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How do airlines compensate for a plane crash?

Mon, 2015-03-30 09:09

As the details of the Germanwings plane crash continue to be put together, one question yet to be determined is how the families or heirs of victims will be compensated.

Regardless of the circumstances that caused the crash — and remember, a prosecutor has said the co-pilot intentionally flew the plane into the ground — Lufthansa, the parent company of Germanwings, will probably not pay punitive damages.

Under an international agreement called the Montreal Convention, the families of victims probably will be entitled to 'unlimited compensation,' unless Lufthansa claims in court that it was not responsible for the crash in any way. That's a claim the company is highly unlikely to make.

Unlimited compensation means that courts will decide compensation for each victim according to fairly standard calculation. "Things like age, income, the earning capacity, marital status, education," says aviation attorney Mark Dombroff with the law firm McKenna Long and Aldridge.

Punitive damages, designed to punish a company in cases of willful negligence, do not apply under the treaty. "Let’s hypothecate that they did everything wrong, the fact is underneath the international agreement, you still can't get punitive damages," Dombroff says.

Still, some compensation cases may yet argue negligence on the part of Lufthansa. The fact that two pilots were not required to be in the cockpit will likely still come up in court.

"Did they know that that could have left them open to sabotage or pilot suicide?" asks Mary Schiavo, a former Inspector General of the U.S. Department of Transportation. "Of course I'd argue that and I will argue that if I'm involved in the case. And they should have known that. So, am I saying that there is no way they'll have additional liability? No.”

Schiavo estimates that total payments will reach into the hundreds of millions of dollars, which is well short of the $1.5 billion insurance policy that nearly all airlines carry per flight.

The risks of being an activist CEO

Mon, 2015-03-30 09:06

There is suddenly a slew of CEOs speaking out about one sensitive issue or another. Tim Cook of Apple wrote a piece in favor of gay rights in the Washington Post. “ 

Tim Cook: Pro-discrimination 'religious freedom' laws are dangerous

America’s business community recognized a long time ago that discrimination, in all its forms, is bad for business,” Cook wrote in the Post op-ed. The CEOs of Salesforce and Yelp made similar stands on the issue, also citing a controversial Indiana law. Not long ago, Starbucks CEO Howard Schultz used his coffee pulpit to spur discussion on race relations. Before that,  he waded into the issue of gun control.

Publicly held companies are, at the end of the day, about maximizing shareholder value. And CEOs are locked in a delicate balance of power between those shareholders, their own interests and their boards of directors (which are usually empowered to fire him or her).

So what explains these kinds of high-profile stances? After all, a controversial stand can alienate customers and weaken brand loyalty — or it can strengthen it — but why become embroiled at all?

“CEOs are people too, as surprising as that may sound,” says Steven Davidoff Solomon, professor of law at University of California, Berkeley. “Sometimes they have to speak, just like you do.”

And they usually ask permission first. 

“You don’t very often see a CEO of a public company taking a public stance on a controversial issue without the CEO going first to the board,” says Donna Dabney, executive director of the Conference Board’s Governance Center.

And boards of directors are apt to give the okay, she says. “CEOs and companies these days are feeling they should speak up on societal issues.”

In fact, says Dabney, CEOs are often criticized for not speaking out enough: “It used to be that you would find that heads of large public companies would take a leadership role in community and societal affairs and I think there’s kind of a change toward stepping up to that role again.”

Having the board on board doesn’t necessarily mean things will go well, of course.

“I’m afraid Starbucks found the experience of dealing candidly with race, even though a commendable effort, to have been something that went rather embarrassingly awkwardly for the company,” says John Coffee, professor of law at Columbia University’s school of law.  

A lot of what determines whether a CEO will take a stand boils down to corporate policy. “Every company does things differently,” says Coffee. Some have business-policy committees to control corporate image — and corporate mouths — extra tightly. Others will let a CEO live his or her life as long as they don’t reduce shareholder value.

Where do hotels buy their art?

