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How the jet changed air travel

Mon, 2014-06-09 08:24

If you're someone who frequently takes cross-country or even international flights, you have the Boeing 707 to thank for making them shorter and more affordable. It cut travel time from New York to London in half, and opened up jet setting to a new clientele.

"It usually was 14, 15 hours, and you had to stop in places like Gander, Newfoundland, or Reykjavik, Iceland...and you got there nonstop in six hours, which was unbelievable," said William Stadiem, author of the new book Jet Set: The People, the Planes, the Glamour and the Romance in Aviation’s Glory Years.

Although the jet itself didn't take off until the late 1950s, Stadiem says the so-called "jet set" lifestyle was nothing new; other modes of transportation were simply more in vogue at the time.

"They were the yacht set, or the Queen Mary set. They were just rich people who liked to travel Europe and live in high style," he said.

But after 1958--when the Boeing 707 came along--jet setting became much more affordable for your average middle-class American.

"One of the best-selling books of the '60s was Europe on five dollars a day. You could live like a king on five dollars a day," Stadiem said. "And airlines were doing package tours of one month in Europe, including airfare, for under a thousand dollars. That was a bargain."

PODCAST: Exploding student debt

Mon, 2014-06-09 03:00

With student loans at an alltime high, President Obama is expected to push for qualifying more people for income-based repayment plans. Plus, the new tear-jerker "The Fault in Our Stars" had a huge weekend at the box-office, making a case for the newest blockbuster demographic: teenage girls. Also, hear how a tiny town in Pakistan served as a testing ground for why technology takes so long to adopt into industry

NCAA trials

Mon, 2014-06-09 02:42

President Obama aims to reduce burden of student loans

Mon, 2014-06-09 02:00

Altogether, the value of every outstanding federal student loan and loan guarantee is around $1.2 trillion. That is a staggering number, and many economists say that debt is becoming a drag on the overall economy.

President Obama is expected to take steps toward, as the White House puts it, “reducing the burden of student loan debt."

It is no secret many young Americans – especially recent graduates – are having a tough time. According to Kevin Carey, who directs the New America Foundation’s Education Policy Program, they are having trouble “trying to get jobs in a still-weak economy, and having to make bigger loan payments at the same time.”

The president will direct the Department of Education to work more closely with the companies that service federal loans, and he wants to make more borrowers eligible for something called an “income-based repayment plan,” in which payments are capped at 10 percent of what a borrower makes.

“It could be a very big deal, depending on the number of people who use it,” Carey says.

According to Sandy Baum, a senior fellow with the Urban Institute, that has been a big obstacle so far.

“Lots of people who are eligible for income-based repayment don’t participate in it,” she notes, adding that many aren’t aware the program exists.

There is, of course, only so much the president can do without help from lawmakers. Sen. Elizabeth Warren (D-Mass.) has drafted a bill that would allow borrowers to refinance their student loans, but the Congressional Budget Office estimates that would cost taxpayers about $60 billion over the next decade, which is unpalatable to many Republicans.

Monday, President Obama is expected to ask companies that help borrowers prepare their taxes, including Intuit and H&R Block, to make sure their customers know what tax credits and re-payments plans are out there.

Landmark trial begins in NCAA case

Mon, 2014-06-09 01:00

A landmark trial begins today in a long-simmering case involving the National Collegiate Athletic Association, or NCAA.

The anti-trust lawsuit against the NCAA strikes at the heart of the organization's amateurism rules. Under the rules, former and current student athletes can't profit from colleges' commercial use of their names, images, and likenesses in, say, broadcasts of games.

"The plaintiffs would say these rules are not essential to college sports -- that they actually lead to exploitation of student athletes," says Michael McCann, Director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law.

Mark Conrad, Director of the Sports Business Specialization at the Gabelli School of Business at Fordham University, expects the NCAA will argue that not all schools can afford to share revenue with students. Conrad says only a few programs have major media deals to broadcast games.

"Most schools, even though they derive revenues from the system, they have to spend it, and athletic departments are very expensive to run," he says.

We don't hate change, but sometimes change hates us

Mon, 2014-06-09 01:00

You would think from our rapidly obsolete laptops and ever updating phones that all new technology spreads at a breakneck pace. 

You would be wrong.

“People who’ve studied technology adoption have often been struck by how slow it is,” says Eric Verhoogen, an Associate Professor at Columbia’s School of International and Public Affairs. “The technologies that make the news are the ones that move fast, but many cases -- including basic industrial technology -- have taken a long time to diffuse.”

Think unsexy things like “continuous annealing lines” for steel, or “lean production” (efficiency-focused manufacturing).  One review of 15 industrial technologies found that countries tend to adopt them, on average, 45 years after their invention.

Why? Well, there are many reasons, one of which came to light in a Pakistani manufacturing town called Sialkot. 


