I’m really considering trying to arrange some kind of discussion around why the drug industry charges so much for drugs and the true cost of research etc. Maybe when I have more time. It is a very important topic and the people closest to the problem seem to be left out of the policy discussions. I think it’s time we hear from them.
Closely related, Derek Lowe at In the Pipeline has a short post about how devastating the mergers have been to R&D. He touches briefly on a subject that Matt Taibbi and Michael Lewis could write volumes about: consultant groups, like McKinsey and BCG. Take about vampire squids and blood funnels. This is a vast untapped area of greed and corruption that just flies under the radar.
Update: Derek posted this morning about the firing of Chris Viehbacher from Sanofi recently. A Whistlblower alleges that this is due to kickback arrangements Viehbacher had with consulting company Accenture and others. It’s intriguing especially because Accenture is all over pharma and I’ve had friends who have had to deal with them before. There is a lot of money involved in an Accenture deal, lots of subcontractors, lots of poorly paid developers in India, many delays, budget overruns and poor products. Think of Obamacare’s rollout. Yeah, like that, only worse. That’s what consultants do for pharma. Am I surprised that Accenture might be involved in unethical activity? Not in the least.
On a more cheerful note, I love Christmas time. It’s not because of the concept of Christmas. Historically, it makes no sense. But I love all the celebrations at the end of the year. I’ve taken a fancy to Solstice because it is a celebration of nature and I love that. Nevertheless, I have a Christmas tree because it is pretty and shiny and reminds me of my grandparents.
But I’ve stayed away from decorating Christmas cookies. It is always my intention to make them every year but I never get around to it. This year, I might attempt something simple, like reindeer cutouts. But check out this Christmas cookie to end all Christmas cookies from youtuber Sweetambs:
She makes it sound so easy. Yeah.
But if red flood icing is not your thing, maybe you’d rather dance. Here’s a line dance to Rudolf the Rednosed Reindeer.
No, precariat is not a misspelling of a group of single celled organisms. It’s a very disturbing word, an ominous word, a word that has already arrived here in the United States and is slowly moving up the food chain:
Precariat- a social group consisting of people whose lives are difficult because they have little or no job security and few employment rights
It’s a portmanteau of “precarious” and “proletariat”. A precariat is a person who doesn’t have a reliable job. Precariats initially were service workers who may have been working a 40 hour work week, but maybe not. A precariat could be called in to work a 6 hour shift, every other day and one long 12 hour day at some other point in the week or come to work expecting a full 8 hours but sent home after 2. The amount of work can vary from day to day, week to week. This worker typically has no benefits.
I think most of us can see right away the limitations of the precariat world. If you can’t say for sure how many hours you’ll be working each month, can you afford to rent a nice apartment or buy a house? Can you buy a new car? If you have children, how do you schedule and pay for their child care? Can you depend on your paycheck to feed them? Work and living become precarious. Here is a video about the precariat from The Precariat: the New Working Class:
Precariats usually spring up in countries where workers are not protected by unions or strict labor laws. Right now, the UK is starting to come to terms with the precariat but in a way, the Welsh precariat has it good compared to the American version. Here in the US, there is no national health care system or reasonably priced, government subsidized schools of higher education. So, the land of opportunity in America is starting to look like the last place you want to live if you are forced into precariatism.
Another feature of precariatism is the appearance of the middle man hiring agency. That agency stands between the employer and you. The employer hands off responsibility of hiring and paying the worker. The worker becomes a true human resource to be hired when needed and laid off when not. Benefits and risks are born by the employee. The hiring agency takes a cut of the worker’s pay, I hesitate to call it a salary because that would imply some kind of security and regularity.
A couple of years ago, we who were salaried employees would have looked down on the precariat with pity. Now, we are one. From my vantage point, this is the way the pharmaceutical industry has decided to handle its well educated, experienced workforce. We are now service workers. More and more of us can only find contract work. The work is parceled out in 3, 6 or 12 month contracts. There are no benefits. In some cases, the worker pays both sides of the social security tax. It is hard to plan where to live because you don’t know if you’ll be able to pay the rent. You can’t make any major purchases on credit because there is no guarantee that you’ll be able to afford the car payment.
One of the reasons I suspected that the McKinsey reports of employers dropping health insurance coverage for their employees after the passage of the Affordable Care Act was true was because it fits so well with the precariat worker norm. Since a universal mandate meant that workers would be legally compelled to spend whatever the insurance companies could charge for health insurance, the employer could cut this benefit out of their compensation packages guilt free. To escape the employer mandate, all the employer would have to do is make many of its permanent employees into contractors. The number of layoffs would be expected to increase. Responsibility and risk would now be transferred to the employee. You don’t have to be a highly paid consulting company or economist to see how this would work. All you have to do is think a couple of steps ahead. Mandatory universal coverage without a public option or a single payer system that requires employers to pay in puts much of the American workforce at risk of falling from the middle class into the precariat.
