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<channel>
<title>Techdirt. Stories filed under &quot;employment&quot;</title>
<description>Easily digestible tech news...</description>
<link>http://www.techdirt.com/</link>
<language>en-us</language>
<image><title>Techdirt. Stories filed under &quot;employment&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Fri, 31 May 2013 14:47:51 PDT</pubDate>
<title>Lawsuit Over Who Gets Starbucks Tips</title>
<dc:creator>Above The Law</dc:creator>
<link>http://www.techdirt.com/articles/20130530/17590423256/lawsuit-over-who-gets-starbucks-tips.shtml</link>
<guid>http://www.techdirt.com/articles/20130530/17590423256/lawsuit-over-who-gets-starbucks-tips.shtml</guid>
<description><![CDATA[ <div style="text-align:center;padding:8px;margin:0 0 7px 15px;border:2px solid #bbb;float:right;line-height:1.2;">
<i style="font-weight:bold;color:#666;font-size:90%;">Cross-posted from</i><br />
<a href="http://abovethelaw.com/2013/05/this-tipping-automatically-its-for-the-birds/" target="_blank"><img src="http://i.imgur.com/RvpZD0T.jpg" width="110" title="Above The Law" style="margin:6px 0 0 0;" /></a></div>
<p>
I imagine <a href="http://www.imdb.com/name/nm0000114/?ref_=tt_trv_qu">Mr. Pink</a> doesn&#8217;t tip at Starbucks. Hell, I don&#8217;t &#8220;tip&#8221; at Starbucks. Occasionally, I don&#8217;t feel like having 30 cents clanging around in my pocket all day, so I throw it in the tip jar. But there&#8217;s only so much I can pay for a cup of coffee in good conscience.
</p>
<p>
Apparently, there&#8217;s a lawsuit kicking around the New York Court of Appeals over who owns the tips at Starbucks. The baristas are fighting to keep control over the jar and not share the tips with assistant managers.
</p>
<p>
It&#8217;s kind of sad. At this point, why not just dump the tip jar out on the floor at the end of the day and watch them fight over it&#8230;
</p>
<p>
<span id="more-247468"></span>
</p>
<p>
The Starbucks decision could have a significant impact on the hospitality industry in New York. Here&#8217;s a report from <a href="http://www.cbsnews.com/8301-201_162-57586404/n.y.s-top-court-to-decide-who-can-tap-starbucks-tip-jars/">CBS News</a>:
</p>
<blockquote><i>
<p>
The Court of Appeals was asked by a federal court to interpret New York&#8217;s labor law and its definition of an employer&#8217;s &#8220;agent,&#8221; who is prohibited from tip sharing.
</p>
<p>
On one side are low-level baristas who serve customers and share tips weekly based on hours worked. On the other side are assistant managers who don&#8217;t get any gratuities and want some. In between are shift supervisors with limited management responsibilities who serve customers and also share tips.
</p>
</i>
</blockquote>
<p>
Starbucks &#8212; which thinks that its assistant managers should <em>not</em> get tips &#8212; points out that their assistant managers are salaried full-time employees with performance-based bonuses. Lawyers for the assistant managers argue that they are not &#8220;agents&#8221; because they don&#8217;t have hiring and firing capabilities.
</p>
<p>
I feel sorry for these people, I really do. They shouldn&#8217;t have to fight over loose change. I do think that assistant managers are in the wrong; they get bonuses, and they knew damn well their jobs were not &#8220;tips&#8221; jobs when they signed up.
</p>
<p>
But this does, you know, illustrate a little bit of what Quentin Tarantino was getting at when he wrote <a href="http://www.hark.com/clips/jjnqskprdp-im-very-sorry-the-government-taxes-their-tips">that bit for Mr. Pink</a>. Society somewhat arbitrarily decides which people get tips and which people don&#8217;t. It&#8217;s not like you are tipping your Starbucks barista for his or her specific skill and talent in pouring your coffee. Instead, you&#8217;re slavishly giving a billion-dollar corporation loose change because they put a freaking jar on the counter. I can see why the assistant managers want a cut.
