Marketplace - American Public Media

State exchanges going into year two, but slowly

Fri, 2014-04-25 13:19

At one point, Affordable Care Act architects thought every state would eventually run its own exchange. So far only about a quarter of states – and the District of Columbia – have actually done it. Or at least, they have tried their best to.

Oregon’s exchange voted to have Washington run the IT side of the operation on Friday. That’s after the state received some $300 million in federal funds to get its own of the ground.

There are lots of reasons why states may want to take over their exchanges from the feds sometime in the future. But here are six reasons why they may not be in such a hurry: “Hawaii, Maryland, Massachusetts, Minnesota, Oregon and Vermont,” says Caroline Pearson who tracks state exchanges for consulting firm Avalere Health.

Pearson says technical disasters like Oregon – it’s still processing applications on paper – could scare off most anyone else for the next year or two. But, she says, as states and the federal government work out the bugs, running an exchange will get smoother.

“Once you have something that is working, it will be easier for other states to import that and customize it and tweak it for their own program,” she says.

Map by the National Conference of State Legislatures

Sonya Schwartz with the Georgetown Center for Children and Families thinks states that run their own exchanges may be better able to control healthcare costs, and that could make switching worthwhile.  

“Our health system is expensive. And if we had an ambitious plan to reign in costs, it’s worth it. But if we just create a rinky-dink enrollment system, it’s not worth it,” she says.

Moving forward, some states could take a hybrid approach. Much like Oregon is doing now: letting the feds run technical operations, but managing the types of insurance plans on the exchanges, and overseeing outreach and enrollment efforts.

New rules and systems could make things more complicated for insurers, says PricewaterhouseCoopers’ Ceci Connolly.

“It’s just like, 'How many different languages do you learn, and can you master?” she says.

Connolly says the silver lining in struggling state-run exchanges may be that it forces everyone to standardize -- a great way to keep costs down.

State Exchanges Going Into Year Two

Fri, 2014-04-25 13:19

At one point, Affordable Care Act architects thought every state would eventually run its own exchange. So far only about a quarter of states – and the District of Columbia – have actually done it. Or at least, they have tried their best to.

Oregon’s exchange voted to have Washington run the IT side of the operation on Friday. That’s after the state received some $300 million in federal funds to get its own of the ground.

There are lots of reasons why states may want to take over their exchanges from the feds sometime in the future. But here are six reasons why they may not be in such a hurry: “Hawaii, Maryland, Massachusetts, Minnesota, Oregon and Vermont,” says Caroline Pearson who tracks state exchanges for consulting firm Avalere Health.

Pearson says technical disasters like Oregon – it’s still processing applications on paper – could scare off most anyone else for the next year or two. But, she says, as states and the federal government work out the bugs, running an exchange will get smoother.

“Once you have something that is working, it will be easier for other states to import that and customize it and tweak it for their own program,” she says.

Map by the National Conference of State Legislatures

Sonya Schwartz with the Georgetown Center for Children and Families thinks states that run their own exchanges may be better able to control healthcare costs, and that could make switching worthwhile.  

“Our health system is expensive. And if we had an ambitious plan to reign in costs, it’s worth it. But if we just create a rinky-dink enrollment system, it’s not worth it,” she says.

Moving forward, some states could take a hybrid approach. Much like Oregon is doing now: letting the feds run technical operations, but managing the types of insurance plans on the exchanges, and overseeing outreach and enrollment efforts.

New rules and systems could make things more complicated for insurers, says PricewaterhouseCoopers’ Ceci Connolly.

“It’s just like, 'How many different languages do you learn, and can you master?” she says.

Connolly says the silver lining in struggling state-run exchanges may be that it forces everyone to standardize -- a great way to keep costs down.

Weekly Wrap: Who's feeling those sanctions

Fri, 2014-04-25 13:18

Secretary of the Treasury Jack Lew said American companies will be paying a little bit of a price for the sanctions  imposed on Russia.

“Visa has already said that the sanctions are likely having an effect on its performance. The other likely culprits are Boeing or Exxon [or] Morgan Stanley. There are a number of major U.S. companies that have complained about both sanctions that already exist and ones that appear to currently be on the table, because they could hurt their business as well,” said Catherine Rampell, columnist for the Washington Post.

Rating agencies have also laid out numerous warnings for the Russians, but to no avail, according to Sudeep Reddy from the Wall Street Journal:

“We’ve seen warnings for weeks and months and they haven’t really made that much of a difference. The sanctions so far have barely scratched the surface. There are a lot of things that could be placed on the Russian economy to force the hand on some of the leaders there at least to get them thinking a lot harder about what’s being done… But the question here is how much pain do you end up with on regular Russians, and regular Ukrainians, and regular Europeans, and ultimately regular Americans in all of this?”

Lew also mentioned that things are still rough out there for a lot of people in this economy, but the American economy is bouncing back. Furthermore, the consumer confidence number out today even revealed that consumers are feeling better than they’ve felt since the beginning of the Great Recession.

“If you breakdown those confidence numbers… you can sort of look at the different components of the survey and say, okay, [this is] where people are feeling a little bit better and [this] where are they still kind of pessimistic," Rampell said. "The places where people seemed to be a little bit more optimistic were places like job prospects. People say they’ve experienced income gains, they perceive inflation to be low. They basically think that their current financial status is... a little bit better than it had been,” says Rampell.

Although the economy is getting better, Reddy says it’s not moving fast enough: “…We’re improving, it’s just not filtering through across the spectrum as quickly as it needs to for us to feel like this is a real recovery.”

Alibaba: Yes, it's that big

Fri, 2014-04-25 13:14

Alibaba is getting ready to go public, and analysts have predicted the company could be worth upwards of $150 to $200 billion. Its high valuation is a factor of its scale, its dominance in the Chinese e-commerce market, and its highly successful monetization of its platform through ad revenue.

