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Saturday, February 16, 2019

Bipartisan Bill Protecting Older Workers From Age Discrimination is Announced in U.S. Congress

Two days ago we received an official press release, stating that a bipartisan group of House members are introducing a new bill that will correct the distortions in current age-discrimination laws. This is a small step forward towards leveling the playing field, for enforcement of fair employment practices in the U.S. labor market.

As you may already know, particularly if you are a regular reader of this web site, we have been pushing and advocating for revisions in civil rights protection and enforcement laws, associated with age discrimination, for the last three and a half years. Our specific emphasis is on effective enforcement and fair monetary recovery for victims of age discrimination -- issues that are very poorly defined in current laws and were never revised to match today's job market demographics. We have been working with members of Congress and Senate and their staff by providing education and support materials that we made available to them over the last three years.

Note that law changes relevant to age discrimination have been blocked in both the U.S Congress and the U.S. Senate for over a decade, chiefly due to political gridlock. With the new bi-partisan support for the new bill, the chances of seeing the final bill turning into law are better than ever.

See summary sheet at: Protecting Older Workers Against Discrimination Act

All the best,

--Dr. Flywheel

FOR IMMEDIATE RELEASE                                                                                     
February 14, 2019

Democratic Press Office, 202-226-0853                                                                                                        

Scott, Sensenbrenner Lead Bipartisan Group of House Members to Introduce Bill Protecting Older Workers from Age Discrimination

WASHINGTON – Today, Representatives Bobby Scott (VA-03), chairman of the Committee on Education and Labor, and Jim Sensenbrenner (WI-05) introduced the Protecting Older Workers Against Discrimination Act (POWADA), a proposal to strengthen anti-discrimination protections for older workers. They were joined by Representatives Alma Adams (NC-12), Suzanne Bonamici (OR-01), Mark Takano (CA-41), Will Hurd (TX-23), John Katko (NY-24), and Glenn Grothman (WI-06). The bipartisan legislation is a companion to a Senate bill of the same name introduced by Senators Bob Casey (D-PA), Chuck Grassley (R-IA), Susan Collins (R-ME), and Patrick Leahy (D-VT).

In 2009, the Supreme Court’s decision in Gross v. FBL Financial Services, Inc. weakened protections against age discrimination under the Age Discrimination in Employment Act (ADEA). Under Gross, plaintiffs seeking to prove age discrimination in employment are required to demonstrate that age was the sole motivating factor for the employer’s adverse action. POWADA returns legal standards to the pre-2009 evidentiary threshold to ensure all claims of discrimination are adjudicated fairly.

“Discrimination shuts too many people out of good paying jobs. All Americans – regardless of their age – should be able to go to work every day knowing that they are protected from discrimination. The Protecting Older Workers Against Discrimination Act would ensure there are no additional barriers for older Americans when making a discrimination claim compared to any other protected class. This legislation is a step toward restoring the rights of older workers,” said Chairman Bobby Scott (VA-03), Committee on Education and Labor.

“Older Americans should be valued because of their experiences, not viewed as a liability due to their age. This bipartisan legislation will restore fairness in the workplace for our more seasoned workers, providing them the peace of mind that they will not be unfairly fired from their job because of age discrimination. I’m proud to reintroduce this bill with my friend, Congressman Bobby Scott, and am grateful for his continued leadership on this effort,” said Congressman Jim Sensenbrenner (WI-05).

“Americans are living and working longer, and we must do all we can to make sure they are protected from age discrimination. Oregon’s population is one of the most rapidly aging in the country, and I have heard from workers who believe they have been dismissed or denied employment because of their age. We cannot allow employers to violate the civil rights of older workers who are striving to provide for themselves and their families. The bipartisan Protecting Older Workers Against Discrimination Act is an important step to protect older workers from discrimination in the workplace,” said Chairwoman Suzanne Bonamici (OR-01), Subcommittee on Civil Rights and Human Services.

“Discrimination based on age, race or gender has no place in today’s workplace. I am proud to join my colleagues to introduce this bipartisan bill that ensures equitable standards for fighting unlawful employment practices based on discrimination, so all of our nation’s workers can continue to support their families and help our businesses and economy thrive,” said Congressman Will Hurd (TX-23), a strong voice for South and West Texas seniors in Congress.