</p>
<p>
Of course, if the assistant managers win, hospitality personnel will come out of the woodwork wanting tip money, and &#8220;mandatory gratuity&#8221; will go up. Middle-class customers will get screwed a little more, to help out lower-class service employees, who can&#8217;t otherwise get a living wage from their employers.
</p>
<p>
You know what I think?
</p>
<p>
<em>&#8220;I&#8217;m very sorry the government taxes their tips, that&#8217;s f**ked up. That ain&#8217;t my fault. It would seem to me that waitresses are one of the many groups the government f**ks in the ass on a regular basis. Look, if you ask me to sign something that says the government shouldn&#8217;t do that, I&#8217;ll sign it, put it to a vote, I&#8217;ll vote for it, but what I won&#8217;t do is play ball.&#8221;</em>
</p>
<p>
<a href="http://www.cbsnews.com/8301-201_162-57586404/n.y.s-top-court-to-decide-who-can-tap-starbucks-tip-jars/">N.Y.&#8217;s top court to decide who can tap Starbucks&#8217; tip jars</a> [CBS News]
</p>
<br /><br />
<b>More stories from Above The Law</b>
<ul><li><a href="http://abovethelaw.com/2013/05/how-not-to-answer-the-order-to-show-cause-that-you-shouldnt-be-disbarred/" target="_blank">How Not To Answer the &#8216;Order to Show Cause That You Shouldn&#8217;t Be Disbarred&#8217;</a>
</li><li><a href="http://abovethelaw.com/2013/05/by-all-means-allow-law-students-and-grads-to-work-for-free/" target="_blank">By All Means, Allow Law Students and Grads to Work for Free</a>
</li><li><a href="http://abovethelaw.com/2013/05/about-two-thirds-of-parents-want-their-kids-to-be-lawyersrelatedly-about-two-thirds-of-parents-dont-read-the-news/" target="_blank">About Two-Thirds of Parents Want Their Kids to Be Lawyers
(Relatedly, About Two-Thirds of Parents Don&#8217;t Read the News)</a>
</li></ul><br /><br /><a href="http://www.techdirt.com/articles/20130530/17590423256/lawsuit-over-who-gets-starbucks-tips.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130530/17590423256/lawsuit-over-who-gets-starbucks-tips.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130530/17590423256/lawsuit-over-who-gets-starbucks-tips.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>too-much-tipping</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130530/17590423256</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 11 Apr 2013 15:51:00 PDT</pubDate>
<title>Proposed WA Bill Would Allow Employers To Request Facebook Passwords</title>
<dc:creator>Timothy Geigner</dc:creator>
<link>http://www.techdirt.com/articles/20130405/09461122596/wa-bill-allowing-employers-to-request-facebook-passwords.shtml</link>
<guid>http://www.techdirt.com/articles/20130405/09461122596/wa-bill-allowing-employers-to-request-facebook-passwords.shtml</guid>
<description><![CDATA[ The issue of employers reviewing and seeking to <a href="http://www.techdirt.com/articles/20090618/1444465282.shtml">access</a> the social media accounts of their applicants and employees is now several years old. To be honest, I'm more than a bit surprised the conversation persists, since it seems such an easy one to resolve, but I'll get to that in a bit. Still there are some companies who do <a href="http://www.techdirt.com/articles/20120321/14383118190/should-we-outlaw-employers-asking-social-networking-logins.shtml">ask</a> for social media login info.  While there's been some discussion about laws to forbid this practice, some in Washington state are trying to go in the other direction.  Taking a bill that was constructed specifically to <i>safeguard</i> the passwords of applicants and employees, a proposed amendment would instead <a href="http://seattle.cbslocal.com/2013/04/03/washington-bill-would-allow-employers-to-seek-workers-facebook-passwords/">codify into law a company's <b>right to request those passwords</b></a> for the purposes of an "investigation." Via reader <a href="http://www.techdirt.com/user/akp">akp</a>:
<blockquote>
<i>The amendment says that an employer conducting an investigation may require or demand access to a personal account if an employee or prospective employee has allegations of work-place misconduct or giving away an employer&rsquo;s proprietary information. The amendment would require an investigation to ensure compliance with applicable laws or regulatory requirements.</i></blockquote>
<blockquote>
<i>Under the amendment, employees would be present when their social network profiles are searched and whatever information found is kept confidential, unless it is relevant to a criminal investigation.</i></blockquote>
One could easily be fooled into seeing this as reasonable compromise when it is in fact nothing of the sort. Let's be clear on what social media is and is not. A Facebook account can include aspects that are both public and private. The very nature of the site's privacy controls prove that to be the case. If I choose to share thoughts, messages, or anything else exclusively with my friends, which Facebook indeed allows me to do, what should it matter if those friends are sitting next to me on my couch or seated on their own couches reading my words on a website? It shouldn't, yet this amendment would open up those thoughts and communiques to corporate fishing expeditions. Worse, it would open up the responses of any of my comrades to those same investigations. Were I to use company equipment for any of this, that can and should be reviewed by my employer, but a line is crossed when a password is given. No longer is the company investigating what their employer has done on the company machine, they're investigating the account. That's completely different.
