National News

Jobless claims reach 40-year low. Is wage growth next?

Marketplace - American Public Media - Thu, 2015-07-23 13:00

New jobless claims fell to 255,000, their lowest weekly level since November of 1973, the U.S. Department of Labor said Thursday.   

One would expect that this is an indication of labor market tightening. Fewer people getting laid off, fewer people in line to do your job, possibly for less than you. There should, theoretically, be less restraint on workers’ demands for a raise.

“It’s all about supply and demand,” explains Harry Holzer, professor of public policy at Georgetown. 

“The tighter the labor market, the harder it is for employers to attract or retain the workers they want or need, so they have to raise wages.”

But hourly wage growth data don’t seem to be bearing that out yet. 

Wage growth has sat at around 2 percent for the past five years, says Elise Gould, senior economist at the Economic Policy Institute. 

“That’s pretty slow,” she says. “That’s far below any sort of reasonable wage target that would be consistent with the [Federal Reserve’s] inflation target of 2 percent and productivity growth we’ve seen. That should put wage growth more like 3.5 to 4 percent.”

The monthly wage data may not be telling the whole story, however. Gad Levanon, managing director of macroeconomic and labor market research at the Conference Board, says the average hourly earnings number can be skewed by changes in the composition of the labor market. 

“If there are more low paid occupations joining the labor market or if employment is growing faster in low paid positions, that would pull down the average paycheck increase,” he says.

Levanon looks at something known as the employment cost index, which looks at compensation while weighting the value of specific industries so it’s more of an “apples to apples comparison.” 

The most recent increase by that measure is 2.7 percent, and it has been growing faster than average hourly earnings since 2014. 

Levanon also points to the Federal Reserve Bank of Atlanta's Wage Growth Tracker, which looks at wage growth among a consistent group of individuals over time. That measure of growth is 3.2 percent.   

Will health insurance mergers help or hurt consumers?

Marketplace - American Public Media - Thu, 2015-07-23 13:00

Health insurer Anthem appears ready to throw down nearly $50 billion to purchase rival Cigna. This would be the second proposed mega-merger in the industry in less than a month.

Welcome to healthcare’s version of an arms race, where hospitals and insurers vie for supremacy. As these titans battle it out, the threat is that consumers end up losing no matter who winds up on top.

Carnegie Mellon economist Martin Gaynor says there’s a simple question we shouldn’t lose sight of in this new wave of potential deals.

“Are these mergers going to make us better off?” he asks.

Will a merged Humana and Aetna be able to do things more cheaply? Will a merged Anthem and Cigna be able to do something new?

University of Minnesota economist Steve Parente says the answer is probably yes. If these deals go through, companies will expand their business into different types of insurance, giving them better intelligence about what hospitals are willing to take.

“You now get to see in a sense exactly what providers are willing to take for a Medicaid patient that’s low income, and a commercial insurance patient that is basically the best reimbursement you are going to see,” he says.

That leverage may be why Anthem’s CEO Joe Swedish says this deal would bring in $2 billion in “annual synergies,” business speak for cost savings. Companies say that could get passed on to consumers.

But professor Leemore Dafny with Northwestern’s Kellogg School of Management says if past is prologue, when insurers merge, premiums go up.

“This is a highly consolidated industry that has not delivered a lot of innovation historically,” she says. “And to believe that more consolidation is going to serve us is to put a lot of faith that increased scale will bring us improvements.”

What really troubles Dafny is that it’s hard to enter the insurance business. So if insurers fail to deliver on these merger promises, it’s not clear if anyone can step up and provide consumers with another choice.  

For background on the proposed merger, check out Mitchell Hartman’s story here.

Army Warns Of 'Armed Citizens' Trying To Protect Recruiting Stations

NPR News - Thu, 2015-07-23 12:56

Vigilante guards — some associated with militia groups — have begun appeared outside recruiting stations around the country, ostensibly to protect them in the wake of the Chattanooga shootings.

» E-Mail This

An 80-Year-Old Looks Into The Eyes Of Her Teenage Self

NPR News - Thu, 2015-07-23 12:51

In 1950, a teenage girl in Nigeria put on her mother's fancy clothes and posed for a photo. In 2015, she had her first encounter with the original, hand-colored portrait.

