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After four decades, Delta's DC-9 jets make final landing

Mon, 2014-01-06 05:28

Delta Air Lines is the last domestic carrier to fly the DC-9, and one final Delta flight this Monday afternoon will mark the close of the plane’s nearly half-century run.    

Most passengers about to board Delta flight 2494 from Atlanta to Akron a few days ago had no idea their jet was built during the Carter administration.

When 44-year-old Scott Smith learns of the plane’s age, his face lights up.

“I think it’d be fantastic,” the Canton, Ohio native says.“I remember when I was a little kid I would get those -- they don’t do this anymore -- but you could go to the cockpit and they’d give you these little metal planes. And I’d collect them.”  

A lot’s changed in aviation since then. Like the planes. Today’s jets almost fly themselves, but the DC-9 definitely does not.

Delta Captain Scott Woolfrey will fly the airline’s final DC-9 flight. He said because pilots have to always be “hands-on,” most enjoy the plane more than other commercial aircraft. 

“A lot of pilots here at Delta have a sentimental attachment to the aircraft,” he says. “It was their first right seat check out or first left seat checkout.”  

The DC-9 was designed for short, frequent routes. It brought jet service to most U.S. cities for the first time. Delta launched the airplane 1965, but sold the fleet in the early 90s to smaller carriers. When Delta merged with Northwest Airlines in 2008, Delta got some of the DC-9s back

“It’s been a workhorse,” says Robin Barnes, a Delta flight attendant for three decades. She says interior upgrades mean most passengers can’t tell the plane’s vintage. “The give-away being if you look in the cockpit, the framework is still robin’s egg blue,” she notes. “But they still run great. I’m kind of sorry to see them go. I like working on them.”  

The DC-9’s final domestic passenger flight is number 2014. It takes off from Northwest’s former base -- Minneapolis/St. Paul -- and lands at Delta’s current headquarters in Atlanta.

Two economic powerhouses have a sit down

Mon, 2014-01-06 04:58

This week, Treasury Secretary Jack Lew will be in Germany to meet with his counterpart, Wolfgang Schäuble. On the agenda is the U.S. Treasury's criticism that Germany is putting too much emphasis on selling to the rest of Europe, instead of buying more. The U.S. says this bias toward domestic consumption hurts the rest of Europe, but Germany may not be in the mood to be told what do by the U.S. The BBC's Damien McGuinness reports from Berlin. Click the audio player above to hear more.

 

2014 Resolutions: Melissa and Joshua

Fri, 2014-01-03 14:52

Happy New Year! In 2014, Marketplace Money will follow a few listeners from around the country who’ve resolved to make over their personal finance lives. We’ll be checking up on their financial New Year’s resolutions periodically throughout the year and see if they're achieving their goals!

Name: Melissa, 39 and Joshua, 27

Family: Daughter, 14 months old

Location: Oakland, Calif.

Resolutions: “Break that paycheck-to-paycheck mentality. We’re starting to make money, we’re becoming more financially secure, but we’re still living like our paychecks are going to evaporate into dust if we don’t spend our money.”

“We don’t know what to do with our extra income. Do we pay off old debt?” Their combined student loan debt is at $70,000 at 6.3 percent interest, and they also have $7,000 credit card debt that is heading into collections. “Do we start our daughter’s  college savings account? We’re not quite sure what to do.”

“We could probably, if we really scrimped, could get $300-400 in savings.” They also have zero retirement savings.

Carmen Says: “We all want to give our kids a great education. The trouble is, when you give an education to a child at the expense of your needs, your kid is going to end up depending on you. And that is actually a situation that several million people are finding themselves in now where they’re taking care of aging parents … one of the biggest gifts you can give a child is to make sure that you are financially stable, so they can start their adult life without that added burden.” 

Carmen’s next suggestion, head to NFCC.org and find a non-profit credit counselor. “Find a non-profit credit counselor. What you don’t want to do is you don’t want to head over to things called debt repair or something like that.”

Carmen’s resolution prescription: “You’ve got about $300 to play with. I would put $100 a month in cash savings account, so that will keep your head above water, and you won’t have to borrow any more if the car breaks down. Two: start taking another 100 to 150 to start paying off that debt. If you have any money left over, go ahead and put some of that money in a pre-tax, your employer’s savings accounts, 401k’s. But that credit card debt, it may be a little while before you can save for retirement in a full way.”