<br /><br />
Moreover, the clamor over company secrets and financial information being disseminated via social media seems to me to be manufactured outrage. How many victims of this sort of thing have there been compared to the massive breaches in that same information occurring due to poorly insulated networks? I would think corporate America should want to get its own house in order before strolling through mine. That the bill includes broad language allowing for investigations over "work-related misconduct" makes it all the more worrisome, as the EFF rightly notes.
<blockquote>
<i>This amendment "says they have a right to enter your digital home," [Dave] Maass said. "It's astounding that they would try to codify this and that all employers could do this&hellip; the national trend is to move away from this. It's shocking that the amendment is going in the right opposite direction."</i></blockquote>
Part of that trend includes the CFAA, which potentially makes <a href="https://www.techdirt.com/articles/20130406/22004022615/which-ny-times-reporter-jenna-wortham-accidentally-reveals-how-she-violated-both-cfaa-dmca.shtml">logging into</a> other people's social media accounts, or giving out your password to anyone, a crime. Under those auspices, would every company that asked for the passwords in these investigations be party to criminal conduct? I would think those details would be ironed out in some way, but when you have to massage the bill to get around privacy of citizens, rather than protecting their privacy, you know you've got a bad bill.<br /><br /><a href="http://www.techdirt.com/articles/20130405/09461122596/wa-bill-allowing-employers-to-request-facebook-passwords.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130405/09461122596/wa-bill-allowing-employers-to-request-facebook-passwords.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130405/09461122596/wa-bill-allowing-employers-to-request-facebook-passwords.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>no-more-private-life</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130405/09461122596</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 11 Apr 2013 12:47:46 PDT</pubDate>
<title>Oh Look, The Number Of People Employed In The Movie And Music Recording Business Just Hit An All Time High</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130411/11122622680/oh-look-number-people-employed-movie-music-recording-business-just-hit-all-time-high.shtml</link>
<guid>http://www.techdirt.com/articles/20130411/11122622680/oh-look-number-people-employed-movie-music-recording-business-just-hit-all-time-high.shtml</guid>
<description><![CDATA[ The common refrain coming out of the MPAA and RIAA over the past few years has really focused on "jobs, jobs, jobs!"  This is a message that often works with Congress.  If you can convince Congress that "jobs" are at risk, they go scrambling to protect those jobs, even if the economy would be much better off with obsolete jobs going away, and better jobs taking their place.  That said, the MPAA and RIAA have a long history of making up <a href="http://www.techdirt.com/articles/20120911/01015620336/mpaa-sends-five-key-propaganda-points-to-politicians.shtml">ridiculous</a> claims about the number of people employed in their industries, as well as the number of supposed <a href="http://www.techdirt.com/articles/20121008/11012620639/riaas-bogus-math-strikes-again-claimed-41-decline-musicians-not-even-close-to-true.shtml">"lost jobs."</a>  So it's <i>rather noteworthy</i> to see that the good folks over at ZeroHedge have pointed out that, according to the Bureau of Labor Statistics (BLS), <a href="http://www.zerohedge.com/news/2013-04-11/we-have-discovered-boom-record-jobs-those-who-make-stuff" target="_blank">jobs in the motion picture and sound recording industries hit an all time high in December</a>.
