Marketplace - American Public Media

PODCAST: A case of the Mondays for BofA

Tue, 2014-04-29 06:55

Bank of America stock lost more than six percent of its value on Monday after it revealed it made a big mistake on its stress tests, which is the Federal Reserve's system to see if banks have the wherewithal to survive a future crisis without a bailout. BofA blames an internal communications error for miss-stating the amount of money it had in certain locations on its balance sheet. Marketplace's Mitchell Hartman joins us to explain.

Meanwhile, starting Tuesday, you can stroll into Starbucks for a Chai Tea with Oprah’s name on it – Teavana Oprah Chai, to be exact. Oprah Winfrey's product and book endorsements used to send sales through the roof. But will the "Oprah Effect" hold, now that she's teamed up with a corporate giant?

And, you may have missed this a while back in the MIT Sloan Management Review, volume 52, number three. They call them "dormant ties" but it's really about the business value of connecting with old flames, or at the very least, re-connecting with someone whom you used to know, to paraphrase Gotye. Wharton business school professor Adam Grant keeps an eye on the business journals for us and joins us to explain

Government targets millions for job training programs

Tue, 2014-04-29 05:47

U.S. Secretary of Labor Thomas Perez has announced $150 million in new funding for states to develop and expand job-training programs. Since January 2014, a total of $1 billion in federal spending has been targeted to workforce development and employment opportunities for people suffering the lingering effects of the Great Recession.

The money is authorized under the Workforce Investment Act of 1998. States can apply for the newly released money to help fund apprenticeships, on-the-job training, partnerships with employers, and industry certification programs. The overall goal, according to the U.S. Department of Labor, is to train people—especially the long-term unemployed—in industries where there is now increasing demand for skilled labor.

As manufacturing picks up and Baby Boomers retire from middle-class blue-collar jobs, there’s plenty of need for additional workers, said machine-tool instructor Keith Knight at Mount Hood Community College near Portland, Oregon.

“As far as industries looking for these jobs—Boeing, Oregon Iron Works, the majority of industries—they’re starting to see more and more work showing up,” said Knight. The community college’s programs for machine-tool operator, automotive technician, and welder all fill up quickly, and many students are able to line up jobs before they graduate, instructors said.

Knight said job training can help someone with only a high school diploma, or a two-year associate’s degree, land a higher-skilled or better-paying job.

That’s what attracted Andrew Stevens, 27, to the community college program. “This is 'Plan F,'” said Stevens ,as he sat at his workbench disassembling and rebuilding a Chrysler transmission in the bright, clean automotive classroom. “I’ve done many things—from guiding fishing in Alaska, to laying ceramic tile—which is no fun—to being a prosthetics technician—I made fake arms and legs. I was pretty much at the top of my pay scale, making as much as I was going to make, and decided that wasn’t enough.”

Stevens’ instructor, Steve Michner, said auto technicians can ultimately earn $45,000 to $55,000 per year.

Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University, said job-training programs can help individual workers boost their earnings and job opportunities, and they can help companies fill positions that require specific skills. But they can’t necessarily address high local or regional unemployment—for instance, in old industrial cities or depressed urban areas.

“The fancy term is ‘spatial mismatch’—people live in the wrong part of the country from where the jobs are,” explained Van Horn. “There might be lots of jobs in Southeastern Louisiana. But the people who used to work in the construction industry in New Jersey either can’t, or don’t want to, move there. Or, go to the Dakotas, which is another place that’s booming.”

Van Horn pointed out that sometimes the spatial mismatch is hyper-local. Some neighborhoods in New Orleans, for instance, have high poverty and unemployment, even though oil refineries and chemical plants may need skilled workers just a couple hours away.

Many economists say skills training is important at this point in the economic recovery, so employers can fill jobs in regions and industrial sectors that are growing strongly. But also, employers need to generate more jobs overall, in more places, to pick up the slack in the labor market nationwide.

Government targets $1 billion for job training

Tue, 2014-04-29 05:47

U.S. Secretary of Labor Thomas Perez has announced $150 million in new funding for states to develop and expand job-training programs. Since January 2014, a total of $1 billion in federal spending has been targeted to workforce development and employment opportunities for people suffering the lingering effects of the Great Recession.

The money is authorized under the Workforce Investment Act of 1998. States can apply for the newly released money to help fund apprenticeships, on-the-job training, partnerships with employers, and industry certification programs. The overall goal, according to the U.S. Department of Labor, is to train people—especially the long-term unemployed—in industries where there is now increasing demand for skilled labor.

As manufacturing picks up and Baby Boomers retire from middle-class blue-collar jobs, there’s plenty of need for additional workers, said machine-tool instructor Keith Knight at Mount Hood Community College near Portland, Oregon.

