The April unemployment numbers come out this Friday, after "weak" figures in March. But Stephen Dubner says there may be a larger, hidden side to the month-to-month swings in joblessness.
A "great reversal" in demand is what economist Paul Beaudry calls it. In the 1990s, there was healthy growth in jobs requiring a lot of education, and cognitive or technical skills.
"Then you start noticing that it has plateaued in 2000, even though more and more people are getting educated," Beaudry says. "It should have kept on going."
The result is that those high-educated workers are forced to take jobs further down the labor ladder than they were hoping for. What happens to the people who used to take those jobs?
"We started noticing all this cascading," Beaudry says. "I wouldn’t want to exaggerate -- it’s not like everyone is getting a barista job, but that’s exactly the feeling. It’s kind of like this pushing down."
So highly skilled workers go for the jobs of the lower-skilled. At the bottom of the ladder, workers can be pushed off entirely, into unemployment.
The effect has been masked, in part, by the financial crisis. Beaudry says things like banking and housing sectors may continue to improve, but this "cascading" will endure as a fundamental force dragging on the economy.
There may be a silver lining to all of this, before you get depressed.
With this recent push down the labor ladder, many highly trained and highly educated workers are going into the classroom.
This year, Teach For America received 57,000 applications -- the largest pool of interest in its history. On average, the program signs up fewer than 15 percent of those applicants, making it even more selective than many of the elite colleges where its new teachers graduate from.
It's decision day for students, and many of them will be going out of state. Who loses in this equation?
The Federal Reserve’s interest rate-setting committee wraps up a two-day meeting today. This afternoon, it will announce its next steps in shoring up the economy. The Fed has been pumping money into the economy for the past four years, buying $85 billion worth of U.S. bonds each month. The thinking is, when there’s that much cash sloshing around, interest rates will stay low. But how low and how long is anybody's guess.
Maybe you saw the ‘Google Nose’ April Fool's prank, where users clicked on 'wet dog' and sniffed their laptops to find out what it smells like. Well, new smell technology is not a joke -- or not only a joke.
Today is National College Decision Day, the day when most colleges and universities require accepted students to submit a deposit if they plan to attend. These days, the down payment is just a tiny fraction of the total cost of tuition. To cover the difference, many parents are opting for 529 savings plans -- college savings accounts that aren’t subject to any tax as long as the money’s used for tuition.
Marketplace Senior Producer of personal finance Paddy Hirsch explains how 529s work and how to decide if they are right for you.
Today is International Workers Day, and to mark the occasion, protestors in Greece are rallying against austerity. The demonstration comes just days after the country's government voted to allow 15,000 public employee layoffs.
The BBC's Mark Lowen joins Marketplace Morning Report host Jeremy Hobson with the latest from Athens.
From the good people at Putnam Investments, a list of words not to use on Twitter lest you -- and your company -- come under unwanted regulatory scrutiny.
We're talking specifically financial advisory firms on social media here, but you never know -- a word to the wise and all that.
Stay away from saying things like "innacurate" or "incomplete." "Loophole" is bad. Also, "circumvent" and "overcharge."
So now you know.
The Federal Reserve’s interest rate-setting committee wraps up a two-day meeting today. This afternoon, it will announce its next steps in shoring up the economy.
The Fed has been pumping money into the economy for the past four years, buying $85 billion worth of U.S. bonds each month. The thinking is, when there’s that much cash sloshing around, interest rates will stay low. That will encourage consumers to buy houses and cars.
Len Blum, managing partner at Westwood Capital, expects the Fed to just continue what it’s doing.
“The status quo right now probably makes sense," he says. "You know, there just seems to be more risk to not continuing than continuing."
But don’t expect the Fed to step on the gas any more to stimulate economic growth. Former Fed economist Ken Kuttner doesn’t think the Fed’s Open Market Committee will try to push interest rates any lower because that would encourage risk-taking, which could lead to another bubble.
“I don’t think people on the committee are actually using the word bubble," he explains. "Excessive risk taking is sort of a code word for bubble."
Kuttner says the Fed is also worried that financial markets will get too dependent on it, if it steps up the stimulus. Forgetting how to operate on their own, without government help.
