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Updated: 25 min 21 sec ago

Your cell phone bill isn't as high as it used to be

Fri, 2014-11-07 07:56

As part of our program's 25th anniversary, we've been tracking the odd ways prices have changed over that period. According to a cellular phone industry group, the average monthly cell phone bill has dropped from an inflation adjusted $151 back in 1989, to $47 today.

A 69 percent drop? How is that possible? 

Michael Grubb is an economics professor at Boston College who has studied the cell phone market. 

Listen to the full conversation in the audio player above.

PODCAST: Jobs up; wages... well...

Fri, 2014-11-07 07:48

As part of our program's 25th anniversary, we've been tracking the odd ways prices have changed over that period. According to a cellular phone industry group, the average monthly cell phone bill has dropped from an inflation adjusted 151 dollars back in 1989 to 47 dollars now. Plus: Chris Low of FTN Financial gives us some perspective on the 214,000 jobs added to payrolls this month.

The labor force participation rate is at a low point (updated)

Fri, 2014-11-07 07:00

UPDATE: October's numbers are in from the Bureau of Labor Statistics: 214,000 jobs added, and the unemployment rate "edged down" to 5.8 percent. 

The monthly employment report from the Department of Labor will likely show the economy added approximately 240,000 jobs in October, and unemployment held steady at 5.9 percent, after falling below 6.0 percent in September for the first time since mid-2008.

Economists can point to steady improvement over the past several years in those two statistics—job creation, and the unemployment rate (which was 7.2 percent in September 2013, and 9 percent two years earlier).

Yet, this ‘official’ unemployment rate doesn’t accurately characterize many aspects of the labor market right now—in particular, how hard it still is to land a middle-income job; how easy it is for employers to find qualified candidates; and how little those employers have to compete with each other over wage and benefit offers, in order to hire the workers they want.

The ‘official’ unemployment rate—called the U-3 by the Bureau of Labor Statistics—only counts how many people are actively unemployed. They’re looking for work and actually applied for a job in the past four weeks.

But right now, the number of people who are not working, but would like to work, is unprecedentedly high. These people have given up looking—possibly because they don’t think any jobs are available for them, or perhaps to attend school and upgrade their skills, or to go into semi-retirement. They’ve pushed down the labor force participation rate to its lowest level (62.7 percent in September) since the late 1970s.

Combine these discouraged and marginally attached workers with the ‘underemployed’—people who would like to find better-paying full-time jobs but can only find part-time jobs—and total unemployment (the U-6 rate), as measured by the BLS, is averaging well over 12 percent in 2014 (it was 11.8 percent in September).

Economists have anticipated that some attrition in the labor market would occur when the Baby Boomers began retiring earlier this decade. But in fact, after the recession, older workers have stayed on the job longer than was predicted, on average. With retirement savings and home equity depleted by the recession, older Americans are holding on to jobs if they can.

“Where we’re seeing large declines in labor force participation is actually among prime-age workers,” explains University of California-Berkeley economist Jesse Rothstein, “especially among people in their early twenties. It’s hard for me to believe that there’s this enormous group of people in their early twenties who have decided that they’re never going to work.”

Rothstein and many other economists believe the economy hasn’t changed structurally so that fewer people want to work or feel the financial need to work. Rather, they think the labor market is simply too weak, and demand in the economy too anemic, to employ all the potential workers who want and need jobs. They believe if the economy strengthens significantly, many of those potential workers will come out of the woodwork and begin job-hunting again.

Absent such improvement, the labor market is likely to remain slack, even if the official unemployment rate continues to decline steadily and eventually dips below the Federal Reserve’s target of 5.5 percent. Fed policymakers, led by chair Janet Yellen, have said they are looking at other labor market indicators in addition to the unemployment rate, to make sure they don’t withdraw economic stimulus and kill the nascent recovery before it’s helped the hard-core and long-term unemployed, the underemployed, and discouraged workers.

Rising wages are now considered a key harbinger of labor-market tightening by market participants and Fed policymakers, explains economist John Canally at LPL Financial.