Mon, 2015-03-30 07:33

Aaron Bachler, an amateur photographer, recently received an email from his mother, who was staying at a hotel at the Grand Canyon. She thought the art hanging on the walls looked like her son's work. "She said, 'Boy, these look a lot like yours,'"  Bachler says. "And I thought: Where do these hotels buy, y'know, that kind of artwork?"

The answer begins with the hotel owner — and the "brand" of the particular hotel.

"We manage many different brands," says Hung Luk, COO of the Lam Group, a hotel developer in New York City. "Marriott, Starwood, Hilton..." 

All these familiar chains are actually franchises — like McDonald's or Burger King. Hotel owners pay to share the name, the reservation system and, yes, the "look." For each hotel, the Lam Group's architects and interior designers create furniture and finishings within that chain's "brand standards."

"A lot of our guests stay with us consistently no matter what city they're in, so we want them to see some consistency to the brand," says Terry Brooks, director of product quality for Hilton Garden Inn. "For Hilton Garden Inn, I would describe it as light, bright, airy, very professional but approachable." 

Those "airy" brand qualities can be translated into very concrete design guidelines. Brooks says each Hilton Garden Inn must have two pieces in the lobby from a particular set of approved artworks. A visit to several Hilton Garden Inns around Manhattan revealed the same dot-patterned carpeting, and tree-like pattern on the glass front doors. 

When it comes to the art in the guestrooms, guidelines can be just as stringent — Hotel Indigo, for instance, requires black and white photographs from within a few blocks of the hotel, according to hotel art provider Jesse Kalisher

But people throughout the industry say that over the years, franchises have given owners more latitude when it comes to selecting art. 

"When I first got started, I remember the franchise community would say 'Pick A, B or C art options,'" says Luk, the hotel developer. He describes seeing many landscapes and flowers. "If you travel around the country, you don't want to see the exact same flower," he laughs. 

But the reason the same flower appeared in many hotel rooms twenty years ago wasn't just the brands — it was also the technology. 

"It used to be just poster art, where everything was on paper and what you saw is what you got," says Puneet Bhasin, COO of the Artline Group, a hospitality art provider in Hicksville, New York. He says the only technology for getting cheap, mass-produced art 22 years ago was to turn to catalogs of posters that had been mass-produced using offset lithography, the kind of printers used for newspapers. 

"The designer would say 'Send me a catalog!'" Bhasin says. "And we would literally mail them hundreds of catalogs and they would choose the image based on that. But now, with the digital age, all the items are digitized, so you can make whatever color you want, whatever size you want, and you can print them on whatever you want." 

In the entryway to the Artline Group's office, there are shelves of samples of exotic materials onto which they can print drawings, photographs and paintings.

"These are like MDF boards, which is basically a hard type of wood," says graphic artist Tony Bracco, knocking on the board to demonstrate. "These are aluminum." 

Not only does digital printing allow a variety of materials, it allows printing a near-infinite variety of images. Bhasin says the Artline Group has access to over 200,000. He says if a single image is licensed for use in a hundred hotel rooms, the licensing fees can drop to as low as a couple of bucks a copy.

The digital approach also allows Artline to accommodate more custom requests, such as the one they received from the Radisson Martinique in midtown Manhattan. 

"What they wanted to do was a collage with the Chrysler Building, street signs, the Brooklyn Bridge, street map," says Artline graphic artist Tony Bracco. "And they had a specific color set: They wanted blacks, whites and gold."

Bracco used Adobe Photoshop to combine and filter stock photographs to produce new artworks — and so his artworks are prominently displayed  in an upscale hotel. 

"Yes, but it doesn't have our names on it unfortunately," he says. 

Then again, to include the names of all the photographers, hotel employees and brand managers whose input resulted in this work — well, that probably wouldn't fit on the canvas.

Courtesy:Tony Bracco

GNC will do more testing after investigation

Mon, 2015-03-30 03:00

GNC says it’s reached an agreement with New York Attorney General Eric Schneiderman to expand its testing deeper into its supply chain, to the sources of the ingredients for its dietary supplements. And it says it’s going to “enhance certain other aspects of its operations,” although it won’t say exact how it’ll do that.