Forty percent of the world’s soccer balls are made in Sialkot at hundreds of factories using fairly uniform methods. The local industry is in a tight battle with competitors elsewhere in Asia, who have driven down Sialkot’s share of the global soccer ball market. Verhoogen and colleagues at the Lahore School of Economics saw an opportunity to use the city as a test tube -- a rare real world experiment -- to test the spread of cost saving innovation. 

So the economists offered a group of factories a leg up: a technological innovation.   

It was a die to cut pentagons with which to make soccer balls. More specifically, the cutting blades were arranged in such a way so as to create less waste. Nothing as magical as an iPhone, but  “we’re talking about something like 12 percent increase in profits from adopting this,” says Verhoogen.

Incidentally, Verhoogen got the idea serendipitously by watching Youtube videos of Chinese competitor factories. “Industrial espionage via Youtube,” he calls it.

The economists gave the die for free to one group of firms, gave the cash equivalent to another group, and a third group received neither. Shamyla Chaudhry, Associate Professor at the Lahore School of Economics, recalls that “initially we thought we had a breakthrough idea and we were very convinced that the minute we give the die to the manufacuters, they will switch on and see the cost advantages.”

In reality, the uptake was slow; 15 months later, only six firms out of 135 in town had adopted the technology. 


The economists didn’t have to look far to find a reason:

“I told the owner that it’s not going to work,” says Mohammed Iqlal Urfnana, a worker at one of the soccer ball firms. He is a cutter, meaning he operates a die-press to cut out the hexagons and pentagons that are sewn together to make a soccer ball. Like many workers, Urfnana didn’t like the new die. “For us cutters, this means lower daily wages.”

That's because Urfnana, like most cutters in Sialkot, is paid by the piece. Learning how to use the new die would slow him down, so he would make fewer pieces and therefore less money. While it was in the factory’s interest to save money by cutting the fake leather more efficiently, it was not in the worker’s interest. 


To realign the incentives, Verhoogen, Chaudhry, and their colleagues then offered a bonus for workers who learned the new die. It worked. About half of the firms where employees were offered a bonus adopted the die.

Verhoogen points to one firm in particular when talking about a misalignment of interests and incentives blocking the adoption of new technology. It’s a large firm, employing 1,000 people, and was the only firm to adopt the die technology that had not been given the technology directly. What set it apart was how it paid its workers – not by the piece, but a simple hourly wage (with some bonuses). 

“Employers need to think about what incentives are being built into the payment scheme visavis innovation. Do workers have an incentive to adopt innovation or not? That’s the broader message we’re getting out of this study,” says Verhoogen. “Workers have to expect that they will share in the gains of innovation in order to cooperate in the process, and if they don’t cooperate then innovation might not happen.”


“It’s not unique at all...any time there’s change, we have a natural resistance to change because people are used to doing what they’re doing and they’ve been successful when they were doing it,” says Hal Sirkin, senior partner at Boston Consulting Group.

“You always have to share with the workers” to bring them along, he says. “It can be a small amount but they need to benefit as well otherwise you’ll have even more resistance, and the change won’t work.”

As a management consultant, Sirkin says the incentive mismatch is familiar to him. “In one consumer products business,” Sirkin recalls, “they started to evaluate people by the number of pounds they sold. So people went from looking at the higher margin products to now the things that are the heaviest. Of course that created a very deleterious problem on the bottom line of the company.” 


“Some conflict of interest is a conspicuous and ongoing feature of all organizations,” says Robert Gibbons, professor at MIT’s Sloan School and coeditor of "The Handbook of Organizational Economics." The conflicts can be complex. Senior employees might block a new digital innovation because younger workers would be better at it. Bankers paid by the loan might take more risks than their managers prefer. The sales department might want less inventory on display than the marketing department. 

Further complicating the entire question is trust. Do workers or factory managers trust one another? Is the new technology actually more efficient? Will it cost jobs? Unlike the Sialkot experiment, “most of the time it’s not demonstrable,” says Gibbons. “You get to questions, is my boss leading me down the path here, are there unforeseen questions about this new chemical, and so forth.”

"All of these make it enormously more difficult to think you’ll implement a new tech with a simple bonus," he says.

And not all conflicts of interest can be easily resolved with a bonus.

Untethering the Road Warrior

Mon, 2014-06-09 01:00

Saturday afternoon, I pedaled my way up a last nasty hill and made for the finish line in Los Angeles of this year's AIDS Lifecycle bike ride. Me and 2,200 other cyclists. My final odometer reading was 545.5 miles over hill and over dale from San Francisco. My 10 year-old bicycle held up nicely. My 54 year-old body did okay, other than losing six pounds and gaining a handlebar-inflected blister at the base of each palm.