» E-Mail This

In Hot Pursuit Of Public Safety, Police Consider Fewer Car Chases

NPR News - Thu, 2015-07-23 12:39

Each year, 300 to 400 people are killed in high-speed police pursuits in the U.S. Some solutions to create safer chases have emerged — such a Batman-like dart that tracks fleeing cars.

» E-Mail This

Obama Thinks Solar Power Will Boost Kenya. Kenyans Aren't So Sure

NPR News - Thu, 2015-07-23 12:39

Are solar panels the best way to connect millions of Africans to electricity? That's the plan President Obama will tout on his visit to Kenya. Critics ask: What about tapping into power lines?

» E-Mail This

Even If You're Lean, 1 Soda Per Day Ups Your Risk Of Diabetes

NPR News - Thu, 2015-07-23 12:26

A daily habit of sugary-sweetened drinks can boost your risk of developing the disease — even if you're not overweight. And diet soda might not be doing you any favors, either.

» E-Mail This

Obama's First Trip To Kenya As President Is Less About His Roots This Time

NPR News - Thu, 2015-07-23 11:53

President Obama is heading to Kenya, where his father was born. He'll meet with relatives, but the trip is not strictly personal. There's plenty of official business on the agenda.

» E-Mail This

Why Disability And Poverty Still Go Hand In Hand 25 Years After Landmark Law

NPR News - Thu, 2015-07-23 11:38

Disabled Americans are twice as likely to be poor as those without disabilities. They continue to face many financial and physical barriers, despite the Americans with Disabilities Act of 1990.

» E-Mail This

Everyone's getting the music streaming business wrong

Marketplace - American Public Media - Thu, 2015-07-23 11:19

Taylor Swift picked a pretty big fight this summer. No, not that one.

The pop megastar took on Apple over allegedly skimping on royalties during Apple Music's free trial period, and got the company to change its tune. This wasn't the first time Swift and others had spoken out about low royalty payments from music streaming services like Spotify, from which she pulled her catalog last year. Meanwhile, Spotify argues it has paid out over $2 billion in royalties.

But a new report from the Berklee Institute for Creative Entrepreneurship says these squabbles miss the point. In fact, there are a bunch of other players, complex accounting and backroom deals that stand between the royalties services pay out and the artists' paychecks.

"We were trying to figure out what exactly happens in the value chain from the minute I [listen] to music, to the minute the creator on the other end gets paid," says Allen Bargfrede, Berklee associate professor and one of the authors of the report.

Berklee has launched a new initiative, Rethink Music, to untangle all the streams of money, dispel misconceptions about the business and propose more transparency. Let's do the numbers:

70 percent

That's the portion of revenue the iTunes store and streaming services pay out in royalties. It's tempting to think of per-stream royalties — often a fraction of a cent — as piddly contrasted with a 99 cent song or $9.99 album, but you can't really compare the two business models. The report notes someone could easily stream a song enough times to generate far more in royalties than they would have ever paid to own it. As streaming grows, what's more important is the way businesses split revenue, Bargfrede says.

"They're still paying 70 percent of their revenue, so what do you expect them to do? Do you expect them to pay 140 percent of their revenue, so you're getting twice as much? Twice as much would still be a fraction, maybe a penny or two," he says. "What exactly can a digital service do beyond what they're already doing, and waiting for the market to grow?"


That's about how many streams of royalty revenue a single song can have, according to music data company Kobalt. That's all the internet and terrestrial radio stations, streaming services, digital music stores, physical sales, licencing and so on. As more music becomes available online and services start paying royalties by-the-stream instead of by-the-sale, the amount of micro-transactions increases exponentially, Bargfrede says, and it's harder for the existing technology to keep up with all that information.

68 cents

That's the portion of a $9.99 monthly subscription to a streaming service actually makes it to artists, according to the Berklee report, and all told, labels keep about 73 percent of royalties from streaming. But that doesn't even tell the whole story.

Here's the rub: those royalties are passed down a line of rights groups, publishers or third-party distributors before they make it to the label and then the artist. These players are supposed to divvy up the royalties companies like Spotify are paying out, which is complicated; the composition and recording are usually two separate copyrights, or there might be several co-writers or publishers. All the agreements dictating those payments are secret, and researchers found that royalty statements were difficult to parse.