The agreement follows an investigation by Schneiderman's office. Schneiderman hired a lab to test the ingredients in dietary supplements sold at GNC, Target, Walgreens and Walmart. Schneiderman says, in some cases, the testing didn’t find any traces of DNA from the herbs listed on the supplements labels. 

GNC criticized the testing methods used in the Schneiderman investigation, and it says sometimes, processing can remove DNA from the herbs used in supplements. 

But supplements can be contaminated with things like metal.

“Mostly lead – that’s the most common contaminant," says Tod Cooperman, head of, a website for consumers that does its own testing. "Actually, we recently found arsenic, cadmium. So we do find heavy metals in products."

Cooperman isn’t saying you shouldn’t buy these products. He just recommends being judicious: making sure they’re actually helping you, and not interfering with other medicines you’re taking.

The Food and Drug Administration does require supplement makers to verify that their products are safe and properly labeled. But they’re not evaluated or approved by the FDA, so it’s pretty much an honor system, even though Americans spend $33 billion a year on these products.




PODCAST: It's on me

Mon, 2015-03-30 03:00

We had news this morning from the Commerce Department, reporting the latest economic data on income and spending for the month of February — both rose. More on that. Plus, Northeastern University announces Monday its plan to launch a series of educational hubs embedded directly in select companies across the Bay Area. The Boston college says the program takes a unique hybrid approach—part online, part face-to-face instruction—and aims to draw in more women and minorities to the STEM field. How does it plan to do that? And over the past 50 years, women have made great strides towards equality in the work place. But when it comes to dating, most men still pay for the majority of expenses at the beginning of a relationship. In a day and age where women make as much as or more than men, why are they still not picking up the dinner tab? 

Northeastern's Silicon Valley campus

Mon, 2015-03-30 02:00

Northeastern University announced on Monday its plan to launch a series of educational hubs embedded directly in select companies in Silicon Valley.

The announcement comes a few months after the Boston-based university opened a branch campus in tech-heavy Seattle.

There is a reason colleges rarely open branches on the opposite side of the country. They tend to be expensive and hard to pull off. But that is not stopping Northeastern.

“When you have people who are in the workforce already, then we don't expect them to come to Boston, we have to go to them,” says University President Joseph Aoun. "People who are in the workplace who want to retool or advance and their knowledge is becoming obsolete." 

Northeastern has partnered with the San Jose company, Integrated Device Technology (IDT), to offer a mixture of long-term internships and classroom instruction.

Scott Jaschik is the editor of Inside Higher Ed. He says it’s still too soon to tell how students will respond.

"We'll either be seeing a lot of people going into the program and coming out and getting good jobs and having their careers advance, or not," says Jaschik.

Jaschik says other schools might offer similar programs at a lower cost but might not have the same industry connections that Northeastern has.

In an age of equality, who should pay for dates?

Mon, 2015-03-30 02:00

Over the past 50 years, women have made great strides towards equality in the workplace. But when it comes to dating, most men still pay for the majority of expenses at the beginning of a relationship. In a day and age where women make as much as or more than men, why are they still not picking up the dinner tab?

Porscha Kazmierzak is one of the many women who still think that men should pay on a first date, even though she identifies as a hard core feminist.

“If somebody offers to pay for my meal, I’m thinking this person is considerate and they are maybe going to take care of me,” she says.  “If I insist on paying on a first date, it’s because I’m not interested.”

The tradition of paying for dates is a “short cut to figure out what the other person is thinking," says Rita Seabrook, a PhD student in women's studies and psychology at the University of Michigan.

Seabrook says when a men pays for dinner, it sends clues to the other person such as I like you or I want us to be more than friends. It makes things seem comfortable and certain when dating can feel so uncomfortable and uncertain. So the tradition has stuck around. But so has its other—more subtle—message.