Why spend more than 42 hours on a bike seat over seven days, beyond the spectacular scenery and extraordinary sense of comradery? For starters, the AIDS ride last year raised more than $10 million dollars for people in the margins struggling with HIV and AIDS, once expenses were subtracted. The year, the ride is on track to raise even more.

I am still processing the many lessons of this pilgrimage -- and, yes, it was a pilgrimage. Here is just one conclusion, since every one of you is reading this using a digital device: The ride was way better because the organizers of the AIDS ride did not go out of their way to enable our digital addictions.  

I found this expressed in different ways. Very sensibly, everyone was banned from using any digital device while actually riding the bike. No video tracking shots destined for Youtube were allowed while blasting down the stunning 7 percent downgrade of the Gaviota Pass. Plus, no still photos while on the bike, no checking texts, no phone calls. If you wanted to check a text, the rule was pull the bike well off the road and hold the thumb of one hand up to indicate to others you were not in any trouble. The thumb thing alone was enough to keep me from wanting to deal with the phone at any place other than a formal rest stop.

There were other ways the ride's organizers seemed to keep a lid on our compulsion to stay connected. The camps could have had wifi set up. They do this at outdoor concert venues, but if you wanted connectivity on the AIDS ride you had to bring your own 3G or LTE.

Lastly -- and this was the biggee -- they didn't make it that easy to recharge devices. There was a recharging tent each evening, but its existence wasn't heavily promoted and only phones, not tablets or laptops, were allowed. Plus, the limited number of outlets always seemed full to capacity. My friend Richard rode fast and hard through a grueling 84 mile day just so he could get to a recharge station for a boost. When he arrived, again the recharging stations were full to capacity.

Let me emphasize that I am describing a feature of the ride, not a bug. Some people got some love from solar chargers, others brought extra batteries, but by and large, folks knew they had to conserve power. That meant there was less social media socializing and more actual socializing among real human beings.  There was less tweeting and more learning -- Like my interaction with an AIDS ride veteran named Michael who broke into tears when he told me about the candlelight vigil on the beach to commemorate people who died from AIDS-related diseases that occurs each year on the sixth night of the ride. And, I am here to tell you after seven days on a bicycle, there was more time for looking, appreciating, and thinking.

After all, what are the features that turn a trip into a pilgrimage? Sociologists and historians say a pilgrimage involves some kind of lengthy, physical undertaking in the service of some kind of higher purpose. Another key feature of a pilgrimage is that pilgrims cut themselves off temporarily from the normal bonds of society and family.

The first few days of the ride, mindful of the limited recharging capacity, I still kept an occasional eye on the news wires, my Facebook feed, and even work email, truth be told.

Then on day four, the fates intervened. I was just cresting a nasty hill within Vandenberg Air Force Base territory when the velcro flap on my backpack flew open, launching my smartphone in a delicate arc through the air like artillery shell gone awry. It shattered on the pavement and was run over by fellow cyclists and became, along with three flat tires, the only equipment failures of the trip. The phone was barely usable: It still connected, but my finger tip ran into slivers of glass when I tried to manipulate the screen.

So for the rest of day four -- and over days five, six, and seven -- I found myself less connected to the digital universe and more connected to the diverse set of folks pedaling around me. I saw the scenery more vividly; I engaged in conversations at camp with greater focus. It was then that I felt that I had both feet and a full brain in the ride and in its purpose. You may not be biking 545 miles this summer, but you may get a chance to get away, to experience something fresh, to consider new ideas. If you are lucky enough to have this kind of opportunity, you might think about whether turning down or turning off the digital while you are away might enhance your experience.

Movies aimed at teenage girls bring box office bank

Mon, 2014-06-09 01:00

This weekend at the box office, “The Fault in Our Stars” brought in $48.2 million dollars.

It’s Hollywood's latest movie adaptation of a book that appeals largely to young women.

It's part of a string of successful movies aimed at this very demographic -- The box-office success of Twilight, Hunger Games and Malificent shows the movie business is moving past its traditional audience (men aged 13  to 34) and found another, new way to make money.

“It’s like they looked under a rock and found this great big core audience that they didn’t know was there, which is young women,” says Sharon Waxman, CEO of The Wrap, which covers the business of Hollywood.

According to Waxman, instead of relying on broader appeal, studios are aiming for a stronger following with smaller slices of the audience; in this case, young women.

“Don’t forget that when you do that, you’re driving all kinds of other engagement," Waxman says. "They come back and see the movie more than once ... They’ll buy the DVD ... If they ever do a theme park ride around it, they’ll go to that too.”

Kathryn Arnold, an independent film producer, says that movies based on books keep appearing because Hollywood is making a lot of money.

“They’re realizing that they can have more confidence to actually go ahead and make these kinds of movies for young girls because they’re proving themselves at the box office,” she says.

Though, Arnold says that while this may seem like a feel-good Hollywood moment, the trend will only last as long as ticket sales keep coming in.

