Marketplace - American Public Media

Won't you please take a vacation?

Mon, 2014-08-18 11:52

Chances are you know someone in your workplace who refuses to take a vacation. Or maybe it’s you. Research shows that one out of seven workers entitled to paid vacation time didn’t use it this past year.

Some managers prefer when their employees don’t take a vacation.

"Somewhere around 13 percent of U.S. managers are more likely to promote people who don’t take all of their vacation days," says Nancy Koehn, historian at the Harvard Business School.

Other companies want to fix this problem - so, they’re paying for their employees’ vacation expenses. In 2012, the company FullContact began offering their employees about $7,000 a year for a vacation.

"The perception of managers and workers is that somehow people who never take any vacation, or are always doing their job, are somehow better team members and are more productive," says Koehn. "But the evidence on all of that is unambiguous. People who take time off are actually less stressed, more focused and more productive."

'No medical student goes to...become a businessperson'

Mon, 2014-08-18 11:05

When Dr. Sandeep Jauhar was growing up, his mother held doctors in high esteem. 

"She always told us she wanted us to become doctors because she wanted people to stand when we walked into a room," says Jauhar, who went on to become a cardiologist.

Upon donning that hallowed white coat, however, Jauhar says he started to get uncomfortable. He felt like he was compromising some of the ideals of his youth to fit the business model of the American healthcare system. His new book, "Doctored: The Disillusionment of an American Physician", voices his frustrations with today's changing medical landscape.

"What the system has done is forced physicians to behave in ways that they don't want to behave," he says. "No medical student goes to become a doctor to become a businessperson, but the system is so dysfunctional today that it has created this business mentality among doctors."

Jauhar says the system needs to be fixed to accommodate the needs of more ordinary patients.

"The system is wonderful if you have a rare disease or if you require very high-tech care, but if you're a run-of-the-mill patient who has a chronic disease that needs to be managed by multiple doctors, the level of coordination and communication in the American system is so weak, so lacking," he says. "Today, if a politician says, 'we have the best medical system in the world,' he doesn't sound patriotic, he just sounds clueless."

Why we should bring back the Postal Banking system

Mon, 2014-08-18 10:19

When I was 12 years old, my Mum presented me with a little blue plastic-covered book with the design of a key on it.

It was my first savings account, provided by the British Post Office. There's no way that I would have been able to open an account with a bank, given the paltry amount of money I wanted to save, or the zero amount of money that I earned. But the Post Office didn't care that how skint or young or unemployed I was: it was determined to provide me with banking services, regardless. That savings account really did operate like a key. It helped me understand all sorts of thing about personal finance, including the magic of compounding.

I mention this because I just read a fascinating article about the history of the postal banking system in the US. First off, I had no idea that there used to be a postal bank system in America, but there was. And just like the Post Office in the UK, it was aimed at  providing banking services to people of modest means. The kind of people who today are widely denied access to banking services, and who are forced instead to reply on payday lenders.   The post office offered information to customers in 24 languages and would pass out leaflets right outside the ports of entry into the U.S.

The author points out that the rise of payday lending coincided exactly with the decline in postal banking. That began around 1965, when the postmasters general began to endorse ending it. The system died a quick, quiet death, which coincided with banks' withdrawal from low-income (and thus low-yield) neighborhoods in the early 1970s. That created a financial services vacuum, which was quickly filled by, you guessed it, payday loan operations.

Postal banking was America’s most successful experiment in financial inclusion—a problem we face again today.

The problem is that postal banking is expensive. It's a low-margin business, after all, as most customers probably won't have much money to save, and the post office would find it tough to upsell its banking customers into higher-yielding products, in the way banks do. It's also administratively expensive: a recent British government report on the unbanked in the UK found the cost of a simple banking transaction at the Post Office was about 100 times more expensive than a similar transaction done at a bank. 

