|jgo Resume||jgo Books|
|jgo Econ Data||jgo Econ News Bits Index|
|Economic News Analysis Summary|
|Links||jgo's Work in Progress|
|"It is no longer socially acceptable to dump employees on to the heap of unemployed. Loss of market, & resulting unemployment, are not foreordained. They are not inevitable. They are man-made." --- W. Edwards Deming|
Comverse Technology Inc.
"Verint digital security & surveillance solutions include the STAR-GATE & RELIANT communications interception products & LORONIX digital video security products. STAR-GATE enables communications service providers to intercept communications over a variety of wire-line, wireless & Internet protocol, or IP, networks for delivery to law enforcement & other government agencies. RELIANT provides intelligent recording and analysis solutions for lawful interception activities, & is sold to law enforcement & government agencies. LORONIX digital video security products provide intelligent recording & analysis of video for security and surveillance applications, & are sold to government agencies & public & private organizations, such as airports, public buildings, correctional facilities & corporate campuses."
|"the greatest menace to freedom is an inert people" --- Louis D. Brandeis 1927 Whitney vs. California|
"In the United States, over 400K jobs have been lost since 1973 as US corporations like Liz Claiborne and The Gap move operations over-seas. Most of the workers in these factories are young women, although in some areas like Bangladesh, children from the ages of 10 and 14 also assemble the clothing we wear. Workers typically live in crowded dormitories which lack adequate facilities. These young women work 6 or 7 days a week, 10 to 15 hours a day, but don't make enough to afford decent meals; many are malnourished. A 1996 October segment on 48 Hours revealed that workers in sub-contracted Nike factories in VietNam make only $20 a month working 6 days a week, earnings equalling only half the country's minimum wage. Nike recently claimed that 25% of their workers make Rp350,000, or US $47, a month. However, the cost of 3 basic meals alone is $2.10 a day, or $65 a month. While Nike may subsidize some of the workers' meals, they wouldn't have to if they paid a living wage."
Death from Over-Work in Japan
"In 1960 the average [Japanese] employee worked 2,432 hours a year -- that's almost 50 hours a week with only 2 weeks of holiday. In 1987 the government passed a new Labor Standards Law which decreased the work week from 48 to 40 hours. By 1997 annual working hours reported by employers fell to 1,900 -- about 38 hours a week. These statistics are a little deceptive. [As in the USA] Japanese employers have a tradition of asking for 'service over-time' -- unrecognized and un-paid work performed voluntarily by the employee. A survey of employees themselves found that annual working hours are about 300 more than reported by the Ministry of Labor."
|Beginning January 1, 1937, your employer will be compelled by law|
|to deduct a certain amount from your wages every pay day. This is|
|in compliance with the terms of the [Socialist Insecurity] Act,|
|sponsored and signed by President Roosevelt, August 14, 1935.|
|The deduction begins with 1% and increases until it reaches 3%.|
|There is no guarantee that the fund thus collected will ever be|
|returned to you. What happens to the money is up to each congress.|
|No benefits of any kind before 1942.|
|This is NOT a voluntary plan. Your employer MUST make|
|Regulations are published by the [Socialist Insecurity] Board,|
Beardsley Ruml _American Affairs_ vol8 #1 pg35/_Scribd_
taxes for revenue are obsolete
Tax Freedom (pdf)
2008-12-03: discussion at WinterSpeak
2005-07-29: Devvy Kidd: World Net Daily: former Fed chairman: taxes for revenue are obsolete
Garet Garrett _Ludwig von Mises Institute_
The March of Socialism
Index of articles on mises.org
Henry T. Heald _Longines Chronoscope_
WikiPedia on Henry Townley Heald
Henry Hazlitt _Ludwig von Mises Institute_
The Essence of Keynesian Thinking
Frank Chodorov _Out of Step_/_Ludwig von Mises Institute_
Taxation Is Robbery
Gwee Ah Leng _Singapore Medical Journal_
Recognition of Foreign Medical Degrees (pdf)
"No nation in the world in her senses would on her own offer recognition to foreign institution unasked, for in the event of a rebuff, she would be the laughing stock of the whole world... The American Medical Association insists on an assessment for all outside degrees, and this is not a question of that Americans can afford to pick and choose, because it has been stated amply elsewhere by responsible people that America too is 'short of doctors'."
earth as photographed by Apollo 8 crew
Murray N. Rothbard _Ludwig von Mises Institute_
Economic Depressions: Their Cause and Cure
Richard M. Nixon announces separation of US dollar from gold backing
Students in India riot for "right" to cheat on tests
"Any American educator who feels harried by student protests might consider the state of learning at some schools in India. When a proctor at Satna College in Madhya Pradesh complained that students were copying examination answers from their text-books, the students staged a minor riot. At Mainpuri a proctor who caught students cribbing was hacked to death with knives. In Gorakhpur, a high school student brought his homicidal Alsatian dog to bare his fangs at any teacher who tried to interfere with his right to cheat."
Confronting Leviathan | Arbitration: A Fundamental Alternate Institution (R. Fucetola, III) | The Law of the Sea | Transnational Relations | Review of Bruno Leoni's Freedom and the Law (G. Greenberg) | Localism and Bureaucracy In 19th Century China (M. Rubenstein) | Bombing the Dikes | America's Newest Enemies
Karl Keating, Susan Love Brown, Patrea Post & Stuart Smith _World Research Institute_
Incredible Bread Machine
Friedrich A. Hayek _Ludwig von Mises Institute_
A Free-Market Monetary System
_Industrial Research and Development_ pp51-62
the dark side of technology export: U.S.A. builds Soviet war machine
we are a soft target
_AAAS Science_ pp364-368
Eastern Bloc evades technology embargo
_Washington DC Compost_ pgA3
Russian cloak-and-briber goal: American high-technology secrets
Daniel H.H. Ingalls _XEROX Palo Alto Research Center_/_Byte_
Design Principles Behind Smalltalk
Jan Bellamy _Reason_
Two Utilities Are Better Than One
the spies among us
Sheldon Richman _Wall Street Journal_/_Future of Freedom Foundation_
Examining Reagan's Record on Trade
Murray N. Rothbard _Lew Rockwell_
Where the left goes wrong with US foreign policy
Richard W. Riche, Daniel E. Hecker & John U. Burgan _Monthly Labor Review_
High technology today and tomorrow: A small slice of the employment pie
"High tech industries are expected to provide only a small proportion of the jobs created between 1982 and 1995, under 3 concepts which embrace from 6 to 48 industries... Employment in high tech industries increased faster than average industry growth during the 1972-82 period. High tech industries accounted for a relatively small proportion of all new, jobs nationwide, but provided a significant proportion of new jobs in some States and communities. About 6 out of 10 high tech jobs are located in the 10 most populous States. States with relatively high proportions of employment in high tech industries are generally small; most are in the Northeast. Through 1995, employment in high tech industries is projected to grow somewhat faster than in the economy as a whole. High tech industries, even broadly defined, will account for only a small proportion of new jobs through 1995. Scientific and technical workers, while critical to the growth of industry and the economy, will account for only 6% of all new jobs through 1995... Michael Boretsky, uses the 2 measures frequently employed in examining high technology: R&D expenditures as a percentage of industry value added, and industry employment of scientists, engineers, and technicians as a proportion of the industry work force... We defined scientific and technical workers as engineers, life and physical scientists, mathematical specialists, engineering and science technicians and computer specialists . We refer to these workers as technology-oriented workers. We excluded government, colleges, and universities... Group I accounted for 15.3% of new wage and salary jobs, group 11, 4.7%, and group III, 7.9% [between 1972 & 1982]... Although for the Nation as a whole, high technology industries generated only between 4.7% and 15.3% of the new jobs in the United States during 1972-1982, several states showed greater growth."
Clint Bolick _The Freeman_
Regulation of Telecommunications
"A second form of scarcity is 'economic scarcity'... the theory of 'natural monopoly'. Some theorists argue that many communications technologies require such intensive capital investments that only one producer may profitably serve a given market. Ostensibly protecting the citizenry from 'monopoly power', the governmental entity chooses and licenses a single producer as a 'franchisee' or 'common carrier', and then subjects that producer to extensive taxation and regulatory control. This notion dates at least as far back as 1585, when the British crown awarded monopoly privileges to publishing guilds. The artificial restriction on the number of publishers facilitated government censorship, but was ultimately undermined by sustained illicit competition. In America, the concept of economic scarcity was suggested as a rationale for requiring newspapers to publish replies to unfavorable reporting -- an argument the Supreme Court firmly rejected. But although the Court has opposed even the most 'benign' regulation of newspaper content, it has yet to fully extend this protection to the new media. It has failed to do so because it asserts that differences in the characteristics of new media justify different degrees of First Amendment protection. This approach contradicts the teachings of America's founders... Despite deregulation at the Federal level, regulation of cable in America is increasingly extensive, restraining the full realization of that medium's enormous potential and laying the groundwork for massive state interference with editorial processes traditionally entrusted to private discretion... Cable is an unnatural monopoly; few companies compete head-to-head only because the system of local franchises and pervasive regulations makes it unprofitable and frequently illegal to do so. Even without direct competition, however, the existence of alternative technologies provides the ira-portant disciplinary effects of the marketplace, making 'public interest' regulation wholly unnecessary. Open entry policies and the constant threat of competition would accomplish the same end. Indeed, some local governments, recognizing that the natural monopoly myth rests on tenuous assumptions, have acted to exclude from their communities not only additional cable companies but competing alternative technologies as well... Even before the rapid development of the new media, Justice William O. Douglas warned of the dangers involved in abandoning the commitment to First Amendment principles on the basis of technological change: 'The struggle for liberty has been a struggle against government... [I]t is anathema to the First Amendment to allow government any role of censorship over newspapers, magazines, books, art, music, TV, radio or any other aspect of the press... My conclusion is that the TV and radio stand in the same protected position as do newspapers and magazines... for the fear that Madison and Jefferson had of government intrusions is perhaps even more relevant to TV and radio than it is to other like publications.'"
Richard M. Devens, Carol Boyd Leon & Debbie L. Sprinkle _Monthly Labor Review_
Employment and unemployment in 1984
"Business services, one of the more cyclically sensitive of the service industries, led the division in both magnitude and rate of growth, making up 40% of the division's employment gain in 1984. A continuing upward trend in personnel supply services -- particularly in temporary help -- [bodyshopping] explained a substantial proportion of business services' growth, although the pace of growth in this industry was a bit slower than in 1983. The temporary help industry contributed about 1 in 30 of the additional private pay-roll jobs in 1984, down from 1 in 20 during earlier stages of the economic recovery."
_US News & World Report_ pg74
How Safe Are Deposits in Ailing Banks, S&Ls?
_US News & World Report_ pg11
Ohio Bank Crisis That Ruffled World
1985 May 19
_American Engineering Association NewsLetter_
AEA Employment Watch
"In an effort to counter the myth of a shortage of skilled US workers, the American Engineering Association will maintain files of lay-off articles and articles dealing with shortened [and unpaid lengthened] work-weeks, forced early retirements, salary cuts, etc. Since the main [dispenser of Engineering Shortage Propaganda] is the American Electronics Association [AeA], we will also flag those companies who retain a membership in that organization, or their parent company or a division of it, etc. is a member. The totals column entry [20/37] means that 20 of 37 articles for the month were about lay-offs, etc. by members of the American Electronics Association... We do feel that the files contain an indication of the overall health of the technical job market... 16,854 lay-offs... 20,400 salary freezes... 32,179 lay-offs year-to-date... 32,600 salary freezes to date. 15+ articles mentioning salary cuts."
1985 June 19
_American Engineering Association NewsLetter_
Salary Conspiracy: Pentagon asks contractors to depress salaries
"A recent study of defense firms' salaries yielded the following results: Executives averaged 42% more than executives in other industries, factory workers about 8% more and engineers 2.5% less. The study was conducted by the GAO... 54,955 lay-offs year-to-date... 'Calhoun, director of business development at Intel Corp., said... that US firms were already accelerating relocation over-seas because of a shortage of engineers here.' 'The shortage is so severe that Intel has been forced to open design facilities in Israel, France and Japan simply due to the availability of highly skilled technical talent.', Calhoun said... We wonder if Mr. Calhoun or Intel has spoken to any of the 1983 or 1984 engineering grads who were unable to find an engineering job..."
Thomas Sowell _National Review_/_Lex Rex_
A Glossary for Translating Political Rhetoric into Plain English
Marvin N. Olasky _Reason Magazine_
Hornswoggled!: How Ma Bell & Chicago Ed conned our grand-parents & stuck us with the bill
"Vail had been president of American Bell during the 1880s & rejoined the company in 1902 as a member of the AT&T board of directors. At that time, Bell's dominance of the telephone industry could not be taken for granted. In 1903 the company listed 1.3M subscribers. That same year, according to a Census Bureau report, independent companies had over 2M. By 1905 -- the year a book entitled _How the Bell Lost Its Grip_ came out -- the independents were breathing hard down Bell's neck. Vail perceived that the threat came predominantly from competition, not regulation. It was an accurate perception. When he resumed AT&T's presidency in 1907, Vail immediately analyzed the Bell System's competitive problems, city by city. In Toledo, for instance, Home Telephone Company had begun competing with the local Bell franchise in 1901. Charging rates half those of Bell, it had 10K subscribers in 1906, compared to 6.7K for Bell. In Nebraska & Iowa, independent phones out-numbered those of Bell 260K to 80K. In his 1975 book, _Telephone: The First Hundred Years_, John Brooks reported that cities with referenda on the granting of independent franchises were voting decisively in favor of competition over regulated monopolies. In Portland, OR, a new telephone company won a franchise by a vote of 12,213 to 560. In Omaha the independent company was approved by a vote of 7,653 to 3,625, and in a national survey of 1,400 businessmen, 1,245 said that competition had resulted or could result in better phone service in their cities, with 982 adding that competition had forced Bell to improve its own service. Bell had been promoting itself as a monopoly provider on the grounds that only a monopoly system would allow telephone users in different cities or different parts of a town to talk with each other. Yet Vail knew that system interconnects were fast becoming technologically feasible, & many scoffed at the company's argument. Something had to be done..."
"Everybody loves to hate the phone company. And the electric company. And the gas company. And any other company that can act with unresponsive arrogance just because it has the government's protection as a legal monopoly. But when angry consumers & other critics call for an end to these monopolies, choruses of utility PR people & government regulators recite the same old story -- once upon a time there was competitioin among utilities, but "the public" got fed up & demanded regulation. Again & again comes the tale: Free enterprise in utilities lost in a fair fight.
It makes a good story, but it's not true. The real story of how public utility monopolies came to be goes like this: Early in this century, 2 utility executives, Theodore Vail of AT&T and Samuel Insull of Chicago Edison, saw that competition was threatening their businesses. The solution to their problems, they decided independent of one another, was to get government to guarantee their markets & protect them from competitors. To succeed, they would have to manipulate public opinion to create the impression of popular dissatisfaction with competition among utilities. Then they could persuade government to step in & set their companies up as monopolies.
Evidence of the real story behind the origin of utility regulation largely comes from hearings of the Federal Trade Commission & the Federal Communications Commission conducted during the late 1920s & 1930s, which revealed the comprehensive public relations strategies that Vail & Insull used to support their great con games. Few scholars, it appears, have looked closely at this evidence. Yet what the actual records reveal is a fascinating tale of immense greed, masterful propaganda, & sleazy politics.
