National News

Why high earnings aren't translating into jobs

Marketplace - American Public Media - Wed, 2014-07-23 13:47

Cash, assets, money.  Businesses in the U.S. have a lot of it these days. 

$16.4 trillion of it, in fact. 

"The ratio of assets to GDP is almost 100 percent," says Joel Prakken, co-founder of Macroeconomic Advisers.  "That’s very, very high."

To translate: every dollar spent in the U.S. economy in a year, businesses are holding in cash or securities. 

It’s a lot of money, but it’s not necessarily a reflection of a healthy economy.  Not all of it was earned here in the U.S., a lot was earned abroad.

“We’ve had very modest economic growth over the last four years and I don’t expect that to change any time soon,” says Scott Wren, senior equity strategist at Wells Fargo Advisors.  

And those gargantuan levels of cash and assets aren’t being spent creating corresponding levels of jobs.  In previous recoveries, monthly job creation has averaged up to 500,000 positions, but the current recovery is mustering a mere 200,000 consistently.      

One reason is the enduring hangover from the Great Recession. 

“A lot of businesses felt like the U.S. economy was ready to roll over into another recession,” says Wren.  Caution and fear do not promote hiring.  Things like business sentiment are improving, but it’s unlikely the country will see consistent economic growth above 3 percent until after 2016. 

But that's only part of the story.  It turns out businesses are trying to hire a little bit.  “There were 4.6 million open jobs in May of this year,” points out Matt Slaughter, Dean of Dartmouth’s Tuck School of Business. That’s an increase of 700,000 over the past year. 

But firms are running into trouble filling those open positions. They’re so desperate that yearly quotas for hiring high-skilled immigrants filled up in four days with a record number of applications, says Slaughter.  “Companies are not finding the right kind of technical or other skills they need to fill some of the jobs they are looking to hire for.”

But maybe there is a bigger explanation, one that many economists including Slaughter, Prakken, and Larry Summers are talking about.  Maybe higher corporate profits and lower employment are the new normal.

It’s possible that “the nature of capital investments is gradually changing,” says Prakken.

For many years, a new technology or capital investment might destroy some jobs, but create many new ones.   The computer, for example, reduced clerical positions initially, but resulted in an explosion of other jobs over time.

Perhaps, though, we are entering a new era of capital investment, “one which destroys the demand for labor without creating parallel opportunities for displaced workers,” says Prakken.  

How airlines decide where it's too dangerous to fly

Marketplace - American Public Media - Wed, 2014-07-23 13:47

Although the FAA has banned American companies from flying to Israel,  potentially dangerous countries like Sudan, Chad, Pakistan and Niger only have warnings.

Michael Boyd, President of Boyd Group International, an aviation industry consulting firm that works with big carriers, says airlines consider many factors when deciding where to fly.

“Airlines don’t make that decision alone,” he says.

Take the case of Malaysian flight MH17, recently shot down over Ukraine. Lots of entities were involved in the decision to let the plane fly there, notes Boyd. Bodies like Eurocontrol – Europe’s answer to air traffic controllers. 

“There were over 400 airplanes the prior week that did the same flight – not a problem," says Boyd. "So there was no strong indication that there was a threat at that point in time.”

And when a route is potentially dangerous Boyd says the U.S. Department of State issues warnings. As a result, passengers don’t want to fly, so airlines cancel flights.

Henry Harteveldt, a travel industry analyst with Atmosphere Research, says the decision about where and when to fly can be much more complex.

“It may be political relationships between the countries. It may be commercial ties between the countries. It may be that while carriers from certain countries are not welcome, carriers from other countries will be welcome," he says.

If airlines have to fly around problem regions Harteveldt says they have to be sure they can accommodate additional flying time as well as costs for fuel and crew. Like pilots who, he notes, have the right to question the safety of destinations. But if one pilot won’t take a flight, an airline can look for another who will.

“Airlines are commercial businesses – they’re there to earn a profit for their investors, as well as provide safe transportation,” he says.

And safety is what a couple of the big carriers say is their top priority. Like American Airlines - it has canceled upcoming flights to Tel Aviv.

First, says Harteveldt, airlines rely on government authorities, like the FAA, to provide either guidance or edicts on what they should do.  They may also rely on other intelligence data that they obtain through private parties like independent companies providing security intelligence. But lastly says Harteveldt, there's one final resource airlines turn to:

"They use common sense."

Obama Declares Emergency As Huge Fires Burn In Washington State

NPR News - Wed, 2014-07-23 13:37

Fire crews have been battling several major fires in central and eastern Washington, including one that has stretched over 250,000 acres.