“Congress must stand strongly against all forms of discrimination, including against older Americans. The Protecting Older Workers Against Discrimination Act (POWADA) will ensure that older workers will be fairly treated in the job market, returning the legal standard for proving discrimination back to its original intent. I look forward to working with my colleagues to ensure that the law once again makes clear that there is no place for disparate treatment based on age in the workforce,” said Chairwoman Alma Adams (NC-12), Subcommittee on Workforce Protections.

“Older Americans are entitled to the right to work and should not be subjected to discrimination during the hiring process. This legislation strengthens protections against the discrimination of older workers in the hiring process, giving them the safeguards, they deserve. I will continue to advocate for the rights of American workers and am proud to support this initiative this Congress,” said Congressman John Katko (NY-24).

“We commend these lawmakers for sponsoring this crucial legislation. Too many older workers have been victims of unfair age discrimination and are denied a fair shake in our justice system. The time for Congress to act is now,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer.

The Protecting Older Workers Against Discrimination Act amends four laws—the Americans with Disabilities Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and theRehabilitation Act. It was previously introduced during the 115th Congress.

For the full text of H.R.1230, the Protecting Older Workers against Discrimination Act, click here.

For a fact sheet on the Protecting Older Workers against Discrimination Act, click here.

Wednesday, January 9, 2019

Ageism in the Workplace Affects Multiple Generations
-- Time to Sound the Alarm Bells --

The Millennials' Trap

By taking workers who are older than 40 but younger than retirement age (67) out of the workforce, or even by just forcing their income to be significantly reduced, the major burden of maintaining the economy for the general population, over the next few decades, will fall on the "millennial" generation.

It looks like age discrimination in the workplace is finally getting more public exposure. The video clip below, taken from the CBS "This Morning" program, provides a glimpse to this incredibly important issue, currently affecting mostly workers who are 40 years old or older. Seemingly, only older workers are being directly affected at the present time; however as we examine the facts more closely, we can see that the dire side effects of age discrimination are going to dominate the economy of all generations of Americans equally badly. In addition, let us not forget that everyone gets older day-by-day and the process of aging is irreversible. It is clear that employers lay off older workers in order to reduce the cost of labor and not because such workers do not bring great value to the business.

(Click on the above image to play the embedded video clip in your browser)

Studies of company layoffs, conducted over that last few years indicate that among workers older than 40 years, women are further affected than men as they get laid off at an earlier age. The most insidious aspect of age-based layoffs is the skewed statistics of executive layoffs. While most workers as well as low and mid-level managers are subject to age-based layoffs, the "executive class" in most companies enjoys great on-the-job longevity and even reaps benefits from employee layoffs. Such executive benefits are realized in the form "efficiency bonuses" that executives receive, due to their initiation of "head cutting" actions...

The Equal Employment Opportunity Commission (EEOC), which is the Federal agency, in charge of enforcing anti-discrimination laws in employment, seems to be very weak in pursuing age-based discrimination cases. However, the real culprit is the U.S. Congress, controlled by highly paid "special interest" lobbyists who insured that laws protecting age-based discrimination would remain weak and very difficult to enforce. Though there were several attempts to revise the laws and update the compensation that can be awarded to proven victims of age-discrimination, a long succession of proposed Bills to revise the applicable laws have met their silent death in the U.S. Senate. The latest of these proposed Bills in Congress is H.R.6811 - Age Discrimination in Employment Parity Act of 2018. A similar U.S. Senate Bill S.443 - Protecting Older Workers Against Discrimination Act remains buried in committee...

Among other things, the compensation levels awarded to age-discrimination victims remained unchanged since 1967. Due to the significant inflation that the U.S. economy underwent since 1967, the compensation amounts set for victims by the existing laws look completely ridiculous by today's standards and have never been indexed or revised. Consequently, very few employment attorneys are willing to take on the case of age-discrimination victims, since the litigation costs would typically exceed the monetary recovery expected after successful litigation. The outcome of keeping the current laws very weak, outdated and unchanged, results in employers firing older employees en-mass and with almost complete impunity. Legal challenges are very rare and Government enforcement of the laws through the EEOC is a long and convoluted process. Without a "sheriff" in town, employers are left unchecked to violate civil rights of older workers at will.