“I think that’s the ultimate indicator—to get wage growth back to normal, back to the 3.5-percent-to-4.5-percent gains we saw prior to the Great Recession,” said Canally. “Then I think there’ll be confidence that businesses are finding it more and more difficult to fill jobs.”

In recent years, average hourly earnings have been rising in the 2-percent-per-year range, just keeping pace with inflation.

Another indicator of a tightening labor market would be a reverse in recent declines in labor force participation, especially among prime-age workers. If more people who have dropped out of the workforce, or never entered it after high school or college,  started looking for work again, that might raise the unemployment rate temporarily. But it would be another sign the economy is truly on the mend.

How to change company boards: the Stringer solution

Fri, 2014-11-07 02:00

New York City Comptroller Scott Stringer wants to bring a kind of direct democracy to corporations.

He’s teaming up with institutional investors, including some of the country’s largest public pension funds, to lobby 75 companies to allow shareholders to nominate directors for election to their boards.

The investors will have to hold more than three percent of the company’s stock for more than three years to qualify but even so, David Nadler, a principle at Nadler Advisory Services, thinks companies will resist.

“The cost and the time and distraction of potentially dealing with contested board elections, I think, is not good for the enterprise,” he says.

Nadler consults with boards and executives on leadership and corporate governance issues and thinks, on the whole, companies have become more responsive to their shareholders in recent years. He doesn’t think these changes would be worth the hassle they’d cause.

Stringer disagrees.

“The old boys' network is still in place,” he says. “You know, 'a friend of a friend of a friend' is serving on these corporate boards, but we need certain expertise. We need more diversity. If you put more women and people of color on boards, studies show that the company does better.”

If companies don’t agree to Stringer’s changes, shareholders would have to vote to approve his proposal next year. Even then, companies wouldn’t have to adopt it. But Stringer says he and his pension fund allies will just keep coming back. 

Free trade on the agenda for Obama's Asia trip

Fri, 2014-11-07 02:00

President Barack Obama will be in Asia starting Monday with an itinerary that includes attending the APEC CEO Summit, a state visit with Chinese President Xi Jinping and the G20 summit in Brisbane, Australia.

Among the top items on the agenda is the Trans-Pacific Partnership (TPP), a 12-country free trade agreement that has proven difficult to hammer out between the U.S. and Japan before being presented to the other 10 countries, says Derek Scissors, an Asia scholar at the American Enterprise Institute.

"There are a lot of really contentious issues,” says Scissors. "Can American farm goods freely enter the Japanese market? The Japanese have resisted this for years. Can Japanese autos freely enter the American market? The United States has resisted.”

If the U.S. and Japan were to settle their differences, that would be a major success story coming out of this latest trip, says Scissors. 

For a president that may be looking at a tough road ahead on his domestic agenda, it makes sense to switch focus to foreign policy, says Russell Riley, a presidential historian at the University of Virginia.

"Towards the end of the term, when presidents are thinking about legacies, they do become focused on places abroad, where they feel like they can make a difference,” Riley says.

The timing may work out for the president, as a recovering economy offers the U.S. a renewed leadership role in global trade.

“We’re the only one doing well,” says Scissors. “So everyone is looking to the United States for wise economic policy, which we don’t always deliver…And the TTP is a good step in that agenda.” 

Silicon Tally: So many penguins

Fri, 2014-11-07 01:14

It's time for Silicon Tally! How well have you kept up with the week in tech news?

This week, we're joined by Ashkan Soltani, newly appointed Chief Technologist at the FTC.

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A losing battle

Thu, 2014-11-06 11:14

There's a little-known Army panel whose decisions can have an enormous impact on the lives of current and former U.S. service members: the Board for Correction of Military Records. The Board is supposed to correct errors or injustices in a service member’s records, like a discharge that denies a vet medical benefits or forces a soldier out after reporting a sexual assault. It’s there to keep the Army honest, but a Fusion investigation found it's doing anything but.

We found that when service members file appeals that could lay blame on the Army or result in significant benefit payments to the veteran, the default answer is often no. Fusion analyzed thousands of Board decisions, reviewed hundreds of internal documents, and conducted nearly 50 interviews and found a system that’s so impenetrable and the results so often negative, that many veterans have given up hope for justice.