“Men are expected to make a lot of money,” says Seabrook. “And women are expected to value men who make lots of money.”

Evan Major used to think these ideas never really affected him. Then he lost his job at the same time he was dating someone new. When they went out, sometimes he would pay as much as he could. Other times, his girlfriend would cover his half. This challenged his sense of self.

“There is such a tight link between financial security and the identity of a man” he says.

But after the beginning of a relationship, men and women usually start to do things differently.

“Couples start to split somewhere in the first six months” says Dr. David Frederick, a professor of psychology at Chapman University.  

But when it comes to changing gender norms, things move slowly.

“Causing those to change, I think, is a very long process that we’ve seen starting over the past 50 years," says Frederick. 

But Frederick says as long as we continue to see a shift towards more gender equality in the workplace, there’s no reason why we shouldn’t also see the same shift at the dinner table.








Northeastern's Silicon Valley campus

Mon, 2015-03-30 02:00

Northeastern University announced on Monday its plan to launch a series of educational hubs embedded directly in select companies in Silicon Valley.

The announcement comes a few months after the Boston-based university opened a branch campus in tech-heavy Seattle.

There is a reason colleges rarely open branches on the opposite side of the country. They tend to be expensive and hard to pull off. But that is not stopping Northeastern.

“When you have people who are in the workforce already, then we don't expect them to come to Boston, we have to go to them,” says University President Joseph Aoun. "People who are in the workplace who want to retool or advance and their knowledge is becoming obsolete." 

Northeastern has partnered with the San Jose company, Integrated Device Technology (IDT), to offer a mixture of long-term internships and classroom instruction.

Scott Jaschik is the editor of Inside Higher Ed. He says it’s still too soon to tell how students will respond.

"We'll either be seeing a lot of people going into the program and coming out and getting good jobs and having their careers advance, or not," says Jaschik.

Jaschik says other schools might offer similar programs at a lower cost but might not have the same industry connections that Northeastern has.

Atlanta puts roads and bridges on its to-do list

Mon, 2015-03-30 02:00

In next year’s budget, President Barack Obama is asking for nearly $500 billion to fix up the country’s transportation infrastructure. But some cities are starting to spend their own money on roads and bridges, after putting it off during the Great Recession.

Take Atlanta. With crumbling sidewalks and potholed streets, that city needs work. Now it’s actually going to get some. Voters recently approved a quarter of a billion dollar infrastructure bond package.

A couple weeks ago, before the vote, about 40 people who wanted to add their concerns to the list of the city’s infrastructure needs gathered in a community center.

“We never got our final paving,” says Jerry Hicks. He lives in a subdivision that the developer didn’t finish building. “All of the manholes are above the ground. As a matter of fact, people have ruined their cars, because they hit those man covers.”

The bond package will raise money to repave streets, fix up fire stations and deal with things like the Courtland Street Bridge, in downtown, which needs to be replaced.

“The original structure is approximately 105 years old,” says Richard Mendoza, Atlanta’s commissioner of public works. “About 50 years ago it was reinforced with steel beams.”

Now there are signs posted on those beams, warning that pieces of the bridge might fall on passersby.

Mendoza says the city put off repairs during the great recession. Now, it’s racked up an infrastructure backlog of about a billion dollars. “I think what we’re doing is trying to stop the bleeding, if you will,” he says.

“Atlanta’s not alone in having a large pot of issues to tackle,” says urban planner Heather Alhadeff. Decrepit infrastructure is a problem for cities all over the country, she says. Like many other urban centers, Atlanta’s population doubles on weekdays. But half of those people aren’t paying to keep the place up, she says.

You know if I came to your house and used your driveway and flushed your toilets and used your mail and your garbage, and everybody on the block did, you know your infrastructure would wear down faster,” Alhadeff says.

The bonds will only raise enough money to address a quarter of the city’s needs.

And exactly what will be fixed isn’t decided. Atlanta basically asked voters to support the idea of infrastructure repairs. The city council is supposed to finalize the project list soon.