<center>
<a href="http://imgur.com/sHies5L"><img src="http://i.imgur.com/sHies5L.jpg" width=560 /></a>
</center>
Funny that.  I thought that they were losing jobs like crazy, and that without SOPA those jobs would just keep disappearing.  Hmm...<br /><br /><a href="http://www.techdirt.com/articles/20130411/11122622680/oh-look-number-people-employed-movie-music-recording-business-just-hit-all-time-high.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130411/11122622680/oh-look-number-people-employed-movie-music-recording-business-just-hit-all-time-high.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130411/11122622680/oh-look-number-people-employed-movie-music-recording-business-just-hit-all-time-high.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>but-jobs-jobs-jobs!</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130411/11122622680</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 19 Aug 2011 09:35:20 PDT</pubDate>
<title>First Year Associate Fired After Telling Partners He Had A 'Superior Legal Mind' Sues Firm For $77 Million</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110818/11051015586/first-year-associate-fired-telling-partners-he-had-superior-legal-mind-sues-firm-77-million.shtml</link>
<guid>http://www.techdirt.com/articles/20110818/11051015586/first-year-associate-fired-telling-partners-he-had-superior-legal-mind-sues-firm-77-million.shtml</guid>
<description><![CDATA[ Lawyers filing lawsuits on their own behalf are always interesting specimen.  Witness the case of Gregory Berry, a recent graduate of UPenn's law school, who got a job at big law firm Kasowitz, Benson, Torres & Friedman.  Like most first year associates, he was given work that wasn't all that interesting, but that's the life of a first year associate at a big law firm.  Mr. Berry decided to take it upon himself to shake things up and sent an email to some partners talking up his "superior legal mind," compared to others at the firm and asking for more important work to focus on.  This came a few months after he had already been reprimanded over a separate incident concerning his (perhaps reasonable) inability to work on a particular case (he claimed he was too busy on other cases).  Either way, the firm decided that Mr. Berry was best suited elsewhere, gave him a severance package and even let him hang onto his work email, voicemail and secretarial answering service for a while.  Hell, to make it easier for him to find another job, they even told him he could keep his bio on the website.
<br /><br />
So he turned around <a href="http://www.abajournal.com/news/article/fired_kasowitz_first-year_sues_for_77m_says_firm_didnt_appreciate_his_super" target="_blank">and sued the firm along with a partner and an associate</a> he felt were instrumental in his firing... for $77 million.
<br /><br />
The email that pushed the firm over the edge read, in part:
<blockquote><i>
It has become clear that the only limiting factor on how much value I am to a case is how much responsibility I am given: the
more responsibility I am given, the better the outcome. I am in
kind of an uncomfortable position at the firm because although I
am a &ldquo;first year,&rdquo; I have 15 years business and real world
experience, as much as many senior associates. When I first got
here I did not know what to expect, but after working here for
several months now it has become clear that I have as much
experience and ability as an associate many years my senior, as
much skill writing, and a superior legal mind to most I have met.
</i></blockquote>
A partner explained to Berry that this email had "upset" some partners and that it had "burned bridges" at the firm.  A few days later, he was fired.
<br /><br />
Reading the case itself is hilarious and highly recommended.  Basically, it sounds like any very typical office situation where there's a minor dispute, but Berry plays up each action.  He also plays up his own abilities.  My favorite line is this one:
<blockquote><i>
After conquering Silicon Valley, he decided to take his talents in a new direction, and in 2007 began law school at the University of Pennsylvania Law School in Philadelphia, PA
</i></blockquote>
I also like how he portrays a pretty standard move.  After he told an (more senior) associate that he probably was too busy to work on her project, she forwarded his email to a partner.  But, look at the way Berry tells the story:
<blockquote><i>
Mr. Berry&rsquo;s communications were, as Ms. Conroy knew, entirely
proper under the duties of his employment. Upon information and belief, refusing her project nonetheless angered Ms. Conroy and she lashed out by maliciously
"reporting" Mr. Berry's e-mail to Mr. Marks.
<br /><br />
Such vindictiveness is outside the scope of Ms. Conroy&rsquo;s employment.
<br /><br />
Complaining to Mr. Marks had no purpose other than to harm Mr.
Berry and interfere with his employment.