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Women’s empowerment gets a corporate boost

Marketplace - American Public Media - Wed, 2014-07-23 13:21

If you spend any time watching viral videos you may have seen some of the latest ads to target women and girls, and their parents. They focus on female strength, and can seem more like public service announcements than marketing campaigns. Except they're coming from companies like Verizon Wireless or Proctor & Gamble – and millions of people are choosing to watch them.

In one of the most-watched ads, for Always feminine products, there's no pitch for an actual product. Instead, a documentary maker sits behind a monitor. She asks several young adults to show her what it looks like to "run like a girl."

Each runner flails around, arms flapping, head flopping from side to side. It's a parody of uncoordinated running. Then the filmmaker asks the same question of a ten-year-old called Dakota.

The little girl races on the spot, like an athlete. No flailing. No flopping. The point? Pre-teens haven't yet absorbed the message that doing anything 'like a girl' means doing it badly – that 'girl' amounts to weakness.

"These ads are putting their finger on something that we all know is true but rarely talk about," says Rachel Simmons, co-founder of the Girls Leadership Institute. "In adolescence there is a precipitous loss of self-esteem that girls experience. And this ad explained what was happening and validated the experience of millions of parents."

Which may explain why it's been viewed more than 40 million times in just a few weeks.

Jodi Detjen, a management professor at Suffolk University in Boston, says marketers are pushing messages about female strength and ability to capitalize on a national movement.

"You've got all these organizations trying to figure out how to get more women leaders," she says. "You've got all this pressure on Silicon Valley to get more women involved."

Not to mention the push to get more young women to take up science and technology careers.

Detjen says if advertisers want to get on board too, that's fine with her.

"Because of the complexity of the problem, I think we need these different approaches, so it's just like this perfect storm."

Rachel Simmons says it's not ideal. She'd rather girls learn this stuff from their parents, not a YouTube video.

"I want to have every girl have her teacher to tell her to stop apologizing, not a shampoo commercial. But if we don't live in that world I don't want to throw out the commercial just on principle," Simmons says.

That shampoo commercial she's talking about shows a woman in a business meeting speaking hesitantly, with this line:

"Sorry, can I ask a stupid question?"

Pantene made the ad. It focuses on some women's tendency to preface their words with an apology. Then the ad urges them to stop being sorry, and start having faith inthemselves. Pantene teamed up with the American Association of University Women to promote the campaign and help it reach a millennial audience.

But some women, like Stephanie Holland, don't relate to this particular commercial. They don't like that the ad encourages women to change their behavior. Holland writes the She-conomy blog about women's marketing power. She's also run her own ad agency for 30 years. For a long time, she did change her behavior.

"I have over time realized that I had to act like a man to be successful," Holland says.

And with hindsight, she regrets that. So if over-apologizing is more of a woman thing, she says, so what? Why can't women today be themselves at work, just like men? She feels the ad is condescending.

"At the end of the day, it's saying that we should change and not them. That they're right, and we're wrong."

Holland says some differences between the sexes are OK – and she's not sorry.

5 numbers that matter to the 'House of Cards' creator

Marketplace - American Public Media - Wed, 2014-07-23 13:16

Executives at Netflix knew Beau Willimon's "House of Cards" would be a hit, long before anyone saw it.

They'd crunched the copious numbers available on their audience - they knew who was watching what and when, on the most granular of levels (like, yes, if you spend 13 hours in front of your screen without pause, someone out there sees you). Their millions of subscribers liked films by director David Fincher, and they'd watch just about anything with actor Kevin Spacey. The British version of the show was already doing well. It seemed like one sure bet

Beau Willimon, however, cares about none of this. As he told Kai Ryssdal, not everyone at Netflix is awash in the same numbers - here are the figures that matter to him: 

Practically 0

...Willimon sees almost no data on "House of Cards." In his words: "I know virtually nothing."

Practically 0, redux

... and he doesn't want to see any data.

"Those numbers can lead to either forced choices that have nothing to do with the creative process, or, conversely, coming from the creative side, a form of pandering. Because you become obsessed with those numbers and try to cater to them. So, I don't have to deal with any of that... You can't get addicted to heroin if it's not available to you."

26 hours, guaranteed

Netflix made a big promise from the start: Two seasons, no matter what. 

"Knowing that I had 26 hours meant that I had a broad canvas I could paint on. I knew there were things I could lay in early on in season one that might not fully come back til the end of season two. So you could really delve deeper into characters. You don't feel rushed. You don't have to force big cliffhangers or jump the shark in order to try to make something dramatic happen unorganically, the way that some shows feel the pressure to, becasue they're in a ratings game week to week, fighting for their life. 

Infinite

...the amount of angst that goes into "House of Cards".