World Leading Economies 2030 GDP Projections
(click on image to expand detail)

Considering the demographic trends of the U.S. population over the next 20 years, we are going to see tremendous unemployment and poverty replacing the relative prosperity that we see today. As more older employees are forced out of the workforce or delegated to take significantly lower paying jobs, the U.S. economy, which is predominantly controlled by consumer spending (see table below), is bound to sink to levels never seen before. Considering that there are credible predictions for China (and very likely, also India) replacing the U.S. as the world leading economies by 2030, we have very little time to prepare for the future.

(click on image to expand detail)

You do not need to be an economist to understand that unemployed or low-paid workers may not have extra money to spend and consequently consumer spending will be sharply curtailed. This growing portion of the population will also not be able to contribute much to government revenue in the form of tax payments to finance necessary public services. Consequently, it is not hard to predict that a regenerative process of sinking of the U.S. economy is bound to happen sooner or later, if employment policies that utilize age discrimination are going to be left unchecked due to legislative neglect. Demographic trends cannot be waved off or ignored in the same manner as climate change, obviously they are mankind made...

(click on image to expand detail)

By taking workers who are older than 40 but younger than retirement age (67) out of the workforce, or even by just forcing their income to be significantly reduced, the major burden of maintaining the economy for the general population, over the next few decades, will fall on the "millennial" generation.

(click on image to expand detail)

Millennials currently form about 35% of the U.S. workforce and many of them are already heavily burdened by student debt. Expecting millennials to pay the tax money required to support the needs of a significantly growing older population is not only an unfair concept, but it also works against the common sense of enabling older workers to continue earning money to cover their needs on their own, all while paying taxes on their earned income.

Age discrimination in employment is therefore a corrosive practice that affects not only older workers; it affects younger workers and their economic future prospects, just as much.

It is time to break the glass and push the alarm button now, before a major crisis is hitting us in the face. Call your U.S. representatives and tell them that the time has come to install fairness and common sense into the U.S. labor policies and protect our civil rights.

--Dr. Flywheel

Additional References:

Tuesday, October 23, 2018

Intel Corp.
The “Headless Chicken” Syndrome

We have a good reason to believe that Brian Krzanich (BK) resignation from Intel Corp. was a “Roger Stone” style diversionary PR stunt, chosen by the Intel Board of Directors to protect the stock price from negative effect of vacating the top executive position. While supposedly, BK resigned his position as CEO due to ethical violation of company rules, in reality, BK was responsible for significant blunders that kept sinking the company position as a leader of the semiconductor manufacturing business.

The fact that Intel has not filled the CEO position since June 2018, indicates one or more of these points:
  1. No reasonable candidate is willing stick their head in the mess that is left behind BK’s legacy.
  2. The Board of Directors is complicit in letting BK run the company unchecked for such a long time and any well qualified candidate who interviewed with the board, figured out that they will be working against the tide and without backup.
  3. The Board of Directors is aware that CEO replacement will not solve the problems that Intel Corp. is facing, because the problems are much more profound and involve general lack of trust within the organization. Consequently, they are only focusing on damage control and can live with an interim CEO who is “absolved” of long-term responsibilities.
  4. The U.S. economy is currently running in full swing. The Board of Directors is focusing on “making hay while the Sun is shining”. A new CEO, particularly one who comes from the “outside” may come up with demands for radical changes to the internal organizations and consequently put the current stock price at risk. It is likely that the Board prefers to maintain the status quo over any "revolutionary" actions.

Brian Krazanich replaced the late Paul Otellini as Intel Corp. CEO in May 2013. Although presenting himself as an “engineer” in practice, BK had a very short engineering experience and very quickly, after being hired as a “process engineer” (a manufacturing position) at the New Mexico Fab, he shifted to a management track, where the rest of his career at Intel Corp. was spent. Most of BK career growth took place as a manager at the Technology and Manufacturing Group (TMG), which operates the silicon manufacturing lines (known as the "Fabs"). BK had no background in circuit design, electrical engineering, systems engineering, or software engineering which together, create the actual IP value of today's computer systems products.

For many decades since its foundation, Intel Corp. held itself to high standards of transparency by keeping low overhead and sharing information with all of its employees. As part of this exercise of transparency, the company annually conducted an employee feedback study known as the Organization Health Survey (OHS). The OHS presented employees with a large number of questions, asking them to grade the company performance over a wide range of issues. The OHS goal was to give managers a realistic assessment of the efficacy of management practices. The results of the OHS were published and distributed to employees, as a matter of course, followed by a public discussion of the issues exposed by the annual OHS. As the late Paul Otellini used to say "OHS goal is to keep Intel Corp. management in tune with company employees".

