National News

Crude oil gets cheaper...again

Marketplace - American Public Media - Tue, 2014-11-04 07:00

The price of crude oil, which had been sinking this fall, took another downward turn today. 

Oil producers can choose to pump more or less oil, of course. They can also adjust prices. That’s what the world’s largest oil exporter did yesterday when Saudi Arabia cut prices for crude sold to U.S. customers.

Saudi Arabia is facing heavy competition from producers in the U.S. and nearby Latin America, according to oil strategist Julian Lee with Bloomberg First Word.

“I think the Saudis have cut crude prices to the U.S. in order to keep their oil competitive,” he says.

Lee says Saudi Arabia wants to retain a stable market share in the U.S.

Energy market analyst Sarah Emerson with ESAI warns against reading too much into yesterday’s price adjustment. Still, she thinks Saudi Arabia is trying to settle on a price per barrel that other members of the Organization of the Petroleum Exporting Countries can support when OPEC meets later this month.

“Saudi Arabia does not necessarily want to defend the price at $100 or $110,” she says. “But defending a price at $85 or $80 makes much more sense.”

Julian Lee says OPEC countries will review their production policy at the forthcoming meeting. There, he says, they could decide whether to cut production to shore up prices, or let prices fall further to choke off growth in North American production. 

PODCAST: Death of a death-industry

Marketplace - American Public Media - Tue, 2014-11-04 03:00

As you were brushing your teeth this morning, crude oil prices were falling nearly 2 percent. Some of this is an announcement that Saudi Arabia, that huge producer of oil, is cutting prices to U.S. customers. More on that. And a year ago, tech CEO Michael Dell paid almost $25 billion for a computer maker … called Dell. He bought enough shares to take the company private, meaning no quarterly earnings reports. Today, at the Dell World conference in Austin, he'll show off his renovations in progress. Plus, America's funeral parlors bring in an estimated $20 billion a year in the U.S. But the industry is changing.

Living without cash or credit cards for a week

Marketplace - American Public Media - Tue, 2014-11-04 02:00

Living life for a week without using a credit card or cash may seem impossible, but with a number of mobile payment options now available, Lisa Selin Davis decided to give it a shot.

In the process, she discovered how feasible (or not) paying exclusively with mobile payments has become, and which stores are most equipped to handle mobile payments. Spoiler alert: Selin Davis found herself mostly at retail giants. 

To hear how Selin Davis' week of mobile payments went down, click on the media player above.

Black-owned funeral homes face existential challenge

Marketplace - American Public Media - Tue, 2014-11-04 02:00

The funeral, or “death-care” industry, brings in an estimated $20 billion a year in the U.S., but the industry is changing. There’s been a shift towards chain funeral homes, and more people are choosing cremation. In some U.S. cities, that has black-owned funeral homes particularly worried about staying above ground.

Bowman and Young Funeral Home on the west side of Dayton is straight out of the year it was built, 1963: low ceilings, retro colors. Dwayne Bickham has been working here since he was 17 years old in 1979. He says the area was thriving when he was a kid.

“People in this community had jobs, we had Frigidaire, we had Inland,” he says. Now those factories are long-gone, and a lot of people have left the neighborhood, too.

“The children and grandchildren don’t live in Dayton,” says funeral director Keith Young.

Lewis Wallace/WYSO

These days, the people shopping for a funeral service could live hundreds of miles away; they’re literally phoning it in from California or Florida or just the suburbs. Or, they’re going online instead of calling the local funeral home they grew up with.

Enter the competition: funeral home chains, which went through a big boom and a spate of buy-outs in the 1990's, and now seem to be resurgent. They’ve got the internet on lock, and TV ads in prime spots. One chain runs ads in Ohio depicting it as family-owned despite the fact that the owners live in Kansas and have chains across Ohio, including several in Dayton.

Meanwhile, black undertakers are in decline: in one survey of mortician schools, the percentage of black students went from 27 percent seven years ago to just 15 percent in 2014. As the demographics and populations of black neighborhoods have changed, funeral directors have been struggling to adapt.

“They have had to either relocate their business to where some of their clientele has moved, or re-market their business to immigrant families,” says Suzanne Smith, a professor at George Mason University and author of “To Serve the Living: Funeral Directors and the African American Way of Death.”

Young says he’s cut prices and tried to have more of a web presence in response to the competition. And he and some local ministers are trying to convince people to stick with the neighborhood undertaker on principle. He says some of his clients have been surprised by the final price tag at the chains across town.

“People get over there and find out that it’s not what they said it was gonna be. And they come back to the west side of Dayton,” he says. “They come back home.”