2014 Resolutions: Melissa and Joshua Poland

Fri, 2014-01-03 14:52

Happy New Year! In 2014, Marketplace Money will follow a few listeners from around the country who’ve resolved to make over their personal finance lives. We’ll be checking up on their financial New Year’s resolutions periodically throughout the year and see if they're achieving their goals!

Name: Melissa, 39 and Joshua, 27

Family: Daughter, 14 months old

Location: Oakland, Calif.

Resolutions: “Break that paycheck-to-paycheck mentality. We’re starting to make money, we’re becoming more financially secure, but we’re still living like our paychecks are going to evaporate into dust if we don’t spend our money.”

“We don’t know what to do with our extra income. Do we pay off old debt?” Their combined student loan debt is at $70,000 at 6.3 percent interest, and they also have $7,000 credit card debt that is heading into collections. “Do we start our daughter’s  college savings account? We’re not quite sure what to do.”

“We could probably, if we really scrimped, could get $300-400 in savings.” They also have zero retirement savings.

Carmen Says: “We all want to give our kids a great education. The trouble is, when you give an education to a child at the expense of your needs, your kid is going to end up depending on you. And that is actually a situation that several million people are finding themselves in now where they’re taking care of aging parents … one of the biggest gifts you can give a child is to make sure that you are financially stable, so they can start their adult life without that added burden.” 

Carmen’s next suggestion, head to NFCC.org and find a non-profit credit counselor. “Find a non-profit credit counselor. What you don’t want to do is you don’t want to head over to things called debt repair or something like that.”

Carmen’s resolution prescription: “You’ve got about $300 to play with. I would put $100 a month in cash savings account, so that will keep your head above water, and you won’t have to borrow any more if the car breaks down. Two: start taking another 100 to 150 to start paying off that debt. If you have any money left over, go ahead and put some of that money in a pre-tax, your employer’s savings accounts, 401k’s. But that credit card debt, it may be a little while before you can save for retirement in a full way.”

Uncertainty ahead for India's economy

Fri, 2014-01-03 14:29

Manmohan Singh announced he will step down as India’s Prime Minister after elections in the spring. Singh has been in power for a decade and was the country’s Finance Minister for ten years before that. His policies helped India’s economy grow at a rapid rate -- though in the past few years, inflation and corruption scandals have tarnished Singh’s administration.

“How big a shift this is going to be will really depend on whether his successor is capable of grabbing the reins as it were and pushing ahead with the next phase of reforms which are politically very difficult things to deal with” says Andrew Walker, economics correspondent with the BBC.

Under Singh’s influence, India’s economy opened up more to foreign investment.    

India’s growth slowed in part because of the global recession. But the country’s crumbling infrastructure – including poorly maintained roads and an unstable power grid – has probably stifled investment.

 “I think history will see Manmohan Singh as being the one who started the transformation,” says Walker, “taking India away from this heavily government-dominated economy to a market oriented system that has grown strongly and is capable of doing so for a lot longer under the right kind of leadership.”

2014 Resolutions: Nina

Fri, 2014-01-03 13:56

Happy New Year! In 2014, Marketplace Money will follow a few listeners from around the country who’ve resolved to make over their personal finance lives. We’ll be checking up on their financial New Year’s resolutions periodically throughout the year and see if they're achieving their goals!

Name: Nina, 49
Family: Daughter, 18, in college
Location: Oakland, Calif.
Resolutions: “First and foremost, is to be financially set for retirement which isn’t too far off, so I have to figure out what to do to build my nest-egg a little stronger. At a minimum, I would need a million dollars. I’m no where near a million dollars” Nina says she has about $350,000 saved, is planning to retire around age 65, and she’s interested in retiring abroad where living costs could be cheaper.

She has about $50,000 left on her mortgage to pay off, which she’s been trying to pay down aggressively … perhaps too aggressively. Nina has been dipping into her emergency savings to get it paid off.

“My second resolution is, finding out how to find greater tax-shelters, to make sure that I’m not giving Uncle Sam too much of my hard-earned money.”