In 2013 (the first year in which BK was the CEO), Intel Corp. "C-Suite" issued a message to employees that the pending, annual OHS will not be conducted for that year. This was supposedly, because BK was in his position for less than a full year. This was the first time that the OHS was not run, since inception of the practice at Intel Corp.

In 2014, though the OHS questioner was distributed to employees on time, executive management refused to publish the OHS results for the first time in the history of the company. The only points that were exposed, came out of the personal blog that Richard Taylor (head of Intel HR at at the time) published on Planet Blue, the internal employee social network. The major issues mentioned on that blog included the fact that the OHS revealed significant trust issues among corporate entities, as well as lack of trust between managers and technical leaders, serving within the same business units.

Since Richard Taylor’s blog was open to all employees, his comments about the OHS received a flood of comments and questions. Like other company employees, I contributed a few of these comments at the time. My comments specifically addressed the growing lack of knowledge and many times complete ignorance of significant technical issues on the part of company managers at all levels. I also mentioned the systemic diminishing of the authority bestowed upon technical leaders and the overt effort to cut their numbers in company ranks, while staffing a growing number of manager positions. At the time, we did not know that BK and his cronies were planning to lay off a large number of employees in 2015; however, in retrospective, it becomes clear that the ground work was already set for this action to happen.

Interestingly, the 2015 mass layoffs were heavily skewed to exclude managers, compared to employees in individual contributor positions. This fact is clearly demonstrated by the OWBPA report filed by Intel Corp. in June of 2015.

(click on image to expand detail)

2014 was the year in which during the course of my work as the systems architect of the Electrical Validation department, I had first row view of the 14nm process yield failures. Upon closer look and a thorough investigation I came to the conclusion that the systems used for engineering audit of the wafers coming out of the Fabs were ineffective for determining a cause-effect correlation. Establishing such correlation is a fundamental requirement for effective failure analysis and subsequent correction of mass manufacturing production flaws. While 20th Century methodologies were sufficient to monitor silicon defects and determine corrective actions for fixing silicon production flaws for many generations of Intel silicon products, it became apparent that these methods have reach their limit at the time that the last 22nm fabrication process (Haswell family of CPUs) was used at the Fabs.

Looking at the vast amounts of data coming out of the production monitoring systems, I was astonished to find out that no-one on the engineering side of the company, knew how to effectively use the collected data for proper analysis as well as how to apply the analysis towards fixing outstanding yield problems. Further, it was shocking to find out that most of the petabytes (millions of gigabytes) of data was never seriously examined or utilized. In fact, most of the collected data was  unfit and useless for engineering analysis. After years of inertia this revelation was the first indication of a systemic failure. A Laissez-faire approach to running a critical part of the business suddenly falling into obsolescence, mostly due to lack of scrutiny and common sense among managers.

In an effort to correct the situation I began working on an initiative to revise the procedures and the methodologies used for identification of root-causes in silicon wafer failures for the 14nm and the upcoming 10nm fabrication processes. In concerted cooperation with other engineering leaders I devised 21st Century methodology, specifically using “big data” and artificial intelligence techniques for collection, organization, and analysis of silicon wafer failure handling. The foundation for this framework became internally known as the INTELligence Initiative.

While it took a significant amount of time to educate and convince people that the methodology change is critical for success, a significant number of technical leaders within the engineering organizations at Intel Corp. became convinced that the new direction that I proposed is the right way to go. Further prototyping and application of the methodology were applied to real-life data demonstrating significant success. The only objections, came from high level managers, who had no technical background and were risk averse. The message that I received at the time was “go ahead and implement your solution, if you are successful, we will support you...”.

The INTELligence Initiative and all the process improvements that I was leading at the time, went on the chopping block after the 2015 mass layoffs. C-Suite executives enjoyed their bonuses at the end of 2015 and the orchestra continued to play while the boat was sinking.

Though my immersion in the analysis of the 14nm production problems allowed me to understand the depth of trouble that hat the company was in, I was still convinced that commonsense would prevail and the new methodology would be adopted to help the recovery process. Now, four years later, I see that the common sense never floated to the top, because the Intel Corp. organization became increasingly dysfunctional, year after year.