Audio Extra: Chris Low, chief economist with FTN Financial, shares his predictions on what the Federal Reserve will do next.
Deposits are due today for students wanting a spot at their college of choice this fall. And for many state public universities, an increasing number of those students will be coming from other states. That means those schools collect much higher tuition.
In-state tuition at the University of Wisconsin Madison, for example, is just over $10,000. Non-residents pay $26,000. In spite of that, out-of-state enrollment there keeps growing.
"So even though we're seeing a significant growth in interest in international and out-of-state students, we really are looking at enrolling as many Wisconsin students as we can," says Joanne Berg, vice provost for enrollment management at the university.
She says the University of Wisconsin has a cap on its percentage of out-of-state undergrads. But that ceiling went up this year, from 25 percent to 26.5 percent.
The risk, some say, is shutting out low-income students. Bradley Curs teaches higher education at the University of Missouri, where he recently did a study on the out-of-state enrollment at public universities.
"So we sort of expected that if you bring in more out of state students, you're more likely to be bringing in more wealthy affluent students," Curs says, "and we find that finding pretty strong."
On the other hand, he says, a midwestern school like Wisconsin almost needs to look out of state to diversify its student body.
Education database compiler and provider Wintergreen Orchard House lists the rates of out-of-state enrollment at public universities. Here's a brief selection from around the country, check out the full list here.
Arizona State University (Tempe, AZ): 23%
Clemson University (Clemson, SC): 29%
College of William and Mary (Williamsburg, VA): 32%
George Mason University (Fairfax, VA): 11%
University of Iowa (Iowa City, IA): 38%
Kent State University (Kent, OH): 11%
Mississippi State University (Mississippi State, MS): 21%
Pennsylvania State University — University Park (University Park, PA): 29%
Purdue University — West Lafayette (West Lafayette, IN): 30%
Rutgers, the State University of New Jersey — New Brunswick (Piscataway, NJ): 7.3%
Texas A&M University — College Station (College Station, TX): 3%
The University of Texas at Austin (Austin, TX): 5%
University of California, Berkeley (Berkeley, CA): 10%
University of Delaware (Newark, DE): 59%
University of Georgia (Athens, GA): 9%
University of Illinois at Urbana–Champaign (Champaign, IL): 7%
University of Maryland, College Park (College Park, MD): 23%
University of Michigan — Ann Arbor (Ann Arbor, MI): 36%
University of North Carolina at Chapel Hill (Chapel Hill, NC): 18%
In recent days, a 22-year-old Yemeni citizen who studied in the U.S. and describes himself as fervently pro-American testified in Washington about the effect of drone strikes. Farea Al-muslimi's account of innocent bystanders who can't stand al-Qaeda but live in fear of the U.S. technology is getting shared widely online. He was even invited to brief the Obama Administration.
Regular contributor and Harvard Law professor Jonathan Zittrain joins Marketplace Tech host David Brancaccio to explain his take on drones and their unintended consequences.
The “Digital Content New Fronts” are sort of like a big fair, where producers of online video meet advertisers to try to lock in advertising dollars for upcoming features. Google, which is raising the curtain on its new YouTube content and ad pricing tonight, is a familiar participant.
But there are some unexpected newcomers to the New Fronts as digital media advertising grows. Magazine publisher Condé Nast is one of the new big names rolling out a suite of original video content.
“We look at digital video as now another platform on which we’ll build audience on, another extension for the Condé Nast brand to reach consumers,” says Fred Santarpia, Chief Digital Officer for Conde Nast Entertainment Group.
Elevator Makeover (Glamour): A weekly series in which one woman gets a hair and beauty makeover in the time it takes her to ride the elevator from the ground floor to the top.
Publishing companies in particular, with all their content production machinery, are entering this world.
The Wall Street Journal unveiled its video line up on Monday -- including a reality show featuring startup entrepreneurs. Nina Lawrence, vice president of global marketing for advertising sales at the Journal, says this is part of an attempt to break free from the declining fortunes of print media.
“While most print based companies are either stalling or retrenching, we are aggressively moving forward into everything new,” she says.
According to digital marketing and consulting firm eMarketer, advertisers spent $4 billion on online video ads in 2012.