Of course, that's not really the point. The point is that in the U.S. there are large sections of the population that are denied banking services, not because they don't understand how to use them, but because the banks have rejected them and the government has deserted them. As such, they are preyed upon by unscrupulous payday lenders, and often left even more disadvantaged than before.

The government has tried a private sector solution, demanding the banks set up shop and provide banking services in these neighborhoods, but the private sector has failed. Which leaves it up to the public sector.

Postal banking is a possible solution. It will be expensive, as most public services are. But the alternative, in the long run, will surely cost us more.

PODCAST: Freeing franchises from their companies

Mon, 2014-08-18 03:00

The Grand Tetons are self-evidently majestic. But there are other reasons that anyone connected to economic policy around the world will keep an eye on Jackson Hole, Wyoming later this week. The top brass at the Federal Reserve will be there, along with their central banking counterparts from across the globe. Plus, Franchises -- everything from fast-food restaurants to plumbing companies -- are getting a lot of attention from lawmakers in California right now. A bill that would make it harder for parent companies to sever agreements with their franchisees, just passed in the state assembly and could soon pass the state senate. More on what the bill could mean for franchise owners, and the workers they employ. Also happening today, Steve Ballmer of Microsoft fame and the new owner of the LA Clippers, is hosting a rally. The first 2,500 fans to arrive at the arena will receive a free Clipper Nation t-shirt. Beyond little free shirts, what does the 2 billion dollar purchase price, a record for a basketball team, mean?

Owners of franchises may get more control

Mon, 2014-08-18 02:00

Franchises, from fast-food restaurants to plumbing chains, are getting a lot of attention from lawmakers in California right now. A bill that would make it harder for parent companies to sever agreements with their franchisees passed in the state Assembly last week. It is headed to the state Senate next, where it is also expected to pass.

Keith Miller, who owns three Subway sandwich shops in northern California, supports the bill. He bristles at the power his parent company has over his business under current California law, which allows a franchisor to terminate a contract if franchisees stray from even the tiniest details.

“Fingerprints on the window — that’s in the operations manual that you must have windows and a front door that are clean and fingerprint free,” Miller says.

The bill moving through the California legislature right now, SB 610, would allow contracts to be severed only for “substantial and material breaches."

Miller, who is chairman of the Coalition of Franchisee Associations, says he hopes the bill will give franchisees like him a little more power in the franchisee-franchisor relationship.

That hope is shared by one of the nation's big labor unions, the Service Employees International Union, which has been paying for radio ads and digital media campaigns supporting the bill. As Christopher Calhoun, spokesman for SEIU California, told the Huffington Post: "Increasingly we are seeing franchisees and workers facing a similar challenge. Fundamental power imbalance enables multinational corporations to haul down billions at the expense of both workers and franchise owners."

But the bill could do damage to corporate brands and the franchisees who profit from those brands, argues Matt Haller with the International Franchise Association, an industry group that represents both corporate franchisors and franchisees.

“If franchisors can't maintain that brand integrity across their system,” Haller says, “then that's really going to be detrimental to the overall growth of franchising.”

The first smartphone turns 20

Mon, 2014-08-18 02:00

20 years ago this past Saturday, IBM's Simon Personal Communicator went on sale. It had a screen, calendar, and could send email, making it by some measures the world's first smartphone. The phone was not exceptionally well received when it was released. BBC Tech Reporter Claire Brennan joined us to explain exactly what it was.

“It looked and felt very different from the modern iPhones and Androids we are used to,” Brennan said.

It got its name from the game Simon says, a marketing attempt to emphasize the apparent usefulness of the device.

The phone was rather large and heavy, weighing half a kilogram, and was priced at the extreme high end of the market, costing $899 at launch.

The model, which was only sold in the US, was not commercially successful, a victim of its size, expense, and a lack of the digital infrastructure taken for granted today, such as wi-fi hotspots and cellular data.