</i></blockquote>
Can you imagine what kind of world we would live in if every time an employee complained about another employee, it was deemed to have "no purpose other than to interfere" with someone's employment?  And, I'm now planning to use "such vindictiveness is outside the scope of your employment" as much as possible in future conversations.
<br /><br />
Oh, and after he got fired and went through all of this, he still wrote the partners at the firm to ask for a letter of recommendation.
<br /><br />
While he's now set up <a href="http://www.gregoryberrylaw.com/" target="_blank">his own law firm</a>, where he advertises "creative and cutting-edge legal strategies," he claims in the lawsuit that the firing will cost him $2.55 million in "lost income."  Then there's an additional $25 million for "emotional distress" and the harm to his career and reputation.  Finally, another $50 million in punitive damages.  Just because.
<br /><br />
I am curious, of course, which thing people think will damage his reputation more.  Getting fired by a big law firm... or then turning around suing that firm for $77 million?<br /><br /><a href="http://www.techdirt.com/articles/20110818/11051015586/first-year-associate-fired-telling-partners-he-had-superior-legal-mind-sues-firm-77-million.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110818/11051015586/first-year-associate-fired-telling-partners-he-had-superior-legal-mind-sues-firm-77-million.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110818/11051015586/first-year-associate-fired-telling-partners-he-had-superior-legal-mind-sues-firm-77-million.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>creative-legal-strategies</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110818/11051015586</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 15 Aug 2011 19:03:00 PDT</pubDate>
<title>Cooley Law School Sued Over Its Supposedly 'Misleading Employment Stats'</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110813/00470615514/cooley-law-school-sued-over-its-supposedly-misleading-employment-stats.shtml</link>
<guid>http://www.techdirt.com/articles/20110813/00470615514/cooley-law-school-sued-over-its-supposedly-misleading-employment-stats.shtml</guid>
<description><![CDATA[ We recently wrote about how the Thomas M. Cooley Law School, whose sole actual claim to fame appears to be that it takes on more students than any other law school, was <a href="http://www.techdirt.com/articles/20110808/02404115428/how-to-make-mockery-your-own-law-school-sue-your-critics.shtml">suing some online critics</a>.  It had actually filed two lawsuits, one was against some online critics, and the other was against a law firm that had clearly been sniffing around some Cooley practices.  Well, now the other shoe has dropped and, as ShellMG points out, that same law firm <a href="http://www.lansingstatejournal.com/article/20110810/NEWS01/308100037/Cooley-Law-School-sued-alleged-misleading-employment-statistics?odyssey=tab|topnews|text|FRONTPAGE" target="_blank">has sued Cooley in a class action lawsuit</a>, claiming that the school posts false claims about its postgraduate employment rates.  This is, clearly, what Cooley was trying to stave off with its original lawsuit, since in its lawsuit against the Kurzon Strauss law firm, it highlighted a message posted to a legal board asking students to come forward with information about Cooley's employment stats.  Of course, the fact that Cooley sued first (with, as many people pointed out, lawyers who graduated from <i>other schools</i>) kind of makes you wonder what the school is hiding.  That is, rather than wait to see if the law firm actually had anything, Cooley filed what could be described as a SLAPP suit, in that it appears it sought to stop the law firm from actually getting its message out to former students.  It certainly makes for an interesting defamation claim.  Can you accuse a class action law firm of defamation for reaching out to find people who had a bad experience?