Hey, 20-somethings: Quit your job!

Mon, 2014-06-09 01:00

Economists want more Americans to quit their jobs.

That's because more voluntary quitting by people who have jobs — whether it be to get a better, higher-paying job, or to go back to school for additional skills or credentials — is a sure sign the job market is getting stronger and workers’ confidence is on the mend.

The rate of voluntary quitting — called the ‘quits rate’ by the Bureau of Labor Statistics — has been rising in fits and starts ever since bottoming out after the recession ended in early 2010. But the rate (at 1.8 percent in March 2014), is still approximately 20 percent below its level before the recession hit, says labor economist Heidi Shierholz at the Economic Policy Institute.

“There is a big backlog of people who would probably like to quit their jobs,” says Shierholz. “Someone who got their job before the recession in 2007 — over the last seven years they might have really benefited from changing jobs, but instead they’ve been locked in.”

The problem of ‘failure to quit’ is especially acute for younger workers in this economy, says Shierholz. “Mobility — the ability to move jobs — is really important for people who are at the beginning of their careers,” says Shierholz. “They’re still trying to figure out what their interests are, what their skills are, where they want to live.”

Three young people who have taken this plunge were milling around on a recent Sunday in Portland after an electronic dance party.

“I wasn’t planning on staying a paralegal forever — work felt like a bit of a grind,” said Will Petillo, 28. He quit recently, after working at an intellectual property lawfirm, to pursue post-graduate study in electrical engineering.

“I was working at a bakery,” said Rachel Maddox, 27. “And every time I went to the bakery my entire insides were on fire and I didn’t want to be there. I’ve been ready to get back into my own business and I just quit.” She’s now launching a life-coaching business.

Jesse Allen just quit the last of a series of manufacturing jobs he’s had over the past few years. “I was manufacturing saw chain,” he said. “The air inside the factory was nasty, there were failures from OSHA — I decided I’m just giving up on manufacturing altogether.” He wants to try to support himself by teaching dance classes.

These kinds of life and career choices are exactly what economists are hoping young people will make more often as the economy improves. More to the point, they're hoping that this generation will get bored in lower-skilled, less-interesting jobs, and try something new. 

Nedah Zamani, 26, is now on that path. She graduated from Cornell College, a small liberal arts college in Iowa, in 2010. A speaker at her commencement sent a chill through the graduates, says Zamani: “A third of us were going to move home and live with our parents, and that was very scary.”

Zamani had done the perfect internship during college at a nonprofit arts organization in Southern California. But by the time she graduated, there was a hiring freeze at the organization due to budget cuts, and her promised job evaporated. Eventually, she ended up back at her alma mater working in the admissions office.

Now, she’s packing up and about to start an MBA program in arts management at the University of Southern California. She’s saved to pay for school, and will also incur some debt to complete the degree.

“Even though it’s a certain level of unknown,” said Zamani, “I’m able to see it as a return on investment, in a way that I don’t know that I could have a couple of years ago.” Zamani said the improving economy gave her the confidence to go back to school to develop her career. “I think I will be better equipped for the market, and the market will be better equipped for me.”

There's still a lot of hesitation among middle-aged workers, though, to take career and income risks like these young people are taking. Fear of unemployment, of downward mobility, of only finding short-term employment after leaving a steady job — all of these drive people to stay in jobs longer than might be good for them, says Dan Finnigan, CEO of online recruiting site Jobvite.

“The last recession actually frightened the workforce,” says Finnigan. “You’re not going to take the chance of moving your whole family for a new job unless you believe it’s a job that’s going to stick. And most companies now have a difficult time convincing prospective employees that they’re going to be able to stick with them for a long career.”

Still, career counselors will say, it’s ever-more difficult to advance one’s career — to get a higher salary or more job responsibilities — without moving from one employer to another. That opportunity for advancement is what employees have sacrificed over the past decade. That is, if they’ve stuck with jobs they don’t like or that don’t allow for upward mobility within the organization. 

“Don't be afraid to go in and take a job that is lower level and less pay the what you have, in order to get into that organization, to learn the field, to network and move up,” advises Jean Erickson Walker, an executive coach in Portland, Oregon. “We didn't say that before. Years ago we said you want to stay in one company and work your way up. Now that's not very appealing. Most employers don't want someone who has been in one company for more than ten years.”

Which state's residents love distance learning?

Sun, 2014-06-08 15:53
<a href="">View Survey</a>

It's jobs day, so here's a picture of a career fair

Sat, 2014-06-07 02:26

Friday morning the Labor Department reported that the U.S. added 217,000  jobs in May, and the unemployment rate stayed the same at 6.3 percent.

Whether it’s here at Marketplace, elsewhere online or in newspapers, stories about the latest unemployment numbers need pictures. In the past, news outlets used images of people in line at the unemployment office. But nowadays, people can sign up for jobless benefits by phone or online.

