Marketplace - American Public Media

Opportunity cost and the home

Mon, 2014-05-19 23:40

I met someone recently who bragged that she and her husband had saved hundreds of thousands of dollars over the years because they did all the work around their house themselves. That means yardwork, maintenance, the whole nine.

But did they really save money? What if they ran the numbers on that opportunity cost equation and found they actually lost money?

I'm thinking a lot about this right now, because I bought a new house recently, and there's plenty of maintenance to be done. In fact, right now, there's a guy out back fixing a busted pipe in my sprinkler system. And I’m feeling a bit guilty: Should I be out there fixing that thing? It doesn't look that difficult – all it really amounts to is replacing a piece of broken plastic piping.

The case for outsourcing

  1. I know nothing about sprinkler systems. Nada. Zip.
  2. I have no specialized equipment, or materials, so I’ll have to find out what I need to buy and then go buy it. And then get distracted in the grilling section of the hardware store. And end up spending way more than I really should.
  3. I’ll probably make a mess of it the first time and have to do it over. Plus there’s that vital part that I didn’t get at the store, so I have to make another trip.
  4. It’s what time? Where did the day go?
  5. I didn’t even start writing this blog, and now I might get fired.
  6. My sprinkler guy will take 30 minutes and charge me $50. Boom.

The case for DIY

  1. I’m gaining valuable experience. Once you’ve done something once, whether its stucco, or concreting or sanding a painting a deck, you know what to do, what equipment to buy or lease and how much time it takes. And that investment could mean that every time my sprinklers go kablooey, I have the confidence, know-how and gear to fix them myself in short order, and for next to nothing.
  2. I’m not making any money during the time that the sprinkler guy is fixing my stuff: I’m an exempt employee and I don’t’ get paid overtime.
  3. I get huge satisfaction out of fixing stuff myself. I feel like a provider, a fixer, someone who can be relied on to get things done when things break down. I feel like Magyver. I feel … like a man!
  4. Fixing stuff is fun. Plus you have bragging rights. 

If opportunity cost is "the road not traveled," then the cost of outsourcing is the improvement in my expertise and sense of satisfaction. The cost of DIY, on the other hand is all the time (and maybe money) that I could otherwise spend either making money or relaxing (hey, it's the weekend).

Which means that the opportunity cost calculation of whether or not to outsource household chores becomes a very personal one. People calculate it when they decide whether or not to get groceries delivered, to have a gardener come to work on their yard, or to have their house cleaned by someone else. And a big factor in the decision is how much you enjoy doing those chores yourself. If you really, really hate it, and it takes forever, and you'd enjoy that time so much more doing something else productive or fulfilling or rewarding, then go ahead and outsource.

For a lot of people, of course, there is no question of doing an opportunity cost calculation: they simply don't make enough money to even consider paying someone else to do something for them, so they have to do it themselves. Which means that if you're in a position where you find yourself wondering about opportunity cost, it means you're lucky. Even if it does mean doing some math.

GM doesn't want employees using these words in memos

Mon, 2014-05-19 14:16

A quick follow-up to last week's story about the $35 million fine General Motors is going to pay for not telling the truth about its ignition switch problems.

As part of the document dump related to that case, there's a PowerPoint presentation about how to describe the recall process. Words employees were never to use? "Grenadelike," "Kevorkianesque," "widow-maker," and "rolling sarcophagus," and more:

A coffee plant disease threatens more than prices

Mon, 2014-05-19 13:37

Farmers and harvesters in Central and South America have been hit hard by Roya, or "coffee rust," a fast-spreading fungus that infects the leaves of coffee plants. Roya has caused an estimated $1 billion in damage, and threatened the livelihoods of more than half a million families from Mexico to Peru.

"Entire fields have just been devastated by the rust," said Jonathan Rosenthal, executive director of Cooperative Coffees, who saw the impact of the rust in Honduras. "The trees have turned to skeletons. It's like a ghost town." 

