Economic News 1999 May

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updated: 2018-03-30
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1999-05-07
_InterBizNet_
"Challenger, Gray, & Christmas (a Chicago based out-placement firm) notes from a study of lay-offs circa 1993-1998 that the computer industry is a large-scale creator AND eliminator of Jobs."

1999-05-07
_PEN-L_
54,399 lay-offs were announced in April
"Businesses announced in April that they would cut 54,399 jobs, the lowest level in 6 months, according to a report by Challenger, Gray & Christmas.   The number of job cuts declined 21% compared with March's total of 68,984.   This made April the lowest job-cut month since November... (Daily Labor Report, page A2)."

1999-05-13
Jonathan Katz
What Is Political Correctness?
"What is political correctness, where did it come from, and why is it so influential at universities?   It is the object of widespread ridicule, usually a very powerful weapon, so why doesn't it go away?   I used to think it was a simple matter of conformism, but there is a lot more to it than that.   Political correctness is also sometimes regarded as synonymous with 'left-wing' politics, but I think it is a tool rather than a specific set of political positions, and it appears in apolitical contexts also.   Consider, for example, the indignant letters that appear (as did recently in my local paper) when a newspaper publishes a picture of someone bicycling without a helmet.   These letters criticize the newspaper for publishing the picture.   We may be justified in criticizing hazardous or reckless behavior, but why should a newspaper suppress the fact that people act that way?"

1999-05-13
Jonathan Katz
Diversity Is the Last Refuge of the Scoundrel
"The air is full of talk of 'diversity', meaning the ethnic and racial composition of populations, work-forces and (especially) student bodies at universities.   This is shorthand for concern about how many members of various 'racial' groups are present.   Most biologists doubt that race is meaningful in describing people, unlike dogs or cattle, but in everyday life the term 'race' is used as a proxy for physical appearance.   It is remarkable that the harder it is to evaluate accomplishment, and the less accomplishment matters to an institution, the more concern there is with diversity.   In the absolute meritocracy of a used car lot, all that matters is whether a salesman can 'move the iron', and no one talks about diversity.   In large corporate bureaucracies, government and academia, in which accomplishment is hard to measure and has only distant effects on the success and survival of the organization, diversity is always on the agenda.   The concern for 'diversity' can be an obsession.   For example, at some universities the administrators appear hardly ever to think of anything else.   Every public statement must drag in diversity, no matter how irrelevant.   No platform or program is complete without a nod to diversity.   The majority of public lectures concern diversity-related issues, with all the other areas of human knowledge and concern, from Shakespeare to molecular biology, confined to a minority (at my institution this was true for some years, but is now [2004] less so).   Even the old-fashioned Southern racist occasionally stopped to think about the price of cotton.   Why am I so concerned about universities?   Partly because I am a professor, so I see a university close-up every day.   Most university faculties have less diversity of thought than the trio of Cotton Mather, Roger Williams and William Penn.   But they don't count, because they belonged to the wrong 'race'.   And partly because we subject our impressionable young people to them, as their first environment as adults.   University admissions are important because they are crucial to social mobility.   That is where a young person with ability and character, but no special advantages or connections, ought to be able to leave his (or her) background behind and join an aristocracy of talent.   The more university admissions are clogged with irrelevancies such as diversity, the less opportunity there is for the talented outsider, and the more the ideal of fair play is corroded.   At some institutions only 10% of the places are open to applicants who are not members of some preferred group.   Former presidents of Harvard and Princeton recently published a book (_The Shape of the River_) advertising the great advantages in life conferred by degrees from those institutions.   Prejudice should not affect the award of this privilege.   In the diversity business what matters about people is their 'race', which is taken to determine character, intellect and moral value.   That is the philosophy of National Socialism, with a different Master Race and (so far) no subhumans...   PostScript: The 2004 February 13 issue of the Chronicle of Higher Education contained an article by one of the prominent advocates of 'diversity' (a man named Stanley Fish, an administrator and formerly an English professor -- surprising, in view of his self-proclaimed limited vocabulary -- see the article for details).   He asserted that there is no place for intellectual diversity at a university.   This Fascist idea, that only one kind of thought is acceptable, is unfortunately very influential in many universities today.   Thus, as Orwell predicted, fascism comes calling itself anti-fascism.   In contrast, I assert that intellectual diversity is the only kind of diversity that has any relevance to a university's mission."