A big day for the Clippers and the NBA

Mon, 2014-08-18 02:00

The $2 billion deal to sell the Los Angeles Clippers is a record price for a basketball team. It also makes for a happy story because the sale of the Clippers means there are a lot of winners:

“Well, certainly, Donald and Rochelle Sterling,” the team’s original owners who bought the Clippers decades ago for $12 million dollars, says Andy Zimbalist, a sports economist at Smith College. He says the team and the NBA are also winners.

“Because having a retrograde embarrassing owner who won’t spend money on the team is not good for the whole league either,” he says.

Kevin Zanni, a manager with Willamette Management Associates, a valuation firm, notes that even the NBA commissioner comes out looking good. 

“Because he gets rid of Sterling without having to force him out through the legal means to do it,” he says.

Finally, there’s the team’s new owner, Microsoft billionaire Steve Ballmer, another winner, says Smith's Andy Zimbalist: “If Mr. Ballmer didn’t have $20 billion of net worth, I would say that this is an awful purchase for him.“

But he does. He doesn’t have to worry about getting a return on this investment.  #Win.

 

 

The emotional and economic toll on Ferguson, Missouri

Mon, 2014-08-18 02:00

When the man with the trumpet finished his rendition of “My Country ‘Tis of Thee,” he lowered his head and raised his arms in a gesture that everyone here -- and across the country -- now realizes means: “don’t shoot.” The posture matched that of others in the crowd of demonstrators that gather daily in a parking lot across from the Ferguson, Missouri Police Station. 

Noel King/Lindsay Thomas

Despite the rain, about a hundred of them turned out for a prayer vigil on Saturday, eyes closed, heads lowered, arms raised.

The demonstrations in this part of historic downtown Ferguson have been peaceful. Traffic flows normally, punctuated by occasional bursts of sound from the car horns of passing drivers honking to show support. The weekend farmers’ market is open, and bustling.

The city has made efforts to attract new businesses to this part of town, and the efforts seem to be paying off. South Florissant Street boasts a new wine bar, a bike shop, and a handful of new restaurants. On the outdoor patio of the Ferguson Brewing Company, diners chatter over their meals.

This economic revival, however, doesn't define Ferguson. Like a lot of cities across the U.S., it also has neighborhoods presently experiencing little or no financial investment. Here, those areas have been characterized by different types of protests.

Noel King/Lindsay Thomas

Less than two miles away, not far from where Michael Brown was killed, there are more demonstrations taking place outside of a QuikTrip convenience store that was gutted by fire when looting erupted.

Traffic is thick, business owners are boarding up their windows, and those in attendance seem to want something other than prayer: they want to be heard. 

23-year-old Jamieko Rich, a friend of Michael Brown’s, is clutching a pack of skinny cigars, the item the Ferguson Police Department said Brown stole from a convenience store, making him a robbery suspect. The timing of that announcement and the deep well of mistrust between people here and the authorities, has made many suspicious.

Noel King/Lindsay Thomas

“His life was worth more than this,” Rich said. “He still didn’t deserve to get shot. It don’t matter if he stole a million of these [cigarillos]. His life wasn’t worth it.”

The unrest has disrupted life in this part of Ferguson. Protesters and police have clashed in the evenings, sometimes violently. Residents charge the authorities with disproportionate use of force. This weekend, Missouri Governor Jay Nixon ordered a night-time curfew to be put in place, and many businesses closed early. 

Noel King/Lindsay Thomas

Rich, who works three jobs, says he’s lost shifts at the nearby McDonald’s since the unrest started.

“The day before yesterday, the police stormed in there while I was on the clock and told everybody we had a minute to get the [expletive] out of there,” Rich said. “The manager told everybody, ‘clock out.'”

He's lost money, but what's more, the situation has reinforced his belief that the police here don’t value the lives of young, Black men like him.

“They value dogs way more than they value us,” Rich said. “We’re a level beneath the dogs to them. I really believe that.”

He wants better from the police, not just because he’s a part of this community, but because their salaries are funded by taxpayer dollars.

And, he says, “I’m a taxpayer, right?”