“As far as industries looking for these jobs—Boeing, Oregon Iron Works, the majority of industries—they’re starting to see more and more work showing up,” said Knight. The community college’s programs for machine-tool operator, automotive technician, and welder all fill up quickly, and many students are able to line up jobs before they graduate, instructors said.

Knight said job training can help someone with only a high school diploma, or a two-year associate’s degree, land a higher-skilled or better-paying job.

That’s what attracted Andrew Stevens, 27, to the community college program. “This is 'Plan F,'” said Stevens ,as he sat at his workbench disassembling and rebuilding a Chrysler transmission in the bright, clean automotive classroom. “I’ve done many things—from guiding fishing in Alaska, to laying ceramic tile—which is no fun—to being a prosthetics technician—I made fake arms and legs. I was pretty much at the top of my pay scale, making as much as I was going to make, and decided that wasn’t enough.”

Stevens’ instructor, Steve Michner, said auto technicians can ultimately earn $45,000 to $55,000 per year.

Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University, said job-training programs can help individual workers boost their earnings and job opportunities, and they can help companies fill positions that require specific skills. But they can’t necessarily address high local or regional unemployment—for instance, in old industrial cities or depressed urban areas.

“The fancy term is ‘spatial mismatch’—people live in the wrong part of the country from where the jobs are,” explained Van Horn. “There might be lots of jobs in Southeastern Louisiana. But the people who used to work in the construction industry in New Jersey either can’t, or don’t want to, move there. Or, go to the Dakotas, which is another place that’s booming.”

Van Horn pointed out that sometimes the spatial mismatch is hyper-local. Some neighborhoods in New Orleans, for instance, have high poverty and unemployment, even though oil refineries and chemical plants may need skilled workers just a couple hours away.

Many economists say skills training is important at this point in the economic recovery, so employers can fill jobs in regions and industrial sectors that are growing strongly. But also, employers need to generate more jobs overall, in more places, to pick up the slack in the labor market nationwide.

Which brand is bigger: Oprah or Starbucks?

Tue, 2014-04-29 02:58

Starting Tuesday, you can stroll into Starbucks for a Chai Tea with Oprah’s name on it – Teavana Oprah Chai, to be exact. Oprah Winfrey's product and book endorsements used to send sales through the roof. But will the "Oprah Effect" hold, now that she's teamed up with a corporate giant?

"No," says marketing consultant Jonathan Salem Baskin.

He says it's been a while since Oprah was a TV regular. But he says any sales are a win-win for Oprah, since proceeds help her youth education work.

"The only potential downside exists for Starbucks," he says. "However sincerely they want to help Oprah support her schools, their goal is to sell a boatload of cups of tea."

Brand-building expert Denise Lee Yohn thinks Starbucks, known for its coffee, may have this incentive to use Oprah's name.

"Tea may be perceived as being more exclusive, more upscale," she says. Oprah's known for her taste, but, "she also has very mainstream appeal. So this may be a way for Starbucks to make tea seem more accessible and relevant to the average person."

Toyota of Texas

Tue, 2014-04-29 02:45

Toyota is moving its North American headquarters – all three of them. To Plano, Texas, just north of Dallas.

Right now the car company has its sales headquarters near Los Angeles, its manufacturing headquarters in Erlanger, Kentucky, and another headquarters in New York.

The move is part of reinvention at the company, says Columbia Graduate School of Business professor Rita Gunther McGrath.

"With the problems following on their latest recall and all the problems they had with unintended acceleration, they were in the process of rethinking a lot of things that had been taken for granted in that company, including things like location," she says.

Moving a large company offers a rare opportunity to alter a business's "social architecture" says McGrath. "It breaks through inertia, shakes up existing power relationships, and it changes the way people share information."

Old rationales for being located in different places were no longer as relevant as they were before. Los Angeles for example, where Toyota has its sales and marketing headquarters, no longer has the draw it once did.

"Once upon a time," says Kelley Blue Book analyst Karl Brauer, "the coast of California was the closest part of the mainland U.S. to Japan physically and that mattered," whether for transfer of people or cars. Now, the bulk of Toyotas in the U.S. are built in the U.S., from West Virginia to Indiana.

But why Plano, Texas?

It's closer to Toyotas plants, including its newest, most expensive one in San Antonio. Texas has tried to brand itself as a business-friendly place, and there were undoubtedly economic incentives offered by some constellation of state and or local governments.

But it's not just about the business. Toyota has to convince 4,000 people with families and hobbies and lives to move as well.