U.S. allies rush to join World Bank alternative

Mon, 2015-03-30 02:00

One likely agenda item during U.S. Treasury Secretary's meetings with Chinese officials at the end of March: the Asian Infrastructure Investment Bank that China is launching to supplement existing global development funds like the World Bank. The United States tried to keep its allies from joining the project. 

The U.S. warned other countries that China’s new institution might not give enough attention to things like environmental concerns or fairness in awarding contracts. 

"I think there’s a lot of concern on the U.S. side that this institution would become an instrument of Chinese foreign policy," says Robert Kahn, a fellow at the Council on Foreign Relations.

The U.S. didn’t prevail. Founding members of the Chinese-led bank include most Asian countries, and key European allies like France, Italy, Germany and the United Kingdom.

The U.S. should join too, says C. Fred Bergsten, a senior fellow at the Peterson Institute for International Economics. He doubts the governance issues will be a problem.

"Because the Chinese have been suspect on these issues, they will lean over backwards to follow international best practices," he says. "My guess is, they’re going to be holier than the Pope."

A dingo ate my international leader's passport

Mon, 2015-03-30 01:59
6,500 stores

That's how many stores diet and herbal supplement juggernaut GNC owns nationwide, as reported by the NY Times. In response to recent accusations of  potentially hazardous inclusion of unlabelled ingredients, the company announced Monday that it would enact new testing procedures that go above and beyond what is required by federal law. 

105 years old

That's the approximate age of the Courtland Street Bridge's framework in Atlanta, GA. With repairing transportation infrastructure a national issue, some cities are starting to take charge of funding themselves.

8,000 square feet

That's how much space Inte­grated Device Tech­nology will provide for Northeastern University to open educational hubs embedded directly in select companies in Silicon Valley. The satellite locations will offer some long-term internships mixed with in class curriculum. 

31 international leaders

That's how many international leaders' personal info —including passport numbers, and visa grant numbers — was leaked by the Australian immigration department following the last G20 summit. As reported by the Guardian, the info was accidentally sent to the organisers of the Asian Cup football tournament.


That's the cost of a small media player, known as a "notel," that is reportedly in up to half of all North Korean households. Able to play DVDs and content stored on USB sticks, the device is an outlet for contraband material to make its way into the country. As Reuters reports, notels were legalized by the North Korean government last year, but are still illegally smuggled in from China.

People aren't walking into banks anymore

Fri, 2015-03-27 15:40

If you see a vacant building for lease in the neighborhood, chances are there was a bank there at one point. We’re seeing it at financial institutions big and small — from Citigroup, now operating in fewer cities, to FirstMerit, which is closing 16 branches in four states. 

Between direct deposits and ATM’s, walking into a bank isn’t something a lot of people do anymore. Loans are now more by-the-numbers.

Charles Kahn, who teaches finance at the University of Illinois, says it makes sense that banks are closing branches to cut costs — specifically real estate and personnel. Also, Kahn says banks have a lot more competition, from credit card companies and brokerage firms, for instance.

What’s lost with a branch closing? A lot of hand-holding for people who find banking confusing, says Paul Noring, managing director in the Financial Risk Management practice at Navigant, a consulting firm. Noring says, a branch is like an ad. 

"Branches are the best way that banks can still reflect their brand with their customers," Noring says. 

Still, for most customers, says Ross Levine professor of banking and finance at the Haas School of Business at University of California, Berkeley, it’ll just be an inconvenience. 

Women lag in well-paid blue-collar jobs

Fri, 2015-03-27 12:14

With the job market getting tighter, employers are starting to report shortages of skilled workers, especially in manufacturing and the construction trades—for jobs like welder, electrician, carpenter and machinist. The Manufacturing Institute, part of the National Association of Manufacturers, predicts there will be 2 million unfilled jobs at American companies by 2025 due to the so-called ‘skills gap.’  The American Welding Society estimates that the building and manufacturing industries will need 290,000 additional welders, welding instructors and the like by 2020.

