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Issue: 016 CPU: Working in the Computer Industry 05/01+3/96
An electronic publication for workers in the computer industry
- ABOUT BOX
- LETTERS: MISCELLANY
- LETTERS: ON THE RISE IN CARPAL
- LETTERS: ON NON-COMPETE AGREEMENTS
- LETTERS: ON THE INDIAN SOFTWARE INDUSTRY
- LETTERS: JOB LOSS: A PAINFUL PROBLEM
- BILLBOARD: UPCOMING CONFERENCES
- TOOLBOX: CPU NOW AVAILABLE ON THE WEB
- LABOR BYTES
- EOF: (SSSHHH! -- UPCOMING _WIRED_ COVER LEAKED TO CPU!)
1. ABOUT BOX
Online subscriptions to CPU are available at no cost by e-mailing firstname.lastname@example.org, with a single line in the message:
SUBSCRIBE CPSR-CPU Chris Marker
To cancel your subscription, send to email@example.com:
PLEASE RE-POST THIS FREELY, especially at work. CPU material may be reprinted for non-profit purposes as long as the source is cited. We welcome submissions and commentary. Mail sent to the editors or to CPU will be treated as a "letter to the editor" and considered printable, unless noted otherwise.
Editors for this issue: Michael Stack and Jim Davis. We may be contacted by voice at (510) 763-8760, by email to firstname.lastname@example.org, or by USPS at POB 3181, Oakland, CA 94609.
CPU is a project of the "Working in the Computer Industry" working group of Computer Professionals for Social Responsibility / Berkeley Chapter (though views expressed herein are not necessarily those of CPSR).
Thanks to everyone who wrote. This is the first issue where _all_ of the main stories have been contributed by CPU subscribers. Keep 'em coming!
The current issue of the _CPSR Newsletter_ (Winter/Spring 1996) focuses on the relationship of technology and jobs (guest-edited by me). The text will eventually make it to the CPSR site, but in the meantime, if you are not already a CPSR member, please consider joining. Email email@example.com for more info, or check out the CPSR web site.
Several of you responded to the inquiry in the CPU.015 re: forming a CPSR working group on working in the computer industry. We are still planning to establish the working group, and will be in touch.
Finally, in celebration of its 15th anniversary, CPSR is honoring two leaders in CPSR and the computer field in June. I invite you to attend the dinner on Saturday, June 22, 1996 at Sun Microsystems in Menlo Park, California in honor of the work of Terry Winograd and Eric Roberts. Through their research and teaching in computer science; and their dedicated efforts with CPSR, Terry and Eric have advanced not only the computer field, but also the socially responsible use of computing technology. Tickets start at $35; for more info email firstname.lastname@example.org.
3. LETTERS TO THE EDITOR - 1 (SHORT ITEMS)
ON THE MITNICK SAGA
In case you missed it, Charles Platt wrote a devastating review of _Takedown_ (the Kevin Mitnick saga) by Tsutomu Shimomura and John Markoff. The review appeared in Computer underground Digest volume 7 issue 95.
>This book and a considerable number of similar studies
>document the consistent thrust of capitalist enterprises
>to deskill the skilled.
Is it really to deskill the skilled? Or is it just to eliminate peoples' jobs altogether, replacing them with cheaper machines. Once upon a time, this wasn't a threat, it was a promise: "in the future, manual labor and drudgery will be a thing of the past."
>workers with good-paying, interesting jobs in which they
>exercised considerable judgement and autonomy have been
>stripped of it all by automation controlled by management.
>The same thing will happen to programming and related work,
>including my own work, technical writing. The question is, how
>shall we respond?
I guess the answer isn't "with applause". At least not until we find a way of letting everybody pay for goods and services in a world where it takes only a few people to produce enough for everybody. 12-hour work week, anyone? Or is it 6-month vacations all around?
4. LETTER: ON THE RISE IN CARPAL TUNNEL SYNDROME
Someone really needs to write about the rise in carpal tunnel syndrome and other forms of repetitive strain injury among computer programmers. Unfortunately I don't have time to write the story. But here are some facts that make me think this is increasingly important:
- Many programmers where I work have it. We have programmers here
who have hired clerical temps to sit in front of workstations
and type dictated C++ code and debugger commands. It's really
weird to observe: someone who doesn't know anything about what
she's typing (the temps *are* all "shes") as the programmer
sits behind her, trying to dictate code or emacs commands (try
to speak in C++ sometime). Other programmers here are using
voice-recognition software. The refrigerators around here were meant
for holding employee lunches; more and more they are used to hold
employee ice-packs. My company treats it as covered under workmans'
compensation and, according to afflicted people I've talked to, takes
it seriously and is doing a pretty reasonable job of helping
employees who have RSI. One sees lots of unusual ergonomic
keyboards, mice, etc. A high-level committee was recently formed to
investigate the problem, which makes sense even if we attribute no
altruism to management: RSI is clearly costing the company serious
money these days.
- An engineer here that has been called "the world's greatest
living programmer" has RSI so bad that he has to restrict his
hacking to brief periods followed by days or weeks of recovery.
- I've heard that the other contender for "world's greatest
programmer", Richard Stallman at MIT, has RSI.