Carmen Says: “Number two may not be possible, because you can only max out your tax-shelter so much. But number one, we can absolutely get you there. Really focus on saving up money for your retirement. Please protect that emergency fund, at least have a years worth in there. And then any additional funds … you can split between bulking up your retirement and traveling, so you can see where you want to go.”

Carmen also suggested to not completely pay off her mortgage in lieu of properly saving up for retirement and emergencies. “You can’t take the house to the grocery store, the house won’t pay your bills.”

And one last tip, “Learn some spanish, so you can do your travel and enjoy retirement in the sun!”

Will the big profits of 2013 continue this year?

Fri, 2014-01-03 13:46

Marketplace's Lizzie O'Leary, Leigh Gallagher of Fortune Magazine, and Felix Salmon of Reuters looked back on the huge gains in the stock markets and corporate profits in 2013 and whether we can look forward to workers -- as well as corporations -- sharing in the good fortune this year.

Gallagher says most analysts predict stock prices to continue to rise for at least part of 2014, but it won't all be smooth sailing:

"One thing that has been totally absent in this past year has been volatility. We forgot what it's like to be jerked around so much. Three percent gains, three percent drops -- it was just gone this year, so I think we'll see a little bit more of that."

Salmon agrees that profits will probably continue to rise, but wonders whether the rest of us will see some benefit as well:

"A much bigger proportion of the total economy is corporate profits than we've ever seen before, and so the big question for 2014 is, 'are workers going to get back some of those profits, in which case earnings are going to go down and the stock market will probabaly go down too, or are companies going to continue to make these insane profits?' In which case the stock market is looking perfectly well-placed right now."

Should we get rid of the NFL blackout rule?

Fri, 2014-01-03 12:28

Football fans in Cincinnati, Indianapolis and Green Bay almost missed the chance to watch their teams compete in the NFL playoffs this weekend, thanks to the NFL's "blackout rule":  When games don’t sell out at least three days in advance, they can’t be shown on local TV.  

Forty years ago, when the Federal Communications Commission approved the rule, ticket sales were the NFL’s bread and butter.  Protecting them from getting cannibalized by TV seemed reasonable.  But times have changed. Just last month, the FCC gave notice that it wants to revoke that ruling.

Allen Sanderson of the University of Chicago was one of nine economists who sent the FCC a memo saying, in effect, "Good on ya."

"If nobody showed up to an NFL game, and we just can Photoshop it in, so it looks like there are people, the NFL would lose a lot of revenue," he says. "But not the lion’s share, because that’s television."

Depending on how you slice it, Sanderson says TV accounts for 70 to 80 percent of the money in pro football. 

And these are not cases of empty stadiums —just a few thousand tickets, so the amount teams would lose is a tiny fraction. In fact, sometimes the football team itself buys up unsold seats so the broadcast can go forward

Another of the economists who signed the memo encouraging the FCC to end the blackout rule, the University of Maryland's Dennis Coates, says the real puzzle is why the NFL even enforces the rule anymore.  Or why the league wants to keep it.

"Honestly, I don’t know why they defended it," he says.  "It didn't make any sense to me, given that the evidence doesn’t show that it costs them anything."

Some Senators have leaned on the FCC to revoke the blackout rule, including Ohio’s Sherrod Brown

But Brown isn’t ready to pick a head-to-head fight—to yank the NFL’s anti-trust waivers over the blackout rule, as his colleagues John McCain and Richard Blumenthal have proposed.

Which prompts a question: Does this mean he thinks Congress is even less popular than NFL owners?

"You could march us down to mid-field and flip a coin," Brown says. "That’s probably a toss-up."

Leaving the ball—to mix sports metaphors—in the FCC’s court.

Look, we have enough bugs. Can we do other things now?

Fri, 2014-01-03 12:28

Insects and Intentions:  Smithsonian Goes to Court

A SIX LEGGED LAW SUIT

Forty-nine years ago, entomologist and Smithsonian researcher Carl Drake left the Smithsonian Institution $250,000 (which has now grown to $4 million)  to study bugs.  Specifically a type of bug called the hemiptera.  It’s a diverse group of 40,000 species that include stink bugs, bed bugs, and assassin bugs.  Drake also left the institution many of his own bugs.

The Smithsonian now has enough of these bugs, it insists.  It would much prefer to use the money to maintain, identify, and study them – all of them, including the ones that it collected independently of Mr. Drake’s gift.