"This is difficult – this is a life event for a lot of people," says Dave Sullivan with Auto Pacific. People have to move their families, find new school districts, it's stressful. When Nissan moved to Nashville in 2005, many employees did not follow, creating significant challenges for the company.

Plano, part of greater Dallas, is more palatable than other options.

"Its mild climate, central location, transportation, quality of education – all of that is very desirable," says Kelley Blue Book's Brauer.

Texas also has no state income tax, which, when combined with the lower cost of living than Los Angeles or New York, is a powerful incentive in its own right.

Toyota says offices will move in stages and gradually, and that the move won't be complete until 2017.

Cities want to make your rooftop gardens profitable

Tue, 2014-04-29 02:18

On a recent Saturday morning in the Lincoln Heights neighborhood of Los Angeles, the city's River Revitalization Corporation is showing off a plan to add green space to an area that's now dominated by heavy industry. And Lee Christie of architecture firm Perkins+Will is explaining some options.

"You'd be looking at more raised beds or more greenhouses," she says, "which really opens up the possibility for rooftops."

Rooftops have a lot of hidden potential. A new EPA study predicts that as cities grow hotter, replacing flat black rooftops with plants could cool the cities back down.

According to Phil Morefield, one of the co-authors of that study, "any sort of well-designed, well-maintained green roof will give some benefit for the building that it's installed on."

Those benefits include reversing urban warming, absorbing rain before it overburdens sewers, and providing habitat for butterflies.

There's just one problem: green roofs come with a big up-front cost. So now, some cities are experimenting with financial encouragement.

For example, Austin lets developers build more floor space if they include green roofs. And Seattle gives out credits and discounts for rooftop gardens.

"Properties that take advantage of that credit range from single family homes to a regional airport," says Seattle Urban Designer Dave LaClergue, "so they're very different in size and scale."

The gardens on top of the Chloe Apartments in Seattle. That's the Space Needle on the right.

Courtesy of Dave LaClergue/City of Seattle

But it's been a learning process. Many of Seattle's first rooftop gardens died, since they were designed with assumptions based on what worked in east-coast cities. And a garden that cools one city might have less of an effect in another.

"There really isn't a 'one-size fits all' strategy," says Britta Bierwagen, another co-author on that EPA study. "And there are a lot of things to consider."

Financial incentives are similarly fickle. In Nashville, a credit of $10 per square foot of green roof hasn't attracted a single taker. But Portland, Oregon, got an overwhelming response to a credit of just half that much.

That's because green roofs need to be customized to what the market in each city wants, as much as to the weather. One market might respond best to grants, while another prefers tax credits.

Courtesy of Dave LaClergue/City of Seattle

For example, in Portland, the incentive amount was determined in part by the region's damp climate and sewers that combine wastewater with stormwater. "It was the amount that we could apply that essentially would cost less to manage a gallon with a green roof than it would with a pipe," explains Portland Environmental Program Coordinator Matt Burlin.

And green roof incentives aren't just for major cities. In tiny Saluda, North Carolina, the Polk County Community Foundation provided a $6,000 grant for a green roof on the new restrooms at Pearson's Falls.

On a recent afternoon, foundation President and CEO Elizabeth Nager stopped by to see how the plants are filling in. It's looking good: "The roof resembles the forest floor in the glenn below the waterfall," she observes. "There are smooth rocks that fill the space where you expect to see traditional gutters."

It's more than just a few rocks and sage bushes, of course. It's part of a national experiment that's happening right over our heads.

Hiding pregnancy from the marketing machine

Tue, 2014-04-29 01:00

When couples find out they are expecting, they usually spread the news to family and friends as soon as possible. When Janet Vertesi, an assistant professor of sociology at Princeton University, found out she was pregnant, she made a very similar call to family and friends, but with very different intentions.

Those close to Vertesi and her husband were told not to post anything on social media sites that would reveal the couples' pregnancy. Vertesi had decided to take her pregnancy off the grid, not because she wasn't overjoyed, but because marketing bots that figure out when a woman is pregnant become relentless in their targeted advertising.

Vertesi says the project was inspired by the invasiveness of data driven marketing that seems to go unchecked. So for the last nine months, she and her husband have paid for all baby-related expenses in cash, avoided social media, and used Tor, a browser that lets you use the internet anonymously, to visit sites like Babycenter.com and Namberry.com. 

"So many of those websites also have trackers and cookies that know that you’re visiting so they can follow you around with advertising afterwards," says Vertesi. What she noticed in hiding her pregnancy from marketing bots was that her activity looked more like someone involved in illegal activity than someone about to have a baby. Tor, for example, is notoriously used for drug deals.