Employer groups, labor unions, women’s advocacy groups and government policymakers all see women as part of a potential solution to the coming blue-collar labor shortage. But so far, progress to recruit more women to training programs and jobs in the construction trades has been slow.

“We’ve seen the desegregation of many occupations—bus driver, mail carrier, firefighter, police officer,” says Lauren Sugerman, director of the National Center for Women’s Employment Equity, a research and advocacy program of the Washington, D.C.-based group Wider Opportunities for Women. “But we have not seen the same movement of women into the construction trades.”

Sugerman says that is a significant failure because such occupational segregation leaves women out of lucrative jobs that require skill and training, but not necessarily an expensive four-year college degree. Construction jobs — often through unions — also frequently come with health coverage and a pension. She says the difference between traditionally male-dominated blue-collar jobs and traditionally female-dominated "pink-collar jobs" can lead to “between a $900,000 and $2 million gap in earnings over a lifetime.”

WOW has compared the top occupations (by participation) of men and women and found big gaps in pay (see chart). The top three occupations for women include secretary ($665 median weekly wages), registered nurse ($1,086) and cashier ($368). For men, they are truck driver ($736 median weekly wages), manager ($1,409) and first-line supervisor of retail workers ($792).

And, says Sugerman, women are poorly represented in jobs such as roofer, carpenter, electrician, ironworker. All of those jobs can pay $40/hour or more once a worker reaches journeyman status. “Women are now 2.6 percent of the construction workforce,” says Sugerman, “so there’s been very little progress.”

Making progress on that gender gap starts in a smattering of nonprofit pre-apprenticeship and skills-training programs around the country. They’re supported by unions, employers, and community colleges, and teach women basic tool-use, applied math, worksite job safety.

Holly Huntley owns environs, a small construction firm in Portland, Oregon, and regularly brings women onto the job site to train them through a pre-apprenticeship she teaches in that is run by the nonprofit group Oregon Tradeswomen. Huntley has hired two graduates from the program. Once they reach journeyman status they’ll make $26/hour.

Huntley says she’s glad to be able to offer a woman-run construction workplace.

“I know a lot of women in the trades that experience harassment on a daily basis,” she says. “I think it’s history, it’s a male-dominated culture with the catcalls and racial slurs and gender-based slurs and jokes. And I can’t have that, I have a really low tolerance for that.”

Journeyman carpenter Dan Ewing is the lone man on Huntley’s crew. “When I mention that everybody else in the company is a woman, people tend to raise their eyebrows,” says Ewing. “But it’s really nice. Men are fine, but we tend to be pretty crass. Everyone here is just more civilized.”

Where there are pre-apprenticeship programs, like in Oregon, the number of women making it to construction apprentice and journeyman is rising. Unions and employers often support the programs—to boost women’s participation and counter discrimination, and also to deal with a growing shortage of skilled workers.

That support has made a big difference for Heather Mayther. She’s 32. Last year she did a free training program with Oregon Tradeswomen, went on to another training program and is now an apprentice in the local carpenter’s union.

Mayther has three-year-old triplets and she has been earning $19.69 an hour, plus getting family health insurance. “Gender-wise, I didn’t really notice any discrimination or anything like that,” says Mayther of the construction sites she’s worked on so far. “The crew was great, they were more than willing to show me what I needed to know.”

She says she has been catcalled, and propositioned for dates. She says her supervisor has her back when she complains. “I’m not here for a husband, I’m here to work. I’m here to work my butt off, and to take home a paycheck that I can live on.”

