The Petition to Revitalize Dutchess County's Economy
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Author:
n/a -
Send To:
Dutchess County residents
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Sponsored By:
members of the Real Majority Project -
More Info at:
If you agree that the Dutchess County Legislature should pass the resolution below as soon as possible to revitalize our local economy, pull ourselves up by our bootstraps to get us out of our de-facto Depression-- and send a strong message to Washington to greatly increase corporate accountability for corporations like IBM as well-- then sign on to this petition, pass it along to all you know and send a letter to all 25 legislators at countylegislators@co.dutchess.ny.us!
Joel Tyner
County Legislator
Clinton/Rhinebeck
joeltyner@earthlink.net
DutchessDemocracy.blogspot.com
(845) 876-2488
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These seven articles below have much more information on this issue:
"IBM East Fishkill Continues Layoffs Today" by Craig Wolf [Poughkeepsie Journal 1/28/09]
http://www.poughkeepsiejournal.com/article/20090128/BUSINESS01/901280341
"IBM Posts Record Revenue, Profit for 2008" by Julie Moran Alterio
http://www.lohud.com/article/2008901210324 [The Journal News 1/22/09]
"Jobless Rate Highest Since 1993 IBM Downsizing" by Craig Wolf [Poughkeepsie Journal 1/23/09]
http://www.poughkeepsiejournal.com/article/20090123/BUSINESS/901230325
"IBM Lays Off Hundreds in Dutchess" [Associated Press 1/28/09]
http://www.dailyfreeman.com/articles/2009/01/28/news/doc497fe5f144350528209256.txt
"Does Giving Big Green to Big Blue Pay Off? States Throw Money at IBM, But Company Shifts Jobs Around the Globe"July 27, 2008 Albany Times-Union Christine Young
http://timesunion.com/AspStories/story.asp?storyID=706921&TextPage=2
"De-Escalating the 'Economic War Among the States' & Reforming the Development Subsidy Game"
Presentation by Frank J. Mauro, Executive Director, Fiscal Policy Institute
http://www.fiscalpolicy.org/syracuseAug2000speech.htm
"Congress Should End the Economic War Among the States" by Melvin L. Burstein and Arthur J. Rolnick of the Federal Reserve Bank of Minneapolis
http://woodrow.mpls.frb.fed.us/pubs/ar/ar1994.cfm
These ten websites also have provide much more documentation on this issue:
www.petitiononline.com/statewar; www.AllianceIBM.org; www.Clawback.org
www.ctj.org/html/corp0402.htm; www.aflcio.org/issues/jobseconomy/exportingamerica/
www.epinet.org/content.cfm/issueguide_offshoring
www.goodjobsfirst.org/corporate_subsidy/overview.cfm
www.blog.aflcio.org/2009/01/10/obama-economic-plan-create-made-in-america-jobs/
www.GreatAmericanJobsScam.com; www.FiscalPolicy.org/HR1060.htm
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[this submitted to our County Legislature's offices Jan. 28th; email countylegislators@co.dutchess.ny.us!]
WHEREAS, the Journal News reported January 22nd that Mark Loughridge, Senior Vice President and Chief Financial Officer for IBM, stated, "the fourth quarter wrapped up an exceptional year in which we delivered record revenue of over $103 billion, record profit of $16.7 billion, record earnings per share of $8.93 and record free cash flow of $14 billion, up almost $2 billion year to year; that's a lot of records"; in the fourth quarter, IBM beat the consensus estimate of Wall Street analysts of around $3 a share with earnings of $3.28 per share, up 17 percent from the $2.80 a share recorded in the final quarter of 2007; IBM's income was up 12 percent to $4.43 billion from $3.95 billion a year earlier, and
WHEREAS, IBM filed notice in late January that it will cut hundreds of positions at East Fishkill's Hudson Valley Research Park as of April 27, as the state Department of Labor has confirmed; published reports put the layoff number at IBM's East Fishkill plant between 400 and 750, with another 90 to 100 jobs being eliminated at IBM-Poughkeepsie, and
WHEREAS, IBM also cut 265 positions in 2007, while increasing profits by over a billion dollars; one estimate of IBM's recent job cuts put the number at more than 4,000 jobs lost since IBM's fourth-quarter earnings announcement in January; those earnings contained an unexpected surprise: IBM forecast at least $9.20 per share in profit in 2009, and
WHEREAS, according to the Associated Press, in 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the United States, down slightly from the year before; the company's staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007, and
WHEREAS, the fact is also that IBM has literally spent $26 billion since 2007 buying back stock instead of investing in keeping its employees; last year Dutchess County taxpayers spent $286,138.42 on vendor payments for various IBM products; corporations like IBM now pay literally half the state income taxes they did in the early 1970's under Governor Nelson Rockefeller, and
WHEREAS, Dutchess County's unemployment rate was 6.1 percent this past December, with 8,900 people out of work and looking, up from 5.5 percent in November and far higher than December 2007 when the rate was 4 percent, and this past December's unemployment rate was also the highest December posting since the 8 percent of 1993, and
WHEREAS, in 2000 Governor George Pataki announced that New York would help IBM with $660 million in state and local incentives; in return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs; as of last year, 1,400 people were working at the East Fishkill plant, and
WHEREAS, last July Governor David Paterson called for another $140 million for IBM, together with a $1.5 billion investment by IBM itself, including $75 million from taxpayers for 1,000 new jobs: 325 at UAlbany's NanoCollege and another 675 at an upstate facility that has yet to be sited, with the remaining $65 million to help finance the expansion and upgrade of IBM's East Fishkill plant, in return for IBM's pledge to retain 1,400 semiconductor jobs at the Dutchess County site, and
WHEREAS, the Fiscal Policy Institute and many others have questioned why state taxpayers were asked last July to pay another $65 million, de facto double-billing, to keep IBM employees in East Fishkill, since New York state and local taxpayers already paid an estimated $660 million for those same 1,000 jobs, and
WHEREAS, according to Citizens for Tax Justice, IBM reported $5.7 billion in U.S. profits in 2000, but paid only 3.4 percent of that in federal income taxes; in 1997, IBM reported $3.1 billion in U.S. profits, and instead of paying taxes, got an outright tax rebate; from 1997 to 2002, IBM received $4.7 billion in corporate tax welfare, and
WHEREAS, since 2000, corporations have shipped more than 525,000 white-collar overseas; from 2000 through 2005, U.S. multinational corporations eliminated 2.1 million jobs at home while adding 784,000 to their payrolls abroad, according to the Bureau of Economic Analysis; at the end of 2005, U.S. corporations employed almost 9 million people outside the United States, and a study published in Tax Notes last March concluded that multinational companies shifted almost $50 billion in income to low-tax countries in 2004, depriving the government of $17.4 billion in tax revenue, and
WHEREAS, USA Today reported last March that corporate profits earned in the United States are subject to the 35\% corporate tax, but multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to this country, transfers that often don't happen for years; General Electric, for example, has $62 billion in "undistributed earnings" offshore, according to recent Securities and Exchange Commission filings, Pfizer has $60 billion, and ExxonMobil has $56 billion, and
WHEREAS, current federal law law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore; this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S.; ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes, and
WHEREAS, many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements; these taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas, and
WHEREAS, the U.S. government should collect detailed and comprehensive data on the number of jobs lost overseas due to offshore investments and trade, including by requiring all companies to fully disclose this information; firms should also be required to inform consumers where the services they purchase are produced and provided from, with penalties for disclosing false information and failures to disclose, and
WHEREAS, the federal government has a special obligation to assist workers who lose their jobs to trade and offshore outsourcing; the current WARN (advance notice) and Trade Adjustment Assistance (TAA) programs are intended to help trade-impacted workers make the transition to new jobs, but these displaced worker programs need to be greatly expanded and strengthened, and
WHEREAS, President Barack Obama co-sponsored legislation last year in the Senate that would give "Patriot Employer" corporations a tax credit equal to 1\% of their taxable income if they maintain or increase the ratio of their U.S. workforce to the number of workers abroad, keep their headquarters in the U.S. and meet other wage, health care and pension requirements, as the U.S. takes in less annual revenue from corporate taxes, measured as a percentage of economic output, than almost all other major economies, and
