Detroit threatened residents behind on their water bills in March: Pay up, or we’ll shut you off. What made the threat especially noteworthy was that it applied to about half of the city’s water customers. Before declaring a 15-day moratorium last week, the city did turn off the taps on thousands of households, setting off protests, official condemnation from human-rights experts at the U.N., and grumbling from the judge overseeing the city’s ongoing bankruptcy case that the city already has enough public-relations problems.
Meanwhile, one question has come up repeatedly: Corporate customers— including both private companies and branches of the government— have also fallen behind on their bills, to the tune of millions of dollars. Why didn’t the city shut them down first? Officials say they have turned off close to 19,000 residential accounts, but could not provide a number for corporate customers.
Darryl Latimer, the Water and Sewerage Department’s deputy director, says the residential shutoffs were always intended as a scare tactic, to combat what he calls "a culture that’s developed: 'Since you’re not cutting me off, I’m not going to pay you.' And what we’ve found when we shut residents off is that 60 percent are coming in and paying."
Latimer says he’s been going after corporate deadbeats, too. Often, they’re disputing part of their bill, and negotiating takes time. He says that paid off with Chrysler Group: The company gave Detriot a check for $2.9 million— and the city recognized that Chrylser no longer owns some of the properties that were in dispute. The Detroit Public Schools, he says, have paid off about three quarters of a $12 million tab.
Shea Howell, a volunteer with the People’s Water Board Coalition, says residential customers do not get similar treatment. "Many, many resident also have problems with their bills," she says. "They also have problems they’d like to talk with the water department about, and they can’t even get through on the water department’s service lines." She says customers report wait times of up to four hours on hold.
The scale of Detroit’s problems make it unusual, says Janice Beecher, director of the Institute for Public Utilities at Michigan State University. "What we don’t have in the water sector is a really clear policy for coping with something like this, so in some ways it’s a learn-as-you-go process," she says. "I do think it will go down as a case study in this sort of problem."
Residential shutoffs are due to resume next week.
There's really only one reason consumers shop at the dollar store.
Joe Feldman, Senior Managing Director and Assistant Director of research with Telsey Advisory group, says Family Dollar played around with its raison d'etre more than was wise: “One would think that a dollar store would be at an everyday low price." But, Feldman notes, its name notwithstanding, Family Dollar has been embracing a multipricing strategy - which wasn't a hit with consumers.
“Maybe they’re not shopping at Family Dollar, they may be shopping at Dollar General,” he says, referring to one of the store's competitors.
The entire dollar store industry has slowed down this year. One reason — middle and upper middle class consumers can now afford to shop somewhere else.
Robert Campagnino, head of consumer research at SSR, says dollar stores have started selling higher-margin discretionary items which can prove to be problematic. If there is a recovery, says Campagnino, lower income consumers are not feeling it.
“So what’s happened when their consumer has been under pressure is that higher margin category has been where the sales weakness has been,” he says.
Even some staples are a hard sell. Like food, which Sandeep Dahiya, a professor of finance at Georgetown University’s McDonough School of Business, says dollar stores have been increasingly getting into.
“The operations involved in selling something that has low shelf life is very different than selling soap. Soap doesn’t go bad... If that three pound chuck doesn’t get sold today tomorrow it will be thrown out,” he says.
Family Dollar says its sale means a good deal for shareholders, employees and shoppers. Joe Feldman says Dollar Stores, all of them, need to continue to make sure they have the right price.
During the housing bubble, websites focused on the real estate sector sprung up like "for sale" signs in a hot neighborhood. Over the past couple of years, out of sight of the headlines, those companies have been merging and buying each other out. It's called "a roll-up," and it happens when a sector begins to mature.
In the last couple years, Zillow snapped up New York apartment site StreetEasy and HotPads. Trulia bought Market Leader and last month was rumored to be close to buying Realtor.com. Today came the biggest deal yet: Zillow said it agreed to buy rival Trulia for about $3.5 billion. The pair will create the proverbial 800-pound gorilla for online real estate. Part of the reason for the merger-mania is that when it comes to online real estate, bigger is pretty much always better.
"In internet-based economies, scale matters a lot," says Nic Retsinas, a professor of real estate at the Harvard Business School. "And as the two largest players in this marketplace, the possibility of them coming together gave them advantages of scale."
Together Zillow and Trulia will command more than 60 percent of online real estate traffic. That mega-market share is a big part of the reason we’re seeing this deal.
"As one company takes a leadership position, it amasses enormous capital," says Glenn Kelman, CEO of real estate site Redfin. "So you see Wall Street really rewarding the number-one player in the space and that gives them the capital to buy other companies."
The real estate market is recovering slowly, but the online real estate space is booming. Redfin is growing by 50 percent a year.
Growth is likely to continue as more people get online and the internet generation comes of home-buying age. "People do love to look at what their house is worth," says Richard Green, director of the USC Lusk Center for Real Estate. "And, let’s face it, they want to look at what their neighbor’s house is worth."
Still, Green doesn’t think we’ll see many more mergers of this kind. He says most of the deals that could be done have been done.
One-click online shopping is changing how we shop. Stores with leases as short as a day are proliferating — meaning a storefront can be a designer clothing store one day and a test kitchen the next.
From October 2013 to June 2014, more than 57,000 unaccompanied minors have migrated to the United States, most from El Salvador, Guatemala and Honduras. One solution for dealing with these children is to send them back home, a plan both President Obama and congressional Republicans endorse.
But with that many kids and toddlers being juggled around the system, that simple-sounding solution could actually create an even bigger strain on resources.
"Money would help deal with the influx now," says Esme Deprez, U.S Border Reporter for Bloomberg Businessweek. "We’re seeing shelters overwhelmed, we’re seeing processing centers that are run by border patrol agents completely overwhelmed, courts overwhelmed as well. The system is being stretched at every turn."
The White House has asked Congress for $3.7 billion in emergency funds, but Deprez says there is not a lot of hope that Congress will act.
"They’re going on break for five weeks on July 31," says Deprez. "So, even if they do pass separate bills in the House and Senate, we don’t know if they’re going to come to an agreement and reconcile the two."
If Congress were to approve the emergency funds requested, it would include $879 million to pay for the minors’ prosecution, deportation and to help expedite their court hearings.
"The bulk of the money would go to care for the newly-arrived children and the shelters," says Deprez.
Listen to the full conversation in the audio player above.
The Colorado attorney general has asked the state's Supreme Court to stop same-sex marriages.
Congress has reached a bipartisan deal to reform the Department of Veterans Affairs, after nearly two months of tense negotiations.
The airline industry and its unions support the bill, which would allow them to list ticket prices without taxes and fees. Consumer groups say that will lead to deceptive marketing.
The National Labor Relations Act of 1935 (NLRA) "guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike if necessary."
Despite the NLRA, some companies still threaten their employees with lowering their pay or hours and even with termination if they discuss their pay with other employees.
"Gag rules are illegal," says Nancy Koehn of the Harvard Business School. "But there is no question that they are alive and well in America."
There are many disadvantages for workers who don’t know if they’re getting paid fairly or not, says Koehn.
"If you have no sense of what your pay is on some kid of latter of compensation across the organization, you have no sense of what kind of organization this is in terms of how they reward people for a job well done," says Koehn.
Listen to the full conversation in the audio player above.
Russia says it will appeal an unfavorable decision by a court in The Hague. The Permanent Court of Arbitration awarded $50 billion to shareholders of the defunct Yukos oil company.
NPR's Emily Harris reports on the Muslim holiday of Eid in Gaza, where one where one family traces the course of three weeks of war in broken bread, temporary shelters and mourning for their dead.