African-American funerals are often called homegoings, and Young says he hopes the next generation will keep coming back home for their funerals.

 

 

 

 

Low-wage workers stuck with non-compete agreements

Marketplace - American Public Media - Tue, 2014-11-04 02:00

If you’re a CEO or a senior manager, you may have signed a non-compete agreement, which would limit or restrict your ability to work at a competing company for a pre-determined period of time after leaving your job. 

But in the last couple of decades, an increasing number of American workers are being asked to sign such deals, including service-sector and low-wage employees.

“We’ve seen them expand to jobs like yoga instructors and camp counselors,” says Orly Lobel, a professor at the University of San Diego School of Law and author of the book “Talent Wants To Be Free,” which addresses the subject.

Take the case of Danny Davies, who worked at a Jimmy John’s sandwich shop. He says when he got hired, he was required to sign a non-compete agreement that limited his ability to work at any other sandwich restaurant.

“They ask everyone to sign it when you get hired,” says Davies, who hasn’t worked at Jimmy Johns since February 2014. And while neither Davies nor his colleagues initially took the agreements seriously, Davies says their views changed once they considered leaving the sandwich shop and finding a job elsewhere.

"I’ve known people that have done this: they start working somewhere…And keep this job secret, just in case,” says Davies, alluding to the concern that the franchise owner of the sandwich shop might pursue legal action against them.

There have been several stories of employees who have been restricted from taking other jobs because of non-compete agreements—from a children’s camp counselor to a physicist. Jimmy John’s is currently facing a class-action lawsuit over its non-compete agreements.

One of the rationales for requiring the non-competes from lower-wage workers is that they may have received a lot of training in their jobs, and if they leave to work at a competing company, that may be an unfair advantage. But Lobel says non-compete agreements have spread beyond even that thinking.

"I teach cases about welders who receive so little training, but they still can’t move to a competitor,” says Lobel.

Lobel says part of the reason for the expansion of these agreements is a shift in business culture. “Today, it’s really human capital that is what creates value," Lobel says. "And companies have this impulse that the way they’re going to keep people is by cutting off their outside opportunities.”

“Non-compete law is essentially state law, and it varies somewhat significantly among states,” says Michael Rosen, a partner at the Boston law firm Foley Hoag LLP. 

Rosen specializes in non-compete agreements in Massachusetts, which has a relatively permissive non-compete law. Meanwhile, California is one of the most restrictive states. It does not recognize the agreements except for owners of businesses. In the summer of 2014, Massachusetts’ state legislature considered amending non-compete rules, but the initiative failed.

Rosen says there is a place for non-compete agreements in business even for low-level workers, such as those at a high-tech firm with access to confidential code.

“Generally, the legitimate interests that would justify enforcement are…protection of trade secrets or confidential information, and protection of good will,” Rosen says. “But in terms of low-skill areas where confidential information and good will are really not in jeopardy, I think it’s difficult to justify asking folks to sign a non-compete."

Dell reboots as a private company

Marketplace - American Public Media - Tue, 2014-11-04 02:00

A year ago, tech CEO Michael Dell paid almost $25 billion for a computer maker … called Dell. He bought enough shares to take the company he founded private, meaning no quarterly earnings reports. At the Dell World conference in Austin, he’ll show off a reboot-in-progress. 

One area where Dell wants to grow is data services: Helping corporate clients manage “the cloud.”

There are pitfalls to a cloud strategy, says James Kelleher, an analyst with Argus Research. "Number one, it’s not enough to announce that you’re a cloud company," he says.

Simply providing software tools isn't enough either, he says. As companies like IBM have learned, "you need to actually provide the cloud facility." Competitors like Amazon have had early success with that strategy. 

Meanwhile, Dell can finance its transition by selling more computers. Tablets have eaten into traditional PC sales, but for now, Dell’s are strong

"That’s really the million-dollar question here, for every technology company," says Matt Eastwood, an analyst with the tech consultancy IDC. "How quickly will that traditional profit pool begin to dry up, and how quickly will those new profit pools develop and emerge?"

As a private company, Dell won’t have to worry about the stock market freaking out if it doesn’t show results every quarter.

Priceline's mission: Be bold

Marketplace - American Public Media - Tue, 2014-11-04 02:00

William Shatner has been Priceline’s spokesman for years, but the company is not following the script of Shatner’s Star Trek days. 

“It’s not just William Shatner, but the whole company has to boldly go where no travel company has gone before," says Gary Leff, who writes the viewfromthewing.com blog. "They haven’t quite figured out how to teleport themselves into the future of online travel."