WHEREAS, the Binghamton Press and Sun-Bulletin and Rochester Democrat and Chronicle websites have long had information on the Dutchess County Empire Zone and other Empire Zones throughout the state regarding monies, benefits, and assistance received, jobs promised, and jobs created, and therefore be it
RESOLVED, that the Dutchess County Legislature embrace and set in motion the following six-point plan to revitalize our local economy with greater corporate accountability for companies like IBM:
-- First, that the Dutchess County Legislature co-host with the County Executive a public forum within a month on the current recession to hear input, ideas, and suggestions from local taxpayers on what steps Dutchess County government should take to put more local residents back to work, and
-- Second, that a new Dutchess County Economic Revitalization Task Force be created, to be composed of twenty economic advisers as Ulster County recently wisely chose to do, ten to be appointed by the County Legislature Chair and ten from the County Legislature Minority Leader, that task force to meet publicly, allow public input at its meetings, and report back to the County Legislature and County Executive monthly as this is the most important issue in Dutchess County, and be it further
-- Third, that the Dutchess County Legislature requests that IBM must make every effort to save jobs; if cost cutting is needed, IBM should suspend its stock buyback program, and if job cuts occur, IBM must divulge the number of job cuts, where they are taking place and whether any of these affected jobs are being shifted offshore; executive positions should be eliminated in divisions where job cuts occur; pay, bonuses and perquisites for executives should be slashed; work should not be shifted from IBM workers in the United States to offshore locations; full disclosure of why individual jobs are being eliminated is essential, and before any new hires are added to the payroll, IBM must recall and rehire employees terminated in past resource actions, and be it further
-- Fourth, that the Dutchess County Legislature requests that the Dutchess County Economic Development Corporation work with the Dutchess County Empire Zone and Dutchess County Industrial Development Agency to greatly increase transparency and accountability for companies like IBM by making it easier for all Dutchess County residents to know about monies, benefits, and assistance received, jobs promised, and jobs created by putting that information online, and
-- Fifth, that the Dutchess County Legislature calls on Congress and President Barack Obama and to pass and sign legislation that protects U.S. jobs by ending tax breaks for companies that shift jobs overseas, and calls for the full disclosure of offshoring and outsourcing of American jobs by IBM and other companies, initiate the Patriot Employer program proposed by President Barack Obama last year, and expand the current WARN and TAA programs for workers who have lost their jobs due to outsourcing, and
-- Sixth, that the Dutchess County Legislature request that Congress and President Barack Obama pass and sign into law the Distorting Subsidies Limitation Act, legislation supported by the Fiscal Policy Institute and Federal Reserve Bank of Minneapolis that would enact a 100\% tax on any subsidy provided by a state or local government to a corporation to locate into or remain within a government's jurisdiction, effectively rendering such subsidies ineffective and unneeded, thereby saving billions annually for New York taxpayers, for example, and
RESOLVED, that a copy of this resolution be sent to President Barack Obama, Senators Charles Schumer and Kirsten Gillibrand, Representatives John Hall and Maurice Hinchey, County Executive William Steinhaus, Dutchess County Economic Development Corporation, Dutchess County Empire Zone, and Dutchess County Industrial Development Agency.
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"Does Giving Big Green to Big Blue Pay Off? States Throw Money at IBM, But Company Shifts Jobs Around the Globe" by Christine Young [Albany Times-Union 7/27/08]
http://timesunion.com/AspStories/story.asp?storyID=706921&TextPage=2
It was December 2004, and Tulsa, Okla., was abuzz with excitement.
IBM, which already employed more than 1,200 in Tulsa, had made a deal with Oklahoma to add another 1,000 jobs by 2009. In return, Big Blue would get $35.2 million in rebates over 10 years.
Calling it "great news for Tulsa and for all of Oklahoma," Gov. Brad Henry praised IBM as "a vital and valuable corporate citizen." He said the deal "signifies good things for both IBM and Tulsa."
He was only half right.
Since the 2004 agreement, the Oklahoma Tax Commission has sent Big Blue more than $4.4 million in rebates. Yet state figures show the company's job count is the same today as it was before the deal was signed.
This raises questions for the state of New York and Albany, where the ink is still drying on an agreement with IBM that will cost taxpayers $140 million for promises of job creation and economic development.
IBM employs hundreds at the University at Albany's College of Nanoscale Science and Engineering on Fuller Road, site of much of the company's cutting-edge computer chip research. It also has a big office in downtown Albany on State Street, devoted largely to serving state government clients.
And while Big Blue is one of New York's largest employers, with 11,600 workers in Dutchess County and 20,000 across the Hudson Valley, Oklahoma's experience offers a cautionary note and reason to wonder if New York's investment is money well spent.
Economic development packages are great for politicians. Jobs are promised, deals are signed, happy headlines are made.
But what happens after the hoopla?
Since the Oklahoma celebration, there appears to have been no follow-up or oversight by the state.
Last week, the marketing director for the Oklahoma Department of Commerce had no idea if IBM had kept its end of the bargain.
"I would imagine that they had," Beth Schmidt said. "It's performance based -- if they meet the requirements and add those jobs."
Yet a January report from Schmidt's agency shows IBM Tulsa's payroll remains near 1,200, the same as it was before the agreement.
And in May, IBM announced 350 Tulsa accounting and finance positions were going to Argentina...
Exuberance over IBM's presence, be it in Oklahoma or New York, is not unusual.
In Boulder, Colo., the city doled out a $100,000 tax rebate to IBM on top of state incentives worth $632,000 to get Big Blue to put a "green" data center there.
"The city's money was really an indication to IBM corporate that Boulder really cares about having this company here," Frances Draper of the Boulder Economic Council told reporters.
"That was an incredibly important part of their decision."
This year, IBM has slashed 400 jobs in Boulder.
And the dirty secret is no one wants to take on IBM for fear of losing jobs and hurting the local economy, especially in areas such as Dutchess County, where IBM is such a vital player.
"Nobody wants to throw the baby out with the bath water," Dutchess County Legislator Joel Tyner said.
And so New York went ahead with a pact with IBM, requiring a hefty donation from taxpayers, announcing it one day before Big Blue's second-quarter profit jumped a dizzying 22 percent to $2.77 billion, defying even Wall Street's expectations.
The agreement with the Westchester County-based technology giant, announced by Gov. David Paterson on July 15, calls for a $1.5 billion investment by IBM and $140 million by the state.
It includes $75 million from taxpayers for 1,000 new jobs-- 325 at UAlbany's NanoCollege and another 675 at an upstate facility that has yet to be sited.
The remaining $65 million will help finance the expansion and upgrade of IBM's East Fishkill plant, in return for IBM's pledge to retain 1,400 semiconductor jobs at the Dutchess County site.
Paterson said the arrangement is "what we are going to need to reignite the engine of the state's economy."
But to Frank Mauro of the Fiscal Policy Institute, a nonpartisan research and education organization in Latham, it brings a sense of deja vu.
Mauro recalls in 2000, then-Gov. George Pataki announced New York was bankrolling IBM with $660 million in state and local incentives. In return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs.
Eight years later, 1,400 people work at the East Fishkill plant. But Mauro wonders why the state suddenly has to pay another $65 million to keep them there.
It "seems like double billing, since New York state and local taxpayers already paid an estimated $660 million for those 1,000 jobs," he said. "It would be good to know ... how long IBM was required to maintain those 1,000 jobs"...
Dutchess County, where IBM has invested more than $5 billion over the past 10 years, recently gave Big Blue a tax break for a possible $36 million upgrade of its Poughkeepsie plant.
