Marketplace - American Public Media

How the EPA made gas-mileage numbers accurate

Tue, 2015-02-24 07:09

The U.S. Environmental Protection Agency issued new guidelines to car makers this week, clarifying how they should measure gas mileage. Auto-makers like Hyundai, Kia and Ford have gotten in trouble for over-stating fuel-economy claims, and many consumers assume that the miles-per-gallon numbers on a new-car sticker must be taken with a heavy grain of salt.

However, the big surprise about those numbers is this: For most cars, they’re pretty accurate.

David Greene, a professor at the University of Tennessee, was one of the architects of the website fueleconomy.gov, where consumers report their actual mileage. Now, he's looking at how close those thousands of reports are to the official mpg numbers.  

"They are pretty close— within a couple of percentage points— on average," he says. "But that’s kind of like saying the average family has 2.6 children. Nobody has 2.6 children."

As the saying goes, your mileage will vary, depending on how and where you drive. But the numbers reflect the average.

It wasn’t always this way, but in 2008 the E.P.A. changed testing procedures to reflect reality— including driving speeds of up to 80 miles per hour, air-conditioning systems running against 95-degree heat, and the like.

The result: the estimated mpg on most cars dropped by 10 to 20 percent.

The housing market is still struggling

Tue, 2015-02-24 06:52

The price of an existing home grew 4.46 percent last year, according to the Case Shiller Home Price Index. Sales of existing homes, while not at pre-recession peaks, were up, but new home sales and construction were still weak. 

New home sales are a particularly key figure to focus on. While existing home sales are important, an existing home doesn’t help GDP the same way a brand new home does, and a lot of new homes aren’t being built — because people aren’t buying them.

“The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession ... The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence,” says David Blitzer in a statement, manager of the S&P Dow Jones Index Committee, who oversees the Case Shiller Home Price Index.

Why does housing remain sluggish? Why does it still seem haunted by the recession while other economic indicators are improving?

1.“It’s exceedingly expensive and I don’t have the financial capability to do that”: Those are the words of Phil Litman, a random person on the street. Random, but also typical. “I mean if I had an unlimited source of financing, I’d rather buy, yes, but in my current situation right now, I’d rather rent.” It’s basically that, in the words of Mark Willis, executive director of NYU’s Furman Center, a lot of people just don’t have a lot of money. “There are parts of the market ... having to deal with relatively stagnant incomes,” he says. 
 
2. Millennials: Young people, the would be first-time homebuyers, face financial instability. Chris Mayer teaches Real Estate at Columbia Business School, and says there are signs of this in demographic data. “People are getting married later, and having kids later and settling down later.”
 
3. The rise of renting: Connected, perhaps, to prolonged financial instability for millennials, is the shift towards renting. “Renter construction rate still up and up pretty dramatically – 20% over the year,” says Susan Wachter, professor of real estate and finance at the Wharton School.
 
4. Credit, still tight: People are renting, not just because buying is expensive, but because borrowing is still hard. “The uneven recovery in construction is fundamentally reflective of tight credit conditions,” says Wachter. Interest rates may be low, but that doesn’t guarantee someone will qualify for a loan.    
 
5. Something else entirely: As much as we like to pin our dismal housing sector on the recession that just won’t die, the reality is there were changes in housing happening way before it. “Homeownership actually peaked in 2004, before the recession, in fact, before the clear boom in housing peaked,” says S&P Dow Jones’ David Blitzer. He says the recession may have just accelerated a larger trend that was happening anyway.

Supreme Court considers retirement plan lawsuits

Tue, 2015-02-24 03:00

The U.S. Supreme Court is scheduled to hear oral arguments Tuesday about a case that centers on whether there should be a six-year time limit on being able to sue a company over its oversight of funds it offers in a retirement plan. The question has pitted the AARP, the U.S. Solicitor General and others against groups representing employers and the financial industry.

"The people who run these plans have a legitimate interest in saying: look you can't sue us for 20 years of damage," says Norman Stein, a professor at Drexel University who is an expert on laws surrounding employee benefits and pensions.

But employers are arguing that that six-year limit should apply not to damages, but to when a fund was introduced into a company's retirement plan. That would limit the number of funds subject to lawsuits.

PODCAST: A state of the art tunnel

Tue, 2015-02-24 03:00

Market players are focused on key testimony about interest rates and jobs that starts this morning. More on that. Plus, Comcast stock is up a bit after the cable and media content company reported fourth quarter profits up from a year earlier. This a few weeks before federal regulators are scheduled to decide whether to allow a merger with Time Warner Cable. And underground water and drain pipes in America are often state of the art ... if we were living in 1915. Money to replace and upgrade has been in short supply. But in the nation's capital, the utilities are embarking on a $2.6 billion dollar remedy in the form of a tunnel.