Leff says Priceline's third quarter earnings report will give a glimpse of the success of the company's strategy of growth through the acquisition of other companies.  

Priceline seeks out new companies to buy, like the dinner reservation website Open Table.

Basically, Priceline is trying to be your one stop shop for everything; your plane ticket, hotel and restaurant reservation. 

“Priceline’s really trying to expand how much of the wallet it can capture from the consumers and keep them on a Priceline-branded website," says Adam Fleck, director of consumer equity research at Morningstar.

Perhaps not a bold strategy, but enterprising. 

 

New Attorney General Not Likely Until 2015

NPR News - Mon, 2014-11-03 15:39

Though a short list of candidates to replace current Attorney General Eric Holder is circulating, a nomination and confirmation is increasingly unlikely until after an expected shift in Congress.

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Invasive Bug Prompts Quarantine In Pennsylvania Townships

NPR News - Mon, 2014-11-03 15:37

The spotted lanternfly has officially arrived in the U.S., and leaders in Pennsylvania are hoping it won't be staying long.

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Supreme Court Case Tests Status Of Jerusalem

NPR News - Mon, 2014-11-03 12:59

Can U.S. citizens born in Jerusalem list Israel as their place of birth on their passports? A 12-year-old boy is contesting the U.S. position that no one has sovereignty over the city.

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Armor For Batteries Could Protect Hungry Kids From Harm

NPR News - Mon, 2014-11-03 12:20

Thousands of children swallow tiny batteries used in watches, calculators and toys each year. A team from MIT and Harvard is working on a pressure-sensitive insulating shield to prevent damage.

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The unexpected budget lines

Marketplace - American Public Media - Mon, 2014-11-03 11:45
To mark the turn of this millennium, developers in Britain once spent something close to $1 billion to create a huge dome outside London. When the dome’s business model crumbled, about $160 million in government money had to be put into the bubble-shaped venue to keep it solvent. That is a lot of money to spend on infrastructure for a New Year’s Eve party, and many Britons thought it was a boondoggle.    That said, at least it was money spent for something that was supposed to be fun.   The federal government in the U.S. is about to spend extra money next year, but the word “fun” has absolutely nothing to do with it. Experts say the federal budget is likely to be punctuated with new, previously unexpected spending to stop the terrible Ebola virus.   With these mid-term elections, the expectation is that Republicans will emerge with more sway in Congress. Following conservative principles, this might suggest that that government budgets would be in for some new trimming.    The threat of Ebola could push things the other way. Stan Collender watches the federal budget with the practiced eye that some handicappers train on horses. Collender is now a senior VP at Qorvis MSLGroup, but in another life he was a staffer on both the House and Senate budget committees.   He points out that after cuts in recent years for public health programs - including new vaccines for infectious diseases - the National Institutes of Health will get more money. So will the Centers for Disease Control. But it won’t stop there. “Transportation, Homeland Security, Education, Health and Human Services are all going to find some way of being involved in the Ebola fight,” Collender said. And don’t forget the Department of Defense, which has already deployed soldiers in West Africa to help fight the disease closer to the outbreak. “I expect there will be pockets of Ebola money all over the domestic side of the budget just to deal with it in every way possible.”   In a perverse way, this extra spending could produce a boost to the U.S. economy. First, there is the new spending itself. Gross Domestic Product counts money that changes hands and money will change hands, from taxpayer to the anti-Ebola fight. And if the spending actually works, there will also be an incalculable multiplier effect. Imagine the human and economic benefits if these augmented government programs keep people from getting sick.   It pains me to have to type the word “if” in the middle of that sentence.

It Turns Out That Fighting Polio Is Good Training To Fight Ebola

NPR News - Mon, 2014-11-03 11:20

Nigeria knows how to beat back polio. And that's helped in the battle against Ebola. But other West African countries are struggling to beat the deadly virus — and neglecting anti-polio efforts.

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Holy Goats! They're Kind Of A Big Deal In One Nepali Town

NPR News - Mon, 2014-11-03 11:07

The people of Nepal like goat dishes. They like goat sacrifices. But not all local goats meet such a fate. In one town, goats do as they please. After all, they're divine!

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Why Taylor Swift broke up with Spotify

Marketplace - American Public Media - Mon, 2014-11-03 11:00

Music superstar Taylor Swift and her label Big Machine Music have pulled her catalog of songs from the music streaming service Spotify.

Swift’s single “Shake It Off” is currently the most played song on the radio, according to Billboard. And Spotify says Swift’s music was being streamed by 16 million of its users in the past month. The service has 10 million subscribers and and 40 million active users globally, according to Spotify.

Spotify made the announcement on its blog, in a cheeky note that asked Swift to come back. 