"All we really care about is the work we're trying to do that day. Trying to tell the best story we can... Constantly contending with our own sense of self-doubt and self-loathing, which is worse than any data set."

At least 1

 ...piece of data he wouldn't share with us.

 No, he wouldn't give us a release date for "House of Cards" season three. 

5 numbers that matter to the 'House of Cards' creator

Marketplace - American Public Media - Wed, 2014-07-23 13:16

Executives at Netflix knew Beau Willimon's "House of Cards" would be a hit, long before anyone saw it.

They'd crunched the copious numbers available on their audience - they knew who was watching what and when, on the most granular of levels (like, yes, if you spend 13 hours in front of your screen without pause, someone out there sees you). Their millions of subscribers liked films by director David Fincher, and they'd watch just about anything with actor Kevin Spacey. The British version of the show was already doing well. It seemed like one sure bet

Beau Willimon, however, cares about none of this. As he told Kai Ryssdal, not everyone at Netflix is awash in the same numbers - here are the figures that matter to him: 

Practically 0

...Willimon sees almost no data on "House of Cards." In his words: "I know virtually nothing."

Practically 0, redux

... and he doesn't want to see any data.

"Those numbers can lead to either forced choices that have nothing to do with the creative process, or, conversely, coming from the creative side, a form of pandering. Because you become obsessed with those numbers and try to cater to them. So, I don't have to deal with any of that... You can't get addicted to heroin if it's not available to you."

26 hours, guaranteed

Netflix made a big promise from the start: Two seasons, no matter what. 

"Knowing that I had 26 hours meant that I had a broad canvas I could paint on. I knew there were things I could lay in early on in season one that might not fully come back til the end of season two. So you could really delve deeper into characters. You don't feel rushed. You don't have to force big cliffhangers or jump the shark in order to try to make something dramatic happen unorganically, the way that some shows feel the pressure to, becasue they're in a ratings game week to week, fighting for their life. 

Infinite

...the amount of angst that goes into "House of Cards".

"All we really care about is the work we're trying to do that day. Trying to tell the best story we can... Constantly contending with our own sense of self-doubt and self-loathing, which is worse than any data set."

At least 1

 ...piece of data he wouldn't share with us.

 No, he wouldn't give us a release date for "House of Cards" season three. 

Common Ground Between Iraq's Rebels May Be Crumbling

NPR News - Wed, 2014-07-23 13:14

The radical Islamic State and former associates of Saddam Hussein have fought together against Iraq's government. But the fault lines between the unlikely partners are beginning to show.

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Summer Program For Hungry Kids Gets Creative With Food Delivery

NPR News - Wed, 2014-07-23 13:08

Around the U.S., food assistance agencies are trying to come up with new ways to feed hungry kids in the summer. In Hopkins County, Ky., they're using mobile vans to take food to where kids live.

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Insurance For Fake Identities The Latest Skirmish Over Obamacare

NPR News - Wed, 2014-07-23 13:06

Republicans say a sting in which false identities were used to sign up for health care has revealed a major problem. Democrats question the premise that people would try to steal insurance.

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Federal Health Exchange Stays Busy After Open Enrollment Ends

NPR News - Wed, 2014-07-23 12:52

Federal data, obtained by ProPublica under the Freedom of Information Act, show that nearly 1 million insurance transactions have taken place since the middle of April.

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'Tahrir Harassment' Trials End In Sexual Assault Convictions

NPR News - Wed, 2014-07-23 12:16

Sexual assault convictions have been handed down to some Egyptian men, after several women were attacked during celebrations for incoming President Abdel Fattah el-Sisi.

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N.Y. Man's Death Prompts Police Introspection On Use Of Force

NPR News - Wed, 2014-07-23 12:13

Funeral services are being held for Eric Garner, a New York City man who died in police custody. The incident is prompting the NYPD to rethink how it trains all its officers in the use of force.

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Kerry Claims Progress In Gaza Cease-Fire Talks

NPR News - Wed, 2014-07-23 12:08

Secretary of State John Kerry met separately Wednesday with Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu to try to ease tensions in the Gaza Strip.

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Glenn Beck Takes His Campaign Against Common Core To The Big Screen

NPR News - Wed, 2014-07-23 12:08

Conservative commentator Glenn Beck hosted a live, interactive "night of action" against the Common Core State Standards. He has long fought against the learning benchmarks in reading and math now being used in 43 states. Events such as these, and the Common Core itself, could continue to play a role in the 2014 midterm campaigns.

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Faced With Undocumented Minors, Iowa Is Wrenched By Stark Divide

NPR News - Wed, 2014-07-23 12:08

The governor of Iowa says that unaccompanied minors from Central America should not find shelter in his state. But the mayor of Des Moines and many religious leaders are at odds with the governor.