“Each case has its own outrage,” said Michael Wishnie, a professor and deputy dean at Yale Law School. “They routinely ignore the evidence, the medicine, the rules and the law to deny veterans benefits.”  

The Army Board says it grants relief in about 41 percent of cases it reviews. Most of those cases involved requests to correct clerical errors, and other purely administrative matters.  We analyzed publicly available decisions for veterans appealing three common discharges between 2001 and 2012 that disqualified them from receiving Army medical benefits. We found that only about 2 percent were granted a medical evaluation, which would be just the first step in getting medical benefits from the Army.

Veterans and lawyers say the system is broken. Board members spend an average of about three minutes and 45 seconds per application, even though some are hundreds of pages long. In most cases they rubber stamp draft decisions prepared by Army staff. While the Board’s decisions can be appealed in federal court, that only happens in an estimated 1 percent of cases, lawyers say.

Discovery's new show: Watch a snake eat a guy

Thu, 2014-11-06 11:00

Step aside, Nicki Minaj, there's a new anaconda in town.

The Discovery channel will debut a new series called "Eaten Alive" in December.

Apparently, on the premiere episode a guy will be swallowed alive by a giant snake after covering himself in pig's blood while wearing a custom-built suit. Seems suspicious.

Is it animal abuse? Is it criminal stupidity? Is it possible?

Whatever, just don't watch.

Microsoft makes Office free on mobiles

Thu, 2014-11-06 11:00

All aboard, Microsoft is jumping on the freemium bandwagon. In the past their product, Office 365,was subscription-only if you wanted to do anything other than read your documents on your mobile device. 

Now the updated free Microsoft app will allow you to change, or write new Office documents on your iPhone or iPad. The version for Android tablets will be available early next year. 

It's adopting a strategy companies like LinkedIn have been using for ages - giving stuff away for free to get more users, then charging a premium for extras.  

“There’s a recognition that like, better to get everyone in the tent and then later you can figure out how to make money off of them," says Jeff  Howe, head of the Media Innovation Program at Northeastern University.  

If you want to get fancy – with say, advanced editing – then you have to pay. 

So why is Microsoft shifting their strategy?

“Well, you know, the world has changed,” says Michael Atalla, director of product management at Microsoft. “People expect to be able to use their favorite apps, on their favorite device, wherever they are. And we’re enabling that.”

Another big reason for this enabling is competition from Google Docs and other free software for document writing. Microsoft has to find a way to keep Office users using their product. 

“This will help Microsoft maintain its customer relationships and reduce the likelihood that existing customers will try to move to Google Docs,” says Frank Gillett, Vice President and Principal Analyst at Forrester Research.

At least that what Microsoft hopes. The impact of their decision is still to be determined. 

Who shares the growing productivity pie?

Thu, 2014-11-06 11:00

Productivity in the latest quarter came in 2 percent higher. That’s an increase from an average of about 1 percent the last three years. Rising productivity means workers are cranking out more goods and services every day, or every hour.

Productivity, by quarter

(US Bureau of Labor Statistics)

The latest numbers are not the surge of 5 to 10 percent in the late 1990s and early 2000s, but a hopeful sign. And gains do not appear to be simply bosses cracking whips on the backs of a couple workers.

Productivity in the postwar era

(US Bureau of Labor Statistics)

“Sometimes employers raise productivity simply by squeezing more output out of fewer workers, and that very much was the story in the earlier part of the recession,” says labor economist Harry Holzer of the Georgetown University Public Policy Institute. “It doesn’t look like that’s happening now, because we know the employment numbers are growing.

Employment is up, and so are wages. So part of the pie is going to workers, and part going to company profits and investors.

Zooming back, workers’ share of the fruits has been relatively low for decades. Many say the fates of companies and employees have “decoupled.”

Productivity and Employment: Decoupling?

(Jared Bernstein, Center on Budget and Policy Priorities/US Bureau of Labor Statistics)

So, are they re-coupling?

Brookings Institution senior fellow and economist Gary Burtless doesn’t think so.