- A programmer I know who used to work at Apple had RSI so bad
she could hardly use her hands at all: she couldn't type at all,
she could not shake hands with anyone, she couldn't lift steel
silverware (she had to use plastic forks, etc.). She had learned
to type with her feet. That was difficult, so she used word-
completion software to help minimize typing.
- A graduate student I know at MIT who has RSI told me that her advisor and other faculty ignored and ridiculed her claims that she was having trouble typing, with the result that her injury has become much worse. They refused her requests for compensation for medical expenses (apparently, they don't treat graduate students as eligible for workman's compensation).
It is interesting to consider what might happen over time as an RSI-afflicted programmer works with a particular typist. Will the typist begin to learn programming? Recall the scene in the movie "Amadeus" where the dying Mozart dictates the "Requiem" to the composer Salieri, using higher and higher-level language as the scene proceeds. Some brief scenarios based on that thought:
- After two weeks:
Programmer: "Lower-case 'l', capital 'S', lower-case
't', 'r', 'i', 'n', 'g'."
Typist: "I think the variable is spelled without the 'i'."
Programmer: "You're right. No 'i'."
- After one month:
Programmer: "Increment arrayCount."
Typist: "Don't you mean matrixCount? arrayCount isn't defined in this procedure."
Programmer: "You're right. matrixCount."
- After three months:
Programmer: "Do a for-loop on i, stop when i less-than or equal to max."
Typist: "If we do that, won't it go one element past the end of the array?"
Programmer: "You're right. Stop when i less-than max."
- After six months:
Programmer: "Subclass Car, call it Truck, and add an integer data-member
Typist: "Subclass Car? Shouldn't we subclass Vehicle to define a Truck class?"
Programmer: "You're right. Subclass Vehicle."
- After a year:
Programmer: "We should sort the array using a bubble-sort."
Typist: "No, not a bubble-sort! This method is called in an inner loop. Remember how bubble-sort slowed everything down in our last project? Let's use a heap-sort, OK?"
Programmer: "Sigh, you're right, as usual. Heapsort."
- Name withheld by request
[Also, in reply to a request re: studies on the cost of preventing RSI vs. the cost of treating it, Sarah-Stein@uiowa.edu wrote: "The writer could take a look at:
Andrew Hopkins. "The Social Recognition of Repetition
Strain Injuries: An Australian/American Comparison."
_Social Science Media_, v 30, no. 3, pp. 365-372, 1990.]
5. LETTER[S]: ON NON-COMPETE AGREEMENTS
[Given that employers can be finicky beasts, we respect the wishes of correspondents who wish to remain anonymous. This occasionally leaves us-the-editors in the middle of anonymous communications -- kinda like anon.penet.fi, except done manually. Here's an exchange that happened in response to a letter in the previous issue re: non-compete agreements, and other stuff employees are asked to sign:]
An anonymous writer was asked to sign a non-compete agreement with the following language:
- "I agree that for a period of two years after the termination of my employment with the Company for any reason whatsoever, I shall not, directly or indirectly, within the USA or its Territories or Possessions or within any other country in which the Company or any licensee or affiliate is engaged in or actively contemplating engaging in any activity described below i) engage in, ii) own an interest in, be employed by, or consult for, or act as an advisor to, any business, person or entity which engages in, or iii) otherwise participate in any way in research, development, manufacturing, marketing, selling or licensing activities, or in any other activity, in the field of [my company's business area (rather loosely described)]"
I recently started a job at a small company and was given an employment contract containing similar language. My wife, who *is* a lawyer who has done some labor work, reviewed it. Fortunately, my new employer was willing to negotiate, and we changed a number of the terms; however, most of my fellow employees signed the thing as it stood, unaware of the issues.
As with many other things, there are fads in employment contracts. In the community of lawyers who deal with these things, common language gets passed around and appears, with minor variations, in contracts all over the country.
The following is *my* understanding of the law and the realities of non- compete agreements.
There are three major elements in a non-compete agreement: Geographical area, time, and definition of competing entities. As a matter of public policy, the courts will not enforce non-compete agreements which, given the combination of these three elements, are "too broad". "Too broad" is not precisely defined, but what's definitely too broad is an agreement that would, in essence, render the signer unemployable within their area of expertise.
Looking at the three elements here: Two years, in and of itself, is probably reasonable. (That's what I have in my contract; I think it was originally three years, but we cut it down.) The geographical area is most likely too broad - it's really not a limitation at all. Finally, we don't have the text of the definition of the company's business area, but if it's like the one in the contract I was given, it's so broad as to be unrestricted; I put in a fairly specific definition. It's legitimate for a company to list its business area as, say, "the production of computer-controlled games". This may, indeed, keep you from working on things you have become an expert in (at least for two years), but a court would probably find that legitimate. On the other hand, if the company's business is "the production of computer software" I doubt any court would accept the limitation.
Now, what does "the court wouldn't accept" translate into in reality? Legally it means that, when the company sues you, demanding an order enjoining you from working for a competitor, or monetary damages, the court will decline to issue any such orders. The courts deal with these things as matters of "equity", and can and will re-write the contract to meet their standards - and then hold both parties to the re-written contract. So it's not all-or- nothing: Even if the contract said "production of computer software" and a court finds that over-broad, it may interpret it as "production of computer- controlled games" - and if you're now working for a competing game company, you'll lose.