<br /><br />
In the end, I still think that Cooley comes out of this looking terribly.  Suing critics never looks good.   And now its stats are likely to get a lot more scrutiny.  I'm curious how comfortable Cooley is with that...<br /><br /><a href="http://www.techdirt.com/articles/20110813/00470615514/cooley-law-school-sued-over-its-supposedly-misleading-employment-stats.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110813/00470615514/cooley-law-school-sued-over-its-supposedly-misleading-employment-stats.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110813/00470615514/cooley-law-school-sued-over-its-supposedly-misleading-employment-stats.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>so-that's-why-it-sued</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110813/00470615514</wfw:commentRss>
</item>
<item>
<pubDate>Wed, 25 Aug 2010 14:15:47 PDT</pubDate>
<title>Proposed German Law Says Employers Can't Review Applicants On Facebook... But Googling Them Is Fine</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20100824/03070110752.shtml</link>
<guid>http://www.techdirt.com/articles/20100824/03070110752.shtml</guid>
<description><![CDATA[ Ah, the bizarre laws politicians think up.  There has been plenty of concern these days about your "online permanent record," and it's no secret that plenty of prospective employers check out applicants' online presence in reviewing their candidacy for jobs.  However, a newly proposed law in Germany will apparently <a href="http://www.spiegel.de/international/germany/0,1518,713240,00.html" target="_blank">bar employers from checking out non-career focused social networking sites</a> as part of reviewing a candidate, but they <i>can</i> still search on Google.  The details:
<blockquote><i>
Although the new law will reportedly prevent potential bosses from checking out a candidate's Facebook page, it will allow them to look at sites that are expressly intended to help people sell themselves to future employers, such as the business-oriented social networking site LinkedIn. Information about the candidate that is generally available on the Internet is also fair game. In other words, employers are allowed to google potential hires. Companies may not be allowed to use information if it is too old or if the candidate has no control over it, however.
</i></blockquote>
This sounds like politicians overreacting to a specific complaint ("oh my! companies will look at my drunken antics on Facebook!") and coming up with a law that makes no sense at all.<br /><br /><a href="http://www.techdirt.com/articles/20100824/03070110752.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100824/03070110752.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100824/03070110752.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>and-when-Google-leads-to-Facebook?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100824/03070110752</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 9 Jul 2010 18:40:34 PDT</pubDate>
<title>Andy Grove Suggests US Protectionism For Tech Jobs</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20100702/17414610064.shtml</link>
<guid>http://www.techdirt.com/articles/20100702/17414610064.shtml</guid>
<description><![CDATA[ Former Intel CEO Andy Grove is one of those guys who I always pay attention to when he speaks.  Usually, he makes me look at things in a different light and, more often than not, shift my thinking on a certain subject.  It's quite rare that I finish reading something he's written in near total disagreement, but it's happened this time.  Grove has penned a long, and thought-provoking piece for Bloomberg, where he takes the surprising-for-Silicon-Valley position that <a href="http://www.bloomberg.com/news/2010-07-01/how-to-make-an-american-job-before-it-s-too-late-andy-grove.html" target="_blank">offshoring jobs to China is bad, and the US government should get involved with protectionist policies on American jobs</a>.
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Now, as always, his position is deeply nuanced, and not as simplistic as the typical calls for US job protectionism.  He talks up the importance of job "scaling" in the US economy:
<blockquote><i>
Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
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The scaling process is no longer happening in the U.S. And as long as that's the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
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Scaling used to work well in Silicon Valley. Entrepreneurs came up with an invention. Investors gave them money to build their business. If the founders and their investors were lucky, the company grew and had an initial public offering, which brought in money that financed further growth. 
</i></blockquote>
First of all, I'm not convinced he's right that the scaling doesn't happen in Silicon Valley.  The same day that Grove's column was released, Tom Foremski had a short post about the <a href="http://www.siliconvalleywatcher.com/mt/archives/2010/07/are_silicon_val.php" target="_blank">hockey-stick-like job growth</a> at Silicon Valley's most popular companies, where even he worried that such scaling -- which does appear to be happening -- might "crowd out" other startups.  So, we have Andy Grove saying Silicon Valley startups can't scale from an employment standpoint just at the same time the data shows that they still do...
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But as we dig a bit deeper into the article, we find out what Grove's real concern is.  It's not that jobs aren't scaling, but <i>which kind of jobs are scaling</i>.  And, to Grove, the problem is that we're no longer scaling <i>manufacturing jobs</i>:
<blockquote><i>
Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers. 
