Article 43
Friday, August 31, 2007
Google Telecom
From GoogleNet to GoogleCo - Google KNOWS all, SEES all, and CONTROLS all.
Who needs AT&T GOING THROUGH ALL YOUR DATA, SELLING YOUR PHONE RECORDS, and SPYING FOR THE NSA?
Now GOOGLE hears all.
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The Gphone is coming; how Google could rewrite the rules
By Daniel Langendorf
Last 100
August 29, 2007
If done right, the Gphone and not the iPhone will be the one to change the face of the wireless industry.
Apples iPhone, at least in its initial release, has not upended the wireless industry, particularly in the United States, as much as hoped. The iPhone certainly has pushed the cell phone envelope a bit further, and it hints at whatҒs to come, but so far the iPhone is still playing by the rules.
Google, if it enters the fray as expected with its so-called Gphone, may truly rewritethe rules. What it plans to do is an ongoing topic of discussion and speculation on the Internet, not unlike Apples plans for the iPhone before its release at the end of June. The Gphone may be announced as early as next week and may debut as early as the first quarter of 2008. The anticipation will be as fervent as it was for the iPhone, without the Steve Jobs showmanship.
Why Google? Why A Phone?
Google is positioning itself for the future. ItҒs conquered search on the Internet, revolutionized advertising with AdSense, and opened the door for the development and acceptance of Web applications like Gmail and Gcal. At the same time Google is leading a media renaissance with the acquisitions of YouTube, Blogger, Picasa.
Google could sit tight and count its pennies, not unlike what Microsoft did during its heyday, or it could push forward, beyond the desktop and into the mobile world, where content and information are meeting voice communication and the cell phone.
Its a natural fit. Google takes what it has pioneered on the desktop and through the browser and applies it to mobile lifestyles, providing a seamless transition for people on the go. At the same time it opens up new opportunities for search and advertising, expanding the ғGoogleverse (and bottom line) even more.
Unlike Apple, which positioned itself as hardware-focused and consumer-friendly with the iPhone, Google is diving much deeper into the world of telecommunications and many wonder if it plans to become a wireless carrier just like Verizon or AT&T. Google has been lobbying the U.S. government for changes in wireless policy. While it did not achieve as much as it wanted in the planning for the upcoming 700 Mhz spectrum auction in January, it did push for the fact that consumers in the U.S. can buy any phone and use it on any carrier in the future.
Google is also expected to bid on the spectrum, pledging upwards of $5 billion in an auction that may net the government between $10 billion and $12 billion. What Google plans to do with the spectrum, and how it might fit in with Gphone plans, is the focus of media and Internet speculation.
So what will be Gphone be?
If done right, the Gphone will change the wireless industry, at least in the U.S. If not done right, the Gphone will be just another cell phone with some advanced features. HereԒs what it might look like, if done right:
Operating System
The big rumor is that Google is working on its own operating system, which would make sense if Google is to tie all of its applications and properties together in a cell phone. Back in 2005, Google purchased the mobile software company Android, started by Danger cofounder and former president Andy Rubin. The Android/Google team supposedly has developed a Linux-based mobile OS, which one expects will integrate tightly with Googles interests to provide a satisfying user experience.
Radio Communications
To be truly carrier agnostic and international, the Google phone will have to support CDMA and GSM standards. Could these be built into the same phone or will there be several models available for the different carriers? Come to think of it, if Google is successful in its bid for some of the 700 Mhz spectrum, what will it do with it and how will it affect the Google phone?
The Google phone most certainly will support Wi-Fi and most likely 3G for wireless data transfers. Apple has come under fire for not supporting 3G immediately in the iPhone, although this is expected to change with the phoneҒs next release. The use of 3G also will make the Google phone attractive internationally.
Googles Gtalk is a VoIP service, allowing people to hold phone conversations over the Internet. Many are hoping and praying that the Google phone will support Internet telephony, either through Gtalk or maybe even Skype.
The Physical Phone
Display
While larger-screen cell phones have been around for many years, the release of the iPhone has drawn attention to an elegant, crisp display that measures a generous 3 inches by 2 inches, eclipsing all cell displays to date. With the amount of data expected to be accessed on a Google phone, it would be stupid not to include a large quality display.
Input
People are split on the subject of input. Should the Google phone have a touch screen interface like the iPhone, should it have a tiny QWERTY keyboard like a BlackBerry, should it have a stylus/touch interface like a PDA, or should it have a slide-out keyboard found on newer cell phone models?
No matter which direction Google goes, somebody will be unhappy. What Google should keep in mind is this: make input as easy and enjoyable for the user as possible. Remember: People will be interacting with the Google phone in many ways, accessing and using a large amount of data, and creating content, so crummy input will severely impair the device.
The Fun Stuff
The iPhone sports a 2 megapixel camera. Google should at least match this, or maybe go one better if itҒs feasible cost-wise. One way Google could differentiate its camera from others is not through megapixels but through image stabilization, which is now found on many point-and-shoot cameras and high-end lenses for digital cameras. Camera shake is prevalent in cell phone cameras especially, it seems, on the iPhone ח and including IS would do wonders to minimize shaky, soft, and slightly blurry images.
Video cameras on cell phones are nice to have, and are becoming more relevant in the era of YouTube. But cell phone video cameras suck. The filmӔ is grainy and its hard to do anything with the content other than watch it on the phone. A cell phone that could shoot 640 x 480 video, in an acceptable standard (like H.264), and allow people to do something with the content (email, download to a computer, upload to YouTube) would usher in a new wave of mobile content development.