So, it’s asking a judge to let it get around the requirements outlined in Mr. Drake’s will.  See the petition here, via LegalTimes.

Smithsonian Petition

WHEN NEEDS METAMORPHOSE, AND THE MONEY DOESN’T

This is a common problem in science, according to Michael Raupp, an entomologist at the University of Maryland.  Collecting bugs is relatively easy, “When we sample it’s not unusual to collect tens of thousands of individual specimens.” 

Usually, he says, there’s lots of money floating around for going out into nature and bringing bugs back.  “The real challenge comes in finding resources to identify these things, curate them correctly, they have to be stored in controlled conditions to be preserved for further study and examination  -  this is not a trivial task.”

SWARMS OF SUITS?

A non-profit plays a dangerous game when it seeks to upend a donor’s wishes.  If not done judiciously and in good faith it can easily scare off other donors.  So it’s fairly unusual.  But it’s happening more frequently.

“We’re seeing more interest in doing that as the bad economy has put pressure on non-profits to find various ways to get money from any place they can,” says Stacy Palmer, editor of the Chronicle of Philanthropy. 

In response, wary donors have become increasingly careful in recent years to line up legally binding agreements explaining what they do and don’t want their money to be used for.  

WISHES DON'T HAVE WINGS OR STINGS

“I was very surprised,” says planned giving attorney Winton Smith, “when I found that in many states donors have no legal standing to go into court and enforce .. a gift restriction” without a will or a binding agreement signed by both the recipient and the donor.

Under common law, that right was reserved for a state’s Attorney General.   Attorneys General, says Smith, have sometimes proven unreliable defenders of the deceased’s wishes.   

While it remains the case that donors and their descendants do not universally enjoy control over the gifts they make, regardless of their wishes,  courts have trended in recent years towards deferring to them where “where they have a special relationship to the gift,” or a vested property interest says Smith.

CRAWLING OUT FROM THE WILLS

Even in the case where a will outlines what a deceased wishes his or her gift to be used for, it can still be modified. 

In such cases, “most courts are pretty conservative about preserving what a donor wanted but a lot of it depends on how clear the donor was,” says the Chronicle of Philanthropy’s Stacy Palmer.  “Some times the documents are distinct and other time they aren’t.” 

Institutions, whether an art museum or a scientific institution, must demonstrate two things to successfully change the terms of a gift. 

Under a legal doctrine called cy près, “they’ll have to show that the restricted gift is no longer possible,” says Smith.  For example, if the will said the money was to cure a disease and that disease was cured.  The charity will also have to ask a court for permission “to use those funds for the nearest similar purpose.”

Sometimes an institution will have a compelling case, sometimes they may be stretching it “beyond what’s appropriate.”  With no one to represent the deceased’s wishes, those wishes are sometimes not respected, says Smith.   Such conflicts can become intensely bitter, says Smith.

In the Smithsonian’s case, the museum still wants to use the Mr. Drake’s gift for the same type of bugs as he’d intended - but to maintain them, as opposed to collect more of them.    

 

Snowstorm, pilot's rule change pack 1-2 punch

Fri, 2014-01-03 12:28

The weather outside is frightful and airports in stormy states are trying to cope. But tomorrow the aviation industry will have to deal with even more.

That’s because new federal regulations kick in over the weekend -- rules that require more rest for pilots and restricting the hours they can fly.

"Under the new rules you actually have hard stops in which you cannot exceed more than a certain amount of hours on any given duty that you’re at the controls," says Captain Sean Cassidy, a vice president for the Air Line Pilots Association.

Cassidy says because there are so many different kinds of flights the new regulations also take into account the amount of crew on a plane, the time of day pilots start work, and the number of trips they take.

“We fly flights that are as little as 15 minutes and flights that are as long as fifteen hours,he says.

Under the current rules if a pilot starts a trip, but goes over his or her allotted time, it’s up to the pilot whether he or she wants to finish the trip or not.

"Today they're able to go ahead and finish the trip," says Helane Becker, managing director with financial services firm Cowen and Company, "going forward, they won’t be able to."

Longer international flights already have extra crew. Becker says complicated schedules mean in nasty weather, like we’re seeing today, airlines will be much more likely to cancel flights.

"Not only are we going to see actually an increase in flight cancellations because of this. But we’re also going to see an increase in pilot hiring," she says.

