know plenty of people who are terribly unhappy in their jobs, but nonetheless extract a sense of wellbeing from having a stable source of INCOME to pay their bills (anecdotally speaking, acute stress from recent job losses is closely linked to uncertainty about how bills are going to be paid, that's why those with a safety net of accumulated savings report less stress than those without). Loss of status, social standing and identity and the chronic stress borne from these become evident much later I.e. when the unemployment is prolonged, accompanied of course by the still unresolved top-of-mind concern of "how to pay the bills".

As such, acute stress for the recently unemployed is driven by financial/income uncertainty (I.e. how am I going to pay the bills) whereas chronic stress from prolonged unemployment brings into play the more identity driven aspects like loss of social standing and status. For policy interventions to have any effects, policy makers would have to delineate the primary drivers of stress (or lack of wellbeing as the author calls it) during the various phases of the unemployment lifecycle. An Unemployment Insurance Fund (UIF) like we have here in South Africa appears to address the early stages of unemployment, and the accompanying acute stress, quite well by providing the income guarantee (for six months) that cushions the shock of losing a job. What's still missing of course are interventions that promote the quick return to employment for those on UIF, so maybe a middle of the road solution between UBI and a jobs guarantee scheme is how policy makers should be framing this, instead of the binary either/or we currently have.

TroyMcClure , November 21, 2017 at 9:19 am

Lots' of people think they're unhappy with their jobs. Let them sit unemployed for 9 months and ask them if they want that job back. The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Thuto , November 21, 2017 at 10:06 am

If you'd read through my comment, and not rushed through it with a view of dishing out a flippant response, you'd have seen that nowhere do I question the validity of his data, I merely question how the argument is presented in some areas (NC discourages unquestioning deference to the views of experts no??). By the way, anecdotes do add to richer understanding of a nuanced and layered topic (as this one is) so your dismissal of them in your haste to invalidate people's observations is hardly helpful.

jrs , November 21, 2017 at 1:15 pm

Yes people many not like their jobs but prefer the security of having them to not. Yes even if the boss sexually harasses one (as we are seeing is very common). Yes even if there is other workplace abuse. Yes even when it causes depression or PTSD (but if one stays with such a job long term it ruins the self confidence that is one prerequisite to get another job!). Yes even if one is in therapy because of job stress, sexual harassment or you name it. The job allows the having health insurance, allows the therapy, allows the complaining about the job in therapy to make it through another week.

Lambert Strether , November 22, 2017 at 2:04 am

> The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Ding ding ding!

Democrita , November 21, 2017 at 8:13 am

When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it.

I would love to see some more about happiness or its lack in retirement–referenced by stay-at-home dad BJ , above.

I wonder, too, about the impact of *how* one loses one's job. Getting laid off vs fired vs quitting vs involuntary retirement vs voluntary, etc feel very different. Speaking from experience on that, too. I will search on these points and post anything of interest.

jrs , November 21, 2017 at 1:40 pm

There are also other things that are degrading about the very process of being unemployed not mentioned here. What about the constant rejection that it can entail? One is unemployed and looking for work, one sends out resumes, many of them will never be answered, that's rejection. Then if one is lucky they get interviews, many will never lead to jobs, yet more rejection. Does the process of constant rejection itself have a negative effect on a human being whether it's looking for jobs or dates or whatever? Isn't it learned helplessness to if one keeps trying for something and keeps failing. Isn't that itself demoralizing entirely independent of any doubtful innate demoralizing quality of leisure.

freedeomny , November 21, 2017 at 10:23 am

I am not so sure if I agree with this article. I think it really depends on whether or not you have income to support yourself, hate or love your job, and the amount of outside interests you have, among other things. Almost everyone I know who lives in the NYC area and commutes into the city .doesn't like their job and finds the whole situation "soul-crushing".

Those that live in Manhattan proper are (feel) a bit better off. I for one stopped working somewhat voluntarily last year. I write somewhat because I began to dislike my job so much that it was interfering with my state of well being, however, if I had been allowed to work remotely I probably would have stuck it out for another couple of years.

I am close enough to 62 that I can make do before SS kicks in although I have completely changed my lifestyle – i.e. I've given up a materialistic lifestyle and live very frugally.

Additionally I saved for many years once I decided to embark on this path. I do not find myself depressed at all and the path this year has been very enriching and exciting (and scary) as I reflect on what I want for the future. I'm pretty sure I will end up moving and buying a property so that I can become as self sufficient as possible. Also, I probably will get a job down the line – but if I can't get one because I am deemed too old that will be ok as well. The biggest unknown for me is how much health insurance will cost in the future .

Yves Smith Post author , November 21, 2017 at 5:15 pm

The article made clear that the studies included "unemployed but with income" from government support. It is amazing the degree to which readers ignore that and want to make the findings about "unemployed with no income".

JBird , November 22, 2017 at 3:30 am

That's because we Americans all have work=good=worthy=blessed by God while workless=scum=worthless=accursed by God engraved into our collective soul. Our politics, our beliefs, are just overlays to that.

Even when we agree that the whole situation just crushes people into paste, and for which they have no defense regardless of how hard they work, how carefully they plan, or what they do, that underlay makes use feel that this is their/our fault. Any suggestions that at least some support can be decoupled from work, and that maybe work, and how much you earn, should not determine their value, brings the atavistic fear of being the "undeserving poor," parasites and therefore reprobated scum.

So we don't hear what you are saying without extra effort because it's bypassing our conscious thoughts.

Jamie , November 21, 2017 at 10:43 am

Add my voice to those above who feel that forced labor is the bane of existence, not the wellspring. All this study says to me is that refusing to employ someone in capitalist society does not make them happy. It makes them outcasts.

So, I say yes to a JG, because anyone who wants work should be offered work. But at the same time, a proper JG is not forced labor. And the only way to ensure that it is not forced labor, is to decouple basic needs from wage slavery.

Left in Wisconsin , November 21, 2017 at 12:02 pm

I am critical of those who distinguish between the job and the income. Of course the income is critical to the dignity of the job. For many jobs, it is the primary source of that dignity. The notion that all jobs should provide some intrinsic dignity unrelated to the income, or that people whose dignity is primarily based on the income they earn rather than the work they do are deluded, is to buy in to the propaganda of "passion" being a requirement for your work and to really be blind to what is required to make a society function. Someone has to change the diapers, and wipe the butts of old people. (yes, I've done both.) It doesn't require passion and any sense of satisfaction is gone by about the second day. But if you could make a middle class living doing it, there would be a lot fewer unhappy people in the world.

It is well known that auto factory jobs were not perceived as good jobs until the UAW was able to make them middle class jobs. The nature of the actual work itself hasn't changed all that much over the years – mostly it is still very repetitive work that requires little specialized training, even if the machine technology is much improved. Indeed, I would guess that more intrinsic satisfaction came from bashing metal than pushing buttons on a CNC machine, and so the jobs may even be less self-actualizing than they used to be.

The capitalist myth is that the private sector economy generates all the wealth and the public sector is a claim on that wealth. Yet human development proves to us that this is not true – a substantial portion of "human capital" is developed outside the paid economy, government investment in R&D generates productivity growth, etc. And MMT demonstrates that we do not require private sector savings to fund public investment.

We are still a ways from having the math to demonstrate that government investment in caring and nurturing is always socially productive – first we need productivity numbers that reflect more than just private sector "product." But I think we are moving in that direction. Rather than prioritize a minimum wage JG of make-work, we should first simply pay people good wages to raise their own children or look after their elderly and disabled relatives. The MMT JG, as I understand it, would still require people to leave their kids with others to look after them in order to perform some minimum wage task. That is just dumb.

jrs , November 21, 2017 at 1:31 pm

Maybe it's dumb, it's certainly dumb in a system like the U.S. where work is brutal and often low paid and paid childcare is not well remunerated either. But caretakers also working seems to work in countries with greater income equality, good job protections, flexible work arrangements, and a decent amount of paid parental leave – yea Denmark, they think their children should be raised by professionals, but also work-life balance is still pretty good.

Whiskey Bob , November 21, 2017 at 1:34 pm

My take is that capitalism has made the benefits and malus of having a job so ingrained into culture and so reinforced. Having a job is so closely linked to happiness because it gives you the money needed to pursue it.

A job affords you the ability to pursue whatever goals you want within a capitalist framework. "Everything" costs money and so having a job gives you the money to pay for those costs and go on to fulfill your pursuit of happiness.

Analyzing whether people are happy or not under these conditions seem apparent that it is going to lead to results heavily biased towards finding happiness through employment.

The unemployed are often living off someone else's income and feel like an undeserving parasite. Adults are generally ingrained with the culture that they have to grow up and be independent and be able to provide for a new family that they will start up. Becoming unemployed is like being emasculated and infantile, the opposite of what is expected of adults.

There's also that not having a job is increasingly being punished especially in the case of America. American wages have stayed either largely static or have worsened, making being unemployed that much more of a burden on family or friends. Unemployment has been demonized by Reaganism and has become systematically punishable for the long term unemployed. If you are unemployed for too long, you start losing government support. This compounds the frantic rush to get out of unemployment once unemployed.

There is little luxury to enjoy while unemployed. Life while unemployed is a frustrating and often disappointing hell of constant job applications and having many of them lead to nothing. The people providing support often start to become less so over time and become more convinced of laziness or some kind of lack of character or willpower or education or ability or whatever. Any sense of systemic failure is transplanted into a sense of personal failure, especially under neoliberalism.

I am not so sure about the case of Europe and otherwise. I am sure that the third world often has little or no social safety nets so having work (in exploitative conditions in many cases) is a must for survival.

Anyways, I wonder about the exact methodologies of these studies and I think they often take the current feelings about unemployment and then attempt to extrapolate talking points for UBI/JG from them. Yes, UBI wouldn't change culture overnight and it would take a very, very long time for people to let down their guard and adjust if UBI is to be implemented in a manner that would warrant trust. This article seems to understand the potential for that, but decides against it being a significant factor due to the studies emphasizing the malus of unemployment.

I wonder how different the results would be if there were studies that asked people how they would feel if they were unemployed under a UBI system versus the current system. I know a good number of young people (mostly under 30) who would love to drop out and just play video games all day. Though the significance of such a drastic demographic shift would probably lead to great political consequences. It would probably prove the anti-UBI crowd right in that under a capitalist framework, the capitalists and the employed wouldn't tolerate the unemployed and would seek to turn them into an underclass.

Personally I think a combination of UBI and JG should be pursued. JG would work better within the current capitalist framework. I don't think it is without its pitfalls due to similar possible issues (with the similar policy of full employment) either under Keynesianism (e.g. Milton Friedman sees it as inefficient) or in the USSR (e.g. bullshit jobs). There is the possibility of UBI having benefits (not having the unemployed be a burden but a subsidized contributer to the economy) so I personally don't think it should be fully disregarded until it is understood better. I would like it if there were better scientific studies to expand upon the implications of UBI and better measure if it would work or not. The upcoming studies testing an actual UBI system should help to end the debates once and for all.

redleg , November 21, 2017 at 2:28 pm

My $0.02: I have a creative pursuit (no money) and a engineering/physical science technical career (income!). I am proficient in and passionate about both. Over the last few years, the technical career became tenuous due to consolidation of regional consulting firms (endemic to this era)- wages flat to declining, higher work stress, less time off, conversation to contact employment, etc.- which has resulted in two layoffs.

During the time of tenuous employment, my art took on a darker tone. During unemployment the art stopped altogether.

I'm recently re-employed in a field that I'm not proficient. Both the peter principle and imposter syndrome apply. My art has resumed, but the topics are singular about despair and work, to the point that I feel like I'm constantly reworking the same one piece over and over again. And the quality has plummeted too.

In some fields (e.g. engineering), being a wage slave is the only realistic option due to the dominance of a small number of large firms. The big players crowd out independents and free lancers, while pressuring their own employees through just-high-enough wages and limiting time off. Engineering services is a relationship- based field, and the big boys (and they are nearly all boys) have vastly bigger networks to draw work from than a small firm unless that small firm has a big contact to feed them work (until they get gobbled up). The big firms also have more areas of expertise which limits how useful a boutique firm is to a client pool, except under very narrow circumstances. And if you are an introvert like most engineering people, there's no way to compete with big firms and their marketing staff to expand a network enough to compete.

In that way, consulting is a lot like art. To make a living at it you need either contacts or a sponsor. Or an inheritance.

ChrisPacific , November 21, 2017 at 5:30 pm

I would be interested to know what the definition of unemployment was for the purpose of this study (I couldn't find it in the supplied links). If it's simply "people who don't have a job," for example, then it would include the likes of the idle rich, retirees, wards of the state, and so on. Binary statements like this one do make it sound like the broad definition is the one in use:

When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed.

The conclusion seems at odds with results I've seen for some of those groups – for example, I thought it was fairly well accepted that retirees who are supported by a government plan that is sufficient for them to live on were generally at least as happy as they had been during their working life.

If, on the other hand, the study uses a narrow definition (e.g. people who are of working age, want a job or need one to support themselves financially, but can't find one) then the conclusion seems a lot more reasonable. But that's a heavily loaded definition in economic and cultural terms. In that case, the conclusion (people are happier if they have a job) only holds true in the current prevailing model of society. It doesn't rule out the possibility of structuring society or the economy differently in such a way that people can be non-working and happy. The existence of one such population already (retirees) strongly suggests that outcomes like this are possible. A UBI would be an example of just such a restructuring of society, and therefore I don't think that this study and its result are necessarily a valid argument against it.

nihil obstet , November 21, 2017 at 6:07 pm

Which makes a person happier -- being considered worthless by one's society or valuable? How many studies do we need to answer that question? Apparently, a lot, because studies like this one keep on going. The underlying assumption is that jobs make one valuable. So if you don't have a job you're worthless. Now, who's happier on the whole, people with jobs or the unemployed? That's surely good for a few more studies. Did you know that members of socially devalued groups (minorities, non-heteros, and the like) have higher rates of dysfunction, rather like the unemployed? Hmm, I wonder if there's maybe a similar principle at work. And my solution is not to turn all the people of color white nor to change all the women to men nor to "cure" gays. Well, maybe a few more conclusive studies of this kind will convince me that we must all be the same, toeing the line for those whom it has pleased God to dictate our values to us.

I am convinced that we shouldn't outlaw jobs, because I believe the tons of stories about happy people in their jobs However, I also believe we shouldn't force everyone into jobs, because I know tons of stories about happy people without jobs. You know, the stories that the JG people explain away: parents caring for their children (JG -- "oh, we'll make that a job!"), volunteers working on local planning issues (JG -- "oh, we'll make that a job, too. In fact, we'll make everything worth doing a job. The important thing is to be able to force people to work schedules and bosses, because otherwise, they'll all lie around doing nothing and be miserable"), the retired (JG -- "that's not really the same, but they'd be better off staying in a job"). And this is all before we get to those who can't really hold a job because of disability or geography or other responsibilities.

I support the JG over the current situation, but as to what we should be working for, the more I read the JG arguments, the more paternalistic and just plain narrow minded judgmental they seem.

Summer , November 21, 2017 at 6:52 pm

If someone else gives you a sense of purpose and takes it away what was the purpose?

Lambert Strether , November 22, 2017 at 1:24 am

Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work .