As a company, Alibaba is often described as a combination of eBay and Amazon, but you could throw in a little PayPal, Yahoo, and Citigroup too. Alibaba has a sizable role in mobile banking and online advertising technology.

So here is a comparison of Alibaba with those companies for some perspective on just how big it is.

Deciphering financial aid offers for college

Fri, 2014-04-25 13:07

Spring is the time of year when high school seniors prepare for college and their life after school. Though a typical undergraduate program lasts four years, paying off student loans can easily last decades if you don't properly plan.

If you're comparing the costs of tuition between schools, there are a few things you should look out for, says personal finance expert Liz Weston.

Financial aid offers often don't include the total cost of attendance, according to Weston. "That’s fairly common that they might just mention tuition and fees, and not mention books and supplies or living expenses," Weston says. In a city like Manhattan, living costs can dwarf the cost of tuition.

Financial aid packages also blur the lines between loans and actual savings like grants and scholarships. "They pretend, 'Hey, look at this great award we've just given you, and most of it is loans.' So, they’re not really reducing the cost for attending — they’re just shoving it out into the future and putting it on you."

Weston says that some, but not all, schools have adopted standardized "shopping lists" that make it easier to compare offers. She also suggests the College Board (bigfuture.collegeboard.org) or CollegeData (www.collegedata.com) and Consumer Financial Protection Bureau's financial aid comparison tool (www.consumerfinance.gov/paying-for-college/) to better compare costs.

But how much is too much for college?

That answer depends on the individual, but Weston says one rule of thumb is, "try to limit the amount that you borrow to the amount you expect to make your first year out of school. So, the total for your undergraduate education is no more than your first job is going to pay you. Now again that’s very general, it’s not going to apply to everyone, but it’s a good start."

But as Weston notes, "the problem that a lot of people have is that they’re not really sure what they want to do when they’re 17 or 18 [years old] ... an even better rule of thumb is to stick to federal student loans." Unlike private loans, federal student loans are capped at $5,500. That won't cover the cost of a four-year private university in a big city, "but it gives you an idea that you really need to limit this debt you really need to be on your guard. And if you’re a parent, I'dd be very very careful about taking on debt, particularly if you’re not already saving enough for your own retirement. You don’t want to be in a situation where you can’t retire because you’re still paying for your kids education."

When ads start jumping to the second screen

Fri, 2014-04-25 11:28
Monday, April 28, 2014 - 05:21 Justin Sullivan/Getty Images

It’s enough to give advertisers nightmares: more and more people picking up their phones and tablets during commercial breaks and tuning out the ads. (That’s if they’re still watching broadcast TV at all).

"As an advertiser, you're never really sure if the audience that the networks say they're delivering to you actually watch your ads," says analyst Paul Sweeney with Bloomberg Industries.

Now the company Xaxis has developed a product called Sync to reclaim those “lost” TV viewers. It sends complementary ads to the ones you’re ignoring on TV right to websites you’re likely to visit online.

"Oh, you're hearing a commercial for a food company and then, oh, I'm looking at my Facebook and there's a sponsored post there," says Xaxis' Larry Allen.

The big idea: There’s no escape during commercial break.

Marketplace Morning Report for Monday April 28, 2014Marketplace Tech for Monday, April 28, 2014by Kate DavidsonPodcast Title When ads start jumping to the second screenStory Type News StorySyndication Flipboard BusinessSlackerSoundcloudStitcherBusiness InsiderSwellPMPApp Respond No

New York's median rent is $1,100. Seems low...

Fri, 2014-04-25 11:23
Monday, April 28, 2014 - 05:18 Mario Tama/Getty Images

The Stuyvesant Town and Peter Cooper Village apartment complexes are seen October 22, 2009 in New York City.

 

Rents in New York City are up 75 percent since the year 2000, according to a new report from the New York City Comptroller's office.

"The data from the report is chilling," says Comptroller Scott Stringer.

Since 2000, median incomes are down, but rents are up far more than elsewhere in the U.S. And, there are fewer apartments available to the middle class.

"We've actually lost 400,000 apartments renting for less than a $1000," Stringer says.

But the median rent -- the point at which half of rents are below and half above -- might not be what you think. In New York, it's now $1,100 a month, according to the report.

Anyone who notices New York real estate knows that rent averages are often reported to be much higher. Reis, one company that compiles such data, says it's now around $3,200 a month.

But that number only looks at apartments on the open market. In New York, more than 60 percent of rentals are public housing, or subsidized or rent regulated.

Ryan Severino, a senior economist at Reis, says that can limit supply and, "It can make apartments more expensive for anyone who has to compete in the more competitive market."

And, yet, people keep moving here, far faster than new units are built.

Marketplace Morning Report for Monday April 28, 2014by Dan BobkoffPodcast Title New York's median rent is $1,100. Seems low...Story Type News StorySyndication Flipboard BusinessSlackerSoundcloudStitcherBusiness InsiderSwellPMPApp Respond No

Skype bans certain 'offensive' emoticons

Fri, 2014-04-25 10:57

We told you a couple weeks ago about how Yelp now lets you search with emoticons. A pair of scissors gets you salons nearby, the Korean flag finds you Korean restaurants, and so forth. 

 

On the other side of the happy face is Skype. According to the website Techcrunch, Skype has "removed certain...offensive emoticons from its emoticon dictionary."  

 

You can see the offending faces here. In Techcrunch's words:

 

"Oddly enough, you can still happily moon your chat buddies(), puke on them(), have a smoke with them () and pretend you are virtually drunk (). Skype is good with this guy, too ( ). Maybe because he is offset by this emoticon: ."

In which Dove's 'Real Beauty' campaign faces real backlash

Fri, 2014-04-25 09:35
Friday, April 25, 2014 - 16:38 campaignforrealbeauty.co.uk

In Dove's latest advertisement, "Patches," a scientist prescribes a "beauty patch" to women suffering from low self esteem. Over the course of four minutes, the patch-wearing "patients" move from lines like "If I were more confident, I'd have the confidence to approach a guy, maybe," to "I've defintiely opened up something inside of me to make me feel more... great."