Finally, the Google phone must include GPS, which is another complaint of the iPhone. The iPhone uses Google Maps, a nice-to-have application that falls short of being truly useful without GPS capabilities. Imagine GPS on the Google phone: Addresses in Gmail or in Gcal are automatically mapped and plotted for real-time travel. Another benefit of using GPS is the coming of location-based services and proximity-based notifications.
Theres been very little speculation about the Google phone having a built in MP3 music player and video-playback features like the iPhone and iPod. Music playback is not unlikely, and one can be certain that YouTube will be built into the phone. Whether it can play other video is uncertain.
Design
gphone designItҒs doubtful Google itself will design the phone. Google is expected to use overseas OEMs like HTC or maybe farm design to handset manufacturers such as Samsung, LG, or Danger, freeing Google to work with HTC on the manufacturing.
Googles track record җ as seen through its Web application development is no thrills and minimalist. Expect the phone to be innovative and full of promise but not nearly as pretty and awe-inspiring as the iPhone.
Applications
Thereגs no doubt that Google will showcase its suite of applications and properties: its many varieties of Search, Gmail, Gcal, Gtalk, Gchat, Documents and Spreadsheets (part of the so-called Goffice), Google Groups, Google Notebook, Google Maps (and maybe even Google Earth), YouTube, Blogger, Picasa, and so on.
But lets hope that Google doesnҒt go all GooglelyӔ on us. In other words, promote the GoogleverseӔ as much as possible but leave the Gphone platform open for third party developers, something that the iPhone lacks. If someone wants to use AOLs Instant Messenger or Yahoo Chat instead of or in addition to Gchat, let them download and install applications so the phone truly fits their needs.
Google needs to be smart. It has an opportunity here to redefine the relationship between a mobile device, applications, and the customer experience. For the most part, mobile applications today are just extensions of desktop programs. Google should take the opportunity to rethink and tweak its applications to work well in mobile and desktop settings. For example:
Gmail and Gcal, as previously noted, can integrate more closely with Google Maps when people are mobile.
Docs could be integrated with Blogger, so when users are mobile and are using Docs they can update easily their blogs without having to use a separate program.
The digital camera application, Picasa, should not only upload photos directly to Picasa but also be flexible enough to upload to non-Google properties such as flickr. Picasa might also provide a few rudimentary editing and image manipulation tools.
The digital video camera application, whatever it may be called, should also upload directly to GoogleҒs YouTube and maybe even supply rudimentary editing tools as well.
By the way, editing cutting and pasting on a cell phone ח should be as easy as possible because people will be moving information between all sorts of Google applications, including Google Groups and Google Notebook. Cutting and pasting is currently not available on the iPhone.
Being Social
To be truly revolutionary, the Google phone should play nice with the other kids, especially in a social setting. Not everybody is using Googles social network, Dodgeball; in fact, many people use more than one social network җ MySpace, Facebook, LinkedIn, Bebo, Twitter and these should be available on the Gphone through third party developers. Google is rumored to be working on a social aggregator as well, which could certainly work on the phone.
Advertising
Itגs the giant smelly monster sitting in the middle of the room. If theres going to be a Google phone, and it looks like thatҒs a distinct possibility, expect advertising along the lines of AdSense and the recently introduced ticker adsӔ Google is now placing on certain YouTube videos.
Mobile advertising revenue is another billion-dollar cash cow for Google. Some people could care less if there is advertising on the phone, as long as their monthly bill and the cost of the phone are cheaper than they are today. Some people hate advertising and swear that if there are ads on their phone they will not use Google. Theyd rather pay higher prices for the phone and their service.
ItҒs doubtful, but perhaps Google comes out with two flavors: one with advertising, lowering initial purchase costs and monthly bills, and one that has no advertising but costs more to purchase and has higher monthly fees.
Verdict
So what if Google doesnt deliver the right Gphone? What if it has only some of the features and functions discussed above? The Gphone could still revolutionize the wireless industry, but not by itself.
What if Google and Apple are in cahoots? GoogleҒs Eric Schmidt already sits on Apples board of directors. And thereҒs cozy integration between Google and Apple in the iPhone, AppleTV, and in iLife 08. Could Google and Apple ї two outsiders take on the wireless industry and change it? Weגll find out, as soon as Google delivers the Gphone.
Concept Credit: The Gphone concepts were contributed by Lorin Wood, a previsualization designer who specializes in concepts and ideation for Hollywood. His portfolio and art direction can be found at his Web site (he also maintains a blog). Woods concepts for last100 explored how Google applications, and its advertising, might look like on the Gphone.
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Thursday, August 30, 2007
The State Of Working America 2007
Economy’s Gains Fail to Reach Most Workers’ Paychecks
By Jared Bernstein and Lawrence Mishel
Research assistance from James Lin
Economic Policy Institute
August 29, 2007
As of Labor Day 2007, the economic recovery that began in 2001 is six years old, and the economy has consistently expanded over this period. Productivity growth, though slower of late, has been particularly strong, and after a long, slow start, employment has been consistently growing, albeit slower than past recoveries.
But most AMERICAN WORKERS HAVE NOT SHARED in the growth and prosperity they have been helping to create. Surely, one measure of the success of an economic growth period is how much of that growth finds its way into workers’ paychecks. In a period of sharply rising inequality, however, this is no “slam dunk.” In fact, as much of the data in this brief reveal, many workers’ wages have been stagnant for a number of years, after adjusting for inflation, particularly those at the middle and lower end of the pay scale. For example, while productivity is up nearly 20% since 2000, the real median hourly wage is up 3% overall and 1% for men, with none of this growth occurring over the three-and-a-half years since 2003. At the top of the wage scaleat the 95th percentileחreal wages are up 9%.