“Just like a snowflake doesn’t bring Christmas,” Burtless says, “seeing one quarter of pretty good wage gains is not a signal that those wage gains are going to continue forever.”

And any gains are not shared evenly across workers. To some degree, productivity is about machines. Are you the worker getting replaced by a more efficient machine? Or designing the next one?

Labor economists see a complex shakeout underway.

“There are more high-skilled workers versus less-skilled workers,” says MIT Sloan School business professor Erik Brynjolfsson, author of "The Second Machine Age." “There are capital owners and employers versus labor. And there are superstars versus everyone else. In each case, the first group recently has been doing quite well.”

The second group, he says, has fared far less well.

Facebook will solicit donations to fight Ebola

Thu, 2014-11-06 11:00

It seems like $25 million was just a start.

You may recall that Facebook's co-founder Mark Zuckerberg and his wife pledged that much last month to help fight Ebola. A few weeks later, Zuckerberg’s company is now rolling out a fundraising pitch at the top news feeds for Facebook users in more than 30 countries. The money will go to three groups working in West Africa: the Red Cross, International Medical Corps and Save the Children.

Helping stop Ebola in its tracks is clearly a philanthropic act, says Facebook executive Naomi Gleit. But really, she says the company’s mission to make the world more open and connected.

“And when the world is more open and connected, together we can do really great things,” she says.

Facebook hopes its campaign will jump start a wave of philanthropic giving that’s been slow coming. After the Haitian earthquake, for example, the International Medical Corp. received more than 8000 donations, for Ebola it’s been a tenth of that. Yale’s Nicholas Christakis sees two reasons why Facebook’s campaign may work.

“They have the scale which is enormous, you know countless millions," he says. "But also they have the ability to use peer effects to magnify the impact, because of course you are more likely to respond to something if your friends have also responded to it,” he says.

The World Health Organization says containing the virus will require $1 billion dollars as well as hundreds of healthcare worker volunteers. It’s clear Facebook founder Mark Zuckerberg has taken that challenge to heart, says Jim Ferris of the USC Center on Philanthropy and Public Policy.

“It’s what I would call all-in philanthropy. Really being out there, entrepreneurial, it’s not just writing a check,” he says.

He says Zuckerberg’s entrepreneurial approach is part of a new trend where individual donors and foundations throw themselves into their own causes.

Given the scale of the threat in West Africa, it might be good that one of the world’s richest people is locked in.

'The Simpsons' and 'Marketplace' are the same age

Thu, 2014-11-06 10:05

You might have heard of a little show called "The Simpsons."

Like Marketplace, the show turns 25 this year. Let's do the numbers: "The Simpsons" premiered on December 17, 1989. It's still going strong at 557 episodes and Hank Azaria has voiced at least 100 characters like Moe the bartender, Chief Wiggum, and Apu.

Listen to the full conversation with Azaria, from our stage show "How I Learned to Stop Worrying and Love the Numbers," in the audio player above.

Marketplace's road show wraps up in Los Angeles Saturday, November 8.

The numbers for November 6, 2014

Thu, 2014-11-06 09:40

With the euro at a 26-month low, the European Central Bank is readying new efforts to buy bonds and stimulate the eurozone's languishing economy. The move comes as Fed prepares to phase out quantitative easing, and Japan announced its own stimulus efforts last week.

The announcement has quieted concerns over President Mario Draghi's leadership, Reuters reported. Draghi said he'd like the ECB's balance sheet to look the way it did in March 2012, which would mean buying about a trillion euros in bonds.

As we keep an eye trained on the eurozone, here are some other stories we're reading — and numbers we're watching — Thursday:

733

That's how many days away we are from the 2016 election, and fundraising has already begun. The day after a resounding midterm victory for Republicans, Dreamworks executive Jeffrey Katzenberg is seeking donations for his Hilary Clinton-backing super PAC Priorities USA Action, the Washington Post reported. The group had a big impact on the 2012 election and political strategist Andy Spahn said he expects donors to "double down." They certainly have time to.