* To put this another way, anybody who has really suffered the crawling inwardness of anxiety, in the clinical sense, knows that it affects every aspect of one's being. Anxiety is not something deplorables deploy as cover for less than creditable motives.

[Nov 04, 2017] No Dress Code AHAHAHAHAHA by Lindsay Hill

Nov 04, 2017 | lkhill.com

[Oct 31, 2017] In many companies its questionable whether the process can even be ever understood well, unless you have significant in-company knowledge, which makes outsourcing a key risk

Notable quotes:
"... Personnel turnover in Indian firms is sky high. As soon as software engineers finish taking part in a project, they jot the reference on their CV, and rush to find another project, in a different area, to extend their skill set, beef up their CV and improve their chances of a higher salary in the IT market. ..."
"... The consequence is that Indian IT firms in charge of the outsourced projects/products just cannot rely upon the implicit knowledge within the heads of their employees. In a sense, they cannot afford to have "key personnel", experienced people who know important, undocumented aspects of a piece of software and can be queried to clear up things -- all employees must be interchangeable. Hence the strict reliance on well-documented processes. ..."
"... Outsourcing your core competencies or your competitive advantage -- that's the real beauty of outsourcing! What could go wrong? ..."

Oct 30, 2017 | www.nakedcapitalism.com ,

Jesper , , October 30, 2017 at 7:40 am

I've seen a couple of BPOs, Business Process Outsourcing deals.

The key for success of BPO in the short term is to define the process -- document every step of the process of having something done and then introduce control-functions to ensure that the process is being followed. Possibly also develop some tools in supporting the process.

If the process is understood and documented well -- so well that rare/expensive skill is no longer needed to follow the process -- then it is possible to look for the lowest possible cost employee to follow the process.

As far as I can tell the most common mistake in BPO deals is that the process being outsourced isn't understood well. The documentation tends to be extensive but if the understanding is lacking then the process might be providing different results than wished for. Key Performance Indicators (KPIs) are introduced and then the gaming of the KPIs is begun .
Even if the initial process was understood well and documented well then the next problem is that due to distance (provider to client) there might be difficulties in adapting the process to changing circumstances.

And yes, there are similarities in BPOs and automation. Understanding of the process is key, without understanding of the process then the end result is usually bad. The key to learning and understanding is often humility and humility is often (in my experience) lacking in executives, senior management and project managers involved in BPO deals and/or efficiency projects.

Automation in the Too Big bank Nordea:
https://www.bloomberg.com/news/articles/2017-10-26/nordea-to-cut-at-least-6-000-jobs-in-fight-to-stay-competitive
Time will tell if it is a success for Nordea and if other big banks will follow suit and cut 13% of their workforce.

vlade , , October 30, 2017 at 8:35 am

See, you put it right on "the process is not understood well". My point is, in many companies it's questionable whether the process can even be ever understood well, unless you have significant in-company knowledge, which makes outsourcing a key risk, even in absence of anything else.

ejf , , October 30, 2017 at 9:54 am

Yup,you got it -- Business Process Outsourcing. I've seen the ill-understood processes ruined when, e.g., software development was transferred to India. I saw this starting in 2000 up til the present day. Yankee management LOVED the idea of cheap labor, but never got back the software it originally intended and designed.

It was the culture: Yankees are software cowboys -- able to change project as needed; Indians loved the process of development. The Indians sounded good but never go the job done.

visitor , , October 30, 2017 at 11:02 am

In the 1990s, I was quite impressed that the first company to reach a CMM level 5 was from India (a subsidiary from IBM, if I remember correctly) -- and thereafter seeing Indian software firms achieving ISO 9000/CMM compliance before large Western corporations.

Later, I worked in several projects that were partly outsourced/externalized to India (the usual suspects like HCL or Wipro), and I understood. Personnel turnover in Indian firms is sky high. As soon as software engineers finish taking part in a project, they jot the reference on their CV, and rush to find another project, in a different area, to extend their skill set, beef up their CV and improve their chances of a higher salary in the IT market.

Remaining in one domain area, with one set of technologies, is not considered a good thing for advancement in the Indian IT market, or when trying to get directly hired by a Western firm. They often have to support an extended family that paid for their computer science studies, so fast career moves are really important for them.

The consequence is that Indian IT firms in charge of the outsourced projects/products just cannot rely upon the implicit knowledge within the heads of their employees. In a sense, they cannot afford to have "key personnel", experienced people who know important, undocumented aspects of a piece of software and can be queried to clear up things -- all employees must be interchangeable. Hence the strict reliance on well-documented processes.

Jesper , , October 30, 2017 at 1:46 pm

all employees must be interchangeable

To expand on that I'd say that interchangeable employees have limited or no bargaining power leading to it being easier to keep salaries low. What is left for the interchangeable employee to do to increase earnings? Yep, change jobs leading to more focus on making employees interchangeable .
The game (war) between the company and its employees escalates. Power is everything and all CEOs know that you don't get paid what you're worth -- you're paid what you negotiate. Maintaining power is worth the cost of churn.

d , , October 30, 2017 at 3:12 pm

dont we have some of the all employees must be interchangeable in the US too?

Thuto , , October 30, 2017 at 8:18 am

Pity the "build or buy" decision calculus has been perverted beyond what the firm needs as inputs into its final market ready products, but is increasingly being used as a defensive move by big companies to kill off competition from smaller firms via knock off products or "acqui-hiring" of talent.

Thuto , , October 30, 2017 at 8:25 am

Aqui-hiring aka acquiring the smaller firm, pretending to integrate its product into the big company's product line, starving the product of resources to slowly kill it off, then pulling the plug citing "dissapointing sales and take up in the market" to protect big company's market share

Thuto , , October 30, 2017 at 8:41 am

Then redeploying the acqui-hired "talent" (I.e. founders of the acquired firm) to work on the next generation of big company's products (except now they do so in a bureaucratic, red tape laden maze of "corporate innovation management" processes).

Dan , , October 30, 2017 at 10:13 am

Outsourcing your core competencies or your competitive advantage -- that's the real beauty of outsourcing! What could go wrong?

WobblyTelomeres , , October 30, 2017 at 11:25 am

I thought one would outsource the core competitive disadvantages. That is, a smaller firm would outsource (buy) when they could not competitively create a subassembly/subcomponent because the sourcing firm had successfully achieved superior economies of scale (EoS) . This is why multiple automobile manufacturers purchase their subcomponents (say, coils or sparkplugs or bearings) from a supplier instead of manufacturing them in-house as the supplier achieves superior EoS by supplying the entire industry.

Even commenter Larry's above example ("offload liability risk with our larger insurance policy") is an EoS advantage/disadvantage, no?

Problems occur when one side of the dance is dominated by one or two very large players (think WalMart or Takata) or political will (defined here as $) is involved.

OTOH, I'm prolly just extremely naive.

sgt_doom , , October 30, 2017 at 2:59 pm

Naοve? No, you sound unholy ignorant, chum!

When Corporate America started offshoring R&D, scientist jobs, engineering jobs, programming jobs, medical jobs, legal jobs, etc., etc., etc. beginning in the late 1970s, but exploding under Jack Welch at GE in 1984-1985 [and I was offered a position helping in the process -- so nobody dare contradict me] it simply exacerbates those offshored manufacturing jobs, for without them in the past, too many American inventors would never have come to fruition -- this of course requires some knowledge of the history of technology.

The one absolute in human nature and human commerce: the greater the inequality, the lower the innovation -- IN EVERYTHING, IN EVERY AREA!

In other words, the greatest innovation in America (and everywhere else throughout history) took place when this nation was at its lowest in inequality indices and closest to socialism: the 1950s to 1960s and early 1970s -- and almost everything has simply been incremental since then.

As Leonardo da Vinci once remarked:

" Realize that everything connects to everything else. "

WobblyTelomeres , , October 30, 2017 at 7:44 pm

In other words, the greatest innovation in America (and everywhere else throughout history) took place when this nation was at its lowest in inequality indices and closest to socialism: the 1950s to 1960s and early 1970s

I disagree with this statement and would ask you to provide specific references for such a sweeping claim.

and almost everything has simply been incremental since then.

And would argue, with diagrams on a chalkboard if necessary, that all human knowledge is incremental. At least, that which requires more than simple immediate sensory perception.

sgt_doom , , October 30, 2017 at 2:54 pm

Thanks, Dan! Most of the comments here today are simply beneath commenting on, therefore your most sarcastic and cogent comments sums it up!

I should be flabbergasted by them, but I have frankly given up!

Recommended Reading (to the clueless, not Dan!):

Sold Out by Michelle Malkin Outsourcing America by Ron Hira Take This Job and Ship It by Byron Dorgan

[Oct 17, 2017] Use Spare Older Workers to Overcome 'Labour Shortages' naked capitalism

Notable quotes:
"... By Leith van Onselen. Originally published at MacroBusiness ..."
"... "remains low by historical standards" ..."
"... There's a myth that innovation comes from the 20 something in their basement, but that's just not the case. ..."
Oct 17, 2017 | www.nakedcapitalism.com

Yves here. On the one hand, as someone who is getting to be pretty long in tooth, I'm not sure about calling un and under-employed older workers "spare". But when the alternative is being thrown on the trash heap, maybe that isn't so unflattering.

Even though this analysis is from Australia, most of if not all of its finding would almost certainly prove out in the US. However, there is a whole 'nother set of issues here. Australia is 85% urban, with most of the population living in or near four large cities. So its labor mobility issues are less pronounced than here. Moreover, a lot of the whinging in the US about worker shortages, as even readers of the Wall Street Journal regularly point out in its comment section is:

1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

2. Not being willing to train less skilled workers, as companies once did as a matter of course

By Leith van Onselen. Originally published at MacroBusiness

A few weeks back, the Benevolent Society released a report which found that age-related discrimination is particularly rife in the workplace, with over a quarter (29%) of survey respondents stating they had been turned down for a job because of their old age, whereas 14% claimed they had been denied a promotion because of their old age.

Today, the Regional Australia Institute (RAI) has warned that Australia is facing a pension crisis unless employers stop their "discrimination" against older workers. From The ABC :

[RAI] has warned the Federal Government's pension bill would rise from $45 billion to $51 billion within three years, unless efforts were made to help more mature workers gain employment, particularly in regional communities.

Chief executive Jack Archer said continued unemployment of people older than 55 would cut economic growth and put a greater strain on public resources.

"We hear that there is a lot of people who would like to work, who would love to stay in the workforce either part-time or full-time even though they're in their late 50s, 60s and even into their 70s," he said.

"But we're not doing a very good job of giving them the training, giving them the incentives around the pension, and working with employers to stop the discrimination around employing older workers"

"It basically means you've got a lot of talent on the bench, a lot of people who could be involved and contributing who are sitting around homes and wishing they were doing something else," he said

Mr Archer said as the population aged the workforce shrank, and that risked future economic growth.

But he said that could be reversed provided employers embraced an older workforce

"[When] those people are earning [an income], their pension bills will either disappear or be much lower and the government will get a benefit from that."

For years the growth lobby and the government has told us that Australia needs to run high levels of immigration in order to alleviate so-called 'skills shortages' and to mitigate an ageing population. This has come despite the Department of Employment showing that Australia's skills shortage "remains low by historical standards" and Australia's labour underutilisation rate tracking at high levels:

Economic models are often cited as proof that a strong immigration program is 'good' for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.

The most dubious of these assumptions is that population ageing will necessarily result in fewer people working, which will subtract from per capita GDP (due to the ratio of workers to dependents falling).

Leaving aside the fact that the assumed benefit to GDP per capita from immigration is only transitory, since migrants also age (thereby requiring an ever-bigger immigration intake to keep the population age profile from rising), it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed. This is exactly what has transpired in Japan where an ageing population has driven the unemployment rate down to only 2.8% – the lowest level since the early-1990s:

The ABS last month revealed that more Australians are working past traditional retirement age, thereby mitigating concerns that population ageing will necessarily reduce the employment-to-population ratio:

Clearly, however, there is much further scope to boost workforce participation among older workers.

Rather than relying on mass immigration to fill phantom 'labour shortages' – in turn displacing both young and older workers alike – the more sensible policy option is to moderate immigration and instead better utilise the existing workforce as well as use automation to overcome any loss of workers as the population ages – as has been utilised in Japan.

It's worth once again highlighting that economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:

If anything, countries experiencing more rapid aging have grown more in recent decades we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita on the contrary, the relationship is significantly positive in many specifications.

The last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.

The sustainable 'solution' to population ageing is to better utilise the existing workforce, where significant spare capacity exists.

Enquiring Mind , October 17, 2017 at 10:26 am

At what point might an impatient constituency demand greater accountability by its elected representatives? In the business world, the post-2000 accounting scandals like Enron resulted in legislation to make company execs sign off on financial statements under threat of harsh personal penalties for misrepresentation. If legislators were forced by constituents to enact similar legislation about their own actions, the transparency could be very enlightening and a type of risk reduction due to acknowledgement of material factors. Imagine seeing in print the real reasons for votes, the funding sources behind those votes and prospect of jail time for misrepresentation about what is just their damn job. Call it Truth-In-Legislating, similar to the prior Truth-In-Lending act.

Vatch , October 17, 2017 at 11:29 am

It's a nice idea, but I don't think that very many executives have been penalized under the Sarbanes Oxley Act. Jamie Dimon certainly wasn't penalized for the actions of the London Whale. I guess we'll see what happens in the near future to the executives of Wells Fargo. I suspect that a Truth-In-Legislating law would be filled with loopholes or would be hampered by enforcement failures, like current Congressional ethics rules and the Sarbanes Oxley Act.

sgt_doom , October 17, 2017 at 2:11 pm

At what point might an impatient constituency demand greater accountability by its elected representatives?

At that point when they start shooting them (as they did in Russian in the very early 1900s, or lop their heads off, as they once did in France).

Personally, I'll never work for any Ameritard corporation ever again, as real innovation is not allowed, and the vast majority are all about financialization in some form or other!

My work life the past thirty years became worse and worse and worse, in direct relation to the majority of others, and my last jobs were beyond commenting up.

My very last position, which was in no manner related to my experience, education, skill set and talents -- like too many other American workers -- ended with a most tortuous layoff: the private equity firm which was owner in a failed "pump and dump" brought a "toxic work environment specialist" whose job was to advise the sleazoid senior executives (and by that time I was probably one of only four actual employee workers there, they had hired a whole bunch of executives, though) on how to create a negative work environment to convince us to leave instead of merely laying us off (worked for two, but not the last lady there I myself).

The American workplace sucks big time as evidenced by their refusal to raise wages while forever complaining about their inability to find skilled employees -- they are all criminals today!

RUKidding , October 17, 2017 at 10:55 am

Interesting article and thanks.

I lived and worked in Australia in the late '70s and early '80s. Times were different. Back then, the government jobs came with mandatory retirement. I believe (but could be wrong) that it was at 63, but you could request staying until 65 (required approval). After that, one could continue working in the private sector, if you could find a job.

The population was much less than it is now. I believe the idea was to make room for the younger generation coming up. Back then, government workers, as well as many private sector workers, had defined benefit pension plans. So retiring younger typically worked out ok.

I had one friend who continued working until about 70 because she wanted to; liked her job; and wasn't interested in retiring. However, I knew far more people who were eager to stop at 63. But back then, it appeared to me that they had the financial means to do so without much worry.