In recognition of Labor Day, this report examines the wage and employment trends in the 2000s and finds:
Real wages have been stagnant for many workers in the 2000s. After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003. This result holds for a wide variety of wage and compensation measurements, including those that add the value of fringe benefits.
The productivity/wage gap has grown. The gap between productivity growth and workers wages, especially those of middle- and low-wage workers, is at a historically high level.
Wage growth has been unequal. Wage growth in the 2000s followed a highly unequal pattern, and higher-wage workers gained the most ground.
Despite low unemployment, workers’ bargaining power has diminished. Though the unemployment rate has been low in historical terms, it does not capture the erosion of employment relative to the population caused by weak growth in (or withdrawal from) the labor force over the past few years. The bottom line is that many workers still lack the bargaining power to claim their fair share of the productivity growth they themselves are helping to create. This is partly due to weak job creation over the course of this recovery.
More downward pressure on wage growth is likely. The recent slowing of productivity growth and rising unemployment are likely to place further pressure on most workers’ real wages in the near to medium terms.
Wage growth in the 2000s: A detailed look
The wage trends in the 2000s represent a pronounced downshift for middle- and low-wage workers relative to the late 1990s. The figure plots low, middle, and high wages, corresponding to the 10th, 50th (median), and 95th percentiles, with each series indexed to 100 in 1973.1
While the real wages of low and middle earners were stagnant or falling for much of the period covered by the figure, they rose smartly in the latter 1990s, as the tight job market forced employers to bid wage offers up. Productivity also accelerated in the second half of the 1990s, and the persistently tight job market helped ensure that the benefits of growth were broadly shared.
However, these positive trends flattened in the recession of the early 2000s, and despite even further acceleration of productivity growth, real wages have remained relatively stagnant for many workers. As the figure demonstrates, the gap in wages between high-wage workers and both middle-and low-wage earners has grown significantly and now stands at a historical high.
This same stagnation pattern in the 2000s shows up in a wide variety of wage series. These data track recent wage trends, as compared with productivity in the 2000s. While productivity increased by nearly 20% since 2000, the real median hourly wage rose by just 3%. Wages for middle and low-wage workers grew modestly in real terms over the course of the current expansion, but real gains have been far less impressive since 2003.
Real median wages were basically flat for men, up only 1.1% over six-and-a-half years, though the median female did considerably better, up almost 5.0%. Both high school and college workers gained about 2.5%, a finding explored in greater detail below. Yet the wages of all of these workersthe median worker and those with either high school or college degreesחhave been flat or falling since 2003.
A different data source shows that the real hourly earnings of the roughly 80% of the workforce in non-managerial occupations rose 3.3% in the 2000s. Due to the weak performance of hours per week, however, weekly earnings grew about half that fast. Here again, real growth decelerated and disappeared after 2003, up only 0.2% since then.
Yet another measure of compensation, the Employment Cost Index (ECI), shows faster real growth over the period 2000-07, up 5.0%. Two factors account for the faster growth of the ECI. First, unlike median measures, this measure constitutes a broad average over all workers, and is thus boosted by high earners. Second, the ECI includes employer-provided benefits, which have increased faster than wages over this period. Since 2003, even with these factors in play, real average compensation has been flat.
This finding regarding benefit growth does not imply that the less impressive wage results, such as the male median, would be largely changed if benefits were included. When we assign average benefits to the wage of the median male (a generous assignment since the median worker likely receives below-average fringe benefits), for example, we find that instead of rising 1.1%, real compensation rises 4.0% over the full period, with all of the growth occurring before 2003. Since then, median compensationwages plus benefitsחhas been stagnant for both men and women.
Wage growth over the 2000s was generally faster for higher wage workers, and that since 2003, middle- and low-wage workers have lost ground. Combining men and women, real wages are up about 3% at the lowest decile (the 10th percentile of the wage scale) and at the median (the 50th percentile), though all of this growth occurred before 2003. At the top of the scale, however, growth has been much stronger and steadier.
The real wage results for men and women at particular deciles is often quite different from the overall result for that decile, because unlike averages, a particular wage percentile is not a weighted average of the gender wages for that percentile. Due to sharp post-2003 losses, low-wage men (10th and 20th percentiles) are back where they started, and low-wage women have done only slightly better (see Figure B). The median male achieved only a slight gain: 1.1% over six-and-a-half years, while the median women’s real wage is up 4.7%.
At the higher end of the wage scale, however, both men and women realized significant gains, with real hourly wages at the 95th percentile up about 9% for men and 12% for women. Note the “staircase” pattern of wage growth in the figure as we move up the wage scale, a pattern clearly associated with growing wage inequality between the top earners and everybody else.
Wages in the 2000s by education level;
Men with some college or less (71% of the male workforce in 2006) have seen only small wage gains since 2000. Interestingly, high-school dropouts experienced faster wage growth than those with higher attainment levels. The real wages of women with less than a high school education, for example, grew by just under 7%, more than three times that of more highly educated women. This result likely relates to strong demand for women workers in the low-wage side of the health care, restaurant, and hotel services sectors.2 It also may reflect the fact that numerous states raised their minimum wage levels over these years, and low-wage women are often the beneficiaries of such increases.3
Despite the oft-cited strong demand for more highly educated workers, the wages of college-educated workers have not grown particularly quickly in the 2000s. After rising in the first year of the decade, college workers’ wages were relatively stagnant for the next five years, though men is this category got a jump in the first half of this year.