The U.S. is stepping up its efforts to help eradicate the disease, partnering with Texas A&M's World Coffee Research Center. Coffee farming has lifted many families in Central and South America out of poverty. USAID Administrator Rajiv Shah says the organization's Feed the Future program has connected thousands of coffee growers to companies including Starbucks and Peet's. In some cases, Shah said, those farmers have seen their yearly incomes double or triple. He warns that as families fall into poverty, they become increasingly susceptible to the influence of drug traffickers and gangs.

"They prey upon communities that are poor, where lots of children are hungry, and they offer them an illicit income opportunity by producing drugs and selling drugs," Shah said. 

Fungicides are able to treat the blight, but many small farmers can't afford them. 

"The fungicide requires investment; the tools that are used to apply the fungicide require investment," said Lindsey Bolger, vice president of coffee sourcing and excellence for Keurig Green Mountain. "In some cases, these farmers just don't have the resources that they need." 

Unpacking the AT&T-DirecTV deal

Mon, 2014-05-19 13:29

Over the weekend, AT&T announced it plans to buy DirecTV for $48.5 billion. That is, of course, pending approval from federal regulators that are already busy sorting out a different telecommunications merger: Comcast’s bid to buy Time Warner Cable.

“Big fish are swallowing small fish,” says Reed Hundt, former chairman of the Federal Communications Commission, of the changing media landscape. “And if you want to avoid being swallowed, you need to be a bigger and bigger fish.”  AT&T, which is primarily a wireless provider, wants to diversify – to be able to sell customers phone service, internet access, and television.

And its advantage in selling regulators on the deal? Its size. "In terms of the pay TV business," says Todd Rethemeier of Hudson Square, "AT&T is a relatively small player."

Why Google isn't really 'free'

Mon, 2014-05-19 11:43

Martin Smith says its OK for you to be outraged by the NSA's surveillance programs, but still use Google and Facebook every day.

“People like the connectivity that they get out of giving information to private companies,” says Smith, producer of the two-part Frontline documentary "United States of Secrets". “And we haven’t seen the kind of abuses [with private companies] that we associate with government overreach. When George Orwell wrote "1984", it was about government. It wasn’t about private corporations.”

But private companies aren’t totally in the clear. Companies like Google may not have been doing the spying. But Martin says that when the government came calling, they didn’t ask many questions.

The documentary includes a clip of President Bush speaking shortly after 9/11:

BUSH: “The new law that I signed today will allow surveillance of all communications used by terrorists. Including emails, the internet, and cell phones.”

“It was kind remarkable to go back and in the context of what we know now listen to what President Bush was then saying,” says Smith “It was all laid out. The companies clearly had to know.

Smith says what we need to remember is that services like Gmail aren’t really free. At heart, Google is an advertising company. They make money by selling stuff to their users. The more data they have, the better the internet giant is at selling their users more stuff

“When Sergey Brin and Larry Page of Google put together their search engine, that could have been a service that you paid for. Instead, its a 'free service.' But what we are giving in return is access to our personal data.”

Frontline's"United States of Secrets" Part II airs Tuesaday night on PBS.

Two obsessed guys and a radical motorcycle design

Mon, 2014-05-19 10:24

Ten years ago JT Nesbitt was one of the top motorcycle designers in the world. His picture graced the cover of magazines. Celebrities sought out his extravagantly expensive machines. But in 2005, while he was visiting a prince in the Middle East, hurricane Katrina hit New Orleans and destroyed Confederate Motorcycles, the company that built Nesbitt’s bikes. Seven years later, his career hadn’t recovered. He was about to take a job waiting tables in the French Quarter, when a stranger showed up on his doorstep and turned his life upside down.

The stranger was a fan of Nesbitt’s work. He wanted to see his latest motorcycle projects. But, Nesbitt explained, he hadn’t designed a bike in seven years, and he was broke. The stranger looked around the shop and offered to buy Nesbitt a drink. So the two of them took a walk down Decatur street, to a French Quarter bar called Molly’s .

They took a seat at a table and ordered beers. And then the stranger asked Nesbitt a question.  “He says, 'What would you do if you could do anything?'”