Under D.C., a new tunnel almost no one will see

Tue, 2015-02-24 02:05

Reporter's Notebook:

My water tunnel tour starts at 7 a.m. Come early, the media relations person for the utility DC Water tells me, it's a 35-minute train ride to the tunnel face. The tunnel boring machine has already chewed through more than three miles of earth, in what will eventually be a colossal, 13-mile network under the District of Columbia.

The visit begins like an oil rig tour: Safety talk. Helmet. Earplugs. Safety glasses. Boots. "Tuck in your pants," DC Water construction director Chris Varellan says. It can be messy down there.

Scott Tong in center. Chris Varellan to right (construction director, DC Water). Ray Hashimee, assistant resident engineer, EPC Consulting to the left.

Andy Le, DC Water

It turns out the tunnel-making machine, a German-made industrial digger, has a name: Ladybird. These machines are commissioned like ships, I'm told. Each machine has a name, always female. In this case, the namesake is a former First Lady, Lady Bird Johnson, who campaigned for cleaner rivers in the 1960's and reportedly pressured her husband, Lyndon B. Johnson, to declare D.C.'s putrid Potomac River a "national disgrace."

Follow Ladybird's progress here:

<br />

Why construct a mega-tunnel no one will ever see? The point is to catch rainwater from big storms, and give the water somewhere to go. Right now, when a big storm hits, the water drains into the sewer pipe system. That's how it was designed. The sewer and storm water systems are one.

DC Water CEO George Hawkins picks up the story there:

 

David Kidd

"All of that storm water rushes into the storm drain and goes into the pipe. And almost no matter how big it is, they fill ... the choice by design was an overflow to rivers,” says Hawkins.

Here's George Hawkins talking about the DC Clean River Project:

You mean, right now raw sewage goes straight into the rivers, I ask? Hawkins nods. Eww. The completed tunnel give the sewer/rainwater cocktail a different place to go, a place to be stored and treated rather than dumped straight into rivers.

The elevator buzzes. Down we go, 16 floors to the tunnel. By now, the staggering dimensions come into focus. This is no crawl-through-it tunnel. Twenty-three feet in diameter, it's roughly the size of a Metro train tunnel. That allows for enough water in the biggest of storms, over the next 100 years. This is an infrastructure project to last generations. "The Roman aqueduct," Hawkins declares.

The train comes to pick us up, and off we go in the dark. Twenty minutes in, I'm told we're 80 feet below the bottom of the Potomac River. I exhale slowly. It's actually quite warm inside, maybe 55 degrees compared with 30 on the outside. It's somewhat lighted, and I'm told in an emergency there are rudimentary facilities available. The only thing missing, really, is a cellular signal. Fifteen minutes later, we reach Ladybird, boring away. Here is what she looks like, in a model.

Scott Tong

At the tunnel face, our party exits and walks a few steps along the tunnel wall. Verellan points out each white-colored tunnel section as we pass. Ladybird digs in six-foot increments. Then each section is immediately reinforced by a concrete, cylindrical retaining wall to keep it in place. On today's newest, cleanest section, a construction worker spray paints @marketplace public radio on the wall to mark the occasion.

The Marketplace twitter handle on the wall of the D.C. tunnel.

Scott Tong

It's a shrewd PR move. Later in the day, I email a picture of the spray-painted panel to my Sustainability Desk colleagues, suggesting we have a permanent spot in D.C. infrastructure lore. I don't realize until the next morning that this "I was here" moment will likely wash away when the first storm hits the tunnel.

Our group approaches the backside of Ladybird, the only part I can see. The boring machine is longer than a football field; regular folks like reporters can't enter (her cockpit is pressurized). At this point, a half-dozen workers install the newest concrete ring to the tunnel. Work will go on like this, every day, until the project's anticipated finish date of 2018. That's when this tunnel will open for storm/sewer water business.

What will become of D.C.'s rivers, the Potomac and Anacostia? The aspiration is for them to be clean enough to be "swimmable and fishable," Hawkins says. This is not his goal, but rather a mandated requirement of the EPA under the 1972 Clean Water Act.

Swimmable? Fishable? My wife's cousin rows regularly on the Anacostia and has told us of televisions floating by. One article mentioned a cow's head. If you've lived here long enough, chances are you've heard the joke about the Anacostia: it's so dirty you can walk across and leave footprints. Then there's LBJ's description of the Potomac as disgraceful. We'll see.