Wage growth falls behind productivity growth
These real values show wage growth relative to inflation, and thus inform us of how the buying power of workers hourly wages has evolved over the 2000s. But it is also important to compare these wage gains to productivity growth, which has been notably strong for much of the period (though productivity has slowed recently). This comparison asks the critical question: to what extent have workers living standards been lifted by the increase in the economy’s ability to produce more goods and services per hour worked? Are working families fairly benefiting from the greater economic efficiencies that they themselves are helping to generate?
Working families have generally not shared in the productivity growth over this decade. The wage data here are from the same underlying source as the hourly data above, but they are quarterly data on real median weekly earnings of full-time workers, published by the Bureau of Labor Statistics (BLS).4 Productivity is up just under 20% over the period, while the real weekly earnings of the typical full-time male are down about 1.0% and those of women are up 3.5%.
What explains the weak and unequal wage results?
Changes in real compensation result from a broad set of factors, including:
workers’ bargaining power, which is closely related to the tightness of the job market and the strength of unions and other labor market institutions, including the minimum wage;
changes in the rate of inflation;
the cost of fringe benefits, including health care; and
productivity growth.
Of these, especially in a productivity-rich recovery like this one, bargaining power is dominant, since it determines how the benefits of productivity growth will be distributed. In a labor market like the United States, where unions are unfortunately relatively scarce, the fit between labor supply and demand needs to be awfully tightwe need full employment conditionsחif workers are to share broadly in the recovery. We discuss these issues more fully below.
Inflation played a role in the 2000-07 results, especially in the deceleration of real wages from the first part of the 2000s, when many series were rising in real terms, to the post-2003 period, when even average compensation was flat. The main culprit here, along with diminished bargaining power, was faster inflation. Due largely to energy costs, inflation grew 3 percentage points faster in the post-2003 period compared to the 2000-03 period.
Analysts often cite the rising cost of fringe benefits, particularly health care, as another explanation for the weak wage results in the 2000s. The intuition here is that employers will substitute benefit payments for wages, and when this occurs, looking exclusively at wages tells only part of the story.
It is true that there is some tradeoff between wages and benefits, but evidence suggests that benefits do not account for recent wage stagnation. First, only about half the workforce is offered and participates in health or retirement plans through their employer.5 Other work, such as Mishel et al. (2006), shows a fairly steep gradient to benefit receipt as you move up the wage scale: higher-wage workers are more likely to receive benefits than lower-wage workers, so we’re less likely to see wage/benefit trade-offs among those in the bottom half of the wage scale. Yet, as shown in Figure B, their wages grew the least, the opposite of what the benefit trade-off explanation would predict.
Finally, according to ECI data, fringe benefits in general and health care in particular grew considerably less quickly as the 2000s progressed.6 Figure E shows that while employers’ health costs, for example, were growing in the early 2000s, their rate of growth decelerated considerably, from over 10% per year in the early part of the decade to less than 5% most recently. Yet, real wage trends show the opposite pattern, rising more quickly from 2000 to 2002 than thereafter. Clearly, such a trend argues against a benefit explanation of poor wage growth: while real wages were flattening or falling in the post-2003 period, benefit costs were not accelerating, they were slowing.
Unemployment, employment, and wages
Unemployment and employment rates: What are they?
Economists recognize a strong relationship between employers’ demand for workers and real wage trends. When the job market is tight (i.e., when job seekers closely match the number of available jobs), wage pressure tends to be greater than when job seekers outnumber available jobs.
Yet, while the overall unemployment rate has been relatively low in the 2000sthough less so for several populations, such as minorities who rarely see low unemploymentחthis clearly has not translated into strong wage gains for most workers. What is holding down wage pressure and why is it disconnected from a seemingly tight job market?
A closer examination of some other key indicators of labor market tightnessemployment rates and job creationחhelp explain the disconnection. One reason for the current low rate is that workers who have left the labor force and are not actively seeking jobs are not counted as unemployed, i.e., the unemployment rate only counts those workers who are looking for work. This can be seen in the smaller share of the population that is employed nowthe employment rateחrelative to earlier years, which seems to be a more representative indicator of true labor market conditions than the unemployment rate.
Overall unemployment rate was 4.2% when the recovery began and was only slightly higher (4.5%) in the most recent quarter. In fact, unemployment has hovered around the mid-fours for the past year. African American unemployment rates are much highermore than twice that of whitesחbut the trend there, too, has been the same: up only 0.3 percentage points for both groups.
Employment rates, however, remain a lot lower than they were at the end of the last cycle, down 1.2 percentage points overall, and more than that for men and African Americans. By this measure, labor markets are not as tight as they were prior to the last downturn. Moreover, since only those looking for work are counted as unemployed, the fact that the lower employment rate is not showing up as higher unemployment suggests that many of these potential workers are not looking for work.
Job growth and loss
Another factor holding down wage pressures is the fact that job growth itself has been notoriously weak in this recovery. The nation’s payrolls grew 5.5% in this recovery, compared with 11.3% over the same period in the last recovery, and 17.1% for all recoveries that have lasted at least this long.7
Some economic observers, often those with political motivations, count job growth not according to the business cycle (as is usual practice among economists), but starting when employment began to expand, in the summer of 2003.8 But even by these cherry-picked standards, this recovery has lagged the last one in terms of net job growth (10.4% in the 1990s vs. 6.4% in this one).9
It is instructive to examine the rise in employment in terms of ‘gross flows’, that is, the rate at which new jobs are created and the rate at which jobs disappear. In particular, gross job growththe number or share of jobs createdחreveals an underappreciated weakness in the current recovery. As shown in Figure F, jobs created as a share of total jobs have been lower on average in this recovery relative to the prior one (these data only begin in the 1990s). In fact, the average job creation rate for 20066.7%חis the lowest annual rate on record going back to 1990.