American Apparel CEO Dov Charney on pushing boundaries and his biggest weakness

Fri, 2015-03-27 11:56

Updated March 27, 2015. This story originally aired Jan. 20, 2104.
  Clothing company American Apparel is known for making their products in the U.S. and for paying their employees more than minimum wage. It's also known for eccentric CEO Dov Charney:       On pushing boundaries  “It’s important that every generation, there are going to be certain people that push boundaries. And those are my people."   On using sex to sell clothes
“Sex is inextricably linked to fashion and apparel. And it has been and always will be. And our clothing is connected to our sexual expression so of course, advertising related to clothing, there’s going to be a sexual connection forever, whether it’s Calvin Klein, American Apparel, or brands we haven’t even contemplated."   Kai Ryssdal: Do you ever look at one of your billboards and go: Whoa, alright wait, we went too far?
Dov Charney: Absolutely.
KR: And then what do you do?
DC: We put up another one.   On the importance of Made-in-USA
“I don’t think it’s very important to the customer and I’m glad that it’s not.” He clarifies that the "made in LA" aspect of the brand “brings flavor and it should also call attention to the fact that we make the merchandise ourselves which is very important.”   On his biggest weakness
“My biggest weakness is me. I mean, lock me up already! It’s obvious! Put me in a cage, I’ll be fine. I’m my own worst enemy. But what can you do—I was born strange.”      


Inside American Apparel's factory         Charney opened his first retail store in 2004, in Los Angeles. The bulk of American Apparel manufacturing happens in an immense warehouse in the city's downtown district. Employees from all departments work together out of the bright pink building. "We have sellers,  marketers, photographers, computer programmers, IT experts, production, product design, scheduling, forecasting, retail development, everybody is connected to this building," Charney says.   The last few years have been financially difficult for the company. "Right now, we’re retrenching a little bit because it’s unclear what the future of bricks and mortar retail is," says Charney. He has plans to build up the company's presence online and to expand the business in the future.   Charney's no stranger to personal difficulties as well. He's faced several sexual harassment lawsuits from past employees, most of which have been dropped. He's also faced criticism for the sexual images American Apparel uses on billboards that promote the brand.

Your Wallet: Recycling

Fri, 2015-03-27 10:15

Next week, we're talking about Recycling. How does reuse factor into your financial life?

Maybe you're in the market for a used car, or passed along your old baby clothes to a friend...

Tell us your story of economic recycling. Write to us, or tweet us -- we're at @MarketplaceWKND.

Transforming your wait in line from torture to fun

Fri, 2015-03-27 09:31

Have you ever had such a bad experience somewhere — a store, a hotel, a restaurant, an airport — that you vowed never to return? 

That's the question Dick Larson, a MIT engineering professor known as "Dr. Queue", asks his students. Larson, an expert in the field of lines, says that in a class full of college students, more than half of the hands go up. In fact, it was his own horrible experience in line at a big box store that first interested Larson in lines. Now, he studies the ways to optimize structures for an overall improved experience.

People have been studying lines since at least 1955, when an experiment in New York attempted to solve an issue with complaints about elevator delays. Larson says a business analyst at Wharton suggested that floor to ceiling mirrors be installed next to an elevator to stop complaints about delayed wait times. The elevator wait times stayed the same, but with people occupied by their own reflections, complaints dropped to near zero.

Coincidentally, 1955 also marked the opening of Disneyland, which soon mastered the art of the line to become, as Larson says, "The best scientist and engineers of line management in the world."

Disney's Imagineers — a team of scientists, engineers and operations managers — design lines along side attractions at Disney parks. The story begins with the wait to ride, and the Imagineers calculate and optimize the experience based on the payoff.

"They design all kinds of distractions within the line ... so that you feel like the amusement has actually started before you get on your two-minute ride up Space Mountain," Larson says.

If you've waited in line at a theme park (especially if you've waited alongside a child), twisting and turning through rooms and meticulously decorated outdoor spaces, to the tune of a favorite theme song and with video updates on monitors overhead, you've experienced firsthand some of these careful scientific calculations at work.

It's one thing to wait for the anticipated joy at the end of a theme park line, but lines aren't all so happy, and many of us are in them every day. In traffic, on hold with the cable company, waiting for checkout at the grocery store. It can be exasperating. Larson says that a lot of this is about managing expectations and weighing value.