Things have changed since then. More of my friends are putting off retirement bc they need the money now. Plus defined benefit pension plans have mostly been dispensed with and replaced by, I believe (I'm not totally clear on this), the Aussie version of a 401 (k) (someone can correct me if I'm wrong).

What the article proposes makes sense. Of course here in the USA, older workers/job seekers face a host of discriminatory practices, especially for the better paying jobs. Nowadays, though, US citizens in their golden years can sell their house, buy an RV, and become itinerant workers – sometimes at back breaking labor, such as harvesting crops or working at an Amazon gulag – for $10 an hour. Yippee kay-o kay-aaay!

So let us also talk about cutting Medicare for all of those lazy slacker Seniors out there. Woo hoo!

jrs , October 17, 2017 at 1:34 pm

There is really two issues:
1) for those whom age discrimination in employment is hitting in their 50s or even younger, before anyone much is retiring, it needs to be combatted
2) eventually (sometimes in their 60's and really should be at least by 65) people ought to be allowed to retire and with enough money to not be in poverty. This work full time until you drop garbage is just that (it's not as if 70 year olds can even say work 20 hours instead, no it's the same 50+ hours or whatever as everyone else is doing). And most people won't live that much longer, really they won't, U.S. average lifespans aren't that long and falling fast. So it really is work until you die that is being pushed if people aren't allowed to retire sometime in their 60s. Some people have good genes and good luck and so on (they may also have a healthy lifestyle but sheer luck plays a large role), and will live far beyond that, but averages

RUKIdding , October 17, 2017 at 4:44 pm

Agree with you about the 2 issues.

Working past 65 is one of those things where it just depends. I know people who are happily (and don't "really" need the money) working past 65 bc they love their jobs and they're not taking a toll on their health. They enjoy the socialization at work; are intellectually stimulated; and are quite happy. That's one issue.

But when people HAVE TO work past 65 – and I know quite a few in this category – when it starts taking a toll on their health, that is truly bad. And I can reel off several cases that I know of personally. It's just wrong.

Whether you live much longer or not is sort of up to fate, no matter what. But yes, if work is taking a toll on your heath, then you most likely won't live as long.

cocomaan , October 17, 2017 at 11:06 am

In January, economists from MIT published a paper, entitled Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation, which showed that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:

From the cited article.

I don't know why it never occurred to me before, but there's no reason to ditch your most knowledgeable, most skilled workers toward the eve of their careers except if you don't want to pay labor costs. Which we know that most firms do not, in their mission for profit for shareholders or the flashy new building or trying to Innuhvate .

There's a myth that innovation comes from the 20 something in their basement, but that's just not the case. Someone who has, for instance, overseen 100 construction projects building bridges needs to be retained, not let go. Maybe they can't lift the sledge anymore, but I'd keep them on as long as possible.

Good food for thought! I enjoyed this piece.

HotFlash , October 17, 2017 at 4:19 pm

There's a myth that innovation comes from the 20 something in their basement, but that's just not the case.

Widely held by 20 somethings. Maybe it's just one of those Oedipus things.

fresno dan , October 17, 2017 at 11:08 am

1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate

2. Not being willing to train less skilled workers, as companies once did as a matter of course

3. older workers have seen all the crap and evil management has done, and is usually in a much better position than young less established employees to take effective action against it

Disturbed Voter , October 17, 2017 at 1:26 pm

This. Don't expect rational actors, in management or labor. If everyone was paid the same, regardless of age or training or education or experience etc then the financial incentives for variant outcomes would decrease. Except for higher health costs for older workers. For them, we could simply ban employer provide health insurance then that takes that variable out of the equation too. So yes, the ideal is a rational Marxism or the uniformity of the hive-mind-feminism. While we would have "from each according to their ability, to each according to their need" we will have added it as an axiom that all have the same need. And a whip can encourage the hoi polloi to do their very best.

Jeremy Grimm , October 17, 2017 at 2:25 pm

Fully agee! To your list I would add a corollory to your item #3 -- older workers having seen all the crap and evil management has done are more likely to inspire other employees to feel and act with them. -- This corollory is obvious but I think it bears stating for emphasis of the point.

I believe your whole list might be viewed as symtoms resulting from the concept of workers as commodity -- fungible as cogs on a wheel. Young and old alike are dehumanized.

The boss of the branch office of the firm I last worked for before I retired constantly emphasized how each of us must remain "fungible" [he's who introduced me to this word] if we wanted to remain employed. The firm would win contracts using one set of workers in its bids and slowly replace them with new workers providing the firm a higher return per hour billed to the client. I feel very lucky I managed to remain employed -- to within a couple of years of the age when I could apply for Medicare. [Maybe it's because I was too cowed to make waves and avoided raises as best I could.]

[I started my comment considering the idea of "human capital" but ran into trouble with that concept. Shouldn't capital be assessed in terms of its replacement costs and its capacity for generating product or other gain? I had trouble working that calculus into the way firms treat their employees and decided "commodity" rather than "capital" better fit how workers were regarded and treated.]

BoycottAmazon , October 17, 2017 at 11:16 am

"skills vs. demand imbalance" not labor shortage. Capital wants to tip the scale the other way, but isn't willing to invest the money to train the people, per a comment I made last week. Plenty of unemployed or under-employed even in Japan, much less Oz.

Keeping the elderly, who already have the skills, in the work place longer is a way to put off making the investments. Getting government to tax the poor for their own training is another method. Exploiting poor nations education systems by importing skills yet another.

Some business hope to develop skills that only costs motive power (electric), minimal maintenance, and are far less capital intensive and quicker to the market than the current primary source's 18 years. Capitalism on an finite resource will eat itself, but even capitalism with finite resources will self-destruct in the end.

Jim Haygood , October 17, 2017 at 1:35 pm

Importantly, the chart labeled as Figure 2 uses GDP per capita on the y-axis.

Bearing in mind that GDP growth is composed of labor force growth times productivity, emerging economies that are growing faster than the rich world in both population and GDP look more anemic on a per capita basis, allowing us rich country denizens to feel better about our good selves. :-)

But in terms of absolute GDP growth, things ain't so bright here in the Homeland. Both population and productivity growth are slowing. Over the past two-thirds century, the trend in GDP groaf is relentlessly down, even as debt rises in an apparent attempt to maintain unsustainable living standards. Chart (viewer discretion advised):

https://gailtheactuary.files.wordpress.com/2016/02/us-annual-gdp-growth-rate-2015.png

Van Onselen doesn't address the rich world's busted pension systems. To the extent that they contain a Ponzi element premised on endless growth, immigration would modestly benefit them by adding new victims workers to support the greying masses of doddering Boomers.

Will you still need me
Will you still feed me
When I'm sixty-four?

-- The Beatles

Arthur Wilke , October 17, 2017 at 1:44 pm

There's been an increase in the employment of older people in the U.S. in the U.S. population. To provide a snapshot, below are three tables referring to the U.S. by age cohorts of 1) the total population, 2) Employment and 3) employment-population ratios (percent).based on Bureau of Labor Statistics weightings for population estimates and compiled in the Merge Outgoing Rotation Groups (MORG) dataset by the National Bureau of Economic Research (NBER) from the monthly Current Population Survey (CPS).

The portion of the population 16 to 54 has declined while those over 54 has increased.
1. Percent Population in Age Cohorts: 1986 & 2016

1986 2016 AGE
18.9 15.2 16-24
53.7 49.6 25-54
12.2 16.3 55-64
9.4 11.2 65-74
5.8 7.7 75 & OVER
100.0 100.0 ALL

The portion of the population 16 to 54 employed has declined while the portion over 54 has increased..

2 Percent Employed in Age Cohorts: 1986 & 2016

1986 2016 AGE
18.5 12.5 16-24
68.4 64.7 25-54
10.4 16.9 55-64
2.3 4.8 65-74
0.4 1.0 75 & OVER
100.0 100.0 ALL

The employment-population ratios (percents) show significant declines for those under 25 while increases for those 55 and above.

3. Age-Specific Employment Population Ratios (Percents)

1986 2016 AGE
59.5 49.4 16-24
77.3 77.9 25-54
51.8 61.8 55-64
14.8 25.9 65-74
3.8 7.9 75 & OVER
60.7 59.7 ALL

None of the above data refute claims about age and experience inequities. Rather these provide a base from which to explore such concerns. Because MORG data are representative samples with population weightings, systematic contingency analyses are challenging.

In the 30 year interval of these data there have been changes in population and employment by education status, gender, race, citizenship status along with industry and occupation, all items of which are found in the publicly available MORG dataset.

AW

Yves Smith Post author , October 17, 2017 at 4:54 pm

I think you are missing the point. Life expectancy at birth has increased by nearly five years since 1986. That renders simple comparisons of labor force participation less meaningful. The implication is that many people are not just living longer but are in better shape in their later middle age. Look at the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64. How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford? And the increase over time in the current 55=64 age cohort is significantly due to the entry of women into the workplace. Mine was the first generation where that became widespread.

The increase in the over 65 cohort reflects desperation. Anyone who can work stays working.

Arthur Wilke , October 17, 2017 at 6:27 pm

Even if life-expectancy is increasing due to improved health, the percentage of those in older cohorts who are working is increasing at an even faster rate. If a ratio is 6/8 for a category and goes up to 10/12 the category has increased (8 to 12 or 50%) and the subcategory has increased (6 to 10 i or 67% and the ratios go from 6/8 or 75/100 to 10/12 or 83.3/100)

I assume you are referencing the employment-population (E/P) ratio when noting "the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64." However the change in the E/P ratio for 25-54 year olds was virtually unchanged (77.3/100 in 1986 to 77.9/100 in 2016) and for the 55-64 year olds the E/P ratio INCREASED significantly, from 51.8/100 in 1986 to 61.8/100 in 2016.

You query: "How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford?" That's a set of concerns the data I've compiled cannot and thus cannot address. It would take more time to see if an empirical answer could be constructed, something that doesn't lend itself to making a timely, empirically based comment. The data I compiled was done after reading the original post.

You note: ". . . ;;[T] the increase over time in the current 55-64 age cohort is significantly due to the entry of women into the workplace." Again, I didn't compute the age-gender specific E/P ratios. I can do that if there's interest. The OVERALL female E/P ratio (from FRED) did not significantly increase from December 1986 ( 51.7/100) to December 2016 (53.8/100).

Your write: "The increase in the over 65 cohort reflects desperation. Anyone who can work stays working." Again, the data I was using provided me no basis for this interpretation. I suspect that the MORG data can provide some support for that interpretation. However, based on your comments about longer life expectancy, it's likely that a higher proportion of those in professional-middle class or in the upper-middle class category Richard Reeves writes about (Dream Hoarders) were able and willing to continue working. For a time in higher education some institutions offered incentives for older faculty to continue working thereby they could continue to receive a salary and upon becoming eligible for Social Security draw on that benefit. No doubt many, many vulnerable older people, including workers laid off in the wake of the Great Recession and otherwise burdened lengthened their or sought employment.

Again the MORG data can get somewhat closer to your concerns and interests, but whether this is the forum is a challenge given the reporting-comment cycle which guides this excellent site.

paul , October 17, 2017 at 1:54 pm

Institutional memory (perhaps, wisdom) is a positive threat to institutional change (for the pillage).

In my experience,those in possession of it are encouraged/discouraged/finally made to go.

The break up of British Rail is a salient,suppurating example.

The break up of National Health Service is another.

It would be easy to go on, I just see it as the long year zero the more clinical sociopaths desire.

Livius Drusus , October 17, 2017 at 3:20 pm

I don't understand how the media promotes the "society is aging, we need more immigrants to avoid a labor shortage" argument and the "there will be no jobs in the near future due to automation, there will be a jobs shortage" argument at the same time. Dean Baker has discussed this issue:

http://cepr.net/publications/op-eds-columns/badly-confused-economics-the-debate-on-automation

In any event, helping to keep older workers in the workforce can be a good thing. Some people become physically inactive after retirement and their social networks decline which can cause depression and loneliness. Work might benefit some people who would otherwise sink into inactivity and loneliness.

Of course, results might vary based on individual differences and those who engaged in hard physical labor will likely have to retire earlier due to wear and tear on their bodies.

flora , October 17, 2017 at 7:42 pm

Increase in life expectancy is greatly influenced by a decrease in childhood mortality. People are living longer because they aren't dying in large numbers in childhood anymore in the US. So many arguments that start out "we're living longer, so something" confuse a reduction in childhood mortality with how long one can expect to live to in old age, based on the actuarial charts. Pols who want to cut SS or increase the retirement age find this confusion very useful.

" Life expectancy at birth is very sensitive to reductions in the death rates of children, because each child that survives adds many years to the amount of life in the population. Thus, the dramatic declines in infant and child mortality in the twentieth century were accompanied by equally stunning increases in life expectancy. "

http://www.pbs.org/fmc/timeline/dmortality.htm

TarheelDem , October 17, 2017 at 5:24 pm

I've noticed ever since the 1990s that "labor shortage" is a signal for cost-cutting measures that trigger a recession. Which then becomes the excuse for shedding workers and really getting the recession on.

It is not just older workers who are spare. There are other forms of discrimination that could fall by the wayside if solving the "labor shortage" was the sincere objective.

JBird , October 17, 2017 at 5:57 pm

Often productively, sales, and profits decrease with those cost cuttings, which justified further cuts which decreases productivity, sales, and profits which justifies

It's a pattern I first noticed in the 1990s and looking back in the 80s too. It's like some malevolent MBAs went out and convinced the whole of American middle and senior business management that this was the Way to do it. It's like something out of the most hidebound, nonsensical ideas of Maoism and Stalinism as something that could not fail but only be failed. It is right out of the Chicago Boys' economics playbook. Thirty-five years later and the Way still hasn't succeeded, but they're still trying not to fail it.

SpringTexan , October 17, 2017 at 6:59 pm

Love your reflections. Yeah, it's like a religion that they can't pay more, can't train, must cut people till they are working to their max at ordinary times (so have no slack for crises), etc. etc., and that it doesn't work doesn't change the faith in it AT ALL.

JBird , October 17, 2017 at 5:42 pm

This is ranting, but most jobs can be done at most ages. If want someone to be a SEAL or do 12 hours at farm labor no of course not, but just about everything else so what's the problem?

All this "we have a skilled labor shortage" or "we have a labor surplus" or "the workers are all lazy/stupid" narratives" and "it's the unions' fault" and "the market solves everything" and the implicit "we are a true meritocracy and the losers are waste who deserve their pain" and my favorite of the "Job creators do make jobs" being said, and/or believed all at the same time is insanity made mainstream.

Sometimes I think whoever is running things are told they have to drink the Draught of UnWisdom before becoming the elites.

Dan , October 17, 2017 at 7:12 pm

So I'm a middle aged fella – early thirties – and have to admit that in my industry I find that most older workers are a disaster. I'm in tech and frankly find that most older workers are a detriment simply from being out of date. While I sympathize, in some cases experience can be a minus rather than a plus. The willingness to try new things and stay current with modern technologies/techniques just isn't there for the majority of tech workers that are over the hill.

flora , October 17, 2017 at 7:46 pm

Well, if you're lucky, your company won't replace you with a cheaper HiB visa holder or outsource your job to the sub-continent before you're 40.