Job loss rates have fallen, too, and the gap between them and net job creation has been positive, as noted above. But the relative low level of job creation further suggests a less-tight job market than a 4.5% unemployment rate would indicate.
Future downward pressure on wage growth
The slowdown in productivity growth is an important development on the wage front. As stressed in a research that analyzes the much more positive wage trends of the latter 1990s, the combination of faster productivity growth and full employment are necessary conditions for broad-based wage growth (e.g., Bernstein and Baker 2003). Full employment job markets force employers to bid wages up to get and keep the workforce they need, and faster productivity growth enables them to do so without cutting profit margins or raising prices.
In the 1990s analysis, we stressed the “4/2 solution,” the need for both low unemployment in the 4% range, and relative fast productivity growth, in the 2% range. These conditions have not been present over much of the 2000s. Unemployment, though measured in the mid-fours, would be higher if we considered the missing labor force, and productivity has decelerated from an average over 3% per year though the first half of 2004 to an average 1.5% since. The causes of this slowdown, and whether it will persist, are of course critical questions, though their answers are as yet unknown. What we do know is that broad-based wage gains have been much harder to achieve even when productivity growth was strong and will likely be even more difficult to achieve if the lower productivity regime of the last few years continues.
Conclusion
Most workers have relatively little to show in terms of real wage and income gains over this recovery. The real wage of the typical male worker, for example, is up only 1% since 2000 and not at all since 2003. Even a broader measure like real average compensation has risen less than 1% per year and has barely budged since 2003. As of 2006, the MEDIAN INCOME of working-age families (those headed by someone less than 65) was down -4.2% in real terms over the cycle, a loss of -$2,375 (2006 dollars). Poverty, at 12.3%, remains 1.0 percentage point above its 2000 trough. Though productivity growth has slowed somewhat in recent years, this business cycle has been reasonably rich in terms of efficiency gains, and these gains have generated considerable wealth. The problem is, of course, the narrow extent to which the gains have been shared. Inequality data bear this out, showing the classic “staircase” pattern to wage growth, as higher-wage workers saw greater gains.
We would expect tight labor markets to counter these developments, to push employers to bid wages up, but this has not occurred. The evidence we provide shows one reason for this is that the job market is not as tight as the relatively low unemployment rate would suggest. Employment rates remain well below their peak levels, and job growth has been uniquely weak in this recovery.
When examined closely, the wage findings tell an important story about whso has and who lacks the bargaining power to benefit from today’s economy. Economic elites talk up the economy, with bullish references to GDP, productivity, and job growth. But just whose economy are they talking about?
Clearly, policy makers need to focus much more attention on real wage trends, inequality, and the productivity/wage gap. A central goal of economic policy must be to reconnect the living standards of the workers embodied in the tables and charts to the growth in the overall economy (see THIS SITE). That will not occur simply because we wish it to, nor will it arise automatically from faster overall growth. It will be the result of DELIBERATE POLICIES to build institutions and mechanisms that enable working persons to claim their fair share of the growth they themselves are helping to create.
Endnotes
1. We begin this data series in 1973 because that is when the data needed to construct the series becomes available. The data are from the Current Population Survey, and our methodology is elaborated in Mishel et al. 2006, Appendix B.
2. BLS establishment data show that, while overall job growth is up about 6% since 2000, job growth for women is up 18% in hotels and restaurants and 22% in health care.
3. See: THIS.
4. These data are seasonally adjusted by EPI.
5. See Table 2 of THIS.
6. See THIS for data on changes in employer benefit costs.
7. The average includes the recoveries that began in February 1961, November 1982, and March 1991.
8. The WHITE HOUSE WEBSITE, for e.g., stresses the addition of over 8 million jobs since August 2003. .
9. This calculation uses August 2003-July 2007 for the current recovery, and the same period (recovery months 21-68) in the 1990s recovery.
References
Bernstein, Jared and Dean Baker. 2003. The Benefits of Full Employment: When Markets Work for People. Washington, D.C.: Economic Policy Institute.
Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto. 2006. The State of Working America 2006/2007. Washington, D.C.: Economic Policy Institute.
Section Dying America •
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Tuesday, August 28, 2007
Bad Boss Contest
Welcome to Working America’s My Bad Boss Contest
And the winner is…
The People’s Choice Grand Prize winner has been decided! Congratulations to “Pete Yonski” for his award-winning story, “Cancer Can’t Stop This Boss.” The “Most Outrageous Story” Grand Prize goes to “Steaming Mad” for his story “Business is Burning and so are the Employees.” Congratulations to our prize winners! You can also read the stories that were considered for both awards here.
Cancer Can’t Stop This Boss
By Pete Yonski, Illinois
My story starts with me being diagnosed with a rare form of cancer. I am in my early thirites and have not worked since March of this year. I also have three young children under the age of 8, and a wife who cannot work due to my condition. I think you get the idea.
In the industry I work in, disability benefits are available but only equal about one-half of what I normally would be making. These benefits are formulated from a day to day basis for days you have received no other compensation for. Needless to say, every day claimed is extremely important in the basic task of feeding my family and keeping the lights on.
I have been an employee for about 10 years and as such, I have built up some paid time off. I sent paperwork in to take some of my time off, to help pay the bills, but when the paycheck came, I was short on several days. This was compounded when I did not claim disability benefits on the days I thought I was being paid for. As an end result, I lost out on my vacation days AND DISABILITY BENEFITS. Talk about getting hit where it hurts.
My boss threw away the paperwork I sent in and then lied about ever receiving it knowing that filing a complaint for the time I should have received would take months if not years to resolve. Its hard enough just trying to stay alive, let alone trying to pull knifes out of not only my back, but the backs of my wife and children too.