The stranger says he asked the question on a whim, “I just honestly wanted to know, and [Nesbitt] was momentarily dumbfounded because nobody had asked him that. But strangely, as if it were rehearsed, he had his notebook with him.”

Nesbitt always carries his sketchbook with him.  And so he pulled it out. But before opening it, he made the stranger swear on his grandmother’s eyeballs that he wouldn’t tell anyone about what he was about to show him. The Stranger agreed. So Nesbitt opened up his sketchbook.

Courtesy of JT Nesbitt

The "Stranger’s" name turned out to be Jim Jacoby and in many ways, JT Nesbitt and Jim Jacoby are opposites. Jacoby loves technology; he thinks it can be used to better mankind. Nesbitt shuns most modern conveniences. He doesn’t have phones that can text. Jacoby is soft-spoken, an introvert. “Even having a conversation like this is outside of what I would find comfortable,” he said in a recent interview. Nesbitt can be blunt and abrasive. “Dude, that’s a stupid question,” he once responded to a question I asked.

But one trait they both share is obsessiveness. “This is the only thing that I think about,” said Nesbitt referring to his design project, “and the only thing I’ve thought about for the last eight years.”

Jacoby says he asked to see Nesbitt’s sketchbook simply out of curiosity. What he saw were the drawings of a bizarre looking motorcycle. But the more he thought about them, the more began to see the motorcycle as a solution to a much bigger problem: The decline of industrial design and craftsmanship in America.

“It's unacceptable,” said Jacoby, “that somebody like JT would be sitting here waiting, unable to do what he’s capable of doing. And if we don’t capture this in people like JT and many other incredibly talented people who work with their hands first and then transfer things to computer, we’ll have lost something incredibly valuable.”

Jacoby is a successful entrepreneur who started a company in 2001 called Manifest Digital. It builds websites and does social marketing for large corporations like McDonalds. He built it from nothing and had 140 employees working for him. But he was starting to have doubts about the life he had built around his company.

“A company that needed to be profit driven and hit certain numbers... and I was trying to [save] the world... those two things are hard to square,” said Jim.

The meeting with Nesbitt pushed him over the edge. He made the decision to quit the company he founded.

And then he took his life savings and handed them over to Nesbitt to fund the building of three prototypes of this unusual machine. But the motorcycle commission is just one part of something bigger.

“The goal is to separate the drive for profit from the act of designing,” explained Jacoby. He wants to remove the corporate constraints that normally hinder industrial designers like Nesbitt.  Nesbitt doesn't have to worry about things like keeping the cost of materials down or designing for mass appeal.

One of the reasons Nesbitt was on the verge of going back to being a waiter is that he is unwilling to compromise.

“If Jim hadn't shown up I would be serving you lunch,” said Nesbitt, “and that’s OK. There’s honor in that. I’d rather be the guy serving you lunch than a guy who is building a compromised motorcycle for mass consumption.”

Jacoby has not given Nesbitt any design restrictions for this motorcycle. Nesbitt has complete and total freedom. “So I don’t have to worry about 'Will people like this or that?', which frees me up to do pure design, pure art.”

JT and Jim are trying to create a new type of patronage system. They compare it to the Medici’s, the wealthy banking family that birthed the Italian Renaissance. They call this system the ADMCi, short for "The American Design and Master Craft Initiative".

“I think we're at the beginning now of what could be another Renaissance,” says Jim. “You have more money sitting on the sidelines through private equity and venture capital and in business profits than has ever existed. My goal is to lead through example and inspiration, and say, 'Let’s believe in great craftsmen first, and put that money to work with them.' And the byproduct will create all kinds of other business opportunities.”

The ADMCi is made up of three entities. One of them is a nonprofit called The Master Practitioner Foundation. This entity will apply for grants, and most importantly seek out wealthy donors, or patrons. JT is building three prototypes. When they are finished, JT and Jim will likely sell them for about $250,000 each. But whoever buys one won’t own it outright. They will be more like stewards of the motorcycle. In the same way an art collector might purchase a painting to be on display to the public, the motorcycle may be part of a traveling museum exhibit.