The upgrade would give Poughkeepsie a competitive edge against IBM sites elsewhere, such as North Carolina and Colorado, said Michael Tomkovich, chairman of the Dutchess County Industrial Development Agency.
Tyner, the county legislator, called the breaks a "bad deal" for local taxpayers.
"It's time to end this economic battle between the states," he said. "We need to remove the ability of these companies to hold us over a barrel."
In fact, Big Blue scored big in North Carolina by leveraging competition among states.
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"IBM Lays Off Hundreds in Dutchess"
Wednesday, January 28, 2009 3:06 AM EST
By The Associated Press [Daily Freeman]
http://www.dailyfreeman.com/articles/2009/01/28/news/doc497fe5f144350528209256.txt
IBM CORP. has eliminated hundreds of jobs in Dutchess County as part of thousands of layoffs extending across at least eight plants run by the computer giant.
Published reports put the layoff number at IBMs East Fishkill plant between 400 and 750, with another 90 to 100 jobs being eliminated at IBM-Poughkeepsie.
There also were IBM layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; Austin, Texas; and Burlington, Vt.
IBM said it doesnt have to reveal the number of jobs it is cutting, because the Securities and Exchange Commission requires companies to disclose only material events and IBM considers its job cuts to be a regular part of the companys business model. The company noted that it eliminates thousands of jobs every year but usually adds some back in other places.
Because of that, IBM contended it doesnt have to break out its layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts.
Thats why while IBMs head count keeps growing, topping 400,000 at the end of 2008, laid-off IBM workers have flooded online job boards with complaints about the companys stealth cuts.
One estimate of IBMs recent cuts put the number at more than 4,000 jobs lost since IBMs fourth-quarter earnings announcement last week. Those earnings contained an unexpected surprise: IBM forecast at least $9.20 per share in profit in 2009. IBM shares are up more than 10 percent since then.
The Associated Press reviewed one document sent to laid-off workers that identified some of the positions that were cut. Employees werent identified by name, but positions and the workers ages were listed. The document listed nearly 3,000 jobs.
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"IBM Is Cutting Jobs; Maybe Some Locally"
BY CRAIG WOLF POUGHKEEPSIE JOURNAL JANUARY 22, 2009
http://www.poughkeepsiejournal.com/article/20090122/BUSINESS01/901220332/1003/business
Job cuts that began Wednesday within IBM Corp. will likely be seen in the divisions that have large numbers of employees in Dutchess County next week, according to the head of a workers group.
The company confirmed "resource actions" began Wednesday but refused to comment on specifics or sites involved, or any plans.
Lee Conrad, national coordinator for the Alliance@IBM, said from reports he's getting from people inside the company, "Systems and Technology will get hit Tuesday - East Fishkill, Poughkeepsie and Burlington; Fishkill and Burlington the heavy hitters."
The two Dutchess County sites, plus Burlington, Vt., are in IBM's Systems and Technology Group, which makes computers and microchips.
IBM, the region's largest private employer, has said it employed 11,600 in Dutchess at the end of 2007. It hasn't posted end-of-2008 numbers yet.
Conrad said he's learned IBM's Software Group had cuts of about 1,400 people in the U.S. and Canada and the sales and distribution group also had cuts. Software has a contingent in Dutchess; sales staff are widely spread.
"Other divisions, I think, will probably spread out over a couple days and next week. That seems to be the pattern they've done in the past," Conrad said.
The day after IBM reported rising profits and a year that was its first as a $100 billion company, it began the nationwide series of cuts.
Spokesman Doug Shelton confirmed IBM management had notified some employees about "resource actions," the usual term for large-scale job eliminations.
"We are not going to discuss specific numbers or locations. What I can tell you is that managing resources and skills is an ongoing component of our business model," he said in an e-mail.
Skill, Resources Mix
"IBM continuously evaluates its mix of skills and resources, and makes changes as needed," Shelton said. "The nature of our business is that we must constantly assess employee skills and resources and at any given time, give IBM the flexibility to match the current and future needs of our clients (skills that the client needs).
"Managing talent in this way promotes the continued competitiveness of our operations and matches our skills and capabilities with the evolving needs of our clients. We anticipate some employees will find other positions that match their skills within IBM, and we're enabling them in that effort," he said.
In the past, IBM has been more specific about major staff reductions. Conrad said secrecy has long been management's way, but not to this extent.
"I think it gives them a bad reputation when they cut jobs, and they don't like that," he said.
It may also affect tax favors the company gets from states such as New York, he said.
"IBM's cutting jobs around the country and they're cutting them in states that have handed out tax breaks to the company," Conrad said. "They're being arrogant."
New York is giving IBM $140 million as IBM invests $1.5 billion in three New York state programs.
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From www.aflcio.org/issues/jobseconomy/exportingamerica/outsourcing_solutions.cfm...
Policy Solutions to Shipping Jobs Overseas
Home>Issues>Jobs, Wages & the Global Economy>Exporting America
Many experts have argued that losing jobs overseas is both inevitable and ultimately healthy for the U.S. economy. They claim that policy solutions that would inhibit the movement of jobs within an unfettered global marketplace will be counter-productive and costly. What these arguments ignore, however, is that the destruction of U.S. jobs is not occurring on a level playing field resulting from neutral policies. Rather, a broad range of state and federal policies allow, facilitate and even reward the destruction of U.S. jobs. Government policies lavish tax breaks, government contracts, and easy access to the U.S. market on companies that destroy good jobs and exploit lax workers rights to produce overseas. These misguided policies hurt Americas working families and fail to promote equitable economic development in other countries.
Policymakers must reform policies that encourage and reward job destruction and implement new policies that will create good jobs for the future. While no single policy measure provides a magic bullet for stopping job loss, a dramatic re-orientation of U.S. policy that removes incentives for shipping jobs offshore, while fostering healthy conditions at home for job creation, will go a long way towards building a more balanced global economy that works for working families.
1) Remove Incentives to Ship Jobs Overseas
Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.
Public Contracts and Subsidies: Many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements. These taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas. Laws at the local, state and federal level should be reformed to ensure our taxpayer dollars are not subsidizing the destruction of American jobs.
Currency: A number of U.S. trading partners China in particular manipulate the value of their currency relative to the dollar to give their exports to the U.S. an artificial cost advantage, while making American products more expensive. This puts American producers and workers at an impossible cost disadvantage, effectively shutting them out of export markets and undermining their competitiveness at home. The U.S. must take immediate and aggressive action to ensure that the dollar is appropriately valued and withdraw trade benefits from countries that insist on manipulating their currency to unfair advantage, in violation of international trade rules.
Trade Laws: Domestic trade laws enable the government to redress unfair trade practices that give an illegitimate advantage to overseas production. These laws were intended to provide the first line of defense for American producers and workers, yet they are very poorly enforced. The World Trade Organization has weakened our ability to use these laws, and on-going trade negotiations may undermine these laws even further. We must vigorously enforce our domestic trade laws, defend them from challenge, and work to strengthen them in the future.
Trade Agreements: Trade deals such as the North American Free Trade Agreement (NAFTA) create new rights, but no responsibilities, for companies that ship jobs overseas. NAFTA contains strong legal protections for companies investing abroad and guaranteed access for their products into the U.S. market. But NAFTA provides no comparable protections for the rights of workers and the environment, allowing companies to escape their international obligations by shipping work overseas. We must fundamentally reform flawed trade rules to hold companies accountable for respecting workers rights no matter where they produce.
2) Rewardthe Creation of Good Jobs in the United States
Health Care: Ballooning health care costs are creating a crisis for all American families and companies, with particularly devastating impacts on American manufacturers. The absence of a functional health care policy in the U.S. not only denies millions access to quality, affordable health care it also impairs our companies ability to compete with companies in nations that control costs and share them more broadly, rather than imposing the burden on individual employers and employees. A national solution to our health care crisis is needed to reduce cost burdens on American firms and workers and make U.S. production more competitive.