Lights Out for Competition
Samuel Insull came to the US from England in 1881 to be Thomas Edison's secretary, then Edison's key manager & strategic planner. Edison's inventions turned dozens of industries upside down. Insull learned from him how quickly new inventions could radically alter existing patterns of commerce under conditions of free competition -- and Insull was resolved not to allow competition to disrupt his plans, once he was in power.
Insull came to the city he would dominate for 4 decades when he took control of Chicago Edison in 1892. In his biography of Insull, historian Forrest McDonald describes how the young executive learned to play political hard ball in one of the nation's major leagues, the Chicago City Council. By 1905, after merging Chicago Edison with Commonwealth Electric, Insull had gained monopoly power in the electric lighting & power business in Chicago.
Before 1905, the electricity industry was "one of full & free competition", economist Burton Behling noted in a 1938 monograph. Municipalities reserved the right to assign franchises, but "the common policy was to grant franchises to all who applied". In 1887, for instance, a single NY City Council resolution granted competitive franchises to 6 different electric companies. Low prices & innovative developments resulted, along with some bankruptcies & occasional disruption of service.
Once Chicago Ed was dominant, Insull increasingly emphasized the importance of avoiding disruption of electrical service & how competition supposedly contributed to the problem. Through frequent speeches, many collected in the 1915 book Central Station Electric Service, he popularized anti-competition arguments. And as president of the National Electric Light Association (NELA), a major utility trade group, Insull argued that utility monopoly & "franchise security" could best be secured by the establishment of government commissions, which would present the appearance of popular control.
The way to sell such a plan to the public, Insull suggested, would be to emphasize the commissions' power to fix rates. He told utility owners not to worry about regulation -- regulated rates might be slightly lower than those utility owners would prefer to charge, but they would be higher than what would prevail under full competition.
Insull's theory that regulation by commission would benefit utilities was dead right, as economic historian Gregg Jarrell showed in a 1978 article in The Journal of Law & Economics. In states that led the way in regulation, Jarrell noted, utilities' prices & profits rose while their output fell, but in states that continued to allow competition had lower prices for electricity. "State regulation of electric utilities", Jarrell concluded, "was primarily a PRODUCER policy."
Insull's real public relations genius, however, lay in convincing the American public that state regulation was primarily a proCONSUMER policy. To accomplish that legerdemain, he master-minded specific PR strategies to overcome popular objections to his anti-competitive maneuvering.
[photo caption: sleazy (sle-*ze-) 1. vulgar, disreputable, See Samuel Insull.]
First, he instructed his PR managers to heighten popular fears of socialism in order to promote acceptance of government regulated monopoly as a less undesirable alternative. According to biographer Forrest McDonald, Insull had no objection to socialism in general & "lobbied for 20 years to bring about a government owned system for England". Insull believed he could maintain his power under a system, public or officially private, in which governments afforded his organization monopoly status, but he knew that most Americans favored a competitive system & would support regulated monopolies only if they were seen as precautions against socialism rather than stiflers of competition.
Second, Insull realized that he & his cohorts in government would have to perform a charade at times, because those favoring competition would stand for regulated monopolies only if the regulators were seen as severe watch-dogs. Insull's principle was never to attack a government official who attacked him: "One must expect & accept public denunciations by one's political friends, whenever political expediency necessitated.", he once remarked.
Third, Insull believed that industry executives, as soon as the time was right, should lead the fight for increased regulation. Such a stance would allow executives to develop alliances with pro-regulation politicians, who would man the regulatory commissions when established or at least appoint regulatory officials. Under Insull's instigation, the NELA trade group set up a Committee on Public Policy in 1906, which lobbied vigorously for establishment of state regulatory commissions.
By 1912, scholar Gregg Jarrell has found, "utilities were the main champions" of state regulation. J. Allen Smith, a former dean at the University of Washington, wrote in a 1914 issue of the "Annals of the American Academy of Political & Social Science" that the regulatory movement, "though ostensibly designed to give cites more effective protection against public utility abuses, has not had its origin in any popular demand from urban communities. The initiative in this matter seems to have come very largely from the public utility interests."
That phase 1 of the Insull-led utility campaign succeeded is evident from the chronology of events: Early in the 20th century, only 5 states had regulatory commissions for utilities. Between 1912 & 1917, 25 states established regulatory commissions. But Insull's artful machinations were not yet exhausted..."
Max L. Carey & Kim L. Hazelbaker _Monthly Labor Review_
Employment growth in the temporary help industry: Bodyshopping
"The number of [temporary] employees [i.e. bodies shopped] rose by 70% from 1982 November to 1984 November, making the industry the fastest growing among those with employment over 50K... Average annual employment in the temporary help industry grew from about 340K in 1978 to 695K in 1985, an increase of 104%... Data on the number of workers supplied by job shops are not available, but some industry observers estimate that it may have been as high as 150K in 1985... The use of temporary workers may be particularly attractive to organizations with high fringe-benefit costs. [Donald Mayhall and Kristin Nelson, The Temporary Help Supply Service and the Temporary Labor Market (Salt Lake City, UT, Olympus Research Corporation, 1982 December 14).] One of the more pronounced trends in labor costs over the last several years has been the increase in the relative importance of employer-paid benefits. For example, between 1981 June and 1985 December, wages increased 27.0%, but total compensation costs, including employer costs for employee benefits, rose 29.2%. [Employment Cost Index-1985 December, BLS News Release, 1985 January 28. The trend of larger increases in benefits than wages reversed in 1985, when wages were up 4.4%, compared with 4.3% for total compensation.] Traditionally, temporary employees [are paid] fewer benefits than permanent employees and therefore lower benefit costs [and lower total incomes to the bodies shopped]."
Wayne J. Howe _Monthly Labor Review_
The business services bodyshopping industry sets pace in pseudo-employment growth
"Industries which provide services to businesses for a fee or on a contractual basis have had rapid gains in employment growth over the last decade, especially firms supplying computer and data processing services and temporary help; expansion is expected to continue."
Wayne J. Howe _Monthly Labor Review_
Temporary help workers (i.e. bodies shopped): who they are, what jobs they hold
"These workers are disproportionately female, young, and black; they are more likely to work part time and in clerical and industrial help jobs."
Murray N. Rothbard _Ludwig von Mises Institute_
_Making Economic Sense_ Government vs. Natural Resources
"Fortunately, the Reagan Administration rejected the Law of the Sea Treaty, which would have permanently subjected the world's ocean resources to ownership and control by a world-government body under the aegis of the United Nations. With that threat over, it is high time to seize the opportunity to allow the expansion of private property in one of its last frontiers."
Murray N. Rothbard _Ludwig von Mises Institute_
Protectionism and the Destruction of Prosperity (pdf)
"One of the major... fallacies is to confuse the price of labor (wage rates) with its cost... If the [foreign] government is really willing to waste scarce resources subsidizing American purchases of [goods made there], so much the better! Their policy would be just as self-defeating as if the losses were private... Any government subsidizing of [an] industry will funnel too many resources into that industry as compared to older firms, and will also inaugurate distortions that may persist and render the firm or industry permanently inefficient and vulnerable to competition... &nbp; the steel industry has been inefficient ever since its inception, and its chronological age seems to make no difference. The first protectionist movement in the U.S.A. was launched in 1820, headed by the Pennsylvania iron (later iron and steel) industry, artificially force-fed by the War of 1812 and already in grave danger from far more efficient foreign competitors... If U.S. banks, spurred on by the Fed or previous forms of central banks, inflated money and credit, the American inflation would lead to higher prices in the U.S.A., and this would discourage exports and encourage imports. The resulting deficit had to be paid for in some way, and during the gold standard era this meant being paid for in gold, the international money. So as bank credit expanded, gold began to flow out of the country, which put the fractional-reserve banks in even shakier shape. To meet the threat to their solvency posed by the gold out-flow, the banks eventually were forced to contract credit, precipitating a recession and reversing the balance of payment deficits, thus bringing gold back into the country."
"The issue of 'independent contractors' has been boiling over since the IRS came up with rule 1706 back in 1986. It meant the rise of bodyshops hiring people because companies didn't want to deal with rule 1706. They left that to the [bodyshops]. And with that the fall of true independent contractors who had to create a corporation in order to get contractor status."
Stephen P. Halbrook _Law & Contemporary Problems_
What the Framers Intended: A Linguistic Analysis of the Right to "Bear Arms" (pdf)
Shirley Hobbs Scheibla _Barron's_ pg16
Clint Bolick _Cato Institute_
The Age Discrimination In Employment Act: Equal Opportunity or Reverse Discrimination?
John Tschetter _Monthly Labor Review_
Producer services (i.e. bodyshopping) industries: Why are they growing so rapidly?
"Does the hefty post-war growth of some service industries mean that manufacturers are cutting over-head by farming out activities once performed in house? Analysis of data shows this to be an unlikely explanation for the growth of producer services industries."
Ron Paul _Freedom Under Siege_/_Daily Paul_
A Definition of Individual Rights
Ron Paul _Ludwig von Mises Institute_
Freedom Under Siege (pdf)
Jim Ludwick _The Missoulian_
Job-hunt rules strip liberty from us all
"It started last week. Throughout the country, illegal aliens stepped forward as the US Immigration and Naturalization Service launched an amnesty program under a federal law signed in November. Legal status is being offered to those who have lived here illicitly since before 1982 January. The amnesty program will [supposedly] help clean the slate for an upcoming crack-down on more recent arrivals. And it is that crack-down -- not the amnesty -- which will have the more significant effect. For the first time, job-seeking US citizens will be asked to show documents proving they are not illegal. And therein we find the truly dark side of the program that will affect the civil liberties of every American in order to make things easier for Mexican-watching federal employees, who complain they can't control the tired, poor and huddled masses yearning to move north. World history is a catalog of troubled societies that repeatedly come up with the same wrong answer: Give more power to the cops. And that is the essence of America's new plan. In this case, since the cops are having trouble collaring the guilty, society is shifting the burden of proof, requiring the not-guilty to prove they are innocent. No doubt, that will make things easier for the gun-toting bureaucrats who watch our borders. And starting in June, every business manager who wants to hire someone will be enlisted to help; employers will have to view the documents delivered by job-seekers, then will have to keep records to occasionally display to authorities searching for the not-proven-innocent. It isn't right. Proponents see the system as a way of dealing with an extremely difficult problem. But regardless of the problems facing a society, there are a couple of good, standard rules for reining in excessive police power. One rule is that people shall be given the benefit of the doubt; they shall never have to prove their innocence, but shall be assumed to be innocent until there is evidence of guilt. Another rule is that people shall not be brow-beaten with questions that dare self-incrimination. Those rules must not be forgotten, no matter how loudly bureaucrats whine about needing more power to do their jobs. That's what they said about money, and look where it got us [a reference to the soaring inflation which has now made a dollar worth about 4.5% of what it was worth when the Federal Reserve was created in 1913]. And here's a revolutionary thought that apparently hasn't occurred to our leaders: The tail doesn't wag the dog. The government shouldn't command the job market. If a company is operating honestly and decides to deal in good faith with an honest job candidate, that situation is good, not bad. There is no need for the government to step in with nosey requests for proof of the innocence of people who are accused of nothing. There is no need to add to the red tape already facing employers or to expand their legal jeopardy for dubious reasons. Chances are, the next time you look for a job, no one will think you are an illegal alien. Chances are, your future boss won't be thrilled about the paper-work and won't have any intrinsic interest in the documents you will be asked to produce. Chances are, it will never occur to anyone that you might have slipped across the Mexican border, originally hoping to cheat an American out of a scuzzy job requiring little education and no command of the language. But it won't matter what anybody thinks. What will matter is that employers will have been pressed into the service of the federal bureaucrats. It will matter whether you have the right pieces of paper to prove you did not commit a crime that no one ever accused you of in the first place. It will matter that you have lost a measure of your liberty, and it will matter that the federal government thinks it should intercede every time a US citizen seeks a job. This should be stopped."
Karla Jennings _NYTimes_
New tax threatens high-tech free-lance consultants
"The law is aimed at skilled workers, many in the high-tech industry, who [are free-lancers or] sell their skills through service agencies, which then match them with clients such as banks and stock-brokerage firms. A number of these professionals -- engineers, designers, drafters, computer programmers, systems analysts -- are called 'self-employed consultants', and they are losing that tax status under the new legislation. The impact of the law, Section 1706 of the Tax Reform Act of 1986, was not fully appreciated by its targets until December, when the Internal Revenue Service published a circular on it... Because of the new law, service agencies formerly listing consultants as independents may now have to list them as employees or face a penalty and possible investigation by the Internal Revenue Service."
Taxation of technical services personnel: section 1706 of the Tax Reform Act of 1986 : a report to the Congress
Paul Craig Roberts _Business Week_
how "experts" caused the third world debt crisis
Remarks to FFA
How Safe Are Your Deposits?
Ken S. Ewert _Freeman_
International Monetary Fund
"It was on 1944 July 1, just 3 weeks after the Allies had landed in Normandy, that the most significant intergovernmental conference of the century began. The conference took place at Bretton Woods, New Hampshire, and it represented, in the main, the thinking of two individuals, Harry Dexter White and John Maynard Keynes. Both of these men had grave doubts about the beneficence of market processes and preferred to put their faith in the ability of national and international 'managers' to coordinate the world’s economic affairs... Because the Fund does not advocate the true prerequisite for economic prosperity—a lawfully constrained government which respects private property—its record as an economic manager is rather poor. There is every reason to believe that in the absence of the IMF, private lenders would require conditions (in return for further loans) which would be at least as effective in promoting economic health... Even more important, it has allowed governments the world over to expropriate the wealth of their citizens more efficiently (through the hidden tax of inflation) while at the same time aggrandizing their own power. There is little doubt that the IMF is an influence for world-wide socialism..."
|"[H]oarded sums of money do not lie idle, whether they are regarded from the social or from the individual point of view. They serve to satisfy a demand for money just as much as any other money does." --- Ludwig von Mises 1934 _The Theory of Money & Credit_ pg 171|
David Horowitz _Front Page Magazine_
Reality and Dream presented at the Second Thoughts conference
see also David Horowitz 2013 _The Black Book of the American Left: vol1 My Life and Times_ pp 31 et seq.
Robert A. Rivers _Technology Employment_
Conference Board Help Wanted Index Confirms Timing & Level of UnEmployment
John Markoff _NYTimes_
Control Data Corporation to sell Imprimis Technology to Seagate
"[Insane] Executives of Control Data, which is based in Minneapolis, have said frequently in recent months that they have been trying to transform the company from a computer maker into [a bodyshop]."
Constance Holden _AAAS Science_
Wanted: 675K Future Scientists and Engineers: A shortage of technically trained workers is looming, says NSF's Peter House, unless more women and minorities can be attracted to science
"The crisis that is being widely predicted over the next decade is rooted in an incontrovertible demographic fact: because of the low birth rates in the 1960s and 1970s, the college-age population -- the raw material for tomorrow's educated work-force -- is shrinking."
And so, the myth began...jgo
_New American_ pg15
Review of the News: GHWBush signed Financial Institutions Reform and Recovery Act
John Markoff _NY Times_
Control Data Corporation searching for a new chief
_National Science Foundation [NSF]/ Policy and Research Analysis_
"A growing influx of foreign PhDs into U.S. labor markets will hold down the level of PhD salaries to the extent that foreign students are attracted to U.S. doctoral programs as a way of immigrating to the U.S.A. A related point is that for this group the PhD salary premium is much higher [than it is for Americans], because it is based on BS-level pay in students' home nations versus PhD-level pay in the U.S.A... [If] doctoral studies are failing to appeal to a large (or growing) percentage of the best citizen baccalaureates, then a key issue is pay... A number of [the Americans] will select alternative career paths... For these baccalaureates, the effective premium for acquiring a PhD may actually be negative."