Magic! Except spoiler: There's nothing in the beauty patch. Dove's not selling any patches -- they're selling the story of women finding inner beauty, a.k.a., the Dove brand's strategy since 2004. They've sold creams to slow the signs of aging with messages about being "pro age." They've launched self-esteem programs and campaigns critiquing the whole business of advertising. 

A Dove spokesman told Ad Age they created the "Patches" video "to intentionally provoke a debate about women's relationship with beauty." And what a debate they've started: The "Patches" ad has been called patronizing, garbage and at least one word we wouldn't print on our own site. In just one hour Friday morning, at least 500 people watched this parody video:

Dove grew from a $200 million soap brand in the early 1990s into a nearly $4 billion corporation by 2013, selling everything from deodorant to hairspray. They've sold products -- lots of products -- with the message "You are more beautiful than you think." 

Andrea Learned, a communications consultant and author of "Don't Think Pink," a book about marketing to women, says Dove’s original ‘Real Beauty’ campaign turned selling soap into an important cultural dialogue, helping women embrace their bodies—old or young, fat or thin. 

But she thinks the latest campaign has "lost its way. It kind of creeped me out right from the beginning," she says. She thinks the tactic in the video of misleading the female subjects about the treatment they're getting in order to show that really, you are beautiful if you feel beautiful, will alienate many female consumers. She found herself wondering if the real Dove ad might not just be the parody. “Get out of digging this hole for women—of being these incredibly insecure beings," she says. "That is old news.”

Former ad executive Cindy Gallop agrees that the new Dove campaign is "patronizing" and "not credible." She thinks it's a big misstep for Dove's ad agency, Ogilvy & Mather. But she also thinks any publicity can be good publicity—if the brand embraces the criticism and builds on it.

“The fact that they are stimulating dialogue, that we are talking about this, in whatever context, is terrific," Gallop says. "And it’s all tremendous fodder for them to take the campaign forward in an even stronger way next time out of the gate.”

Gallop has a pitch for Dove’s next campaign: real-life men saying what they like in their real-life women. Grey hair, freckles, curves—things most advertisers never portray in their impossible-to-acheive models of female beauty.

Is all this pushback a sign that Dove doesn't have its pulse on what women think any more? What do you think of the campaign? Tell us on Twitter or Facebook

Marketplace for Monday April 28, 2014by Ariana Tobin and Mitchell HartmanPodcast Title In which Dove's 'Real Beauty' campaign faces real backlashStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

A piece in a jigsaw puzzle. A missing piece.

Fri, 2014-04-25 08:35

From the Marketplace Datebook, here's an extended look at what's coming up the week of April 28th:

On Monday the National Association of Realtors releases its pending home sales index for March.

Congress returns from recess.

Now that it's T-rex has arrived, the Smithsonian's National Museum of Natural History is shutting down its Fossil Hall for a 5-year renovation in preparation for its new centerpiece. While you're waiting to see the new Tyrannosaurus take center stage you could finally plan to see the Mona Lisa instead.

On Tuesday, the Conference Board releases its April Consumer Confidence Index.

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

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.

On May 1st, 1941 "Citizen Kane" premiered in New York City. It was about a publishing tycoon.

Also on May 1, automakers are scheduled to release sales figures for April.

(Hey, have I got a great name for your new ride; Rosebud.)

On Friday, the Commerce Department reports on March factory orders and the Labor Department issues its jobs report for April.

And finally, I know we've been talking a lot about eggs this past week. 'Tis the season. And it continues all May long with National Egg Month. So scramble up some fun.

Preparing middle-class workers for middle-skill jobs

Fri, 2014-04-25 07:44

Many great jobs don’t require bachelor’s degrees.

American manufacturing isn’t dead.

Some Americans will find those two statements preposterous, a perception nourished by a society that steers students toward four-year degrees from a young age, as well as vivid memories of shuttered factories and outsourced jobs.

But many Americans aren’t surprised at all by that pair of assertions. They’re the ones working in "middle-skill jobs" -- those requiring more than a high school diploma, but less than a four-year degree. High-tech manufacturing jobs are growing and pay good wages. These middle-skill jobs will support middle-class lives, but America’s education and training system isn’t doing a great job of getting people ready for them. There’s now a growing push from educators, industry and policymakers to do better.

One can see this up close at GlobalFoundries, a semiconductor manufacturing facility in Malta, New York, just north of Albany. Many people think of manufacturing as dirty work, but this is the cleanest place most people will visit in their lives, cleaner than an operating room.

Workers zip into the clean suits and layers of gloves, boots and masks required for the cleanroom environment where they make the semiconductors inside smartphones, appliances, cars and more. They have to, because in the tiny universe of a microchip, a fallen eyelash is like a truckload of toxic waste. With everyone covered up, coworkers tell each other apart by their eyes.

“I think it’s fun to see everybody else right there with you looking equally weird and different with their get-up on,” says technician Megan Boettner.

The suits may be a bit spooky, but the pay can be quite good.

“An individual with an associate’s degree, the industry standard is about $40,000-$60,000 a year starting, depending on education and skills,” says technical training manager Don Garrison. “Within 2-4 years, they can see a pretty substantial increment, even up to like 20 percent.”

He’s hiring 400 technicians this year. But there aren’t enough people with the right skills in upstate New York. Recruiting elsewhere is expensive and doesn’t always work out. If GlobalFoundries hires someone from Arizona or Texas, which have established semiconductor industries, it’s on the hook for moving expenses. And some of those hires don’t stay, for any number of reasons, including the frosty upstate weather.

“After about one or two winters… we have some people that just say, ‘Hey, this isn’t for me,’” Garrison says.

A shallow local talent pool is also a big problem for New York leaders, who spent a fortune on incentives to get GlobalFoundries to build its multi-billion dollar facility here.