“Video still commands high ad rates compared to other banner ads online,” says Clark Fredricksen, a vice president at eMarketer, “so it’s a good revenue opportunity.”
He says he expects video advertising revenue to grow by more than 40 percent this year. Still, online video advertising pales in comparison to TV, which he says raked in $64 billion in ad revenue last year.
Video of The Bugeye Classic Car - GQ Car Collectors: NY EP5
Car Collectors (GQ): In this web series, car collectors, such as comedian Adam Carolla, show off their lot and latest auto obsessions.
Maybe you saw the Google Nose April Fool's prank, where users of a pretend new application clicked on "wet dog" or "Egyptian tomb" and sniffed their laptops to find out what these things smell like. Well new smell technology is not a joke -- or not only a joke.
Last week at the Crossing Europe film festival in the Austrian town of Linz, for example, an artist named Wolfgang Georgsdorf premiered a smell movie with an important distinction: It works. In NO(I)SE, an experimental film, colors flicker on a screen and a series of aromas float past your nose. Viewers got a whiff of wet earth, mushrooms, dung, shirt, chocolate, sweat, fresh cut grass, hay, lemon cake, rotting fish, ocean, and diesel fuel.
The smells are blown in and out of the theater by a smell projector, called Smeller 2.0, that occupies the whole of the back of the room. Georgsdorf finished it last year. The $260,000 projector has 64 smell source chambers all of which send a scent to the front of the machine, where a wide pipe blows fresh air through the theater and out of a window hidden behind the screen.
It makes “a smooth, gentle cake of air moving slowly through the room, transporting little compartments of smells,” says Georgsdorf.
There’s been smell at the movies longer than there’s been sound -- since the scent of roses was wafted into a theater where people were watching newsreel footage of Pasadena’s Rose Parade in 1906. The difficulty up until now has been that smells linger. You end up with a sick-making mix of smells in the air and maybe a pile of scratch cards on the floor.
Geza Schoen, a German perfumer who has created fragrances for some famous French fashion houses, created the smells for NO(I)SE.
Thanks to Smeller, he says, “you can have different smells in a row, changing after a few seconds and they don’t over-layer. That’s important.”
It means you can use them to tell stories. Smells, says Georgsdorf, take us back to the time when being able to smell the tiger when it was still a way off was a matter of life and death.
Round the back of Smeller, Georgsdorf’s assistant, Claudio Thamm, shows me the smell source chambers he’s filling ahead of another movie performance. They include “predator” and “death”. The latter, you guessed it, smells really bad. For Hollywood, maybe one day, maybe one day soon, these could be powerful story-telling tools.
Today's final note comes to us courtesy of Bloomberg.
Remember the kerfuffle during and after the financial crisis about executive pay? How disconnected it seemed to be from A) reality and B) what regular people were making?
Bloomberg points out today that the rules designed to force disclosure of CEO salaries has been, well, held up in Congress. So it's done some analysis of its own -- see the chart here.
The CEO with the paycheck that's the most removed from what his average employee makes?
Ron Johnson, who ran JCPenney for about a year-and-a-half until he was fired not too long ago. He made 1,795 times what a JCPenney clerk made.
Forms for health care reform are getting reformed. (Try saying that three times fast.)
Under the health care reform law, Americans without health insurance will soon be able to buy coverage through a program called a health insurance marketplace, also known as an “exchange.” The federal government will begin accepting applications in October.
Today, the Centers for Medicare & Medicaid Services (CMS) posted those applications online. It called them “consumer-friendly” and stressed their relative simplicity.
“They’re pretty short,” says J.B. Silvers, who teaches health care finance at the Case Weatherhead School of Management. “Less than an awful lot of individual forms that people fill out these days.”
One of the applications -- for individuals whose employers don’t offer health coverage -- is just three pages long. A similar form, for families, is only seven pages.
It took me four minutes to fill out that form for families. It probably would have taken even less time if I didn’t have to dig up my most recent tax return. That tax return was the only other piece of paper I needed. I was able to fill out the rest from memory.
Draft versions of these forms were much longer and more complex, and some policy analysts worried they’d stay that way.
When it was first released in January, the form for families was 21 pages long, and it was written in confusing bureaucratic language. For example, “Does PERSON 1 plan to file a federal income tax return next year?” instead of “Do you plan to file a federal income tax return next year?”