Public Investment: New technologies and productivity advances require wise investments, and the public sector can play an important role in stimulating such innovation. The U.S. needs a comprehensive policy on education and training, research and development, infrastructure investment, and energy independence to spur innovation and ensure it leads to the creation of more good jobs. State and local economic development policies also have an important role to play in helping American producers remain competitive in the global economy.
3) Improve Transparency and Protect Consumers
Data Collection: There are no comprehensive, official data on how many U.S. jobs have been lost to trade and offshore outsourcing. Even government statistics on service sector imports are unreliable, since they are self-reported by importing companies. The U.S. government should collect detailed and comprehensive data on the number of jobs lost overseas due to offshore investments and trade, including by requiring all companies to fully disclose this information. Greater coordination among agencies that collect labor market and international economic data is also needed.
Disclosure: Consumers have a right to know where the goods and services they purchase are produced country of origin labels on goods sold in the U.S. are required by law, but there is no policy for labeling services sold in the U.S. Firms should be required to inform consumers where the services they purchase are produced and provided from, with penalties for disclosing false information and failures to disclose.
Privacy and Security: Personal financial and medical data is being sent overseas without consumers knowledge or consent and without the full protection of domestic privacy laws. Projects with sensitive security information, such as infrastructure engineering and design, are also being sent overseas. Information with such serious privacy and security implications must be adequately protected if it is allowed to be processed abroad at all, it must be governed by the same legal safeguards that apply in the U.S. and subject to prior informed consent from consumers.
4) Assist Displaced Workers
Program Coverage: While all displaced workers need adequate notice, income support, training and health care, when resources are limited the federal government has a special obligation to assist workers who lose their jobs to trade and offshore outsourcing. The current WARN (advance notice) and Trade Adjustment Assistance (TAA) programs are intended to help trade-impacted workers make the transition to new jobs, but these displaced worker programs need to be expanded and strengthened. The WARN act should be amended to apply to more workers and provide more notice before layoff. TAA needs to be expanded to cover all workers who lose their jobs to import competition or production shifts, regardless of the sector (manufacturing or services) in which they work or the country to which their job has gone.
Program Administration: Significant additional funding will be needed to finance this expansion, and to support improved outreach, program administration, income support, health care, training, and wage insurance benefits that reach every worker who needs them. The Department of Labor must demonstrate the will to ensure workers receive the benefits to which they are entitled, and assist states in the effective administration of these benefits. Additionally, TAA programs should continue to be administered by state workforce agencies and state merit-staff, not contracted out to non-governmental entities.
5) Support Equitable and Sustainable Development Abroad
Development: Stimulating robust and stable development around the world not only benefits workers in other countries it is essential to building a more balanced global economy where workers and countries can engage in high-road competition based on skills and productivity instead of a race to the bottom in wages and working conditions. Until workers in other countries are able to earn a decent wage and build a middle class, they will never be able to purchase the goods and services they produce, much less consume those produced in the U.S.
Workers Rights: The international community must recognize strong workers rights as a key foundation for vigorous democracy and equitable economic development, and incorporate obligations to uphold these fundamental rights in international rules and institutions. Research shows observing workers rights is good for growth and it contributes to development by building democratic institutions, decreasing inequality, and encouraging political participation.
Underestimating the role of workers rights in development ignores the history of the wealthiest countries, where unions proved critical to democratization and the growth of a middle class.
Debt Relief and Aid: Crippling debt burdens prevent many developing countries from meeting basic human needs and investing in the building blocks of development. Many indebted governments pursue short-term, export-led growth strategies to earn the dollars they need to pay the costs of debt service strategies that do little to promote sustainable development and put even more competitive pressure on American workers. The U.S. must work with other creditors to relieve unpayable debt burdens and enable governments to invest the resulting savings in development. In addition, the U.S. must increase development aid and ensure its delivery is guided by democratic participation from those most affected.
International Financial Institutions: Too often, the International Monetary Fund (IMF) and the World Bank pressure countries to reform their economies in the wrong direction. They press for deregulation, privatization, liberalization of trade and financial markets, and rolling back labor market regulations, urging that such steps are needed to attract foreign investors and expand exports. These policy prescriptions have failed to create robust growth and reduce poverty, and they speed up the race to the bottom for workers everywhere. The international financial institutions must be fundamentally reformed to work with developing country governments, trade unions, and other citizens organizations to promote core workers rights, strengthen the rule of law and democratic institutions, and invest in domestically-oriented development strategies.
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"New Report: 30 Million Service Jobs May Be Shipped Overseas"
[Digg] by James Parks, Jan 23, 2009
http://blog.aflcio.org/2009/01/23/new-report-30-million-service-jobs-may-be-shipped-overseas/
Recent telecommunications advances, especially the Internet, could theoretically put more than 30 million U.S. jobs at risk of being exported overseas. Services previously needed to be performed domestically theoretically can be done anywhere in the world through the Internet, four U.S. Bureau of Labor Statistics (BLS) analysts say in an article appearing in the agencys Monthly Labor Review.
The 160 occupations considered capable of being performed in other countries account for some 30.3 million workers, one-fifth of total U.S. employment and cover a wide array of job functions, pay rates and educational levels.
More than half of the vulnerable jobs in the BLS study are professional and related occupations, including computer and mathematical science occupations and architecture and engineering jobs, and many office and administrative support occupations also are considered susceptible.
Since 2000, corporations have shipped more than 525,000 white-collar overseas, according to the AFL-CIO Department for Professional Employees (DPE).Some estimates say up to 14 million middle-class jobs could be exported out of our nation in the next 10 years. Accountants, software engineers, X-ray technicians, all are losing their jobs as corporations look for low-wage workers in countries such as India and China.
Meanwhile, the jobs being created in the United States often are low-wage jobs that dont offer health coverage or ensure retirement security. Nearly one-quarter of the nations workers labor in jobs that generally pay less than the $8.85 hourly wage the U.S. government says it takes to keep a family of four out of poverty. Sixty percent of such workers are women, and many are people of color.
Among the occupations most susceptible to being sent overseas, the BLS analysts say, are those that produce information and do not require face-to-face contact. Among the most vulnerable are office and administrative support jobs, with relatively low education or training requirements, including telephone operators, payroll and timekeeping clerks, and word processors and typists.
Another 11 of the highest ranked jobs are professional and related occupations, which generally possess higher educational requirements. They include pharmacists, computer programmers, biochemists and biophysicists, architectural and civil drafters, financial analysts, paralegals and legal assistants.
Among the occupations least likely to be shipped overseas are financial managers, food scientists and technologists, front-line retail sales managers, and training and development specialists.