Chris Cox _Orange County CA Register_ pgG3
The con game we call congress: in the still of the night, members raised their own pay, raided the Treasury
_Commission on the Skills of the American Work-Force_/_National Center for Education and the Economy_
America's Choice: high skills or low wages! (pdf 40MB)
"[pg 15] Since 1969, real average weekly earnings in the United States have fallen by more than 12%. This burden has been shared unequally. The incomes of our top 30% of earners increased while those of the other 70% spiraled downward. In many families, it now takes 2 people working to make ends meet, where one was sufficient in the past... 50% of our population is employed compared with 40% in 1973... We can no longer grow substantially just by adding new workers... The new high performance forms of work organization..., [rather] than increasing bureaucracy...reduce it by giving front-line workers more responsibility. [pg 17] Workers are asked to use judgment and make decisions... While businesses everywhere complained about the quality of their applicants, few talked about the kinds of skills acquired in school. The primary concern of more than 80% of employers was finding workers with a good work ethic and appropriate social behavior: 'reliable', 'a good attitude', 'a pleasant appearance', 'a good personality'... only 5% of employers were concerned about a skilled shortage... More than 70% of the jobs in America will not require a college education by the year 2000. These jobs are the back-bone of our economy, and the productivity of workers in these jobs will make or break our economic future... [pg 18] Two factors stand in the way of producing a highly educated work-force: We lack a clear standard of achievement and few students are motivated to work hard in school. One reason that students going right to work after school [and those going through college] have little motivation to study hard is that they see little or no relationship between how well they do in school [and on the job] and what kind of job they can get after school [and what compensation they are likely to receive]."
The ETA Saga: How to mis-manage a company according to Control Data Corporation
spin-offs of Control Data Corporation
Control Data time-line
Andrew J. Cowin _Heritage Foundation_
Campaign Finance "Reform" that Protects Incumbents
"in 1974... 87.7% of House members who sought re-election won re-election. By 1988 it had become almost impossible for a House member seeking re-election to lose; that year, 98.5% were re-elected."
Charles McCoy & Todd Mason _Wall Street Journal_ pgA12
audit report by FDIC shows M. Danny Wall's estimates for thrift bail-outs in 1988 were wildly low
Alan Fechter _PhDs_/_The Bridge_
Engineering Shortage and Short-Fall Myths & Realities (pdf)
Robert D. Wildman & David A. Ross _Oceanus_
Sea Grant's Role in Marine Education
"In a 1989 study, the National Science Foundation (NSF) concluded that the United States faces a short-fall of about 500K scientists and engineers by the end of the 20th century and that the number could increase to 675K by the year 2006. One simple reason is that college-age students will number only 24M in the mid-1990s, whereas they were 30M strong in 1980. On top of this reduction in the available population, only a small portion, about 5%, of these students will actually earn a bachelor's degree in science. [This study was discredited before 1992.]... In 1989, nearly 9,600 Americans received PhDs in the natural sciences and engineering."
Roger A. Rosenblatt, M.D. & Denise M. Lishner, M.S.W. _Western Journal of Medicine_
Surplus or shortage? Unraveling the physician supply conundrum.
"Despite the lack of consensus on the adequacy of America's physician supply, the basic statistics are not in doubt... The number of medical schools increased from 87 to 126 between 1963 and 1980, and the number of medical graduates more than doubled during that same period. As a consequence, the relative supply of physicians has risen from 150 per 100K in 1970 to 225 per 100K in 1986... A typical HMO has a staffing level of about 120 physicians per 100K population, only about half of that in the 'first compartment' or fee-for-service sector and much lower than the physician-population ratio projected for the 21st century... The number of medical students in the United States doubled in the past 25 years, from 7,081 in 1960 to 16,318 in 1985. Although the number of applicants to medical school rose commensurately until 1973, the applicant pool actually declined until leveling out in 1990... in 1983, well over 100K foreign graduates were practicing in this country, accounting for more than a fifth of the total physician supply... [citing] Swanson AG: US medical school applicants and matriculants, 1960-1985 and beyond, In Eli Ginzberg (Ed.): _From Physician Shortage to Patient Shortage: The Uncertain Future of Medical Practice_. Boulder, CO, Westview Press, 1986. Mulhausen R, McGee J: Physician need: An alternative projection from a study of large, prepaid group practices. Conn Med 1989; 5:293-298. Beeson PB: Making medicine a more attractive profession. J Med Educ 1987; 62:116-125. Sandrick K: US MD glut limits demand for FMG physicians. Hospitals 1988 Feb 5, pp 67-69."
Workers at Risk: Increased Numbers in Contingent Employment (i.e. Bodies Shopped)
"In the past, nearly all employed Americans worked full-time for a single employer, but that pattern is changing. Many workers currently are employed in part-time, temporary, contract, and other types of flexible work arrangements... self-employed, leased employees, and workers in the business services sector... Non-traditional work arrangements offer immediate benefits, such as increased flexibility for both employers and employees and labor cost savings for employers."
Chris Tilly _Monthly Labor Review_
Reasons for the continuing growth of part-time employment
"The rise in the share of these workers appears to be driven by employer demand for scheduling flexibility and a work force that commands lower compensation. This article examines the long-term growth of part-time employment, including the effect of growing demand for such workers from employers."
_Washington Post_ pg1
Scientist Short-Fall a Myth: NSF Study Seriously Flawed, Panel is Told
Lawrence W. Reed & Harry Hutchison _Mackinac Center for Public Policy_
Educational Choice for Michigan
John E. Chubb & Terry M. Moe: Trends in education and learning
|"Though we all crave security and a sense of an assured tomorrow there really is no sure way to achieve that." --- R. Berel Wein|
Jeffrey Mervis _Scientist_
Congress Presses Probe Into NSF Prediction Of Scientist Shortage
"[Peter House] based his analysis on the demographic fact that the size of the U.S. college-age population had peaked in the early 1980s and was expected to drop sharply through most of the 1990s. He assumed that the percentage of students graduating with science and engineering-related degrees -- historically between 4% and 5% -- would remain steady into the next century. And he made the number of science graduates in the period 1984-1986, a record-high level, a surrogate for future demand. Based on those assumptions, he calculated that the U.S. would produce 675K fewer B.S. graduates trained as scientists and engineers than it 'needed' by 2006... But that number, first put forth in a 1987 internal NSF document, is now under attack. Statisticians have questioned the assumptions that under-pin the analysis, as well as the choice of factors used (The Scientist, 1991 April 29, page 1; and 1991 May 13, page 1). Others are worried that [Peter House's] conclusion goes beyond the existing data. And many labor economists don't believe that the supply of scientists can be determined independent of the market demand for their services; they question the value of any prediction that tries to separate the two."
Murray N. Rothbard _Ludwig von Mises Institute_
The Struggle Over Egalitarianism Continues: Freedom, Inequality, Primitivism, and the Division of Labor
Texas Public Educational Grant Funding to Community Colleges
"To offset the cost of tuition to the students least able to pay, institutions are required to set aside a percentage of the tuition revenue for the Texas Public Educational Grants (TPEG) and emergency loans. The present set aside rate is 25 cents out of each resident student's hourly tuition charge for academic courses and 6% of the hourly tuition charge for vocation-technical courses... The federal government is the major provider of financial aid, awarding about 75% of all aid dollars or about $20G nationwide in the 1988-1989 school year... The colleges receive funding from 6 sources. The 3 major sources -- state appropriations (45%), local taxes (20%), and tuition and fees (15%) -- make up approximately 80% of the revenue. The remaining 20% is from federal funds (8%), auxiliary income (6%), and miscellaneous revenue (6%)."
Douglas J. Braddock _Monthly Labor Review_ pp28-41
Scientific and technical employment, 1990-2005
|"If we wish to make democracy permanent in this country let us abide by the fundamental principles laid down in the Constitution. Let us see that the state is the servant of its people and that the people are not the servants of the state." --- Robert A. Taft|
Robert Higgs _Journal of Economic History_
War-Time Prosperity? A Reassessment of the U.S. Economy in the 1940s
Amid allegations of a shortage, young physicists see few jobs
"Permanent research jobs for young physicists have virtually dried up, partly because the recession has drastically under-cut the resources of universities and commercial research institutions. [Amherst received 813 applications for one job opening.]"
Billy E. Reed _American Engineering Association_
Projecting Science and Engineering Personnel Requirements for the 1990s: How Good Are the Numbers?
"AEA is the only engineering association dedicated exclusively to the professional needs and concerns of the U.S. engineering community. Among these concerns is what we have termed Engineering Shortage Propaganda or ESP.
AEA believes this nation's engineers are a valuable resource and as such should be nurtured... Working level engineers consider the National Science Foundation a very anti-engineer organization... For example, in 1983, the American Engineering Association was working to require foreign engineering students to return to their homeland before being granted permanent residence status to remain here to work. Our amendment was to be introduced by the Sam B. Hall of Texas and during one conversation with his immigration aide I was told, 'The pressure against this amendment is incredible. Every member of the Fortune 500 as well as the National Science Foundation has been lobbying us to drop the amendment.'. After more discussion, I was told representative Hall's office had received several calls from people within the NSF who indicated Erich Bloch, the then Director of NSF, had asked them to call...
Typical of the predictions of engineer shortages was perhaps the most widely quoted 'source' of recent times, the American Electronics Association [AeA] survey which gained prominence in 1983 [which declared] there was going to be a shortage of engineers [after] surveying themselves... In early 1986 Pat Hill Hubbard of AeA finally admitted 'the electrical engineering shortage no longer exists'... The 1986 May 12 issue of Electronic Engineering Times carried a story which makes the following statements: 'A high-ranking National Science Foundation official (Nam Suh) told engineering vice presidents here last week that America engineers are over-paid and less productive than their foreign counter-parts... In his speech... Suh said there is a shortage of engineers, a contention with which few engineering groups concur...'... He told EE Times afterward, 'We need to improve the quality of them and the number of them.'...
If you believe academia and corporate management, there has been a 'crisis level' engineering shortage for the last 45 years. The following quotes illustrate my point: 'Since 1947 the number of scientists and engineers employed has gone from 575K to 900K... Engineers now start at $400 per month in contrast to less than $250 nine years ago...'... 'The most challenging aspect of the problem lies in the fact that today only 16% of university students major in science and engineering, down from 25% since 1950...'... This quote came from Forbes Magazine 1981 May 11 quoting from an article that appeared there in 1956... For the entire decade that I have been involved in these issues, we have not produced enough engineers in our schools according to management and academia, yet the Bureau of Labor Statistics has indicated that some 20% of each year's graduating class never enter the engineering work-force...
In late March of 1992 the CNN financial show 'Money Line' quoted the latest version of this report suggesting we are facing a crisis level shortage of engineers by the year 2010 or so. Less than a week later Money Line also ran a story about the difficult time this year's crop of college graduates were having finding a job. One of the professions spot-lighted as having the toughest time finding work was engineering... To the best of my knowledge we have never had a 'current' shortage of engineers, they have always been 5 or 10 years or more in the future and seem to appear at about the same time as new immigration legislation.
Economics 101 teaches us if a commodity is in short supply the price increases. Engineering salaries have been virtually flat, in terms of common dollars, since at least the mid-1960s. Compare the salaries of engineers to doctors over the last 30 years. There is not now, nor has there ever been a shortage of engineers...
[During] the early 1970s... between 60K and 100K engineers and scientists were unemployed... Remember the early 1980s when the universities were lobbying for money to expand our engineering schools, turning away domestic students and at the same time were recruiting over-seas for students?... High school students were enticed to enroll in engineering only to find they were unable to get jobs upon graduation, older engineers were laid off and salaries failed to keep up with inflation."
Boyce Rensberger _Washington Post_
Scientist Short-Fall Is a Myth -- NSF Study Flawed, Panel Is Told
"The familiar claim that the United States faces a major shortage of scientists and engineers -- often cited by National Science Foundation officials when seeking budget increases -- is false and was based on a seriously flawed NSF study, 7 scientists, engineers and government officials told a congressional subcommittee yesterday."
Eliot Marshall _AAAS Science_ vol 256
Congress asks: Was the "Short-Fall" Phony?
"During the 1980s, Erich Bloch, director of the National Science Foundation (NSF), raised an alarm about an imminent national crisis. Within a decade or two, he said, the country would begin to discover it was not producing enough scientists and engineers to carry on the business of a great economic power. Sometimes Bloch spoke of a 'short-fall', sometimes of an unsatisfied 'demand' or a 'shortage'. But the message was always the same: that the United States needed more scientists and engineers -- immediately. Now comes a critical investigation by representative Howard Wolpe (D-MI) suggesting that this alarmist message was one-sided and possibly a deliberate exaggeration."
Arthur Higbee _International Herald Tribune_
Poking Holes in the Myth About a Scientist Shortage
"In fact, witnesses said, the shortage that was to have begun a few years ago never materialized. Indeed, there is now such a surplus of scientists and engineers that unemployment rates in some fields far exceed those for the country as a whole."
_Electronic Engineering Times_
Congressman hits NSF short-fall study (M$word doc)
Declan Conroy _New Technology Week_
NSF Gets Raked Over the Coals on Engineer "Shortfall" Study
"Unfortunately, NSF's former director, Erich Bloch, used the figures repeatedly in speeches for levering more federal money for education -- and for the foundation. The studies themselves were titled 'Future Scarcities of Scientists and Engineers: Problems and Solutions'."
Robert Bellinger _Electronic Engineering Times_/_EE Times_
NSF Study Under Fire on the Hill: Congressman Hits NSF Short-Fall Study
"The NSF paper predicted a short-fall or 400K to 692K engineers and scientists. It became one of the most widely quoted papers the NSF ever produced -- and one of the most controversial. Last week, the man behind the prediction, Peter W. House, the director of the Policy Research and Analysis division of NSF, was grilled for more than 2 hours on methodology, squabbles within NSF over the report, and why he remained silent for 5 years while the media, executives and Congress spread the news of an impending shortage."
Jeffrey Mervis _Nature_ vol 356
NSF falls short on shortage
"A widely publicized [1987 report] by the National Science Foundation (NSF) forecasting a shortage of 675K scientists in the next 2 decades is so flawed as to be nearly worthless, a sub-committee of the US congress has concluded... The number helped NSF to gain a larger budget, Wolpe claims, and [affected] legislation.""
Skill shortages in the USA is a myth
Immigration and the Labor Market: Non-Immigrant Alien Workers in the United States
"The H-l class was created in 1952 to assist U.S. employers who 'needed' workers temporarily. The position an H-1 non-immigrant was to fill was required to be a temporary one. In 1970, the law was amended to allow an H-1 non-immigrant to fill a permanent position, although the individual H-1 alien's period of stay in the United States was still required to be temporary...
Aliens who were entitled to an employment-based immigrant status under previous law were faced with waiting periods from 1 to 10 years before immigrant visas could be made available to them (not counting the time required to process the paperwork to legalize their admission to the United States after an Immigrant visa was issued)...
The H-1 class we studied was abolished by the combined provisions of the Immigration Nursing Relief Act of 1989 and the 1990 Immigration Act. It was replaced by 7 non-immigrant classes, 5 of which are designed to accommodate (and more closely regulate) the entry of aliens who are entertainers, athletes, artists, and in similar occupations (one of which includes aliens with 'extraordinary ability' in sciences, business, or education). The other 2 classes are for (1) aliens with a 'specialty occupation' and (2) alien nurses...