</i></blockquote>
I'm kind of surprised that Grove would make this argument.  From David Ricardo, writing 200 years ago, forward, the concept of comparative advantage is pretty well-established.  Now, there definitely are some recent critiques of the concept of comparative advantage, and one major concern is whether or not it really applies in a globalized world, but the general theory still seems valid: if it's more efficient and economical (other things equal) for manufacturing to take place in China, then it should actually make the US better off.  Now, obviously, reality is more complex than theory, and there are other considerations as well, including human rights, quality, and even safety (lead in toys and poisoned toothpaste, anyone?).  But, on the whole, that's not what Grove is talking about.  Instead, his main worry seems to be that if we lose our manufacturing prowess in certain tech fields, it actually puts us behind the curve in important new fields:
<blockquote><i>
There's more at stake than exported jobs. With some technologies, both scaling and innovation take place overseas. Such is the case with advanced batteries. It has taken years and many false starts, but finally we are about to witness mass- produced electric cars and trucks. They all rely on lithium-ion batteries. What microprocessors are to computing, batteries are to electric vehicles. Unlike with microprocessors, the U.S. share of lithium-ion battery production is tiny.
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That's a problem. A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn't participate in the first phase and consequently weren't in the running for all that followed. I doubt they will ever catch up. 
</i></blockquote>
Now, I will agree that this is a point that got me thinking.  It certainly fits well with our recent post about how <a href="http://www.techdirt.com/articles/20100627/2304419976.shtml">scientific knowledge advances</a>, where the research has shown that those who aren't actively involved in a particular field simply can't understand that field enough to stay innovative or competitive in that field.  So, the real question is whether or not the jobs that are being offshored are really the ones in areas where the US needs to be that knowledgeable... and also whether or not the knowledge transfer really is that complete.  If, as is sometimes the case, the design work still really takes place in the US, but the manufacturing takes place in China, which bit of knowledge is more important?
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I can understand where Grove is coming from.  While many people still think that Intel's advantage was in its chip design, that was never really the case.  It was always its manufacturing capabilities that put the company ahead.  Intel's manufacturing expertise meant that its yield rates (effectively, the percentage of silicon that was successfully turned into a working computer chip) were always significantly higher than competitors, allowing Intel to produce more at a lower cost, and keep its margins higher.  So, it's no wonder that Grove would focus in on manufacturing expertise as being key.  But there is more to innovation than just manufacturing.
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Grove reiterates the same point later in the article, but makes a big assumption:
<blockquote><i>
Consider this passage by Princeton University economist Alan S. Blinder: "The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became 'just a commodity,' their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success."
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I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today's "commodity" manufacturing can lock you out of tomorrow's emerging industry. 
</i></blockquote>
But you could make the same argument with plenty of industries that went overseas, or were more automated, that <i>didn't</i> end up harming the US.  The textile industry was once a huge domestic industry, but much of it has gone overseas, and because of that, we tend to have cheaper clothing for everyone.  Again, there are issues there to be aware of, such as human rights and sweatshops -- something I'm not defending -- but it's not clear that jobs going overseas automatically means harm to the economy, as Grove implies.
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Grove then challenges the "free market" orthodoxy by pointing to the growth of certain east Asian economies in the 70s and 80s that were largely due to heavy government involvement and planning:
<blockquote><i>
Consider the "Golden Projects," a series of digital initiatives driven by the Chinese government in the late 1980s and 1990s. Beijing was convinced of the importance of electronic networks -- used for transactions, communications and coordination -- in enabling job creation, particularly in the less developed parts of the country. Consequently, the Golden Projects enjoyed priority funding. In time, they contributed to the rapid development of China's information infrastructure and the country's economic growth. 
</i></blockquote>
Indeed, that's undoubtedly true.  But Grove is playing a bit of a game with confirmation bias on this one.  Yes, certain government mandates worked well for certain countries, but some of them also had governments force them to bet on the wrong technology.  Japan bet on certain technologies (like HDTV) too soon, and discovered that they got leapfrogged in the market.  Sometimes, it's absolutely true, a government can help an industry develop, but often it can push an industry down the wrong road.  To ignore that is dangerous.  In fact, we were just discussing how some of Japan's choices pushing certain industries have had <a href="http://www.techdirt.com/articles/20100630/13460810027.shtml">long term negative consequences</a> in terms of Japanese domestic efficiency and innovation.
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Protectionism leads to perverse incentives that can absolutely work against long term growth and innovation.
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Yet, Grove goes so far as to suggest that we should put a tax on offshoring and try to force companies to keep certain types of jobs in the US:
<blockquote><i>
We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted. 