It is now the end of 2018, BK is no longer the CEO, many thousands of experienced Intel Corp. employees had been permanently laid off in 2015 and 2016 and most of them do not wish to ever return to employment with Intel Crop.

Let us do a reality check as of end of October 2018:
  • BK received the dubious credential of being the “First Intel Corp. CEO to Break Moore’s Law”, an attribute that he certainly worked hard to earn...
  • BK appointed more Vice Presidents during his tenure as CEO, than any one of his predecessors. The question remains open: "What does the company have to show for this generosity?"
  • Intel Corp. has trouble finding competent people who are willing to work for the company, due to its diminished reputation as a fair employer.
  • The employee trust issues that were revealed in the 2014 OHS have never been attended to and the employee scare tactics, subsequently employed by BK for more than four years, further eroded chances of repair.
  • Intel Corp. sustained tremendous production yield problems with its 14nm silicon production processes while other semiconductor manufacturers, including Global Foundries, TSMC and Samsung proceed to offer reliable 14nm, 12nm 10nm and 7nm products.
  • Intel lost its place as the number one semiconductor manufacturer in the world, more than likely, forever.
  • AMD business success due to its reliance on external Fabs is capitalizing on Intel Corp. failure to lead in manufacturing technologies and product intellectual property development.
  • While still fighting yield problems with the so called “mature” 14nm process current industry news give the impression that the 10nm silicon manufacturing process will never see the light of day, due to both technical and economical factors.
  • Apparently the pressure on the limping 14nm production process is so bad that Intel Corp. is moving the system integration “Chip-set” parts back into the older 22nm production line.
  • Intel Corp. began selling assets, to offset losses. The latest such action is apparently, the sell off of the memory business, back to Micron Technology, for $1.5 billion
My analysis is that Intel Corp. is facing a plethora of technical problems that are real. However, the overwhelming problem for the company is the presence of incompetent management at all levels, in addition to lack of trust and cooperation inside business units and absence of leadership direction. The current production yield problems are only a symptom of the underlying organizational weakness and lack of leadership resolve. I define this phenomenon as the “headless chicken syndrome”.

--Dr. Flywheel

Friday, June 22, 2018

MF Intel CEO Resignation Raises More Questions

Recent news regarding about Intel Corp. CEO Brian Krzanich informed the public that BK resigned from his position, voluntarily. In view of of the company's record while under the tenure of BK, we believe that this "surprise" resignation was due to multiple factors and was a lot more predictable than not. The "fraternization" charges seem to be a PR solution that was devised to cover up for much more material misdeeds on the part of the beleaguered CEO.The swift way in which the event was announced and executed, indicates that Intel Corp. is doing its best to put maximum distance between BK and the company, more than likely because more serious revelation are about to see the light of day, very soon.
  • So far we know that multiple law suits have been filed against Intel Corp. as consequence of the multiple security flaws, found inside Intel's advanced microprocessor architecture that have been discovered by outside security experts. These law suits will have potentially detrimental effect on the company's revenue stream.
  • We know that the Federal Government is actively investigating Intel Corp. for illegal workforce manipulation and age discrimination charges. According to our sources, this investigation has been significantly expanded in recent months. The results of this investigation, which is already more than two and a half years along the way, are bound to be significant, both in terms of company image and monetary cost.
  • BK himself is facing investigation regarding his sale of millions worth of his stock options, while having first class access to propriety information, regrading the severity of security flaws in Intel Corp. microprocessor architecture and while being able to fully assess the corresponding risks to the company stock valuation.
  • The company's announcement that its 10nm manufacturing will not bear fruit until later in 2019, serves as a clear indication that something is awfully wrong with with the way that the company operates. Industry veterans, including myself, assess that the execution problems are not purely technical in nature, but rather have lot to do with chaos within the ranks, due to absence of leadership and expertise. Intel Corp. lost many highly experienced employees due to laying off about 1200 employees in 2015 and 12,000 in 2016, besides forcing thousands of veteran employees to retire. Apparently, the payroll savings in prior years are now costing a fortune in reduced productivity and chaos within the company ranks. To be fair, Intel Corp. annual reports, published over the last few years, stated the risks that such layoffs might bring about; however, management under the leadership of BK decided to take the risk, nevertheless!