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Finally, the eight links below also have more pertinent information on this:
Ulster County Executive Michael Hein's Council of Economic Advisers
http://www.co.ulster.ny.us/downloads/EcoDevTaskForceReport.pdf
Rochester Democrat and Chronicle info on Dutchess County Empire Zone (and all in NYS):
http://php.democratandchronicle.com/RocDocs/taxcredits/
Binghamton Press and Sun-Bulletin info on Dutchess County Empire Zone (and all in NYS):
http://www.pressconnects.com/assets/pdf/CB81019731.PDF
"Across the Nation, IBM Leaves a Trail of Broken Promises" Times Herald Record C. Young 7/27/08
http://www.recordonline.com/apps/pbcs.dll/article?AID=/20080727/BIZ21/80725017
"Does Tax Code Send U.S. Jobs Offshore?" by David J. Lynch [USA Today 3/20/08]
http://www.usatoday.com/money/perfi/taxes/2008-03-20-corporate-tax-offshoring_N.htm
"Timeline: IBM East Fishkill Over the Years" by Craig Wolf [1/28/09]
http://www.poughkeepsiejournal.com/article/20090128/BUSINESS01/901280339
"Getting Our Money's Worth: The Case for IDA Reform in New York State"
[New York Jobs With Justice May 2007 ( http://www.nyjwj.org/docs/GO$W.pdf )]
"Little Done To Fix Empire Zone Tax Program" by Mike McAndrew [Syracuse Post-Standard 7/13/08]
http://www.syracuse.com/news/index.ssf?/base/news-0/1215939359223980.xml&coll=1
Joel Tyner
County Legislator
Clinton/Rhinebeck
joeltyner@earthlink.net
DutchessDemocracy.blogspot.com
(845) 876-2488
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These seven articles below have much more information on this issue:
"IBM East Fishkill Continues Layoffs Today" by Craig Wolf [Poughkeepsie Journal 1/28/09]
http://www.poughkeepsiejournal.com/article/20090128/BUSINESS01/901280341
"IBM Posts Record Revenue, Profit for 2008" by Julie Moran Alterio
http://www.lohud.com/article/2008901210324 [The Journal News 1/22/09]
"Jobless Rate Highest Since 1993 IBM Downsizing" by Craig Wolf [Poughkeepsie Journal 1/23/09]
http://www.poughkeepsiejournal.com/article/20090123/BUSINESS/901230325
"IBM Lays Off Hundreds in Dutchess" [Associated Press 1/28/09]
http://www.dailyfreeman.com/articles/2009/01/28/news/doc497fe5f144350528209256.txt
"Does Giving Big Green to Big Blue Pay Off? States Throw Money at IBM, But Company Shifts Jobs Around the Globe"July 27, 2008 Albany Times-Union Christine Young
http://timesunion.com/AspStories/story.asp?storyID=706921&TextPage=2
"De-Escalating the 'Economic War Among the States' & Reforming the Development Subsidy Game"
Presentation by Frank J. Mauro, Executive Director, Fiscal Policy Institute
http://www.fiscalpolicy.org/syracuseAug2000speech.htm
"Congress Should End the Economic War Among the States" by Melvin L. Burstein and Arthur J. Rolnick of the Federal Reserve Bank of Minneapolis
http://woodrow.mpls.frb.fed.us/pubs/ar/ar1994.cfm
These ten websites also have provide much more documentation on this issue:
www.petitiononline.com/statewar; www.AllianceIBM.org; www.Clawback.org
www.ctj.org/html/corp0402.htm; www.aflcio.org/issues/jobseconomy/exportingamerica/
www.epinet.org/content.cfm/issueguide_offshoring
www.goodjobsfirst.org/corporate_subsidy/overview.cfm
www.blog.aflcio.org/2009/01/10/obama-economic-plan-create-made-in-america-jobs/
www.GreatAmericanJobsScam.com; www.FiscalPolicy.org/HR1060.htm
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[this submitted to our County Legislature's offices Jan. 28th; email countylegislators@co.dutchess.ny.us!]
WHEREAS, the Journal News reported January 22nd that Mark Loughridge, Senior Vice President and Chief Financial Officer for IBM, stated, "the fourth quarter wrapped up an exceptional year in which we delivered record revenue of over $103 billion, record profit of $16.7 billion, record earnings per share of $8.93 and record free cash flow of $14 billion, up almost $2 billion year to year; that's a lot of records"; in the fourth quarter, IBM beat the consensus estimate of Wall Street analysts of around $3 a share with earnings of $3.28 per share, up 17 percent from the $2.80 a share recorded in the final quarter of 2007; IBM's income was up 12 percent to $4.43 billion from $3.95 billion a year earlier, and
WHEREAS, IBM filed notice in late January that it will cut hundreds of positions at East Fishkill's Hudson Valley Research Park as of April 27, as the state Department of Labor has confirmed; published reports put the layoff number at IBM's East Fishkill plant between 400 and 750, with another 90 to 100 jobs being eliminated at IBM-Poughkeepsie, and
WHEREAS, IBM also cut 265 positions in 2007, while increasing profits by over a billion dollars; one estimate of IBM's recent job cuts put the number at more than 4,000 jobs lost since IBM's fourth-quarter earnings announcement in January; those earnings contained an unexpected surprise: IBM forecast at least $9.20 per share in profit in 2009, and
WHEREAS, according to the Associated Press, in 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the United States, down slightly from the year before; the company's staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007, and
WHEREAS, the fact is also that IBM has literally spent $26 billion since 2007 buying back stock instead of investing in keeping its employees; last year Dutchess County taxpayers spent $286,138.42 on vendor payments for various IBM products; corporations like IBM now pay literally half the state income taxes they did in the early 1970's under Governor Nelson Rockefeller, and
WHEREAS, Dutchess County's unemployment rate was 6.1 percent this past December, with 8,900 people out of work and looking, up from 5.5 percent in November and far higher than December 2007 when the rate was 4 percent, and this past December's unemployment rate was also the highest December posting since the 8 percent of 1993, and
WHEREAS, in 2000 Governor George Pataki announced that New York would help IBM with $660 million in state and local incentives; in return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs; as of last year, 1,400 people were working at the East Fishkill plant, and
WHEREAS, last July Governor David Paterson called for another $140 million for IBM, together with a $1.5 billion investment by IBM itself, including $75 million from taxpayers for 1,000 new jobs: 325 at UAlbany's NanoCollege and another 675 at an upstate facility that has yet to be sited, with the remaining $65 million to help finance the expansion and upgrade of IBM's East Fishkill plant, in return for IBM's pledge to retain 1,400 semiconductor jobs at the Dutchess County site, and
WHEREAS, the Fiscal Policy Institute and many others have questioned why state taxpayers were asked last July to pay another $65 million, de facto double-billing, to keep IBM employees in East Fishkill, since New York state and local taxpayers already paid an estimated $660 million for those same 1,000 jobs, and
WHEREAS, according to Citizens for Tax Justice, IBM reported $5.7 billion in U.S. profits in 2000, but paid only 3.4 percent of that in federal income taxes; in 1997, IBM reported $3.1 billion in U.S. profits, and instead of paying taxes, got an outright tax rebate; from 1997 to 2002, IBM received $4.7 billion in corporate tax welfare, and
WHEREAS, since 2000, corporations have shipped more than 525,000 white-collar overseas; from 2000 through 2005, U.S. multinational corporations eliminated 2.1 million jobs at home while adding 784,000 to their payrolls abroad, according to the Bureau of Economic Analysis; at the end of 2005, U.S. corporations employed almost 9 million people outside the United States, and a study published in Tax Notes last March concluded that multinational companies shifted almost $50 billion in income to low-tax countries in 2004, depriving the government of $17.4 billion in tax revenue, and
WHEREAS, USA Today reported last March that corporate profits earned in the United States are subject to the 35\% corporate tax, but multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to this country, transfers that often don't happen for years; General Electric, for example, has $62 billion in "undistributed earnings" offshore, according to recent Securities and Exchange Commission filings, Pfizer has $60 billion, and ExxonMobil has $56 billion, and
WHEREAS, current federal law law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore; this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S.; ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes, and
WHEREAS, many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements; these taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas, and
WHEREAS, the U.S. government should collect detailed and comprehensive data on the number of jobs lost overseas due to offshore investments and trade, including by requiring all companies to fully disclose this information; firms should also be required to inform consumers where the services they purchase are produced and provided from, with penalties for disclosing false information and failures to disclose, and
WHEREAS, the federal government has a special obligation to assist workers who lose their jobs to trade and offshore outsourcing; the current WARN (advance notice) and Trade Adjustment Assistance (TAA) programs are intended to help trade-impacted workers make the transition to new jobs, but these displaced worker programs need to be greatly expanded and strengthened, and