The Armed Forces Immigration Adjustment Act of 1991 (Public Law 102-110) generally delayed the implementation of the new O and P classes (for aliens seeking non-immigrant admission as artists, entertainers, athletes, or fashion models) until 1992-04-01. Persons in these occupations were admitted as class H-1B non-immigrants in the meantime, under the rules in effect for that class as of 1991-09-30. On 1992-04-01, provisions of the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (Public Law 102-232), which changed some provisions relating to the O and P non-immigrant clauses, became effective. We have included the provisions of this law in our discussion of how the 1990 act is likely to affect non-immigrant...
The L- 1 class was created in 1970 to assist international companies in temporarily transferring certain of their employees to the United States to continue their work...
First, some U.S. business representatives and members of the Congress believe that the recent increases in H-1 admissions have, in some part, been caused by the delays of 1 to 10 years experienced by qualified aliens in becoming employment-based immigrants, and that increasing the annual number of employment-based immigrant visas from 54K to 140K will alleviate some of these demands.
Second, the 1990 act allows some aliens to more easily qualify for both non-immigrant and immigrant visas. The annual 54K limit under previous law was distributed equally between 2 employment-based immigrant preference classes, termed the third and sixth preferences. These 27K preference class limits included the immigrant's spouse and children. The third preference class was comprised of 'members of the professions or persons of exceptional ability in the arts and sciences'. The sixth preference was 'workers in skilled or unskilled occupations in which laborers are in short supply in the United States'. The 136,325 aliens who became immigrants under these preferences because of their labor market skills during the period 1984-1989 (not including their spouses and children) numbered less than half of the 292,886 H-1 and L-1 non-immigrant visas issued during that same period... H-1A nurses...
The INS representatives we interviewed told us that there are approximately 1.2M records for H-1 and L-1 non-immigrants currently in the NIIS data base covering the period from 1983 to mid-1991, and only about 770K (approximately 65%) can be readily 'matched' -- that is, the record of admission to the United States can be matched with a record of departure...
For example, we found that approximately 84% of the H-1 admissions between 1985 and 1987 could be linked to matched H-1 departure records. For admissions in 1990, however, the percentage of matches had declined to about 42%. For L-1 admissions, matches were approximately 88% of admissions between 1985 and 1987 but decreased to about 51% of 1990 admissions. However, H-1 and L-1 non-immigrants still in the United States do not account for alI unmatched records... approximately 93% of L-1 and H-1 non-immlgrants leave the United States within 1 year. (They can, of course, return; these data reflect on the length of an individual stay.) The extent to which the actual lengths of stay of L 1 and H- 1 non-immigrants are interrupted by multiple entrles into and departures from the United States is not well understood... For the 3 years we analyzed, the estimated average annual length of stay for single-entry H-1 non-immigrants ranged from 165 to 175 days, or less than 6 months. For single-entry L-1 non-immigrants, the average annual length of stay was between 199 and 208 days, or between 6.5 and 7 months. For multiple-entry H-1 non-immigrants, the estimated average total length of stay (covering all periods of admission to the United States) ranged from 13 to 14 months; for L-1 non-immigrants, the range was 18 to 20 months...
relatively few (55,857, or about 3%) of the 1,830,275 aliens who adjusted to immigrant status during the period 1982-89 did so from H-1 or L-1 status. Viewed against the total immigration of 3,917,482 during that same period, the 55,857 figure is even smaller-about 1.4%. (See table 4.1.) Of these 55,857 adjustments, 70% were by H-1, and the remaining 30% by L-1, non-immigrants...
During the period 1984-89, however, this overall percentage [H-1 and L-1 visa holders who convert to immigrant status] is 15.5%. Specifically, during this period, there were 211,697 H-1 visas issued and 32,487 adjustments (15.3%) by H-1 non-immigrants, and 81,189 L-1 visas issued and 12,849 adjustments (15.8%) by L-1 non-immigrants. (The number of H-1 and L-1 visas issued during the 1982-1983 period was not available.)... The total annual number of adjustments to immigrant status by H-1 non-immigrants has increased regularly from 3,327 in 1982 to 6,409 in 1989. L-1 adjustments have been much less variable and of smaller volume (averaging 2,079 annually), but they have decreased slightly each year since 1985...
The H-1 class we studied was abolished by the combined provisions of the Immigration Nursing Relief Act of 1989 and the 1990 act and was replaced by 7 new non-immigrant classes: H-1A (nurse), H-1B ('specialty occupation'), O-1, O-2, and P-1 to P-3, as shown in table 5.1... The 1990 act abolished the definition of class H-1B non-immigrants as those of distinguished merit and ability and replaced it with that of an ahen who performs services in a 'specialty occupation'... H-1A [and H-1B] Up to 5 years; 6 years under 'extraordinary circumstances'...
The spouses and children of principal aliens in these classes are admitted separately under non-immigrant classes H-4 (which existed under previous law), O-3, and P-4 (both created under the 1990 act) for the length of stay of the principal alien, and they are not allowed to work in the United States...
Under the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991, the 'distinguished merit and ability' standard haa been retained only for fashion models [!?!?!?] entering the country under H-11B visas... The H-1A class, like the H-1 class before it, has no numerical limits...
Class O-1 covers aliens of 'extraordinary ability' in the arts, sciences, education, business, or athletics that has been demonstrated by 'sustained national or international acclaim'. Class O-1 non-immigrants are, therefore, likely to be international 'super stars' in a variety of fields whose name recognition and documented accomplishments qualify them for admission...
the 1990 act increased the length of stay for [L-1A] managers and executives from 5 to 7 years and extended petitioning qualifications to companies offering international accounting services...
there were significant increases in (1) allocations of [total] employment-based immigrant visas, from 54K to 140K annually (which should reduce waiting periods), and (2) 'per-country' limits for employment-based immigrants, from 4K under previous law to more than 10K under the 1990 act...
Specifically, an approved labor attestation or labor condition application will not necessarily prove that there are no U.S. workers available... Under the 1990 act, DoL is required to establish a pilot program during 1992-94 to determine 'labor shortages or surpluses' in up to 10 defined occupations in the United States based on 'labor market and other information'."
Steve Scrupski _Electronic Design_
Congress Meets the NSF
"The mid-1980's study conducted by the National Science Foundation -- yes, the one that insidiously predicted a looming engineering shortage -- has prompted an investigation by Congress of that organization... Here we have a U.S. government agency, the NSF, that is not 'a friend of the engineering community', but rather has done harm to all engineers doing their part to improve the country's competitive technology stance."
_Free Library_/_Science News_
NSF shortage study called "bad science"
"A 1987 National Science Foundation (NSF) report forecasting a 'shortfall' of 692K scientists and engineers in the United States by 2010 is unfounded and untrue, scientists told a congressional sub-committee hearing April 8 in Washington, DC. Although NSF never published the report, it was widely circulated throughout the organization in draft form. Furthermore, former NSF director Erich Bloch cited the study in numerous speeches, said representative Howard Wolpe (D-MI), chairman of the investigations and oversight subcommittee of the House Committee on Science, Space and Technology. Bloch's reference caught the attention of both the media and policy-makers.. Report author Peter House testified that his predictions were purely hypothetical and intended solely to indicate the number of future graduates with science and engineering majors. The study did not consider demand for those degree holders, conceded [Peter House], who serves as deputy director of NSF's office of planning and assessment. 'We did not do a market analysis that related to jobs.', he said... 'If we produced more engineers, there would be no work for them to do.', said Richard A. Ellis, director of man-power studies at the American Association of Engineering Societies in Washington, DC."
Howard Wolpe _Washington Post_ pg A19
Bogus study about scientists
Peter Morici _Foreign Policy_/_U of ME_
Free Trade with Mexico
"In 1991, the United States exported $33G to Mexico, making it our third largest customer after Canada and Japan. From the mid-1940s to the early 1970s, Mexico's macroeconomic policy was fiscally conservative. For 30 years, GDP grew at a brisk 6.7% rate, and inflation averaged only 3.8%... President Salinas has imposed the disciplines of competition on Mexican industry. The average tariff has been cut from 29% to about 10%. Import licenses are required for fewer than 5% of products... Tariffs do not dominate trade negotiations. Although the United States maintains some tariff spikes (duties greater than 15% in import-sensitive industries like apparel, footwear, and leather products), the average U.S. tariff is less than 3.5%... Mexican wages are about one-eighth of U.S. levels, and this offers Mexico much greater advantages in attracting new manufacturing plants than a 10% tariff."
Jeffrey Mervis _Nature_
NSF falls short on shortage
"A 1987 National Science Foundation (NSF) report projecting a cumulative shortage of 675K scientists during the next 20 years was valueless because of the slipshod research on which it was based. The investigations subcommittee of the US House's science committee found that the report, written by NSF analyst Peter House, was so riddled with errors and false assumptions that it should not help determine federal policy. Subcommittee [chair] Howard Wolpe criticized the NSF for not admitting that the report was a mistake."
Edward Yourdon _The Decline and Fall of the American Programmer_ pg 1
(quoted in CPSR 1993-09-06 review)
"By the end of the decade, I foresee massive unemployment among the ranks of American programmers, systems analysts, and software engineers. Not because fifth generation computers will eliminate the need for programming, or because users will begin writing their own programs. No, the reason will be far simpler: International competition will put American programmers out of work, just as Japanese competition put American automobile workers out of work in the 1970s."
CPSR == Computer Professionals for Social Responsibility
|"Implicit in the term 'national defense' is the notion of defending those values and ideals which set this Nation apart... It would indeed be ironic if, in the name of national defense, we would sanction the subversion of one of those liberties... which makes the defense of the Nation worthwhile." --- Earl Warren supremes in US v Robel|
A battle erupted near Waco, Texas, when Bureau of Alcohol, Tobacco and Firearms agents attacked the Branch Davidians at their church home; 4 agents and 6 Davidians were killed that day as a 51-day siege began.
Michael G. Finn & Joe G. Baker _Monthly Labor Review_
Future jobs in natural science and engineering: shortage or surplus?
Sheldon Richman _Cato Policy Report_ vol15 #1
Dissolving the Ink-Blot: Privacy as Property Right
Michael G. Finn & Joe G. Baker _Monthly Labor Review_ pp 54-61
Future jobs in natural science and engineering
"For a long time now, there has been a continuing need for occupational demand and supply projections for purposes of educational planning. In recent years, however, concerns over shortages of technical labor, international competitiveness, changes in the demographics of the work force, and other issues have come to the fore, especially regarding scientists and engineers. In a 1990 study, the National Science Foundation [NSF] projected a cumulative short-fall of 675K bachelor's degrees in the natural science and engineering fields by the year 2006. The finding was based largely on demographics: the college-age population was projected to decline throughout the 1990-2006 period... The study assumed that future demand for these workers would remain constant at historical levels."
G. Pascal Zachary _Wall Street Journal_/_New America Media_
Black-Hole Opens in Scientist Job Rolls
Gene A. Nelson _Young Scientists' Network_
DoL to essentially eliminate alien labor certification
"Additional references, available in your library are: 'Black Hole Opens in Scientist Job Rolls' The Wall Street Journal, 1993 April 14, p. B-1,'Chemical Job Surplus Alleged - Finding Riles Scientists and Congress', Chemical & Engineering News, 1993 April 26, p. 6, and 'Labor Dept. List Sparks Tech Job Fears' and 'Fed Plan to Ease Aliens' Hiring Slammed' Electronic Engineering Times 1993 April 26, p. 1 and 1993 May 10, pp. 68-70 and 'Open: Jobs for Specialists, Wanted: Foreign Workers' The Washington Post, 1993 May 7, page A-21. See also 'Scientific Ph.D. Problems' by David Goodstein in The American Scholar, 1993 Spring, pp. 215-220."
Gene A. Nelson _Young Scientists' Network_
Letter to Department of Labor
|"The mushrooming of surveillance has been explained by the sense of panic and crisis felt throughout the government during this period of extremely vocal dissent, large demonstrations, political and campus violence, and what at the time seemed the inauguration of a period of wide-spread anarchy. While officials... suggested that these crises justified the surveillance, they failed to recognize that the rights guaranteed by the constitution are constant and unbending to the temper of the times..." --- Senate Subcommittee on Constitutional Rights 1973|
Pete Carey _San Jose Mercury News_ pg A9
High-Tech Workers Bitter Over Shortages Myth: Soft Labor Market, Immigration Growth Collide in Work-Place
"Gene Nelson, a physicist who devotes much of his time to combatting the myth of skills shortages in the sciences, still remembers the shock he experienced when he first read about the Immigration Act of 1990. 'We already had a very soft labor market for science and engineering, and here are these people boosting potential science and technology immigration.', said Nelson, a 41-year-old with a Ph.D. who teaches part time for $120 a week at Cuyahoga Community College..."
Jane H. Ingraham _New American_
|"[T]he time has come to recognize the UN for the anti-American, anti-freedom organization that it has become. The time has come for us to cut off all financial help, withdraw as a member, & ask the UN to find a HQ location outside the US that is more in keeping with the philosophy of the majority of voting members, some place like Moscow or Peking." --- Barry Goldwater 1971-10-26 _Congressional Record_ pg S16764|
Shawn Tully & Roslind Klein _CNN_/_Fortune_
Supply of and Demand for Doctors
Thom Geier _US News & World Report_
Down-Sizing Toll Keeps Going Up
"the number of permanent job reductions announced by big companies this year to nearly 400K. That's enough to offset almost 2 months' worth of new-job creation, which so far in 1993 is puffing along at a lack-luster rate of about 160K positions per month. For many, the job market looks no better than it did during the recession, which technically ended in 1991 March. The out-placement firm Challenger, Gray & Christmas is advising more laid-off employees now than during the recession. And 41% of consumers today say jobs are hard to get; only 36% said that during the recession's deepest point. 'Job security is a thing of the past.', concludes David Wyss, research director at the economic-consulting firm DRI/McGraw-Hill."
|"The Privacy Act, if enforced would be a pretty good thing. But the government doesn't like it. Government has an insatiable appetite for power, and it will not stop usurping power unless it is restrained by laws they cannot repeal or nullify. There are mighty few laws they cannot nullify." --- Sam Ervin (author of the Privacy Act of 1974)|
CPSR review of Ed Yourdon _Decline and Fall of the American Programmer_
"'I have not been impressed with the energy level of the average programmer in the vast majority of DP [Data Processing] shops I've visited in the United States. Most of them have a difficult time remaining in an upright position all day. I'm convinced that many organizations play muzak to hide the sound of snoring.' [pg 6] -- and this just after citing his consulting comrade, Capers Jones, claiming the average American programmer puts in 50-hour work weeks...
He [Ed Yourdon] describes a test given by Sackman, Erickson, and Grant back in 1968 to 12 experienced programmers. They found wide variance with the best person in the group finishing coding 28 times faster than the worst person, and the best program was approximately 10 times more efficient (in terms of memory and CPU cycles). There was no correlation with years of programming experience or scores on standard programming aptitude tests.
By contrast, for programming teams, Capers Jones reports that development and maintenance costs of projects using experienced people were half that of projects using inexperienced people...
Companies are opting NOT to invest in their 'peopleware'. Lay-offs, out-sourcing and the tendency toward contracting programming labor are what we are getting instead. CASE tools are a large capital investment and you can hire multiple cheap Indian, Irish, FOC's (Fresh Out of College) or whatever programmers for the same price -- and not be stuck with an obsolete shelf-full of dated manuals and software 6 months later. (The relative high-cost of CASE is why little is done with this technology in India, Yourdon writes). Have labor make the capital investment themselves either by self-financing education and then getting hired or have some foreign government subsidize a programmer acquiring current skills. That Yourdon discusses little these tendencies is a major omission."