Of course, you'll have to defend yourself. That probably means hiring a lawyer and going to court, always an expensive proposition. Your old company will try to sue your new company as well, claiming that they induced you to break your contract. If you've been hired by a medium or large new company, they will probably defend you, in practice if not on paper. The real problems can come up if you are hired by a small company, or even worse, try to go out on your own. Then you may have to come up with the resources to defend yourself.
Contracts like this are becoming so wide-spread that I think companies will soon find that everyone they hire (short of recent grads) is bound by one (or more) of them. In that case, it probably won't have much of an effect on your marketability, except with very small firms that can't afford to fight.
Unfortunately, there is really nothing to prevent companies from writing these kinds of agreements: The worst that can happen is that the court throws the worst portions of the agreement out, in which case they are back where they would have been in any case. (If the language is *really* egregious, a court may decide to throw the whole thing out; but I gather that's rare. A lawyer whose agreements were tossed out on this basis would soon be looking for new work - the game is to be as one-sided for your client *as you can get away with*. Personally, I think a wonderful change in the law would be to hold a lawyer who drafted an agreement containing terms he knew or should have known were unenforceable personally liable for all court costs. This would do wonders for employment contracts, leases, etc. - but don't hold your breath waiting for such a reform.)
I'll point out one other bit of over-reaching language (which also appeared in my contract - we took it out): The prohibition on "directly or indirectly ... own[ing] an interest in" any competing company, on its face, covers owning stock in a publicly-held company that is itself, or owns a subsidiary that is, in a competing business. Think about what *that* covers!
The original correspondent only sent along this one paragraph. I'll bet there are other equally over-reaching paragraphs elsewhere. Usually there are some really tight restrictions on the use of trade secrets and company-proprietary information. These can be a back door for imposing restraints. For example, a company could claim that its program development techniques were valuable company-proprietary property and that you would be using them if you went off and programmed elsewhere. (This would probably be tossed out by a court, but again it could be something to harass you with. As an example of the line that has been drawn, a salesman certainly can't take along his client list, but he can't be prevented from working as a salesman. The fuzzy area is the degree to which he can use his contacts in the industry. Saying he can't talk to them at all effectively prevents him from working.)
By the way, in any agreement binding you to respect trade secrets, make sure there is a paragraph that releases you from the obligation should the trade secrets become publicly known without your involvement. You also should not be bound concerning trade secrets you learn about elsewhere than from your employer.
It's easy to say "you shouldn't accept" such language. Often, contracts like this a represented on a take-it-or-leave-it basis - where the second "it" is your job. In a case like this, keep in mind that (a) it *almost* never hurts to try to negotiate - there may be more flexibility on the other side than you expect. (However, you have to read your own position carefully. In some cases, asking for changes will mark you as a troublemaker - and troublemakers get, err, removed.) (b) If it comes down to your job today versus possible problems tomorrow, you're probably better of signing. In today's market, the next company you go to will likely present you with the same [non]options.
By the way, if you feel you're not likely to get anything changed, and you feel you really don't have any choice and *must* sign, don't raise a fuss and don't leave a record of questions and clarifications. Don't even ask a lawyer for advice (that you know you won't be able to do much with). Better, should it ever come to it, to be able to go to court as a poor innocent dupe than as someone who (as your employer will paint the picture) explored the options and signed willingly.
[The original poster replied]
Your respondent who replied to my query about non-compete agreement language and tactics was very helpful... I expect to follow his advice. FYI, and his, in case he's interested, so far I have simply neglected to sign and return the thing to my boss.
[The respondent replied:]
"Neglecting to sign" is often a good strategy. Just be sure you understand the ground you are standing on: It could be used against you later, as an excuse for termination. Then again, these days it's easy to find excuses for termination. (Also, it's easy to find excuses to sue for wrongful termination. We've evolved a system in which there is little real protection for workers, little real protection for companies against vindictive workers - but a real windfall for lawyers. Sigh.)
[... and then added this:]
Over dinner, something further occurred to me which you might want to include with my previous message.
On negotiation: In all but the very smallest of companies, it's quite certain that your manager does not have the power to negotiate the terms of a non- disclosure agreement. (In fact, he's probably had to sign pretty much the same agreement himself!) If you ask if the terms are negotiable, the answer will certainly be "no" - which really means "*I* can't, and won't even consider, negotiating with you."
The actual agreement, however, was drafted by a lawyer somewhere. In a small company, he's probably an outsider; in a larger one, he's probably on staff. Ultimately, he's the person who will be called upon to approve any changes; so he's the one you should be negotiating with. Fortunately, lawyers *expect* negotiation - it's central to much of what they do. You may not get the lawyer to change much, but you certainly won't offend him by asking.
The trick is getting to talk to the lawyer - *without* stepping on toes you don't want to step on along the way. It's impossible to give any general advice about how to do this. (If you have any friends who are salesmen, especially salesmen who work for or sell to your employer, you might ask them for advice: A big part of a good salesman's job is getting to talk to the decision makers. BTW, this is a very useful skill when job hunting, too.)
It's probably easier in large companies - the lawyer is already on staff, he's probably in the company phone book, and there's probably a well-defined appeal path, most likely through the human resources hierarchy, to get to him. In the case of a small company with an outside lawyer, if you talk to the lawyer, the company gets a bill for his time, so you're likely to encounter resistance to the notion. (In my case, there was an outside lawyer, but I was given his phone number and we talked things through. It later turned out that he's an investor in the company, and doesn't charge for his time. Such an arrangement may be more common than you'd expect.)
