economy on the rise

[gldstwmn]

http://www.taipeitimes.com/News/worl.../17/2003175447

High-end tech jobs outsourced by Microsoft

INDIAN CONTRACTS: Critics say the software giant's deals for software architects and developers are just the tip of the iceberg of future job losses

NY TIMES NEWS SERVICE , NEW YORK
Thursday, Jun 17, 2004,Page 12
In the debate over high-technology work migrating abroad, there has been widespread agreement on at least one thing: The jobs requiring higher levels of skill are the least at risk.

Routine software programming and testing jobs, analysts agree, are the ones most susceptible to being grabbed by fast-growing Indian outsourcing companies. By contrast, the people who devise the early blueprints for projects -- the software architects -- have been regarded as far less likely to see their jobs farmed out.

But Microsoft contract documents show that as far back as 2001 the big software maker had agreed to pay two Indian outsourcing companies, Infosys and Satyam, to provide skilled "software architects" for Microsoft projects. The documents were obtained earlier this month by WashTech, an organization of technology workers based in Seattle, which gave copies to The New York Times.

"The policy prescription you hear from people again and again as the response to the global competition of outsourcing is for Americans to move to high-end work," said Ronil Hira, an assistant professor for public policy at the Rochester Institute of Technology.

"It's important to dispel the myth that high-end work is immune to offshore outsourcing," he said.

"What is not clear," Hira added, "is how much of that high-end work will go abroad."

A Microsoft spokeswoman, Stacy Drake, said that as a matter of policy the company did not comment on individual contracts with suppliers. But, she said, "We often use outside companies for projects."

The outside contractors, Drake said, are used to bring in specialized expertise Microsoft may not have in-house or to bring additional technical support onto a project.

Still, Drake said, building the "core intellectual property" in Microsoft products is left to full-time company employees.

Though definitions vary, software architects are highly skilled workers who often earn six-figure salaries in the US. The Microsoft contracts with Infosys and Satyam show that the work of software architects, senior software developers and software developers was being done by employees of the Indian companies working at Microsoft facilities in the US.

Their work did not come cheap for Microsoft, which was billed US$90 a hour for software architects, or at a yearly rate of more than US$180,000. Senior software developers were billed at US$72 an hour and software developers US$60 an hour.

The on-site work, said Hira, an expert on offshore outsourcing, is usually done by Indian software engineers who come to the US on H-1B visas, which allow foreign workers to be employed in the US for up to six years.

The Indian workers themselves are paid a fraction of what their employers collect. The top annual salaries paid by Indian outsourcing companies to Indian software experts working in the US are US$40,000 or so, Hira said.

The contracts also say that for short stints of work, less than 90 days, Microsoft will pay for round-trip economy airfare for travel between India and the US.

The contracts also include work done in India, by project managers and by software development and testing engineers. The billing rate for this work ranges from US$36 an hour to US$23 an hour.

A spokeswoman for Infosys said the company did not comment on its contracts, and a Satyam spokesman could not be reached.

Critics of the outsourcing trend regard such agreements with Indian contractors, with work done both in the US and in India, as a step toward shifting more and more skilled technology jobs overseas.

"Microsoft has hired vendors whose whole reason for being is to transfer work offshore," said Marcus Courtney, president of WashTech, an affiliate of the Communications Workers of America.

The foreign competition for work at Microsoft, Courtney said, will help the company's management put more pressure on wages for its American workers and reduce employee benefits. Last month, Microsoft announced that it planned to cut costs by an estimated US$80 million a year by trimming prescription-drug benefits, tightening parental-leave policies and making it more expensive to buy Microsoft shares through the employee stock purchase plan.

Despite its use of foreign contract workers, Microsoft expects to add 3,000 to 3,500 full-time employees to its US payroll of 37,000 in the fiscal year that ends next month.

This country is quickly going third world.

[gldstwmn]

http://www.financialsense.com/Market/wrapup.htm

The market players are struggling back and forth with these forces of inflation and deflation. To further complicate things, we are engaged in wars all around the globe and face the politics of a presidential election year. To add even more fuel to the fire, when we look at economic numbers and developments, we have to determine if we are looking at the picture from a country-specific point of view or a global point of view. I believe we are seeing a huge global expansion of economies, but I’m not sure how much the USA will participate since we are the largest debtor nation in the history of the world. We have debts and deficits like never seen before, but Japan, China and Europe have current account balances that are net positive and not bleeding red ink. We’ll see how it all goes!

