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In "Sun: A CEO's Last Stand" (Information Technology, July 26), there was no mention of Sun Microsystems Inc. (SUNW
)'s successful foray into the legal-and-professional-services market, a potential gold mine for them and a boon for us. Sun has more than met our extensive technology needs with state-of-the-art server technology tailored to our particular firm. With clients and offices throughout the world, it is critical for us to have servers and applications accessible 24/7 and a low cost of ownership. Sun servers replaced hundreds of Windows servers with fewer, scalable, clustered UNIX servers.
Those of us responsible for planning long-term IT infrastructure investment must also be concerned about the financial viability of our partner-suppliers. Just this week, CEO Scott McNealy announced Sun's return to profitability and revenue growth. We are proud to partner with Sun as it steps into the legal field and expect a continued prosperous future.
Robert F. Ruyak, CEO
Brian Conlon, CIO
Howrey Simon Arnold & White LLP
One can't help but wonder if Scott McNealy was paying attention to the mistakes Ken Olsen made while [McNealy] was decimating Digital Equipment Corp.'s business -- the parallels are striking. Both companies "owned the market," and their CEOs acted with arrogance. Yet when the indicators -- and their direct reports and customers -- called for dramatic changes to effectively compete against new, cheaper platforms built on open standards, both failed to listen and respond, driving their companies into virtual extinction. Having worked at DEC during these times, as well as at Intel Corp. (INTC
), it seems to me they failed to understand the basic premise of Andy Grove's philosophy: "Only the paranoid survive."
Wellesley, Mass. "The Benefits Trap" (Cover Story, July 19) accurately depicted a serious problem for the majority of Americans who suffer from the delusion that they will be able to stop working in their early- to mid-sixties and live a life of comfortable leisure. Defined-benefit plans are fading quickly, and only one in five private-sector workers is now covered by such plans. One in four workers covered by 401(k) plans does not contribute a penny. Social Security and private savings also will be woefully inadequate to support most boomers if they don't continue to work
The Retirement Guide section of the July 26 BusinessWeek, however, paints a different picture. "No need to hit the panic button" (Personal Business, July 26) assures us that with a few minor changes in their lifestyles, boomers can make their retirement dreams come true, using an example of a 46-year-old executive who earns $190,000 a year and has about $600,000 in financial assets. "Making your money last over the years" uses a fictitious couple who earn $200,000 per year and have $800,000 in financial assets.
Let's put this in perspective. Median household income in the U.S. is about $42,000 a year. Using the Federal Reserve Board's Survey of Consumer Finances, Edward N. Wolff of New York University calculates that the median household net worth in the U.S. is $73,500. Excluding home equity it is $23,200.
The vast majority of boomers aren't preparing for life after work. In truth, the era of universal retirement is coming to an end. BusinessWeek would help shape realistic expectations for future seniors by focusing on a broader segment of Americans than a tiny sliver of the more affluent.
Edward M. Syring Jr.
Gulf Stream, Fla.Editor's Note: The writer is a former economist at Federal Reserve Bank of New York and an ex-chief economist at Marine Midland Bank (HBC
) and E.F. Hutton & Co. In "Another Look At Those Job Numbers" (News Analysis & Commentary, July 26), Peter Coy takes issue with my conclusion that the recent upturn in hiring has been concentrated at the low end of the quality spectrum. There is a serious shortcoming to his analysis: It is based on unpublished data taken from the government's smaller and less reliable survey of U.S. households. My conclusions are based on the far more comprehensive and accurate survey of workers on payrolls in business establishments.
The Bureau of Labor Statistics' "active sample" of some 400,000 establishments in the payroll data covers about a third of the total universe of such workers. By contrast, the monthly sample of only 60,000 households covers only 0.06% of the universe of more than 106 million households in the U.S. The data are unpublished for good reason: Much of the granular detail in the 154 job categories Coy has analyzed is simply not statistically significant. Nor are these data reliable enough to seasonally adjust. Coy and other analysts examine trends on a year-over-year, or 12-month trailing, basis. That misses the key aspect of this debate: a decomposition of job trends over the past four months, March to June, 2004.
I stand by my analysis: By industry, restaurants, temporary hiring agencies, and building services were the leading sources of hiring over the past four months. Accounting for only 9.7% of total nonfarm payrolls, these three low-quality segments of the U.S. workforce contributed 25% to the cumulative growth in overall hiring from March to June, 2004. All in all, lower-end industries, which employ 22% of the workforce, have accounted for 44% of new hiring -- or twice their fair share -- over the past four months.
Contrary to the sub-headline in the BusinessWeek article, the BLS is not putting any spin on newly revealed jobs detail by recommending one conclusion over another. That task, according to Coy's reporting, apparently has fallen to the White House's Office of Management & Budget. Now why would they be interested in painting a rosy picture of one of America's toughest problems?
Stephen S. Roach