CPSR == Computer Professionals for Social Responsibility
"Q: What is the difference between Jurassic Park and IBM?
A: One is a high-tech theme park for dinosaurs and the other is a movie by Steven Spielberg. Ba-bing!
Q: What is the difference between Jurassic Park and MSFT?
A: One is a high-tech theme park dominated by expensive, nasty, hungry, predatory monsters that will destroy anything they can get their teeth into... and the other is a movie by Stephen Spielberg." --- CPSR humor
CPSR == Computer Professionals for Social Responsibility
Rob Sanchez _Job Destruction News-Letter_/_60 Minutes_/_CBS_
HP cutting staff, contracting, sub-contracting with foreign bodyshops
Lynne Duke & Pierre Thomas _Washington DC Post_ pg A22
HP cutting staff, contracting, sub-contracting with foreign bodyshops
(cited in Michelle Malkin 2002 _Invasion: How America Still Welcomes Terrorists, Criminals, And Other Foreign Menaces To Our Shores_)
|"The caveman had the same natural resources at their disposal as we have today, & the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources & the knowledge used today." --- Thomas Sowell|
Leslie Helm _Los Angeles Times_ pg A1
Creating High-Tech Sweat-Shops
top 500 fastest super computers LinPack bench-mark
H. Rosemary Jeronomides _Georgetown Immigration Law Journal_ vol7 pp 367 et seq.
The H-1B Visa Category: A Tug of War
AT&T to Cut Up to 15K Positions
"AT&T, the nation's largest long-distance carrier, yesterday announced plans to eliminate 14K to 15K jobs over the next 2 years. AT&T's plan, designed to save the company at least $900M a year, is the latest example of the massive down-sizing underway in the communications industry. Communications companies eliminated 44,314 jobs in January alone, compared with 50K jobs for all of 1993, according to the out-placement firm of Challenger, Gray & Christmas Inc."
Malcolm W. Browne _NY Times_
Opportunities in Science Dwindle
"Many scientists are angry at the National Science Foundation [NSF], which in 1987 predicted that by the year 2010 there would be a shortage of scientists and engineers in the United States of 692K. The foundation's prediction clashed with other findings that the job market was already shrinking. The foundation's data seems to have been overtaken by workaday experiences. The most recent job data collected by the foundation are for the year 1991, and they do not suggest a shortage of scientific jobs. The foundation calculated that only 1.4% of doctoral-level scientists and engineers in the United States were unemployed in that year, and only another 1.7% were under-employed. But Melissa Pollak, an official of the foundation's Science Resources Division, said figures for 1993, which will be available next fall, may show a large change. 'A lot of professional associations have been documenting widespread hardship.', she said. A recent survey by the American Institute of Physics found that in 1992, the most recent year for which it obtained data, the number of job openings for doctoral-level physicists at universities, national laboratories and industry was about 800. Competing for these jobs, along with older physicists, were 1,350 scientists who received their Ph.D. degrees that year."
H-1B, Europe, Illegal Immigration Into Russia, Red China Sterilization, Thailand Considering Amnesty for Illegal Aliens
|"In 1900 only 5% to 10% of the US population graduated from HS. By 1940, 5% to 10% went to college. By 1983... 80% of the population graduated from HS & over 60% of all HS graduates attended college." --- Robert E. Kelley 1985 _The Gold Collar Worker_ pg 11|
Bill Varner _Gannett Suburban News-Papers_
"'Of the people who found new jobs last year, 74% moved to smaller companies.', said John Challenger, executive vice president of Challenger, Gray & Christmas inc., an international out-placement company based in Chicago. 'There were also a lot more entrepreneurs. In the last quarter of 1993, 18% to 20% of the people who found new jobs went to work for themselves [i.e. remain unemployed]. Five years ago it was only 8% to 12%.'... As the economy slipped into recession in the late 1980s, corporate loyalty declined. Results of a Gallup Poll released in December showed that 29% of employees believe their co-workers do not have a strong sense of loyalty to their company. 'People are tired of being at the mercy of a corporation or the government.', said Roberta Jean Bryant."
Sally Lerner _Futures_
The Future of Work in North America: Good Jobs, Bad Jobs, Beyond Jobs
"Rapid technological change and the globalization of economic activity are re-structuring the North American economy, and with it the nature and future of work in the United States and Canada. There is now a clear, though barely-articulated question as to whether secure, full-time, adequately-waged employment will be available to much of the North American work-force, at least over the next 30-60 years, or whether 'jobless growth', under-employment and 'contingent' employment will become the norm, as happened first in Britain and is increasingly the trend in other industrialized nations."
Robert W. Crandall _Maine Policy Review_/_University of Maine_ [unnatural monopoly]
Pricing issues in telecommunications
"There was a time when telecommunications was considered a 'natural monopoly'. Today, scores of carriers actively compete for customers in voice, data, video and information services markets. Even if the natural-monopoly diagnosis was correct in 1914, the year of the ('Kingsbury Commitment' by which AT&T sought refuge from anti-trust in federal government regulation; in 1934 the year in which the Federal Communications Act was passed; or even in 1949, the year in which the government first sued AT&T for monopolization, it surely is incorrect today. Monopoly power may still exist, but it is far from 'natural'. Rather, such monopoly exists either as a transitory phenomenon, awaiting imminent destruction by emerging competitive forces, or because of government regulation."
_CPU_/_Computer Professionals for Social Responsibility_
bodyshopping up, real jobs down
"a recent Newsweek story (1994/03/14), 'Help Wanted -- Reluctantly... Jobs: Why getting hired will never be the same': 'The dramatic restructuring of U.S. business has made for major changes in the job market. Work is more specialized, information is harder to come by, employers are smaller and exceedingly cautious about hiring. In searching for a job, what you don't know can hurt you badly.' Companies are 'niche players', often obscure, and finding the companies is job 1. According to the article, companies rely more on professional associations, or exclusive publications which raise an additional barrier to the job seeker -- the cost of subscribing is frequently high, putting the job announcements out of reach of the unemployed. Employers use various screening devices, including agencies to weed through resumes that don't display exactly the requested job skills. Employers are more reluctant to extend permanent employment... The article also claims that employee law-suits have driven up the cost of dismissing employees that don't fit in. So [bodyshops] have thus become a major tool for weeding out prospective workers ('try before you buy'). As one plant manager told the magazine, [bodyshopping] 'gave us a 2K hour job interview. We got very confident with their mind set, their abilities, their interest.' The article concludes: 'Many companies are prepared to move work around the world or contract it out if they can't find workers they want to hire. That may be the biggest difference between the economy of the 1990s and the one that used to be...'"
Llewellyn H. Rockwell _Lew Rockwell_
Protectionism, War, and the Southern Tradition
Robert Zacher _Young Scientists' Network_
Full UNemployment Policy for American Ph.D Scientists
Larry D. Swanson _Montana Business Quarterly_/_The Free Library_
Making regional market-places international
"Under NAFTA, most barriers to trade will be phased out within ten years; for a few sensitive product areas, the phase-out period is 15 years. Tariffs between the U.S.A. and Canada will continue to be phased out according to the earlier FTA schedule -- most by 1998. Half of all U.S. exports to Mexico received tariff-free entry into Mexico with NAFTA adoption. Before then, Mexican tariffs on U.S. goods averaged about 10%; average U.S. tariff on Mexican goods was 4%."
Christopher Conte & Albert R. Karr: US Embassy in Germany: An Outline of the US Economy
"As a result of NAFTA, the average Mexican tariff on American goods dropped from 10% to 1.68%, and the average U.S. tariff on Mexican goods fell from 4% to 0.46%. Of particular importance to Americans, the agreement included some protections for American owners of patents, copyrights, trademarks, and trade secrets; Americans in recent years have grown increasingly concerned about piracy and counterfeiting of U.S. products ranging from computer software and motion pictures to pharmaceutical and chemical products."
|"The output of knowledge workers is at best difficult to quantify. While counting the number of forms a clerk-typist prepares might be a valid performance measurement, it would be meaningless to count the number of drawings a drafter produces or the lines of code a programmer generates." --- Ira B. Gregerman 1981 _Knowledge Worker Productivity_ (quoted in Robert E. Kelley 1985 _The Gold Collar Worker_ pg 16)|
Gary Belsky _Money_
Escape from America: Citizens who leave the country
"From 1960 to 1976, 9 out of every 10 Americans who emigrated ended up in 1 of 7 countries -- Mexico, Germany, England, Canada, Japan, Australia and Israel. Today many still head for those countries, but they also choose more diverse locales such as the Czech Republic, where the American expatriate population has soared to an estimated 20K from fewer than 100 in 1989, or Hong Kong, where American ranks have nearly doubled to 27K, from 14K in 1986... In Money's poll, more than 2 out of 5 Americans ages 18 to 34 who have considered emigrating cite better economic opportunities as the reason... And though the U.S. has rebounded smartly from recession, prospects are still bleak for those just entering the work force. A recent study by the Collegiate Employment Research Institute at Michigan State University projects a meager 1% lift in hiring for the class of 1994 -- and that after a 35% drop over the past 5 years... In fact, almost 1 in every 6 U.S. jobs pays below the poverty line for a family of 4, or $14,228 a year. And many young Americans have soured on the Darwinian corporate culture in which 1.4M managers lost their jobs since 1990."
|"The limits of my language are the limits of my mind. All I know is what I have words for." --- Ludwig Wittgenstein (quoted in Richard Lederer 1991 _The Miracle of Language_ pg 3)|
Visa Reform: Not Enough New Programming Jobs Are Being Created
"CFVR argues that the U.S. is not generating enough programming jobs, whether through growth or attrition, to absorb recent graduates from U.S. universities... In an early July posting to misc.jobs.misc, CFVR estimated the number of new programming jobs becoming available each year: 'The Bureau of Labor Statistics reports that there are 550K computer programming jobs in the U.S., with a growth rate of 4.4% per annum... The Bureau of Labor Statistics reports that there are 156K computer and office repair jobs (which includes installation and maintenance of machinery), 282K computer equipment operators, 37K computer peripheral equipment operators, 565K computer programmers, and 463K system analysts. This adds up to a total of 1.503M jobs in computer related fields.'...
We have reported in every issue of CPU the massive lay-offs that have hit especially the mainframe and mini companies, but also the much smaller PC and software houses... And companies aren't just exploiting the visa program to bring programmers here from India or France or Russia. It is often easier to take the work over-seas... If companies use visa workers, those workers should be paid at the same level as U.S. programmers, with the same benefits. Commissions to the placement firms should be on top of the scale salaries that the contract employees get. Severe penalties should be levied against companies that abuse contract employees, or that use contracting houses that abuse their contractors. Foreigners of uncertain position in a strange land are easy targets of ill-treatment and low-wages. (See, e.g., CPU.007 for complaints against Hewlett-Packard in its use of over-seas contractors)..."
CPSR == Computer Professionals for Social Responsibility
Mitch Betts _IDG_/_ComputerWorld_
National ID system proposed for immigration job tracking
"During the past 20 years, privacy advocates have beaten back numerous proposals to create a national identification system... Barbara Jordan... last week called for a national computer data-base that would allow employers to verify whether a job applicant is authorized to work in the U.S.A... Legislative proposals for a national ID card were rejected in 1986 and 1990... U.S. senator Alan K. Simpson (R-WY), a long-time supporter of a national ID card, predicted that election-minded senators will rush to attach the plan to any bill moving through the Senate this year, 'even if it's tacked on to a bloated cow bill'. Indeed, senator Dianne Feinstein (D-CA) said she plans to do exactly that."
|"The great thing in this world is not so much where we stand as in what direction we are moving." --- Oliver Wendell Holmes (quoted in Mark Skousen & Jo Ann Skousen 1993 _High Finance on a Low Budget_ pg 199)|
Engineers and Employment in the Global Economy: A View from Capitol Hill
Thank you so much for inviting me to address your conference. I am speaking today, not as a representative of Congress or of the Science, Space & Technology Committee, but as an observer of administration and Congressional policies that affect global employment. These policies impact your jobs, your future, your standard of living and those of your children. They raise many questions. I have no definite answers, but want to pose some possibilities for you to think about and begin to discuss.
A cartoon appeared in the newspapers this Spring that pictured a new college graduate being handed a spatula by the college president who said, "Go forth and serve mankind." That cartoon summarizes much of what we know about the present American economy, and the college graduate could just as well have been a 50-year-old engineer.
The questions we must address are three: First, can we maintain our national standard of living in a global economy where there are hundreds of people for every job? Second: What are our policymakers doing to plan for the economic future of our citizens? Finally, what can we do to ensure good employment opportunities?
I am going to give you the quick answers based on today's economic policies:
1. We cannot maintain our standard of living.
2. The policy-makers are doing little or no planning.
3. We must demand a complete shift in economic policy.
The end of the Cold War, the globalization of the economy as exemplified by the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), the continuing advance of automation and information technologies and the relentless downsizing of corporations are affecting employment as never before. These are not job-creating events. Computer-aided design systems help one engineer do the job 6 - 12 did two decades ago. A Cummins Engine factory in Indiana has a new, team work-place where a smaller number of workers make $8 per hour, about half of what the previous work-force made. People talk of the eeriness of factory floors because of the small number of workers.
Information technology has facilitated the elimination of a whole layer of management. You all know how risky it is to have obtained membership in the "50-50 Club". That means 50 years old with a salary of over $50K -- in other words, a mid-manager. In their relentless drive for higher profits, multi-nationals compete with each other to eliminate these mid-managers and others. In the first quarter of this year, these companies eliminated 192,572 jobs, or 3,106 every day -- mostly in the communications, aerospace, computer, transportation and retail industries. Many more jobs were eliminated by smaller companies.
Announcements of job cuts and management restructuring are inevitably rewarded with stock price surges the next day on the Dow Jones. Earlier this month, the Wall Street Journal (1994-08-01) reported that major companies increased after-tax earnings 39% over last year. Those that did best contained costs. "Heavy investments in technology and years of restructuring have resulted in 'relatively low unit labor costs and profit-margin improvement.'"
It is a different story, however, for those who get laid off. When they get rehired, it is for lower salaries, fewer benefits and less security. And this is a worldwide phenomena, extending even to companies in the developing world which hope to compete in the new world market.
The world is already short of jobs. According to the United Nations' International Labor Organization 120M people are un-employed, and 700M are under-employed. 47M more enter the job market every year, and there will be 750M more in the next 20 years. With the demise of subsistence agriculture that is the inevitable result of free trade in agricultural goods, hundreds of millions more will be moving to the cities and clamoring for jobs.
Another way to improve profits is to move facilities over-seas to cheap, but productive, labor markets. Motorola, for example, gets workers as skilled as those in the U.S.A. in Beijing for $65 per month. Even a superb educational system cannot protect U.S. workers against this type of move.
We praise the European and the Japanese educational system and their apprenticeship training programs for young people. But, according to the Financial Times earlier this week (1994-08-31), joblessness in Japan is at an a seven-year high, creating the worst job outlook for new college graduates in many years. There are 100 job seekers for every 62 jobs. The cause? Corporate Japan is shifting production to cheaper south-east Asia locations and cutting domestic recruitment.
Germany's BMW and Mercedes-Benz are willing to leave their highly skilled work-force behind, build new plants and train new workers in the U.S.A., not because they are better, but because they are cheaper. And U.S. companies do the same with Mexican or Chinese workers. According to the UN's World Investment Report, multi-nationals have created 8M jobs since 1985. Virtually all of them were in foreign affiliates; 7M were in developing countries.