1999-05-26
Jonathan Katz
Nature Cannot be Fooled
"1986 January 28, the space shuttle Challenger exploded on launch, killing all 7 astronauts aboard in the worst space disaster ever.   This catastrophe was entirely preventable.   Engineers knew, and warned, that the solid fuel booster rockets of the shuttle were not safe in cold weather, but senior managers dismissed these warnings and insisted on launch.   At the subsequent inquiry the physicist Richard Feynman summarized the debĂ cle with the statement 'Nature cannot be fooled'.   We have not learned that lesson.   In more and more ways American society has come to confuse its wishes with reality, and to pretend that wished-for fictions are true.   In most cases these fictions are well intentioned, just as we all wish the Challenger could have been launched safely, but good intentions do not make wishes come true.   We ignore history, which shows that most airplane hijackers are Arab.   Refusing to 'ethnically profile' airline passengers, airport security paid little attention to obvious risks, with the result that more than five thousand Americans were murdered by terrorists.   All because we deliberately refused to recognize the obvious..."

1999-05-28
_Tech Law Journal_
Representative Lamar Smith urged INS to fight H-1B visa fraud
"Representative Lamar Smith, the Chairman of the House Immigration and Claims Subcommittee wrote INS Commissioner Doris Meissner on May 26 about H-1B visas being obtained fraudulently, thereby disadvantaging employers who use these visas legitimately.   Late last year Congress expanded the annual cap on H-1B visas because of [an alleged] shortage of high-tech professionals in the computer industry.   Computer industry executives lobbied and testified before committees that there is a severe shortage of high-tech workers which is threatening the industry.   The bill increased the number of H1B temporary worker visas from 65K to 115K in 1999, 115K in 2000 and 107,500 in 2001.   The visa limit will return to 65K in 2002.   Now, representative Lamar Smith (R-TX) is concerned that many of these visas are going to unqualified applicants who receive their H-1B visas fraudulently."

1999-05-09
Carol Kleiman _Chicago Tribune_ section 6 pg 1
Do "new workers" get a raw deal?
"In 1997, there were more than 12.6M US workers in these non-traditional jobs [on-call, temp, contract], according to a study [reported in the 1998 November _Monthly Labor Review_] by Sharon R. Cohany, economist at the US BLS in Washington [DC]...   Not included were the nation's 5.6M contingency workers, though there was an over-lap of 1.7M non-traditional workers who also put themselves in that category in the 1997 CPS used for the study...
  Two-thirds of the 8.5M [independent contractors] were men; some 34% had college degrees; 74% worked full time.   Jobs were [mostly] in managerial, sales & precision production work.   Average earnings were $587/week, 15% higher than [the average for] workers in traditional jobs in these categories.   Self-employed, nearly 75% had benefits.   2M [on-call] workers...
  Some 26% were college graduates.   They worked as substitute teachers, construction workers, nurses & truck drivers.   Average weekly earnings were $432 for full-time workers; 31% were eligible for benefits...   1.3M [temporary] workers...   Nearly 22% had college degrees.   [Most] worked in clerical & machine operator occupations.   Surprisingly, 80% worked full-time & averaged $329/week.   Only 7% had health benefits from their employers...
  'The great majority of the nation's 127M workers remain in traditional arrangements.', said Cohany.   'These jobs are getting stratified just like the rest of the labor market into good jobs, such as independent contractors who are doing great, & bad jobs, such as some on-call laborers who are not.', said June Lapidus, associate professor of economics at Roosevelt U.   'This leaves workers at the high end stressed out & insecure, & those at the low end without benefits or career ladders.'"

1999-05-10
Barb Cole-Gomoslki _ComputerWorld_
H-1B Visa Abuse on the Rise House Told: Critics Charge Vague Policies Leave Door Open
http://www.computerworld.com/news/1999/story/0,11280,35634,00.html
"William Yates, acting deputy commissioner at the INS, told the subcommittee that 21% of more than 3,200 H-1B visa applications that were filed during the past year through the American consulate in Chennai, India, and audited were found to be fraudulent.   The INS began working with the consulate last year to detect H-1B visa fraud.   The consulate processed 20K H-1B applications last year, mostly for computer programmers...   The most common types of fraud involve companies petitioning for H-1B visas without having a specific job for a worker and falsifying educational data, Yates said."

1999-05-13
Jonathan Katz _Washington University_
Don't Become a Scientist!
"American science no longer offers a reasonable career path.   If you go to graduate school in science it is in the expectation of spending your working life doing scientific research, using your ingenuity and curiosity to solve important and interesting problems.   You will almost certainly be disappointed, probably when it is too late to choose another career.   American universities train roughly twice as many Ph.D.s as there are jobs for them.   When something, or someone, is a glut on the market, the price drops.   In the case of Ph.D. scientists, the reduction in price takes the form of many years spent in 'holding pattern' post-doctoral jobs.   Permanent jobs don't pay much less than they used to, but instead of obtaining a real job 2 years after the Ph.D. (as was typical 25 years ago) most young scientists spend 5, 10, or more years as post-docs.   They have no prospect of permanent employment and often must obtain a new post-doctoral position and move every 2 years...   the general cheapening of scientific labor means that even the most talented stay on the post-doctoral tread-mill for a very long time...   Suppose you do eventually obtain a permanent job, perhaps a tenured professorship.   The struggle for a job is now replaced by a struggle for grant support, and again there is a glut of scientists.   Now you spend your time writing proposals rather than doing research.   Worse, because your proposals are judged by your competitors you cannot follow your curiosity, but must spend your effort and talents on anticipating and deflecting criticism rather than on solving the important scientific problems.   They're not the same thing: you cannot put your past successes in a proposal, because they are finished work, and your new ideas, however original and clever, are still unproven.   It is proverbial that original ideas are the kiss of death for a proposal; because they have not yet been proved to work (after all, that is what you are proposing to do) they can be, and will be, rated poorly.   Having achieved the promised land, you find that it is not what you wanted after all."