Nationwide, though, a slow process is underway of cleaning up urban waterways. This is more than an environmental thing. A downtown river is now viewed by development types as a high-end economic hub, a place for high-rises, ballparks and walking trails.

"Think about where we were in the late 60s, where we literally had rivers on fire in Cleveland," says Matt Ries, chief technical officer of the nonprofit Water Environment Federation. Now "we could talk about Chicago that used to have along the Chicago River all kinds of warehouses that are all being converted into high price condos. You have San Antonio with its river walk. You look at the inner harbor of Baltimore. People want to be by the water. There's something inherent in our DNA that attracts us to water. Why do people go to the beach every summer?"

Matt Ries, chief technical officer, Water Environment Federation.

Scott Tong

"Think about where we were in the late 60s, where we literally had rivers on fire in Cleveland,” says Matt Ries, chief technical officer, Water Environment Federation.

Here's Matt Ries talking about rivers as an economic resource for cities:

This tunnel project is ambitious, impressive, and expensive. The projected pricetag is $2.6 billion. Some of the funding comes from a rare 100-year bond issuance. Some will come from ratepayers, who have already seen monthly rates doubled to more than $80 a month in the last six years.

To the angry ratepayers, Hawkins offers this defense: you can spend the public's money on storm water emergencies after the fact. Or you can get ahead and fund preventive efforts like this one. "Either way," Hawkins says, "you pay."

 

Zen and the art of coding

Tue, 2015-02-24 02:00

Shawnee is 14. She didn't know anything about coding before she was sent to Wyoming Girls’ School in Sheridan, roughly five months ago. 

Then, she took her first coding class. When it was over, she started another class — online — in her free time. The school is a secure juvenile justice facility, working to bring better technology into its classrooms.

Here’s her account of how she became a coding convert:

I didn't particularly like computers. I didn't like technology. I was just that teenager who texted all the time and who was talking on the phone all the time. I didn't really bother to find out how things work.

So when I first started coding, I thought “This is weird,” because I don’t usually like this stuff. Then our class did Hour of Code, [a one-hour introduction to computer science, teaching anyone who wants to participate the basics]. And I knew I needed to know more about it. I asked my teacher to give me some paper. I was takin' notes.

My grandma always told me that if you’re doing something you love, you’re at peace with yourself. And when I think about coding, and do coding, I’m at peace with myself.

Sometimes I get really stressed out, with all the things that are going on in my life. And when I code I realize it helps me think about that, and not about the things I can’t change. It also reminds me that there are things I can change, and that even when it’s hard to overcome obstacles, you can.

After her first coding class at Wyoming Girls' School, Shawnee discovered her hidden passion for the work.

Photo by Justin Sheely

People have asked me what you want to do when you grow up, and I used to say, “I don’t know, get rich quick somehow, I guess.” And now, with coding, I feel like I can have a steady job and a job that I have a passion for. And people always ask me, “What about retirement, and what if you turn 60 and want to retire and live out in the field somewhere and have a family and stuff?” and I always tell them, that when you’re doing something you have a passion for, it’s not going to matter whether it includes retirement or not, because you’re gonna want to do it forever.

To hear more of Shawnee's story, click the audio player above.

Click here to share your thoughts on this story.
Email us at learningcurve@marketplace.org or send us a tweet @LearningCurveEd

Zen and the art of coding

Tue, 2015-02-24 02:00

Shawnee is 14. She didn't know anything about coding before she was sent to Wyoming Girls’ School in Sheridan, Wy., roughly five months ago.

Then, she took her first coding class. When it was over, she started another class — online — in her free time.

Here’s her account of how she became a coding convert:

I didn't particularly like computers. I didn't like technology. I was just that teenager who texted all the time and who was talking on the phone all the time. I didn't really bother to find out how things work. So when I first started coding, I thought “This is weird,” because I don’t usually like this stuff. Then our class did Hour of Code, [a one-hour introduction to computer science, teaching anyone who wants to participate the basics]. And I knew I needed to know more about it. I asked my teacher to give me some paper. I was takin' notes.

My grandma always told me that if you’re doing something you love, you’re at peace with yourself. And when I think about coding, and do coding, I’m at peace with myself.

Sometimes I get really stressed out, with all the things that are going on in my life. And when I code I realize it helps me think about that, and not about the things I can’t change. It also reminds me that there are things I can change, and that even when it’s hard to overcome obstacles, you can.

After her first coding class at Wyoming Girls' School, Shawnee discovered her hidden passion for the work.