Earlier this year, Swift wrote an op-ed in the Wall Street Journal, saying in part that artists should have more control over the price value of their albums. Rolling Stone reported Monday that the label and the artist did not negotiate with Spotify prior to pulling the songs off the service, and that the move may be tied to the label trying to increase its value ahead of a possible sale. 

The clout that Taylor Swift and her label have over Spotify is a sign of an ever-shifting music industry landscape. Downloads have flatlined, album sales are down and streaming is up. But streaming services are dependent on big-name acts, says Karen Allen, a digital music consultant. 

“The problem is that if you don’t have popular music on a streaming service that you’re asking people to pay for, then they don’t want to use it,” Allen says. “Because the promise of a streaming service is… it’s unlimited access to everything. When you don’t have a huge artist, it’s less attractive.” 

On mobile phones, streaming audio is the second most popular thing to do, after streaming videos, says Roger Entner, a telecom analyst and founder of Recon Analytics. But streaming services, such as Spotify and Pandora, face a paradoxical problem. 

“Consumers aren’t willing to pay that much for songs any more,” says Entner. “They’re not willing to pay say more than $10 a month, if even that.”

There’s an expectation for online songs to be free, says Allen. “That has been a challenge for all streaming services, to find that magic offering for users, where it’s worth paying for and they’re also getting value.”

Spotify charges $5 or $10 a month. Or, it's free if you don’t mind ads. But the company pays artists, on average, just $.007 per stream. That’s despite the fact that the music industry has huge leverage over Spotify.

“There’s only three major labels left on the planet. They have tremendous leverage," says Casey Rae, vice president of policy and education at the Future of Music Coalition, which represents the interests of musical artists. 

“So, I think that in some instances you’ll see these superstars using their clout as leverage, and sometimes that might mean taking your toys and going home,” says Rae. But smaller artists don’t have that luxury and have to go where the fans are, Rae says, which increasingly is on online streaming music services. 

French ad giant Publicis to buy digital firm Sapient

Marketplace - American Public Media - Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

CORRECTION: A previous version of this story misspelled Sapient's name in the headline. The text has been corrected.

French ad giant Publicis to buy digital firm Sapiant

Marketplace - American Public Media - Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

National parks consider adding Wi-Fi

Marketplace - American Public Media - Mon, 2014-11-03 11:00

We've all been there – you're at the national park and want to take a selfie with your favorite sulfur cauldron. But tragedy strikes when you can't upload it to your Instagram, because you don't have Wi-Fi. 

Parks service officials are currently asking the question, "do national parks need Wi-Fi?"

They are considering a $34 million plan to run fiber optic cable through Grand Teton National Park into Yellowstone.

If ever there was a time to embrace your inner-Luddite, now might be that time.

Cruise ship comeback still tied up in port

Marketplace - American Public Media - Mon, 2014-11-03 11:00

It’s been a pretty rough couple of years for the cruise industry.

First, there was the global recession. As if that wasn't enough, the Costa Concordia ran aground off the coast of Italy. And finally, let’s not forget the handful of other high profile disasters and the image of cruise ships stranded at sea plastered all over cable news.

Yet, despite all this, the cruise industry is as hopeful as ever.  Bob Sharak is president of his eponymous travel consulting company.

“The cruise industry has proven to be continually popular and resilient after a little bit of a tough period in the last few years," says Sharak, who also spent 20 years with the Cruise Lines International Association. “You’re seeing full ships, high occupancies. But you’re also seeing customers coming from not just North America, but from Europe, Asia and a lot of other emerging markets.”

Technically he’s right about the industry's growth.

In 2012, 10.6 million Americans took a cruise, a number that inched up to 10.9 million last year. And, yes, as Sharak points out, cruising is becoming more popular in other parts of the world.

But others say that growth is too slow.

“There’s an expectation that it’s gotta, gotta get better and since that didn’t happen this year, it should happen next year," says Maggie Rauch, an analyst with PhoCusWight, the travel industry research group behind those numbers. “Some of the optimism that you might be hearing is optimism that always exists this time of year for the coming year. Things are going to improve next year. Kind of like when your team doesn’t make the playoffs.”

Rauch said the cruise industry is having a hard time increasing its customer base.

Even more than hotels or airlines, cruising relies heavily on repeat business, she said.

“There’s a group of people that just take cruises ever year, do it again and again," Rauch said. "And while obviously the cruise lines welcome their business, in order to grow they're always looking at 'how can we get people who haven’t taken a cruise before to do so for the first time?'”

So far this year’s been without major incidents meaning in the industry might be able to get more folks on board.

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