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    • Week-end Wrap – Political Economy – August 25, 2019
      Week-end Wrap – Political Economy – August 25, 2019 by Tony Wikrent Economics Action Group, North Carolina Democratic Party Progressive Caucus Strategic Political Economy Give No Heed to the Walking Dead [The Scholar’s Stage, via Naked Capitalism 8-18-19] The People’s Republic of China is wealthier than any rival America has faced. Its leaders are convinced […]
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Phase out the 401K

401k-624x416There is a post in the NY Times today about the way companies that layoff their workers and replace them with H1B visa holders also require those workers to keep their mouths shut about what is going on.

The non-disparagement clauses might be partially responsible for the conventional wisdom that we need more STEM graduates when clearly we don’t. Long time readers of this blog know that I and my colleagues were laid off in NJ when our site closed. In fact, New Jersey, Connecticut, New York, Maryland, Delaware and Pennsylvania, the Northeast Corridor, laid off hundreds of thousands of invaluable researchers and replaced them with… nothing. In some cases, brand new research facilities, some built for very specific studies that cost millions of dollars to build, were mothballed or even destroyed.

That’s right, it made more sense to the bottom line to destroy valuable lab space than keep the facilities with the upkeep, maintenance and taxes on the books. The people? What about them? It’s interesting to me that the braintrusts who decided to lay off all those scientists and planned to rent out the buildings to new start ups had a hard time finding renters. Who did they think they were going to rent to? The same scientists who were laid off didn’t have the funds for the start ups that were meant to replace the large corporate labs. They were too stressed trying to find any work in any state while keeping their families in the expensive northeast and mortgaged houses out of foreclosure. So, the “rent the labspace to the old labrats” scheme turned out to be a bust and now the buildings have to come down.

There are a couple of states that benefitted from the destruction of the research industry. Those would be Massachusetts and California. The business models were changed from small molecule research to biologicals. But number of jobs created is small. Only a tiny fraction of those laid off were invited to go to Cambridge. Medicinal chemistry in this country is decimated. Compounds can be made very cheaply in India. There’s still research in graduate school labs but it does not begin to make up for what has been lost.

It’s not like there’s not enough biology to research and anyone in the research industry knows that training is not the problem. These are some of the most highly trained people in the world who have to continue reading the latest papers to keep up. Soooo, that’s not it.

What could be driving the frenzy to dismantle the country’s research industry? Hmmm, what could it be, what could it be.

Well, in some companies, the decision to close the site was followed a few days later by an email to all employees from the finance department that congratulated itself on reducing costs and creating a nice quarterly profit. Sort of a “You who are about to die, we salute you!” email.

When they say it’s not about money, it’s about money.

Working Americans have been forced to participate in their own destruction through the 401K. We invest in funds that are rewarded when companies merge, consolidate and layoff. Companies are sold like baseball cards, drained of their assets and left as hollow shells of what they used to be. Research is expensive. Paying for experience is expensive. Better to ship that out if you can, hire only short term contractors, buy up companies with a promising drug lead and lay off their early research staff.

In the meantime, the portfolios will grow and now the masters of the financial universe have brought us into the game, some of us unwillingly. We are now complicit, watching the quarterly earnings reports and demanding more shareholder value. Because there are no pensions in our old age. This is how we make our money- on the backs of our fellow Americans.

And let us now turn our attention to the H1B visa holders who unfortunately have no rights here. If they lose their jobs, they can be sent back to their home countries. It doesn’t matter if they have lives, relationships or property here. Those are risky luxuries. And it doesn’t help that these people may eventually get green cards. Some green cards are so narrowly tailored so as to make getting a new job after a layoff very difficult for the bearer.

It’s all because of the vast amounts of money that used to be tied up in safe, boring but reliable pensions that are now splashing around the world like colored scrip in a global game of Life. The greed of the financiers and titans of industry is gargantuan. The analysts who work for them on Wall Street are incentivized to accumulate as much wealth as possible, with as much risk as possible in as short a time as possible. If they lose money, the government will cover it or some stupid firefighter will take the hit. It’s their fault if they didn’t go to Harvard and make the right connections.

The 401K is at the heart of everything that is wrong with the current economic system. It encourages risk taking, it incentivizes avarice, it propels the short term investment cycle, it causes the outsourcing, it destroys industries and it is now starting to affect productivity. Because when you sacrifice your talent for youth and low wages, and then force everyone to account for every billable minute, you force the workforce to reinvent the wheel and cause anxiety and distraction in the offices with endless paperwork and minute swapping.

Phase it out. Get rid of the pyramid scheme. Disincentivize short term investment and greed. If we don’t tackle the 401K, all the unions in the world won’t make a dent. There will be no need for them when we are all independent contractors in the gig economy looking over our shoulders for the next layoff and becoming more angry by the minute.

This is the legacy of the last eight years when no bankers were held responsible and no hearings were conducted to ferret out the root causes of so much risk and destruction while the companies held revolvers to the heads of their laid off staff and told them to not say a word about what was happening to them. Funny, the CEOs don’t have any problem telling the researchers what they think of them and how expendable and exploitable they are.