My money story: Synthpop band Future Islands

Fri, 2014-08-15 13:52

Everybody has one, a moment or a story where money changes your life. This week, the band Future Islands and the unexpected financial side of making it. 

“I think a big turning point was when we got picked up by a booking agent," says band member William Cashion. "That was the first allegiance in the music industry. We always felt like we were kind of on the outside. I booked our shows for about seven years, and we all just did everything, especially the first five or six years. We were going to Kinko's, making black and white Xerox copies and cutting them out in the van and burning CDRs."

"As soon as we brought on a booking agent it was like somebody waved a magic wand and we were just getting guarantees everywhere we went," Cashion says. "Which wasn’t a lot of money but it was like a door deal, it was like a pre-arranged amount of what we would get paid which totally changed the game for us as far as the kind of money we were making.”

But even when the band started making more money on the road, there were other unexpected financial problems.

“We were pretty far in the red at the end of last year," says Samuel Herring. We pretty much sunk everything into the music as well as getting hit with 2012 taxes in the middle of producing the album and we were just like, 'Oh, we forgot about that.' We got hit really hard with taxes last year. Our accountant called us in one day and [said], ‘Umm … well first off you guys have very high taxes, because you made a lot of money last year, a lot more than I expected. And because you’re an LLC you’re in the highest tax bracket.’ I was kind of looking at the guys, ' Should we high five? We made it! Highest tax bracket!' And we got destroyed. We got destroyed by the US Government. Maybe they’ll come after us.”

But with the band's recent success, Future Islands is learning to balance their DIY upbringing. 

“We’ve always worked solely out of necessity with what we could do, and I think that’s one of the reasons we’ve survived," says Herring. "It’s funny because now it’s at the point where we’re realizing we do need these certain crew members. And I’m fiercely shacking my head like, no, like I don’t want to do that! Even though it is time to give the reigns over because it’s too much for us now.”

Future Islands' latest album is "Singles." They're touring the U.S. this summer and fall.

Celebrities get out of the prepaid card business

Fri, 2014-08-15 13:39

When it comes to celebrity endorsements, there are plenty of success stories. Michael Jordan’s name brought in more than $2 billion for Nike last year, and back in May, Apple paid $3 billion to snap up rapper Dr. Dre’s Beats

But there are some things a famous name just can’t seem to sell.  Case in point: prepaid debit cards.

Magic Johnson and financial adviser Suze Orman pulled their prepaid cards about a month ago. Lil Wayne appears to be the latest celebrity to bow out. Try applying online for the Young Money card he endorsed, and you get an error page.

"This was sort of low-hanging fruit," says Matt Britton, CEO of the marketing agency MRY.  "Prepaid cards is a growing phenomenon, so I think celebrities initially saw this as a great opportunity for 'me to be able to leverage my fan base.'"

Consumer spending with prepaid cards jumped 6 percent last year to more than $118 billion, according to the Nilson Report. The cards are increasingly popular with people who don’t want traditional checking accounts - and those who can't get them.

"A lot of these - particularly newer prepaid card offerings that have more transparent fee structures - make a pretty compelling option for them," says Greg McBride, chief financial analyst at Bankrate.com.

Hidden fees helped tank the Kardashian family’s attempt at a prepaid card a few years ago, and more cards now disclose their costs.  

"The lack of regulation is the downside," says Susan Weinstock, director of consumer banking for the Pew Charitable Trusts.  "These cards do not have any protection should you lose the card or it gets stolen."

Weinstock says federal regulators plan to weigh in on prepaid cards this summer. As for whether celebrities should keep endorsing them, Britton says it takes a star with a "pristine brand" and a broad enough fan base to make it work.  

"LeBron James, maybe, especially since his move to Cleveland," she says. 

Coke gets an energy jolt from Monster, and vice versa

Fri, 2014-08-15 13:37

Coca-Cola is buying a nearly 17 percent stake in Monster Beverage for $2.15 billion. Reaction can be summed up as such: It’s been a long-time coming, and it’s a win-win for both companies.