WHEREAS, President Barack Obama co-sponsored legislation last year in the Senate that would give "Patriot Employer" corporations a tax credit equal to 1\% of their taxable income if they maintain or increase the ratio of their U.S. workforce to the number of workers abroad, keep their headquarters in the U.S. and meet other wage, health care and pension requirements, as the U.S. takes in less annual revenue from corporate taxes, measured as a percentage of economic output, than almost all other major economies, and
WHEREAS, the Binghamton Press and Sun-Bulletin and Rochester Democrat and Chronicle websites have long had information on the Dutchess County Empire Zone and other Empire Zones throughout the state regarding monies, benefits, and assistance received, jobs promised, and jobs created, and therefore be it
RESOLVED, that the Dutchess County Legislature embrace and set in motion the following six-point plan to revitalize our local economy with greater corporate accountability for companies like IBM:
-- First, that the Dutchess County Legislature co-host with the County Executive a public forum within a month on the current recession to hear input, ideas, and suggestions from local taxpayers on what steps Dutchess County government should take to put more local residents back to work, and
-- Second, that a new Dutchess County Economic Revitalization Task Force be created, to be composed of twenty economic advisers as Ulster County recently wisely chose to do, ten to be appointed by the County Legislature Chair and ten from the County Legislature Minority Leader, that task force to meet publicly, allow public input at its meetings, and report back to the County Legislature and County Executive monthly as this is the most important issue in Dutchess County, and be it further
-- Third, that the Dutchess County Legislature requests that IBM must make every effort to save jobs; if cost cutting is needed, IBM should suspend its stock buyback program, and if job cuts occur, IBM must divulge the number of job cuts, where they are taking place and whether any of these affected jobs are being shifted offshore; executive positions should be eliminated in divisions where job cuts occur; pay, bonuses and perquisites for executives should be slashed; work should not be shifted from IBM workers in the United States to offshore locations; full disclosure of why individual jobs are being eliminated is essential, and before any new hires are added to the payroll, IBM must recall and rehire employees terminated in past resource actions, and be it further
-- Fourth, that the Dutchess County Legislature requests that the Dutchess County Economic Development Corporation work with the Dutchess County Empire Zone and Dutchess County Industrial Development Agency to greatly increase transparency and accountability for companies like IBM by making it easier for all Dutchess County residents to know about monies, benefits, and assistance received, jobs promised, and jobs created by putting that information online, and
-- Fifth, that the Dutchess County Legislature calls on Congress and President Barack Obama and to pass and sign legislation that protects U.S. jobs by ending tax breaks for companies that shift jobs overseas, and calls for the full disclosure of offshoring and outsourcing of American jobs by IBM and other companies, initiate the Patriot Employer program proposed by President Barack Obama last year, and expand the current WARN and TAA programs for workers who have lost their jobs due to outsourcing, and
-- Sixth, that the Dutchess County Legislature request that Congress and President Barack Obama pass and sign into law the Distorting Subsidies Limitation Act, legislation supported by the Fiscal Policy Institute and Federal Reserve Bank of Minneapolis that would enact a 100\% tax on any subsidy provided by a state or local government to a corporation to locate into or remain within a government's jurisdiction, effectively rendering such subsidies ineffective and unneeded, thereby saving billions annually for New York taxpayers, for example, and
RESOLVED, that a copy of this resolution be sent to President Barack Obama, Senators Charles Schumer and Kirsten Gillibrand, Representatives John Hall and Maurice Hinchey, County Executive William Steinhaus, Dutchess County Economic Development Corporation, Dutchess County Empire Zone, and Dutchess County Industrial Development Agency.
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"Does Giving Big Green to Big Blue Pay Off? States Throw Money at IBM, But Company Shifts Jobs Around the Globe" by Christine Young [Albany Times-Union 7/27/08]
http://timesunion.com/AspStories/story.asp?storyID=706921&TextPage=2
It was December 2004, and Tulsa, Okla., was abuzz with excitement.
IBM, which already employed more than 1,200 in Tulsa, had made a deal with Oklahoma to add another 1,000 jobs by 2009. In return, Big Blue would get $35.2 million in rebates over 10 years.
Calling it "great news for Tulsa and for all of Oklahoma," Gov. Brad Henry praised IBM as "a vital and valuable corporate citizen." He said the deal "signifies good things for both IBM and Tulsa."
He was only half right.
Since the 2004 agreement, the Oklahoma Tax Commission has sent Big Blue more than $4.4 million in rebates. Yet state figures show the company's job count is the same today as it was before the deal was signed.
This raises questions for the state of New York and Albany, where the ink is still drying on an agreement with IBM that will cost taxpayers $140 million for promises of job creation and economic development.
IBM employs hundreds at the University at Albany's College of Nanoscale Science and Engineering on Fuller Road, site of much of the company's cutting-edge computer chip research. It also has a big office in downtown Albany on State Street, devoted largely to serving state government clients.
And while Big Blue is one of New York's largest employers, with 11,600 workers in Dutchess County and 20,000 across the Hudson Valley, Oklahoma's experience offers a cautionary note and reason to wonder if New York's investment is money well spent.
Economic development packages are great for politicians. Jobs are promised, deals are signed, happy headlines are made.
But what happens after the hoopla?
Since the Oklahoma celebration, there appears to have been no follow-up or oversight by the state.
Last week, the marketing director for the Oklahoma Department of Commerce had no idea if IBM had kept its end of the bargain.
"I would imagine that they had," Beth Schmidt said. "It's performance based -- if they meet the requirements and add those jobs."
Yet a January report from Schmidt's agency shows IBM Tulsa's payroll remains near 1,200, the same as it was before the agreement.
And in May, IBM announced 350 Tulsa accounting and finance positions were going to Argentina...
Exuberance over IBM's presence, be it in Oklahoma or New York, is not unusual.
In Boulder, Colo., the city doled out a $100,000 tax rebate to IBM on top of state incentives worth $632,000 to get Big Blue to put a "green" data center there.
"The city's money was really an indication to IBM corporate that Boulder really cares about having this company here," Frances Draper of the Boulder Economic Council told reporters.
"That was an incredibly important part of their decision."
This year, IBM has slashed 400 jobs in Boulder.
And the dirty secret is no one wants to take on IBM for fear of losing jobs and hurting the local economy, especially in areas such as Dutchess County, where IBM is such a vital player.
"Nobody wants to throw the baby out with the bath water," Dutchess County Legislator Joel Tyner said.
And so New York went ahead with a pact with IBM, requiring a hefty donation from taxpayers, announcing it one day before Big Blue's second-quarter profit jumped a dizzying 22 percent to $2.77 billion, defying even Wall Street's expectations.
The agreement with the Westchester County-based technology giant, announced by Gov. David Paterson on July 15, calls for a $1.5 billion investment by IBM and $140 million by the state.
It includes $75 million from taxpayers for 1,000 new jobs-- 325 at UAlbany's NanoCollege and another 675 at an upstate facility that has yet to be sited.
The remaining $65 million will help finance the expansion and upgrade of IBM's East Fishkill plant, in return for IBM's pledge to retain 1,400 semiconductor jobs at the Dutchess County site.
Paterson said the arrangement is "what we are going to need to reignite the engine of the state's economy."
But to Frank Mauro of the Fiscal Policy Institute, a nonpartisan research and education organization in Latham, it brings a sense of deja vu.
Mauro recalls in 2000, then-Gov. George Pataki announced New York was bankrolling IBM with $660 million in state and local incentives. In return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs.
Eight years later, 1,400 people work at the East Fishkill plant. But Mauro wonders why the state suddenly has to pay another $65 million to keep them there.
It "seems like double billing, since New York state and local taxpayers already paid an estimated $660 million for those 1,000 jobs," he said. "It would be good to know ... how long IBM was required to maintain those 1,000 jobs"...
Dutchess County, where IBM has invested more than $5 billion over the past 10 years, recently gave Big Blue a tax break for a possible $36 million upgrade of its Poughkeepsie plant.
The upgrade would give Poughkeepsie a competitive edge against IBM sites elsewhere, such as North Carolina and Colorado, said Michael Tomkovich, chairman of the Dutchess County Industrial Development Agency.
Tyner, the county legislator, called the breaks a "bad deal" for local taxpayers.