While she wouldn't recommend the experiment to others, Vertesi says it raised some interesting questions:

"What I would recommend is thinking seriously about how and where you want your data to go...That doesn’t mean, 'Don’t participate in social networks' or 'Don’t buy anything online.' But it does mean it’s time to think seriously about how and where we want to engage in these kinds of transactions."

A post mortem for the 'worst video game ever'

Mon, 2014-04-28 15:00

On Saturday, near the New Mexico town of Alamagordo, a group of video game enthusiasts, excavation specialists, and filmmakers started digging a hole in a desert landfill. Why? You may remember some months ago we talked about the legend that in the early 1980s, video game maker Atari secretly dumped tons of video games into a hole in the middle of the desert.

The reasons for this particular move remain a bit of a mystery, but certainly the game maker was in financial trouble. That's in part because of one particular game -- it was based on the movie E.T., and it did poorly. So poorly, in fact, that it's still described as the worst video game in history.

The man who designed Atari's E.T. game is Howard Scott Warshaw. He was there when the video game treasure trove was uncovered. Listen above for the post mortem. 

Will Jupiter align with Mars?

Mon, 2014-04-28 14:18
Monday, April 28, 2014 - 14:09 Wikimedia Commons

From the Marketplace Datebook, here's a look at what's coming up Tuesday, April 29th:

In Washington, the Federal Reserve begins a two-day meeting on interest rates. It's one of eight scheduled over the course of the year.

The Conference Board releases its April Consumer Confidence Index.

46 years ago, in the Age of Aquarius, "Hair" opened on Broadway. Let the sunshine in.

Newspaper publisher William Randolph Hearst was born on April 29, 1863. He built a media empire and a giant castle which you can tour in San Simeon, California.

And what's the deal with birthdays? Comedian Jerry Seinfeld turns 60.

Marketplace for Monday April 28, 2014by Michelle PhilippePodcast Title Will Jupiter align with Mars? Story Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

If your company ID badge was a tracking device...

Mon, 2014-04-28 14:08
Monday, April 28, 2014 - 14:48 Courtesy of Ben Weber/Sociometric Solutions

A company called Sociometric Solutions has developed tracking badges for employees.

What if your company ID badge was a tracking device? You'd wear it from the moment you got to work in the morning til you clocked out at night. Your badge would constantly collect data that could potentially benefit you and the whole company.

Great news: It exists.

A company called Sociometric Solutions has developed this technology. They insert microphones, Bluetooth, and other proximity sensors into an employee’s company ID badge. So far, they've had a 90 percent participation rate in every rollout they've done.  

"What we’re trying to do is really quantify what people have always felt to be unquantifiable," says Ben Waber, President and CEO of Sociometric Solutions. "Things like, how are people interacting with each other? How do you talk to customers? How engaged are you in a conversation? And how is information flowing in an organization?"

How does Sociometric Solutions get workers to agree to participate in the research process?

“[We] don’t just come into a company and say, 'Here everybody, wear this sensor.' It's actually about a four week rollout process," says Waber. "We give people consent forms, which show them the actual database tables of what we collect."

Naturally, participants have had privacy concerns. But Waber tells them not to worry: "We won’t share your individual data with your company. We don't even keep your name in the database where we are calculating all the features."

Marketplace for Monday April 28, 2014Interview by David GuraPodcast Title If your company ID badge was a tracking deviceStory Type InterviewSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

CarMax, Virgin Air, others abandon Clippers' ship

Mon, 2014-04-28 13:33
Monday, April 28, 2014 - 14:00 Streeter Lecka/Getty Images

A fan holds a sign in protest of Los Angeles Clippers owner Donald Sterling in Game Four of the Eastern Conference Quarterfinals during the 2014 NBA Playoffs.

The NBA is still investigating the legitimacy of a recording that appears to show Los Angeles Clippers owner Donald Sterling making racist remarks, but action from the corporate world was swift and decisive. Several major sponsors of the Clippers either "paused" or pulled their support from the team.

The used-car retailer CarMax and Virgin Airlines both announced they will cut ties to the Clippers immediately, while insurance company State Farm and the auto maker Kia Motors have suspended their sponsorships. It is difficult to be exact with the numbers on how much each company pays in sponsorship, but it will certainly be a blow to a team that was otherwise having a strong year. 

Listed No. 13 on Forbes' list of NBA team valuations, the Clippers are currently valued at $575 million, though many estimate the team could sell for more than that. It is also worth noting that Sterling bought the team in 1981, when they were based in San Diego, for $12 million.

This is not the first time the Clippers' owner has faced accusations of this nature -- in 2009, Sterling paid a settlement of $2.725 million in a federal housing discrimination case in which he was accused of excluding black and hispanic tenants from renting properties that he owned in Los Angeles.