It seems like the issue of fraternization, could have been handled with finesse, should BK's functional value in the eyes of the Board of Directors, was in order. The Intel Corp. PR machine could have come with subtle declarations and very little fanfare (like announcing a transition period for the CEO). Such was the case in the past when company executives were involved in quandary of various sorts. Typically, they were put to pasture (or sent to Siberia...) for a few months before quitting their job. Switching titles between President, President Emeritus, and CEO, was also common tactic to contain such moves. However, BK, more than any other Intel CEO before him, positioned himself at the center of a large number of PR campaigns and public personal appearances, in a self-promoting campaign that could only be described as a Trumpian Parade. Apparently, seeking the lime light came home to roost, when the Board finally decided to cut their losses with BK. Undoubtedly, the resignation came as a result of the mounting public scrutiny regarding company performance and dismal growth predictions, relative to the position of Intel's industry competitors. For the Board this is a matter of facts speaking for themselves and not of a sudden puritan morality campaign.

In spite of admitting to the shortsightedness and the missed opportunities in the smart phone ("mobile") market, switching to other sources of revenue to replace the PC market derived income, the company execution remained very slow. Instead of demonstrating true leadership by example, BK elected to run the company as a dictator, eject many of his coworkers whom he viewed as competitors and laid off tens of thousands of experienced employees from the company. Through the course of this process BK demolished the internal, productivity culture that was known until then as "Intel Culture".

Generally, Intel Corp. under the leadership of BK traveled through a process of organizational collapse ever since BK became CEO in 2013. The latest revelations about production line failures and inability to deliver 10nm high volume products, is a symptom of such organizational collapse. Intel Corp. rapidly lost it position as the world's leading semiconductor manufacturer to Samsung and its fledgling merchant Fab business never took off in a substantial way.

BK demonstrated significant lack of trust in in the company's human capital, particularly veteran company employees, a fact that is proven by the following points:
  • In his first year as CEO, BK blocked the publishing of the annual Organizational Health Survey (OHS), a survey in which employees provided their feedback about declared organizational goals and related management actions. This blocking of material information from employees, raised a lot of discontent among the rank and file within the company, since such a move has never happened before and clearly demonstrates a lack of transparency. BK never provided employees with an acceptable answer for his move.
  • BK drove the company to layoff tens of thousands of veteran employees and forced additional thousands of experienced employees to retire. No attempt was done to invest in employee retraining or reassignment. At the same time that Intel Corp. laid off a massive number of employees, the company also recruited an equal number of inexperienced new employees with foreign citizenship, many of them through H1B visa sponsorship and F1 to OPT conversions. This resulted in vacuum within the ranks, due to shortage of experienced leadership and a complete decimation of the "Intel Culture", a culture of taking responsibility, effective problem solving and operating with open communication and mutual trust. Newcomers, many of them recently arriving from countries that are not compatible with "Intel Culture", had no means to learn and follow by example, because the ranks were void of the older and experienced employees.
  • Due to his perceived notion about difficulties in managing the lower ranks, BK elected to invest tens of billions of dollars, into purchasing two outside companies, Altera and MobilEye for ridiculously overpriced valuations. The jury is yet to decide if these purchases were justified in any way; however, through this approach, BK's disdain to take charge and lead his own employees became apparent.
  • In 2015, BK declared the 1200 employees who were laid off by the company as "Lowest Performers". He did this in an open forum of employees, which created an enormous uproar inside the company. No attempt was made to correct the statement or apologize to the employees. Instead, Intel Corp. banned these employees from being rehired for their lifetime.
  • While trying his best to inflate his PR image, BK painted himself as a champion of female participation in the workforce. In January 2015 he announced that the company will spend $300 million on a new “diversity in technology” initiative. He also appointed his alleged girlfriend Danielle Brown, who was once his "technical Assistant" as the company "Chief Diversity Officer", a position that did not exist until then. Suspicious graft? You decide. Interestingly enough, the 1200 employees who were laid off in July 2015, received along with their "pink slip" a message from CEO BK, declaring that their layoff was called for due to the need to save $300 million, supposedly due to forecast of flat revenue. So it seems like BK was determined to promote his PR agenda by arbitrarily laying off veteran employees, and replace them with "diversity candidates". This would have been perhaps acceptable, besides that many of the women hired were foreign citizen spouses of H1B visa holder workers who stayed in the U.S. under H4 visas. So much to serving equality in diversification. According to the Economic Time of IndiaMore than 90% of such spouses are Indians. According to a recent report of the Migration Policy Institute, the US has issued EADs to more than 71,000 spouses of H1B visa holders, as of early 2017.
Workforce manipulation shenanigans and publicity stunts for hiding self serving nefarious agenda will remain the characteristics of Brian Krzanich career at Intel Corp., as well as his unique legacy of being the first Intel CEO to break Moor's Law. Though BK PR blurbs attempt to present the person as an "engineer" who runs a large technology company, people that knew BK at the beginning of his Intel career, told me that Brian had a very short stint in chemical engineering at the Albuquerque Fab, after which he immediately became a manager. Most of his time at Intel, BK spent at promoting his career, managing people and organizations and NOT doing actual "engineering" work. This could explain, at least in part, why real engineering and organizational problems are plaguing Intel Corp. as of late, since the CEO was probably not being able to understand what was broken in the system and what was necessary to fix it, while his personality prevented him from seeking good advice from either inside or outside the company.