Photo by Justin Sheely

People have asked me what you want to do when you grow up, and I used to say, “I don’t know, get rich quick somehow, I guess.” And now, with coding, I feel like I can have a steady job and a job that I have a passion for. And people always ask me, “What about retirement, and what if you turn 60 and want to retire and live out in the field somewhere and have a family and stuff?” and I always tell them, that when you’re doing something you have a passion for, it’s not going to matter whether it includes retirement or not, because you’re gonna want to do it forever.

To hear more of Shawnee's story, click the audio player above.

Click here to share your thoughts on this story.
Email us at learningcurve@marketplace.org or send us a tweet @LearningCurveEd

Unlocking the digital classroom for kids in lock up

Tue, 2015-02-24 02:00

Technology has become an integral part of education. Students are increasingly learning with help from laptops, iPads and other digital technology. Schools are embracing blended classrooms, which mix traditional and online learning.

But technology presents unique hurdles for the juvenile justice system, which has been reluctant to introduce computers and the internet into secure facilities.

Since 2013, San Diego County has been confronting the challenges of introducing laptops — and digital learning — into its juvenile justice facilities.

On Tuesday, Feb. 24, Marketplace takes a look at the surprising results. Check back then for the full story.

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The Comcast merger with Time Warner isn't a sure thing

Tue, 2015-02-24 02:00

Last February, when Comcast announced it was buying Time Warner Cable, federal approval of the merger didn't seem like a major hurdle. The two biggest cable companies said their merger wouldn’t reduce competition — and wouldn’t result in higher rates —  because geographically, they served different markets.

However, as the Federal Communications Commission prepares to rule on the merger in late March, investors seem to think the deal may fall through. Time Warner's stock has been trading at prices below the amount Comcast has offered to pay.

"There’s a lot changing in how people consume media," says Amy Yong, an analyst with Macquarie Group. "And that’s why it’s become a lot more contentious than a lot of people originally anticipated."

She means cord-cutting — getting video on the Internet instead of over cable TV — has started to look more like a reality. For instance, HBO announced last fall that it would soon offer a stand-alone online service, no cable package required.

That prospect raises new questions about Comcast and Time-Warner, companies that sell both cable TV and broadband services. As broadband providers, might they choke out cord-cutting services to protect their TV business?

The FCC has started looking at new regulations to prevent just that, including a proposal to regulate broadband services as a utility.

"The actions that we've seen may suggest a mindset that is more concerned about competition in broadband, and simply less hospitable to further mergers in this sector," says Kevin Werbach, a Wharton School professor and former counsel to the FCC.

The FCC's concern might spell trouble for the Comcast merger. 

However, Jeff Wlodarczak, CEO of Pivotal Research Group, thinks Comcast's interests in selling broadband services, and the FCC's interests in protecting video services like Netflix or the new HBO service, line up just fine.

"Cable has no real interest right now in doing anything that makes Netflix less attractive," says Wlodaczak. "Netflix consumes massive amounts of bandwidth." And as a broadband provider, Comcast wants to sell more bandwidth, not less.

Who should have the key to your messages?

Tue, 2015-02-24 02:00

Remember when UK Prime Minister, David Cameron, said that he wanted to pass a law that would compel messaging apps to provide a backdoor for security agencies? That would, in effect, ban encrypted software that has no key. President Barack Obama agreed with him.  

In response to that proposal, Jonathan Zittrain, a professor of internet law at Harvard University, wrote an open letter to Cameron, explaining why he thinks it’s a “very bad idea.”

It’s one thing to try and regulate WhastApp, says Zittrain, because the government knows  where Facebook “lives,” and the Silicon Valley company has assets that could be seized.

But what happens when someone produces the next wildly popular messaging app? What if that someone happens to be, as Zittrain wrote in his letter, “two caffeine-fueled university sophomores?” They would be pretty hard to regulate, or even find, according to him.

“You’re kind of stuck, which means you have to go double or nothing,” says Zittrain. “You now have to try to regulate the entire app ecosystem.”  

Even if that were to work, which he doubts, he believes the price is not worth the reward. The way he sees it, it’s similar to a rule that would allow the police to walk into people's homes without a warrant and look around to make sure everything is fine.

“That might well reduce crime, but it’s just not something that a free society would tolerate,” says Zittrain.

 

Gas prices inch up as refinery strike continues

Tue, 2015-02-24 02:00

The nation’s largest refinery strike in decades continues. The United Steelworkers’ strike began on the first of February and has now expanded to 12 facilities, including the nation’s largest oil refinery in Port Arthur, Texas. The union is striking over the use of contract workers and worker safety, among other issues.  

Since the strike started, average gasoline prices have risen modestly. Most of the affected oil refineries are still running, staffed by managers and most likely, some contractors. Shell Oil is the leading oil company negotiator in the labor dispute.

Click the media player above to hear more.