Still, keep the general rule in mind: Don't waste your time trying to negotiate with people who don't have the power to grant what you are asking for. It annoys them, frustrates you - and leaves no one better off. Go to where the power is.
-- Name withheld on request
[And we also received this item...]
I was faced with a similar clause in an employment agreement when I joined Data General earlier this year (or possibly identical -- I didn't check). When I read the clause carefully I realized that the only reasonable interpretation, given the wide-ranging interests and potential interests of DG, was that I couldn't do any programming for the stated period after I left DG. Even writing programs for personal use that were never released to anyone was questionable.
I realize that the agreement is unenforceable, but I don't like signing a document I have no intention to follow. Luckily I had good access to the vice president and I signed a modified agreement that stated that projects conceived after I left DG were exempted, which solved the problem well enough that I was willing to sign the document.
In the course of the discussion, the vice president stated that he had signed the agreement himself just a few months before, and he believed the theoretical impact was as severe for him as it was for me.
The end result of this game is nothing. I believe DG still has the same agreement. Over 10,000 employees have left DG over the years, and I haven't heard of any who ran into problems over that clause (and I have asked around). The vice president is now at another company and I haven't heard talk of a lawsuit.
I would like unenforceable clauses in documents to be illegal. I would like unenforced laws and regulations stricken from the book (with mechanisms to ensure that happens). I would like peace on earth. This year I had to settle for a nice Christmas with my family.
[and one just last week...]
You might be interested to know that I evaded signing my NCA until the 11th hr. (i.e., last mo. before my stock option vesting date), but my boss finally "remembered" I hadn't returned it. At that time, I politely renegotiated a reduction in the probationary period, during which time I can't work for any competitor, from 2 to 1.5 yrs. Small victory, but at least something.
I now have some occupational health questions concerning ozone in the office. Its another story, but for now: do you know any pointers to info about this issue? Thanks.
[Name withheld on request]
[Anyone have info on office ozone? -ed.]
6. LETTER: ON THE INDIAN SOFTWARE INDUSTRY
A blatant piece of self-publicity, I know, but India does seem to come up so often in CPU that I can't help pointing CPU readers towards two sources of information on India's place in the global software industry, both to be published in January 1996.
Heeks, R. (1996) INDIA'S SOFTWARE INDUSTRY. Sage Publications, New Delhi. [US ISBN: 0-8039-9265-3]
This takes as its main focus the role played by the Indian government in fostering (or hindering) the growth of India's software industry, but also contains all you would ever wish to know about sub-contracting to India: its history; production figures; number of workers; the firms involved; costs; divisions of labour and skills; future directions; threats; impact of automated programming tools; etc.
The second, for those too busy hacking code to read a whole big book:
Heeks, R. (1996) "Global Software Outsourcing to India by Multinational Corporations", in: GLOBAL INFORMATION TECHNOLOGY AND SYSTEMS MANAGEMENT, P. Palvia et al. (eds), Ivy League Publishing, Nashua, NH, pp.365-392 [ISBN: 0-9648382-0-6]
If you want an answer to the question - "Will Indians (and others from lower-wage locations) destroy software production in the US?" - then the answer is "Of course not". There will always be software production in the US.
If you want an answer to the question - "Will Indians (and others from lower-wage locations) substitute for some US software jobs?" - then the answer is "Yes, of course BUT the US software industry is undergoing constant change, of which outsourcing to lower-wage locations is only part, and the impact will be much less than many people imagine."
Some facts on the matter:
So... don't expect massive layoffs just yet in the US software industry. (But equally, don't expect to be able to halt or even slow the internationalization of software production. Better to try to understand it and then work on a package of training, retraining and business/government strategy -- assuming the Lord High Gingrich allows you to have something as dangerouslysubversive as a government, let alone one with a strategy -- to place the US software labour force in its new position in a globalised industry.)
Spare a thought, too, for the Indians. The "grunt work" being done by Indian programmers remains susceptible to automation; when working onsite they often work and live in worse conditions than US counterparts; job and contract security is not high; and many are dissatisfied because they feel they are "punching below their weight" - doing simple coding tasks because they are not trusted, yet capable of doing more complex programming.
And spare a thought for India. Up to US$500m-worth of software contracts will go to Indian firms this year, but the Indian economy sees very little of the money since much of it remains tied up within multinational subsidiaries or leaves the country to pay for imports or travel costs. And there's been a tremendous opportunity cost associated with India's heavy emphasis on software exports - software for Indian domestic development (applications in health care, irrigation, agriculture, rural development, etc) has been neglected whilst the cream of India's software talent creates new systems for the American businesses which are Indian firms' competitors.
University of Manchester, UK
According to _Forbes ASAP_ (12/4/95, and reported in Edupage), the number of Indian software export companies has exploded in the past five years, from seven to more than 130, providing jobs for more than 100,000 programmers.