 

JT Nesbitt and Jim Jacoby.

Scott Tudury

David Lenk is an industrial design expert who also designs museum exhibits for a living. Lenk thinks the ADMCi could help reverse the decline of industrial design and manufacturing in America, which, he says, peaked in the mid 1950s: “You can walk through any flea market aisle today and find a Sunbeam blender or an Emerson fan or Bakelite Xenith radio from the late '40s to early '50s and, not only do they look good, they probably still work.”

But, said Lenk, things started to change in the mid-50s. “The Harvard MBA grads started fanning out with their evangelizing of planned obsolescence, and finance became more important than corporate traditions of design or quality. And by the mid 60s it was all gone. It’s just junk.”

Lenk believes that if the ADMCi’s first commission is a big enough success, if it makes a big enough splash, it could be a model for a new way to fund innovation and design, an alternative to traditional profit-driven investment models. It’s part of a decentralization that’s occurring, he said, “sort of an anti-corporate, structures that are like virtual teams of suppliers that come together to support efforts that will allow individuals with ideas such as JT Nesbitt to produce.”

Jason Cormier

Lenk’s involvement in this project happened entirely by chance. Nearly two years after JT first showed Jim his sketchbook at Molly’s, the two of them were back at the bar in their usual spot when Lenk happened to sit next to them. “It was a real motorhead moment. Within two sentences we were talking about French Coach work of the 1930s.”

And then JT told David about his motorcycle prototype which by this point was nearly complete. It was in his shop just a few blocks away.  The conversation ended, said Lenk, with an invitation to visit JT’s shop that Saturday, “but nothing could have prepared me for what I saw.”

Hacking won't scare U.S. companies out of China

Mon, 2014-05-19 10:11

The Department of Justice announced today that five Chinese military officers have been indicted for allegedly hacking trade secrets from U.S companies.

It’s the first time that the U.S. has charged specific foreign officials with cyber espionage, but as Marketplace's China correspondent Rob Schmitz tells us, it’s actually sort of old news.

“A little more than a year ago we learned that the People’s Liberation Army hacked into dozens of U.S. companies, stealing reams of intellectual property,” says Schmitz. “But this news and its implications were cut short: Right after it was discovered, Edward Snowden released what amounted to a nuclear bomb on the U.S. intelligence community by exposing the NSA’s spying operation.”

Schmitz says China probably wants the trade secrets to help build up its infrastructure. The hacking allegedly took place three or four years ago, when China had just announced plans to build dozens of nuclear power plants across the country.

“Of course the United States has a lot of experience building nuclear power plants. So it could be reasonably assumed that China was cutting and copying the U.S.”

Schmitz says hacking is a growing problem for U.S. companies, but that doesn’t mean they’ll abandon their operations in China.

“The companies that were hacked last year were too scared to complain about having their technology stolen by the Chinese, because they were afraid of upsetting one of their most important global markets. Unless U.S. companies stand up for themselves and start publicly complaining about this, I think the hacking will go on for quite a while.”

Cats, video games, funerals: All with video on demand

Mon, 2014-05-19 09:31

According to Variety, Google is in talks to buy Twitch, a live video game streaming service, for close to $1 billion. Yup, a website that lets you watch other people play video games may be worth $1 billion. Fans don't even have to fire up their own version of "Call of Duty." The reported deal illustrates the growth of live streaming technology. For example:

Streams that make us go Squee! Streaming service provider UStream says the market for live streaming is growing. Right now it says it gets about 77 million unique global views a month -- a year ago at this time it got just 55 million. The company says it broadcasts everything from church services, to content broadcast by citizen journalists to disc jockey lessons. Animal cams, it notes, are always popular:

1. French bull dog puppies!

2. Baby Hummingbirds!

3. Kitty rescue center cam!

Life event live streams

1. Graduations
In case you can't get enough tickets for grandma, grandpa, and grandma and grandpa.

2. Weddings

You may not catch the bouquet, but you also don’t have to shell out for plane tickets.