“Becker notes that the new rules mean pilots are going from 8 hours of rest to 9. So, if airlines want to achieve the same schedule they’ll need more pilots. She says more cancellations plus more pilots equals higher prices for consumers.

But Don Dillman, managing director of flight operations at Airlines for America, a trade organization representing airlines, isn’t so sure.

"You know I don’t know about that," he says. "What you’re going to find is that the airlines are going to schedule their pilots a little bit differently."

Dillman agrees bad weather and the new rules will pose a challenge. But he says it means airlines will need become more efficient in other areas, like traffic control and scheduling.

Besides, says Cassidy, when it comes to waiting on the tarmac, we’re already used to delays.

After all he says, "that’s something that happened prior to Jan 4 of this year."

Bernanke's final speech: economics in verse

Fri, 2014-01-03 11:51

This final note as Fed Chair Ben Bernanke took a bow of sorts, giving one of his final speeches, as chair, to an annual gathering of economists.

Bernanke said 2014 potentially "bodes well" for the US economy, but then things got weird when University of Chicago economist Anil Kashyap unveiled this tribute he wrote:

Economists, we love you. But maybe keep your day jobs.

The NSA is trying to build the fastest computer in the world

Fri, 2014-01-03 08:50

The Washington Post is reporting on another secret National Security Agency project revealed by Edward Snowden. The $80 million project is called Penetrating Hard Targets. It's goal is to build a quantum computer that can break every kind of encryption currently used in the world. Quantum computers are a complicated to explain, but think of a machine that operates under the theoretical laws of quantum physics. It would probably be faster than all of the world's current supercomputers combined, and it could ostensibly gain access to banking records, medical records, and other private data sets. Steven Rich co-wrote the story in The Washington Post, and tells Marketplace Tech more.

AT&T declares war on T-Mobile

Fri, 2014-01-03 08:42

The war among wireless providers continues to intensify. AT&T is going after T-Mobile customers, with a new promotion.

If a T-Mobile customer switches to AT&T, AT&T says it will give that customer a $200 credit, and up to $250 more for trading in his smart phone. 

“I think the first thing that hit me was this: AT&T declares war on T-Mobile,” says Ramon Llamas, research manager for IDC’s mobile phones team. To be fair, fighting may have escalated. The two carriers have been going at it for a while now.

According to Llamas, “the proof is going to be in the pudding.”

“When people are going to see how much money I am going to save, and how much I am going to end up spending,” he says.

A T-Mobile customer who switches to AT&T could face a penalty for breaking his contract, if he has one, and on top of that, there is the cost of the smart phone. Customers usually pay for that over the life of a contract.

That $450 credit “might not be nearly as much as you think,” says Weston Henderek, principal analyst with Current Analysis.

He says AT&T used to have a leg up on T-Mobile, but today “the differences are much smaller than they’ve been in the past.”

AT&T has had trouble selling customers on higher-end plans, and Henderek says throwing money at them just might help. 

GED was never meant to be second-chance diploma

Fri, 2014-01-03 08:23

In 1942, Congress lowered the draft age from 21 to 18. America had been fighting in World War II for nearly a year. The change made an additional 2.25 million young men available for the war effort.

Over the course of the war, about 16 million Americans served in uniform. Some troops were drafted right out of high school, though local draft boards often let them finish their current term.

Don Kruse of Minnesota was an 18-year-old high school junior when he got drafted in June of 1945. The war had ended in Europe but the Allies were still fighting a brutal campaign in the Pacific.

"I thought maybe I could get into the Air Force and be a radio operator on an airplane," Kruse says. "That didn't happen."

Instead, he learned to be a radio repairman on the ground. As his term wound down, Kruse began thinking about college. He wanted to become an engineer. Like many other GIs, Kruse had gotten specialized technical training in the service. But he didn't have a high school diploma.

"You couldn't send 21-year-olds who had been in Germany, in the trenches, back into a regular high school. It just wasn't going to work," says H.D. Hoover, a retired University of Iowa professor and an expert on standardized testing. "The idea came along to say, 'OK, is there some way we can give these people some kind of credential to get them into university?'"