But while their productivity climbs, Third World workers face multi-national corporations no more conducive to improving the workers' lot in life than were the coal and steel barons of another century. Just as Cummins Engine cut workers and pay by 50%, Third World plants are also looking for ways to cut salaries and employees. When I visited a GM-owned maquiladora in Matamoros last Fall, the manager told us that the company moved there because of the low wages. Workers make $2 an hour, but the plant's technological, productivity and quality levels are equal to or greater than comparable plants in the U.S.A. But even at $2 an hour, reduction of the workforce by upgrading technology is already under-way.
Maquiladoras in Matamoros are also trying to reimpose a 48-hour work week. Just recently, Sony broke the 40-hour ceiling gained after a long union struggle by setting up a dual system: 40 hours for old workers and 48 hours for new. It also is forcing its mostly female work-force to work on Sundays, their only family day. So much for family values.
Nissan, Texas Instruments and Xerox have state-of-art facilities in Aguascalientes, Mexico, employing tens of thousands of Mexicans. But they don't share the profits of their work. Most of them live in slums with 2 telephones for 20K people. The developed countries cannot maintain their standards of living if forced to compete with equally productive, but dramatically cheaper, Third World workers. These countries will continue in a labor over-supply mode for many years, a situation which significantly distinguishes them from the United States in the same stage of development and guarantees long term downward pressure on wages.
What we have is a situation where the developed world is losing well-paying jobs that have supported a consuming middle class. We may been actually losing consumer power. The developing world is getting the "good" jobs, but they aren't middle-class jobs any more and don't support much more than a subsistence lifestyle.
What should the role of the policy maker be in meeting these challenges? First, he or she should get his or her respective head out of the sand and stop mouthing platitudes about "free" trade, the "shortage" of scientists and engineers in the U.S. and pipe dreams about the magical future awaiting anyone who under-goes additional training.
It is, however, very possible that the dominance and political correctness of the "free" trade gospel will stop any meaningful discussion of the problem. One of the most disappointing aspects of the NAFTA debate was the refusal of any of its proponents to have a serious free-trade policy debate. At a time when we should have been discussing what kind of society we wanted, and how we were going to achieve it, all we heard from the administration, the think tanks and other pro-NAFTA forces was, "Trust me, 'free' trade is good for you."
I believe that the goal of policymakers should be to ensure that U.S. workers -- and I am including all of us in that phrase because we are just professional workers -- are free to compete on an even playing field with other workers who are receiving a fair day's pay for a day's work. That is called "managed" competition, and that is how this country became great.
We should not become a Third World country ourselves by running a dual society of (1) low-wage jobs held by new immigrants and the unfortunate and (2) overpaid Wall Street, legal and CEO jobs.
The policy wonks, however, seem to have accepted the latter scenario with barely a whimper. A recent meeting in Jackson Hole, Wyoming, of government officials, economists and other experts from industrialized countries concluded that the developed countries had only 2 choices: to keep their minimum wage low and below inflation growth to attract low-paying jobs for their citizens or to keep their income support benefits up with the resulting high unemployment rates of the European countries.
Paul Krugman, described as a "wunderkind" among academic economists, was at that conference. He recently wrote in Foreign Policy that "it is obvious that something has gone wrong with the promise of economic growth" stimulated by technological gains. The paradox created is "growing misery in the face of growing wealth". Market forces, Krugman said, are increasingly pushing against income equity.
I often wonder about the innate intelligence of economists. I could have told them that 5 years ago. Don't they understand supply and demand which is, after all, the under-pinning of capitalism? What the economists are saying, ladies and gentlemen, is that "free" trade and technological advances are bringing us increasing income inequities and there is nothing we or our governments can do about it. I call that deliberately "Third Worlding" our own society. Perhaps if they untangled themselves from their rigid adherence to free-trade theories, they could come up with some more creative ideas.
President Clinton brags about the new jobs created, but a survey of American industry indicates that most are not high-paying jobs; they are service, temporary and retail jobs. Just this morning, CNN reported 180K jobs created in July but a decrease in family income. Income is not keeping up with the inflation rate.
Labor Secretary Reich says that all American workers need is more education, preferably in technical fields. If 50% of our college graduates had science, math and engineering degrees, would they find high-paying jobs in their field? No. There would be too many of them. The New Scientist reported in June (1994-06-13) that current science and engineering college graduates were having a hard time and should think about combining their degrees with study in law, business, public policy or communications so they could get a job.
And we must remember that 75% of our citizens are only high school graduates. They are the ones who define our standard of living. If 50% of the new high school students went on to become skilled technicians, would they find high-paying jobs in their fields? No, because the country can absorb only so many of them. The result would be falling wages. I have nothing against better-trained workers, but that is the India solution, where you train workers and then have to export them because there are no jobs domestically.
You may think that competition for industrial jobs has nothing to do with your highly skilled jobs. To a great extent, professional salaries are based on blue-collar salaries. In a world economy, if blue-collar salaries are low, the salaries of professionals who compete worldwide will be most affected. Computer programmers, scientists and engineers are on the front line of the global, white-collar, free-market labor battleground.
Let's look at computer programming for a minute. According to the August issue of CPU, IBM, Motorola and Texas Instruments have production and research facilities in Bangalore, India; Oracle will soon put its fifth -- and largest -- R&D center outside of the U.S.A. in Bangalore. Apple is setting up a development and education project in the Ukraine which has 500K computer programmers. Apple will train them and assign programming tasks at one-quarter of the price of a U.S. programmer. Their inventions -- like ours -- will be sold worldwide. This has to impact the job prospects of the average programmer.
Engineering is described as the discovery, refinement and application of technology. It shapes all aspects of our society. It is not surprising that one of the first professions every country promotes is engineering. A developing country is a country that needs engineers to build its infrastructure and its industries. Right now, there are a lot of good engineers in the world and not enough work for them. This fact has changed the entire engineering employment equation. IEEE's Spectrum a year ago in its "Jobs at Risk" issue found the only place in the world there was a shortage of engineers was in Hong Kong.
It's true that there are some new, high-tech jobs for engineers, but they are not reserved for you in the First World. As international corporations move their facilities to cheaper locations, jobs in fields such as product design, process engineering and software development are moving with them. You were used to competing with your counterparts in Germany, France and Japan. Now you must compete with the best that India, Mexico, Korea, China and Brazil have to offer. They cost a lot less than you do, and often they are just [almost] as good. India has one-third of the world's Ph.D scientists and engineers. Other countries have thousands more.
The pell-mell rush of the world's nations into free-trade agreements, with their accompanying international joint ventures further weakens the connections of any corporation to the well-being of a specific country's economy. The bottom line controls everything. Our research efforts are also being internationalized, with the result that the skilled jobs created are shared with other countries. The end of the Cold War has only speeded up the process. There are no longer 2 competing, somewhat duplicative systems. We all compete for the same jobs.
Additionally, although very high-tech research continues to be done successfully in the United States, it cannot be counted on to spin off into domestic manufacturing facilities providing employment for many engineers and skilled workers. Let me refer to the Sematech experience. After a $1G federal investment which did help recapture leadership for the U.S.A. in the semiconductor equipment manufacturing field, the General Accounting Office [GAO] warned that a net job increase was not evident because of what it termed "increasingly complex international business relationships". That's a delicate way of saying that semiconductors continue to be manufactured in cheap labor markets because that is where the profit is.
Down-sizing of U.S. corporations by eliminating large numbers of middle managers -- one economist calls it "wringing out" excess employment in the American economy -- also impacts on you. It holds down pay-rolls -- and wages. More senior engineers frequently move into management and free up jobs for younger people. Where are these people going to go now -- back to the drawing table -- or the computer? Into contract engineering? [Being bodyshopped.]
And I don't need to discuss with you the impact of defense down-sizing on engineers. From 1976-86, the decade of defense build-up, there was an 100% expansion in the number of scientists and 90% for R&D engineers, a greater expansion than in any other field. Defense engineers also got top salaries compared to other engineers. Defense build-up accounted for 17% of all new jobs in U.S.A. during this time. This is a thing of the past. All of these factors add up to a very tight job market with no salary growth expected. There has been buying power loss for engineers for several years, and there will be more. This year, for the first time, graduating nurses received higher wages than engineers.
What are our policy-makers doing? Very little. Many are in a state of denial, or they are trying to preserve existing jobs through defense technology conversion programs. As you may know, there is also growing resistance in Congress to further defense cuts because it means more skilled job cuts. But 4 to 5 years ago, there were plenty of signs that a crisis was coming, which were ignored by the policy-makers and, frankly, I don't have much hope for them.
When I came to the Science Committee in July of 1991 as an investigator, by the end of my first week, I had heard that the much-repeated statement from the National Science Foundation [NSF] about a pending shortage of scientists and engineers was false. When I started to ask more questions, the first people I heard from were engineers telling me it certainly wasn't true for them. Older engineers were being off-loaded into contract positions [bodyshopped], losing their benefits and their careers as quickly as the new ones were graduated. Young engineers were doing work that in years past was done by drafts-people.
Then I heard from the young scientists who were struggling from one post-doc to another to patch together a career until some university would give them a position. Often that never happened, and, after years of education and near-poverty, they were forced into other careers. Mathematicians, geologists, biologists and, of course, the physicists, all confronted that reality while the policy-makers denied it was happening and said these particular young people must not be very good.
The Committee's attempts to expose the myth were not welcome. The National Science Foundation, the National Science Board, AAAS, the universities and influential members of Congress stood behind the idea of a shortage. The NSF orchestrated with others the media and public policy campaign that put hundreds of millions of dollars into science and math education.
I have no quarrel with money to improve the science and math literacy of our children, but we should never mistake basic literacy with degree achievement or market demand. However, these projections of shortage had no basis in reality, and the NSF knew it. But because everyone had a vested interest in getting more federal dollars, no one would admit it, even after the Berlin Wall fell, and there was clear evidence that the defense budget was going to be cut.
The Hudson Institute also manipulated figures to project an enormous demand for highly skilled workers. Again, the media and the policy-makers used this number to play "Chicken Little".
The NSF and the Hudson Institute studies were the impetus behind a provision in the 1990 immigration reform bill that allowed 65K skilled, temporary workers into the U.S.A. annually and also generated the ill-fated pilot labor market certification program. The latter program would have allowed immigrants in 10 mostly high-tech fields supposedly in shortage to obtain permanent work certification in the U.S.A. by simply demonstrating that they had a job offer in one of the shortage areas. Engineering societies, along with other scientific organizations, banded together last year during the proposed regulation stage to object because the Labor Department could not credibly demonstrate any labor shortages in the selected occupations. Secretary Reich then aborted the program.
Clearly, the "vision thing" is still lacking among many of our policy-makers. Now they tell us that if we train or retrain, there will be new high-tech, high-paying jobs waiting for us. And for some, there will. But all of us know highly skilled people already out of work or taking new jobs that pay significantly less than their previous ones. If there aren't good jobs for them, where will the jobs be for the new workers? Policy-makers are very careful not to mention the number of jobs that will be created, and the salaries they are going to pay. Perhaps it is then true, as one economist said, the whole purpose of all this down-sizing and "free" trade is to reduce our salaries.
Labor Secretary Reich already knows these problems; he built his academic reputation on alerting us to the challenges of the global labor market. In a 1991 article in the Harvard Business Review,["Who Is Them?" 1991 March-April, pp.78-80] he said "corporate decisions about production and location are driven by the dictates of global competition, not by national allegiance... For the past two decades, U.S. businesses have maintained their shares of world markets even as America has lost its lead." Let me quote Secretary Reich:
In deciding where around the world to do what, the global manager seeks to meet the needs of the customers worldwide for the highest value at the least cost. Some production will be done under the company's direct supervision; much will be out-sourced. Often design and marketing activities will be sited close to the markets to be served; research and complex engineering, where skilled scientists and engineers can be found... When 2 or more locations are about the same, the decision will be based on the where the global manager can secure the most profitable deal... The global web's highest value-added activities -- its most advanced R&D, most sophisticated engineering and design, most complex fabrication -- need not be in the nation where most of the company's share-holders and executives are. Ford's state-of-the-art engine factory is in Chihuahua, Mexico, where skilled Mexican engineers and technicians produce more than 1K engines per day.
Profit. That's why Mercedes-Benzes for the U.S. market will now be built in Alabama -- not because the workers are better than those in Germany. They aren't, but they certainly are cheaper.
What Secretary Reich recommended was not more trade agreements -- he said they were irrelevant -- but a U.S. Investment Representative whose job was to bring international investment and good jobs to the U.S.A. by threatening to close the huge U.S. market if this was not achieved. That's what [Red China] did with Ford Motor Co. earlier this year. There would be no assembly plants in [Red China] without development of components manufacturing in [Red China]. But now as a key policy-maker, Reich is constrained by political pressures to down-play both the ability of the rest of the world to compete with us as workers and the need for us to develop any concrete action plans. Publicly, he supported NAFTA and GATT unreservedly. Privately, he admits that he doesn't know any more than you or I do where the high-tech jobs are or how many there are going to be or what his training programs are for. His main legislative program, which will probably not succeed in this Congress, is combining 6 dislocated worker programs and beginning to simplify the employment and training system. These are laudable goals, but they do not create jobs.
I want to pose a partial solution -- a variation on the managed competition that made our country great. It will not be politically correct in economic circles. If we are not going to have tariffs and a meaningful "most favored nation" process for controlling trade, we have the right to demand, as a condition of access to our markets, that Third World countries trading with us give their workers the opportunity to organize for better pay and living standards.
Only if the standard of living of Third World workers increases will our standard of living remain constant. Notice that I did not say improve. We are struggling just to maintain our standard of living. In addition, we must allow subsistence farming to continue in the developing countries so that they can limit the urban labor market supply until the standard of living has increased. That means that U.S. agricultural interests must have restricted access to other countries' agricultural markets.
One of the most devastating impacts of NAFTA in the next decade will be the replacement of Mexican corn by U.S. corn. Millions of subsistence farmers will be driven off the land with nowhere to go because we are the most economical corn producers in the world. They will skew the labor market for decades.
If you look at the legislative battles over both the NAFTA and the GATT -- or the recent dispute over granting most favored nation status to [Red China] -- you can see how controversial the idea of taking deliberate step to raise workers' standards worldwide is. The multi-nationals fought so hard to keep workers' rights out of the NAFTA and the GATT because countries that allow their workers to organize aren't as cheap as those which don't. The same is true for environmental standards which we also need to establish. Countries that enforce environmental laws instead of allowing helter-skelter use and disposal of toxic chemicals increase the cost of doing business -- and leave their workers with the energy to demand better salaries.
Just as we were once told that our society would demand more engineers and scientists to function, we are now being told that high-paying, high-skill jobs for everyone are the foregone result of free trade, and we must prepare for it. It is not true. We must say that loud and clear so we can take the first step toward changing the reality.
As AAES' Dick Ellis said in his report "At the Crossroads: Crisis and Opportunity for American Engineers in the 1990s", if we do not create prosperity for the rest of the world, there will be no room for our own prosperity. The policy-makers need to hear that from you.
Kirk Ladendorf _Austin American-Statesman_ pg A1
David Goodstein _California Institute of Technology_/_NCAR 48 Symposium_/_Scientific American_
The Big Crunch:
"The period 1950-1970 was a true golden age for American science. Young Ph.D's could choose among excellent jobs, and anyone with a decent scientific idea could be sure of getting funds to pursue it... But now, in the 1990s, the situation has changed dramatically... It didn't take long for American students to catch on to what was happening."