</i></blockquote>
Yikes!  Grove should certainly know that the history of trade wars -- even when you "fight to win" is not pretty for <i>any</i> of the countries involved in those wars.  They lead to less growth, less innovation and higher prices.  They're incredibly dangerous, and the unintended consequences do significantly more harm than good.
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Besides, how do you pick the "good jobs" from the jobs we're actually better off offshoring.  Nearly every day we hear stories about attempts by the US government to protect jobs in a particular industry.  Just look at US telco policy or US copyright policy -- both of which are very much designed to prop up less efficient companies in the industry, at the expense of more innovative, more efficient upstarts.  Protecting jobs comes at a cost to efficiency.  If we always had a policy of "protecting jobs," then we never would have automated the telephone switching system, which put tons of "operators" out of work.  But that also opened up massive new innovations, including the internet.  I don't think anyone would argue that the jobs created due to more efficient telephone switching have so far surpassed the jobs lost from no longer needing operators to connect one party to another.
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Yes, Grove has an important point in the middle of all of this, about the potential loss of key knowledge and expertise that is needed for the next generation of innovation, but he's cherry picked the other examples, without realizing the very real and very serious downsides to protectionism and to having government policy pick which industries (and which players in those industries) are "winners" and which are "losers."
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In the end, the article is thought-provoking, and is at least making me reconsider some aspects on how we handle knowledge transfer for future innovation.  But mostly the suggestions seem to go too far in heavy handed government involvement in propping up less efficient businesses, just to keep jobs local, even if it comes at the expense of future innovations that actually will (despite Grove's claims) create the jobs of the future.<br /><br /><a href="http://www.techdirt.com/articles/20100702/17414610064.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100702/17414610064.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100702/17414610064.shtml?op=sharethis">Email This Story</a><br />
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<slash:department>didn't-see-that-coming</slash:department>
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<pubDate>Tue, 8 Dec 2009 09:56:00 PST</pubDate>
<title>Disney CEO: I Can't Figure Out Ways To Adapt My Business, So I Need Government Protection</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091206/2325097225.shtml</link>
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<description><![CDATA[ We had high hopes for Robert Iger when he took over Disney from Michael Eisner (whose views on intellectual property were positively <a href="http://www.techdirt.com/articles/20080311/190606504.shtml">wacky</a>).  Iger surprised a lot of people by taking a very <a href="http://www.techdirt.com/articles/20060412/011217.shtml">progressive view</a> towards digital and online content, as well as recognizing the need for new business models, rather than attacking your fans and customers.  In 2006, he noted that the recording industry had screwed up and he intended to respond differently:
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"The bottom line is they were not in tune with what their customers wanted and what the world was demanding of them and I think it hurt them significantly." 
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So we were disappointed last year when Iger came out <a href="http://www.techdirt.com/articles/20080911/0352222239.shtml">strongly in support</a> of rules to force ISPs to kick customers off the internet based on a "three strikes" plan, where accusations, not convictions, are all that matter.
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It seems that he's not giving up.  <a href="http://dcmetal.wordpress.com" target="_blank">Chris</a> points out that, at President Obama's recent "Jobs Summit" Iger gave a speech where much of it was <a href="http://www.huffingtonpost.com/robert-a-iger/two-common-sense-ways-to_b_382034.html" target="_blank">focused on the need for stronger intellectual property protection from the government</a>, and no talk about all of the innovative business models that others are creating without relying on governments to prop up their business model.   In discussing his talk, he noted:
<blockquote><i>
So when you hear about "stealing intellectual property," a term that may have little meaning to you, think about it as a means of contributing to unemployment and harming our economy.
</i></blockquote>
Of course, there's no indication that this is actually true.  Even if people are saving money by not spending on Disney content, they are spending that money elsewhere, contributing to jobs in those sectors.  If you want to use Iger's logic, you could just as easily claim that copyright laws allow them to charge monopoly rents on products, thus depriving many other industries of money and jobs.  Thus -- again, using Iger's own logic -- copyright contributes to unemployment and the harming of our economy.  Not sure he really wants to go there.<br /><br /><a href="http://www.techdirt.com/articles/20091206/2325097225.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091206/2325097225.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091206/2325097225.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>well,-that's-compelling</slash:department>
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