3. Funerals

Mark Krause of Krause Funeral Homes says he started offering a streaming service in 2009, charging consumers about $195 on top of  regular costs. While Krause notes that the stream wasn’t meant to replace the ceremony itself, he says it was  helpful for family members who weren’t able to physically attend. Unfortunately Krause notes that just a few years ago, the technology was too unstable to provide a seamless experience for consumers: "It's more on the bloody edge, than the cutting edge," he says. "I'm always about trying innovating things but funeral directors won't provide it if they can’t rely on it."

Other

1. 2014 Rope Skipping National Championships

BrightRoll, a tech platform that powers video advertising on the web says sports make up a massive, disproportionate share of streamed video. Tim Avila, Senior Vice President of Marketing Operations at BrightRoll says there was a 176% increase in live video ad views between 2013 and 2014.
http://www.ustream.tv/channel/sctv18

2. Bigfoot cam.

Do you believe? Watch this stream and maybe you'll finally spy proof for your theories.

3. London Bridge

Like bridges? Like London? You will love this.

Tap dance your way into the White House, kids

Mon, 2014-05-19 07:25

From the Marketplace Datebook, here’s a look at what’s coming up Tuesday, May 20:

On this day in 1873, Levi Strauss and Jacob Davis are given a patent to create work pants with metal rivets; you may know them as blue jeans.

And in 1932, Amelia Earhart became the first woman to fly solo across the Atlantic.

In Washington, the Senate Health, Education, Labor, and Pensions Committee will hold a roundtable on economic security for working women.

And First Lady Michelle Obama and the President’s Committee on the Arts and Humanities will host the first-ever White House Talent Show.

PODCAST: AT&T bids $48.5 billion for DirecTV

Mon, 2014-05-19 06:57

AT&T is buying satellite TV company DirecTV in a $48.5 billion deal. Like so many other media mergers, the news has executives and Wall Street analysts tossing around corporate buzzwords. There’s the old favorite “synergy,” of course. But “bundle” is the key word for this proposed combination.

And we're reporting from London this week, and what London market report would be complete without a visit to Smithfield Market? Where even at 1:30 in the morning you can buy wholesale bits of cattle. Michell Hucks, who works at Abslom and Tribe at Smithfield, gives us an inside look.

Banks, brokers, markets -- London has it all. Add to that a sturdy legal system and you can begin to understand why it's the financial capital of the world. The city is loved by its locals and foreigners seeking a safe -- and profitable -- haven.

 

AT&T’s $48.5 billion bid for your everything

Mon, 2014-05-19 05:16

AT&T is buying satellite TV company DirecTV in a $48.5 billion deal. Like so many other media mergers, the news has executives and Wall Street analysts tossing around corporate buzzwords. There’s the old favorite “synergy,” of course. But “bundle” is the key word for this proposed combination.

“They can bundle this with a broadband product and offer a bundle of voice, video and broadband, which they haven’t been able to do in a lot of their footprint up until now,” says Jonathan Chaplin at New Street Research.

Grabbing America’s biggest satellite provider allows AT&T to expand its move to sell more services on one bill nationwide.

If the deal goes through, AT&T would be the second largest American pay TV operator. Its 26 million customers would be just behind a combined Comcast-Time Warner Cable, which would have 30 million if its own proposed merger goes through.

AT&T is already offering significant concessions, enough that Wall Street expects regulators will let its deal go through.

Mark Garrison: Media mergers tend to be heavy on corporate buzzwords. Synergy is an old favorite. Bundle is popular these days and Jonathan Chaplin at New Street Research says this deal is bundle-icious.

Jonathan Chaplin: They can bundle this with a broadband product and offer a bundle of voice, video and broadband, which they haven’t been able to do in a lot of their footprint up until now.

AT&T wants to sell you everything on one bill. Grabbing America’s biggest satellite provider lets them do that nationwide. If all goes through, AT&T will be the second largest pay TV operator. That means regulators will take a close look. Chaplin and other analysts believe AT&T’s offer to make concessions will be enough.

Chaplin: This is a deal that’s gonna get through.