 

by Tobin LowStory Type BlogSyndication PMPApp Respond No

Can pandas jump the shark?

Mon, 2014-04-28 13:26
Monday, April 28, 2014 - 15:55 Paul J. Richards/AFP/Getty Images

Bao Bao, the Giant Panda cub, in one of his first media appearances.

You know that in Washington, DC we like politics. What may surprise you is how much we love pandas.

At the National Zoo, there was my favorite: Rusty, the red panda. And now there's always a long line to see Bao Bao, the baby giant panda. We even have panda related press conferences.

The National Zoo sent an email to donors this morning advertising a "$6,000 VIP Bao Bao Tour package." That'll get you a private, behind-the-scenes tour to meet the giant panda cub, five valet parking passes and admission to a panda-themed cocktail reception.

 

Washington City Paper has decided we may have hit "peak panda" -- like "peak beard," but it looks more like this:

 

Baby Bao Bao at the National Zoo.

Paul J. Richards/AFP/Getty Images

 

Marketplace for Monday April 28, 2014by David GuraPodcast Title Can pandas jump the shark?Story Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

How Russian sanctions could pinch Western companies

Mon, 2014-04-28 13:23

President Obama announced new sanctions against Russia today. The sanctions target 17 Russian companies and seven individuals. Among those individuals is Igor Sechin, the head of Russia’s biggest oil company, Rosneft.

How will that affect Big Oil? Well, for starters, BP’s stock fell after the sanctions were announced. BP owns almost 20 percent of Rosneft. 

At its annual meeting earlier this month, BP said it’s committed to its investment in Rosneft, and will comply with any relevant sanctions. And if those sanctions really start to bite, will Moscow take a whack at BP or Exxon? Some oil analysts say no.

“Western oil companies and Russia are in bed together... they are strange bedfellows, but they are dependent on one another,” says Stephen Schork, of the Schork report.

So far, drilling is continuing as usual in Russia. But senior Obama administration officials say the sanctions could be ratcheted up.

 

 

Coal ash = environmental win (when you recycle it)

Mon, 2014-04-28 13:21

Coal ash jumped into the headlines this year when a pond maintained by Duke Energy spilled into the Dan River in North Carolina. It fouled the water supply, and brought national scrutiny to what sounded like a huge, and largely unregulated source of toxic waste.

The same week, to much less fanfare, the Environmental Protection Agency announced that it endorsed the practice of using coal ash to make concrete. As it turns out, environmentalists largely agree. 

Engineers tend to be advocates. Steve Fleming is technical director for Chicago-based Prairie Materials, a large concrete supplier. And he is a fan of coal ash.

"We add it to our concrete to help with its performance," he says. "Both in its plastic state"— that is, when it’s wet, since coal ash makes concrete easier to work with — "and most important from my point of view, it helps the long-term performance of the concrete as well. It actually increases the strength, and makes the concrete last longer."

As an engineer, Fleming has long appreciated coal ash’s benefits. It took customers longer.

"When I first started, 18-19 years ago, I had a lot of customers who thought that fly-ash was not good," he says. "They said, 'It’s a waste product, and why are you putting it in my concrete?' Now, we have contractors who are requesting fly ash. If we ship them a straight cement mix, they’ll complain."

There are environmental advantages, too. Coal ash has toxins in it: arsenic, lead, mercury. Locking that stuff up in concrete seems safer than letting it sit in landfills or ponds that can contaminate groundwater.

The EPA endorsed using coal ash in concrete after comparing it to the toxins in Portland cement. Turns out, Portland cement is more toxic.

Portland cement is also much worse for the environment. "Portland cement production is one of the major greenhouse-gas sources  worldwide," says Craig Benson, a professor of environmental engineering at the University of Wisconsin.

He explains: Making Portland cement involves applying heat to limestone — which is made of calcium, oxygen and carbon — to get lime: calcium and oxygen.

"That process liberates a lot of carbon dioxide," he says. "That goes right up in the atmosphere."

There are more benefits: Using coal ash means not using resources to dig up limestone. Or burning fuel to heat it up. And because fly ash makes concrete last longer, it also means not replacing the concrete as often.

All of which also means saving money. Benson did a study on that. "It was really remarkable," he says. "Just the economic impact is about $5 billion to our economy."

Lisa Evans, a lawyer for Earthjustice, is reluctant to declare herself a fan of using coal ash for concrete. She’d rather we stop burning coal. Failing that, however, she thinks concrete is a good idea.

"I think characterizing it as a 'win' would be accurate," she says. "If you’re going to make coal ash in the first place, locking it up in concrete is preferable to a lot of the other ways we use or dispose of coal ash."  