David R. Kaspersin _Dynamic Recording_
The Down-Sizing and Demoralizing of the American Work-Force
|"There are no bad books any more than there are ugly women." --- Anatole France (quoted in Richard Lederer 1991 _The Miracle of Language_ pg 167)|
_CPU_/_Computer Professionals for Social Responsibility_
tens of thousands of STEM workers dumped
"DIGITAL EQUIPMENT lost $2.1G in the fiscal year that ended last July. Over 9K jobs were cut last spring as part of a massive 'down-sizing' effort, which, when the smoke clears, will mean some 70K DEC jobs will have disappeared since 1989. Pity the poor executives there. The pay for the top 5 execs went up 70% last year. CEO Robert Palmer received stock options that exceeded, on paper at least, his $900K salary. VP Enrico Pesatori got an 18% raise. The execs who lost jobs did okay too: sales head Edward Luciente got a $630K settlement; consulting chief Gresham Brebach Jr. walked with $500K. (Business Week 1994/10/03). And over at Borland, even though the company lost $370M in the fiscal year that ended last March, CEO Philippe Kahn received favorably priced options to purchase 1M shares. (Business Week, 1994/09/12)
JOBS: BELL ATLANTIC announced in August that it was taking a $150M charge for reducing its workforce by 5,500 over the next 3 years as it consolidates offices that handle billing, maintenance and other functions. According to the Wall Street Journal piece, 'all seven Bells are looking to cut costs and work forces...' (1994/08/15).
HUGHES ELECTRONICS, a GM unit, will layoff 4,400 workers through 1995, or 10% of its workforce. (USA Today, 1994/09/18).
NOVELL, as expected, announced in August that it would lay off 1,750 workers. That's 17% of the combined workforce of Novell and Wordperfect. (USA Today, 1994/08/25). On the heels of its takeover of Aldus, Adobe announced it was cutting the work-force of the combined operation 20%, or some 400 jobs.
QUARTERDECK reported in August it was cutting 25% of its work-force (55 employees) (WSJ, 1994/08/19).
And this from our European correspondent: SEL, the German Branch of the Telecom Goliath Alcatel will reduce its workforce by more then *5K* people in the next months. Restructuring activities in 1993 and 1994 have already dropped the company's work-force below 20K. From 1992 until now Siemens-Nixdorf had reduced its work-force from 48K to 39,200. Till the end of this year, 2K more Siemens-Nixdorf employees will lose their jobs...
EXPORTING WHITE-COLLAR JOBS: L.A. Times columnist Michael Schrage suggests that successful implementation of the Global Information Infrastructure may result in the exporting of information-intensive jobs to less expensive labor markets -- sort of white-collar maquiladoras. For instance, Motorola has moved its Iridium project's software production over-seas to India where Bangalore is already the second-largest software producing area after Silicon Valley. (Telecommunications Policy Review 1994/09/25).
NOT ENOUGH WOMEN AND NOT ENOUGH PROGRAMMERS: An executive of the Software Human Resources Council in Ottawa says that 'women are definitely under-represented at all levels, in virtually all jobs' in the information technology field. He also says that Canada's computer industry is short about 4K software professionals, adding that the reason for the shortage is that development departments are sweat-shops. (Toronto Globe & Mail 1994/10/18)"
top 500 fastest super computers LinPack bench-mark
|"It is with words as with sun-beams. The more they are condensed, the deeper they burn." --- Robert Southey (quoted in Richard Lederer 1991 _The Miracle of Language_ pg 238)|
Sharon Begley, Lucy Shackelford & Adam Rogers _NewsWeek_
Glut of Scientists: No PhDs Need Apply
E.B. Baatz _CIO_
Down-Sizing Is Tough On Everyone
"Firings, lay-offs and reductions in force -- terms that reflect anguished cuts businesses make in times of financial stress -- have been replaced by down-sizing, re-engineering and right-sizing -- less threatening words that suggest the continual adjustments businesses make in order to maximize corporate health. But whether employees are down-sized or fired, laid off or re-engineered out of a job, their pain remains the same... Economists tell us that the 1991 recession hurt the working population as much as the Great Depression... Big corporations announced over 615K job cuts in 1993, says John A. Challenger, an out-placement consultant with Challenger, Gray & Christmas Inc. based in Chicago. In the first 9 months of 1994, another 418K jobs fell beneath the down-sizing ax."
The Case Against the Fed
_The Standish Group International Inc._
CHAOS Report on IT Project Success & Failure
Timothy Egan _NY Times_
_CPU_/_Computer Professionals for Social Responsibility_
BOOK REVIEW: _The Jobless Future_ by Stanley Aronowitz & William DiFazio
"The authors contend jobs -- work as we know it -- is going away. They cite the tendency of new jobs to be part-time and/or temporary [bodyshopping], and often at minimum wage. Official unemployment figures fail to measure the state of partial employment and those who have given up looking for work. The authors mention the thousands of lay-offs at GM, IBM, Boeing, Kodak and Sears and that even 'the older and most prestigious professions of medicine, university teaching, law, and engineering are in trouble: doctors and lawyers and engineers are becoming like assembly-line clerks... proletarians' (p. 54). The authors comment: '...we have yet to feel the long-term effects on American living standards that will result from the elimination of well-paid professional, technical and production jobs' (pg xi). The mass of lay-offs and the destruction of high-quality, well-paid, permanent jobs is produced by 3 closely related developments: First in response to pervasive, long-term economic stagnation and to new scientifically based technologies, we are experiencing massive restructuring of patterns of ownership and investment in the global market. Fewer companies dominate larger portions of the world market in many sectors, and national boundaries are becoming progressively less relevant to how business is done, investment deployed and labor employed... Second, the relentless application of technology has destroyed jobs and, at the same time, reduced workers' living standards by enabling transnational corporations to deterritorialize production... 'and thirdly, U.S. corporations are locating not only low-skilled jobs, but also design and development activities in other countries such as India and [Red China] where labor is both skilled and cheap.' (pg 8-9)... 'All of the contradictory tendencies involved in the restructuring of global capital and computer-mediated work seem to lead to the same conclusion for workers of all collars -- that is, un-employment, under-employment, decreasingly skilled work, and relatively lower wages. These sci-tech transformations of the labor process have disrupted the work-place and worker's community and culture. High technology will destroy more jobs than it creates... all workers, including managers and technical workers...' (pg 3)... The 1994 November issue of IEEE Spectrum completed a series on engineering employment with an article on 'Lay-Offs: Myths and Facts'. This last article has a U.S. focus and illustrates its previous claims with personal stories of engineers. Spectrum reports that while many indicators suggest that an economic recovery is under way, lay-offs in high-technology companies are continuing. Not only are permanent jobs scarce, but a lot of vacant ones pay 10%-50% less than such positions paid only a few years ago, and may also demand relocation. 'Moreover, according to at least one observer, the full-time job itself may be disappearing as a way of structuring work.' The myths and facts: MYTH: Being at the cutting edge of technology makes an engineer desirable. MYTH: Having many talents will set an engineer apart from the crowd. MYTH: Skills learned in defense work can be easily converted to civilian use. FACT: Continuing education or re-education will keep an engineer employable. FACT: Salaries of full-time engineers are falling. FACT: Demand for temporary engineers is booming and compensation is high... Although the number of scientists with Ph.D.s keeps rising every year, job prospects for them keep dropping. More than 12% of new Ph.D.s in math had no jobs after graduation, and there is a 20-year high in joblessness among chemists. The trends suggest that the future for most American scientists lies in industry rather than in traditional academic research and teaching. (Newsweek 1994/12/05, from INNOVATION 1994/12/12/... The latest issue of Resistor, the news-letter of IBM Workers United writes that 700 workers laid of at Endicot, Poughkeepsie and Burlington are being replaced by essentially the same amount of temporary workers. It also notes that computer programmers who work as contractors for IBM in Austin, Texas claim IBM is using low-paid programmers from India to replace higher paid American workers according to an article in the Austin American-Statesman. The Labor Department is investigating Tata Information Systems [TCS], the employment firm responsible for hiring Indian programmers for the US."
Diversity Training, Illusory Job Ads, Work-Force 2000 Engineering Employment in the New World Order, Readers' Voice (pdf)
Edith Holleman _Silicon V_/_IEEE Rochester NY_
Engineers and Employment in the Global Economy
American Engineering Association (pdf)
"We need to take a hard look at the way we funnel U.S. technology and training into building our competition. We are the world leaders in aerospace technology. Yet we sold our military aircraft technology to Japan, Taiwan and Korea and trained their aerospace engineers. Currently, commercial aircraft is our leading export to [Red China]... We dominate in biotechnology and biogenetics, but in our rush to get more funding for our university labs, we have set up partnerships between our universities and Japanese companies which allow those companies to patent our -- once again -- U.S. [tax-victim]-funded research results."
David Cay Johnston _NYtimes_
Are you your own boss? Only if federal extortionists say so
Elisabeth Rosenthal _NY Times_
Young Doctors Find Specialist Jobs Hard to Get
"Managed care has strikingly decreased the demand for specialists like Dr. B, particularly in places like New York, where specialists are already in abundant supply. So when Dr. B finishes his residency at the Albert Einstein College of Medicine-Montefiore Medical Center in June, after 8 years of training, he is resigned to a temporary job or even a period of unemployment... 'In some specialties we could probably turn off the spigot for 10 years and still have plenty.', said Dr. David R. Dantzker, president of Long Island Jewish Medical Center. 'The pity is there are a number of people involved in years of specialty training who are not going to use it, who aren't going to have a job or at least aren't going to practice their subspecialty.'"
Jeffrey D. Nichols _Utah History To Go_
Reed Smoot and the Smoot-Hawley Tariff of 1930
"In 1930 President Hoover signed the Smoot-Hawley Tariff which boosted average duties on imports to 53%, the highest in American history. While Smoot saw this legislation as the culmination of his protectionist career, most economists then and since have assailed the tariff's disastrous effect on world trade at a time when the domestic economy of the U.S. was already suffering. The higher rates, about one-third greater than previous duties, made it more difficult for foreign nations to purchase American goods and pay off their war debts. In retaliation, some twenty-25 nations raised their duties, making American goods more expensive. By the time the Democrats took power in 1932 and lowered the tariffs [an average of 4%] under the Reciprocal Trade Agreements Act in 1934 the world economy was in a tail-spin."
|"The thing of which I have the most fear is fear." --- Michael E. Montaigne (1553-1592) (quoted in Marko Perko 1994 _Did You Know That...?_ pg 19)|
1995-05-13 13:41:44PDT (15:41:44CDT) (16:41:44EDT) (20:41:44GMT)
"Matt Murray 1995-05-04 _Wall Street Journal_ 'Amid record profits companies continue to lay off employees' pp A1 & A5: 'During the 1990-91 recession, when lay-offs were announced almost every day, workers around the nation were angry and anxious... most employees assumed that the lay-offs would stop when the good times returned. They were wrong. While corporate profits were surging to record levels last year, the number of job cuts approached those seen at the height of the recession. Corporate profits rose 11% in 1994, after a 13% rise in 1993, according to DRI/McGraw Hill, a Lexington, MA, economic consultant. Meanwhile, corporate America cut 516,069 jobs in 1994, according to out-placement firm Challenger, Gray & Christmas in Chicago. That is far more than in the recession year of 1990, when 316,047 jobs were eliminated, and close to the 1991 total of 555,292 jobs.'
Roger Lowenstein 1995-05-04 _Wall Street Journal_ 'The 20% Club no longer is exclusive' pg C1: 'Once upon a time -- say, the year before last -- a company making a 20% return on equity was among the elite... In the first quarter, the average ROE of the Standard & Poor's 500 companies hit 20.12%. This figure (hot off the calculator from Salomon Brothers) represents the highest level of corporate profitability in the post-war era, and probably since the latter stages of the Bronze Age.'"
|"The thing of which I have the most fear is fear." --- Michael E. Montaigne (1553-1592) (quoted in Marko Perko 1994 _Did You Know That...?_ pg 19)|
William Massy of Stanford, Charles Goldman of RAND Corp., Stanford graduate students Marc Chun and Beryle Hsiao
Doctorate surplus in science and engineering continues
"Universities in the United States are producing about 25% more doctorates in science and engineering fields than the U.S. economy can absorb... Economic models prepared by the group show that 'you can increase sponsored research by 10%, and while you are in the process of making that increase -- let's say you move it up at 2% a year for 5 years -- you surely will sop up the unemployment.', Massy said during a recent interview. 'The whole system will be expanding and people will get the kinds of jobs they were trained for. However, as soon as you stop increasing it and go back to a steady state -- not a decrease but just stop increasing research funding -- all of a sudden the under-employment comes back. In fact, it comes back worse than it was before because the whole system has scaled up.' In an analysis of 13 science and engineering fields covering 210 doctorate-granting institutions and more than 1K educational institutions that employ people with doctorates, the researchers found that supply and demand do not work in the usual way to regulate the employment market. In labor markets, when job opportunities decrease fewer people usually seek to enter the field in response to the reduced opportunities. In the case of Ph.D.s, however, the researchers said, they found that 'neither departments nor prospective doctoral students take close accounting of the doctorate employment gap'. Interviews with 300 faculty members on 19 campuses indicated that doctoral admission decisions 'are driven not by the output market [for doctoral degree holders] but by the academic department's own production needs' for teaching and research assistants, Massy said. Teaching and research assistantships are temporary, part-time jobs for doctoral students that are normally thought of as the byproduct of producing doctorates. 'It's kind of the tail wagging the dog.', he said. The only way to solve the long-term under-employment of doctoral degree holders in sciences and engineering, the researchers say, is for academic departments either to reduce the number of doctoral students they admit or to convince more potential Ph.D. candidates not to seek the degree. Both are difficult to do, Massy said. Faculty and administrators who make admissions decisions tend to admit their targeted number of doctoral students, regardless of changes in quality of applicants, he said. 'They do that because they must have the Ph.D. students for teaching assistants, for research assistants and because faculty have a sense, in certain places, that they really need Ph.D.s to keep intellectually alive.' At his own School of Education, for example, Massy said, 'every faculty member believes that he or she should be able to admit 1 Ph.D. student a year. Departments and schools have different numbers, but there is a sense that this is what we are entitled to as faculty. It's part of our intellectual culture.' The targets for Ph.D. admissions vary greatly with the type of institution and by field, he said. In electrical engineering, the volume of sponsored research grants tends to drive the number of doctoral students needed to do the research, and that field has the highest number of doctoral students per faculty member at the institutions studied. In other fields, such as mathematics, chemistry and economics, under-graduate enrollment is a greater influence on the number of doctoral students admitted because these departments are responsible for teaching many under-graduate general education courses, and the departments admit doctoral students to help teach those courses, Massy said. 'To put it bluntly, in departments where general enrollment is a problem, at least some kinds of institutions will have to change their mix to use more faculty and fewer TAs [teaching assistants] to teach under-graduate courses, because that has a dual effect: It reduces the number of doctoral students produced and it increases the demand for faculty', thereby creating higher numbers of permanent jobs for the doctoral students who are admitted. The best place for this change to occur would be at the lowest-ranking doctoral-training departments, but faculties in these departments are not likely to make the change voluntarily, he said, because having fewer graduate students would tend to have a negative effect on their own careers. It is more difficult for them to publish new research results without new graduate students and they most likely would have to spend more of their time teaching under-graduate courses than the advanced courses many prefer. 'It goes against a whole lot of forces.', Massy said. Over-production may cease in time, he said, because of rising pressure on institutions of higher education to increase the quality of under-graduate education. Some parents and students complain that under-graduates are too frequently taught by doctoral students rather than faculty... Potential doctoral students also might apply in smaller numbers if they have better information on their permanent job prospects, he said. In the absence of data, they may be too influenced by the success of their primary role models -- faculty members with their own research laboratories. 'If they only knew that a small fraction of the people who start off ever get there, it might make a difference at the margin.', Massy said. Problems in providing such information result from the difficulties encountered in tallying the numbers of graduates who are actually employed after graduation in jobs that use their degrees. Some data count temporary post-doctoral employment or 'nomadic' [contingent, body shop, temporary] employment as a lecturer as if the graduate had reached his or her goal, he said. Other data sets merely count the total graduates who are employed. Doctoral students are likely to have skills that will lead them to compete better than the average applicant for jobs, he said, even if those jobs are as taxi drivers... over the long term and across all science and engineering fields, 3 of 4 doctoral degree holders eventually get jobs related to their degree qualifications. The actual percentage varies by field, is dependent upon assumptions about the proportion of doctoral students from foreign countries who fill some of the jobs available in the United States, and can change temporarily when shortages occur in a given field. 'For the 5 engineering fields [studied], the employment runs between 25% and 50% of Ph.D. production under the assumption that half of the visa-holding graduates remain in the United States.', the researchers report. 'The employment gap remains positive, between 5% and 20% of total degrees, even if we assume that none of the foreign graduates remain. If we want to characterize the gap for a lay audience, we would choose 25% of total degrees -- the low end of the 50% foreign retention range. For the 5 engineering fields, this would imply that about 200 new Ph.D.s, on average per field, would fail to find suitable doctorate-level employment.' The 25% who do not make it usually do get jobs for which they may be over-qualified."