As part of the deal, Coca-Cola will transfer its existing energy drinks to Monster, and Monster will transfer its non-energy drinks to Coca-Cola. 

“It really is well-suited for both organizations to focus on what they do, what they’re known for and what they do best,” says Darren Tristano, executive vice president with Technomic.

Consumers have been cutting back on sugary drinks lately, but the energy business has been growing. So while Tristano says these types of brand swaps are rare, it’ll allow each company to focus its strengths.

Coca-Cola was late to the energy drink game and its own brands haven’t been nearly as successful as Monster or its main competitor, Red Bull, says Ross Colbert, a global strategist for beverages at Rabobank International. Both companies have been successful at targeting younger, highly-active ­­consumers.

“The category is very competitive,” he says. “It takes a lot of merchandizing.”

By clearing the decks of its other brands, Monster can focus on its core energy drinks, fed by the help of Coca-Cola’s huge distribution network. Coca-Cola will get some popular brands, too, like Hansen’s Natural Sodas.

“It adds some flesh to their portfolio, too,” says Tom Pirko, the president of the food and beverage consulting company Bevmark. “So we have a nice division of labor.”

Starbucks brews changes to its scheduling algorithm

Fri, 2014-08-15 13:37

Chalk one up for old media.

There was an article in the New York Times Thursday detailing the struggles of a woman working irregular hours at Starbucks. Really irregular, like working late into the night, then starting at 4 the next morning.

Now the company says it’ll do better.

Among other things, it has promised work hours will be posted a week ahead of time. And that it'll make its scheduling software more flexible.

Starbucks is far from the only company that uses workers when, and only when, it needs them.  S0-called "just-in-time hiring" is a widespread practice in retail, hospitality and healthcare. There aren’t exact numbers on how many part-time workers fall into this category, but the number of people working part-time jobs, when they would rather be working full-time ones, was about 7.5 million in July. 

The practice has caught on because employers don’t want to pay employees to sit around. And, thanks to computers, with all their fancy data and algorithms and software, employers can more easily figure out when all the sitting around might happen. Software scheduling programs ensure people are booked to work only when they are needed.

“They look at ongoing trends, they look at what a store or restaurant or whatever it is, did last year at this hour,” said Susan Lambert, a professor at the University of Chicago.

These predictive programs then factor in specifics. “In Chicago it might be whether there is going to be a Bears game, or what the weather is likely to be,” Lambert said. 

And then they spit out a work schedule that can be tweaked again depending on how busy a place gets.

“It’s all about the cost-cutting,” said Peter Cappelli, a professor of management at the Wharton School of Business.

To make sure they have the staff they need, some businesses require employees to be on call 40 hours a week for part-time jobs.

“Sometimes they make them show up,” said Cappelli, “and you’ve got to commute and drive a fair bit, and then you discover whether or not they need you, but they require that you show up.”

All of which can make it very, very difficult to manage your life. To arrange daycare. Go to school. Work a second job.

There are companies out there staring to take these issues seriously, said Joan C. Williams, director of the center for WorkLife Law at the University of California Hastings College of Law.

Right now she’s working with the Gap on a pilot program to stabilize schedules.

In a statement, a Gap spokesperson said of the program: “We know that consistent and reliable scheduling is important to our employees. We are exploring ways to increase scheduling stability and flexibility across our fleet of stores.”

“If you want to be a high-road employer, who employs low-wage workers," says Williams, "'just-in-time' scheduling has begun to seem inconsistent.” 

Williams said the focus on cutting costs by matching labor supply and labor demand ignores other business costs. 

It also hurts a company’s bottom line, she said, when employees quit or don’t show up because they can’t balance their unpredictable work schedules with the rest of their lives.  

Jawbone tracks big cities' 'Zzz's

Fri, 2014-08-15 13:37

Here's a neat confluence of my lousy night's sleep last night and the rise of big data and wearable technology.