But the consensus isn’t perfect. The EPA is currently deciding between two alternatives for regulating coal ash. Evans favors one that would regulate coal ash as hazardous waste, except for designated "beneficial re-uses" like concrete.  

That proposal worries John Ward, a spokesman for the coal-ash recycling industry, who runs a group called Citizens for Recycling First. He thinks the exception would just cause confusion. "How can you call something hazardous on the property of the people who made it," he says, "and expect you to want to use it in your house?"

He thinks that potential confusion could make utilities reluctant to allow recyclers to take coal ash at all.  

High-school graduation rate hits 80 percent for first time

Mon, 2014-04-28 13:10

For the first time, high school graduation rates in the U.S. are above 80 percent. That’s according to a report called “Building a GradNation.” The study was released today by a coalition of education groups, including Civic Enterprises, the Everyone Graduates CenterAmerica’s Promise Alliance and the Alliance for Excellent Education.

The news represents a significant improvement since 2001, when 71 percent of American teenagers graduated from high school. Researchers say several things have changed since then. One, there is better data, so the public is more aware of the problem. Two, the accountability movement in education: think "No Child Left Behind."

Robert Balfanz,  co-director of the Everyone Graduates Center and a research scientist at Johns Hopkins University, says when researchers started digging into the numbers, it showed that just 12 percent of the nation’s high schools were producing nearly half of the dropouts. Those high schools are known in education circles as “dropout factories.”  

John Bridgeland, CEO of Civic Enterprises and one of the principal authors of the report, says some of those “dropout factories” have closed. “But many of them were re-tooled or re-designed,” Bridgeland says. “Smaller learning environments have been created. More personalized, engaging, rigorous classrooms that keep these young people in school and on track to graduate.”

Some states have raised graduation rates dramatically. North Carolina went from a 68 percent graduation rate in 2005 to over 82 percent today.

Jim Key, area superintendent for high schools in Durham, North Carolina, says his district now starts tracking students who are potential dropouts while they are still in middle school. Then the district sends them to ninth grade a few weeks early.

“That gives them a chance to become more acclimated to high school, to build some positive relationship with a few teachers, administrators and counselors,” Key says. It just gives those students a leg up, if you will, on being prepared for high school, to understand the expectations and what’s at stake.”

 What’s at stake is earning power, among other things. John Bridgeland says a high school graduate “will make $1 million more over his or her life time, than a high school dropout.”

 College graduates, of course, do even better. The latest statistics, however, show that fewer high school graduates are applying to college. Just under two-thirds of the class of 2013 attended college in the fall.

By Shea Huffman/Marketplace

Clippers owner Donald Sterling suspended, fined

Mon, 2014-04-28 13:05

UPDATE: The NBA has banned Los Angeles' Clippers owner Donald Sterling for life. He was also fined $2.5 million.

At a press conference, NBA Commissioner Adam Silver confirmed that Sterling's voice was heard making racist comments. He said the financial impact on the Clippers franchise is yet to be seen. Several sponsors have already withdrawn support.

"I'm outraged and I understand other people are outraged," Silver said.

As an NBA owner, Donald Sterling is a franchisee, but his influence is far greater than that of his counterparts in, for example, the fast food business. 

Typically, in a franchisor-franchisee relationship, it is the franchisor that holds most of the power. Jill Pilgrim, a sports attorney and business consultant, says sports franchises like the NBA "do a little twist on that general concept." In the case of the NBA, Pilgrim explains, team owners decided collectively to coordinate their business operations. 

"The owners are like members of a club," Pilgrim said. "They are a club who have a common business interest in the development of sports, but also revenue generation."

NBA Commissioner Adam Silver will use the NBA's bylaws and constitution to determine if - and how - Sterling is to be punished. Those documents aren't public, but Jill Pilgrim says the constitution probably includes a morals clause that forbids an owner from doing anything that might hurt revenue. 

"There is no doubt," Pilgrim said, "however that provision is worded, that this has definitely hurt the brand of the NBA." 

If an investigation shows the tapes to be authentic, Sterling could face at least a fine, and, at most, a suspension.

"A fine would likely be $500,000 or a million dollars," said Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. "That would be a significant move for many, but Donald Sterling is reportedly worth $1.9 billion, so a fine of $1 million...wouldn't send as strong a signal as the NBA likely wants to send."

If Sterling is suspended, McCann said, the owner would be prevented from having any contact with Clippers players or coaching staff. "It would really be like a restraining order from his own team," McCann said. "And the thinking is that during that time he would try to sell the team."