An important three pieces of paper
At a news conference today, President Barack Obama said the new, shorter forms exemplify “the kind of refinements we’re going to continue to be working on” as the government continues to implement provisions of the healthcare reform law.
Timothy McBride, a health economist at Washington University in St. Louis, says the current applications are easier to follow.
“I was very pleased to see these revised forms, because I had seen some of the draft forms they were considering, and I was getting pretty nervous."
In a statement, the CMS said, “the paper application was simplified and tailored to meet personal situations based on important feedback from consumer groups.” Over these last few months, the agency encouraged the public to submit suggestions, comments and complaints.
It seems a little strange to put so much weight into a few blank lines, but McBride says the forms are important for enrollment.
When a form is too complicated, “it turns people off or it turns people away,” McBride says. “Health insurance is quite complicated even for those of us who know a lot about it.”
Paving the way for other changes?
From a design perspective, these forms look similar to prototypes the Consumer Financial Protection Bureau has released, including a simplified credit card agreement.
David B. Kendall, a senior fellow for health and fiscal policy at Third Way, a Washington think tank, says these new applications for health coverage could encourage other agencies to reexamine their own forms.
“I think this particular application will be more influential in the way we do other things in government services,” Kendal says, suggesting applications for Medicaid and food stamps could be redesigned.
Well, Google is taking on Siri on its home turf. The search giant released its own personal assistant -- called Google Now -- on the iPhone this week, after a successful run on Android phones.
I couldn’t resist, I had to ask Siri what she thought about it.
“I don’t really have anything to say about Google Now or ever.”
Well Siri, you might want to reconsider that.
Google Now takes all the data we feed it -- like what we search for, what we buy, where we are -- and learns our habits, giving us information before we ask for it. I use an iPhone and downloaded Google Now yesterday but so far, it’s not very useful -- just information about the weather and nearby bus stops.
“If you just started using “Google Now” it hasn’t learned that much about your habits yet,” said Liz Gannes, a senior editor at the tech blog All Things D.
She’s got an Android, which has had Google’s personal assistant app for almost a year now, and so Google Now knows a lot about her. It tells her how long her commute will be, when she has a restaurant reservation.
Her favorite example: “I was taking a United Flight so my boarding pass was emailed to my GMail account. So the morning of the flight, it pops up in Google Now with your boarding pass right there,” she said.
Tony Costa, an analyst at Forrester, says anticipatory computing is the next frontier in mobile search. Right now, search is mostly about asking for information, but the trend is to give you information before you ask for it.
“It’s that aspect of these devices becoming active participants with their users rather than just passive order-takers,” Costa said.
In this respect, Google Now has a big head start over Siri, said Tammy Madsen is professor at Santa Clara University’s School of Business.
“There’s a lot to catch up on if we think about the search capabilities behind a “Google Now”-type feature,” Madset said.
She says whereas Apple’s focus is hardware, Google’s spent more than a decade collecting our data or getting to know us better.
Last fall Duke University announced a plan to offer online courses -- for credit -- through a company called 2U. Last week Duke’s faculty said “not so fast.”
Some professors didn’t like how the administration handled the deal, says Tom Robisheaux, chair of the Duke Arts and Sciences Council, which voted down the contract. Others just aren’t wild about teaching online.
“I think we at Duke need a little bit more time to think about this,” he says. “The only way we will get experience and answers to some of these questions is actually to try a pilot project at some point.”
With more people questioning the high price of a degree, colleges are scrambling to figure out how to use technology to save money and stay competitive. As more of them turn to online classes, some professors are pushing back.
Earlier this month faculty at Amherst College rejected an invitation to team up with Harvard and MIT to offer massive open online courses, or MOOCs, for free.
“We work with students pretty closely and the idea of teaching 100,000 students remotely just doesn't seem like it fit Amherst’s goals and values,” says Stephen George, professor of biology and neuroscience.
Faculty at both schools say they haven’t ruled out online education. A handful of professors at Duke already teach MOOCs, says Robisheaux.
They’re also aware of the risks of getting left behind.“There are very powerful reasons to want to do it if it is a great movement and that’s the direction of the future,” says Amherst’s Stephen George. “Either way is risky.”