So today, when news photographers need fresh pictures of lots and lots of unemployed people, they take their cameras to career fairs. Then, each month when the jobless numbers come out, like clockwork, scores of websites and newspapers will dutifully use these photos, repeatedly, in their stories reporting the news.

This endless monthly wallpaper of career fair images got us wondering about what actually happens inside them. Does anyone actually get jobs, or are they a waste of time for job seekers? What kind of companies show up? Who makes money off these events? Are they changing as the economy slowly improves?

Find the answer to all those questions and more, by clicking that play button on the audio player above.

Because, let’s be honest, you can only learn so much about job fairs by looking at these stock photos:

Job fairs are normally held in drab hotel ballrooms

Justin Sullivan/Getty Images

Organizers sometimes try to dress the joints up with balloons, but it makes it look worse, really. However it apparently makes the image more appealing to photo editors. This particular shot has been used over and over.

Job fairs involve a lot of silently waiting in line

Career fairs tend to be packed, with lines wrapping around the block and job seekers arriving hours before they open to get the first crack at employers. Job seekers do a lot of talking to prospective employers, but hardly talk to each other at all. So while waiting to get in front of employers, they play with their phones…

John Moore/Getty Images

 …stare at their resumes or jot down notes.

Mario Tama/Getty Images

Job fairs keep office supply companies in business

The printed resume is something of a dying artifact as the job application process has steadily moved online. But the printed page is alive and well in the world of job fairs, where job seekers tote stacks of resumes from table to table, which are in turn stacked high with pamphlets and promotional materials from the employers.

Chris Hondros/Getty Images

Job fairs give Millennials a chance to expand their love of vintage items

By introducing them to items their parents refer to as “paper,” “clipboards” and “pens.”

Natalie Behring/Getty Images
Job fairs are an excellent place for briefcase enthusiasts to see these objects at use in the wild.

Possibly, the best place.

John Moore/Getty Images

Justin Sullivan/Getty Images

Why Restoration Hardware sends 15-pound catalogs

Fri, 2014-06-06 14:10

When the upscale home furnishings retailer Restoration Hardware sent out its annual catalog in 2011, it was 616 pages long. The company was criticized by environmentalists for the move. In the face of that criticism, Restoration Hardware increased the size of its annual tome. In fact, this year’s edition is actually 11 individual catalogs, bounded together in plastic, at a grand total of 3,000+ pages. 

To call it a "catalog" is a bit of an understatement.  In fact, the company has come up with many other names for it, including "Magalog," "Source book" and "Inspiration file".  We wanted to know why it was so big (and, in the meantime, we came up with some uses for it as well...)

We were wrong: The once-a-year Mega-gantalog is actually part of the company’s strategy to reduce waste.

Brian McGough, a managing director of retail at Hedgeye, says most retailers put out catalogs quarterly or monthly. But because Restoration Hardware puts out its Gargantalog once a year, it actually produces less paper than many of its competitors.

“Williams-Sonoma, who no one ever talks about them and their catalogs, they print three times as many pages annually,” says McGough.

Restoration Hardware previously shipped smaller catalogs 10 times per year. But by moving to the one Megalog, the company’s gotten higher sales for fewer pages “and additionally,” says CEO Gary Friedman, “we ship all our Source books bundled together vs. separately, which is also significantly more efficient.”   

Friedman says his company is applying the same strategy to its stores, closing many of them and moving to fewer but larger locations.

Restoration Hardware takes its design cues from antiques, says Kit Yarrow, a professor of business at Golden State University.“They are really trying to create this sense of faux authenticity, if that makes any sense.”

The company produces so many products that only about 20 percent can fit in a store. The only place big enough to show them all is its catalog/source book/Magalog and website, which accounts for nearly half of all sales. 

Hopefully, the incredibly versatile Ginormolog doesn't become a stand in for Restoration Hardware's home furnishings. Though we're actually finding it pretty useful:



Why the U.S. economy is like a donut

Fri, 2014-06-06 13:06

Happy National Donut Day! That’s what the first Friday in June has been since 1938, when the Salvation Army first declared it so, as part of a donut-themed fundraising event for low-income mothers during the Great Depression.

That bit of trivia is just one of many economic stories baked in to those little toroidal treats we call donuts.

A toroid, in case you’re wondering, is the fancy name for the shape of a donut: full on the outside edges and hollow in the middle. And that’s just about what our economy looks like these days — middle class jobs are hollowing out, but there's plenty of growth at the low and high ends of the income spectrum. And in fact, the donut shop economy seems to be following suit.

In Los Angeles, you can go to Donut Friend, a vegan-friendly, custom-made (I’m boycotting the word artisanal) donut shop that opened up recently in the once-blue-collar-but-rapidly-changing neighborhood of Highland Park. There, along sparkly white subway-tiled walls you can order donuts priced between $2 and $6.