DirecTV’s Latin American business is also a factor, says Macquarie senior analyst Amy Yong.

Amy Yong: That is a clear growth opportunity for AT&T over the next few years.

The companies expect the deal to close within a year. In New York, I'm Mark Garrison, for Marketplace.

Russia and London: The ties that bind

Mon, 2014-05-19 03:31

Banks, brokers, markets -- London has it all.

Add to that a sturdy legal system and you can begin to understand why it's the financial capital of the world. The city is loved by its locals and foreigners seeking a safe -- and profitable -- haven. 

Jamison Firestone, an American lawyer based in London, has years of experience helping American and European companies do business in Russia. Firestone, who previously lived and worked in Russia, fled the country after his law patner Sergei Magnitsky died in Russian custody when he was arrested on tax evasion charges. Magnitsky's supporters say he was beaten and killed by Russian authorities for calling attention to corruption, something Russian officials deny.

The whole affair is just one example of why Russians are looking to take their money out of Moscow and park it elsewhere, according to Firestone. Click on the audio player above to hear more.

 

Russia and London: The ties that bind

Mon, 2014-05-19 03:31

Banks, brokers, markets -- London has it all.

Add to that a sturdy legal system and you can begin to understand why it's the financial capital of the world. The city is loved by its locals and foreigners seeking a safe -- and profitable -- haven. 

Jamison Firestone, an American lawyer based in London, has years of experience helping American and European companies do business in Russia. Firestone, who previously lived and worked in Russia, fled the country after his law patner Sergei Magnitsky died in Russian custody when he was arrested on tax evasion charges. Magnitsky's supporters say he was beaten and killed by Russian authorities for calling attention to corruption, something Russian officials deny.

The whole affair is just one example of why Russians are looking to take their money out of Moscow and park it elsewhere, according to Firestone. Click on the audio player above to hear more.

 

Robots, the space program and innovation

Mon, 2014-05-19 02:39

A robotics competitions gets underway on Monday at NASA's Kennedy Space Center. College students have to build and design a robot that can dig lunar solid, for example, to be used during a mission to Mars.

Experts say competitions like these help foster innovation and can even help bring ideas to market.

 "That's one area where I think you might be getting neat ideas on the cheap," says Ross Mead, a doctoral student studying robotics at the University of Southern California. 

He says the competitions are exciting and also give companies, or NASA, the opportunity to see problems solved in different ways.

Given the deep budget cuts to NASA, competitions are an especially good idea for the space agency. 

"NASA's leveraging the budget they have with trying to stimulate people working outside of NASA to come up with things that could be really helpful to them," says Tom Kinnear, who teaches entrepreneurship at the University of Michigan. 

But perhaps the greatest reason competitions work Kinnear said, is that people love to win.

Campaigns versus coding

Mon, 2014-05-19 01:00

Congressional candidates sometimes come from surprising backgrounds. Former comedians. Former American Idols. Now, thanks the current race being held in New Jersey's 2nd district, you can add programmer to that list of resumes.

Dave Cole is a former techie who grew up in New Jersey before graduating from Rutgers University. After a stint in the White House, where he helped build whitehouse.gov, he moved into the private sector to work for a startup that specialized in online maps called MapBox. According to Cole, it's a move that helped him see what government could learn from startup culture:

"Working in the private sector gave me such an opportunity to see the contrast to the way things get done, but also, how there really are good solutions out there to some of the problems that the government is facing."

 Cole says his background in coding, and the transparency of the coding community, also has a strong influence on how he thinks Congress can be more effective:

"One of the ways running for Congress can be more open is if people who are running are just completely transparent about their platforms. It’s exactly the way the best software is built in the open source community."

Part of his belief in the values of technology comes from exposure at a young age; Cole says his mom bought him a computer when he was eight years old. It's a privilege that he wants to extend into the school system, teaching coding to kids at a younger age:

"I think of it like a foreign language -- It enriches your life, and it’s something that once people are encouraged and they can see all the creative possibilities that come from it, that creates jobs."