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‘Economic patriotism’: Rhetorical, not economic, policy

Marketplace - American Public Media - Wed, 2014-07-23 11:58

Recently, President Obama has been traveling around the country, trying to shift focus back onto the economy. We talked to him about that a few weeks ago, at the White House.

You may have noticed a refrain in some of the president’s most recent speeches. Here is an example from a speech he delivered in Denver: “That’s what makes this country great – a sense of common purpose and patriotism, an economic patriotism.”

President Obama may have cribbed that term from a speech by former Ohio Gov. Ted Strickland at the 2012 Democratic National Convention. He was talking about the Republican nominee for president, Mitt Romney.

“Mitt has so little economic patriotism that even his money needs a passport,” Strickland said. “It summers on the beaches of the Cayman Islands, and winters on the slopes of the Swiss Alps.”

Obama used the phrase in a TV ad soon after, and it became the title of the president’s economic plan. So, almost two years later, how does Strickland define “economic patriotism”?

“Companies, corporations, CEOs need to understand that this country has provided them, and continues to provide for them, the means to be successful,” he says.

“Economic patriotism” is more of a rhetorical device than an economic theory. There is no textbook definition. President Obama has used it to talk about infrastructure investment. Treasury Secretary Jack Lew used it in a letter to lawmakers about corporate taxation.

Economic historian Gavin Wright, who teaches at Stanford, suggests “economic patriotism” is a broad brush. It refers to appeals to make economic behavior or economic policy based on “American values.” And, he adds, that has happened throughout history.

“During the Cold War era, I don’t recall hearing the term ‘economic patriotism,’ but it was more or less taken as a given,” Wright says.

In the 1790s, Alexander Hamilton asked the government to support manufacturers. It was an appeal to a special interest group, Wright notes, “but he also thought that this would be essential for the credibility of the American economy, the American nation.”

The phrase “economic patriotism” has been used by Democrats and Republicans, including Pat Buchanan and Amb. John Bohn, who ran the Export-Import Bank during the Reagan era. Bohn defines “economic patriotism” as understanding our economic policy as it compares to the economic policies of other countries.

“We need to have a kind of partnership between the government and the private sector if we are going to maximize our economic growth,” he says.

Over these last few weeks, the phrase has attracted criticism. Wright summarizes one complaint: “There is a market out there, and the market operates and reaches its outcomes, then the government wants to intervene and change that.”

So, Wright says, the debate over the definition of the term “economic patriotism” is really a proxy for a much bigger debate over the role government should play in the economy.

 

A Doctor Leading The Fight Against Ebola Has Caught The Virus

NPR News - Wed, 2014-07-23 11:56

Hailed as a "national hero," Dr. Sheik Umar Khan has treated more than 100 Ebola patients in Sierra Leone. Now the 39-year-old is fighting for his life in an isolation ward.

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GM Recalls Nearly 718,000 Vehicles For 'Varying Safety Issues'

NPR News - Wed, 2014-07-23 11:13

GM says no deaths and only two crashes have been linked to the recalls. While many of the vehicles have relatively minor issues, thousands of others have potential problems with their steering.

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Palestinian's Death Provokes Israeli Debate On Defining Terrorism

NPR News - Wed, 2014-07-23 11:07

Israel says the recent killing of a Palestinian teenager was an act of terror and his family is eligible for state benefits. This doesn't sit well with one group that assists Jewish victims of terror.

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Small Business remains hopeful during slow season

Marketplace - American Public Media - Wed, 2014-07-23 10:37

As the economy continues to grow and unemployment drops to 6.1 percent in the U.S., we check in with a small business owner to see how things are on the ground level.

Olalah Njenga is the CEO of YellowWood Group based in Raleigh, North Carolina and says her business is doing okay, but it gets a little slow during the summer.

"We had a little bit of a bump from June to July and I think that’s pretty indicative of what’s happening to the general morale of small businesses right now," Njenga says. "I think that optimism is there. I’d like to say that we’ve hopeful but, you know, across the area of the business, hope doesn’t get employees paid."

In terms of hiring, Njenga says it’s been difficult to hire the right person to join the core team at YellwWood Group:

"And I’m not alone," she says. "There’s a lot of small businesses out there looking for that superstar person who is flexible and creative and only needs to be groomed against the values and the culture of the company, but they come in the door with a really nice set of skills."

Njenga says she stays optimistic and is excited for what’s in store for the future of her business.

"We have things in the works right now that we are productizing one of our flagship services," she says. "So we’re excited that we maybe able to take something that has traditionally been of service and translate it into a product. And it is launching this quarter."

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