Why water should cost a lot more

Tue, 2015-02-24 02:00

In today’s markets, the price for water does not follow typical supply and demand considerations and does not reflect water scarcity. In many high-growth regions of the world, the price of water is actually inverse to its scarcity. The disconnect between market price and risk makes it hard to substantiate the business case to invest in water conservation strategies. It also encourages growth in regions where water is scarce – and therefore where growth will be least sustainable.

In many major cities shown on the infographic, the price businesses pay for water is much less than its full value. Cities like San Francisco and Los Angeles, for example, have a risk premium 2 ½ to 4 times higher than the current price of water. Looking ahead, this risk is also expected to grow over the next ten years as populations grow and the demand for water grows. For cities like Las Vegas, Dallas, or Phoenix, whose populations and economies are forecasted to grow significantly, water scarcity presents a significant risk to businesses vitality and profitability. 

Data provided by Trucost and Ecolab.

Uber's valuation is surging

Tue, 2015-02-24 01:30
.925

That's the Austin, Texas metro area's "economic segregation index," and it's the highest of the country's big cities. Two researchers from the University of Toronto devised the metric, the Washington Post reported, which shows how likely residents with disparate income, education and occupation are to live in separate neighborhoods.

$1.49

That's how much a cubic metre of water costs businesses in Los Angeles. That's pretty cheap, especially considering that when you factor in water scarcity and the likelihood of drought, it should cost more like $5.97. And L.A. isn't the only city where water costs beer prices for champagne tastes. It's a problem across the U.S.

$2.6 billion

Speaking of water, it will cost Washington D.C. an estimated $2.6 billion to complete an underground tunnel system that can handle excess water when storms hit. Right now, flooding water can only go into sewage pipes, creating a cocktail of rain and raw sewage that ends up flowing directly into the rivers. With the new pipe system, the mixture will have a place to go to be stored and treated. And for those who scoff at the price tag, some would argue that its better to pay preventative costs to handle flooding rather than deal with the damage after the fact.

$41 billion

Uber's valuation as of its latest round of fundraising, more than double what it was worth in June. The Verge has an interactive graphic showing just how far the the tech start-up bubble has expanded, with valuations and fundraising for the biggest companies on a spectacular rise in the last year alone.

$1.087 billion

The global box office gross of "Transformers: Age of Extinction," which was set in the U.S. but featured an explosive climax in Hong Kong. That diversity in setting — or having no Earth-bound setting at all — defined global box office winners in 2014, according to an analysis by CityLab.

8 regions

Napa Valley may soon be sour grapes. Over at Bloomberg, they've profiled 8 regions which are up-and-coming in the wine industry. Thanks to factors like changing tastes and climate change, places like Tokaj, Hungary and the Republic of Georgia are producing bottles worth uncorking.

As unions decline, dockworkers still have clout

Mon, 2015-02-23 12:27

West coast dockworkers and shippers reached a tentative agreement on a new five-year contract Friday afternoon, ending months of labor strife. The effects of the standoff have been felt around the world – car assembly lines without crucial parts, billions in produce lost, and a shortage of french fries in Japan. 

In a time when organized labor is declining, one relatively small union, The International Longshore and Warehouse Union (ILWU) still has the power to slow down the economy. 

Neither side will reveal details of the new contract, but it’s likely generous.

Shipping companies say dock workers average $147,000 per year. The ILWU says if you take out a few specialized positions, the figure is closer to $80,000. Either way, it is a good salary, especially for non-college grads.

“The ILWU is the American dream,” says Dave Arian, Vice-President of the Port of Los Angeles Harbor Commission, who worked for 44 years on the docks, and was an ILWU President. “My dad was a longshoreman. My daughter works on the waterfront. My sister retired off the waterfront. There are some families who have five generations and 30 people down here or more.”

Arian is well aware that the dock workers are an anomaly, a throwback to the days when blue-collar workers could routinely join a union and live a comfortable middle-class life, complete with a generous pension and full benefits. Such is the advantage of holding the power to shut down all 29 West Coast ports in your hands, as opposed to the East and Gulf Coasts, where ports aren’t covered by a single contract.

“I don’t believe longshoremen are any more militant than autoworkers were or mineworkers were,” says Arian. “But we have something they didn’t have: A strategic position where you can choke off capital.”

That’s because 40 percent of the goods imported into the U.S. come through the ports of Los Angeles and Long Beach.

Being a dock worker is great work if you can get it, but the key is getting it.

“The last time we put out applications, 360,000 people put in applications,” said Arian.

The union resorted to a lottery to pick 16,000 so-called casuals. Known as the “grunts of the waterfront,” they only pick up work full cardholders don’t want. And work is very sporadic, sometimes just one day a week.