“New York’s intention was to provide employment to residents,” says Michael N'dolo, vice president at the economic development firm Camoin Associates. “The direct hiring at the site itself, it has been a little bit of a disappointment.”

Turning that around requires a bigger and better educational pipeline. Student Paul Sisson is in it. We talked with him as he was grabbing a snack at a supermarket coffee shop just down the road from GlobalFoundries. Sisson used to work on the other side of that transaction, in bakeries and restaurant kitchens. He worked 12 hour days, six days a week, sometimes more. It didn’t earn him as much as he’d like.

“The most that I have ever made in an entire year was $28,000,” Sisson says.

He’s now at Hudson Valley Community College, getting an associate’s degree in semiconductors. Set in a cluster of high-tech businesses, including GlobalFoundries, its tech-focused campus is on the front lines of the effort to get more local workers into middle skill jobs.

It’s not what comes to mind when many people think of community college. It’s a new, energy efficient building, with impressive labs packed with high-tech equipment.

And the students aren’t whom many people might expect in a two-year degree program. About half already have bachelor’s degrees.

“We’ve always thought that a four-year degree is the answer to get a good paying job,” says associate dean Penny Hill. “Now, as we’re experiencing, it’s not always the right answer.”

The semiconductor degree program is growing, but not fast enough. It only turns out around a couple dozen grads a year. But nearly all will have job offers, which is what Hill and local companies stress in their campaign to entice more students.

And there’s more at stake here than just future job openings. Building a robust middle skill job pipeline is critical nationwide.

“Productivity and performance of our manufacturing sector is driven by these middle skill jobs and so they’re just very important for the performance of the economy,” says MIT management professor Paul Osterman, who studies the labor market. “If we don’t make investments in our training and education system, it’s gonna be very problematic.”

Back in Hudson Valley’s campus semiconductor lab, students get hands-on training working in a cleanroom. Paul Sisson is among the students moving shiny round semiconductor wafers among various machines, including some powerful furnaces, burning brilliant orange.

They’re basically high-tech ovens, three times hotter the ones Sisson used in his restaurant days. He gets a little kick out of the irony. Sisson’s investment in a middle-skills degree should net him a far greater paycheck than he got in the grueling chaos of the kitchen.

“I can make more than double using my mind, instead of breaking my body,” he says.

America’s high-tech manufacturers will need far more people like him. Improving the education and training pipeline and getting more people in it is the challenge industry, educators and political leaders face.

PODCAST: American's youth want to be their own bosses

Fri, 2014-04-25 07:11

Mortgage lending this winter fell 58 percent from a year ago to the lowest level in 14 years.

Have dentists struck gold? Not in the mouths of their patients, but in of all places, in Medicaid, a program infamous for its low reimbursement rates.

In a recent survey of working adults, Harris Poll and CreativeLive — an online education company — found that many more young workers than older workers want to jump ship from their traditional jobs and become self-employed. Sixty-seven percent of employed Millennials (aged 18 to 34) want to go off and start their own business, compared to 45 percent of workers aged thirty-five and over.

 

Treasury Secretary defends sanctions on Russia

Fri, 2014-04-25 07:01

Treasury Secretary Jack Lew on Friday strongly defended the sanctions the U.S. has imposed on Russia and says the administration "sees many signs" that the sanctions are having an impact, including a downgrade of Russian debt.

"If you look at the conditions since we started imposing sanctions, they're having an impact," Lew told Marketplace in an interview. "Even the Russians are admitting that they are having an impact."

Lew added that the U.S. is working with its allies in Europe on another possible round of sanctions. 

"We are working with our international partners to make sure that when we do it, we do it in an effective way," he said.

Lew said the goal of the sanctions is to damage the Russian economy while doing the least amount of damage to the rest of the global economy.

"When you stop doing business with a country as large as Russia, there are effects outside the boundaries of the country," Lew said. "There are American companies that are already feeling some of the pinch and there are European businesses that are feeling some of the pinch. And that's the goal: The goal is to affect the Russian economy."

Lew also talked about the slowdown of the economy in China, but said the slowdown itself shouldn't stop Beijing from reforming its economy.

"I have a sense that [in] the short term they will be able to manage through," Lew said. "I'm more concerned that they stay on the reform path because in the longer term, if they don't, the efficiency of their economy will suffer. And it will create more tension in the world."

Lew added that in conversations with China's leaders, "they don't disagree with us on what they need to do," it's a disagreement over the pace of change.

Lew spoke to Marketplace from Detroit, where he toured Detroit's Marygrove community Thursday, observing a government program to remove blighted and abandoned Detroit homes.

"It is a real problem when you have vacant houses that are stripped and the windows are broken," Lew said. "Everyone knows what happens on the street corner if a hubcap is taken off of a car. Pretty soon, the rest of the hubcaps are gone and the car is destroyed. That happens to neighborhoods also."

He said the broader U.S. economy is recovering, but housing and construction are still "slower than other parts of the economy" in coming back.

"Families don't forget quickly if they lost their home or lost their job," Lew said. "I view it as an opportunity – there is going to be pent-up demand that needs to be met."

Finally, when Lew's predecessor appeared on Marketplace, Timothy Geithner talked about changing his signature because "on the dollar bill I had to write something where people could read my name. That’s the rationale."

And Secretary Lew also famously tweaked his signature for the dollar bill.

"I've been working on my handwriting for over 50 years," he said in today's interview.

KAI RYSSDAL: Detroit has been in trouble for a while, sir. Can't help but wonder why you picked now to visit.