[Oct 15, 2017] Two Cheers For Trump's Immigration Proposal Especially "Interior Enforcement" - The Unz Review

Notable quotes:
"... In the 1970s a programming shop was legacy American, with only a thin scattering of foreigners like myself. Twenty years later programming had been considerably foreignized , thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American programmers are an endangered species. ..."
"... So a well-paid and mentally rewarding corner of the middle-class job market has been handed over to foreigners -- for the sole reason, of course, that they are cheaper than Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other five percent is sentimentality. ..."
"... Now they are brazen in their crime: you have heard, I'm sure, those stories about American workers being laid off, with severance packages conditional on their helping train their cheaper foreign replacements. That's our legal ..."
"... A "merit-based" points system won't fix that. It will quickly and easily be gamed by employers to lay waste yet more middle-class occupational zones for Americans. If it was restricted to the higher levels of "merit," we would just be importing a professional overclass of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy Americans. How would that ..."
"... Measured by the number of workers per year, the largest guestworker program in the entire immigration system is now student visas through the Optional Practical Training program (OPT). Last year over 154,000 aliens were approved to work on student visas. By comparison, 114,000 aliens entered the workforce on H-1B guestworker visas. ..."
"... A History of the 'Optional Practical Training' Guestworker Program , ..."
"... on all sorts of subjects ..."
"... for all kinds of outlets. (This ..."
"... no longer includes ..."
"... National Review, whose editors had some kind of tantrum and ..."
"... and several other ..."
"... . He has had two books published by VDARE.com com: ..."
"... ( also available in Kindle ) and ..."
"... Has it ever occurred to anyone other than me that the cost associated with foreign workers using our schools and hospitals and pubic services for free, is more than off-set by the cheap price being paid for grocery store items like boneless chicken breast, grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even for the wealthy? ..."
Oct 15, 2017 | www.unz.com

Headliner of the week for immigration patriots was President Trump's immigration reform proposal , which he sent to Congress for their perusal last Sunday. The proposal is a very detailed 70-point list under three main headings:

Border Security (27 items) Interior Enforcement (39 items) Merit-Based Immigration System (four items)

Item-wise, the biggest heading there is the second one, "Interior Enforcement." That's very welcome.

Of course we need improved border security so that people don't enter our country without permission. That comes under the first heading. An equally pressing problem, though, is the millions of foreigners who are living and working here, and using our schools and hospitals and public services, who should not be here.

The President's proposals on interior enforcement cover all bases: Sanctuary cities , visa overstays , law-enforcement resources , compulsory E-Verify , more deportations , improved visa security.

This is a major, wonderful improvement in national policy, when you consider that less than a year ago the White House and Justice Department were run by committed open-borders fanatics. I thank the President and his staff for having put so much work into such a detailed proposal for restoring American sovereignty and the rights of American workers and taxpayers.

That said, here come the quibbles.

That third heading, "Merit-Based Immigration System," with just four items, needs work. Setting aside improvements on visa controls under the other headings, this is really the only part of the proposal that covers legal immigration. In my opinion, it does so imperfectly.

There's some good meat in there, mind. Three of the four items -- numbers one, three, and four -- got a fist-pump from me:

cutting down chain migration by limiting it to spouse and dependent children; eliminating the Diversity Visa Lottery ; and limiting the number of refugees admitted, assuming this means severely cutting back on the numbers, preferably all the way to zero.

Good stuff. Item two, however, is a problem. Quote:

Establish a new, points-based system for the awarding of Green Cards (lawful permanent residents) based on factors that allow individuals to successfully assimilate and support themselves financially.

sounds OK, bringing in talented, well-educated, well-socialized people, rather than what the late Lee Kuan Yew referred to as " fruit-pickers ." Forgive me if I have a rather jaundiced view of this merit-based approach.

For most of my adult life I made a living as a computer programmer. I spent four years doing this in the U.S.A. through the mid-1970s. Then I came back in the late 1980s and worked at the same trade here through the 1990s. (Pictured right–my actual H-1B visa ) That gave me two clear snapshots twenty years apart, of this particular corner of skilled middle-class employment in America.

In the 1970s a programming shop was legacy American, with only a thin scattering of foreigners like myself. Twenty years later programming had been considerably foreignized , thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American programmers are an endangered species.

So a well-paid and mentally rewarding corner of the middle-class job market has been handed over to foreigners -- for the sole reason, of course, that they are cheaper than Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other five percent is sentimentality.

On so-called "merit-based immigration," therefore, you can count me a cynic. I have no doubt that American firms could recruit all the computer programmers they need from among our legacy population. They used to do so, forty years ago. Then they discovered how to game the immigration system for cheaper labor.

Now they are brazen in their crime: you have heard, I'm sure, those stories about American workers being laid off, with severance packages conditional on their helping train their cheaper foreign replacements. That's our legal immigration system in a nutshell. It's a cheap-labor racket.

A "merit-based" points system won't fix that. It will quickly and easily be gamed by employers to lay waste yet more middle-class occupational zones for Americans. If it was restricted to the higher levels of "merit," we would just be importing a professional overclass of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy Americans. How would that contribute to social harmony?

With coming up to a third of a billion people, the U.S.A. has all the talent, all the merit , it needs. You might make a case for a handful of certified geniuses like Einstein or worthy dissidents like Solzhenitsyn, but those cases aside, there is no reason at all to have guest-worker programs. They should all be shut down.

Some of these cheap-labor rackets don't even need congressional action to shut them down; it can be done by regulatory change via executive order. The scandalous OPT-visa scam, for example, which brings in cheap workers under the guise of student visas.

Here is John Miano writing about the OPT program last month, quote:

Measured by the number of workers per year, the largest guestworker program in the entire immigration system is now student visas through the Optional Practical Training program (OPT). Last year over 154,000 aliens were approved to work on student visas. By comparison, 114,000 aliens entered the workforce on H-1B guestworker visas.

Because there is no reporting on how long guestworkers stay in the country, we do not know the total number of workers in each category. Nonetheless, the number of approvals for work on student visas has grown by 62 percent over the past four years so their numbers will soon dwarf those on H-1B visas.

The troubling fact is that the OPT program was created entirely through regulation with no authorization from Congress whatsoever. [ A History of the 'Optional Practical Training' Guestworker Program , CIS, September 18, 2017]

End quote. (And a cheery wave of acknowledgement to John Miano here from one of the other seventeen people in the U.S.A. that knows the correct placement of the hyphen in "H-1B.")

Our legal immigration system is addled with these scams. Don't even get me started on the EB-5 investor's visa . It all needs sweeping away.

So for preference I would rewrite that third heading to include, yes, items one, three, and four -- cutting down chain migration, ending the Diversity Visa Lottery, and ending refugee settlement for anyone of less stature than Solzhenitsyn; but then, I'd replace item two with the following:

End all guest-worker programs, with exceptions only for the highest levels of talent and accomplishment, limit one hundred visas per annum .

So much for my amendments to the President's October 8th proposals. There is, though, one glaring omission from that 70-item list. The proposal has no mention at all of birthright citizenship.

have abandoned it . It leads to obstetric tourism : women well-advanced in pregnancy come to the U.S.A. to give birth, knowing that the child will be a U.S. citizen. It is deeply unpopular with Americans , once it's explained to them.

Yes, yes, I know: some constitutional authorities argue that birthright citizenship is implied in the Fourteenth Amendment , although it is certain that the framers of that Amendment did not have foreign tourists or illegal entrants in mind. Other scholars think Congress could legislate against it.

The only way to find out is to have Congress legislate. If the courts strike down the legislation as unconstitutional, let's then frame a constitutional amendment and put it to the people.

Getting rid of birthright citizenship might end up a long and difficult process. We might ultimately fail. The only way to find out is to get the process started . Failure to mention this in the President's proposal is a very glaring omission.

Setting aside that, and the aforementioned reservations about working visas, I give two cheers to the proposal. email him ] writes an incredible amount on all sorts of subjects for all kinds of outlets. (This no longer includes National Review, whose editors had some kind of tantrum and fired him. ) He is the author of We Are Doomed: Reclaiming Conservative Pessimism and several other books . He has had two books published by VDARE.com com: FROM THE DISSIDENT RIGHT ( also available in Kindle ) and FROM THE DISSIDENT RIGHT II: ESSAYS 2013 . (Republished from VDare.com by permission of author or representative)

SimpleHandle > > , October 14, 2017 at 2:56 am GMT

I agree with ending birthright citizenship. But Trump should wait until he can put at least one more strict constitutionalist in the supreme court. There will be a court challenge, and we need judges who can understand that if the 14th Amendment didn't give automatic citizenship to American Indians it doesn't give automatic citizenship to children of Mexican citizens who jumped our border.

Diversity Heretic > > , October 14, 2017 at 5:04 am GMT

@Carroll Price

Insofar as your personal situation is concerned, perhaps you would find yourself less "relatively poor" if you had a job with higher wages.

Diversity Heretic > > , October 14, 2017 at 5:16 am GMT

John's article, it seems to me, ignores the elephant in the room: the DACA colonists. Trump is offering this proposal, more or less, in return for some sort of semi-permanent regularization of their status. Bad trade, in my opinion. Ending DACA and sending those illegals back where they belong will have more real effect on illegal and legal immigration/colonization than all sorts of proposals to be implemented in the future, which can and will be changed by subsequent Administrations and Congresses.

Trump would also be able to drive a much harder bargain with Congress (like maybe a moratorium on any immigration) if he had kept his campaign promise, ended DACA the afternoon of January 20, 2017, and busloads of DACA colonists were being sent south of the Rio Grande.

The best hope for immigration patriots is that the Democrats are so wedded to Open Borders that the entire proposal dies and Trump, in disgust, reenacts Ike's Operation Wetback.

bartok > > , October 14, 2017 at 6:32 am GMT

@Carroll Price

Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?

White people couldn't possibly thrive without non-Whites! Why, without all of that ballast we'd ascend too near the sun.

Negrolphin Pool > > , October 14, 2017 at 7:53 am GMT

Well, in the real world, things just don't work that way. It's pay me now or pay me later. Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?

Right, prior to 1965, Americans didn't exist. They had all starved to death because, as everyone knows, no Americans will work to produce food and, even if they did, once Tyson chicken plants stop making 50 percent on capital they just shut down.

If there were no Somalis in Minnesota, even Warren Buffett couldn't afford grapes.

Joe Franklin > > , October 14, 2017 at 12:24 pm GMT

Illegal immigrants picking American produce is a false economy.

Illegal immigrants are subsidized by the taxpayer in terms of public health, education, housing, and welfare.

If businesses didn't have access to cheap and subsidized illegal alien labor, they would be compelled to resort to more farm automation to reduce cost.

Cheap illegal alien labor delays the inevitable use of newer farm automation technologies.

Many Americans would likely prefer a machine touch their food rather than a illegal alien with strange hygiene practices.

In addition, anti-American Democrats and neocons prefer certain kinds of illegal aliens because they bolster their diversity scheme.

Carroll Price > > , October 14, 2017 at 12:27 pm GMT

@Realist "Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what?"

Eliminate welfare...then you'll have plenty of workers. Unfortunately, that train left the station long ago. With or without welfare, there's simply no way soft, spoiled, lazy, over-indulged Americans who have never hit a lick at anything their life, will ever perform manual labor for anyone, including themselves.

Jonathan Mason > > , October 14, 2017 at 2:57 pm GMT

@Randal Probably people other than you have worked out that once their wages are not being continually undercut by cheap and easy immigrant competition, the American working classes will actually be able to earn enough to pay the increased prices for grocery store items, especially as the Americans who, along with machines, will replace those immigrants doing the "jobs Americans won't do" will also be earning more and actually paying taxes on it.

The "jobs Americans/Brits/etc won't do" myth is a deliberate distortion of reality that ignores the laws of supply and demand. There are no jobs Americans etc won't do, only jobs for which the employers are not prepared to pay wages high enough to make them worthwhile for Americans etc to do.

Now of course it is more complicated than that. There are jobs that would not be economically viable if the required wages were to be paid, and there are marginal contributions to job creation by immigrant populations, but those aspects are in reality far less significant than the bosses seeking cheap labour want people to think they are.

As a broad summary, a situation in which labour is tight, jobs are easy to come by and staff hard to hold on to is infinitely better for the ordinary working people of any nation than one in which there is a huge pool of excess labour, and therefore wages are low and employees disposable.

You'd think anyone purporting to be on the "left", in the sense of supporting working class people would understand that basic reality, but far too many on the left have been indoctrinated in radical leftist anti-racist and internationalist dogmas that make them functional stooges for big business and its mass immigration program.

Probably people other than you have worked out that once their wages are not being continually undercut by cheap and easy immigrant competition, the American working classes will actually be able to earn enough to pay the increased prices for grocery store items, especially as the Americans who, along with machines, will replace those immigrants doing the "jobs Americans won't do" will also be earning more and actually paying taxes on it.

There might be some truth in this. When I was a student in England in the 60′s I spent every summer working on farms, picking hops, apples, pears, potatoes and made some money and had a lot of fun too and became an expert farm tractor operator.

No reason why US students and high school seniors should not pick up a lot of the slack. Young people like camping in the countryside and sleeping rough, plus lots of opportunity to meet others, have sex, smoke weed, drink beer, or whatever. If you get a free vacation plus a nice check at the end, that makes the relatively low wages worthwhile. It is not always a question of how much you are paid, but how much you can save.

George Weinbaum > > , October 14, 2017 at 3:35 pm GMT

We can fix the EB-5 visa scam. My suggestion: charge would-be "investors" $1 million to enter the US. This $1 is not refundable under any circumstance. It is paid when the "investor's" visa is approved. If the "investor" is convicted of a felony, he is deported. He may bring no one with him. No wife, no child, no aunt, no uncle. Unless he pays $1 million for that person.

We will get a few thousand Russian oligarchs and Saudi princes a year under this program

As to fixing the H-1B visa program, we charge employer users of the program say $25,000 per year per employee. We require the employers to inform all employees that if any is asked to train a replacement, he should inform the DOJ immediately. The DOJ investigates and if true, charges managerial employees who asked that a replacement be trained with fraud.

As to birthright citizenship: I say make it a five-year felony to have a child while in the US illegally. Make it a condition of getting a tourist visa that one not be pregnant. If the tourist visa lasts say 60 days and the woman has a child while in the US, she gets charged with fraud.

None of these suggestions requires a constitutional amendment.

Auntie Analogue > > , October 14, 2017 at 7:10 pm GMT

In the United States middle class prosperity reached its apogee in 1965 – before the disastrous (and eminently foreseeable) wage-lowering consequence of the Hart-Celler Open Immigration Act's massive admission of foreigners increased the supply of labor which began to lower middle class prosperity and to shrink and eradicate the middle class.

It was in 1965 that ordinary Americans, enjoying maximum employment because employers were forced to compete for Americans' talents and labor, wielded their peak purchasing power . Since 1970 wages have remained stagnant, and since 1965 the purchasing power of ordinary Americans has gone into steep decline.

It is long past time to halt Perpetual Mass Immigration into the United States, to end birthright citizenship, and to deport all illegal aliens – if, that is, our leaders genuinely care about and represent us ordinary Americans instead of continuing their legislative, policy, and judicial enrichment of the 1-percenter campaign donor/rentier class of transnational Globali$t Open Border$ E$tabli$hment $ellout$.