Bargfrede says Rethink Music got a hold of one statement from a "platinum-selling artist" signed to a major label and traced back the average royalty rate per stream, but it's difficult to know how accurate those numbers are if a sizable chunk of royalty payments don't make it to artists at all.

$42.5 million

That's the advance royalty payment stipulated by a 2011 contract between Sony and Spotify that leaked this spring. According to the Berklee report, if royalty payouts add up to less than an advance, it's typical for labels to pocket the remainder. And that's not the only way royalties get stuck in between services and artists.

When streaming services or rights organizations don't know where to distribute royalties, they're put in a "black box" account that's eventually paid out to labels according to market share. 

How could rights groups not know whom to give royalties to? Songs are often not registered in a consistent way, and sometimes titles are incorrectly translated, Bargfrede says. The disconnect could come down to a simple spelling issue — the difference between "Beyonce" and "Beyoncé."

Some have pushed for standardizing codes assigned to each composition and recording to more easily distribute royalties, but the report notes these standards — along with better technology for tracking royalties — haven't been widely adopted yet.

"There are a lot of things that could be fixed here, and there's a lot of foot-dragging," he says. "You're looking at a legacy business that's decades old, and it takes time to adopt new technology. But it's time to say, 'OK lets march forward, we need to do this,'" Bargfrede says.

Jury Confirms That Holmes Is Eligible For Death Over Aurora Theater Shootings

NPR News - Thu, 2015-07-23 11:07

A jury still needs to determine how to punish James Holmes. Convicted of first-degree murder, he faces either a lifetime prison sentence or execution.

» E-Mail This

Administration Prods States To Scrutinize Insurers' Rate Hikes

NPR News - Thu, 2015-07-23 10:56

As health insurers propose their rates for 2016, state agencies are So far only a handful of states have finalized rates for 2016.

» E-Mail This

How Democratic-Leaning Detroit Helped Shape Ben Carson's Conservative Views

NPR News - Thu, 2015-07-23 10:48

Detroit is not exactly known as a haven of conservatism, especially in the black community, but a look at where Carson grew up reveals a young man determined to carve his own path.

» E-Mail This

Surprise: America's Roads Are Improving

NPR News - Thu, 2015-07-23 10:40

A common talking point in the Highway Trust Fund fight is that roads are crumbling. So it may surprise you to know that the country's roads and bridges actually have been looking better lately.

» E-Mail This

Man On Train Misses His Stop, So He Pulls Emergency Release To Get Off

NPR News - Thu, 2015-07-23 10:28

The man is seen on a video peeling the metro doors open and then, along with his child, running. His actions contributed to a hellish commute for Washington, D.C., riders.

» E-Mail This

Kepler Telescope Introduces Earth To A Very Distant Cousin

NPR News - Thu, 2015-07-23 09:35

The spacecraft has detected the nearest thing to Earth yet discovered — a planet that's a bit bigger and squarely inside the "habitable zone" for life.

» E-Mail This

Doctors Press For Action To Lower 'Unsustainable' Prices For Cancer Drugs

NPR News - Thu, 2015-07-23 08:08

More than a hundred influential doctors banded together to propose seven ways to bring down the high prices of cancer drugs. They say changes are needed to preserve access to care.

» E-Mail This

Donald Trump On A Circus Peanut, And More Food Art With A Political Bite

NPR News - Thu, 2015-07-23 07:33

Artist Lauren Garfinkel creates indelible images on edible canvases. Some are silly (Justice Ruther Bader Ginsburg as a nacho supreme), others haunting. All offer food for thought on current events.

» E-Mail This

Kerry, Moniz Face Off With Skeptical Lawmakers Over Iran Deal

NPR News - Thu, 2015-07-23 07:25

Secretary of State John Kerry and Energy Secretary Ernest Moniz defended the deal before the Senate Foreign Relations Committee.

» E-Mail This

Japan's Nikkei Will Purchase Financial Times Group For $1.3 Billion

NPR News - Thu, 2015-07-23 07:01

Earlier Thursday, the Financial Times itself had reported that the newspaper's publisher was on the verge of being sold to German media group Alex Springer.

» E-Mail This