The military turned to an influential group of college and university presidents called the American Council on Education (ACE) to develop a battery of tests to measure high school-level academic skills. The tests were supposed to help returning GIs get credit for what they learned before and during the war. One of the test makers was a University of Iowa education professor named E.F. Lindquist.

Lindquist was the man behind a corn-belt academic contest launched in 1929. Iowa high school students took standardized tests to compete in a "meet" the way track stars and football players competed on the playing field. They became popularly known as the Iowa Brain Derby. Local schools would vie for top state honors.

But Lindquist had bigger ambitions than just creating an extracurricular contest for the studious. He wanted to open the narrow gates of American higher education to more students. His academic tests were designed to reveal areas where students needed extra help so they could work on those subjects until they qualified for admission.

Lindquist and his colleagues devised a series of assessments that would be widely used and imitated by other states: The Iowa Tests of Educational Development. This new set of tests would also be used as a template for the tests the military had asked for -- the GED.

The end of World War II wrought big changes in American higher education. In 1946, the president of the American Council on Education declared that returning veterans had forced "a permanent change in the evaluation of student achievement and competence." Time spent in the classroom had been the standard way to credential students. But ACE president George Zook said returning GIs wanted credit for, "what they are, for what they know and for what they can do," rather than just for time spent in the classroom. The GED was the answer.

Veteran Don Kruse took the GED and passed easily. He used the credential to study engineering at a college in Wisconsin, which led to a long career. "I couldn't have gone to college without the GED," Kruse says.

The ACE calibrated the test to be easy, according to Lois Quinn, a researcher at the University of Wisconsin-Milwaukee. Passing most sections of the test required answering only one or two more questions correctly than if you filled in the answer sheet randomly, Quinn says.

"The sentiment was that every person who served in the war should get a degree," Quinn says. "What the test did, possibly, was to weed out the people who were functionally illiterate."

Two trends converged after World War II to accelerate use of the GED. Millions of returning vets wanted to take part in the generous higher education benefits offered under the recently passed GI Bill of Rights. The government would subsidize their tuition, books and living expenses. Veterans swamped the campuses of colleges and universities; many used the GED to gain admission.

The second trend was the enormous growth in intelligence testing. While mental testing for intelligence and achievement had been going on for decades, the scope of testing hit unprecedented levels in World War II and after. Many education experts of the era held a deep belief that standardized tests could revolutionize how human performance was measured and managed, in school and on the job.

"They were really quite convinced that there was a science of education. That learning could be measured. And that there would be tests to both examine as well as credential people, whatever their place in society," says William J. Reese, a historian of education at the University of Wisconsin-Madison. "The GED has to be seen as part of that larger story of how testing became so fundamental to American life."

Widespread use of standardized tests was made possible, in part, by a technical innovation perfected by Iowa's E.F. Lindquist: the optical scanner. Answer sheets that once had to be scored by hand could be fed into the machine for rapid processing.

"What the optical scanner did was immediately go from being able to score 200 tests an hour to 10 to 20,000 an hour," says H.D. Hoover. That meant millions of people could be tested each year at relatively low cost.

The GED began as a program just for veterans. But in 1947, New York became the first state to allow civilians to take the test. A quarter-century later, all 50 states were using the GED. Use of the GED boomed in the 1960s, fueled in large part by the expansion of social welfare programs under President Lyndon B. Johnson. The Job Corps and a variety of other federal programs in Johnson's "War on Poverty" began promoting GED certification as a way to produce high school graduates. Prisons began encouraging inmates to take the GED. And dropouts could qualify for some government assistance programs by getting a GED. By 1981, 14 percent of all high school credentials being awarded in the United States were GED certificates.

The New GED

A new, more rigorous GED test may make it harder for millions of high school dropouts to get a credential. In response, some states are giving up the GED and opting for other exams.

It may soon get more difficult to get a GED. The GED Testing Service (GEDTS) is launching a new GED in January 2014. Public affairs director CT Turner says the updated test will be more rigorous because the skills required for today's jobs have increased.

"This is about: What is the workforce demanding and what does an adult need to really be prepared and have a fighting shot at getting [a job] that's going to support themselves and their families?" he says.

Turner says the decision to change the test dates back to 2009. The American Council on Education (ACE), an association of college presidents that has administered the GED since its inception, was getting ready to revise the test. The GED had been updated three times before. But those were relatively minor changes compared to what ACE officials were thinking about now.