Jim Sweeney > > , October 14, 2017 at 8:26 pm GMT

Re the birthright citizenship argument, that is not settled law in that SCOTUS has never ruled on the question of whether a child born in the US is thereby a citizen if the parents are illegally present. Way back in 1897, SCOTUS did resolve the issue of whether a child born to alien parents who were legally present was thereby a citizen. That case is U.S. vs Wong Kim Ark 169 US 649. SCOTUS ruled in favor of citizenship. If that was a justiciable issue how much more so is it when the parents are illegally present?

My thinking is that the result would be the same but, at least, the question would be settled. I cannot see justices returning a toddler to Beijing or worse. They would never have invitations to cocktail parties again for the shame heaped upon them for such uncaring conduct. Today, the title of citizen is conferred simply by bureaucratic rule, not by judicial order.

JP Straley > > , October 14, 2017 at 9:42 pm GMT

Arguments Against Fourteenth Amendment Anchor Baby Interpretation
J. Paige Straley

Part One. Anchor Baby Argument, Mexican Case.
The ruling part of the US Constitution is Amendment Fourteen: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

Here is the ruling part of the Mexican Constitution, Section II, Article Thirty:
Article 30
Mexican nationality is acquired by birth or by naturalization:
A. Mexicans by birth are:
I. Those born in the territory of the Republic, regardless of the nationality of
their parents:
II. Those born in a foreign country of Mexican parents; of a Mexican father and
a foreign mother; or of a Mexican mother and an unknown father;
III. Those born on Mexican vessels or airships, either war or merchant vessels. "

A baby born to Mexican nationals within the United States is automatically a Mexican citizen. Under the anchor baby reasoning, this baby acquires US citizenship at the same time and so is a dual citizen. Mexican citizenship is primary because it stems from a primary source, the parents' citizenship and the law of Mexico. The Mexican Constitution states the child of Mexican parents is automatically a Mexican citizen at birth no matter where the birth occurs. Since the child would be a Mexican citizen in any country, and becomes an American citizen only if born in America, it is clear that Mexico has the primary claim of citizenry on the child. This alone should be enough to satisfy the Fourteenth Amendment jurisdiction thereof argument. Since Mexican citizenship is primary, it has primary jurisdiction; thus by the plain words of the Fourteenth such child is not an American citizen at birth.

[MORE]
There is a second argument for primary Mexican citizenship in the case of anchor babies. Citizenship, whether Mexican or American, establishes rights and duties. Citizenship is a reciprocal relationship, thus establishing jurisdiction. This case for primary Mexican citizenship is supported by the fact that Mexico allows and encourages Mexicans resident in the US, either illegal aliens or legal residents, to vote in Mexican elections. They are counted as Mexican citizens abroad, even if dual citizens, and their government provides widespread consular services as well as voting access to Mexicans residing in the US. As far as Mexico is concerned, these persons are not Mexican in name only, but have a civil relationship strong enough to allow a political voice; in essence, full citizenship. Clearly, all this is the expression of typical reciprocal civic relationships expressed in legal citizenship, further supporting the establishment of jurisdiction.

Part Two: Wong Kim Ark (1898) case. (Birthright Citizenship)

The Wong Kim Ark (WKA) case is often cited as the essential legal reasoning and precedent for application of the fourteenth amendment as applied to aliens. There has been plenty of commentary on WKA, but the truly narrow application of the case is emphasized reviewing a concise statement of the question the case was meant to decide, written by Hon. Horace Gray, Justice for the majority in this decision.

"[W]hether a child born in the United States, of parents of Chinese descent, who, at the time of his birth, are subjects of the Emperor of China, but have a permanent domicile and residence in the United States, and are there carrying on business, and are not employed in any diplomatic or official capacity under the Emperor of China, becomes at the time of his birth a citizen of the United States by virtue of the first clause of the Fourteenth Amendment of the Constitution." (Italics added.)

For WKA to justify birthright citizenship, the parents must have " permanent domicile and residence " But how can an illegal alien have permanent residence when the threat of deportation is constantly present? There is no statute of limitation for illegal presence in the US and the passage of time does not eliminate the legal remedy of deportation. This alone would seem to invalidate WKA as a support and precedent for illegal alien birthright citizenship.

If illegal (or legal) alien parents are unemployed, unemployable, illegally employed, or if they get their living by illegal means, then they are not ". . .carrying on business. . .", and so the children of indigent or criminal aliens may not be eligible for birthright citizenship

If legal aliens meet the two tests provided in WKA, birthright citizenship applies. Clearly the WKA case addresses the specific situation of the children of legal aliens, and so is not an applicable precedent to justify birthright citizenship for the children of illegal aliens.

Part three. Birth Tourism

Occasionally foreign couples take a trip to the US during the last phase of the wife's pregnancy so she can give birth in the US, thus conferring birthright citizenship on the child. This practice is called "birth tourism." WKA provides two tests for birthright citizenship: permanent domicile and residence and doing business, and a temporary visit answers neither condition. WKA is therefore disqualified as justification for a "birth tourism" child to be granted birthright citizenship.

Realist > > , October 14, 2017 at 10:05 pm GMT

@Carroll Price Unfortunately, that train left the station long ago. With or without welfare, there's simply no way soft, spoiled, lazy, over-indulged Americans who have never hit a lick at anything their life, will ever perform manual labor for anyone, including themselves. Then let them starve to death. The Pilgrims nipped that dumb ass idea (welfare) in the bud

Alfa158 > > , October 15, 2017 at 2:10 am GMT

@Carroll Price

An equally pressing problem, though, is the millions of foreigners who are living and working here, and using our schools and hospitals and public services, who should not be here.
Has it ever occurred to anyone other than me that the cost associated with foreign workers using our schools and hospitals and pubic services for free, is more than off-set by the cheap price being paid for grocery store items like boneless chicken breast, grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even for the wealthy?

Let alone relatively poor people (like myself) and those on fixed incomes? What un-thinking Americans want, is having their cake and eating it too. Well, in the real world, things just don't work that way. It's pay me now or pay me later. Once all the undocumented workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the country, then what? Please look up;History; United States; pre mid-twentieth century. I'm pretty sure Americans were eating chicken, grapes, apples, peaches, lettuce, etc. prior to that period. I don't think their diet consisted of venison and tree bark.
But since I wasn't there, maybe I'm wrong and that is actually what they were eating.
I know some people born in the 1920′s; I'll check with them and let you know what they say.

[Sep 24, 2017] Inside Amazon's Warehouses: Thousands of Senior Citizens and the Occasional Robot Mishap

Sep 24, 2017 | hardware.slashdot.org

(wired.com) Posted by EditorDavid on Saturday September 23, 2017 @09:30PM from the looking-inside dept. Amazon aggressively recruited thousands of retirees living in mobile homes to migrate to Amazon's warehouses for seasonal work, according to a story shared by nightcats . Wired reports: From a hiring perspective, the RVers were a dream labor force. They showed up on demand and dispersed just before Christmas in what the company cheerfully called a "taillight parade." They asked for little in the way of benefits or protections . And though warehouse jobs were physically taxing -- not an obvious fit for older bodies -- recruiters came to see CamperForce workers' maturity as an asset. These were diligent, responsible employees. Their attendance rates were excellent. "We've had folks in their eighties who do a phenomenal job for us," noted Kelly Calmes, a CamperForce representative, in one online recruiting seminar... In a company presentation, one slide read, "Jeff Bezos has predicted that, by the year 2020, one out of every four workampers in the United States will have worked for Amazon." The article is adapted from a new book called " Nomadland ," which also describes seniors in mobile homes being recruited for sugar beet harvesting and jobs at an Iowa amusement park, as well as work as campground hsots at various national parks. Many of them "could no longer afford traditional housing," especially after the financial downturn of 2008. But at least they got to hear stories from their trainers at Amazon about the occasional "unruly" shelf-toting "Kiva" robot: They told us how one robot had tried to drag a worker's stepladder away. Occasionally, I was told, two Kivas -- each carrying a tower of merchandise -- collided like drunken European soccer fans bumping chests. And in April of that year, the Haslet fire department responded to an accident at the warehouse involving a can of "bear repellent" (basically industrial-grade pepper spray). According to fire department records, the can of repellent was run over by a Kiva and the warehouse had to be evacuated.

[Sep 16, 2017] Will Millennials Be Forced Out of Tech Jobs When They Turn 40?

Notable quotes:
"... Karen Panetta, the dean of graduate engineering education at Tufts University and the vice president of communications and public relations at the IEEE-USA, believes the outcome for tech will be Logan's Run -like, where age sets a career limit... ..."
"... It's great to get the new hot shot who just graduated from college, but it's also important to have somebody with 40 years of experience who has seen all of the changes in the industry and can offer a different perspective." ..."
Sep 16, 2017 | it.slashdot.org

(ieeeusa.org)

Posted by EditorDavid on Sunday September 03, 2017 @07:30AM

dcblogs shared an interesting article from IEEE-USA's "Insight" newsletter: Millennials, which date from the 1980s to mid-2000s, are the largest generation. But what will happen to this generation's tech workers as they settle into middle age ?

Will the median age of tech firms rise as the Millennial generation grows older...? The median age range at Google, Facebook, SpaceX, LinkedIn, Amazon, Salesforce, Apple and Adobe, is 29 to 31, according to a study last year by PayScale, which analyzes self-reported data...

Karen Panetta, the dean of graduate engineering education at Tufts University and the vice president of communications and public relations at the IEEE-USA, believes the outcome for tech will be Logan's Run -like, where age sets a career limit...

Tech firms want people with the current skills sets and those "without those skills will be pressured to leave or see minimal career progression," said Panetta... The idea that the tech industry may have an age bias is not scaring the new college grads away. "They see retirement so far off, so they are more interested in how to move up or onto new startup ventures or even business school," said Panetta.

"The reality sets in when they have families and companies downsize and it's not so easy to just pick up and go on to another company," she said. None of this may be a foregone conclusion.

Millennials may see the experience of today's older workers as a cautionary tale, and usher in cultural changes... David Kurtz, a labor relations partner at Constangy, Brooks, Smith & Prophete, suggests tech firms should be sharing age-related date about their workforce, adding "The more of a focus you place on an issue the more attention it gets and the more likely that change can happen.

It's great to get the new hot shot who just graduated from college, but it's also important to have somebody with 40 years of experience who has seen all of the changes in the industry and can offer a different perspective."

[May 20, 2017] Outsourcing higher wage work is more profitable than outsourcing lower wage work

Notable quotes:
"... Baker correctly diagnoses the impact of boomers aging, but there is another effect - "knowledge work" and "high skill manufacturing" is more easily outsourced/offshored than work requiring a physical presence. ..."
"... That's what happened with American IT. ..."
May 20, 2017 | economistsview.typepad.com
cm, May 20, 2017 at 04:51 PM
Baker correctly diagnoses the impact of boomers aging, but there is another effect - "knowledge work" and "high skill manufacturing" is more easily outsourced/offshored than work requiring a physical presence.

Also outsourcing "higher wage" work is more profitable than outsourcing "lower wage" work - with lower wages also labor cost as a proportion of total cost tends to be lower (not always).

And outsourcing and geographically relocating work creates other overhead costs that are not much related to the wages of the local work replaced - and those overheads are larger in relation to lower wages than in relation to higher wages.

libezkova -> cm... May 20, 2017 at 08:34 PM

"Also outsourcing "higher wage" work is more profitable than outsourcing "lower wage" work"

That's what happened with American IT.

[Apr 19, 2017] Paul Krugman Gets Retail Wrong: They are Not Very Good Jobs

Apr 19, 2017 | economistsview.typepad.com
anne , April 17, 2017 at 05:55 AM
http://cepr.net/blogs/beat-the-press/paul-krugman-gets-retail-wrong-they-are-not-very-good-jobs

April 17, 2017

Paul Krugman Gets Retail Wrong: They are Not Very Good Jobs

Paul Krugman used his column * this morning to ask why we don't pay as much attention to the loss of jobs in retail as we do to jobs lost in mining and manufacturing. His answer is that in large part the former jobs tend to be more white and male than the latter. While this is true, although African Americans have historically been over-represented in manufacturing, there is another simpler explanation: retail jobs tend to not be very good jobs.

The basic story is that jobs in mining and manufacturing tend to offer higher pay and are far more likely to come with health care and pension benefits than retail jobs. A worker who loses a job in these sectors is unlikely to find a comparable job elsewhere. In retail, the odds are that a person who loses a job will be able to find one with similar pay and benefits.

A quick look at average weekly wages ** can make this point. In mining the average weekly wage is $1,450, in manufacturing it is $1,070, by comparison in retail it is just $555. It is worth mentioning that much of this difference is in hours worked, not the hourly pay. There is nothing wrong with working shorter workweeks (in fact, I think it is a very good idea), but for those who need a 40 hour plus workweek to make ends meet, a 30-hour a week job will not fit the bill.

This difference in job quality is apparent in the difference in separation rates by industry. (This is the percentage of workers who lose or leave their job every month.) It was 2.4 percent for the most recent month in manufacturing. By comparison, it was 4.7 percent in retail, almost twice as high. (It was 5.2 percent in mining and logging. My guess is that this is driven by logging, but I will leave that one for folks who know the industry better.)

Anyhow, it shouldn't be a mystery that we tend to be more concerned about the loss of good jobs than the loss of jobs that are not very good. If we want to ask a deeper question, as to why retail jobs are not very good, then the demographics almost certainly play a big role.

Since only a small segment of the workforce is going to be employed in manufacturing regardless of what we do on trade (even the Baker dream policy will add at most 2 million jobs), we should be focused on making retail and other service sector jobs good jobs. The full agenda for making this transformation is a long one (higher minimum wages and unions would be a big part of the picture, along with universal health care insurance and a national pension system), but there is one immediate item on the agenda.

All right minded people should be yelling about the Federal Reserve Board's interest rate hikes. The point of these hikes is to slow the economy and reduce the rate of job creation. The Fed's concern is that the labor market is getting too tight. In a tighter labor market workers, especially those at the bottom of the pecking order, are able to get larger wage increases. The Fed is ostensibly worried that this can lead to higher inflation, which can get us to a wage price spiral like we saw in the 70s.

As I and others have argued, *** there is little basis for thinking that we are anywhere close to a 1970s type inflation, with inflation consistently running below the Fed's 2.0 percent target, (which many of us think is too low anyhow). I'd love to see Krugman pushing the cause of full employment here. We should call out racism and sexism where we see it, but this is a case where there is a concrete policy that can do something to address it. Come on Paul, we need your voice.

* https://www.nytimes.com/2017/04/17/opinion/why-dont-all-jobs-matter.html

** https://www.bls.gov/news.release/empsit.t19.htm

*** http://cepr.net/blogs/beat-the-press/overall-and-core-cpi-fall-in-march

-- Dean Baker

Fred C. Dobbs -> anne... , April 17, 2017 at 06:17 AM
PK: Consider what has happened to department stores. Even as Mr. Trump was boasting about saving a few hundred jobs in manufacturing here and there, Macy's announced plans to close 68 stores and lay off 10,000 workers. Sears, another iconic institution, has expressed "substantial doubt" about its ability to stay in business.