Typically the Indian software industry is raised as a formless bogeyman (a sort of high-tech orientalism). Well, the February, 1996 issue of _Wired_ had a long and generally interesting article on Bangalore, India ("Bangalore"), the heart of India's software industry. The article has the curious effect of giving the industry there a comprehensible face. The story is by-and-large told by the business owners, managers and entrepreneurs. One might take issue with the often-repeated contrasting (in this article and elsewhere) of "routine" programming with "cutting-edge" work; and the article generally ignores the impact of the India phenomena on the software labor market in the United States, but the article is a worthwhile read. You can find it online at:
The article has some interesting bits about that modern-day version of indentured servitude called body-shopping. Programmers sent to the states face a variety of pressures to ensure that they complete their contracts, including substantial financial penalties, loss of green card (and with it, legal status), and even harassment of relatives back in India. Which would be an interesting story for a future CPU...
7. LETTER: JOB LOSS: A PAINFUL PROBLEM
[We had received a few letters from following correspondent in response to the past few issues of CPU. He generously agreed to consolidate them into one item. In the interest of open discussion on the critical issues, here are his comments on a regular theme in CPU's.]
Recent trends in the U.S. computer industry involve very painful job losses. We must cushion workers against such blows, and my hat is off to CPSR for its concern with these trends, and to CPU for providing a forum for discussing them. But CPSR is "Computer Professionals for Social Responsibility," implying far-sighted concern for the welfare of others. I am worried that CPU is adopting positions that are both short-sighted and (excessively) selfish.
Recent issues of CPU ( #013, #014, and #015) contained articles focusing on trends such as downsizing and outsourcing (especially offshore), and the wedge that the "information highway" may drive between the "knowledge workers" who will create it and the "just plain folks" who may lose jobs as the highway facilitates outsourcing.
The problems are real, but as a professional economist I can't help feeling that many of the remedies suggested in CPU are either counterproductive, or simply involve shifting the burden to others. David Noble (#013, "The Truth About the Information Highway") wants to "pull the public plug on the Information Highway." James Davis ( #014, "/*COMMENTS*/") opposes the "export of jobs" to "offshore, high skill, low wage areas like Ireland, Eastern Europe, India or China." David Cherson (#014) asks, "Why can't American companies develop 'interchange networks' with suppliers and other smaller companies as corporations do in Japan?"
These remedies are shortsighted. Sure, it is possible to maintain a medieval level of lifestyle indefinitely with a static economy. The Indians and Africans are proving that. There is no example of a static economy with strong guarantees of employment and social security that maintains itself for more than a couple of decades. Not in Europe (average of 10% unemployment now, with unemployment rates for young adults approaching 25% in some major European countries), and not even Japan. The employment rate at graduation of female college graduates here in Japan went from 88% to 70% in three years of recession. Are these examples to emulate?
Directly protecting jobs is an attractive idea, but it doesn't work very well. It's mired in an internal contradiction: most advocate protecting jobs at the expense of profits and efficiency because it provides self-respect for the worker, yet how can one have true self-respect when the foundation for that is being given, and one does not give a return of equal value? Reasonable estimates put the _extra_ cost to American consumers (in more expensive cars, postponed purchases, and never made purchases) of the "voluntary export restraints" violently imposed on Japanese automakers in the 70s and 80s somewhere between $1.75 and $2.50 for every $1 in salary and benefits of the workers whose jobs were saved.
Perhaps it was not that expensive, but it cannot be denied that Americans paid many billions of dollars *more* for *fewer* cars purchased during that period. We could have put all the workers whose jobs were saved on welfare at their original salaries and lost no production (world-wide; US production would have dropped of course)! I think that the VER for automobiles was a mistake; should we repeat it in the computer industry?
These remedies are also selfish. We can only guess what Mr. Noble would condemn our children to miss, but had our parents stopped progress before the development of the minicomputer, few CPU readers would have the same jobs, and there certainly would be no CPU. Mr. Davis seems to intend to exclude Irish, East Europeans, Indians, and Chinese from the society that the "Computer Professionals for Social Responsibility" are responsible for. It's not merely because my granduncle told me stories about facing signs reading "no Irish need apply" that this bothers me.
Mr. Cherson's admiration for the Japanese system is misplaced, as well. You cannot separate the misogyny and the "disinvestments and disregard of the company's human contributors" (his words about American corporations apply even more aptly to Japanese corporations) that is characteristic of Japanese companies from the "interchange networks" and so on. While salaried employees of the largest corporations are protected, with (these days, somewhat weakened) guarantees of lifetime employment, in return they give up job mobility (a typical fast-track 40-year-old takes a 20% pay cut for voluntarily changing employers for _any_ reason), any semblance of home life (a 2 year overseas assignment on a month's notice, leaving family behind, is considered reasonable, in return for "all the company has done for you"), and vacations (taking less than 1/4 of your vacation is a mandatory display of "team spirit" in many large companies; giving up the remainder year in and year out is not uncommon). In Japan, even the skills and connections gained in on-the-job training are designed to be nontransferable to another employer: yet another aspect of the unbreakable yoke a firm places on ambitious "salarymen."
WHAT, THEN, CAN WE DO?
I don't like the risks that most workers are exposed to. I'm looking for alternatives. That's part of my job. Realistically, I see either a dynamic risky economy facing strong competition from all sides, or a static secure -- and relatively poor -- economy. (Japan is not an exception: the economic security of the upper 1/3 of households is purchased at a high cost in personal freedom -- especially for women -- and lower living standards for the less fortunate.)