Graduating to a class-B member can take a decade, but there are lucky ones, like Carol Randolph, who was only a casual for a year and a half.

“I’m kind of embarrassed to say it,” says Randolph. “My son has a casual card now and he’s been there seven years.”

Randolph’s father-in-law and uncles were in the ILWU, and her brother and brother-in-law are still in it now. Both of her sons are casuals, and so is her daughter. She raised all three as a single parent, working at the docks.

“This job has provided me with a decent home, clothes for my kids, food on the table, and they went to college," says Randolph. "We’re not going to Europe on vacation, but we do take vacations.”

But she has mixed feelings about her kids working the docks.

“It is an extremely dangerous job,” said Randolph. “We don’t have small accidents. We have accidents that kill.”

We met for coffee at the end of her nine-hour shift at a diner where, like every other business near the ports of Los Angeles and Long Beach, there were ILWU signs taped to the window.

Randolph worked the docks for years but has enough seniority now that she can have one of the most desirable jobs – a vessel planner.

“We pretty much decide on what order the containers will have to be coming off the shift,” says Randolph. "If you don’t do it right, you can break the ship. Literally break the ship. The dangerous cargo that has hazardous explosives has to be stored in certain positions.”

When I asked Randolph if the union wanted better healthcare benefits, she said no, because how could they get any better? You can see pretty much any doctor you want and pay practically nothing out of pocket.

Randolph understands people not lucky enough to enjoy such gold-plated benefits might be envious.

“I don’t blame them for being jealous,” said Randolph. “This is a nice job.”

There are only about 20,000 dockworkers such as Randolph still working on the west coast, most of them at the ports of Los Angeles and Long Beach.

Billions of dollars were lost as they negotiated for a contract, and experts say it will take several months to clear the backlog at ports.

Closing the digital divide on the inside

Mon, 2015-02-23 11:02

The Wyoming Girls' School in Sheridan, Wy., is home to 39 young women between the ages of 14 and 18. They’ve all broken the law — mostly non-violent offenses like drugs and probation violations. These girls are among the tens of thousands of kids nationally who have been sentenced to live in secure juvenile justice facilities.

Historically, these facilities have failed kids when it comes to getting them an education.

The Wyoming Girls' School is an exception. On Monday, Feb. 23 Marketplace will explore how the school is preparing its girls to succeed in the 21st century economy.

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The magic and misery of compounding

Mon, 2015-02-23 08:57

The president wants to stop unscrupulous brokers from flogging investments to consumers that kick back fees to the brokerage. These kinds of dodgy investments cost consumers one percent a year, on average. That may not sound like much, but one percent a year is worth a lot to a saver, thanks to a magical thing called compound interest. Pop quiz: Would you rather get $10,000 a day for 30 days or a penny that doubled in value every day for the same 30 days? It’s a question often used to show the often counter-intuitive power of compounding. By day two, Option A yields $20,000, while Option B is a mere two cents. It feels like a no-brainer, right? But by the end of the month, Option B is the clear winner at more than $5 million, compared with Option A’s $300,000. The math is clear, but compounding is often difficult for us to wrap our heads around, says Andrew Meadows with Ubiquity Retirement + Savings, which provides retirement accounts for small businesses. “It’s essentially interest earning interest,” says Stephen Brobeck, the executive director of the Consumer Federation of America. What you earn goes back into your account and now you earn interest on that, plus your initial investment. The longer you leave the money, the more it snowballs. But that snowballing can work against you if you’re in debt and paying interest instead of earning it, cautions Diane Lim, an economist at the Committee for Economic Development. 

The DHS needs a morale boost

Mon, 2015-02-23 08:57

The latest skirmish in Congress’s never-ending budget battles comes at the end of this week, when funding for the Department of Homeland Security dries up — unless Congress can agree on a compromise to keep it running. 

But even if Congress acts on the budget, DHS has another huge problem: Morale among DHS employees is dreadful. Every year, the federal government surveys its workers, asking if they're recognized for good work, if they respect their leaders, and so on.

“DHS does not stack up well,” says Max Stier, president of the Partnership for Public Service, a good government group that crunches the federal survey numbers and ranks morale at government agencies. 

For the past few years, DHS has come in dead last.

“It is redefining the bottom of the rankings for large agencies,” says Stier.

Stier says part of the problem is the way DHS was created after the September 11 terror attacks. Twenty-two very different federal departments and agencies were merged into one gigantic bureaucracy — but they all kept their congressional overseers. Now, more than 80 committees and subcommittees have jurisdiction over DHS.  