Overall, department stores employ a third fewer people now than they did in 2001. That's half a million traditional jobs gone - about eighteen times as many jobs as were lost in coal mining over the same period.

And retailing isn't the only service industry that has been hit hard by changing technology. Another prime example is newspaper publishing, where employment has declined by 270,000, almost two-thirds of the work force, since 2000. ...

(To those that had them, they were probably
pretty decent jobs, albeit much less 'gritty'
than mining or manufacturing.)

BenIsNotYoda -> anne... , April 17, 2017 at 06:42 AM
Dean is correct. Krugman just wants to play the racism card or tell people those who wish their communities were gutted that they are stupid.
JohnH -> BenIsNotYoda... , April 17, 2017 at 06:48 AM
Elite experts are totally flummoxed...how can they pontificate solutions when they are clueless?

Roger Cohen had a very long piece about France and it discontents in the Times Sunday Review yesterday. He could not make heads or tails of the problem. Not worth the read.
https://www.nytimes.com/2017/04/14/opinion/sunday/france-in-the-end-of-days.html?rref=collection%2Fcolumn%2Froger-cohen&action=click&contentCollection=opinion&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection&_r=0

And experts wonder why nobody listens to them any more? Priceless!!!

BenIsNotYoda -> JohnH... , April 17, 2017 at 07:34 AM
clueless experts/academics. well said.
paine -> anne... , April 17, 2017 at 08:27 AM
Exactly dean
Tom aka Rusty -> anne... , April 17, 2017 at 07:39 AM
Krugman is an arrogant elitist who thinks people who disagree with him tend to be ignorant yahoos.

Sort of a Larry Summers with a little better manners.

anne -> Tom aka Rusty... , April 17, 2017 at 08:18 AM
Krugman is an arrogant elitist who thinks people who disagree with him tend to be ignorant yahoos.

[ This is a harsh but fair criticism, and even the apology of Paul Krugman was conditional and showed no thought to the other workers insulted. ]

cm -> Tom aka Rusty... , April 17, 2017 at 08:11 AM
There is a lot of elitism to go around. People will be much more reluctant to express publicly the same as in private (or pseudonymously on the internet?). But looking down on other people and their work is pretty widespread (and in either case there is a lot of assumption about the nature of the work and the personal attributes of the people doing it - usually of a derogatory type in both cases).

I find it plausible that Krugman was referring those widespread stereotypes about job categories that (traditionally?) have not required a college degree, or have been relatively at the low end of the esteem scale in a given industry (e.g. in "tech" and manufacturing, QA/testing related work).

It must be possible to comment on such stereotypes, but there is of course always the risk of being thought to hold them oneself, or indeed being complicit in perpetuating them.

As a thought experiment, I suggest reviewing what you yourself think about occupations not held by yourself, good friends, and family members and acquaintainces you like/respect (these qualifications are deliberate). For example, you seem to think not very highly of maids.

Of course, being an RN requires significantly more training than being a maid, and not just once when you start in your career. But at some level of abstraction, anybody who does work where their autonomy is quite limited (i.e. they are not setting objectives at any level of the organization) is "just a worker". That's the very stereotype we are discussing, isn't it?

anne -> cm... , April 17, 2017 at 08:26 AM
Nicely explained.
paine -> anne... , April 17, 2017 at 08:40 AM
Yes
anne -> Tom aka Rusty... , April 17, 2017 at 08:24 AM
Krugman thinks nurses are the equivalent of maids...

[ The problem is that Paul Krugman dismissed the work of nurses and maids and gardeners as "menial." I find no evidence that Krugman understands that even after conditionally apologizing to nurses. ]

paine -> anne... , April 17, 2017 at 08:42 AM
Even if there are millions of mcjobs
out there
none are filled by mcpeople

[Apr 16, 2017] The most common characteristic of people running their own business was that theyd been fired twice

Notable quotes:
"... things might have worked out with better luck on timing), you need your head examined to start a small business ..."
"... If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic. ..."
"... And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy. ..."
"... You're so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses! ..."
"... To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you're SOL! ..."
Apr 16, 2017 | www.nakedcapitalism.com
Yves Smith, April 16, 2017 at 5:00 pm

As someone who has started three businesses, two of them successful (I went to Australia right before the Gulf War started, which led to new business in Sydney coming to a complete halt for six months; things might have worked out with better luck on timing), you need your head examined to start a small business. The most common characteristic of people running their own business was that they'd been fired twice.

If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic.

And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy.

steelhead , April 16, 2017 at 5:41 pm

Unless your family fully bankrolls you until BK kicks in (snark). I would have loved to write as a career. Unfortunately, at the time, promises that had been made were broken and I had to go to work for a F500 just to survive right after my undergraduate degree was completed. Fate and Karma.

oh , April 16, 2017 at 5:56 pm

You're so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses!

To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you're SOL!

[Apr 12, 2017] The Despair of Learning That Experience No Longer Matters

Apr 12, 2017 | economistsview.typepad.com
RGC , April 12, 2017 at 06:41 AM
The Despair of Learning That Experience No Longer Matters

By Benjamin Wallace-Wells April 10, 2017

.....................

The arguments about Case and Deaton's work have been an echo of the one that consumed so much of the primary campaign, and then the general election, and which is still unresolved: whether the fury of Donald Trump's supporters came from cultural and racial grievance or from economic plight. Case and Deaton's scholarship does not settle the question. As they write, more than once, "more work is needed."

But part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument. If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation. Whatever comes from the deliberations over Case and Deaton's statistics, there is within their numbers an especially interesting story.

http://www.newyorker.com/news/benjamin-wallace-wells/the-despair-of-learning-that-experience-no-longer-matters

[Apr 12, 2017] Why losing your job leads to a very long-lasting decline in your lifetime wages

Apr 12, 2017 | lse.ac.uk
Gregor Jarosch (2015, Chicago, Stanford): Jarosch writes a model to explain why losing your job leads to a very long-lasting decline in your lifetime wages. His hypothesis is that this is due to people climbing a ladder of jobs that are increasingly secure, so that when one has the misfortune of losing a job, this leads to a fall down the ladder and a higher likelihood of having further spells of unemployment in the future. He uses administrative social security data to find some evidence for this hypothesis.

[Mar 19, 2017] When inequality is driven by extremes at the tail, using median means that you dont see much change in the demographics

Mar 19, 2017 | economistsview.typepad.com
libezkova : March 16, 2017 at 09:51 PM , 2017 at 09:51 PM
"the U.S. middle class - with household incomes ranging from two-thirds to double the national median"

Median household income in the US in 2015 was less the $60K. Two-thirds is $40K. That's almost poverty not middle class.

Sociologically the middle class is a quasi-elite of professionals and managers, who are largely immune to economic downturns and trends such as out-sourcing.

reason -> libezkova... , March 17, 2017 at 04:24 AM
The definition game? Define something to something else as is being talked about and then claim, claims based on a completely different definition are false?
Lyle -> libezkova... , March 17, 2017 at 12:47 PM
Actually with the change in ratio professionals and managers now tend to upper middle class, (29% of us is upper middle now, 32% middle).

One of the influences is that post WWII it was possible to be middle class and work on an assembly line in a job that was described as check your brain at the door. Automation and process changes have wiped the high pay of such jobs out. Steel makers for example thru mainly process changes (electric furnaces using scrap, continuous casting and the like) mean that it takes 1/5 the hours to produce a ton of steel in did in the 1970s.

The movement of assembly line jobs to the middle class occured because there was a period where the US was much less involved with the rest of the world economically, because their industries had all been destroyed. The change started during the Johnson admin, and showed up in the high inflation of the Nixon admin.

cm -> libezkova... , March 17, 2017 at 10:48 PM
Most "professionals and managers" are nowhere near being immune to downturns and outsourcing, in aggregate.

You could likewise claim that "low skilled" or any other occupations are "immune" as somewhere around 70-80% of their members continue being employed through tough times, in aggregate.

If you take "tech", companies laying off around 5-10% or even more of their staff in busts is a frequent enough occurrence. And that's in addition to the "regular" age discrimination and cycling of workers justified with "outdated skills". Being young and (supposedly) impressionable is a skill!

D. C. Sessions -> libezkova... , March 18, 2017 at 10:16 AM
"the U.S. middle class - with household incomes ranging from two-thirds to double the national median"

That's almost tautological. By definition, there can't be a whole lot of change in the population of groups defined relative to median. Income and wealth of those groups, though, can be enlightening.

Substitute "mean" for "median" and watch what happens. When inequality is driven by extremes at the tail, using "median" means that you don't see much change in the demographics. (Hint: if "middle class" is defined as half to twice the average income, there are damned few in that bracket.)

[Mar 03, 2017] The crazy works iof IT hiring

Mar 03, 2017 | economistsview.typepad.com
"Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work)."

That's a very good and historically accurate point(in 90th Java was a crush ;-). And this type of parasitism continues to flourish even now. Just with the new buzzwords...

When employee's complain that that can't fill open positions that often means that they painstakingly define the position is such a way that the person deemed suitable can hit ground running on the first day or week on the job. No retraining period is needed. Like a new brake pads in a car. Totally replaceable.

To say nothing that in reality Google and other giants (Amazon, Microsoft, Facebook, etc) are to a large extent "cemeteries" for IT talent. What's so exciting is creating Gmail and many other Google products ? Absolutely nothing. This is a pretty disgusting reimplementation work.

cm -> New Deal democrat... March 01, 2017 at 07:55 AM , 2017 at 07:55 AM

One issue that you both don't mention is lags. Translating a demand for skill into available skill takes years to decades in the best of circumstances. Even for many so called "low skilled" jobs, people have to be trained commonly for several years. For "knowledge work" or "new technology paradigms", you basically have to bring up a new generation of school/college graduates.

Expecting training to happen "just like that", or to be funded by the workers themselves, is a non-starter.

And when the business has to pay for the training (with the risk that some of the cost cannot be recouped because trained up people may leave), then we are back at "lack of profitability".

Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work).

reason -> cm... , March 01, 2017 at 07:57 AM
"Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programing languages than the programming languages even existed (in a form to be usable for commercial work)."

The trouble is, I think that was no joke, it was literally true. Which means that were deliberately recruiting liars. Maybe that explains a lot.

cm -> reason ... , March 01, 2017 at 08:24 AM
Yes, the joke was based on true anecdotes. Not sure about "deliberately", my most plausible assumption is that they just plugged the "skill" description into the standard job ad templates.

Looking for about 5 years experience - enough to (presumably) be able to do stuff, but not yet too old/tainted.

cm -> reason ... , March 01, 2017 at 08:27 AM
Also it is not necessary to have exactly all the asked experiences, at least when your resume will be selected/reviewed by a human. Of course if the recruiting process has been made "efficient" that will filter resumes by strict criteria, then the honest/modest applicants will be disproportionately screened out.
cm -> reason ... , March 01, 2017 at 08:30 AM
In a lot of big corps, the early stages of recruiting (processing/screening incoming resumes) are often outsourced to HR who obviously have little idea about the subject matter of the work, and can only go by buzzwords, possibly using computer software (OCR processing of resumes).

I have heard the story often that hiring managers are presented with unsuitable resumes/candidates, and often find better matches going through the raw data themselves. But that costs time ("inefficient").

Anachronism -> cm... , March 01, 2017 at 09:44 AM
I can tell you that, from a consulting standpoint, I have been on several contracts where we've interviewed someone who had great skills, and the person who showed up had zero. So now companies will Skype with people to make sure they're talking to the actual consultant.
DrDick -> cm... , March 01, 2017 at 11:28 AM
Sadly, that is true of far too many companies of all sorts today, who refuse to train their workers and expect them to come preprogrammed with the company's proprietary software.

[Feb 20, 2017] Tech Jobs Took a Big Hit Last Year

Feb 20, 2017 | tech.slashdot.org

Barb Darrow, writing for Fortune: Tech jobs took it on the chin last year. Layoffs at computer, electronics, and telecommunications companies were up 21 percent to 96,017 jobs cut in 2016 , compared to 79,315 the prior year. Tech layoffs accounted for 18 percent of the total 526,915 U.S. job cuts announced in 2016, according to Challenger, Gray & Christmas, a global outplacement firm based in Chicago. Of the 2016 total, some 66,821 of the layoffs came from computer companies, up 7% year over year. Challenger attributed much of that increase to cuts made by Dell Technologies, the entity formed by the $63 billion convergence of Dell and EMC. In preparation for that combination, layoffs were instituted across EMC and its constituent companies, including VMware.

[Jan 11, 2017] Discrimination thru stupid job descriptions is catching up to the economy

Jan 11, 2017 | www.nakedcapitalism.com
cocomaan , January 10, 2017 at 4:04 pm

Coulnd't get the JOLTS, November 2016 links to work, but the skills gap is wild.

At an institution of higher ed I'm familiar with, both faculty and administrative positions continue to be unfilled. There are very few candidates even for entry level positions. Failed searches are now the norm. It's feast or famine: either people are perfect for the job and have many options, or have no related experience at all.

I wonder if the labor force participation rate is starting to catch up with the job market. That is, there are a lot of healthy adults who have dropped out of the workforce who would be the people you'd want in those positions.

Or that the job market is not nearly as liquid as they'd have you believe, and people can't relocate from where they are because of adult children who live with them, or things of that nature. All kinds of weird things now in the job market. I know someone who commutes a significant distance to work that has to look for another job because their workplace's health care plan only covers a geographic area close to that job.

alex morfesis , January 10, 2017 at 4:59 pm

Discrimination thru stupid job descriptions is catching up to the economy paying 12 per hour five years experience required nonsense job descriptions designed to help the accredited and credentialed have a leg up

There seem to be three types of employment categories

real jobs that might last through 12 quarters

gigs

and surfdumb/$lavery gigs where your hours are messed with, your schedule is messed with & you are expected to pay for the stupid uniform some bean counter thinks is branding

IMUO it is not a skills gap it is the demanding of irrelevant capacities and experience that almost always have very little to do with the actual tasks required

[Dec 27, 2016] Facing Layoff, An IT Employee Makes A Bold Counteroffer

Carnival Corp. told about 200 IT employees that the company was transferring their work to Capgemini, a large IT outsourcing firm
Notable quotes:
"... Senior IT engineer Matthew Culver told CBS that the requested "knowledge transfer activities" just meant training their own replacements , and "he isn't buying any of it," writes Slashdot reader dcblogs . ..."
"... Foreign workers are willing to do a job at a lower salary in most if not all cases b/c the cost of living in their respective countries is a fraction of ours. ..."
Dec 26, 2016 | it.slashdot.org
(computerworld.com) 134

Posted by EditorDavid on Sunday December 25, 2016 @05:05PM from the Bob-Cratchit-vs-Scrooge dept.

ComputerWorld reports:

In early December, Carnival Corp. told about 200 IT employees that the company was transferring their work to Capgemini, a large IT outsourcing firm. The employees had a choice: Either agree to take a job with the contractor or leave without severance. The employees had until the week before Christmas to make a decision about their future with the cruise line.

By agreeing to a job with Paris-based Capgemini, employees are guaranteed employment for six months, said Roger Frizzell, a Carnival spokesman.

"Our expectation is that many will continue to work on our account or placed into other open positions within Capgemini" that go well beyond the six-month period, he said in an email.