To me, the issue is income support. Workers are not passive; they enter intentionally into the employment relationship. A worker can terminate the relationship, just as the company can. The risk of a dynamic economy cuts both ways! The difference is that a single worker makes up a small percentage of the firm's work force, while the worker is 100% employed by one firm. Thus, workers are usually at greater risk. Justice and humanity require arranging to protect the worker who loses a "whole job" when terminated, a much more serious problem than that faced by the firm when a worker quits.
We can avoid crippling competitiveness, and protect both workers' incomes and their freedom by creating social institutions to
- Educate workers to realize that only in growing industries
with strong comparative advantages can lifetime employment
at high wages be sustained, so that they make appropriate
- Cushion workers who lose jobs (inevitable in a dynamic economy) from drastic income reductions and to help them retrain, or, with luck, to find new jobs in the same field.
In the long run those social insurance institutions must be paid for out of people's incomes. Part can come from corporate profits -- but only if we maintain competitiveness. They also require that all workers take responsibility for their own futures, looking years ahead to decide if they should find a new job or even career in order to support themselves, their families, and their lifestyles. But isn't responsibility the way to true dignity?
The most easily realized comparative advantage in a world of mobile capital and mobile technology is ... low wages. The alternative, to maintain high growth in good jobs, is to keep moving, retraining, reinventing. Workers, too, must do this ... or accept much lower wages in order to get security in one occupation. The alternative is a no-growth economy -- ie, stealing from our children.
In Fred Brooks's famous phrase, "there is no silver bullet" that will simultaneously protect employment, income, growth, and dignity.
-- Stephen J. Turnbull Institute of Socio-Economic Planning Yaseppochi-Gumi University of Tsukuba http://turnbull.sk.tsukuba.ac.jp/ Tennodai 1-1-1, Tsukuba, 305 JAPAN email@example.com
8. CPU BILLBOARD:
THE SOCIETY AND THE FUTURE OF COMPUTING '96 conference features (June 16 - 19, 1996, in Snowbird, Utah) several panels on "working in the networked economy". See http://www.lanl.gov/SFC for more info.
Also a call for papers and workshop proposals has gone out for the SOUTHERN CALIFORNIA CONFERENCE ON TECHNOLOGY, EMPLOYMENT AND COMMUNITY, to be held in Los Angeles in November, 1996:
"The new technology has already contributed to an uncontrolled restructuring of the global economy, the de-stabilization of entire nations, and the displacement of millions of working people. At the same time, this revolution offers the world great promise:
- To signal the end of meaningless toil;
- To satisfy the basic needs of all the world's citizens;
- To deliver the world's information, knowledge, and perhaps understanding, into every home;
- To offer human beings the time and energy they need to reinvent their lives, their communities, and the planet.
"The [conference] will be open to students, scholars, community activists, business leaders, trade unionists, and anyone concerned with their livelihood and the future of their families and communities. We plan to discuss the problems and possibilities of this controversial revolution and to discuss strategies for using it to raise everyone's standard of living.
In addition to attending the conference, all interested parties are encouraged to submit proposals to:
- Organize and/or conduct a workshop;
- Make a presentation at a plenary session or workshop; or,
- Submit a paper for possible inclusion in the published conference proceedings.
Information on the bizarre case of Randal Schwartz, convicted of multiple felonies for actions taken as part of his work for Intel, can be found at http://www.lightlink.com/spacenka/fors/intro.html
9. TOOLBOX: CPU NOW AVAILABLE ON THE WEB
Back issues of CPU have been html'ized and a search engine is available, so the resources listed in previous Toolboxes are now easier to get to:
10. LABOR BYTES: MISCELLANEA
LIFE AS THE CENTURY TURNS: Doug Henwood, in a recent issue of his _Left Business Observer_ (3/4/96) takes us behind the curtain to show the workings of this Oz economy. This issue's lead article is on "Work and Its Future." In accord with his recent essay in the collection _Resisting the Virtual Life_ (see CPU.014), his thesis is neither a future economy composed of Robert Reich's "symbolic analysts" -- grease-rags are far and few between in this scenario -- nor Rifkin's _End of Work_ projection, but rather something with which we're already familiar. His study of the Labor Bureau of Statistics figures and forecasts shows "basic production employing ever fewer, with ever more in ill-paid service jobs. It's a much less dramatic vision than either decentralized Cybertopias or jobless futures, but that's life as the century turns." In particular, "Engineers, computer professionals, and associated technicians together now account for about 3% of total employment and under 7% of projected growth."
THE $93,000 RECEPTIONIST: T. J. Rodgers, head of CYPRESS SEMICONDUCTOR (and once featured on Business Week's cover as the "bad boy of Silicon Valley") advanced his opinions in a piece in the _Wall Street Journal_ ("Downsizing Crisis? Not In Silicon Valley", 3/12/96) The gist of his piece is that the other side of the downsizing story doesn't make the headlines: those laid off by giants such as AT&T are picked-up by smaller companies such as his. Rodgers was making a case against the Simpson immigration bill (just-passed by the Senate), arguing that immigrants are helpful to the American economy and are needed for job positions that are going unfilled. Then Rodgers says that Cypress's "average Silicon Valley employee, including line workers and receptionists, earns $93,000 a year including benefits."