Tenured professors have been slow to embrace online education, says Elaine Allen with the Babson Survey Research Group. In an annual survey, less than a third of chief academic officers said their faculty accept the value of teaching online.
“Over the ten years that we have done our survey, faculty opinion of online education really has not changed,” Allen says.
And it may not, she says, until her generation of college professors retires.
It's been four years since the great recession hammered state budgets. But new census data shows that state tax receipts crept back up to their pre-recession levels. In total, states collected nearly $800 billion last year. That's the highest level ever recorded.
The recovery has been fueled by increases in state income taxes, sales taxes and real estate taxes. "Our tax revenue has finally recovered. They are pre-recession levels," says Fred Church, the deputy budget director with the Ohio Office of Budget Management.
Return to pre-recession levels has allowed Ohio to spend money on programs that had been cut during the recession. "In this budget we were able to put significant amount of money back into K-12 education," Church says.
And much like other states, Ohio is using its budget surplus to repay the state's rainy day fund. "We'll probably bring the rainy day fund up to its target level of 5 percent of revenues," Church adds.
Ohio also hopes to take advantage of the budget surplus to lower state income taxes.
"States like Kansas, Missouri Ohio, Minnesota, and Massachusetts are looking at different types of tax changes," says Todd Haggerty, a fiscal policy analyst at the National Conference for State Legislators.
Depending on the political climate, some states are using surpluses to lower taxes while others are using the revenue to restore services.
"Things are improving. They are at a stronger spot then they have been in previous years, we're just not seeing the robust recovery that typified previous recoveries," says Haggerty. It took states only one or two years to get back to pre-recession levels in both the 1991 and 2001 recessions. This time around, it's taken four years.
There’s a lot of concern about how much it will cost to buy health insurance on the new exchanges coming online later this year. Some states are predicting double digit increases in premiums.
But beginning next year, if you don’t have coverage, you’ll pay a penalty. The individual penalty under the Affordable Care Act is $95 or one percent of your income, whichever is greater. So if you earn $40,000, you’d pay $400. That's a fraction of what insurance will cost for most people.
But University of Pennsylvania behavioral economist Kevin Volpp says the modest penalty might work better than you think.
“Yeah, the basic phenomenon is called loss aversion,” says Volpp. “People will often cling to that initial purchase price and insist they will not sell for a penny less than that purchase price, even if they have moved out of the house and it's costing them $1000 a month to hold onto the house.”
Now it must be said, the Obama administration isn't counting on the penalty to move the masses. It believes people will buy insurance because they need it and, for many, the government will help them pay for it. The penalty, it's a kind of backup motivator. The theory behind loss aversion is that even if it's the five bucks you lost in the college basketball pool, it's the losing not the loss that matters. Some economists believe the penalty could also work because its is a reminder, you're not following the rules.
“Americans are a very law abiding people,” says MIT economist Jon Gruber. “For example, people don't cheat nearly as much on their taxes as they should. Not as they should in a moral sense, but what will be financially optimal for them. If people think it's the law to do something, they by and large do it,” he says.
Starting next year, you'll be asked about health insurance when you file your taxes. Duke University behavioral scientist Peter Ubel is betting that will have an effect.
“There will be a reckoning. We have to tell them whether we have insurance or not. And if we don't have it that might really feel bad and be enough to change your mind about what you want to do next year,” he says.
Plenty of people don't have the luxury to give into subtle psychological cues and nudges. Take 31-year-old Liana Grey, a massage therapist in upstate New York. She's run the numbers. Grey could pay the one-time $400 penalty or buy subsidized insurance for about $315 a month.
“That is like border of what I was considering acceptable. You know, I don't have health problems. So it's like a gamble,” says Grey.
It's a gamble the government estimates roughly 6 million Americans will take, and many will pay the penalty.
MIT’s Jon Gruber thinks one way to reach the holdouts -- the people really set against buying insurance: good old-fashioned peer pressure. In 2007, Massachusetts state officials started running commercials during Boston Red Sox games at Fenway Park.
“We said you gotta have health insurance. We didn't mention, or you have to pay a penalty. Basically people felt, 'gee, this is the new thing to do to get health insurance state wants me to get it. They've passed a law saying I should get. I should get it,'” says Gruber.