"It's time to end this economic battle between the states," he said. "We need to remove the ability of these companies to hold us over a barrel."
In fact, Big Blue scored big in North Carolina by leveraging competition among states.
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"IBM Lays Off Hundreds in Dutchess"
Wednesday, January 28, 2009 3:06 AM EST
By The Associated Press [Daily Freeman]
http://www.dailyfreeman.com/articles/2009/01/28/news/doc497fe5f144350528209256.txt
IBM CORP. has eliminated hundreds of jobs in Dutchess County as part of thousands of layoffs extending across at least eight plants run by the computer giant.
Published reports put the layoff number at IBMs East Fishkill plant between 400 and 750, with another 90 to 100 jobs being eliminated at IBM-Poughkeepsie.
There also were IBM layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; Austin, Texas; and Burlington, Vt.
IBM said it doesnt have to reveal the number of jobs it is cutting, because the Securities and Exchange Commission requires companies to disclose only material events and IBM considers its job cuts to be a regular part of the companys business model. The company noted that it eliminates thousands of jobs every year but usually adds some back in other places.
Because of that, IBM contended it doesnt have to break out its layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts.
Thats why while IBMs head count keeps growing, topping 400,000 at the end of 2008, laid-off IBM workers have flooded online job boards with complaints about the companys stealth cuts.
One estimate of IBMs recent cuts put the number at more than 4,000 jobs lost since IBMs fourth-quarter earnings announcement last week. Those earnings contained an unexpected surprise: IBM forecast at least $9.20 per share in profit in 2009. IBM shares are up more than 10 percent since then.
The Associated Press reviewed one document sent to laid-off workers that identified some of the positions that were cut. Employees werent identified by name, but positions and the workers ages were listed. The document listed nearly 3,000 jobs.
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"IBM Is Cutting Jobs; Maybe Some Locally"
BY CRAIG WOLF POUGHKEEPSIE JOURNAL JANUARY 22, 2009
http://www.poughkeepsiejournal.com/article/20090122/BUSINESS01/901220332/1003/business
Job cuts that began Wednesday within IBM Corp. will likely be seen in the divisions that have large numbers of employees in Dutchess County next week, according to the head of a workers group.
The company confirmed "resource actions" began Wednesday but refused to comment on specifics or sites involved, or any plans.
Lee Conrad, national coordinator for the Alliance@IBM, said from reports he's getting from people inside the company, "Systems and Technology will get hit Tuesday - East Fishkill, Poughkeepsie and Burlington; Fishkill and Burlington the heavy hitters."
The two Dutchess County sites, plus Burlington, Vt., are in IBM's Systems and Technology Group, which makes computers and microchips.
IBM, the region's largest private employer, has said it employed 11,600 in Dutchess at the end of 2007. It hasn't posted end-of-2008 numbers yet.
Conrad said he's learned IBM's Software Group had cuts of about 1,400 people in the U.S. and Canada and the sales and distribution group also had cuts. Software has a contingent in Dutchess; sales staff are widely spread.
"Other divisions, I think, will probably spread out over a couple days and next week. That seems to be the pattern they've done in the past," Conrad said.
The day after IBM reported rising profits and a year that was its first as a $100 billion company, it began the nationwide series of cuts.
Spokesman Doug Shelton confirmed IBM management had notified some employees about "resource actions," the usual term for large-scale job eliminations.
"We are not going to discuss specific numbers or locations. What I can tell you is that managing resources and skills is an ongoing component of our business model," he said in an e-mail.
Skill, Resources Mix
"IBM continuously evaluates its mix of skills and resources, and makes changes as needed," Shelton said. "The nature of our business is that we must constantly assess employee skills and resources and at any given time, give IBM the flexibility to match the current and future needs of our clients (skills that the client needs).
"Managing talent in this way promotes the continued competitiveness of our operations and matches our skills and capabilities with the evolving needs of our clients. We anticipate some employees will find other positions that match their skills within IBM, and we're enabling them in that effort," he said.
In the past, IBM has been more specific about major staff reductions. Conrad said secrecy has long been management's way, but not to this extent.
"I think it gives them a bad reputation when they cut jobs, and they don't like that," he said.
It may also affect tax favors the company gets from states such as New York, he said.
"IBM's cutting jobs around the country and they're cutting them in states that have handed out tax breaks to the company," Conrad said. "They're being arrogant."
New York is giving IBM $140 million as IBM invests $1.5 billion in three New York state programs.
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From www.aflcio.org/issues/jobseconomy/exportingamerica/outsourcing_solutions.cfm...
Policy Solutions to Shipping Jobs Overseas
Home>Issues>Jobs, Wages & the Global Economy>Exporting America
Many experts have argued that losing jobs overseas is both inevitable and ultimately healthy for the U.S. economy. They claim that policy solutions that would inhibit the movement of jobs within an unfettered global marketplace will be counter-productive and costly. What these arguments ignore, however, is that the destruction of U.S. jobs is not occurring on a level playing field resulting from neutral policies. Rather, a broad range of state and federal policies allow, facilitate and even reward the destruction of U.S. jobs. Government policies lavish tax breaks, government contracts, and easy access to the U.S. market on companies that destroy good jobs and exploit lax workers rights to produce overseas. These misguided policies hurt Americas working families and fail to promote equitable economic development in other countries.
Policymakers must reform policies that encourage and reward job destruction and implement new policies that will create good jobs for the future. While no single policy measure provides a magic bullet for stopping job loss, a dramatic re-orientation of U.S. policy that removes incentives for shipping jobs offshore, while fostering healthy conditions at home for job creation, will go a long way towards building a more balanced global economy that works for working families.
1) Remove Incentives to Ship Jobs Overseas
Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.
Public Contracts and Subsidies: Many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements. These taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas. Laws at the local, state and federal level should be reformed to ensure our taxpayer dollars are not subsidizing the destruction of American jobs.
Currency: A number of U.S. trading partners China in particular manipulate the value of their currency relative to the dollar to give their exports to the U.S. an artificial cost advantage, while making American products more expensive. This puts American producers and workers at an impossible cost disadvantage, effectively shutting them out of export markets and undermining their competitiveness at home. The U.S. must take immediate and aggressive action to ensure that the dollar is appropriately valued and withdraw trade benefits from countries that insist on manipulating their currency to unfair advantage, in violation of international trade rules.
Trade Laws: Domestic trade laws enable the government to redress unfair trade practices that give an illegitimate advantage to overseas production. These laws were intended to provide the first line of defense for American producers and workers, yet they are very poorly enforced. The World Trade Organization has weakened our ability to use these laws, and on-going trade negotiations may undermine these laws even further. We must vigorously enforce our domestic trade laws, defend them from challenge, and work to strengthen them in the future.
Trade Agreements: Trade deals such as the North American Free Trade Agreement (NAFTA) create new rights, but no responsibilities, for companies that ship jobs overseas. NAFTA contains strong legal protections for companies investing abroad and guaranteed access for their products into the U.S. market. But NAFTA provides no comparable protections for the rights of workers and the environment, allowing companies to escape their international obligations by shipping work overseas. We must fundamentally reform flawed trade rules to hold companies accountable for respecting workers rights no matter where they produce.
2) Rewardthe Creation of Good Jobs in the United States
Health Care: Ballooning health care costs are creating a crisis for all American families and companies, with particularly devastating impacts on American manufacturers. The absence of a functional health care policy in the U.S. not only denies millions access to quality, affordable health care it also impairs our companies ability to compete with companies in nations that control costs and share them more broadly, rather than imposing the burden on individual employers and employees. A national solution to our health care crisis is needed to reduce cost burdens on American firms and workers and make U.S. production more competitive.
Public Investment: New technologies and productivity advances require wise investments, and the public sector can play an important role in stimulating such innovation. The U.S. needs a comprehensive policy on education and training, research and development, infrastructure investment, and energy independence to spur innovation and ensure it leads to the creation of more good jobs. State and local economic development policies also have an important role to play in helping American producers remain competitive in the global economy.
