Times They Are A Changing

I used to love listening to Bob Dylan, especially when he was backed by “The Band,” but his words are just as true today as they were in the 60’s, times they are a changing. IBM is making changes to its 401K system; what we thought Thomas Jefferson said is not true; and Apple will be making its “Mac” in the United States (maybe Michael Moore’s challenge to Phil Knight to manufacture Nike shoes in Flint, Michigan will also become true).

IBM has been known as a benefits leader in industry. Although it is not as radical as Henry Ford was when he paid his employees $5 per day to assemble his cars, (his peers called him a Socialist), IBM is known for providing great benefits for its employees. Starting next year, “IBM’s contributions [to an employee’s 401K], which generally range from 6% to 10% of pay will take place December 31st. Workers who leave the company before December 15th won’t qualify for the match, unless they retire.” IBM which used to make monthly contributions to an employee’s fund, will now only make one contribution per year. The issue is the amount of expense associated with retirement-plan expenses, notice that the wording is not related to a pension, but retirement-planning. With the aging boomers who want to retire and go on to the second part of their life, the financial stress for companies is growing. Many have already eliminated the pension option moving to retirement-planning where the employee puts pretax funds into an account and a company matches up to a certain percentage. Now, with so many people moving into retirement age the draw on these funds will be enormous. Thus IBM is trying to get out in front. The amount of interest gained by IBM will be incredible, the interest that used to go to the employee.

“Thomas Jefferson once famously wrote, All tyranny needs to gain a foothold is for people of good conscience to remain silent.” The question is whether he really said it, or not. Anna Berkes is a research librarian at the Jefferson Library located in Monticello, and she says he never said it. According to Berkes there are many quotes that are attributed to Jefferson, which he never said. This is one of the drawbacks to the Internet information glut. Much of the information is inaccurate. However, it really doesn’t make any difference who said the above quote, it is just as true today as it was whenever it was stated. This axiom is currently being portrayed on the world scene in Egypt. It will be interesting to see what happens.

What a difference a leadership change makes. Steven Jobs, founder of Apple, was very stingy; employee’s were supposed to feel privileged to work at Apple. Now with Tim Cook, new CEO of Apply, the company is allowing employees more creative freedom, while improving employee benefits. On top of that he is moving manufacturing back to the US. “Apple Inc. plans to build some Mac computers in the U.S. for the first time in a decade, investing $100 million next year in an effort that could serve as a high profile test of American manufacturing competitiveness.” There isn’t much detail yet, but it will be interesting to see which computer line will be made in America.

Life is never stagnant, it is constantly changing, and those who can adapt will be a bit more fulfilled than those that can’t. I would predict that many more companies that offer contributions to employee 401K’s will follow IBM’s path, but I also hope that mimetic forces will drive movement of more manufacturing back to the U.S, which will result in more jobs.

Although Jefferson may not have stated my earlier quote, it does not change the power of the words. We need to pay attention to government, if we don’t we won’t get the change we want, but we will get the change we deserve.

And that is my thought for the day!



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