In 2009, ACE officials were reviewing data that show how few GED recipients go on to college and graduate (only 5 to 9 percent earn an associate's degree; 4 percent earn a bachelor's). They were also concerned that most GED recipients who go to college need remedial classes.

Even students who make it through four years of high school often need to take remedial classes when they get to college. GEDTS studies show that 40 percent of graduating high school seniors could not pass the GED test. (There is some dispute about these studies. The GED is given to a random sample of graduating seniors, who don't necessarily have an incentive to try very hard on the test.)

Still, ACE officials concluded that the current GED is not preparing people for higher education, and higher education is what people need to make it in today's economy.

At about the same time, another group of educators and policymakers concluded that America's K-12 schools needed more rigorous tests, too.

In 2010, the National Governors Association and the Council of Chief State School Officers released the Common Core State Standards, a set of expectations about what all American students should learn in school. Forty-five states and the District of Columbia have agreed to adopt these standards, along with new, harder tests that will be used to show how students are performing.

ACE decided that if high school was going to be harder, the GED should be too.

CT Turner says the new GED test will require "higher order thinking." There will be more questions that require written responses and fewer multiple-choice items. For example, in the new social studies section, a test-taker might read an excerpt from President John F. Kennedy's inaugural speech. Turner says the question might ask the test-taker to explain in a paragraph what Kennedy meant by a particular passage. "So people are going to have to think critically and then they're going to have to actually write about it."

Something else that will be different about the new GED: It will be available only on computer. No more paper and pencil tests. According to Turner, scoring the computer test will be faster and more sophisticated. Test-takers will get score reports with detailed information about what they did well on and where they need work. Turner says this will allow people who don't pass to study more effectively before taking the GED test again.

There will be two passing levels on the new GED. One will indicate that a person meets the requirements for a high school credential. A higher passing level will indicate that a person is ready for college.

The new test will cost $120, more than what it costs states to administer the current GED. The amount test-takers pay varies because some states subsidize all or part of the fee. CT Turner says updating the GED required $40 million in new investment. That's why ACE created a partnership with for-profit publisher Pearson in 2011, he says.

The bump in price upset many state officials who oversee GED policy. "Their memo about prices panicked the herd," says Troy Tallabas, a GED administrator in Wyoming, referring to the announcement by GEDTS to raise the test fee.

State officials were also concerned about the decision to require everyone to take the GED on computer.

"We were surprised we were being told this rather than having this discussed with us," says Kevin Smith, the deputy commissioner of Adult Career and Continuing Education Services in New York State. Smith says there are 269 GED testing centers in New York, and none of them have any computer equipment available for testing. He says some centers don't even have sufficient electrical power to turn on dozens of computers at one time.

Smith and other adult education directors say many GED seekers may not be ready to take a test on computer. And they may not be ready for a more difficult test. The changes were too much, too fast, says Smith.

In 2011, Smith and adult education directors from several other states formed a working group to discuss getting rid of the GED and coming up with alternatives.

As of early September 2013, the working group counted 41 states among its members. Six of them have announced that they will no longer offer the GED once the new test is released in January, 2014. Those states include New York -- the first state to offer the GED to civilians back in 1947 -- and Iowa, the birthplace of the GED.

Iowa is replacing the GED with a high school equivalency test being developed by the Educational Testing Service, a nonprofit company that produces other widely used standardized exams, including the SAT and the GRE. New York is working with for-profit testing company CTB/McGraw Hill. Both the ETS test and the CTB/McGraw Hill test will be available on paper, though the goal is for most people to take the test on computer eventually. New York state officials asked that the difficulty of the new high school equivalency test be phased in over time. "We have to give people a chance to get the instruction and the support in order to have a chance to pass the exam," Smith says.

But even with instruction and support, people will still have to pass a test. And even if the test is harder, GED critics say no test can certify that someone has the skills of a high school graduate.

A high school diploma means "we have some smarts and we know some stuff," says Janice Laurence, a GED researcher at Temple University. "But beyond that, it also means ... ways of acting and functioning in society" that a cognitive skills test "doesn't take into consideration at all."

When asked about the new GED test coming in January of 2014, Academy of Hope student Charles Gibson shakes his head. "I'm sorry they came up with that," he says with a nervous laugh. "A lot of other people are sorry about that too."