Economic Jihad -- Lots on the Line

Japan is trying to get out of a decade-long recession, China is quickly becoming a huge economic force as the Chinese people get a taste of what it is like to enjoy many of the things we take for granted (energy, transportation, jobs and home comforts), and the European Union is working to place the euro at parity with the U.S. dollar as a world reserve currency. Have you ever noticed how upset the U.S. officials get when an oil exporting nation wants to trade their oil for euros rather than dollars? You can see the stakes are very high.

I got pretty fired-up yesterday when I read a column from one of the mainstream news media outlets about how all of the economic conspiracy theorists are a bunch of whackos. Names really aren’t important, so I’ll just say the author was trying to discredit writers that claim the markets are not manipulated by entities that are “in the know.” The columnist likened them to “black helicopter” writers and saying their ideas are far-fetched at best. An investor today would have to be really naïve to think that the Fed doesn’t work to influence the economy and markets with their rhetoric, open market operations, inflation expectations and through their dealers via the Fed repo pool. Additionally, what do you think the Exchange Stabilization Fund controlled only by the President and Treasury Secretary is used for? How much influence does the Working Group on Financial Markets have on the stock, bond and commodity trades?

Under our current circumstances, many would say they are completely justified in what they do to protect all of us in the U.S. and others would say they are wrong by not allowing the free-market system to determine asset values. Folks, we are at war! A great part of the war is what happens economically. Money means power and there are a lot of players around the globe that want more money and more power! I’ve gotten away from today’s market actions, so I’ll just use one example from today to highlight my case for market intervention.

In the Middle-East we have soldiers getting killed and oil pipelines getting blown-up that cut-off 1.6 million barrels of oil per day from reaching the markets. Global demand for oil is running very high and most exporting countries are already producing as much as they can. With the current developments I would have expected crude to add at least a dollar per barrel, but it barely budged today by only gaining thirteen cents to close at $37.32 per barrel. I could be wrong, but I take the lack of price movement as our guys sending a message to the pipeline terrorists that they can’t win by threatening supplies. There was also added pressure for higher prices because U.S. inventories grew less than expected. Crude was expected to add 1.15 million barrels, but only managed a build of 800,000 and gasoline inventories were forecast to grow by 1.25 million barrels, but actually declined by 500,000. Believe it or not, with inventories declining the price of gasoline futures went down fractionally on the day to close at $1.147 per gallon.

Stocks Treading Water

If you’re bullish on the stock market, you have reason to think twice. With all the great economic news, stocks could never get going. The Dow Industrials dropped a point to close at 10,379, the NASDAQ added two points to 1,998 and the S&P 500 added one point to 1,333. Most all of the sector indices flip-flopped around break-even, but the AMEX Oil Index managed to gain eight points or 1.3% to close at 621.81. One of the reasons for the pop in oil company shares was probably the news release saying the U.S. House of Representatives passed an energy policy bill that gives oil and natural gas producers a tax break and protects manufacturers of the gasoline additive MTBE from product liability lawsuits.

[gldstwmn]

The party's over

NEW YORK (MONEY Magazine) - The Federal Reserve has signaled that it is likely to raise interest rates, just as energy and consumer prices are rising.

The fiscal stimulus provided by the Bush tax cuts is ebbing. And although 625,000 jobs were added in March and April, increases in salaries and wages remain alarmingly subdued.

I talked to Merrill Lynch chief North American economist David Rosenberg about how our nation's economic outlook is changing and how he expects consumers and investors to fare through the remainder of the year.


DOBBS: Let's begin with jobs. Will the recent improvement last?

ROSENBERG: Most of the leading indicators are telling us that we have turned the corner on the employment side. I'm not necessarily convinced that we're going to be seeing the very strong numbers continue. To me, the more important aspect is not so much the employment side but the income side.

Q. How are we doing on that front?

A. Even with these very large numbers, real wage and salary income in March was down 0.1 percent. Average weekly earnings were up 0.3 percent in April, but it looks like consumer prices rose about 0.3 percent as well.