1999-05-16
Jonathan Rabinovitz _San Jose Mercury News_
Are Americans Wimps?: Students are staying out of the tech fields in droves.
(reprinted in Chicago Tribune section 6 pg 3; citing American Electronics Association [AeA] 1999 _CyberEducation: US Education & the High-Technology Work Force_)
"the number of degrees awarded in high-tech fields fell by 5%, or about 11K, from 218,820 in 1990 to 207,684 in 1996...   the schools issued a total of ~2.2M degrees, a 16% increase, or a gain of ~300K from 1990...   business information systems... showed a gain, with degrees up ~3K or 24%.   Computer science dropped 1%, ~300 degrees; engineering dropped 3%, or ~2500; engineering technology dropped 16%, ~9K; math dropped 9%, ~1900; & physics dropped 5%, ~300 degrees.   The report counts asociate, bachelor's, master's & PhD degrees & records a drop across all degree levels."

1999-05-23
James Challenger _Florida Sun-Times_
Starting salaries for new grads
"Surprisingly, nearly 1 out of 3 college students surveyed on spring break in March expects their first job to pay more than $40K; that is, if they wind up being employed after graduating.   28% expect to be paid more than $40K right out of college.   Significantly, more than 31% of the women surveyed expect to break the $40K barrier, while 27% of men participating thought they would make more than $40K...
 
Richard Wiese, human resource director for StarMark in Sioux Falls, SD, said of the graduates' salary expectations, 'They are not realistic at all.   The myth of mega-salaries is a marketing tool used by colleges.   It is driven by colleges that are trying to recruit students by saying their degrees will get grads the high salaries that are just not realistic.'...
 
Researchers at Challenger, Gray & Christmas have found that entry level salaries for graduates with general business degrees will be in the low- to mid-$20K range; engineering or information technology, low- to mid-30s.   However, with higher salary comes higher expectations for job performance.   It seems most grads just want it handed to them...   Nearly 40% of the bachelor's degrees conferred by colleges and universities were in the non-technical, non-scientific areas of business, education, social sciences and history, according to the latest data from the National Library of Education...   only 9% of bachelor's degrees were in computers and information sciences or engineering and engineering-related technologies.
 
According to the National Association of Colleges and Employers, the average starting salary for 1997-1998 liberal arts graduates was $27,600, up 16% from the previous academic year yet well below the expectations of the college students just surveyed.   For new grads, the expectation of an entry-level salary greater than $40K is unrealistic.   There will be graduates with specialized technical skills who can make more than $40K, although high 30s is likely.   For most, mid-20s to low-30s is more realistic...
 
Worker loyalty, considered a victim of the down-sizing decade, may be coming back, if the students in our spring survey are a barometer.   Of the total, 54% expect to remain at their first job between 5 and 10 years.   Three years was the length of time expected to be spent on the first job by 38% of both men and women.   By far, men picked that duration by 47%, the highest of all choices."
-30-
 

1999-05-30
Carol Kleiman _Chicago Tribune_
(reprinted from 1998-11-??) _Chicago Tribune_ section 6 pg 1 (citing BLS studies)
Job Hopping Still Raises a Red Flag
"In 1996, workers between the ages of 18 & 32 held 9.6 jobs -- most of them before age 23.   By age 27, the majority have settled into a career, but an increase in the number of jobs for high-tech workers will also increase the age & number of job hoppers in the future."

1999 May
Aimee Kratts
Working with an Over-Seas Development Team (pdf)
"the hardware didn't travel well and we couldn't get the machine to boot once it was in Oslo.   During the week, I asked for product specifications to read while I was waiting for a working machine to appear.   The developers laughed as a group and one of them tapped his head.   'The specs are up here,' he said, 'for job security'...   Several weeks after my first trip, I was sent back to Norway for a 3-week stay.   While I was in the air on the way to Oslo, my company served notice to the Norwegian office: it was being closed.   No one bothered to tell me.   I was the first American that the Norwegians saw after they had been told their jobs were being eliminated.   When I arrived, the Norwegian manager simply laughed at me and told me to go site-seeing.   No one on staff was going to talk to me."
 
 

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