Business is Burning And So Are The Employees
By Steaming Mad
I worked on a help desk in a plant. I was the least senior of the help desk employees.
Since the company had decided they could not do without a help desk during emergency situations, a contingency plan was developed to move the employees to another building on campus and set up the help desk there. Little did I know exactly what the contingency plan called for.
One day, the fire alarm went off. This time it wasn’t a fire drill but the real thing. A fire had started in the plant and smoke was drifting into the help desk area. At this time, my supervisor explained the contingency plan in full. One person was to leave the area every 5 minutes until the last person was left. We were to leave the office in order of seniority. Making the least senior person left to make sure all computers, lights, etc. were turned off and the help desk office door was locked.
I was the least senior. And with 9 people, I could not leave for 45 minutes even though smoke was filling the room. In my last 5 minutes prior to leaving, coughing and tearing and still answering the help desk phone, a security officer entered the office and yelled at me to leave the area. I explained why I was still there but he told me to leave immediately.
That I know, no action was ever taken change the plan nor explanation ever made to the supervisor that an employee’s life was more important that keeping help desk customers happy.
Non-profit Union Busting And Employees Without Health Insurance
By Reproductive Freedom Fighter
The CEO of the non-profit I work for hides her obscene salary from the public and employs a union-busting law firm to break our union, all while making health insurance so expensive that many staff are on state assistance health insurance and other forms of public assistance, even though they work full-time! We are a health care provider and an organization with a very progressive mission, but our own employees and their families are not able to afford the company health insurance. The irony is literally sickening.
Section Dying America • Section Workplace •
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Monday, August 27, 2007
Hidden Costs of Insourcing
Higher Trade Deficits and Job Losses for U.S. Workers
By Robert E. Scott
Economic Policy Institute
August 23,2007
Public officials have frequently claimed that foreign companies making direct investments in the United States, or insourcing, are creating employment here. In 2006, former Treasury Secretary John Snow said, “We know that investment in America lies at the heart of creating good jobs.” Indeed, 5.3 million U.S. workers alone are directly employed by U.S. affiliates of international companies (U.S. Department of the Treasury 2006). Treasury Secretary Henry Paulson recently said that “U.S. affiliates of foreign companies bring investments to our shores, creating jobs and revitalizing communities” (U.S. Department of the Treasury 2007).
But insourcing can destroy jobs and communities, too. In fact, total U.S. payroll employment of foreign multinationals declined by 50,000 jobs in 2005, and 600,000 jobs between 2000 and 2005. Including job losses from layoffs by firms that are taken over by multinationals, employment in firms that are spun off, and jobs created in new multinational startups, these firms have reduced their overall payroll employment by 4 million jobs since 1990.
Snow and Paulson look at only one side of the ledger, counting jobs created without considering where those jobs came from or counting jobs eliminated. An examination of annual data collected by the Commerce Department on employment related to new foreign investment in the United States casts a different light on the employment benefits conferred by these deals. The acquisitions of ongoing U.S firmsnot new startups - account for the vast majority of employment associated with new investments by foreign companies. And these investments, on net, have not added jobs over the past 15 years.
In the Commerce Departments data, which distinguish between acquisitions and startups, the true picture emerges. In 1990, U.S. affiliates of foreign multinational corporations (MNCs) employed 3.84 million workers. Between 1991 and 2005, foreign MNCs acquired firms employing 4.94 million workers. Over that same 12 years, only 303,000 workers were employed in foreign-owned startups in the United States, or 20,000 jobs per year. Thus, foreign MNCs added or acquired firms employing 5.25 million workers over this period. If not for layoffs and the sale of parts of these firms back to U.S. owners, total employment in these firms would have been 9.09 million jobs (including the 3.84 million workers they employed in 1990 plus the 5.25 million hired or acquired). However, in 2005, these firms actually employed just 5.09 million workers. Thus, although total employment in foreign-owned firms increased in this period from 3.84 to 5.09 million jobs, 4 million jobs in these firms were eliminated due to layoffs and selloffs of U.S. companies by foreign investors, relative to the potential 9.09 million jobs.
Furthermore, actual employment by foreign-owned affiliates peaked at 5.7 million jobs in 2000, and fell to 5.1 million in 2005, a loss of 600,000 jobs. Just because foreign companies are employing millions of Americans does not mean that those companies have created more jobs in the United States.
Insourcing is often deliberately designed to remove jobs from American industries. Foreign multinationals buy U.S. firms and then OUTSOURCE PRODUCTION TO THEIR HOME COUNTRIES. For example, the Indian firm GHLC recently acquired Dan River, a U.S. textile company. News reports confirm that Indian firms are attracted in particular to companies whose brands enjoy considerable popularity in their home markets as those brands can be MANUFACTURED MORE CHEAPLY in their Indian plants (Business Wire 2007).
Sometimes foreign MNCs make an initial job-creating investment and then change their mind. Swedish MNC Electrolux, for example, manufactured refrigerators for years in Greenville, Michigan but recently closed the plant and moved most of its 2,700 jobs to Mexico.
Even the investments that remain can have mixed effects on employment. The Honda auto plants in Ohio, for example, increased employment as they grew and contributed solid products to the U.S. consumer market. However, Honda employs fewer U.S. workers per car sold than domestic producers employ because its vehicles have a much lower share of domestic content (the share of a car’s parts made in the United States or Canada) than comparable models made by domestic producers. A recent report estimates that Hondas domestic content is 59%, as compared with Ford, G.M., and Chrysler, whose average domestic content is 76% (Level Field Institute 2007). Acquisitions such as DaimlerҒs purchase of Chrysler in 1998 are simple changes in ownership between domestic and foreign investors, and have not done much to create new production facilities in the United States.