The new middle man hiring agency becomes the new growth sector. Expect to hear more horror stories of foreign students brought to the US by a hiring vendor promising that they will learn English only to spend their summer in a chocolate factory in Pennsylvania doing manual labor for subsistence wages. Expect Hershey the company to deny all responsibility. Or Amazon. Or {{your company name here}}
It’s hard to say whether Barack Obama was onboard with this or whether he was so overwhelmed by his job that it never was evaluated properly. But I think we can say pretty unequivocally that the acceleration of the expansion of precariatism within the American culture is related to the measures that were or weren’t taken in the wake of the financial collapse. So much attention was focused on shoring up the banks at taxpayer expense that homeowners were allowed to foreclose, jobs were allowed to disappear and healthcare reform was rushed through to score political points without much thought of how those reforms would affect the workforce. In fact, hardly any thought at all has been spent on the workforce. Well, Elizabeth Warren was thinking about it for years but as Adam Davidson pointing out in that blistering Planet Money interview from 2009, Warren’s opinions didn’t really count because she wasn’t a “serious” person. Did Davidson see the rise of the precariat? Does he know that free lancing is going to appear at an NPR station near him someday?
If the US economy is in a slump right now, it may very well be because there are so many more precariats where once there were college educated salaried people. In my own sphere, precariatism is the norm these days, not the exception. It wasn’t like this before 2008. But now, if you’re a precariat, you can not plan for the future. There IS no future. Everyday is a struggle and stress about where the next mortgage payment will come from, what will happen if the car breaks down, how to pay for the plumbing that keeps getting backed up or the last of the orthodontic appointments. It’s the reason why so many grocery stores are shuttering their stores and why Lowes is laying off workers in the northeast and why people are hoarding their money instead of spending it. And it will get worse until more working people realize what is happening to them. The people who are kissing the whip today are going to be tomorrow’s precariats.
We have been subjected to years of politicians relaxing the rules for the 1% and tightening the rules for everyone else. The rise of the number of precariats can be attributed to the politicians who let this happen. We need to replace as many of them as possible. Because it wasn’t too long ago that Americans were pretty cool with capitalism. When we were all making money and productivity gains went to the middle class, we had a vibrant, robust economy. But when the rules went out the window and labor came under attack from the superwealthy and the whip kissers who brainlessly listen to Rush Limbaugh, Glenn Beck and Fox News, an opportunity arose to force many of us to live on the edge of a knife. Now, those of us who didn’t necessarily want to be rich but wanted to work for its own sake are considered losers. And the infection of the precariat is bound to spread. There is no profession that is safe. Once the public unions are broken, precarianism will be the norm, not the exception. Your degrees cannot protect you. Even senior citizens are not sheltered from the effects of precariatism because as the salaries disappear to be replaced with lower, precarious wages, the tax base will continue to shrink. It won’t be that we don’t want to pay for social security. It will be that we just can’t anymore.
The 99% don’t want to live a precarious life. We know who was responsible for the ruination of the American middle class. We focus on the robber barons of Wall Street now but come November 2012, with a handful of notable exceptions in Congress, they ALL have to go, Obama included.
What the OccupyWallStreet protestors object to is the increasing economic injustice forced on the precariat and what they demand is that it stop.
Paul Krugman had a recent post about the McKinsey study that purports to show that up to 30% of employers are planning to drop health insurance coverage due to the Affordable Care Act. The Obama administration and other Democrats seem to be in full denial mode, demanding that McKinsey show its data because it can’t *possibly* be true. Right? RIGHT?!
In some respects, this reaction is reminiscent of the Republicans who were adamant that Democrats take it back about Republicans trying to destroy Medicare in franked mailings and ads.
I’m of the “let’s wait and see the data” variety before I jump on the Democratic bandwagon. Paul’s a pretty smart guy but he may be jumping the gun here. Just because McKinsey isn’t revealing their data doesn’t mean their conclusions aren’t true. You don’t have to be a Republican to consider the possibility that the conclusions are valid.
Here’s just one possible scenario that may explain why McKinsey is holding out. The firms they are consulting for may be planning to layoff a lot of people and hire them back as contractors. If they do that, the employee is responsible for paying health insurance, not the company who is going through a middle man to add staff. Now, your consultants would know about this plan. Presumably, they were the knuckleheads that advised it in the first place. But you don’t want the employees to know what’s coming. I mean, have you *been* in a building that’s going through layoffs?? The people who aren’t wandering around like zombies are busily updating their CVs and contacting their network. No one gets any work done. (well, *I* did but I see now that I was crazy for all the good it did me) It’s a fricking disaster area. And let’s not even talk about the cut throat behavior of people back stabbing each other to make sure they secure the positions that are left. It’s an ugly bloodbath and no one comes out looking good.
So, maybe the reason that McKinsey isn’t talking is because it has to respect the confidentiality of its clients. In this business environment, the bottom line is the bottom line. Companies will do what they have to in order to appease the shareholders and right now, a lot of companies are desperate for cash and can’t cut much more without affecting productivity any more than they have. They still need the people. They just don’t want to have to compensate them so well. If that means laying off and hiring contractors without the burden of health insurance, well, the new Affordable Care Act gives them a great opportunity to do it. They just need to keep everyone working until then.
Of course, this is just a hypothesis. But it could explain the silence on McKinsey’s part. You don’t want to be the bearer of bad news that there is going to be a lot more unemployment soon and a lot more people without health insurance.
The Confluence 