Thanks to the Wall Street Journal and data provided by Jawbone, makers of one of those fitness bracelets, we now know all kinds of stuff.  Like which city's residents get the most sleep: that'd be Melbourne, Australia at seven hours and five minutes a night.

The least? Tokyo at five hours and 45 minutes.

Do consumers have to shop to save the economy?

Fri, 2014-08-15 13:37

Kai looks back on this week, chatting with Linette Lopez from Business Insider and the Wall Street Journal’s Sudeep Reddy about the world economy and the spending power of the American consumer.

The NCAA lawsuit in context

Fri, 2014-08-15 13:32

Imagine that you go to play a video game, and all of a sudden you see yourself – basically your face is put on a motion capture animation. And the thing is, you didn’t give anyone permission to use your face—make money off your face – and so you get mad and decide to sue.

The NCAA is the organization behind college sports, but it's also a massive business, one that makes nearly $1 billion a year in revenue through TV, video games, and merchandising.

All that is up in the air right now, the NCAA just lost a huge court case that could hamper its ability to make money.

The ruling could lead to college athletes being compensated in some way, more court cases are looming, and we wanted to put that in context.

'Las Patronas' and the journey north

Fri, 2014-08-15 13:25

A group of Mexican women, "Las Patronas," are helping migrants on their journey north. The BBC's Will Grant explains:

That simple, instinctive act of kindness by the young girls was to lead to the creation of Las Patronas, a charitable organisation which has helped tens of thousands of Central American migrants over the past two decades and which was awarded Mexico's most prestigious human rights prize last year.

Big college football donors pay for access, even glory

Fri, 2014-08-15 13:15

Have you always dreamed of running through the storied Los Angeles Memorial Coliseum tunnel onto the field in front of 70,000+ roaring fans before a University of Southern California football game? Up until now, you usually had to play or coach for the team to have this "once in a lifetime experience," as the school calls it.

Today, you can do it for $1,500, if you're a USC season-ticket holder. If that's too pricey, consider the pre-game locker room tour for $1,000, or a pre-game photo with the "World Famous" USC Song Girls for $750. (Added bonus: The money is considered a donation, so it's tax-deductible, but that's a different story.)

USC recently started selling these experiences and more for its upcoming season, but at least one former player says they commoditize something that shouldn't have a price tag.

“It does feel a little weird to me to put a price on running out of the tunnel to play a football game, which we were told as players constantly was a very earned and special right," said Petros Papadakis — who captained the USC football team in 1999 and 2000 — on Fox Sports Radio's Petros and Money Show. “It’s USC football. It’s supposed to be honorable to be in that locker room. I didn't think you could put a price on that.”

Craig Kelly, an assistant athletic director at USC, says what donors get to do won't match the specialness of actually playing on the team.

“Putting on the pads, the walk through the tunnel, coming out of the locker room, the meetings that they have and the speech before the game… all that’s included in what Petros is referring to and what we’re offering isn’t that," Kelly said.

Kelly says lots of schools lavish perks on donors, which is true. That’s how the game is played — the most generous boosters get the ear of the athletic director, get to travel with the team and get the very best seats.

At the University of Alabama, you can put your name on the coach’s office, for $1 million. What makes USC’s approach unusual is they’ve gone mass-market, according to Josh Rebholz, UCLA's senior associate athletic director for external relations.

"We do offer some of these experiences, but we really believe that many of them — like running out of the tunnel with the team and being on field pre-game — are pretty sacred assets, and so we try to limit who we offer them [to], and really, we try to only offer them to highest and most generous donors that we have," Rebholz said.

In other words, these prized assets are so sacred that they can only be sold for lots of money.

"Access for the sidelines for us can run as much as $100,000 a year," said Rebholz.

If you want to run out on the field at the Rose Bowl with the Bruins and join them in the locker room after the game, you'll have to write a half-million dollar check to UCLA.

So here’s the lesson, USC: It’s not that you’re commoditizing college football. Schools have been doing that for a long time. 

It’s that you’re probably not charging enough.

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