Insourcing leads to growing imports and increases U.S. trade deficits
Growing job displacement suggests that foreign multinationals regularly buy U.S. firms, hollow them out, and outsource production and employment to other countries. The firms and subsidiaries purchased often have substantial domestic market shares, extensive distribution systems, and widespread brand recognition. When Chinese computer maker Lenovo purchased IBMs laptop subsidiary, Lenovo shut down production and replaced it with imports from China.
Insourcing has also contributed to the rapid growth of imports by U.S. subsidiaries. Total U.S. exports from these foreign-owned firms gradually rose from $79 billion in 1990 to $169 billion in 2005, an increase of 7.5% per year. At the same time, total imports of foreign-owned companies in the United States climbed from $170 billion in 1990 to $453 billion in 2001, or 11.0% per year. As a result, the contribution to the U.S. trade deficits of foreign-owned firms more than tripled, from $79 billion to $283 billion in this period, or 14.3% per year. These firms were responsible for 36.1% of the total U.S. trade deficit in 2005.
Finally, the imports and trade deficits of foreign MNC subsidiaries grew more rapidly than their domestic sales (not shown) in this period. Total sales of these subsidiaries increased 7.2% per year, on average. Their imports increased 8.0% per year, and the trade deficit associated with these firms grew 11.8% per year. Foreign direct investment in the United States fell from a peak of $321 billion in 2000, to an average of $118 billion per year between 2001 and 2005, and to $109 billion in 2005 (Bureau of Economic Analysis 2007a). The growth of sales of foreign-owned subsidiaries fell to 4.9% per year, but their imports continued to grow 8.0% per year.
Both the job and trade statistics refute the argument that insourcing offsets the negative effects of offshoring on U.S. jobs and trade. Surging trade deficits of foreign-owned companies in the United States provide solid evidence that insourcing is displacing domestic jobs, not creating them
Research assistance provided by Lauren Marra is gratefully acknowledged.
Endnotes
1. Recent data on employment and trade by established firms are from Anderson (2007). Information on businesses acquired or established by foreign MNCs are from McNeil (2007), and historical data for these series are from BEA (2007b).
2. These are sales-weighted averages. The average domestic content of all foreign auto producers is 40%. At 3%, Korean manufacturers have the lowest level of domestic content in the U.S. market.
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Sunday, August 26, 2007
Still Looking For Reasons To Keep Away From Windows? Part 16
The only way to deal with software and music companies that use DRM is to to take your business elsewhere, so I’ve been slowly moving to an open source environment, hoping to eventually go DRM free - with no more security, privacy and EXTORTION issues from Microsoft and their ILK.
I STARTING POSTING STUFF about Microsoft last summer, after their 2006 iteration of WGA SPYWARE SNUCK ON, then booted one of my home computers to the PRODUCT ACTIVATION wizard - DENYING me my Windows desktop. Then, after calling Microsoft for help getting the desktop back, was falsely accused over the phone by - and hung up on - by an English challenged customer service rep. Since getting that straightened out - exception logs show uninitiated outbound connection attempts, multiple times each day, to near a dozen Microsoft registered IPs - (65.55.192.29, 65.55.192.61, 65.55.192.93, 65.55.192.126, 207.46.18.88, 207.46.20.93, 207.46.199.93, 207.46.211.122, 207.46.211.124, 207.46.211.126, 207.46.253.125, 207.46.253.157). Every time I turn the computer on now, I take a deep breath and WONDER if today will be the day Microsoft remotely shuts it off for ANY REASON whatsoever, since they - not me - control it.
Further EXPLORATION suggests future Windows Operating Systems and ALL SOFTWARE on any computer running Windows may be DATABASED and CONTROLLED ENTIRELY BY MICROSOFT. Because of that, I’m a SUPPORTER for Open-Source, not that Linux is any BETTER or WORSE than Windows, but BECAUSE we’re ALLOWING OUR RIGHTS TO BE TAKEN AWAY by big CORPORATE INTERESTS Like Microsoft.
Last week - Microsoft’s WGA DRM was explained to the masses of Windows users again in a big way.
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DRM bites again: the Microsoft Windows Genuine Advantage servers (which every XP and Vista install phones home to) all failed sometime earlier today.
The result? Every single Windows XP and Vista installation—except possibly those with volume license keys—is being marked as counterfeit when it tries to check in. Installations which are flagged as counterfeit switch to a “reduced functionality mode” which results in features like Aero and DirectX being disabled.
So far, the only public response from Microsoft has been indirectly via their technical support forums, where a user has posted the following snippet from an email he received from MS’s technical support address:
Thank you for your response.
Im sorry to inform you that the Windows Genuine server might be down for few days. I have escalate the issue to our Genuine team, kindly try to validate again on Tuesday 28 Aug 2007.
Thank you for contacting Microsoft Technical Support.
Phil Liu, the WGA Program Manager has responded on the Microsoft forums to say, effectively, “we know, we’re taking it seriously and we’re working on it.”
I understand the frustration you all are going through. I’m investigating the issue right now.
I guarantee that we’re working on this issue right now. For folks wondering, MACHINES ARE NOT SHUTTING DOWN with reduced functionality.
I guarantee that I will personally resolve this issue before I go to sleep - whether or not it is Tuesday I sleep. My goal is to identify a FIX for this issue - afterwards get you all what you are looking for, an explanation and cause.
The message from the Supportability team will be addressed appropriately as well. I encourage folks to keep an eye out on these forums.