That the 30 NBA owners, including Sterling, appoint the commissioner who is charged with investigating and handing down punishment, raises questions about just how independent Silver can be.

Gabe Feldman, director of the Sports Law Program at Tulane Law School, says NBA owners make a tremendous financial investments in their teams, and those investments appreciate over time.

"Even if the other 29 owners here are unhappy with what Donald Sterling has said, and how it impacts the value of their franchise," said Feldman, "they don't want, down the road, someone to say, 'well, we don't like what you said, so we're going to take your franchise from you.'"

In the NBA, power lies with owner-franchisees

Mon, 2014-04-28 13:05

As an NBA owner, Donald Sterling is a franchisee, but his influence is far greater than that of his counterparts in, for example, the fast food business. 

Typically, in a franchisor-franchisee relationship, it is the franchisor that holds most of the power. Jill Pilgrim, a sports attorney and business consultant, says sports franchises like the NBA "do a little twist on that general concept." In the case of the NBA, Pilgrim explains, team owners decided collectively to coordinate their business operations. 

"The owners are like members of a club," Pilgrim said. "They are a club who have a common business interest in the development of sports, but also revenue generation."

NBA Commissioner Adam Silver will use the NBA's bylaws and constitution to determine if - and how - Sterling is to be punished. Those documents aren't public, but Jill Pilgrim says the constitution probably includes a morals clause that forbids an owner from doing anything that might hurt revenue. 

"There is no doubt," Pilgrim said, "however that provision is worded, that this has definitely hurt the brand of the NBA." 

If an investigation shows the tapes to be authentic, Sterling could face at least a fine, and, at most, a suspension.

"A fine would likely be $500,000 or a million dollars," said Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. "That would be a significant move for many, but Donald Sterling is reportedly worth $1.9 billion, so a fine of $1 million...wouldn't send as strong a signal as the NBA likely wants to send."

If Sterling is suspended, McCann said, the owner would be prevented from having any contact with Clippers players or coaching staff. "It would really be like a restraining order from his own team," McCann said. "And the thinking is that during that time he would try to sell the team."

That the 30 NBA owners, including Sterling, appoint the commissioner who is charged with investigating and handing down punishment, raises questions about just how independent Silver can be.

Gabe Feldman, director of the Sports Law Program at Tulane Law School, says NBA owners make a tremendous financial investments in their teams, and those investments appreciate over time.

"Even if the other 29 owners here are unhappy with what Donald Sterling has said, and how it impacts the value of their franchise," said Feldman, "they don't want, down the road, someone to say, 'well, we don't like what you said, so we're going to take your franchise from you.'"

What if you found out your boss made racist remarks?

Mon, 2014-04-28 13:00
Monday, April 28, 2014 - 13:46 Ronald Martinez/Getty Images

Team owner Donald Sterling of Los Angeles Clippers talks with team owner Peter Holt of the San Antonio Spurs as the SPurs host the Memphis Grizzlies during Game One of the Western Conference Finals of the 2013 NBA Playoffs at AT&T Center on May 19, 2013 in San Antonio, Texas.

On Tuesday night, twelve guys are scheduled to show up at work – a short shift where they'll collectively earn millions of dollars for themselves and their franchise, the Los Angeles Clippers.

But the job could prove tougher than usual in the aftermath of racist remarks allegedly made by team owner Donald Sterling released over the weekend.

The NBA is still investigating the legitimacy of a recording that appears to show Sterling making racist remarks about African-Americans, but the controversy made us wonder: What's it like to work for a boss who you believe harbors prejudice against you and others?

We asked people on Facebook and Twitter to share their experiences:

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One tip for employers – if there is a prejudiced person calling the shots, experts say it's best to give them the boot. "Workplace Discrimination Has Real Economic Consequences" begins one section of a 2013 study by the U.S. Congress Joint Economic Committee. Some of those consequences include lower profits for companies, a high turnover rate and decreased employee productivity at work.

The NBA has not yet decided what, if any, action it will take against Sterling. However, workplace consultant Virginia Clarke has advised employers on how to handle prejudice when it surfaces in the workplace.

"I advise companies to not tolerate bias or discrimination at any level," she says. "Boards of directors must hold senior leaders accountable for such transgressions. Senior leaders need to start making leaders and owners accountable for their behavior and the development of their subordinates."

Clarke, a partner with executive leadership recruiter Amrop Knightsbridge, continues, "Leading in a multicultural world is a leadership competency that needs to be learned in some cases. In order to be a real competency the learning must transcend tolerance; it must require a demonstration of true understanding and empathy."

Have you ever had to work for someone you believed harbored prejudice against you or others? How did that experience affect your ability to do your job? Leave a comment below, on Facebook or tweet us @MarketplaceAPM.