Well, trust Alexander Cockburn writing in _The Nation_ (4/8/96) to spoil the fun. A colleague of his called Cypress and asked the receptionist how much he made. While not forthcoming on the particulars the receptionist did say that the $93,000 a year must be a "joke." Undeterred, Cockburn's colleague called a Cypress recruiter to apply for a job as receptionist at $93,000 a year. He was told that the company used temp agencies and labor contractors to fill receptionist positions. Calling one of the Cypress agencies revealed receptionist pay as $8-$20 an hour. Cockburn went on to regard line workers: "An industry table for Silicon Valley surveying some electrical and electronic assemblers shows that the entry-level wage is anywhere from $5 to $7 an hour. Three years or more on the line sees you up to anywhere from $7.75 to $18.50, with the median at $11.09. Without benefits this tots up to less than $25,000 a year, assuming a forty-one hour workweek, the average in the industry table."
JOBS JOBS JOBS: The big news early this year was the announced cut of 40,000 jobs at AT&T. That number has since been revised downward, but in the wake of the Telecommunications "Reform" Act, mergers among the Baby Bells are expected to lead to further job loss in the telecommunications industry, according to the _New York Times_ (1/8/96). Where in earlier rounds of cuts "the Bells have generally used buyouts and early retirement programs in place of layoffs ... [a]s the pace of competition accelerates, some analysts said the Bells would no longer be able to afford voluntary buyouts." Some companies have been pushing a two-tiered workforce: Bell Atlantic got the International Brotherhood of Electrical Workers to accept lower wages for new employees, who will maintain the fiber optic network, while existing workers at the higher wage scale will maintain the aging copper wiring. As the copper is replaced, fewer people will be needed to maintain the fiber.
Here's some history of the turmoil in telecom industry:
ANNOUNCED JOB LOSSES IN TELECOMMUNICATIONS (SINCE 1992): Latest date of Jobs to be Announcement Eliminated ----------------------------------------------------------------- AT&T yesterday 40,000 AT&T through February 1994 19,500 Cumulative Totals ----------------------------------------------------------------- NYNEX January 1994 38,800 Bell South May 1995 21,500 GTE January 1994 19,600 Pacific Telesis June 1995 10,500 Pacific Bell January 1994 10,000 US West September 1993 9,000 Ameritech March 1994 7,500 Southern New England Tel. August 1995 4,160 MCI August 1995 3,000 Southwest Bell September 1993 1,500 (_NYT_, 1/8/96 )
OTHER JOB CUTS: QUANTUM CORPORATION will quit making its own high-end disk drives, a decision that will result in the layoff of 2,250 permanent and temporary workers, mostly in Malaysia and Milpitas, California. (_San Francisco Chronicle_, 1/31/96) FTP SOFTWARE has cut 10% of its workforce (_WSJ_, 5/2/96). AST RESEARCH, facing further losses in its PC business, is "restructuring", and will dump 300 workers. This brings the job cuts there to 1,000, or about one quarter of its 1994 workforce. (_NYT_, 5/3/96) APPLE warned at the beginning of the year that several thousand jobs might be cut, then new company president Gil Amelio (with his "insanely great paycheck" as _Business Week_ described it (2/26/96) of $2.5 million annual salary plus potential bonuses that make the compensation package worth $10 to $13 million) said that large layoffs would not be necessary (_NYT_, 2/17/96); then, following the announcement of a record $740 million second quarter loss, the company said it was widening its cuts to 2,800 workers, or 20% of its workforce, and planning on doing more outsourcing of its operations and manufacturing. (_WSJ_, 4/18/96) Here's a new addition to the Lexicon of Layoffs: "unassigned" ... as in AT&T's "force management program" aimed at reducing an "imbalance of forces or skills" -- en anglais, axing 40,000 -- finds you "unassigned" (_NYT_, 2/13/96).
THE SHIN BONE IS CONNECTED TO THE KNEE BONE: As an indication of the extent of "the computer industry" the Aluminum Co. of America said that its ALCOA ELECTRONIC PACKAGING unit laid off its entire 1,200-member work force; some 600 of those workers were expected to lose their jobs permanently. The company said the move was necessary because INTEL Corporation, a principal customer, was stopping orders to the unit, which is based in San Diego. The Alcoa unit makes the ceramic packaging used to house microprocessors. About half of the Alcoa workers are contract, or temporary, employees. (_WSJ_, 12/22/95).
BUT DID THEY GET STOCK OPTIONS?: This item from a story by Dan Pens ("Microsoft 'outcells' competion") in the current _Z Magazine_ (5/96): "According to one prisoner who works for EXMARK, a company specializing in product packaging, approximately 90 prisoners at Washington's Twin Rivers Corrections Center packaged 50,000 units of [MICROSOFT's] Windows '95 demo disks and direct mail promotional packets ... Exmark is a subsidiary of PAC SERVICES, a Washington company which also employs non-prisoner, or 'free world' workers. Steve Curly, a 'free world' supervisor at Exmark, denied the company had packed any Windows '95. But he said that Exmark's TRCC operations had packed tens of thousands of units of Microsoft Office and had wrapped and shipped 40,000 Microsoft mice in one week."
Also: Christian Parenti writes ("Making Prison Pay", _The Nation_, 1/96) of prisoners taking hotel reservations, running blood tests for medical firms and raising hogs, and ...