Senior IT engineer Matthew Culver told CBS that the requested "knowledge transfer activities" just meant training their own replacements , and "he isn't buying any of it," writes Slashdot reader dcblogs . "After receiving his offer letter from Capgemini, he sent a counteroffer.

It asked for $500,000...and apology letters to all the affected families," signed by the company's CEO. In addition, the letter also demanded a $100,000 donation to any charity that provides services to unemployed American workers. "I appreciate your time and attention to this matter, and I sincerely hope that you can fulfill these terms."

And he's also working directly with a lawyer for an advocacy group that aims to "stop the abuse of H-1B and other foreign worker programs ."

Re:Dear Matthew ( Score: 5 , Insightful) by Anonymous Coward writes: on Sunday December 25, 2016 @06:00PM ( #53553189 )

Foreign workers are willing to do a job at a lower salary in most if not all cases b/c the cost of living in their respective countries is a fraction of ours.

I would be willing to do my job at a fraction of what I am paid currently should that (that being how expensive it is to live here) change. It is equally infuriating to me when American companies use loopholes in our ridiculously complicated tax code to shelter revenues in foreign tax shelters to avoid paying taxes while at the same time benefiting from our infrastructure, emergency services, military, etc..

Its assholes like you that always spout off about free market this or that, about some companies fiduciary responsibilities to it's shareholders blah blah blah... as justification for shitty behavior.

Re:Dear Matthew ( Score: 2 ) by ShanghaiBill ( 739463 ) writes: on Sunday December 25, 2016 @06:13PM ( #53553247 )
It is equally infuriating to me when American companies use loopholes in our ridiculously complicated tax code to shelter revenues in foreign tax shelters to avoid paying taxes

So who are you infuriated at? The companies that take advantage of those loopholes, or the politicians that put them there? Fury doesn't help unless it is properly directed. Does your fury influence who you vote for?

... while at the same time benefiting from our infrastructure, emergency services, military, etc.

No. Taxes are only sheltered on income generated overseas, using overseas infrastructure, emergency services, etc. I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France.

Re:Dear Matthew ( Score: 2 ) by PolygamousRanchKid ( 1290638 ) writes: on Sunday December 25, 2016 @06:33PM ( #53553303 )
I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France.

In a seriously silly Monty Python sketch about taxes, someone mildly suggested:

"I think we should tax foreigners, living abroad."

Kinda sorta the same idea . . .

Re:Dear Matthew ( Score: 3 ) by fibonacci8 ( 260615 ) writes: on Sunday December 25, 2016 @08:43PM ( #53553777 )

I suppose it's related to the idea that intellectual property "rights" granted by a country of origin should still have the same benefits and drawbacks when transferred to another country. Or at the very least should be treated as an export at such time a base of operations moves out of country.

Re:Dear Matthew ( Score: 5 , Insightful) by Rob Y. ( 110975 ) writes: on Sunday December 25, 2016 @06:37PM ( #53553317 )

Except that calling, say iOS sales 'generated overseas' when the software was written in the US, using US infrastructure, etc . And the company is making the bogus claim that their Irish subsidiary owns the rights to that software. It's a scam - not a loophole.

Re:Dear Matthew ( Score: 5 , Insightful) by geoskd ( 321194 ) writes: on Sunday December 25, 2016 @07:35PM ( #53553547 )
It's a scam - not a loophole.

They are the same thing. The only way to ensure that there are no tax dodges out there is to simplify the tax code, and eliminate the words: "except", "but", "excluding", "omitting", "minus", "exempt", "without", and any other words to those same effects.

Americans are too stupid to ever vote for a poltiician that states they will raise taxes. This means that either politicians lie, or they actively undermine the tax base. Both of those situations are bad for the majority of americans, but they vote for the same scumbags over and over, and will soundly reject any politician who openly advocates tax increases. The result is a race to the bottom. Welcome to reaping what you sow, brought to you by Democracy(tm).

Re: ( Score: 2 ) by ShanghaiBill ( 739463 ) writes:

Except that calling, say iOS sales 'generated overseas' when the software was written in the US, using US infrastructure, etc .

That makes no sense. Plenty of non-American companies develop software in America. Yet only if they are incorporated in America do they pay income tax on their overseas earnings, and it is irrelevant where their engineering and development was done.

It has nothing whatsoever to do with "using infrastructure". It is just an extraterritorial money grab that is almost certainly counterproductive since it incentivizes American companies to invest and create jobs overseas.

Re: Dear Matthew ( Score: 2 , Insightful) by Anonymous Coward writes:

Yes, taxes are based on profits. So Google, for instance, makes a bunch of money in the US. Their Irish branch then charges about that much for "consulting" leaving the American part with little to no profits to tax.

Re: ( Score: 2 ) by SwashbucklingCowboy ( 727629 ) writes:

Oh get real. Companies make it appear that nearly all income is generated overseas in order to get around that. It's mostly a scam.

Re:Dear Matthew ( Score: 4 , Insightful) by msauve ( 701917 ) writes: on Sunday December 25, 2016 @07:45PM ( #53553601 )

"I am baffled why Americans believe they have a "right" to tax the sale of a product made in China and sold in France."

Because the manufacturing and sales are controlled by a US based company, as is the profit benefit which results. If a US entity, which receives the benefits of US law, makes a profit by any means, why should it not be taxed by the US?

[Aug 18, 2016] Neoliberals often argue that people should be glad to lose employment at 50 so that people from other countries can have higher incomes

Notable quotes:
"... Neoliberals often argue that people should be glad to lose employment at 50 so that people from other countries can have higher incomes, and leftists often agree because hey "free movement" and because after all the professional class jobs aren't at risk ..."
"... "I think Trump is afraid the imperial global order presided by the US is about to crash and thinks he will be able to steer the country into a soft landing by accepting that other world powers have interests, by disengaging from costly and humiliating military interventions, by re-negotiating trade deals, and by stopping the mass immigration of poor people." ..."
"... No one has literally argued that people should be glad to lose employment: that part was hyperbole. But the basic argument is often made quite seriously. See e.g. outsource Brad DeLong . ..."
"... To the guy who asked- poor white people keep voting Republican even though it screws them because they genuinely believe that the country is best off when it encourages a culture of "by the bootstraps" self improvement, hard work, and personal responsibility. They view taxing people in order to give the money to the supposedly less fortunate as the anti thesis of this, because it gives people an easy out that let's them avoid having to engage in the hard work needed to live independently. ..."
"... Attempts at repairing historical racial inequity read as cheating in that paradigm, and even as hostile since they can easily observe white people who are just as poor or poorer than those who racial politics focuses upon. ..."
"... The extent to which "poor white people" vote against their alleged economic interests is overblown. To a large extent, they do not vote at all nor is anyone or anything on the ballot to represent their interests. And, yes, they are misinformed systematically by elites out to screw them and they know this, but cannot do much to either clear up their own confusion or fight back. ..."
"... The mirror image problem - of elites manipulating the system to screw the poor and merely middle-class - is daily in the news. Both Presidential candidates have been implicated. So, who do you recommend they vote for? ..."
"... My understanding is trumps support disproportionately comes from the small business owning classes, Ie a demographic similar to the petite bourgeoisie who have often been heavily involved in reactionary movements. This gets oversold as "working class" when class is defined by education level rather than income. ..."
"... Eric Berne, in The Structures and Dynamics of Organizations and Groups, proposed that among the defining characteristics of a coherent group is an explicit boundary which determines whether an individual is a member of the group or not. (If there is no boundary, nothing binds the assemblage together; it is a crowd.) The boundary helps provide social cohesion and is so important that groups will create one if necessary. Clearly, boundaries exclude as well as include, and someone must play the role of outsider. ..."
"... I am somewhat suspicious of leaving dominating elites out of these stories of racism as an organizing principle for political economy or (cultural) community. ..."
"... Racism served the purposes of a slaveholding elite that organized political communities to serve their own interests. (Or, vis a vis the Indians a land-grab or genocide.) ..."
"... Racism serves as an organizing principle. Politically, in an oppressive and stultifying hierarchy like the plantation South, racism not incidentally buys the loyalty of subalterns with ersatz status. ..."
"... For a time, the balkanization of American political communities by race, religion and ethnicity was an effective means to the dominance of an tiny elite with ties to an hegemonic community, but it backfired. Dismantling that balkanization has left the country with a very low level of social affiliation and thus a low capacity to organize resistance to elite depredations. ..."
crookedtimber.org

Rich Puchalsky 08.04.16 at 11:40 am 177

fn: "Of course there is a subtext to these racist hate campaigns that someone else here raised and rich ran with a bit, which is the hatred of the unemployed. I think a lot of people voting leave imagine that the next thing on the agenda is slashing the dole to force poor white people to do the work the Eastern Europeans did. "

Yes, in part. In part, also, people imagine that poor citizens will get jobs that previously were done by migrants. This has a hatred of slackers element that is bad, but as economics, it's pretty well-founded that if you reduce the size of the labor pool relative to the population then unemployment will go down and wages will go up. Neoliberals often argue that people should be glad to lose employment at 50 so that people from other countries can have higher incomes, and leftists often agree because hey "free movement" and because after all the professional class jobs aren't at risk. But strangely enough some people seem to resent this.

Layman 08.04.16 at 11:48 am 178

Lupita: "I think Trump is afraid the imperial global order presided by the US is about to crash and thinks he will be able to steer the country into a soft landing by accepting that other world powers have interests, by disengaging from costly and humiliating military interventions, by re-negotiating trade deals, and by stopping the mass immigration of poor people."

... ... ...

Rich Puchalsky 08.04.16 at 12:03 pm

"I can't recall any particular instance where someone made this argument."

No one has literally argued that people should be glad to lose employment: that part was hyperbole. But the basic argument is often made quite seriously. See e.g. outsource Brad DeLong.

engels 08.04.16 at 12:25 pm

While this may be the effect of some neoliberal policies, I can't recall any particular instance where someone made this argument

Maybe this kind of thing rom Henry Farrell? (There may well be better examples.)

Is some dilution of the traditional European welfare state acceptable, if it substantially increases the wellbeing of current outsiders (i.e. for example, by bringing Turkey into the club). My answer is yes, if European leftwingers are to stick to their core principles on justice, fairness, egalitarianism etc…

http://crookedtimber.org/2005/05/31/talking-turkey-over-welfare/

Lupita 08.04.16 at 2:42 pm

Large numbers of low-income white southern Americans consistently vote against their own economic interests. They vote to award tax breaks to wealthy people and corporations, to cut unemployment benefits, to bust unions, to reward companies for outsourcing jobs, to resist wage increases, to cut funding for health care for the poor, to cut Social Security and Medicare, etc.

The same thing has happened in Mexico with neoliberal government after neoliberal government being elected. There are many democratically elected neoliberal governments around the world.

Why might this be?

In the case of Mexico, because Peρa Nieto's wife is a telenovela star. How cool is that? It places Mexico in the same league as 1st world countries, such as France, with Carla Bruni.


Patrick 08.04.16 at 4:32 pm

To the guy who asked- poor white people keep voting Republican even though it screws them because they genuinely believe that the country is best off when it encourages a culture of "by the bootstraps" self improvement, hard work, and personal responsibility. They view taxing people in order to give the money to the supposedly less fortunate as the anti thesis of this, because it gives people an easy out that let's them avoid having to engage in the hard work needed to live independently.

They see it as little different from letting your kid move back on after college and smoke weed in your basement. They don't generally mind people being on unemployment transitionally, but they're supposed to be a little embarrassed about it and get it over with as soon as possible.

They not only worry that increased government social spending will incentivize bad behavior, they worry it will destroy the cultural values they see as vital to Americas past prosperity. They tend to view claims about historic or systemic injustice necessitating collective remedy because they view the world as one in which the vagaries of fate decree that some are born rich or poor, and that success is in improving ones station relative to where one starts.

Attempts at repairing historical racial inequity read as cheating in that paradigm, and even as hostile since they can easily observe white people who are just as poor or poorer than those who racial politics focuses upon. Left wing insistence on borrowing the nastiest rhetoric of libertarians ("this guy is poor because his ancestors couldn't get ahead because of historical racial injustice so we must help him; your family couldn't get ahead either but that must have been your fault so you deserve it") comes across as both antithetical to their values and as downright hostile within the values they see around them.

All of this can be easily learned by just talking to them.

It's not a great world view. It fails to explain quite a lot. For example, they have literally no way of explaining increased unemployment without positing either that everyone is getting too lazy to work, or that the government screwed up the system somehow, possibly by making it too expensive to do business in the US relative to other countries. and given their faith in the power of hard work, they don't even blame sweatshops- they blame taxes and foreign subsidies.

I don't know exactly how to reach out to them, except that I can point to some things people do that repulse them and say "stop doing that."


bruce wilder 08.04.16 at 5:50 pm

The extent to which "poor white people" vote against their alleged economic interests is overblown. To a large extent, they do not vote at all nor is anyone or anything on the ballot to represent their interests. And, yes, they are misinformed systematically by elites out to screw them and they know this, but cannot do much to either clear up their own confusion or fight back.

The mirror image problem - of elites manipulating the system to screw the poor and merely middle-class - is daily in the news. Both Presidential candidates have been implicated. So, who do you recommend they vote for?

There is serious deficit of both trust and information among the poor. Poor whites hardly have a monopoly; black misleadership is epidemic in our era of Cory Booker socialism.


bruce wilder 08.04.16 at 7:05 pm

Politics is founded on the complex social psychology of humans as social animals. We elevate it from its irrational base in emotion to rationalized calculation or philosophy at our peril.


T 08.04.16 at 9:17 pm

@Layman
I think you're missing Patrick's point. These voters are switching from one Republican to another. They've jettisoned Bush et. al. for Trump. These guys despise Bush. They've figured out that the mainstream party is basically 30 years of affinity fraud. So, is your argument is that Trump even more racist? That kind of goes against the whole point of the OP. Not saying that race doesn't matter. Of course it does. But Trump has a 34% advantage in non-college educated white men. It just isn't the South. Why does it have to be just race or just class?


Ronan(rf) 08.04.16 at 10:35 pm

"I generally don't give a shit about polls so I have no "data" to evidence this claim, but my guess is the majority of Trump's support comes from this broad middle"

My understanding is trumps support disproportionately comes from the small business owning classes, Ie a demographic similar to the petite bourgeoisie who have often been heavily involved in reactionary movements. This gets oversold as "working class" when class is defined by education level rather than income.

This would make some sense as they are generally in economically unstable jobs, they tend to be hostile to both big govt (regulations, freeloaders) and big business (unfair competition), and while they (rhetorically at least) tend to value personal autonomy and self sufficiency , they generally sell into smaller, local markets, and so are particularly affected by local demographic and cultural change , and decline. That's my speculation anyway.

T 08.05.16 at 3:12 pm

@patrick @layman

Patrick, you're right about the Trump demographic. https://fivethirtyeight.com/features/the-mythology-of-trumps-working-class-support/

Layman - Why are these voters switching from Bush et al to Trump? Once again, Corey's whole point is that there is very little difference between the racism of Trump and the mainstream party since Nixon. Is Trump just more racist? Or are the policies of Trump resonating differently than Bush for reasons other than race? Are the folks that voted for the other candidates in the primary less racist so Trump supporters are just the most racist among Republicans? Cruz less racist? You have to explain the shift within the Republican party because that's what happened.