TREASURY SECRETARY JACK LEW: Well, look, Detroit has had challenges over the last decades, but in the last several years in particular, it's been a very hard time. We've been working in the administration, across agencies, to do what we can with the tools we have, the regular programs of the federal government to make a difference. In Treasury, we've done a number of things that actually are making a difference on the ground, and I came here both to see the work that we're doing and to work with business leaders, community leaders, and philanthropic leaders and elected officials to talk about what we're doing and how it's helping in the city. So I'll give you a couple of examples –

KR: Well, I'll tell you what. Actually... So let's do this. Speaking of on the ground, one of the things you're doing there is you're giving federal money to knock down some houses, right? You're actually taking down houses as a way to ... what?

JL: Yesterday afternoon, I visited the Marygrove neighborhood in Detroit. It's a neighborhood that was solid middle class housing, but now, like many neighborhoods in Detroit, vacant properties are causing a blight, and if they're not torn down, you see how it spreads to the neighborhood. We made available several months ago through what is called the Hardest Hit Fund federal funds to be used to demolish houses so that the properties in the neighborhood don't go underwater or come out from being underwater. I was with the mayor yesterday as the first houses were torn down using that funding. The strategy is to stabilize neighborhoods by going at neighborhoods where there's a house here and a house there to stop it from spreading, and then to move on to the neighborhoods where there's a larger problem already. I was impressed with the strategy and the execution, and it was a creative use of a federal program to make a difference. And I think it will make a difference.

KR: "Creative use of a federal program" is a great phrase, but I can't help but wonder how many people are out there listening to this saying, "Wait a minute. We're spending money to tear apart the city of Detroit?"

JL: Well, just to be clear, it is a real problem when you have vacant houses that are stripped and the windows are broken. You know, everyone knows what happens on the street corner if a hub cap is taken off of a car. Pretty soon, the rest of the hub caps are gone and the car is destroyed. That happens to neighborhoods also. It doesn't help the people who are trying to save their neighborhood to leave a vacant building that becomes a blight on the neighborhood. It is a big challenge. There's a lot of abandon properties. The ones that can be used, the city is going to put up for auction -- they have an auction this weekend -- or try and restore. The ones that are beyond restoration do need to come down, and it is an important thing to stabilize a neighborhood because if you have 20 houses on the block and there are a few that are abandoned, you don't want the other to be damaged, either in terms of value or condition, because of the blighted housing.

KR: On the bigger topic of the housing market and real estate in this country, it has been recovering, as you know, from the depths of the recession, but it does seem to have stalled a little bit. It's getting a little flat. I wonder how worried you are about the future of the larger economy if housing gets stuck. It's such a huge part of what we do.

JL: Well, I think if you look at where we are in the recovery, we've seen month after month of steady progress. We're seeing a recovery that's taking hold. And, yes, housing and construction is slower than other parts of the economy to come back. Manufacturing is coming back. Other forms of investment are coming back. I view it as an opportunity. There's going to be pent up demand that needs to be met. It will require access to capital, it will require confidence, both of which are improving. So, I actually think if you look at the recovery we have, before, we've seen a robust recovery in terms of new construction. There is progress still to be made. If you look at property values, they're coming back. If you look at existing home sales, they've been doing pretty well. Our problem is we need more new construction, and we need more new household formation. I think we're going to make more progress and we're going to stick to it, because you know, the progress we've made is important. But until every American who can work is working, until everyone who could qualify for a home mortgage is able to get a mortgage, we still have more work to do –

KR: -- About that, Mr. Secretary. I grant you that the economy is recovering, and jobs are being created, and GDP is growing – we talk about that on this show all the time. Why then, when we talk to regular people out there, and our reporters go out and talk to regular people, why does it feel so soft? Why isn't it more tangible?

JL: You know Kai, the recession of '08-'09 left deep scars. We are seeing a healing, but it's a long process and families don't forget quickly if they lost their home and they lost their job. Businesses are cautious to make sure that demand is going to be there not just now, but in the future, before they make investments and hire people. You know, when I go to international meetings, this is not just a U.S. challenge. There is an issue around the world that we need to worry about promoting more demand in the major economies of the world. I think that there is a growing confidence, I think there is a lot of money on the sidelines that is prepared to come back as the confidence deepens –

KR: – You sound like my stock broker friends: "There's money on the sidelines."

JL: Well, when you're seeing companies retaining earnings and holding back on making investments, it means they have capital to invest. The question is what does it take to get them to make the investment? There's no substitute for order books. When companies are seeing steady improvements in their order books, they tend to be much more inclined to invest.

KR: Yeah, but Mr. Secretary, with all respect, we've been waiting for companies in this economy to start hiring and start doing things with the money they have for literally years now.

JL: Well, we've see progress. While I think there is much more to be done, I think to compare the economy today to the economy just a few years ago, it's a world better.

KR: It is, and that's not what I'm doing though, sir. I'm comparing what companies can do and what they are doing.

JL: But even companies are making investments. We're seeing in the manufacturing area, investments. There are challenges for smaller business to get access to capital. I just came this morning from a firm here in Detroit which stamps out car parts. They have taken a facility that would have been one of the vacant, blighted properties, and through our state small business capital initiative, they've been able to create a business that has 200 jobs, mostly local Detroiters, and they're producing car parts for American companies in Detroit. So, there are things we can do to help small companies get the access to capital they need. I think it's mostly larger businesses that have the retained earnings. You know, I meet with CEOs all the time, and I'm actually hearing quite a bit of optimism when I talk to CEOs. That is the kind of thing you need before you see big investments.

KR: Couple of things I want to touch on with you Mr. Secretary, before you have to run. The first is international affairs. As the guy whose name goes on a lot of the economic sanctions' documents against the Russians for their activities in Russia, Crimea and Ukraine, I wonder when you expect sanctions might start to have an effect, if at all, on President Putin's actions, because so far sir, as you know, it hasn't done much.

JL: Well, I think first of all, sanctions have the effect of creating conditions and then leaders make decisions whether they change their policies. I think if you look at the conditions since we've started imposing sanctions, they're having an impact. Even the Russians are admitting that they're having an impact. We've made it clear, President Obama has made it clear, that Russia cannot continue to violate Ukraine's sovereignty and it cannot continue on the path that it's on without facing additional and more stringent sanctions. We are prepared to take action, and we are working with our international partners to make sure that when we do it, we do it in an effective way.