Marketplace for Monday April 28, 2014In the NBA, power lies with owner-franchiseesCarMax, Virgin Air, others abandon Clippers' shipby Lindsay Foster ThomasStory Type BlogSyndication PMPApp Respond No

Can pandas jump the shark?

Mon, 2014-04-28 12:55

You know that in Washington, DC we like politics. What may surprise you is how much we love pandas.

At the National Zoo, there was my favorite: Rusty, the red panda. And now there's always a long line to see Bao Bao, the baby giant panda. We even have panda related press conferences.

The National Zoo sent an email to donors this morning advertising a "$6,000 VIP Bao Bao Tour package." That'll get you a private, behind-the-scenes tour to meet the giant panda cub, five valet parking passes and admission to a panda-themed cocktail reception.

 

Washington City Paper has decided we may have hit "peak panda" -- like "peak beard," but it looks more like this:

 

Baby Bao Bao at the National Zoo.

Paul J. Richards/AFP/Getty Images

 

Border towns hit hard as fewer migrants cross

Mon, 2014-04-28 12:37
Monday, April 28, 2014 - 15:26 Jude Joffe-Block

Pharmacist Maria Jaime Peña with the products she sells to migrants, including black water jugs that don't reflect in the moonlight.

The rain pours down in the Northern Mexican town of Altar, as local priest Padre Prisciliano Peraza drives down a bumpy dirt road. The road leads to the border town of Sasabe, some 60 miles away. 

Peraza has been the priest here in Altar, Sonora for a decade. In that period, this small town boomed as a staging area for migrants preparing to cross the border. But now it appears on the verge of a bust.

Fewer migrants are trying to sneak across Arizona’s border these days. And that means some towns on the Mexican side that rely on the smuggling economy have been hit hard. Local businesses sprouted up to feed, house and sell supplies to migrants on their way up to the Arizona desert.

Peraza says among those entrepreneurial endeavors are van businesses that drive migrants on this very road.

“They use old vans, and have taken out the seats so they can fit more people,” Peraza says in Spanish.

Much of this business is controlled by organized crime.

But migration from Mexico has been on a downward trend for the last several years, as smuggling routes have changed. 

For the first time in 16 years, the U.S. Border Patrol’s Tucson sector – which covers Southern Arizona – lost its designation as the busiest place to catch migrants last year.

It was surpassed by Texas’ Rio Grande Valley, where agents made almost 155,000 apprehensions last year, a 58 percent uptick from the year before. The Border Patrol’s Tucson sector made 120,939 apprehensions last year, down from 491,771 ten years ago.

“Before, many more people used to come through here,” says local pharmacist Maria Jaime Peña in Spanish. She has been selling migrants items like caffeine pills and electrolyte packets for years.

Altar’s local government estimates that four years ago, several thousand migrants passed through a day. Now? A couple hundred.

“There’s a lot of Central Americans,” Jaime Peña says of the migrants she’s seen lately. “And I’ve seen women some come through with their babies.”

Those are the same recent trends the Border Patrol has reported, too.

About two thirds of Altar’s restaurants and half the convenience stores have closed in the past four years, according to estimates from the local government.

Still, Jaime Peña’s store shows some evidence of the force behind the migrant economy. Like the gallon-size black water jugs she sells for about a dollar.

She says when migrants used the regular clear water jugs they reflected in the moonlight, and made it easier for Border Patrol to spot them. And voila – a business opportunity was born. A local water bottling company came out with a black water jug and that is what most migrants use, Jaime Peña says.

But now that bottling company says it has had to diversify its clientele.

On the outskirts of Altar, local families gather to celebrate a quinceañera, a girl's 15th birthday. A band plays in spite of the rain. Many here are worried about the town’s future.

“It’s as if we’re waiting adrift for something miraculous to happen,” says Juan José Corona Moreno, a doctor at the party. “And really if we as citizens don’t do something, this isn’t going to change.”

Corona Moreno thinks the town should return to its roots in ranching and agriculture.

The local government is trying to recruit a maquiladora to provide manufacturing jobs.

That could be the only chance for new employment here, unless another wave of migration picks up.

Marketplace for Monday April 28, 2014 Jude Joffe-Block

A mural in the center of Altar, Mexico pays tribute to the migrants who make the perilous journey across the desert.

Jude Joffe-Block

Padre Prisciliano Peraza, Altar's priest, reads notes migrants left on a portrait of the Virgin of Guadalupe at his church before they departed for the Arizona border.

by Jude Joffe-BlockPodcast Title Border towns hit hard as fewer migrants crossStory Type FeatureSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No
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