Though, since you buy extra toppings like goat cheese, cherry compote and kosher sea salt, “you could go up to like a million dollars” for a single donut, says Devin Mireles, the shift-manager working behind the counter. “If you wanted everything.”

Jannah Maresh, who works at a local university, has come by to pick up some donuts for her office-mates. She spent more than $35 on a dozen. But the total didn’t seem to phase her. “I mean there's one where there's a crown of bacon and that's totally worth it,” she says. “My team will be very happy today.”

Mireles, the guy behind the counter, is aware of the make-fun-ability of these prices. In fact he and his coworkers sometimes make fun of them too. “In the most appropriate way possible,” he adds. “Without getting fired.”

But Mireles says, most people buy them without a wince, and that means he’s got a job.  Up in Portland, where he used to live, employment is hard to come by. “I couldn’t even get a job like this there because they would be like ‘what’s your donut experience?’” he says.

Donuts have of course long been associated with working and middle class jobs — the most famous being the donut-happy the police man. That’s partly because when police car patrols became common in the 1940s and 50s, one of the few places open during the graveyard shift was the donut shop, says Michael Krondl, author of “The Donut: History, Recipes and Lore from Boston to Berlin.”

One of the earliest donut-memories for Tracy Mikuriya, another customer waiting in line at Donut Friend, was courtesy of her dad, a rail-road worker. “My dad used to work nights, and I would wake up in the morning hoping to see the pink box on top of the refrigerator.”

But, like cupcakes a few years ago (and lately, toast) donuts have made the move from convenient middle class treat to upscale food trend.

“Pastry is an incredibly flexible medium,” says Paul Mullins, an anthropologist at Indiana University and author of "Glazed America: A history of the doughnut.”

“You know I don’t know whether I want to spend $7 on a donut, or whether my donut needs a philosophy,” Mullins says. “But there's clearly a place in the market for these kinds of gourmet foods.”

There's clearly still a place for the un-gourmet, but very delicious, kind of donut too, though, according to the line out the door of Monterey Donuts, a cash only, lottery-ticket-selling donut shop a few miles from Donut Friend.

On National Donut Day, Le Phay, originally from Cambodia, is selling a glazed donut to a construction worker. “Gracias amigo,” she tells him. She learned Spanish and English from twenty years of serving her customers she says.  “They are my school.”

The cost of the average donut here: 75 cents.

Editor's note: If you're an ardent grammarian, you'll likely be aware of the heated debate about the correct spelling of the word "donut." We've cited two books about this deep-fried treat, each of which uses different spelling. The Salvation Army and the Associated Press both spell the word "doughnut," but the vast majority of stores in the Los Angeles area, where this story was reported, use "donut." We gave this a lot of thought, and in the end went with the truncated version. Why? 'cause it's quicker. And if we'd debated much longer, there'd have been no donuts left for us!

Tesla: we're not car dealerships

Fri, 2014-06-06 13:06

If you call a Tesla showroom in New Jersey, they’ll call it a “gallery.” You can look, but you can’t buy. For the last six weeks or so, sales have been banned there because Tesla was selling the cars directly, and a state law requires vehicles be sold through dealer franchises. A bill is advancing in the state legislature that would allow companies that sell only electric cars to open their own stores.

One rationale the company is pushing: its cars don’t need much service. 

That’s one thing that attracted Yina Moore of Princeton to the Tesla nine months ago. She used to drive BMWs and Porches. But she likes that the all-electric Model S needs no oil changes or spark plugs.  

“It has few moving parts in which to have failure,” she says. 

That’s a problem for the dealer franchise model, because most car dealers make very little profit on new cars, from a few bucks to maybe one or two percent of the price. The National Automobile Dealers Association says more than half of dealers’ profits come from service, parts, and used cars. 

Tesla says its cars don’t need much service, so it wants to make its profits on the sales.  

“What we have done in New Jersey is make it illegal for them to use their business model to sell cars,” says Tim Eustace, a New Jersey assemblyman who co-sponsored the bill to allow electric car companies to sell directly.

Tesla wouldn’t comment on tape, but the company has called dealers “middlemen.” Dealers, of course, see it differently.  

“The Tesla business model is designed specifically to eliminate price competition,” says Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. 

He argues that dealers are an important buffer between manufacturers and customers, and are more aligned with consumer’s interests. They compete on price. 

And, he says most new cars don’t need much maintenance anyway. “Tesla may know a lot about electric cars, but apparently they don’t know much about internal combustion cars anymore,” he says. 

 And, for all its talk about not needing to go to the shop often, Tesla does offer service plans. Prepaying $1,900 gets you four years of service. 