It’s about the money. The 401K fuels the Gig Economy. It’s the Gig Economy, Stupid that’s undermining the middle class, causing income instability, family instability and a drag on spending. Get rid of it.

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The Elephant’s Child

we will now seriously devote ourselves to a little high tension

The day after the SOTU address, after the President of the United States pretty much told American scientists that we were not up to Chinese standards, it snowed in New Jersey.  I looked out the window at the snow falling thick and fast and gauged my chances of getting to work with my malfunctioning power steering.  Nah gah happen.  Sigh.  I hooked up my work computer, logged in with my SecureID, and checked my email…

And there, under five or six other messages, was an invitation from the local head honcho to meet him in the cafeteria at 10am.  Uh-oh.  That’s not good.  I stared at it.  WTF?  I clicked it again.  Reread the message.  It was unmistakeable but I didn’t want to believe it.  My supervisor was on vacation.  My director was unreachable.  Nobody in my department available.  In desperation, I called my previous supervisor.

“What?? You got the message to meet in the cafeteria?  It’s not good.  I’m sorry, it’s not a good sign.”

My blood froze.  I am the only employed person in my family with health insurance and steady income for Brooke.  I couldn’t think. So, I did the next logical thing.

I called Katiebird.  I asked her to stay with me until I knew what was going on. I  tried desperately to find someone in my department who was asked to the same meeting.  Unfortunately, I found someone.  It was my lab partner.  She couldn’t disguise the panic in her voice.  I called Katiebird again.  We waited.  Katiebird stayed with me.  My lab partner called back.  It was confirmed.  Our jobs were eliminated.

???

?

My department head finally called me at home.  The HR rep was with him.  They broke the news to me officially.  I was stunned.  My lab partner and I are beyond busy.  Dumping our workload onto the rest of our department seems incomprehensible.   I think there was an, “Oh, shit, what did we do?!” moment from some of the decision makers on our behalf.  But the problem with lay offs is that once the decision has been made to “separate” you, it’s hard to walk it back.  There have been some not insignificant efforts to figure out a way to keep us but they have all met a brick wall.  The bottom line was met, we were part of meeting the reduction goal, we are scheduled to go.  We have about a month and a half left.  It feels like a death sentence.

It’s times like these that tell you who your friends are.  I can tell you that Katiebird and DandyTiger immediately came to my emotional rescue.  I am eternally grateful to both of them.  They have checked in since that day and haven’t let me down.  They both came up with great ideas to see me through.  Right now, I am so busy at work, irony of ironies, I don’t have time to pursue them but I know that I will.  I’d recommend Katiebird to anyone who is getting laid off but in these times, her line would be constantly busy.

I know that the loss of our jobs was not performance related.  Both my lab partner and I had very good performance appraisals.  We busted our butts in the lab last year and it showed.  We solved a previously unknown structure and pushed ourselves to learn new things.  It was not unusual to find us in the lab at 9pm, waiting for a gel to finish so we could plan our work for the next day.  The weird thing is that in spite of all that has transpired since that day in January, I still love my job.  The loss of income is painful but the loss of doing the thing that has become like an addiction to me in the last year is even more painful.  It’s so frustrating to lose something just when it’s starting to get really interesting.  I will never ever have a job as good or as satisfying as this one.  I will never have a lab partner as amiable and hardworking and intelligent and generous as the one I have.  We both feel it deeply.  Separation means more than losing the tether to your income, it means losing a productive and valuable working relationship.

When I think back to that SOTU address, I’m beyond angry.  This president and this Congress have no idea what this country is losing.  I am one of thousands of American R&D professionals who have lost their jobs since the era of mergers and acquisitions went into overdrive in the 1990’s.  The reason you don’t find young Americans going into science, engineering and math is not because the Chinese are so much better than we are.  It’s because there is no future in it.  There’s no career path.  No steady income.  No security.  Just a pile of underwater stock options and a pink slip after years of study and extremely challenging work.  The suits will tell you we aren’t productive but those of us who have been there know the truth.  This generation of American scientists has been blighted by the endless pursuit of meeting the bottom line.  It’s no way to do research.  In fact, it is almost impossible to do research under these circumstances and it has been like this since I started working in the business two decades ago.   Free lancing or starting our own businesses in this area of research is not really an option.  We need the overhead of a corporation.  Yes, believe it or not, sometimes you just can’t get around the corporate model.  So, I join my colleagues, “experienced research professionals” all, in the oblivion of separation from what we love best- the wonder and delight of studying nature and the dedication to cure disease.

I would like to say that I am grateful to my company for all of the years that I was able to learn and work for them.  The great majority of the people I have worked with are wonderful and talented professionals.  I wouldn’t call myself a “disgruntled employee”.  If anything, I am very gruntled and will milk my last days at work for all they are worth.  They are worth it.  Every last one of them.  I count the hours with anticipation and dread but mostly ” ‘satiable curtiosity”.

May you all be so lucky.