"In Lockhart, Texas, inmates held in a private prison owned by the WACKENHUT CORPORATION build and fix circuit boards for L.T.I., a subcontractor that pays $1 a year in rent and supplies companies such as DELL, IBM and TEXAS INSTRUMENTS ... In Colorado, AT&T paid fifty inmate telemarketers $2 an hour... "We have a captive labor force, a group of men who are dedicated, who want to work. That makes the whole business profitable," says Bob Tessler, owner of DPAS, a company based in San Francisco that three years ago sold a maquiladora in Tecate, Mexico, and opened up a data processing operation in San Quentin State Prison."
OTHER CHANGES IN THE INDUSTRY: Outsourcing of data processing is on the rise at state governments, according to Information Week (1/22/96). As many as 17 states are looking at ways to cut their costs by consolidating operations and/or turning them over to companies like EDS or IBM's INTEGRATED SYSTEMS SOLUTIONS CORP.
Typically, mergers are opportunities to consolidate operations, meaning layoffs. _Computing Canada_ (4/11/96) reported on the now complete acquisition of ZENITH DATA SYSTEMS by PACKARD BELL. The article says that Zenith's product line will now be manufactured out of Packard Bell's new Sacramento, California facilities. The United Steelworkers union, which represents the Zenith workers at its St. Joseph, Michigan factory, has been told nothing about this, though rumors have been flying. The article neglected to mention that the Sacramento Packard Bell facility where the production will be moved is a non-union shop. (Thanks to Brandon Weber for this item.)
WHERE THE JOBS ARE: You probably could have guessed this, but in terms of payrolls for computer industry employment, California leads the U.S. by a wide margin (like the Chicago Bulls) with $13.7 billion. Texas is a distant second with $4 billion, followed by Massachusetts ($3.3 billion), New York ($3 billion), Virginia ($2.4 billion), Illinois ($2.2), Pennsylvania ($2 billion), and Minnesota ($1.7 billion). (_NYT_, 1/1/96)
AND TO GET THOSE JOBS...: According to Information Week (1/1/96), employers of information systems experts in 1996 will be looking for people who know the Internet, client-server computing or networking. Security know-how is popular. In the client-server area, expertise in C++, Visual Basic and Forte programming is in demand, as well as front-end graphical user interfaces, relational databases and help-desk support. Such skills might add $10,000 to $20,000 to the salary of programmers who otherwise would be in the $50,000 to $60,000 range, according to recruiting experts.
HOWEVER: Hey, what about that software that "reads resumes." Neat, huh? And it sends rejection letters automatically too! (_NYT_, 3/24/96)
REGULAR PAY VS. CONSULTING: This item appeared on the JOB-TECH list: "I did a spreadsheet a few years ago to figure out how much I would have to make as a consultant on my own, to match the salary I was drawing as an employee. I considered the cost of office space,office equipment, telephone, secretarial support, the various insurances I would have to subscribe to as an individual instead of as a group member, contribution to a personal pension plan, my current employer's matching contribution to 401K, etc. The bottom line indicated that I would have to gross nearly twice my employee salary. So my guess is that a $100 contracting job would net about the same as a $55-60K salary job - unless you find ways to save (or scrimp) on some of the above." (Ralph.Chapman @ ATT.Com)
WHAT KIND OF RAISE DID YOU GET?: The _Computer Industry Daily_ (4/15/96) reports that "executive compensation at the largest U.S. firms averaged an increase of 30% last year, according to _BW_. This rise compares with a 2.8% inflation rate, a 4.2% gain in white collar worker salaries, and a 1% increase for factory employees. The survey is based on the compensation for the two top-paid executives at 362 companies. CEOs averaged $3,746,392 in salary, bonus, and long-term compensation. CEOs at the 20 companies with the largest layoffs last year saw their salaries and bonuses jump by 25%." Some of the leaders: US Robotics' Casey Cowell (in sixth place) with $18.5 million, Oracle's Larry Ellison (fourteenth) with $14.1 million, and IBM's Louis Gerstner (fifteenth) with $13.2 million. And, of course, Robert E. Allen, at AT&T, the man who ordered 40,000 workers cut from the payrolls, received stock options last year that boosted his pay to $16 million from $6.7 million. (_NYT_, 2/28/96) All in a good day's work.
WHAT KIND OF SEVERANCE PAY DID YOU GET?: Outgoing Apple head Michael Spindler's severance package could be worth three times his $1.4 million combined salary and bonus package for 1995, according to a report in the _San Jose Mercury News_. Apple will probably provide health care benefits for the next two years, buy Spindler's $3 million home, and move him and his wife to France. (This item via _The People_, 2/24/96)
[Thanks to Sid Shniad, Jeff Johnson, Brandon Weber, et al. for forwarding articles, and to Edupage. See something relevant to CPU? Please send it to firstname.lastname@example.org]
11. EOF: (SSSHHH! -- UPCOMING _WIRED_ COVER LEAKED TO CPU!)
Someone passed along to us a color xerox of what appears to be the proposed cover for an upcoming issue of _Wired_.
The cover features _Wired_'s man of the year, the once and future presidential hopeful Dan Quayle, with VR goggles propped above his eyebrows. Quote from the man of the year: "in cyberspace everyone will look like me."
Other planned stories:
"Cool telco CEO: 'Why poor people suck.'"
"Global corporations fight for your right to life, liberty and offshore child labor."
"On the info superhighway: Maserati? or Porsche?"
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