Tuesday, June 5, 2018

Student Loan Debt Reached All Time High of
in Q1 of 2018

Student Loan Debt Reached All Time High of $1,521,019,350,000 (more than 1.5 Trillion dollars)  in Q1 of 2018. Consequently, outstanding student debt currently exceeds auto loan debt ($1.1 trillion) and credit card debt ($977 billion). Considering that 42% of people who've gone to college took out debt, this number has high significance on the future of our economy and the future welfare of young families. According to the College Board, "In 2015-16, the 60% of bachelor’s degree recipients from public and private nonprofit institutions who borrowed graduated with an average of $28,400 in debt"

A recent FRB Board of Governors (FRB-BOG) report on the Economic Well-Being of U.S. Households in 2017, published in May 2018 informs us about the student debt situation:

Over half of college attendees under age 30 took on some debt to pay for their education. Most borrowers are current on their payments or have successfully paid off their loans, although those who failed to complete a degree and those who attended for-profit institutions are more likely to have fallen behind on their payments. • Among those making payments on their student loans, the typical monthly payment is between $200 and $300 per month. • Nearly one-fourth of borrowers who went to forprofit schools are behind on their loan payments, versus less than one-tenth of borrowers who went to public or private not-for-profit institutions.

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As the table below shows, many families have taken debt to finance education of their children and/or grandchildren. This creates a "spillover effect" on debt ownership that continues to burden older adults, even after their offspring have become independent adults.

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Here are some interesting anecdotes quoted from the same FRB-BOG report:
  • Nearly 25 percent of young adults under age 30, and 10 percent of all adults, receive some form of financial support from someone living outside their home.
  • Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money. This is an improvement from half of adults in 2013 being ill-prepared for such an expense
  • Over one-fifth of adults are not able to pay all of their current month’s bills in full.
  • Over one-fourth of adults skipped necessary medical care in 2017 due to being unable to afford the cost
  • Nearly half of adults age 22 and older currently live within 10 miles of where they lived in high school, but those who have moved farther from home are more likely to be satisfied with the overall quality of their neighborhood.
  • Out-of-pocket spending for health care is a common unexpected expense that can be a substantial hardship for those without a financial cushion. As with the small financial setbacks discussed above, many adults are not financially prepared for health-related costs. During 2017, over one-fifth of adults had major, unexpected medical bills to pay, with a median expense of $1,200. Among those with medical expenses, 37 percent have unpaid debt from those bills. In addition to the financial strain of additional debt, over one-quarter of adults went without some form of medical care due to an inability to pay.
  • Those with less income are more likely than others to forgo medical care due to cost. Among those with family income less than $40,000, 39 percent went without some medical treatment in 2017. This share falls to 25 percent of those with incomes between $40,000 and $100,000 and 9 percent of those making over $100,000.
  • Over the past several decades, the rate at which Americans move—both short distances within states and longer distances across the country—has steadily fallen. This reduction in geographic mobility also fits within a pattern of less job switching, more generally, or reduced labor market fluidity.
I highly recommend reading the full FRB-BOG report for those of you who are concerned about the future of our economy and the welfare of our general population.

All the best,