I promise I will have an explanation and resolution as soon as humanly possible.
-Phil Liu @ Microsoft
Program Manager, WGA
This isn’t the first time it HAPPENED.
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Windows Update Updating Without Permission
By Thomas Hruska
CUBIC
August 24, 2007
Did I ever mention that I love VERIFYMYPC? Oh wait. Never mind. I did that already.
It has been a while since I have posted but this one is too good to pass up. Every night around 10:30 p.m., my computer is set up to run a VerifyMyPC scan. About 11 p.m. the Scan Notifier runs and does the whole balloon pop-up thing. Normally nothing pops up because there is nothing to report (i.e. another day at the office - figuratively speaking).
When there is something to report, usually a little yellow triangle icon shows up and I say, “Yup, I remember doing that today.” Or, “Those changes to my system sound about right.”
Tonight, the special analysis mode of the Scan Notifier picked up on unusual behavior and popped up the Red-X icon.
If Microsoft ever wanted to get caught with their pants down, they succeeded. For most people, the above doesn’t make a whole lot of sense past the “you might have a virus” part. VerifyMyPC requires a little extra knowledge about computer systems when dealing with the details. Google is your friend in these cases. Running searches for ‘wups.dll’ and ‘wups2.dll’ turns up something about Automatic Updates. In particular, those DLLs provide Automatic Update functionality for Windows.
In other words, the Automatic Updates utility automatically updated itself. Now this might not seem like a big deal but I have automatic updates set to manual (both download and installation have to be approved by me) and not the usual ‘automatic’ setting found on most user PCs. In other words, Windows updated itself without my express permission. Such behavior is right in line with spyware-like activity. Thus, VerifyMyPC is doing an accurate job in reporting such behavior to me. I love VerifyMyPC.
It is also interesting to note that Microsoft pushed out an update to Automatic Updates on a day other than the 2nd Tuesday of the month (also known as “Patch Tuesday").
Rants
You have to wonder why WGA software didn’t just say “Sorry, WGA server is down, please try validating at a later time” instead MS decides to call us criminals and disable features. Whats the logic in that?
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This really highlights the wrongheaded methods Microsoft uses to ensure their profits by preventing piracy. When their OS is unable to verify its authenticity, instead of giving the user the benefit of the doubt, they choose to lock the user out, without requiring any actual evidence of malfeasance. This means that if MS were to cease to exist, their OS product would stop functioning as well, all due to an unnecessary point of failure built into the OS. If future archeologists were to unearth a Windows PC, and try to use it, they would be confronted with this Genuine Advantage crap. Any company that doesn’t have enough respect for its users, and for the integrity of its own products, to design beautiful and timeless software in the ultimate sense, is not a company I wish to support.
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Yawn… These problems were bound to happen. And, they will happen again.
The day will come when crackers succeed in breaking into the WGPAA ("Windows Genuine Product deActivation disAdvantage") servers, and sabotage them. They will then send out malware updates to all (in)validating machines, and take control of each and every one of them. This is just a disaster waiting to happen. I can hear everyone already: “Wir haben es nicht gewusst!” Yeah, right!
Good luck to all WGPAA victims… You’ll need it.
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I was on the phone for 3 hours last night trying to resolve this problem with Microsoft support. They had no clue what was happening and continually tried to get me to have them generate a new product key for my retail copy of Vista when this clearly wasn’t the problem. They told me that installing third party software had corrupted Vista and I needed a new product key. The issue was escalated to a research engineer which did nothing but try to coerce me into getting a new product key. I think it is unacceptable and and huge customer service issue to cripple Windows because of a server issue. My fully legal purchased retail copy of Vista ultimate turned into crippled nagware because of a server issue. And then I spent 3 hours on the phone with support that has no idea of what to do and only wanted to generate a new product key to get me off the phone. Makes me regret ever buying Vista in the first place. Good thing I can dual-boot to XP still.
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I think this exposes how flippant microsoft are about supporting their software. Consider this sequence of events;
WGA ceases to function and renders all Vista machines that attempt to download a critical update invalid.
Tomorrow, a zero day exploit is found in Vista.
A virus is written to take advantage of the exploit.
Because the Critical updates can no longer be downloaded because the broken WGA system disallows it, the virus is able to propagate unhindered through every Vista installation, exposing personal data belonging to every Vista user.
I know this is worst case stuff but someone has to be liable when these things happen. Think about the slammer attacks only worse.
Still Looking For Reason to Keep Away From Windows?
PART 1 - PART 2 - PART 3 - PART 4 - PART 5 - PART 6 - PART 7 - PART 8 - PART 9 - PART 10 - PART 11 - PART 12 - PART 13 - PART 14 - PART 15 - PART 16 - PART 17
MICROSOFT VS THE FREE WORLD
VISTA ACTIVATION WORRIES
VISTA ULTIMATUM
MICROSCUM’S PRODUCT ACTIVATION FAQ
WINDOWS PRIVACY FLEW OUT THE WINDOW
A CONTRACT ONLY MICROSOFT CAN BREAK
MICROSOFT WGA FORUM
MICROSOFT EMAIL SUPPORT
MICROSOFT FACES LAWSUIT OVER WGA
MICROSOFT DENIES WINDOWS XP KILL SWITCH
A GRIPELINE WGA POST
LAUREN WEINSTEIN’S WGA POSTS
GROKLAW - IT’S A MATTER OF INFORMED CONSENT
WGA - WORSE THAN EXTORTION
WINDOWS MEDIA PLAYER EULA
BAD VISTA DOT ORG
RANTS
Section Privacy And Rights • Section Microsoft And Windows •
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