350,000

The number of time Chinese Mac users downloaded apps infected with "Wirelurker." The malware attaches itself to legitimate iOS apps to infect iPhones, Quartz reported. Wirelurker was discovered overnight Thursday, and it's notable as the first malware able to crack iPhones that aren't jailbroken or otherwise messed with by users. It's limited to Chinese users, as the bug stems from third-party app stores known to be awash with viruses.

3 million

That's how many "Frozen" role-play dresses Disney has sold in the year since the film came out, the Wall Street Journal reported. The mega-hit has pulled in nearly $1.3 billion at the global box office, and merchandise sales are expected to drive up Disney's third quarter earnings, out Thursday. That number will get even hire over the holidays, as retailers are expected to carry double the "Frozen" products they did last year. For what it's worth: customers prefer Elsa, whose merchandise outsells her sister Anna two-to-one.

Colleges put career centers on the map

Thu, 2014-11-06 08:35

At Washington College on Maryland’s Eastern Shore, most students never visited the career center until senior year. It was tucked away in a dorm across the street from the main campus. Students needed a key fob to get in.

“It wasn’t very welcoming and inviting, and certainly wasn’t on the admissions tour,” says Joe Holt, chief of staff at the small liberal arts school.

But when prospective students and parents visit these days, Holt says, they ask about the career center. They want to know what the college is doing to help students get internships and land jobs after graduation.

Come January Holt will have something to show them: a new $1 million career center in a converted boiler house. The new center will have a comfy lounge and rooms with built-in cameras, so students can watch how they do in mock interviews. It will be right in the heart of campus.

“Now you just have to stop in on the way to class,” says Holt. “It also sends a powerful message to prospective students about the value we place on this, by giving such important real estate to this function.”

As college gets more expensive, schools are under more pressure than ever to produce graduates who can get good jobs. The pressure doesn’t just come from students and parents. The Obama Administration is working on plans for a college rating system, which could factor in things like employment and student loan repayment rates.

Most colleges just haven’t invested enough in career services, says Edwin Koc, director of research at the National Association of Colleges and Employers. He says the typical career counselor serves 1,500 students.

“They toil away with extremely limited resources, and so the students don’t see the career center as central to being successful at the school,” he says. “For a lot of students the career center becomes an afterthought.”

Even if most colleges can’t afford a sparkly new building, more schools are working to change what goes on inside.

In old brick house at Franklin & Marshall College in Lancaster, Pennsylvania, senior Sean Bell McDermott climbs the creaky stairs for an advising session. Three years ago, F & M transformed its traditional career center into an Office of Student and Post-Graduate Development. Along with the usual coaching on resume writing and interviewing, the office does workshops on financial literacy, business etiquette, and other life skills.

Every student is assigned a student development advisor, starting freshman year. Today McDermott talks with advisor Lori Clark about how to network with alumni.

“Once you actually get them on the phone, what do you think will be some of the things that you would ask about?” Clark asks.

“I always ask them what their major was, and how it led them to where they are now,” McDermott says.

She has a ready answer because she’s met with Clark at least a dozen times. She’s already done two internships—one through an alumni connection. McDermott doesn’t seem at all nervous about graduating into a still shaky job market.

“You also know that it doesn’t end when you graduate,” she says. “I can come back here and keep using their resources.”

Beth Throne, associate vice president of student and post-graduate development, led the overhaul at Franklin & Marshall.

Before, she says, just about 20 percent of students interacted with the career center — mostly seniors. Last year almost 75 percent went to a workshop, checked in online, or met with an advisor.

“When students have interacted with us over the years, they will be clearer about what they want to do after college,” says Throne. “They will leave with connections in their industry and beyond who will be there to mentor them long after they graduate.”

And how are students faring after graduation? Throne says nearly 80 percent of the Class of 2014 has landed—in jobs or grad school—less than six months out. It’s hard to say if that’s an improvement, because the college didn’t really track that kind of data until now.

PODCAST: Raising the minimum wage, state by state

Thu, 2014-11-06 03:00

The president of the European Central Bank made the announcement this morning: interest rates are going to stay where they are at record lows. More on that. Plus, four traditionally red states voted to raise minimum wage: Arkansas, Alaska, Nebraska, and South Dakota. A non-binding increase passed in Illinois. So what could this mean for the president's push to raise the federal minimum wage? And podcasting's audience is growing along with its profits. And while some of the most successful podcasts have come from the public radio world, a podcast network that's based in Northern California, is doing *extremely well ... thanks to advertisers.