KR: You are just back from continuing with your international duties. You're just back from the meetings with the World Bank and the IMF – lots of talk about China and developing economies. What do you expect out of the Chinese economy as it slows, as growth there is not what it once was.

JL: Look, China is facing a number of economic challenges. Obviously they are facing some slowing down of their economy. The longer-term challenges – they have to open their economy more to competition, their markets have to be more open, their exchange rate needs to be market-determined. They know they need to move in that direction and its going to be a process that is somewhat disruptive but they need to stick to it and move step-by-step in order to continue to have the kind of future that they want for China and that the world needs for China to have. Now I have a sense that in the short term that they will be able to manage through. I'm more concerned that they stay on the reform path, because in the longer term if they don't, the efficiency of their economy will suffer and it will create more tension in the world. I have those conversations with the Chinese regularly. I do believe that they understand what they need to do and they don't disagree with us on what they need to do. What I worry about is the pace of change there, and to some extent the short-term economic pressures make it more difficult because disruptive change is always harder when your economy is a little bit softer than it was. But they have challenges that they can't put off dealing with and when I meet with my counterparts in China, I'm struck at how much they understand intellectually what they need to do and how hard it is. And I've made it clear that on issues like exchange rate; it is just not sustainable or acceptable to be on a path where the exchange rate continues to fall and create unfair advantage. So we do have challenges, they have challenges. I think that the world economy needs a strong United States, it needs a strong China, it needs a strong Japan, it needs a strong Europe and as I've said many times, the world can't look to the United States to provide all the growth and demand that is needed for a healthy world economy. And China is big part of the world economy as the second-largest economy in the world.

KR: You know, it seems to me sir that you and the President and Secretary Kerry do a lot of saying that things are unacceptable, that things have to change and if they don't, well, the United States is going to be really upset. But you look at the Russians, and the sanctions aren't doing anything there either. You look at the Chinese and they're doing what they want with their exchange rates. What then are you left to do?

JL:Well I don't accept your characterizations. I don't think the sanctions are being taken lightly in Russia. Whether or not a government changes its policies is separate from the question of whether or not sanctions are doing what sanctions can do. We have sanctioned some of the most significant people in Russia close to the president. We have sanctioned a bank that's the bank where they all bank at. We see many signs that it is having an effect. So just to be clear, sanctions – we've seen in the case of Iran, that governments can absorb sanctions for a period of time, but they don't ignore them in the long term if they care about their economy. We don't know the outcome, in the end, of the negotiations with Iran, but we do know they're at the negotiating table because sanctions have had an impact. Those sanctions have had an impact because the U.S. took a leadership role with very tough sanctions and worked with the world to impose effective sanctions. That's what we're doing with Russia: Working with the world. The President this morning is working with the G-7. I think there will be united action, and I think Russia knows that. So, I actually think in a world where you can't compel another leader how to make a decision, the economic sanctions are being used with a kind of refinement and direction where they're having an impact. And frankly, the goal is to hurt the Russian economy while doing the least damage necessary to the U.S. and the global economy. And I think, we've made clear we're prepared to take tougher actions and prepared to absorb the consequences of that if we need to. But it has to be done in a careful way and it has to be done in an effective way and that's what we're doing.

KR: Do you think the consequences of American and Western sanctions on the Russians might mean damage to the American economy?

JL: Look, there's no question that when you stop doing business with a country as large as Russia, that there are effects outside the boundaries of the country. So there are American companies that are already feeling some of the pinch, and there are European businesses that are feeling some of the pinch. The real burden is being felt in Russia. And that's the goal: The goal is to affect the Russian economy. You look at what happened with the rating agencies in Russia just over the past day? It's not a thing to be taken lightly to be one notch away from a junk rating. You look at the exchange rate of the ruble, the value of the Russian stock market? Russia's economy is not doing well, and they acknowledge it's doing worse because of sanctions. So sanctions are doing what sanctions can do, and we will ratchet them up if we need to in response to Russia's behavior. Ultimately President Putin needs to reevaluate his policies and he needs to take a step back.

KR: Last thing sir, and then I'm going to let you go. It's the same question I asked your predecessor when we had him on a couple of years ago. He, like you, had a famously illegible signature – yours has come to be called the "loop-de-Lew" – you had to change it to get it on the money so it was legible. How long did you have to practice that new signature?

JL: I've been working on my handwriting for over 50 years.

KR: (laughs) You and me both. Jack Lew, he's the Secretary of the Treasury. Sir, thanks very much for your time.

Young people want to ditch the boss and strike out on their own

Fri, 2014-04-25 05:25

In a recent survey of working adults, Harris Poll and CreativeLive — an online education company — found that many more young workers than older workers want to jump ship from their traditional jobs and become self-employed. 67 percent of employed Millennials (aged 18 to 34) want to go off and start their own business, compared to 45 percent of workers aged 35 and over.

More than a quarter of Millennials consider it more likely that they’ll start a business now that the Affordable Care Act has made health insurance easier to obtain and more affordable without having an employer that offers coverage. Only 15 percent of older workers feel that way.