So my sense here is that real income growth is actually still rather subdued. I think the critical thing for the consumer is that even though income growth is rising in nominal terms, it's barely keeping up with the increases in life's necessities: medical care, food and energy.

Interest rates are backing up, and the fiscal stimulus is basically over. You tack on higher energy prices and this headwind ahead for the consumer comes to about $180 billion between now and the end of the year at an annual rate.

Q. Gasoline prices are now at a record high. Oil is moving above $40 a barrel. What will the impact be on both the consumer and the investor?

A. In terms of the investor, it's a classic case where higher energy prices would be good news for the energy sector, but they're a margin crimper for a lot of other industries. And although energy use in the United States as a share of GDP has gone down over time, it's still very significant for individual sectors.

If these gas prices are sustained, they could easily shave half a percentage point off of GDP growth. You're talking about the difference between this year being in the high fours and the low fours. But half a percentage point on a $10-trillion-plus economy isn't exactly chump change.

[strandinthewind]

AND - inflation is coming!!!!!!!!!! YIPES!!!!!!

[gldstwmn]

http://cbs.marketwatch.com/news/news...D9F9929291%7D&

8:30am 06/17/04
U.S. jobless claims fall in latest week By Greg Robb
WASHINGTON (CBS.MW) - First-time claims for state unemployment benefits fell 15,000 to 336,000 in the week ended June 12, the Labor Department reported Thursday. The four-week average of initial claims fell 2,750 to 343,250. A Labor Department official said a portion of the decline in claims can be attributed to the closing last Friday of 15 state unemployment offices as for former President Ronald Reagan's funeral. The drop in claims was roughly in line with the forecasts of Wall Street economists. Meanwhile, the number of Americans receiving state jobless benefits rose 31,000 to 2.90 million in the week ending June 5. The four-week moving average of continuing claims fell 9,500 to 2.93 million, the lowest since June 2001.

[dissention]

Originally Posted by gldstwmn

Foul. Your employer has the best coverage, the "Gold Standard" if you will, of health care. What kind of beneifts do you think the folks at Wal Mart are getting?

None. Wal-Mart rarely hires full-time employees, only part-time so that they don't have to give any substantial benefits. Which is why those "Look what Wally World has done for our community!" commercials sicken me.

[dissention]

Originally Posted by gldstwmn

http://ap.tbo.com/ap/breaking/MGBANVONKVD.html

Workers' Comp Claims From Americans Working in Iraq Could Cost Government Millions

By Leigh Strope The Associated Press
Published: Jun 17, 2004

Good article. Maybe instead of agreeing to provide Halliburton employees with $45 cases of Sprite, they should've thought of this beforehand. One of the biggest blunders of this operation was giving Halliburton a cost-plus-plus contract.

[gldstwmn]

http://story.news.yahoo.com/news?tmp...t&sid=96001027

Queue of newly jobless grows in US

Thu Jun 24, 9:34 AM ET

WASHINGTON (AFP) - The number of people filing new claims for US unemployment benefits soared at a faster than expected rate last week, government data showed.

The number of new claimants jumped 13,000 to a seasonally adjusted 349,000 in the week ended June 19, the Labor Department said.

Private economists had forecast an increase of only 4,000.

The previous week, claims had slumped by 15,000, partly because of the closure of some unemployment offices for the June 11 funeral of former president Ronald Reagan.

A four-week average of new claims, which smoothes out weekly blips, rose 1,000 to 344,250.

In raw, unadjusted figures, the number of people filing new claims for unemployment benefits advanced 9,645 to 321,805. There were 376,560 claims in the comparable period last year.

The existing pool of claimants -- those lodging claims for two weeks or more -- leapt 75,000 to a seasonally adjusted 2.97 million in the week ended June 12, the latest date for which those figures are available.

[gldstwmn]

http://www.kgoam810.com/goout.asp?u=...SM_040702.html

Jobless and Hopless
Some Unemployed Americans Are Backing Out of the Job Market After Months of Searching

By Ron Scherer


N E W Y O R K, July 2, 2004 — After 20 months of looking for work and sending out hundreds of résumés Jeffrey Schwab has given up trying to find another job as a draftsman. He's now taken early Social Security and is considering whether to sell his Bellingham, Wash., home to move to something smaller.