What GOP victories mean for the Affordable Care Act

Thu, 2014-11-06 02:00

Republicans' strong showing in this week’s mid-term elections opens the door to more calls to repeal President Obama’s signature law, the Affordable Care Act.

And while that is all but impossible given the balance of power in the U.S. Senate, victories in Washington and at the state level could usher in other healthcare changes.

A prime target?

The GOP could look to tweak Medicaid, the healthcare program primarily for low-income people.

To understand what reforms the GOP may propose, first understand this: lots of Republicans oppose Medicaid expansion under the Affordable Care Act on philosophical grounds.

“Medicaid was a program designed for the truly needy, and Obamacare makes it an income-based, and goes much higher for working age able-bodied adults,” says Josh Archambault, with the Foundation for Government Accountability.

Archambault says conservatives tend to think able-bodied adults shouldn’t get government-funded healthcare.

So states—including ones with new GOP governors like Illinois and Massachusetts—may pitch Medicaid reforms that introduce monthly premiums and/or co-pays.

Robin Rudowitz with the Kaiser Family Foundation expects to hear lots of proposals in the coming months.

“[Secretary Sylvia Burwell] spoke and said that she was willing and interested in working with states that wanted to expand. So I think that we will see alternative proposals. How far they go, I think that’s a question,” she says.

Until now, federal health officials have blocked reforms that would make it hard for people to get healthcare, like mandatory work requirements.

That could ultimately mean GOP’s Medicaid worldview is on a collision course with the Administration’s Medicaid philosophy.

 

 

 

A stove that can power your phone

Thu, 2014-11-06 02:00

The state of cooking in much of the developing world continues to be cooking over an open fire.

As a result, a lot of what you might find in cigarette smoke ends up around the food. Biolite is seeking to change that.

Their stove concentrates heat and lowers the amount of wood needed to get a fire going.

In addition, the device is able to harness the wasted heat from the fire and convert it to electricity. This can be used to power fans near the fire and reduce particles and other traces of monoxide that appear in the air, while at the same time being able to use that electricity to power your phone or even your TV.

For more, click the audioplayer above to hear Jonathan Cedar, CEO of Biolite, in conversation with Marketplace Tech host Ben Johnson.

Podcasting's audience (and its profits) are growing

Thu, 2014-11-06 02:00

TWiT was started in 2005 long before there was a Twitter. The network is named for its flagship podcast, a roundtable discussion with tech journalists called "This Week In Tech." Leo Laporte had a long track record in TV and radio before he founded TWiT. He says it’s been successful since day one.

"Being a profitable podcast network is not an easy thing to do, and you can count the number of profitable podcast networks on the fingers of one hand. I’m one of them, but that doesn’t mean it’s an easy thing to do by any means," he says.

Laporte hosts nearly half of TWiT’s 30 shows. A live video stream of the tapings draws an audience of 3,000 to 4,000 viewers, but TWiT makes money because a loyal audience downloads five million podcast episodes a month, mostly as audio. That brings in $6 million in ad revenue a year.

Says Laporte, "I came to this from mainstream media. I had a built-in audience already. We have an ad sales infrastructure. We have a way of counting our downloads. And we have a very devoted community."

That community includes a thousand geeks—some of them IT professionals—active in a chat room that weighs in on the tech topics while the podcasts are being recorded. It’s a boon to Laporte and his guests, which includes tech writer John C. Dvorak.

"I spend all my time monitoring the chatroom because they have good suggestions, and they will correct you if you say something stupid or wrong, and then you can correct yourself on the show in real time. And I find that very valuable," says Dvorak.

TWiT’s audience ranges from tweens to seniors, and includes a sizable segment listening abroad. Fans have been known to turn out in droves when Laporte does personal appearances. In 2011, when TWiT’s new state of the art studio was being built in Petaluma, CA, listeners sent in a quarter million dollars to help build the facility. 

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