This week, the Network for Teaching Entrepreneurship (NFTE) brought a few dozen bright young entrepreneurs to Washington, D.C. for the educational organization’s annual gala. Many of the students (from the U.S. and abroad) planned or launched their businesses in high school. Here are a few of their pitches:

“Most people don’t have the budget of a McDonald’s or a Folgers or a Kit Kat. That’s why I created Superb Tune jingle production company, that tends to the young entrepreneur and growing businesses.” -- Annie Nirschel, Stamford, Connecticut

“My business is a software developer company. We have created a game called Better Than History, it allows players to step into the shoes of historical figures, so they can answer the timeless question—what if we could change the past?” --Juan Ramos, Dallas, Texas

“'Modesty', which is a clothing line, is aimed at targeting women who feel comfortable in the skin that they’re in, and allows them to show their inner beauty and confidence through wearing modest and trendy and fashionable clothing.” -- Deena Kishawi, Chicago, Illinois

Interest in studying entrepreneurship in programs like NFTE's, and at the college level, is growing, says Dane Stangler, vice president for research and policy at the Kauffman Foundation. “The Millennials would certainly appear to be more predisposed to entrepreneurship than prior generations,” says Stangler. And yet: “The 20-to-34-year-old age cohort still has a far lower percentage rate of entrepreneurship than older cohorts, and that rate has actually fallen in the last couple of years.”

Stangler offers at least one possible explanation: “No matter how badly you want to be an entrepreneur, no matter how low the cost of starting certain kinds of companies, if you come out of school with $60,000 in debt, entrepreneurship may not be as attractive an option.”

At the University of Portland, business- and non-business majors participate in the school’s popular entrepreneurship program. Many students explore launching a startup during or after college, though the draw of more traditional paid work is strong, given the financial pressures recent graduates face.

Eileen Kannengeiser is a political science and Spanish major, and hasn’t decided yet what she’ll do after graduation. “None of us wants to be living in a cardboard box after we graduate just to be able to pursue whatever we would like to pursue,” she says.

History major Danielle Knott is jumping right in. She says like many young people, she needs a way to pay student debt and bills, and pursue her creative dreams. “I have a receptionist job, but I’m also starting a feminist food magazine," titled "Render", says Knott. "I definitely identify more as an entrepreneur. And I think a lot of liberal arts majors don’t understand that in the current job market, you have to be really entrepreneurial with your degree. And with things like Kickstarter, instead of trying to create the next Apple, people are being entrepreneurial about projects that they’re starting, to improve their quality of life instead of making them millions of dollars.”

Marketing major Alex Gatewood says there’s the hype, and then the reality and sacrifice, of entrepreneurship.

“Being an entrepreneur has kind of become like our generation’s professional athlete or musician,” says Gatewood. “You know exactly who Mark Zuckerberg is. But what it takes to actually be that person? When it comes to paying the bills, those things just fall by the wayside.”

This may be the generation that knows the most about entrepreneurs, but doesn’t have the wherewithal to actually join their ranks, at least not for a while.

Issues of entrepreneurship and first jobs aren't just illuminating for Millenials. We asked people here at Marketplace about their first job and any experience starting their own business:

Kai Ryssdal, host and senior editor

First job? If you don't  count mowing lawns and painting for the school district,  my first actual job was lifeguarding at a hotel on Waikiki Beach. Summer after junior year in college. And yes, it was as great as you think it was.

Have you ever run your own business? Not an entrepreneurial bone in my body.

Scott Tong, senior reporter, sustainability

First job? Made conversational English-language tapes for Taiwanese kids in a Taipei studio. "Orange is a color and a fruit. Okay now, again, but slower." Age: 11. Compensation: obscenely good.

Have you ever run your own business? Freelance radio and TV journalist. Age: 34. Compensation: meager.

Nancy Marshall-Genzer, senior reporter, Washington

First job? Stall mucker: I mucked out stalls at a local stable in exchange for free horseback riding.  I eventually saved up enough from babysitting and a paper route to buy my own horse. Honest-to-god, her name was ‘Pokey.’ 

Have you ever run your own business? I was a freelance reporter for a time so I guess that qualifies as running my own business.

Tommy Andres, producer, Marketplace

First job? My first job was being a ballboy for the Detroit Pistons, working in the visitors locker room, picking up sweaty towels and staying up well past my usual weeknight curfew. Charles Barkley once called me the ugliest kid he’d ever seen. I think he was joking, but I did have bright blue braces and all the physical trappings of a teenager (zits). I shagged balls for Michael Jordan when he returned to the NBA out of retirement. He came early—it was just Michael, me and 25,000 empty seats. I’ll never forget that.

Have you ever run your own business? I've never run my own business. I'm a slave to the man.

Mitchell Hartman, senior reporter, entrepreneurship

First job? Cashier, 7-Eleven, New Jersey. I was nearly fired for making up prices on the fly when the line got long and the customers got ugly—this was before bar codes.

Have you ever run your own business? Freelance reporter in Europe and the Middle East, filing for BBC, CBC and Pacifica. I spent more on travel and fancy meals than I made for my stories, but I did once get Marcel Marceau to speak on tape for a BBC story about an arts festival in Southern France. I also reported on a band from the Sioux Nation coming to a little village in France to receive a donation of one chestnut orchard from a French lover of Indians atoning for his nation's age-old sins.

Meg Cramer, producer, Marketplace Tech

First job? Cafeteria server, Summer Place Retirement Residence. I applied for this job because it was walking distance from my house, and because I thought it would look good on my resume when I was old enough to apply for a waitressing job at Bertucci’s, which was also walking distance from my house.

Have you ever run your own business? I've never run a business, but not for lack of trying. (see photo to the right)

Sabri Ben-Achour, reporter, New York

First job? Shoveling manure at a plant nursery. 

Have you ever run your own business? Ran (and run) a ceramic art business.

Dave Shaw, senior editor, Washington

First job? Clerk, Blockbuster Video, Store No. 92531. I applied because I liked how they always said hello when customers came in the door. I eventually clawed my way up to be a part-time assistant manager.

Have you ever run your own business? Never run my own business, though I’ve done plenty of freelance and contract work, including a gig writing questions for pub trivia.

Sally Herships, reporter 

First job? Babysitter! I ran a summer camp out of my parent's attic and backyard and even outsourced additional help (younger kid to help me watch all the kids).

Have you ever run your own business? In addition to my summer camp dynasty--freelance reporter.

Dan Szematowicz, senior producer, Marketplace Money

First job? I gave “guided star tours” at the Museum of Science and Industry’s planetarium in Tampa, FL. In high school. I was often single. Coincidence?