"From what I can tell, there's not much to look for," says Schwab, who has 35 years of pipeline-design experience. "I am standing around with nothing to do."

Even though the economy has created 1.2 million jobs since January, some 265,000 people have dropped out of the job hunt during the same period. They would join some 19.1 million Americans in the same situation as Schwab, who are unemployed and not looking for work largely because they are convinced they won't find it. This figure, at a record level, is up 44 percent from 10 years ago.

If the job market continues to improve, this large number of people could decide to get back in the job market — which would hold the unemployment rate relatively high, even as new jobs are created.

"If this flow of nonworking Americans were to reverse, it would send the jobless rate toward 8 percent," says John Challenger of the outplacement firm Challenger, Gray & Christmas in Chicago.

That would certainly be the case in Pennsylvania, agrees the state's governor, Edward Rendell (D). The official unemployment rate is 5.4 percent, but it's "much greater," Rendell says, when factoring in men who have been cut off welfare and never got back into the workforce "and as a result never show up in the unemployment rolls."

Rising Jobless Rate a Positive?

Sometimes a rising jobless rate, says Bob Brusca of Fact and Opinion Economics in New York, can be a positive sign of a vibrant labor market that's luring more people in than it can absorb. But "that change has not occurred."

Many workforce dropouts in the age group of 25 to 54 have spent years working in shrinking industries, such as telecommunications or software development. "There are many people who have been downsized — a permanent job loss — that are taking a long time to return to work," says Andrew Stettner of the National Employment Law Project in New York. "They have had such a hard time when they are looking that they have given up, even though they don't necessarily want to."

In Tiffin, Ohio, that's the case with Merree Phillips, who lost her job a year ago as a development officer at Heidelberg College. She says that at times frustrations sap her motivation. "Some weeks you don't work as hard since it's so easy to get discouraged and you wonder whether it's worth it to keep pounding your head against the wall," she says. "I have not gotten to the interview stage of any job I have applied for."

Phillips thinks that the job market is actually shrinking in her area. A year ago, she says there were 20 to 25 listings for professionals in the want ads in The Courier, a Findlay, Ohio, newspaper. Sunday, the online edition had only four such ads. "I don't want to come off as a slacker, but there aren't even any decent prospects," she says.

Returning to School

Some workers who have officially stopped looking are going back to school. Enrollment at the nation's community colleges, which offer much of the job retraining, is soaring.

One of those who has gone back to school is Penni Neff, a divorced mother of a teenage boy who lost her job at a hospital.

Now, she's in school to become a licensed practical nurse.

"Gee, I don't know why people throw their arms up and say 'I give up!' " she writes in an e-mail.

"Sorry, I'm not doing it, but I get doors slammed all the time," says Neff, who has four months left to finish her courses before she starts another training program to become a registered nurse.

Neff's move is probably in the right direction, says Challenger. "She's evidence of the migration of going from the old economy to the new, particularly jobs that are service-related," says the outplacement guru. He says other areas that the long-term unemployed should consider include international business, housing construction, real estate, utilities, and the energy industry. "People often pigeonhole themselves," he says. "We're seeing almost 50 percent of people changing industries, but not functions."

Challenger adds that hiring someone who has been out of work for a long time can be rewarding for employers as well. "[The new workers] are really hungry to get back, so you are getting someone who is really committed and is not going to move quickly as a free agent," he says. "You can save people's lives and get very committed employees that way."

A job would certainly help someone like Schwab in Bellingham. His wife, who was also laid off, is now working 30 hours a week at a store, but she does not get benefits. They are now considering all options, including the sale of their home. "We needed a bigger house to care for my wife's mom, who had Alzheimer's disease," he says. "But it's more expensive to pay for and heat."

[dissention]

I was at the hospital Friday and watched CNN where they announced the new job report for june, which fell WAY below expectations. And let us not forget that once your unemployment checks stop coming, you stop being counted in unemployemeny statistics.

On a different note, Jack Cafferty's question of the day on CNN was "What would you do if you won $290 million?" Some guy wrote in and said:

"If I won $290 million, I'd buy CNN and fire your irritating ass."