Tesla: we're not car dealerships

Fri, 2014-06-06 13:06

If you call a Tesla showroom in New Jersey, they’ll call it a “gallery.” You can look, but you can’t buy. For the last six weeks or so, sales have been banned there because Tesla was selling the cars directly, and a state law requires vehicles be sold through dealer franchises. A bill is advancing in the state legislature that would allow companies that sell only electric cars to open their own stores.

One rationale the company is pushing: its cars don’t need much service. 

That’s one thing that attracted Yina Moore of Princeton to the Tesla nine months ago. She used to drive BMWs and Porches. But she likes that the all-electric Model S needs no oil changes or spark plugs.  

“It has few moving parts in which to have failure,” she says. 

That’s a problem for the dealer franchise model, because most car dealers make very little profit on new cars, from a few bucks to maybe one or two percent of the price. The National Automobile Dealers Association says more than half of dealers’ profits come from service, parts, and used cars. 

Tesla says its cars don’t need much service, so it wants to make its profits on the sales.  

“What we have done in New Jersey is make it illegal for them to use their business model to sell cars,” says Tim Eustace, a New Jersey assemblyman who co-sponsored the bill to allow electric car companies to sell directly.

Tesla wouldn’t comment on tape, but the company has called dealers “middlemen.” Dealers, of course, see it differently.  

“The Tesla business model is designed specifically to eliminate price competition,” says Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. 

He argues that dealers are an important buffer between manufacturers and customers, and are more aligned with consumer’s interests. They compete on price. 

And, he says most new cars don’t need much maintenance anyway. “Tesla may know a lot about electric cars, but apparently they don’t know much about internal combustion cars anymore,” he says. 

 And, for all its talk about not needing to go to the shop often, Tesla does offer service plans. Prepaying $1,900 gets you four years of service. 

Weekly Wrap: A surprise-free 217,000

Fri, 2014-06-06 12:05

Jo Ling Kent of Fox Business and Felix Salmon of Fusion joined Kai Ryssdal to talk about the week's news. Hear their whole conversation in the audio player above.

Some highlights on the May unemployment report:

Felix Salmon:

"[It's] exactly the same as it has been for the past couple of months... it's not spectacular, we're getting better... no surprises."

Jo Ling Kent

"This may be when the Feds starts to think more aggressively about raising those rates eventually... it's interesting... Manufacturing jobs. Good."

Kent on the ECB and negative interest rates:

"This could be an opportunity for small and medium businesses in Europe, pushing money into their hands... could be good for US companies like Boening and big companies like that..."


Six expert secrets to a successful Social Security strategy

Fri, 2014-06-06 11:38

There’s an anecdote Mary Beth Franklin likes to tell about the office of the Social Security Administration having a dartboard with her face on it.

Franklin, an author and contributing editor at Investment News, has spent years exposing helpful secrets about how people can maximize their Social Security dollars. She says that’s information you likely won’t get if you give your local SSA office a jingle – at least, not without the run around – and it’s becoming increasingly difficult for people to understand the right moves to make concerning Social Security. Even the estimate of benefits statements that used arrive in the mail every year were cut from the SSA’s budget in 2011

And so, Marketplace Money and Mary Beth Franklin have come together to present to you the unofficially unofficial Franklin Guide to Scheming a Stellar Social Security Strategy in 6 Easy Steps.

No, really, they’re pretty easy. 

Step 1: Recognize that Social Security isn’t what it used to be (read: simple).

“You retired at 62. You took your Social Security benefits. End of story,” says Franklin. “But that was in the days when people actually quit work at 62. They might’ve had a pension and they probably weren’t going to live 30 years in retirement like a lot of today’s retirees will.”

 Step 2: Commit to making a Social Security strategy.

Franklin says, “Now in an era of disappearing pensions, [and] record low interest rates where you’re getting diddly squat on your CDs at the bank, you really need to make the decision of how and when to claim Social Security in a way that’s going to benefit you. And what will surprise most people is your decision… could mean the difference of thousands of dollars a year on your benefit. And for a married couple, we are talking the difference of more than $100,000 over their joint lifetime. That’s real money.”

 Step 3: Know the basics rules of claiming Social Security.

 “Anybody can claim a Social Security retirement benefit as early as age 62, but their benefit will be permanently reduced for the rest of their lives,” explains Franklin. “ If your normal retirement age is 66 and you take it at 62, you get a permanent 25% hair cut. If your full retirement age is 67 and you take it at 62, you get a 30% hair cut. This is a big deal considering Social Security for most Americans going forward is going to be the only source of guaranteed, cost-of-living adjusted retirement income they’ll ever see.” To determine your normal retirement age (also known as full retirement age), use this simple tool found at

 Step 4: Understand that playing the waiting game isn’t for everyone.

Holding out on claiming Social Security to increase benefits generally works, according to Franklin.  However, “the idea of delaying a SS benefit until it’s worth more later is a little bit like the lottery: You must be present to win. If you’re in a state of health where you may not make it to the average life expectancy, which is closer to 80 or beyond for most people, don’t delay. It’s not going to be in your best interest. But if you’re relatively healthy you can expect to live a long and delaying your benefit until it’s worth more later is really smart.”