3) Improve Transparency and Protect Consumers
Data Collection: There are no comprehensive, official data on how many U.S. jobs have been lost to trade and offshore outsourcing. Even government statistics on service sector imports are unreliable, since they are self-reported by importing companies. The U.S. government should collect detailed and comprehensive data on the number of jobs lost overseas due to offshore investments and trade, including by requiring all companies to fully disclose this information. Greater coordination among agencies that collect labor market and international economic data is also needed.
Disclosure: Consumers have a right to know where the goods and services they purchase are produced country of origin labels on goods sold in the U.S. are required by law, but there is no policy for labeling services sold in the U.S. Firms should be required to inform consumers where the services they purchase are produced and provided from, with penalties for disclosing false information and failures to disclose.
Privacy and Security: Personal financial and medical data is being sent overseas without consumers knowledge or consent and without the full protection of domestic privacy laws. Projects with sensitive security information, such as infrastructure engineering and design, are also being sent overseas. Information with such serious privacy and security implications must be adequately protected if it is allowed to be processed abroad at all, it must be governed by the same legal safeguards that apply in the U.S. and subject to prior informed consent from consumers.
4) Assist Displaced Workers
Program Coverage: While all displaced workers need adequate notice, income support, training and health care, when resources are limited the federal government has a special obligation to assist workers who lose their jobs to trade and offshore outsourcing. The current WARN (advance notice) and Trade Adjustment Assistance (TAA) programs are intended to help trade-impacted workers make the transition to new jobs, but these displaced worker programs need to be expanded and strengthened. The WARN act should be amended to apply to more workers and provide more notice before layoff. TAA needs to be expanded to cover all workers who lose their jobs to import competition or production shifts, regardless of the sector (manufacturing or services) in which they work or the country to which their job has gone.
Program Administration: Significant additional funding will be needed to finance this expansion, and to support improved outreach, program administration, income support, health care, training, and wage insurance benefits that reach every worker who needs them. The Department of Labor must demonstrate the will to ensure workers receive the benefits to which they are entitled, and assist states in the effective administration of these benefits. Additionally, TAA programs should continue to be administered by state workforce agencies and state merit-staff, not contracted out to non-governmental entities.
5) Support Equitable and Sustainable Development Abroad
Development: Stimulating robust and stable development around the world not only benefits workers in other countries it is essential to building a more balanced global economy where workers and countries can engage in high-road competition based on skills and productivity instead of a race to the bottom in wages and working conditions. Until workers in other countries are able to earn a decent wage and build a middle class, they will never be able to purchase the goods and services they produce, much less consume those produced in the U.S.
Workers Rights: The international community must recognize strong workers rights as a key foundation for vigorous democracy and equitable economic development, and incorporate obligations to uphold these fundamental rights in international rules and institutions. Research shows observing workers rights is good for growth and it contributes to development by building democratic institutions, decreasing inequality, and encouraging political participation.
Underestimating the role of workers rights in development ignores the history of the wealthiest countries, where unions proved critical to democratization and the growth of a middle class.
Debt Relief and Aid: Crippling debt burdens prevent many developing countries from meeting basic human needs and investing in the building blocks of development. Many indebted governments pursue short-term, export-led growth strategies to earn the dollars they need to pay the costs of debt service strategies that do little to promote sustainable development and put even more competitive pressure on American workers. The U.S. must work with other creditors to relieve unpayable debt burdens and enable governments to invest the resulting savings in development. In addition, the U.S. must increase development aid and ensure its delivery is guided by democratic participation from those most affected.
International Financial Institutions: Too often, the International Monetary Fund (IMF) and the World Bank pressure countries to reform their economies in the wrong direction. They press for deregulation, privatization, liberalization of trade and financial markets, and rolling back labor market regulations, urging that such steps are needed to attract foreign investors and expand exports. These policy prescriptions have failed to create robust growth and reduce poverty, and they speed up the race to the bottom for workers everywhere. The international financial institutions must be fundamentally reformed to work with developing country governments, trade unions, and other citizens organizations to promote core workers rights, strengthen the rule of law and democratic institutions, and invest in domestically-oriented development strategies.
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"New Report: 30 Million Service Jobs May Be Shipped Overseas"
[Digg] by James Parks, Jan 23, 2009
http://blog.aflcio.org/2009/01/23/new-report-30-million-service-jobs-may-be-shipped-overseas/
Recent telecommunications advances, especially the Internet, could theoretically put more than 30 million U.S. jobs at risk of being exported overseas. Services previously needed to be performed domestically theoretically can be done anywhere in the world through the Internet, four U.S. Bureau of Labor Statistics (BLS) analysts say in an article appearing in the agencys Monthly Labor Review.
The 160 occupations considered capable of being performed in other countries account for some 30.3 million workers, one-fifth of total U.S. employment and cover a wide array of job functions, pay rates and educational levels.
More than half of the vulnerable jobs in the BLS study are professional and related occupations, including computer and mathematical science occupations and architecture and engineering jobs, and many office and administrative support occupations also are considered susceptible.
Since 2000, corporations have shipped more than 525,000 white-collar overseas, according to the AFL-CIO Department for Professional Employees (DPE).Some estimates say up to 14 million middle-class jobs could be exported out of our nation in the next 10 years. Accountants, software engineers, X-ray technicians, all are losing their jobs as corporations look for low-wage workers in countries such as India and China.
Meanwhile, the jobs being created in the United States often are low-wage jobs that dont offer health coverage or ensure retirement security. Nearly one-quarter of the nations workers labor in jobs that generally pay less than the $8.85 hourly wage the U.S. government says it takes to keep a family of four out of poverty. Sixty percent of such workers are women, and many are people of color.
Among the occupations most susceptible to being sent overseas, the BLS analysts say, are those that produce information and do not require face-to-face contact. Among the most vulnerable are office and administrative support jobs, with relatively low education or training requirements, including telephone operators, payroll and timekeeping clerks, and word processors and typists.
Another 11 of the highest ranked jobs are professional and related occupations, which generally possess higher educational requirements. They include pharmacists, computer programmers, biochemists and biophysicists, architectural and civil drafters, financial analysts, paralegals and legal assistants.
Among the occupations least likely to be shipped overseas are financial managers, food scientists and technologists, front-line retail sales managers, and training and development specialists.
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Finally, the eight links below also have more pertinent information on this:
Ulster County Executive Michael Hein's Council of Economic Advisers
http://www.co.ulster.ny.us/downloads/EcoDevTaskForceReport.pdf
Rochester Democrat and Chronicle info on Dutchess County Empire Zone (and all in NYS):
http://php.democratandchronicle.com/RocDocs/taxcredits/
Binghamton Press and Sun-Bulletin info on Dutchess County Empire Zone (and all in NYS):
http://www.pressconnects.com/assets/pdf/CB81019731.PDF
"Across the Nation, IBM Leaves a Trail of Broken Promises" Times Herald Record C. Young 7/27/08
http://www.recordonline.com/apps/pbcs.dll/article?AID=/20080727/BIZ21/80725017
"Does Tax Code Send U.S. Jobs Offshore?" by David J. Lynch [USA Today 3/20/08]
http://www.usatoday.com/money/perfi/taxes/2008-03-20-corporate-tax-offshoring_N.htm
"Timeline: IBM East Fishkill Over the Years" by Craig Wolf [1/28/09]
http://www.poughkeepsiejournal.com/article/20090128/BUSINESS01/901280339
"Getting Our Money's Worth: The Case for IDA Reform in New York State"
[New York Jobs With Justice May 2007 ( http://www.nyjwj.org/docs/GO$W.pdf )]
"Little Done To Fix Empire Zone Tax Program" by Mike McAndrew [Syracuse Post-Standard 7/13/08]
http://www.syracuse.com/news/index.ssf?/base/news-0/1215939359223980.xml&coll=1
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