Jeff Neal, who headed the agency’s HR department from 2009 to 2011, says he was constantly writing reports for Congress.

“It didn’t really help us run the department," he says. "It was very frustrating. We had other things that were more critical than writing reports."

Now, Congress is causing DHS employees more headaches, and this latest budget skirmish just makes morale worse.

“People are very stressed out," says Nicole Byram, president of the National Treasury Employees Union chapter in Savannah, Georgia and a Customs and Border protection officer. "People are very anxious. Everyone kind of has this feeling of, oh no. Not again.”

Because they know, if Congress can’t agree on how to keep funding DHS, there’ll be a partial government shutdown. But they’re considered essential, so they’d have to work without pay during the impasse. And getting back pay? That takes an act of Congress — a mood crusher sure to keep DHS at the bottom of the morale rankings.

Tooth fairies reimburse an average of $4 per tooth

Mon, 2015-02-23 08:57

I've got a seven-year-old who's about to lose a tooth — it's just a couple of good wiggles and a twist or two away from coming out. And when it does, I feel pretty safe in guessing that she's going to get about a buck under her pillow.

Turns out, tooth fairies at other houses are a bit more fast and loose with the cash.

A survey by dental insurance company Delta Dental says the national average for American kids is $4.36.

The Original Tooth Fairy Poll

Not in my house, I'll tell you that.

Edwin Land: "The original Steve Jobs"

Mon, 2015-02-23 07:20

 If you wear sunglasses, use a camera or watch T.V. on an LCD screen you have Edwin Land to thank for one of his many innovations: the polarization process. 

According to Ronald Fierstein, author of "A Triumph of Genius: Edwin Land, Polaroid, and the Kodak Patent War," Polaroid founder Edwin Land and Apple's Steve Jobs had a lot in common.

"They were both college dropouts. They both formed and pretty much single-handedly developed tremendous technology companies," Land says. 

But Land and Polaroid would also have to endure a massive lawsuit with American photography juggernaut Kodak. In the end, Polaroid won, says Fierstein. "Kodak had to pay almost a billion dollars in damages... which until a few weeks ago held the record for most damages ever," he says.

Even though Polaroid was able to keep Kodak from capitalizing on its innovations, eventually both companies just stopped innovating. "They both held on to the technologies that made them great. And they held on too long," Fierstein says.

Land's story isn't just the story of Polaroid though. He was also an integral player in a government committee that led wartime scientific research.

"While all of the polarizing stuff was going on at Polaroid and the photography and everything else, Land, in secret, over the course of several decades, worked for seven American presidents," Fierstein says.

So the guy who came up with the Polaroid instant camera? He also "led a committee that came up with the U2 spy plane," Fierstein says. "Even the mini-cam that was on a stick that Neil Armstrong used on the moon, came from that Land Commission, that Land Panel group."

 

Read an excerpt from Fierstein's book below: 

A Father’s Sage Advice

By Ronald K. Fierstein, author of A Triumph of Genius – Edwin Land, Polaroid and the Kodak Patent War.

When Edwin Land, still in his teens, informed his father that he was dropping out of Harvard before the end of his freshman year to pursue his search for a practical polarizer material, and that he needed the equivalent of seventy thousand dollars to fund his experiments, Land’s father agreed, but gave his son a critical piece of advice that would stand him in good stead for the rest of his career:  when you find your solution, protect yourself so that some big corporation does not come along and steal it from you. 

Land remains perhaps the most important, yet least known, inventor and technology entrepreneur in American history. In many ways, he was the original Steve Jobs.  TheApple founder once hailed Land as “a national treasure,” and modeled much of his own career after the inventor.  Launching his career upon his invention -- at age nineteen -- of the plastic polarizer, Land later imagined and then nurtured into existence the revolutionary “one-step” photographic system that helped build Polaroid into one of the most innovative companies of the 20th century.  Along the way he made critical contributions to top-secret U.S. military intelligence efforts during World War II and the Cold War in the service of seven American presidents.

Polaroid and Kodak had a long relationship that dated back to the early 1930s, when Kodak became the first significant customer for Land’s plastic polarizer material.  Beginning in the early 1940s, when Land began research in photography, Kodak helped at every step of the way, even manufacturing the negative components for incorporation by Polaroid into each of its one-step films.  By the mid-1960s, Polaroid stood as Kodak’s second largest corporate customer – it was truly a mutually beneficial relationship.

But that relationship was soon to change, in a dramatic way.  In 1968, Land showed his Rochester colleagues the prototype for a new generation of Polaroid film. For the first time, the photograph would emerge from the camera and require no further manipulation – one could simply hold it and watch it develop in the light. Land enthusiastically declared that this new system would revolutionize photography, and become as ubiquitous as the telephone.