Anarcissie 08.06.16 at 3:00 pm

Faustusnotes 08.06.16 at 1:50 pm @ 270 -

Eric Berne, in The Structures and Dynamics of Organizations and Groups, proposed that among the defining characteristics of a coherent group is an explicit boundary which determines whether an individual is a member of the group or not. (If there is no boundary, nothing binds the assemblage together; it is a crowd.) The boundary helps provide social cohesion and is so important that groups will create one if necessary. Clearly, boundaries exclude as well as include, and someone must play the role of outsider. While Berne's theories are a bit too nifty for me to love them, I have observed a lot of the behaviors he predicts. If one wanted to be sociobiological, it is not hard to hypothesize evolutionary pressures which could lead to this sort of behavior being genetically programmed. If a group of humans, a notably combative primate, does not have strong social cohesion, the war of all against all ensues and everybody dies. Common affections alone do not seem to provide enough cohesion.

In an earlier but related theory, in the United States, immigrants from diverse European communities which fought each other for centuries in Europe arrived and managed to now get along because they had a major Other, the Negro, against whom to define themselves (as the White Race) and thus to cohere sufficiently to get on with business. The Negro had the additional advantage of being at first a powerless slave and later, although theoretically freed, was legally, politically, and economically disabled - an outsider who could not fight back very effectively, nor run away. Even so, the US almost split apart and there continue to be important class, ethnic, religious, and regional conflicts. You can see how these two theories resonate.

It may be that we can't have communities without this dark side, although we might be able to mitigate some of its destructive effects.


bruce wilder 08.06.16 at 4:28 pm

I am somewhat suspicious of leaving dominating elites out of these stories of racism as an organizing principle for political economy or (cultural) community.

Racism served the purposes of a slaveholding elite that organized political communities to serve their own interests. (Or, vis a vis the Indians a land-grab or genocide.)

Racism serves as an organizing principle. Politically, in an oppressive and stultifying hierarchy like the plantation South, racism not incidentally buys the loyalty of subalterns with ersatz status. The ugly prejudices and resentful arrogance of working class whites is thus a component of how racism works to organize a political community to serve a hegemonic master class. The business end of racism, though, is the autarkic poverty imposed on the working communities: slaves, sharecroppers, poor blacks, poor whites - bad schools, bad roads, politically disabled communities, predatory institutions and authoritarian governments.

For a time, the balkanization of American political communities by race, religion and ethnicity was an effective means to the dominance of an tiny elite with ties to an hegemonic community, but it backfired. Dismantling that balkanization has left the country with a very low level of social affiliation and thus a low capacity to organize resistance to elite depredations.

engels 08.07.16 at 1:02 am

But how did that slavery happen

Possible short answer: the level of technological development made slavery an efficient way of exploiting labour. At a certain point those conditions changed and slavery became a drag on further development and it was abolished, along with much of the racist ideology that legitimated it.


Lupita 08.07.16 at 3:40 am

But how did that slavery happen

In Mesoamerica, all the natives were enslaved because they were conquered by the Spaniards. Then, Fray Bartolomι de las Casas successfully argued before the Crown that the natives had souls and, therefore, should be Christianized rather than enslaved. As Bruce Wilder states, this did not serve the interests of the slaveholding elite, so the African slave trade began and there was no Fray Bartolomι to argue their case.

It is interesting that while natives were enslaved, the Aztec aristocracy was shipped to Spain to be presented in court and study Latin. This would not have happened if the Mesoamericans were considered inferior (soulless) as a race. Furthermore, the Spaniards needed the local elite to help them out with their empire and the Aztecs were used to slavery and worse. This whole story can be understood without recurring to racism. The logic of empire suffices.

[May 28, 2016] How Can Older Workers Compete In An Economy That Values Youth

www.zerohedge.com

Zero Hedge

...

Workers of all ages are caught in a vice. Older workers need to keep working longer in an economy which values younger workers (and their cheaper healthcare premiums). Younger workers are caught in the vice of "you don't have enough experience" and "how do I get experience if nobody will hire me?"

Middle-aged workers are caught between the enormous Millennial generation seeking better jobs and the equally numerous baby Boom generation seeking to work a few more years to offset their interest-starved retirement funds. (Thank you, predatory and rapacious Federal Reserve for siphoning all our retirement fund interest to your cronies the Too Big to Fail Banks.)

Workers 55 and older are undeniably working longer. Here is the labor participation rate for 55+ workers:

... And here's why so many workers have to work longer--earned income's share of the GDP has been in a free-fall for decades as Fed-funded financiers and corporations skim an ever greater share of the nation's GDP.

I am 62, very much an older worker with a startling 46 years in the work force (first formal paycheck, 1970 from Dole Pineapple). (Thanks to the Fed's zero-interest rate policy, I should be able to retire at 93 or so--unless the Fed imposes a negative-rate policy on me and the other serfs.)

But I recall with painful clarity the great hardships and difficulties I experienced in the recessions of 1973-74, 1981-82 and 1990-91 when I was in younger demographics. My sympathies are if anything more with younger workers, as it is increasingly difficult to get useful on-the-job experience if you're starting out.

That said, here are some suggestions for 55+ workers seeking to find work in a very competitive job/paid work market.

1. Target sectors that haven't changed much. There's a reason so many older guys find a niche in Home Depot and Lowe's--power saws, lumber, appliances, etc. haven't changed that much (except their quality has declined) for 40 years.

The same can be said of many areas of retail sales, house-cleaning, caring for children, etc.

Everyone knows the young have an advantage in sectors dominated by fast-changing technology, so avoid those sectors and stick to sectors where your knowledge and experience is still applicable and valued by employers.

2. If at all possible, get your healthcare coverage covered by a spouse or plan you pay. Those $2,000/month premiums for older workers are a big reason why employers would rather hire a $200/month premium younger worker, or limit the hours of older workers to part-time so no healthcare coverage is required.

Telling an employer you already have healthcare coverage may have a huge impact on your chances of getting hired.

3. If you have any computer-network-social media skills, you can get paid to help everyone 55+ with fewer skills. Your computer skills may not be up to the same level as a younger person's, but they are probably far more advanced than other 55+ folks. Many older people are paying somebody $35/hour or more to help them set up email, fix their buggy PCs and Macs, get them started on Facebook, etc. It might as well be you.

4. Focus on fields where managerial experience and moxie is decisive. Even highly educated young people have a tough time managing people effectively because they're lacking experience. Applying biz-school case studies to the real world isn't as easy as it looks. (I found apologizing to my older employees necessary and helpful. Do they teach this in biz school? I doubt it.)

The ability to work with (and mentor) a variety of people is an essential skill, and it's one that tends to come with age and experience.

5. Reliability matters. The ability to roll with the punches, show up on time, do what's needed to get the job done, and focus on outcomes rather than process are still core assets in a work force.

Being 55+ doesn't automatically mean someone has those skills, but they tend to come with decades of work.

6. If nobody will hire you, start your own enterprise to fill scarcities and create value in your community. The classic example is a handyperson, as it's very difficult for a young person to acquire the spectrum of experience needed to efficiently assess a wide array of problems and go about fixing them.

#3 above is another example of identifying one's strengths and then seeking a scarcity to fill. Value, profits and high wages flow to scarcity. Don't try to compete in supplying what's abundant; seek out scarcities and work on addressing those in a reliable fashion.

Every age group has its strengths and weaknesses, and the task facing all of us is to 1) identify scarcities we can fill and 2) seek ways to play to our strengths.

Shizzmoney

That's easy: the elitist old people in power will start a war, force the young people into that war, where they will all be killed and the old people get their jobs.

Also, for those young people who protest the war, the government and corporate military security forces will detain and kill them, too.

Problem solved!

Normalcy Bias

Just wait 'til they get a load of our Mighty Morphin Tranny Ranger Battalion!

KnuckleDragger-X

+1000 for that one.... :-))

KnuckleDragger-X

Bob Seger: Ballad of the Yellow Berets


https://www.youtube.com/watch?v=WP6Xt3GBhdQ

Syrin

Exactly. Value youth? Is that why we saddle them with $250,000 worth of student loan debt and a degree in women's studies to find no jobs because we let in illegals and skilled workers with Visas from foreign countries? Seems like we hate our youth. Of course, they deserve it since they have been focused on being social justice fucktards rather than getting any marketable skills and paying attention to what the gov't is doing to their future. Schadenfreude.

deja

No, they are stupid enough to saddle themselves with $250,000 worth of student loan debt for a degree in womens' studies.

cougar_w

The OP doesn't make much sense to me. Most of the work people my age do, the young people either don't want or are not qualified for. Maintaining vital COBOL apps or air traffic controller software from the 70's? Really? And the ones are, they don't mind working with older employees and seem to enjoy our "gravity".

I work in IT so maybe things are a bit different. Grey beards are huge around here and always will be.

But this has been a challenge for centuries, young people have to find their own way and "their way" (being probably a dream from childhood or an inspiration from a college professor) might not be practical at first. They bounce around a little until marriage hits them and then they find something that works for supporting a family. Same as it ever was. The idea that "their way" is some kind of unswerving life's mission is usually part of the corporate "just do it" meme that sells $400 specialty running shoes. Yeah whatever, just figure it out actually, life will tell you what you are supposed to be doing, and who you are supposed to be doing it with.

GeezerGeek

The market for COBOL programmers had a sudden surge around Y2K, but only certain industries still maintain their old COBOL apps. Curiously, a certain computer/software has recently tried pushing a visual version of COBOL, much like Gates did when he came out with Visual Basic back in the early 1990s. I retired after 40 years in IT in 2011, so I am a bit out of touch where COBOL is concerned. Does anyone even teach it anymore in college? Maybe if someone modified it to create phone apps and games it would once again be popular.

Abbie Normal

Then it's a good thing I didn't follow my undergrad English Prof's advice and switch my major from science to arts, because he thought there was some "real intelligence" in my writing style that even his grad students lacked. Maybe I should look him up....

eatthebanksters

I have two buddies, one a 61 year old attonery who has never lost a case and the other a 59 year old facilities director. The lawyer has been seeking work for 6 years and has pretty much given up...he can't even get hired at lesser jobs because he is overqualified and 'will leave when something better comes along'. The facilities director has a great resume and knows his stuff but has been out of work for almost two years. He has come in 'second' more times than I can count. He is working od jobs and living with a friends mother, exchanging work on the house for rent and meals. Welcome to Obama's economy.

N0TaREALmerican

He'd work if he'd accept less money, but he feels "entitled to earn what HE thinks he's worth". Just another lazy old-fart who feels the world owns him something. Welcome to a competitive economy old-fart, nobody said life was fair. Stop bitching and work for less.

mary mary

If you ever need an attorney, you might look for an experienced attorney who worked so hard that he never lost a case.

If you ever inherit a zillion bucks and buy a bunch of properties, you might confer with an experienced facility manager who actually managed a bunch of properties.

I doubt an attorney who never lost a case achieved that record by going around saying, "somebody owes me something".

I doubt a facilities manager who managed a bunch of properties achieved that by going around saying, "somebody owes me something".

Baa baa

What a load of crap. Most will take anything. I know, I am one. Don't lecture me about being "entitled" you punk. Your post reeks of the entitlement generation. Slug through 50 years of working, rearing a family, kids to college... I am beginning to wonder if the hundreds of thousands spent on the education and well-being of your ingrate ass was a misallocation of funds.

corporatewhore

Give credit where credit is due. This inability to find work at an older age has been going on for years and can't be blamed on Obama. Senior buyers at Macy's, older workers at Monsanto or television weather people at KSDK in St Louis all suffer the same fate. Labor cost and benefits are all less for the younger generation no matter what level of experience or capability. We develop a mindset throughout our productive career that we are indispensable and worth it because of our knowledge, contacts and industry wherewithal. It's all an illusion and we are NOT prepared or equipped to face the reality at an older age that we are completely dispensable.

At an older age if you want meaning you have to find it and think out of the paradigm that you've been led to believe is real. No one owes you anything for your experience or wealth of knowledge. Figure it out and rethink yourself as to what you love to do and want to do not what you must do to make money.

At 58 in 2008 I was fucked over by my corporation and wallowed in miserableness and poverty while i worked every contact and firm I knew. Nothing resulted. I had to work 3 part time jobs until I earned 2 full time ones and work over 90 hours per week because I enjoy it. It is work that covers the bills and allows me to create what I want to work on for the future while I still can walk think and breathe.

Best advice to your children: Go in business for yourself because just as it happened to me, it will happen to you when you become 55.

Nobody For President

Thanks for that, corporate whore. That sounds like an honest reprise of an incredibly hard time in your life, and I totally agree. I'm telling all (4) my grandkids, from 7 to 20, to live your life, not someone else's. The oldest one gets it, and I think the other ones will also, if I live long enough, because I walked that walk.

I'm old, and work full time (more or less) and make a living - not a killing, but a living - at it.

nuubee

Good news old people, the economy currently doesn't value anything you can produce, unless you can print money.

Cautiously Pessimistic

You get up every morning
From your 'larm clock's warning
Take the 8:15 into the city
There's a whistle up above
And people pushin', people shovin'
And the girls who try to look pretty
And if your train's on time
You can get to work by nine

... ... ...

mary mary

MSM says Baby Boomers "have stolen everything", but in fact Baby Boomers are having to extend their careers because they're broke. This is the easily foreseeable result of 20+ years of the Fed keeping interest rates artificially low, making Baby Boomers suffer the double-whammy of (1) not having their deferred income (pensions) grow, while (2) inflation in fact continued at 6% annual, thanks also to the Fed keeping interest rates artificially low.

Yes, someone "have stolen everything". That someone is the owners of the Fed.

[May 21, 2016] NetSlaves: True Tales of Working the Web by Bill Lessard

www.amazon.com
Arthur Lindsey III , April 16, 2003
A 246 Page "Support Group"

Being an unemployed techie myself, I cannot begin to describe what a godsend this book is. NETSLAVES finally reveals the truth about what it is to be part of what is likely the most under-appreciated sect of the working class. The stale stories of "dorm-room success" have been supplanted by the pathetically sad/darkly humorous accounts of those who have been saddled with with million-dollar job titles, bleeding ulcers, and ramen noodle grocery budgets. NETSLAVES is an entertaining and enligtening read, written by two men who have actually been passengers in every sewer pipe that is The new-media industry. This book is a must for every modern library, as it can be considered a "warning shot" for those with IT aspirations, or as a source of vindication for those of us who have been dismissed and trampled on. Bravo!

A customer, November 24, 1999

Handwriting on the Wall

NetSlaves tells it like it is for the millions of us on the business end of the IPO and monopoly screwdrivers. Apply these lessons to the law, publishing, automotive, chemical, airline industries, etc., etc. This book is not just a cerebral and satirical indictment of the internet industry.

It is a comment on upper and middle management corporate business practices in general, and the dismal fate of the vast armies of workers used as cannon fodder since day one for the follies of unscrupulous robber barons; or morons who just happen to find themselves in the right place at the right time to make market killings; or Scrooges who will never learn what it is to have a heart. Baldwin and Lessard are heirs to the muckrakers of the early 20th Century. Corporate E-merica, take heed.