The British have solved unemployment, once and for all

Mon, 2014-05-19 00:47

I am anchoring Marketplace Morning Report from London this week. While on the road, I am scouting for big ideas and I may have found a doozy.

Some iconoclastic economic thinkers just over the river in the Vauxhall area of London have constructed a device that wipes out unemployment.

Roll this baby out into the economy and everyone who wants to have a job would get a job. If it works as promised, not just Britain but the rest of the developed world including the U.S., could have full employment.

Outsourcing of jobs to poorer parts of the world? No problem. Robots and algorithms taking away human jobs, not to worry. And what is this device that would solve what is one of the greatest and most persistent economic problems?

Well, it is not a device in the sense of an electronic contraption. But it is a mechanism, a policy mechanism that is being put forth by experts at the New Economics Foundation here in London, among others. The idea is quite simple (although implementation will be tougher; I'll get to that in a moment).

Here is the idea: the 21-hour work week.

The NEF's proposal allows people to choose to work fewer hours. For the purposes of my discussion, let's do it by official decree: the order comes down that people can only work about half the hours they work now. That means it would take two people to do what is now one job. I do six shows a day as we roll through the time zones, including our ever-popular podcast.

With a 21-hour work week, I might do three of them a day and leave early. That means we could hire one more anchorman. Two people have jobs instead of one. Sure, the boss might try to cut my pay nearly in half, but if every working woman and working man was being paid less, prices should eventually drift downward to compensate.

Think of the benefits. If I were only working 21 hours in a week, I would have more time to do volunteer work, write a book, read a book, ride my bicycle, clean the basement -- more time to be a more balanced human being.

Yet, what might employers say about this 21-hour work week device to rid the developed world of unemployment once and for all? They generally don't like the idea much. You see, if there are two people doing the work of one -- that means two health care plans, two company pensions -- which could be a huge expense.

This suggests the 21-hour work week is more likely to come first to countries (like those in Europe) that have universal health care.

Another criticism that comes to mind about chopping the work week down the middle in order to produce full employment? Possible effects on income inequality. People who live off their wages and salaries as their hours are cut would find their incomes dropping (and their free time rising). People who live off their assets, their investments, might not see the same kind of decline in income. This might widen the gap between the richest and everyone else.

It is not just the New Economics Foundation here in London pushing a voluntary version of this. Up the road in Scotland, a policy group called the Jimmy Reid Foundation is trying to make the case for Scots working few hours. And, with all due respect to our UK hosts this week, the idea has a tradition in the U.S. as well. Not a glorious tradition, but a tradition. In 1933, President Franklin Roosevelt apparently put a stop to a bid to cap the American work week at 33 hours.

Even with the mass unemployment of the Great Depression, shorter work weeks were seen as just too radical a notion.

One rich Londoner unconcerned by wealth gap

Sun, 2014-05-18 23:45

What is the collective noun for plutocrats? A plethora, perhaps? If so London has a plethora. And a big one.

According to the Sunday Times newspaper, the British capital is now home to 72 billionaires – many of them foreigners. Indian steel magnates, Russian energy oligarchs and Greek shipping tycoons. 

With 72 of them, London has more billionaires  than any other city on the planet. New York has only 48. That  abundance of rich people is not exactly fueling national pride in Britain. In fact it's stoking fresh concern about growing income inequality – especially in London.

Not that wealthy London residents see themselves as part of the  problem.

Yvgeny Chichvarkin – reportedly worth around $250 million -- does not even regard himself as a member of a  metropolitan elite. 

"Compared with people on the Forbes rich list, I'm rather poor," he says, while sitting in his business premises  in London's exclusive Mayfair district.

Chichvarkin made his fortune from the sale of the cellphone business he built from scratch in Russia before he settled in London. He claims that he does not flaunt his money.

"I drive an eleven-year old Porsche," he says. "And although I love good food and wine, if I'm busy I will buy a hamburger for lunch."

While he plays down his own wealth, the 39-year old entrepreneur is more than happy to cater to the extravagant needs of the super-rich. His main British business is an exclusive wine store called HEDONISM; located just off Berkeley Square.