L.M. Sixel _Houston Chronicle_
Employers Go Abroad: Programmers Claim They're Displaced by Foreign Workers
Rob Sanchez: Job Destruction News-Letter: H-1B Programmers for $5 an Hour
Mike McGraw _Kansas City Star_
"Boon or Boondoggle: Visa Programs Hurt U.S. Workers, Foster Abuse"
David A. MacPherson & Barry T. Hirsh _Journal of Labor Economics_ vol 13 #3 pp 426-471
Wages and Gender Composition: Why Do Women's Jobs Pay Less? (pdf)
|"[I]t is now the moment... to recall what our country has done for each of us, & to ask ourselves what we can do for our country in return." --- Oliver Wendell Holmes 1884-05-30 at Keene, NH|
Larry Richards _SoftPAC_
Companies Replacing American Workers With H-1Bs
"To demonstrate just how lax the current regulations are, I submitted an application to the Department of Labor in June asking for permission to hire 40 foreign programmers on H-1B visas at a rate of $4.50 an hour (25 cents above the minimum wage). This application was approved and sent back to me in less than 2 weeks. Because of these loop holes, an entire industry has sprung up composed of companies that specialize in hiring foreign programmers whom they contract out to clients seeking low cost labor."
New Data on Contingent and Alternative Employment (i.e. Body Shopping)
"Initial results from the survey show that, in 1995 February, between 2.7M and 6.0M workers -- a range of 2.2% to 4.9% of total employment -- were in contingent jobs... The February survey also showed that 8.3M workers (6.7% of the total employed) said they were independent contractors, 2.0M (1.7%) worked 'on call', 1.2M (1.0%) worked for temporary help agencies, and 652K (0.5%) worked for contract firms that provided the worker's services to one customer at that customer's work-site... an individual's employment arrangement could be both 'contingent' and fall into one of the alternative employment categories... Under all 3 estimates, contingent workers were more than twice as likely as non-contingent workers (those who are not contingent even under the broadest estimate) to be young, that is, 16 to 24 years of age... The services industry alone accounted for more than half of the contingent total but about a third of non-contingent workers. The construction industry also accounted for a relatively large share of contingent workers. This concentration notwithstanding, the proportion of workers within the services industry who were contingent ranged from 3.4% to 7.5%. Similarly, only 4.5% to 8.4% of construction workers were contingent. Contingent workers were concentrated in the professional; service; administrative support; and operator, fabricator, and laborer occupations. The proportion of contingent workers who had health insurance from any source ranged from 57% to 65%, depending on the estimate chosen. This was 17 to 25 percentage points lower than the proportion of non-contingent workers with health insurance... The majority of contingent workers preferred to have permanent rather than temporary jobs..."
Keith Bradsher _NY Times_
Skilled workers watch their jobs migrate over-seas
CPU/Computer Professionals for Social Responsibility
Gerald F. Scully
Kathryn Hoyle _BLS_
New survey reports on wages and benefits for temporary help services workers (bodies shopped)
"The pay of employees placed by the nation's temporary help services firms averaged $7.74 an hour in 1994 November... BLS found that many temporary help supply firms offer a package of employee benefits, including paid holidays, paid vacations, and health insurance, to workers who meet minimum qualifications. However, few temporary workers actually receive these benefits, either because they fail to meet the minimum qualification requirements or, as in the case of insurance plans, they elect not to participate... Since a similar study in 1989, employment in the temporary help supply services industry has grown much more rapidly than in the rest of the economy. Over the 5-year period, the number of workers employed by the nation's temporary help supply firms rose by almost 350K or 43%... Computer Systems Analysts 1,779, average hourly earnings $28.75;... Computer Programmers 2,492, average hourly earnings $25.40;... Computer Operators and Printer Operators 4,217, average hourly earnings $10.63..."
Raju Narisetti _Wall Street Journal_ pp A1, A4
Manufacturers Decry a Shortage of Workers While Rejecting Many
Claudia Allen _NACE_
Starting Salaries for New Grads
|Economics & Finance||$27,650|
_Computer Professionals for Social Responsibility_
Skilled Work Migrating Over-Seas
"Corporate America is getting a lot of work done on foreign shores -- in India, [Red China], Singapore, Hong Kong, Taiwan, Brazil, Mexico and Australia -- but not by Americans. Educated locals in these countries are paid a fraction of the cost (paid in the United States) to perform high-technology tasks like designing sophisticated chips, equipment design and computer-programming. Absence of other infrastructure are no impediment to many of these activities. In most cases, what they need is a private satellite link. High-speed communication links even make it possible to use two teams (one in the United States and other overseas, in a different time zone) together working on a software development project, cutting development time by around 40%. Millions of white-collar Americans are now experiencing the same global wage pressure that their blue-collar counterparts have long faced."
Industry complains of shortages while laying off 300K
_Chemical & Engineering News_/_ACS_
1996 Employment Outlook
"The American Chemical Society's recent starting salary survey confirms that the job market for chemists remains a challenging one, with full-time jobs hard to come by."
Terry Barnhart _Network of Emerging Scientists_
Vocation vs. employment prospects
"CW makes some good points about not going into science as a career, points which I have taken and have largely believed through my own difficult time in finding employment in the field. However, I cannot in good conscience warn someone off from science either. Just as there are successful and happy Archaeologists, ancient historians and English professors, the fact that there are few jobs does not, in itself, constitute a good reason not to do what you love and are good at."
_Monthly Labor Review_
Susan Houseman & Machiko Osawa _Monthly Labor Review_
Part-time and temporary employment in Japan
"The need for less costly labor and protection against fluctuations in labor demand has helped push up part-time and temporary employment in Japan. This article discusses recent trends in part-time and temporary employment and the characteristics of these 'non-regular' workers and their employers in Japan. It also looks at the role of the Japanese industrial relations system, public policies, and other factors in the development of part-time and temporary employment."
John E. Bregger & Steven E. Haugen _Monthly Labor Review_
BLS introduces new range of alternative unemployment measures
"Some of the original BLS unemployment indicators, U-1 through U-7, have been retained as part of the new range, U-1 through U-6; several new measures make use of data heretofore unavailable from the CPS. This article provides a brief history of the old range of alternative measures and reviews the impact of the redesigned CPS on the pre-1994 series, before introducing the new set of unemployment measures... Indeed, since the inception of the survey in 1940, only relatively minor changes have been made to the official definition of unemployment... The official measure has withstood the test of time largely because of its objectivity. As measured via the CPS, the employment status of individuals is determined solely by their work-related and job-search activities durign a specific reference week [each month]. In essence, persons, who did any work at all during the reference week are counted as employed, whle those who did no work, but who searched for a job (some time in the 4 weeks prioer to the survey) and were currently available to take one had it been offered, are classified as unemployed. Those who met neither test are 'not in the labor force'... there are those who feel that the offical statistics under-state the full dimensions of the unemployment problem... Some go even futher, arguing for the inclusion of under-employed individuals -- those who are working, but who have had ther hours cut back or who have had to settle for less work than they wanted (a 2-day job, for example) or for a job that failed to make use of all their skills."
|"[T]he prices of actual labor services are governed, like the prices of all other goods, by their values." --- Carl Menger 1871 _Principles of Economics_ (translated by James Dingwall & Bert F. Hoselitz) pg 171|
|"In all cases where the king is party, the sheriff... ought first to signify the cause of his coming, & make request to open the doors." --- English court of 1603 (quoted in James Bovard 1995 _Shake-Down: How the Government Screws You from A to Z_ pg 82)|
Farrell Kramer _AP_/_South Coast Today_
'Tis the season for lay-offs -- in droves
"From January to October of this year, 343K lay-offs were announced, according to Challenger, Gray & Christmas Inc., a Chicago-based job placement firm. October's 41K rank as the highest since May... Stephen S. Roach, chief economist at Morgan Stanley & Co., the Wall Street investment firm, said that by year-end the number of lay-offs reported since 1991 March, when the economic recovery began, will be 2.5M. 'That's a carnage without precedent.', he said. Overall employment has increased 8% during this recovery compared with 14% through a similar point in the prior 4 recoveries -- translating into 6.5M jobs that were never created, he said."
Scientists' Heated Debate on Immigration
Casey B. Mulligan _University of Chicago_
Economic and Biological Approaches to Inheritance: Some Evidence (pdf)
"Earnings regress to the mean more rapidly among families that are making financial transfers. Earnings of adult children are less unequal across families that make financial transfers. Among families that are making financial inter-generational transfers, consumption does not regress to the mean at all. Consumption regresses to the mean (in percentage terms) across generations less rapidly than does earnings, Consumption inequality grows over time. A [regressive income extortion] decreases the inter-generational mobility of earnings... Williamson and Lindert (1980) suggest that U.S. wealth inequality today is not very different from wealth inequality in 1776. Lindert (1986) reports measures of British wealth inequality that have fallen over the past 200 or 300 years."
Dollar holds mixed on beige book: November lay-off announcements up 45% from a year ago
"Challenger Gray and Christmas Inc, a placement firm, said 45% more lay-offs were announced this November than a year ago."
NSF Finds Most S&E Degree Holders Employed in Non-S&E Occupations
"A new NSF Data Brief shows that the S&E work-force reached nearly 3.2M in 1995 - of which 83%, or 2.6M people, had received their highest degrees in an S&E field. At the same time, however, about 4.7M people whose highest degrees were in S&E fields were working in non-S&E occupations."
Wayne Harris _Research in Review_
"A changing American work-place means pain for survivors on both sides of the desk. The news blared from every media outlet worthy of the name: in 1994, the most productive workers on the planet hailed from the good old U.S. of A. The proof: all the leading economic indicators showed new high-water marks in American employment and productivity, while inflation was tied to a rope... 'It really is bad out there.', says Dr. Pamela Perrewe, chair of FSU's management department in the university's College of Business. 'It's not quite as traumatic as the 1930s, but it's real bad. Today, (one of the main concerns is that) there are no safety nets. There once was an implicit tenure for employees in business organizations. That's gone.'... In the 1990s, of course, the mother of all stressors for American workers has been the ever-present specter of job elimination, the phenomenon that brings a special relevance to Perrewe's findings. Between 1991 January and 1993 December, some 4.5M American workers lost jobs they had held more than 3 years, according to a survey released this Fall by the U.S. Department of Labor. The carnage was nothing if not democratic, cutting equally across occupations, employment levels and geographic regions. If anything, in fact, the ax fell heaviest among the better-paid. Of the 4.5M workers who became emotional and financial casualties of the new, fiercely competitive global economy, more than 1.2M were managers and professionals. Another 1.3M were technicians, sales-people and clerical workers. Not only did not carrying a lunch bucket cease to be a guarantee of a stable career in the early 1990s, it made the possibility proportionately more dicey. Relative to their representation in the corporate work force, managers and supervisors were almost twice as likely to get axed... In _After the Layoff: Closing the Barn Door Before All the Horses Are Gone_ (Business Horizons, 1993), Perrewe and co-author Robert C. Ford argued convincingly that, initially, how laid-off employees are treated will have a major bearing on an organization's ability to keep surviving employees in the fold... In the Department of Labor study, for example, an astounding 42% of the 4.5M laid-off employees received no written notification of their dismissal... Though the down-sizing and restructuring of the 1990s has exacted a huge toll in employee loyalty, most people still want to take pride in their work... 'In the long-term, firms that increased their training budgets after work force reductions were twice as likely to show increased profits and productivity as firms that cut their training expenses.'..."
Murray N. Rothbard _Ludwig von Mises Institute_/_An Austrian Perspective on the History of Economic Thought_
the dialectic of destruction
Pratap Chatterjee _Multi-National Monitor_
Invasion of the Body Shoppers
"The Texas-based Software Professionals Political Action Committee (SoftPAC) estimates that between 1990 and 1993, 50K temporary computer workers entered the United States and 100K computer professionals immigrated to the country. During the same period, the number of unemployed computer professionals doubled to 104K. 'They compete unfairly with their low wages.', Doug Pfenninger, a Los Angeles programmer with 27 years experience, told the Los Angeles Times after losing several jobs to immigrant workers. Pfenninger, who has worked for such leading aerospace companies as Rockwell International, Northrop and Lockheed, lost a job with Hughes Aircraft during a wave of cutbacks in 1992. After losing his house, he took a contract job on a project for Hitachi America in Northern California. After 3 months, he lost that job to a lower-paid foreign programmer. Also bitter was Lou Citarella of Livingston, New Jersey, after he lost his $52K job at the American International Group (AIG) to an immigrant who he had trained. AIG's immigrants were brought to the country by Syntel, a Bombay-based software company that specializes in bringing computer workers from India. Most of the company's contracts are signed through its U.S. office in Troy, Michigan. Its 300 employees work for such clients as AT&T, Xerox, Safeway and AIG. Syntel's 1994 revenues were $1.3M, a 268% increase over the previous year. The immigration of programmers set off a storm of protest in California from unemployed programmers as well as from anti-immigration groups like Californians for Population Stabilization, which sued HCL in 1993 for under-paying its programmers. As a result of the law-suit, Hewlett-Packard agreed to cut some of its 'bodyshopping' and requires its contractors to provide proof of pay. The U.S. government imposed visa restrictions in 1994 on foreign programmers, causing the percentage of 'on-site' programming sales conducted in U.S. offices to drop to 63% from 1993 to 1994. During this period, the number of programmers allowed into the United States dropped from 2,000 to 1,092. The Department of Labor investigated alleged abuses of foreign workers and issued fines in 8 cases in 1993. This year, the Labor Department fined Syntel, the company that helped put Citarella out of work, $117K for under-paying 40 Indian programmers. The company has been suspended from bringing in new programmers for a year. Syntel, which was bringing in programmers from its 3-year-old Bombay subsidiary, was placed under observation when complaints were received about its 'willful under-payment' of AIG contract workers."
David S. North
Soothing the Establishment: The Impact of Foreign-Born Scientists and Engineers on America
|jgo Resume||jgo Books|
|jgo Econ Data||jgo Econ News Bits Index|
|Economic News Analysis Summary|
|Links||jgo's Work in Progress|