Have you ever run your own business? My freshman year in college, I started a sports marketing business with a dorm neighbor of mine. At the time though I knew little about marketing, and less about sports business, so that didn’t work out so well.

Ben Johnson, host, Marketplace Tech

First job? Waiter at a seafood restaurant, Stonington, Connecticut. I was great with people but generally a horrible waiter. Side work—all the extra little things you do when you’re not serving or taking orders--was not my strong suits. Neither was the credit card machine.

Have you ever run your own business? Paper route. I had about 30 houses. I delivered papers on bicycle for all the old rich ladies in my town. I organized it all myself—chose the rates and mapped the route, picked delivery deadlines, worked with the newsstand guy, etc. It taught me the value of a quarter.

Sarah Gilbert, managing editor

First job? Frying fish and chips in a British seaside town. Haven’t felt the same about that particular delicacy since – and I still have the scars to remind me.

Have you ever run your own business? Nope, not unless you count a mercifully short stint at freelance-producing. I found out there are a lot of freelance producers out there.

General Mills says, you can like us and sue us

Fri, 2014-04-25 05:09

If you download a coupon for Yoplait or for any of General Mills food products, you can still sue the company.

The food maker reversed a privacy policy it introduced last week, which forced consumers into arbitration, that’s a way to settle disputes outside of court and through a mediator. The privacy policy appeared to say that if you downloaded a coupon or interacted with any of General Mill’s online communities you gave up their right to sue the company. But after consumers voiced their objections on social media, General Mills backed down.

This is a big win for consumers says Imre Szalai, a professor at Loyola University New Orleans College of Law. 

"If you arbitrate you have very little discovery rights, so you can’t demand documents from the opposing party. And so it’s harder for a consumers to win in arbitration.

Big food companies say they’re being hit by growing number of class-action lawsuits and arbitration is more efficient than litigation, said Jim Angel, a professor at Georgetown’s McDonough School of Business. He said it’ll be interesting to see whether consumers will tolerate this strategy.

"You know slipping this into the fine print, just erodes the trust you have in a food company," Angel said. 

And it can cause a social media black eye all the more likely.

Are hours of football practice a job?

Fri, 2014-04-25 04:58

Football players at Northwestern University are scheduled to vote on Friday whether to join a union.

Student athletes on scholarships are expected to spend 40 hours a week performing and practicing their sport. Some argue that makes them employees, which opens the door to unionization. 

And if players can form a union, "it's possible that the student-athletes' union could negotiate scholarships or other forms of payment," says Gerald Berendt at the John Marshall Law School.

The issue could spread to other private universities and other college sports. But first, the National Labor Relations Board in Washington, D.C. must decide whether student athletes on scholarship qualify as employees.

By Shea Huffman/Marketplace

Doctors can learn a lot from dentists

Fri, 2014-04-25 02:12

Have dentists struck gold?

Not in the mouths of their patients, but in of all places, in Medicaid, a program infamous for its low reimbursement rates. 

In a National Bureau of Economic Research report, University of Michigan business professor Tom Buchmueller found that in states that expanded Medicaid under the Affordable Care Act dentists saw about a 7 percent rise in income. And he says some also avoided increased patient wait times.

New income, new patients and no more wait times? How'd they pull that off?

Dentists leaned on their hygienists.

Wait times did increase in states with restrictive so-called scope of practice laws -- where mid-level professionals like hygienists and nurse practitioners -- have less autonomy. 

Incidental Economist contributor Adrianna McIntyre says the study shows the value of relaxing these state laws and giving those mid-level professionals more responsibility.

"I think that we are going to eventually see changes to scope of practice laws. What I don't know is how long that's going to take," she says.

What isn't available on Amazon Prime: Silicon Tally

Fri, 2014-04-25 01:00

It's time for Silicon Tally. How well have you kept up with the week in tech news?

This week we're joined by tech reporter for the New York Times, Farhad Manjoo.

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Bidding adieu to Ladies' Home Journal

Thu, 2014-04-24 13:58

Today, the Meredith Corporation, which owns Ladies' Home Journal, released its quarterly earnings -- and the earnings call was as good an opportunity as any, I guess, for the company to fire everyone on the magazine's editorial staff.   Yes, it's time to mark the passing of yet another periodical: "Ladies' Home Journal" will no longer be published monthly.    The first issue was printed in 1883. Back then, it was called "The Ladies Home Journal and Practical Housekeeper." Its slogan? "Never underestimate the power of a woman."   "It's not a consumer issue," a company spokesman said. "It's an advertising issue."

The threat of a football union has the NCAA talking

Thu, 2014-04-24 13:42

Scholarship football players at Northwestern University will participate in a historic vote Friday on whether to form a labor union. This vote, as well as lawsuits challenging NCAA rules for athletes, are already forcing the NCAA and big football schools to rethink the business model of college sports.

Until recently, schools were only allowed to feed their giant hulking college athletes a certain amount of food. “There were even rules in place over whether a bagel with cream cheese was a meal or a snack," says Andrew Muscato, producer of the documentary “Schooled – The Price of College Sports." The NCAA’s food rules, which classified a plain bagel as a snack, but with the addition of a spread made it a meal, were draconian, he says.

“And that was a rule that ultimately was changed, but it was changed because of public pressure, and the perception that these athletes are being taken advantage of considering how much revenue they’re bringing back to the universities," he says.

Andrew Zimbalist, a professor of economics at Smith College, says even if the union receives a yes vote tomorrow,  the decision would still have to be approved by regulators.

"At the end of the day, the actual demands that would seem to come out of the football players at Northwestern," he says, "are unlikely to be met via collective bargaining. And the most important element here is that they’re providing more momentum, more fuel for the fire of reforming the NCAA."

As of Thursday, the NCAA said its biggest conferences can now give more aid to their student athletes.

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