It stocks some of the finest and most expensive vintages in the world. Chichvarkin is particularly proud of his Chateu d’Yquem 1811 Sauternes – for $160,000.  Yes, that's $160,000 for one bottle.

"I'm sure we will sell it," he says. "We have - two different customers – who are thinking about buying it."

Running a business in London’s richest neighborhood, rubbing shoulders with the wealthy, surrounded by opulence, Chichvarkon is not worried about London's growing inequality.

"It's not so terrible like in Russia or Venezuela," he shrugs. "Poor people in the UK have hot food, clear water, and a TV. And a mobile phone. They're not really poor, like Russian poor people."

The Russian begrudges paying what he calls "crazy taxes" to fund the benefits of Britain's "idle poor."

"A lot of them do nothing. But our shop creates a lot of taxes for them to do nothing," he says.

He says he's ticked off that if he sells that one bottle of Chateau d’Yquem, the sales tax alone will keep two or three people on welfare for a year.

Public college presidents get big paychecks

Sat, 2014-05-17 23:20

College grads might be having a tough time landing jobs these days, but college presidents are doing pretty well for themselves. That's according to a new survey from the Chronicle of Higher Education on executive pay at public colleges.

"Their pay seems to have been more or less impervious to the recent downturns we've seen in the economy," says Jack Stripling, lead reporter on the Chronicle's college president pay report.

The media group says the typical college president pulled in about $480,000 in total compensation in the 2012-2013 fiscal year. Nine presidents of the 256 public college leaders surveyed by the Chronicle had total compensation packages that topped $1-million. The highest-earning president was E. Gordon Gee, who ran Ohio State University during the period in question. His total compensation exceeded $6-million. Gee is now president at West Virgina University.

Such big pay packages may raise hackles at a time when schools are charging more for tuition and using cheap, adjunct faculty. Stephen Joel Trachtenberg, president emeritus at the George Washington University, says college faculty likely do need a pay bump. But he says that's a separate issue.

"You don't have to make the case that presidents are overpaid in order to make the case that faculty are underpaid," he says.

Trachtenberg argues that college presidents earn their big paychecks by bringing in lots of money in tough fundraising environments.

But Michael Dannenberg, director of higher education and education finance policy with the Education Trust, says public college presidents should have some relationship to graduation rates.

"We have pretty high compensation levels at many institutions with disturbingly low performance when it comes to student success," he says.

The Chronicle of Higher Education's survey reveals that in many cases, presidents are not the top earners at public colleges. Its analysis finds that of the public college faculty earnig more than $1-million in fiscal year 2012-2013, 70 percent were coaches.

The new rules of internships

Fri, 2014-05-16 14:25

Summer's almost here, the traditional season of the internship.

 

But interns beware: in the last few years a series of lawsuits against employers offering unpaid internships have changed the rules of the apprenticeship game.

 

Rachel Feintzeig is a management reporter for the Wall Street Journal, and has been writing about the plight of the new internship.

 

In recent years, internships have become a near-necessity for college students trying to stand out in a brutal job market. And while some positions can provide valuable work experience and a glimpse into corporate life, critics maintain that the stints often amount to little more than unpaid labor.

 

A survey last year from the National Association of Colleges and Employers suggests unpaid internships don't help students land full-time jobs. Alums of unpaid internships had full-time job offers at nearly the same rate as those who had no internships at all—about 37%, compared with 62% for those with paid internships.

To read more about how internships are changing, read Rachel's article for the Wall Street Journal

Final Note: Peak Embarrassed

Fri, 2014-05-16 14:04

In our Final Note for Friday, May 16, I've flashed back to my teenage self: those awkward days when we felt we could do nothing right and mortification lurked at every turn, complete disgrace only a heartbeat away. For me, anyway.

Researchers apparently found the exact age when we're most likely to be embarrassed. "Peak embarrassed," they call it.

17. 2 years of age is that peak point when you're more likely to feel embarrassed by your own actions, according to a 2013 study in the journal Psychological Science.

And that's probably good news for adults, or at least anyone over the age of 17.2 years.

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