The Kodak executives listened carefully, and took his claims seriously.  Following the meeting, Kodak conducted marketing analyses indicating that it stood to lose billions of dollars of film sales because of Polaroid’s new system.  This realization changed Kodak’s attitude toward Polaroid and Land forever.  As a result, it demanded that, in exchange for its help in bringing the new film to market, Polaroid allow Kodak to enter the instant photography field with competitive products sold in its iconic yellow boxes.

This was something that the much-smaller Polaroid could not abide.  When Kodak refused to budge on its demand, Polaroid was forced to go it alone.  It built new facilities to manufacture, for the first time, every element of its film.  Finally, in 1972, Polaroid introduced its SX-70 camera and film combination, a system that delivered on Land’s initial intent to give photographers the instant gratification of holding a photograph in their hands seconds after the shutter was snapped.  Time called it “a stunning technological achievement,” and Life declared that it was “a daring challenge to Kodak for supremacy in the $4 billion-a-year U.S. photo industry.”

Kodak executives apparently agreed with this assessment.  The company had already poured substantial time and resources into an effort to develop its own technology that would allow it to enter the instant photography market.  But these efforts completely changed course in 1972 once Kodak finally saw the commercial SX-70 camera and film. Executives declared that what the proud Rochester company had on its drawing boards was “no longer desirable.” 

An urgent effort was immediately undertaken to come up with a more competitive system.  However, after studying the SX-70 camera and film closely, Kodak scientists were unsure about their ability to meet the challenge. Yet, Kodak top executives were determined, and directed that the research efforts continue.  In so doing, a directive was issued that foreshadowed what was to become one of the most important legal battles over technology in the history of the United States. As observed many years later by industry commentators, Kodak, feeling “hemmed in by Polaroid’s vast portfolio of patents,” had indeed “panicked.” In apparent desperation, management directed Kodak engineers to “not be constrained by what an individual feels is a potential patent infringement,” but to consult the patent department.

The litigation over instant photography technology is among the most historic in American legal annals.  Polaroid’s ultimate victory, as a result of which Kodak was forced to remove its instant cameras and film from store shelves, and to pay almost $1 billion in damages to Polaroid, stands as one of the most severe punishments in the patent field ever meted out by a court of law. 

More importantly, the result in Polaroid v Kodak signaled a shift back to a pro-patent era in the courts from decades in which patents had been seen as a potential tool for anti-competitive corporate behavior, and thus had suffered as a means for technological innovators to protect their work.  Inspired by his father’s early admonition, Land had long been a believer in, and a proponent of, the patent system as a tool necessary to encourage innovation, especially among small companies and individual inventors.  His pivotal role in the trial as Polaroid’s star witness, as a defender of the pioneering research he and his colleagues had done, made for a dramatic denouement to his career, and his life-long support of the patent system.

Supreme Court considers A&F religious head dress case

Mon, 2015-02-23 03:00

The Supreme Court hears oral arguments Wednesday about whether a teenager was discriminated against by clothing retailer Abercrombie & Fitch seven years ago, when a local store manager in Tulsa, Oklahoma did not hire the teen for a job after she showed up to her interview wearing a head dress.

Abercrombie never asked about the then-17-year-old girl's religious affiliation. She is Muslim. The teen did not discuss her religion, either, but also never asked the company to accommodate her wearing a head dress should she be hired.

At the time, Abercrombie had a policy of banning its retail workers from wearing any head coverings, namely hats. Since then, the company has altered its policy to allow for religious exemptions.

When the hiring manager informed a supervisor of the applicant's head dress, and said she guessed that it was worn for religious reasons, the supervisor cited the head covering ban and the teen was not hired.

"The applicant never said, I need a religious accommodation," says Jonathan Segal, a partner at Duane Morris, where he specializes in employment law, among other areas.

When Abercrombie didn't hire the applicant, it was relying on established practice that someone has to volunteer their religious affiliation first and ask a company to accommodate them, says Segal.

"The key is whether the applicant needs to say it, or whether the employer has constructive knowledge," says Segal, clarifying that constructive knowledge means whether Abercrombie should have known that the applicant's head scarf was for religious purposes - just as a yarmulke is often worn by those of the Jewish faith.

Michael Delikat, who heads the labor law practice at Orrick, Herrington & Sutcliffe, says that notion complicates the job interview process.

"If Abercrombie is to lose, it definitely puts employers in a more perilous position," says Delikat, because employers will have to walk a fine line: avoid asking employees about religion but also shouldering a greater burden to avoid any potential discrimination that may occur from observable characteristics.

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