 Step 5: Remember there are huge benefits of waiting to claim, if you can afford to.

“For every year you postpone collecting your Social Security benefit beyond your full retirement age up until age 70, you get an extra 8 percent per year,” says Franklin. “That means if you wait til 70, you’re going to get a 32 percent bump in your Social Security benefit and that means you’ll have a larger benefit going forward, and each year when you get an annual cost of living adjustment, it’s going to be that much bigger.”

 Step 6: Don’t worry too much if you pick the wrong strategy.

There are a couple of options should you need a “do-over,” says Franklin. “If you are in 12 months of first claiming Social Security benefits, you can change your mind, say ‘Nevermind I am going to withdraw my application for Social Security benefits,’ but you have to pay back everything you’ve received. But if you missed your 12 month window, you may be out of luck. People also don’t realize that once they’ve reached their full retirement age (66), you can voluntarily suspend your benefit. Now that means you wouldn’t get any benefit temporarily, but if you suspend your benefits, you earn those 8 percent per year delayed retirement credits between 66 and 70.”

Click the audio player above for more on successfully strategizing your personal Social Security plan of attack, including information on how to factor in medical expenses and what young people should think about long before retirement age. And if you’ve got your Social Security strategy all figured out, tell us how you did it. Leave a comment below or tweet us @LiveMoney.

The tip jar gets a digital makeover

Fri, 2014-06-06 10:30

The humble tip jar is getting an upgrade. Gone are the days when you could just slip in a dollar or two without the cashier noticing how much you think their job is worth.

Instead, welcome to the brave new world of electronic tipping, where life is more complicated, interactions are awkward and the pressure is high. Electronic tipping is now sweeping into coffee shops, bars, bakeries and delis across the country as mobile payment apps grow in popularity.

San Francisco-based reporter Rachel Levin recently wrote about the interaction between technology and tipping for Pacific Standard magazine.

"Maybe there's a tip jar next to the counter but increasingly you're seeing an iPad swivel towards you prompting your finger to press either 15 percent, 20 percent, 25 percent or sometimes, in cautionary bright yellow: 'No Tip'," she says, "which no one wants to press because you'll feel like a jerk."

Jerkiness aside, consumers are being asked to tip more and more frequently these days and not everyone is happy about it.

"People like baristas and bakers and sandwich makers are seeing an upside. They're getting more tips, which is great for them, but from the customer's perspective it's creating a stressful awkward moment up there at the counter."

Even as mobile payment systems like Square, Shopkeep and Revel are growing in popularity, some companies are bucking the trend and eliminating the need for the snap-judgement tip.

"People are silently appreciating the technology where it's used by, say, Uber taxi where you don't have to pay a tip. Tip is included, 20 percent automatically deducted from your account," Levin says.

"So you hop out of the Uber taxi without doing any mental math or figure out how much change to ask for and you just go on your way and say thank you."

But the 'automatic tip' scenario comes with its own set of problems since conventional wisdom is that tipping is supposed to be used as a reward for good service.

But Levin says that's not always the case.

"It turns out that our motivations for tipping are not for rewarding service necessarily," she says. "Economist Michael Lynn at Cornell says it's to win the approval of the server. So now when that server is standing before you, that creates the pressure for you to bestow a bigger tip."

Good jobs report? Bad jobs report? It all depends

Fri, 2014-06-06 10:24

The unemployment rate didn't budge from its 6.3 percent mark in May, and employers added fewer jobs than economists expected. 


Employers created a substantial number of new jobs for the fourth straight month and the unemployment rate held steady at 6.3 percent, the lowest rate in more than five years.

Those two sentences don't seem to be in complete agreement, and yet their conclusions were drawn from the same data. The government and business numbers that are reported every day, and especially the monthly jobs report from the U.S. Labor Department, all depend on context; the reaction to them is in the eye of the beholder.

If you're a glass half-full economist, a slow report can be cause of optimism. If you're a worrywart, a strong number can find a way to scare you.

Try our jobs number headline generator above and you can see what we mean. Pick whether you think the jobs report is happy, sad or mixed... and it'll spits out a headline to match you're thinking. 

The numbers: They're boring, but they matter

Fri, 2014-06-06 09:06

This final note today, an observation or two about our through-line this week, riffing off the live show we're taking on tour this summer and fall, How We Learned to Stop Worrying and Love the Numbers.

There is, in fact, a whole lot to worry about with economic numbers. One, they can be really boring. Two, they can be cherry picked to suit one side or the other. And three, there are just so many of 'em that it can really make your head spin. 

But they matter. They matter a lot. 

So you kind of have to learn to love 'em.




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