Gibson doesn't have much experience with computers. He's not sure he could pass a test that's offered only on computer.

The new GED test will create another challenge for some test-takers, too. People who take the GED and fail some of the sections are allowed to retake just the sections they failed. But starting Jan. 2, 2014, when the new GED test debuts, everything resets. If someone hasn't passed all sections of the current test by then, they will have to start over with the new test.

Charles Gibson doesn't think that rule will apply to him anyway. He says he won't be ready to take the test -- at all -- until 2014.

Read the full report from American RadioWorks.

PODCAST: Cheerios to go GMO-free

Fri, 2014-01-03 07:57

A look at what happened on the first trading day of the new year.

Soon, you will be able to buy a box of Cheerios that is GMO-free. General Mills says it will use corn and sugar that have not been genetically modified.

Which country gets most of its energy from renewable resources? Take the quiz and find out.

Quiz: Which country gets most of its energy from renewable resources?

Fri, 2014-01-03 07:13

It's international quiz time on the Marketplace Morning Report. Stephan Richter, editor-in-chief of the online international affairs magazine, The Globalist, brings us the question below.

Which country gets most of its energy from renewable resources? 

A. United States

B. Germany

C. Canada

D. Brazil

Scroll down to see the answer and click on the audio player above to hear more about renewable sources.

 

 

 

 

D. Brazil

Cuba's drivers don't have to be stuck in the 50s anymore

Fri, 2014-01-03 06:53

In Cuba, there is a genius for fighting automotive obsolescence. Even in 2014, the streets are still lined with 1950s cars, the ones that were there before Fidel Castro came to power in 1959. With some exceptions, imports of new cars were banned since the revolution, but now the ban's lifted and the imports are onsale starting this morning.   The BBC's Sarah Rainsford reports from Havana. Click the audio player above to listen.

Indian PM Manmohan Singh to retire after 10 years

Fri, 2014-01-03 06:41

Today, Indian Prime Minister Manmohan Singh announced his plan to retire after 10 years in power. BBC business correspondent Sameer Hashmi looks at his complicated complicated legacy.  Click the audio player to hear more.

Cheerios goes no-GMO

Fri, 2014-01-03 06:31

Soon, you will be able to buy a box of Cheerios that is GMO-free. General Mills says it will use corn and sugar that have not been genetically modified.

Companies that use genetically-modified ingredients maintain they are safe, and the federal government has no problem with them. But some Americans are wary.

“They can shop for organic products that are GMO-free, but this is an expansion of that GMO-free market,” says Julie Caswell, an economist at the University of Massachusetts Amherst.

General Mills says it is responding to what consumers want. But Alberto Alemanno, a food policy expert at NYU Law School, says there is a reason why the company picked Cheerios, instead of Chex or Wheaties.

“Cheerios contain oats,” he explains. “Oats is not a GM crop. So, it is pretty clear they have targeted this product because it is going to be easier for them to deliver.”

In the U.S., most packaged foods contain ingredients that are genetically modified. Recently, Whole Foods announced it is going to stop selling Chobani Greek yogurt, because the company uses milk that’s not organic. Chobani says there just isn’t enough organic milk available to meet consumer demand.

Obamacare backlog: Walgreen's offers month of drugs

Fri, 2014-01-03 05:53

With the new year come millions of people who will be newly insured under the Affordable Care Act, and pharmacies are among the many companies competing for their business.

This week several drugstore chains offered temporary supplies of medications for those still sorting out their coverage. Walgreens, CVS, Walmart, and Kroger are among the retailers offering to fill prescriptions for people who enrolled in new health plans but don’t have ID numbers yet. They’ll settle the bill later.

“The key is to drive traffic by any means possible,” says analyst Ross Muken with research firm ISI Group.

Once those customers are in the door, drugstores hope to sell them not only pantyhose and bubble gum, but other health care services, Muken says -- like flu shots and even physicals.

“They want to be the place that you think of first when you think of health care,” says Robert Field, a professor of law and public policy at Drexel University. “If they can be friendly for a 30-day bridge period, it’s a small investment to make in terms of that long-term relationship.”

How long-term? Field says customer loyalty isn’t what it was in the days of the corner drugstore. People tend to go to the closest pharmacy their insurance plan allows.

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