And you know what? The plan helped. Estimates show a majority of the uninsured signed up for coverage within a year and a half of the law passing.
But not every state going to play ball.
“Ads at the Astros games are not going to work,” says Vivian Ho, who teaches economics at Rice University in Houston. “There are some people, particularly here in Texas who have a visceral hatred towards Obamacare as they refer to it.”
Ho thinks many will simply refuse to pay. In fact, paying the penalty will be a point of pride. But pride is going to get more expensive. By 2016, the penalty ratchets up to 2.5 percent of your income. Ho says high enough for people to feel the pinch.
Congress may have solved one sequester problem— -- airport delays. But for others touched by sequestration, the budget cuts stand.
“When you look at air traffic control, it affects people in obvious way,” says Dr. Francis Collins, director of the National Health Institute. “Medical research, maybe not so obvious. The lead time between making a discovery and having a clinical benefit may be years. But we are putting a generation of young scientists at serious risk.”
Traditionally, “biomedical research has had bi-partisan support.” After all, “medical research is about all of us -- our loved ones, ourselves -- and it’s also a great way to stimulate the economy so what’s not to love?” But sequester brought $1.6 billion in cuts to the NIH. “This poison pill that when originally designed it was intended to be so poisonous that no one would swallow it -- it got swallowed and we got poisoned.”
When he meets young researchers -- they’re worried. “They’re asking is there a future for us? Do we have a career path? Should we think about doing something else? Or maybe going to another country? The anxiety is palpable and understandable, considering what’s happening.”
Yet, it’s been an otherwise exciting time to be a part of biomedical research, Collins says. “All of us involved in medical research are exhilarated by the pace at which discoveries are now possible. Technology has played a big role in that.”
Collins doesn’t worry funding for the NIH could be cut all together. But he does at times still retreat to his lab where he researches diabetes and aging.
“The lab is wonderful mental health for me when I’m getting a little bit frustrated with the political circumstances and the budgetary squeeze.”
A new market is emerging for apps that can connect people to emergency services and family members during a crisis.
One fake AP tweet sent the stock market downward, but just for a minute. Now the Commodity Futures Trading Commissions is looking at how social media and the markets should interact.
Home prices rose 1.2 percent in February and were up 9.3 percent since last year, according to the S&P Case Shiller Index. Gus Faucher, senior economist with the PNC Financial Services group, discusses the increase and what's causing it.
Home prices rose 1.2 percent in February and were up 9.3 percent since last year, according to the S&P Case-Shiller Index.
Gus Faucher, senior economist with the PNC Financial Services group, joins Marketplace Morning Report host Jeremy Hobson to discuss the increase and what's causing it.
Alibaba, the e-commerce giant of China, is paying more than $500 million to buy a piece of the Chinese social network Weibo. The site, which already has 46 million users, is expected to grow as China's middle class expands and connects to the web.
But does social media still have room to grow in countries where it's been around for a while? Britain's Guardian newspaper is reporting Facebook received 4 percent fewer visits last month in the U.S. The slowdown could be temporary and is not in and of itself a castatrophe for the company, but that trend extends beyond the U.S. to Canada, Japan and Germany. So, has saturation finally set in?
Lindsey Turrentine, editor in chief of CNET Reviews, says Facebook users may be getting tired communicating with lots and lots of friends.
"There's a fatigue that goes along with constantly curating your image," Turrentine says. "Even for younger people, there is something exciting about idea that you could create a small community, that you really only share your thoughts and your feelings with people that you really trust."
Facebook has competition coming at it from diverse angles. Turrentine says innovation is taking off in the social networking world.
"There's Instagram -- which Facebook purchased partially for its young users. And then there's a network like Path, which keeps your friend count limited," Turrentine says. "There's different examples of different types of social networks that are interesting for different reasons, and users are playing with all of them."
And while we're talking about Facebook, there's new research noting a loose link between social media "likes" and obesity. The open source, peer reviewed journal PLOS One published a study suggesting that people who assign social media "likes" to pursuits involving physical activity -- say hiking -- might be thinner than people who assign a lot of "likes" to sedentary activities such as watching TV shows.