"If somebody is shopping for the family for the week, and you have $200 worth of groceries, you expect to wait in that line for awhile, because there might be another one or two carts ahead of you like that," he says. "But if you go back the next day because you forgot a half a dozen eggs and a quart of milk, you expect to go in and out fast in the express checkout lane. It's all a matter of expectations."

If you're shopping for a value, you may be more willing to brave a long line. Larson says big box customers are happier to wait, because they think they're getting a deal, compared to if someone visits a high-end jewelry store, they may expect fast, personal service and no wait times. 

So can the theme-park models be applied to the outside world to make line experiences better elsewhere? Larson says other businesses can take some of the same ideas: distracting, amusing and teaching customers to keep their minds and eyes off their clocks.

And technologically, lines are changing everywhere. There are more options for self-service — at the gas station, the drug store or the bank — and more ways to preempt wait times by scheduling appointments, call back times, or "fast pass" style service: like at Disneyland, or in an airline's mileage club, or in a toll lane, where you can pre-book or pay more so you can wait around less.

Lines may be improving, but Larson says when it comes to wait time, there's still more work to do. 

"This is something that retailers and service providers don't understand," he says. "If they don't pay a lot of attention to their customers' line experiences, they may lose a customer for life."

Should you procrastinate on purpose?

Fri, 2015-03-27 09:19

"Never put off till tomorrow what you can do today." -Philip Stanhope, 4th Earl of Chesterfield 

You may have heard some version of this quote — in school, at work, from your parents or your boss —and you may even have said this to yourself or someone else as a piece of advice. 

But Rory Vaden might disagree. He's the author of "Procrastinate on Purpose", which aims to distinguish procrastination from priority dilution. According to Vaden, the former is a lost art; the latter is a means to mediocrity. 

In the modern workplace, overwhelmed by sheer volume of tasks and an increasingly prevalent over-achiever mentality, people take on as much as the possibly can, something that Vaden argues often leaves the most important things left undone in favor of daily minutia. 

In his book, he suggests that giving yourself permission to procrastinate is about reorganization and patience, by putting tasks through a funnel which allows for elimination, automation, delegation and delay of tasks before committing one's focus. According to Vaden, offloading smaller responsibilities multiplies time for the next day.

To hear the full interview and learn more about how to procrastinate on purpose, listen using the player above.

A push for transparency in healthcare pricing

Fri, 2015-03-27 09:10

Usually when we shop, finding the price is the easy part. Cars, airplane tickets, burgers and beer, it’s all right there. 

But when it comes to health care, an industry we spend $3 trillion dollars a year on, prices often remain a mystery.

Some say that’s no coincidence, and that genuine cost transparency would make some of the waste and price variations vanish. It's not easy breaking open a black box that, intentionally or not, richly rewards doctors, hospitals and insurers.

Barbara Barnes has peered inside that box in a way few of us ever do. She audits hospital medical records for a living, about 20 charts a day, five days a week.

That trained-eye experience has hardened her, so when she plans her own medical care she knows the healthcare system helps her physical health — but when it comes to her financial health, she’s on her own.

“I look at some of this and I think to myself, 'Are you, as a physician, making the best decisions for the patients? Or, are you making the best decisions for you, and your hospital and your business?”

It’s an uncomfortable conclusion to draw about a business that many still see as compassionate, even loving, but in an era where many of us have to shell out thousands of dollars before insurance kicks, there’s nothing kind about concealing prices.

“How did we get to this place where you ask what something costs and no one can tell you and we accept that as normal," asks Jeanne Pinder, who launched, a guide to health care prices.

She’s hoping to stop people like Barnes from getting walloped by big — sometimes financially devastating — bills that are essentially secrets until after the fact.

In her work, Pinder has found example after example of jaw-dropping price discrepancies.

“People [in San Francisco] were being asked to pay anywhere from $20 to $988 for a simple X-ray,” she says.

Pinder relies on a mix of big data, shoe-leather journalism and crowd-sourcing for price information.

To maximize her reach, she’s partnered with four large public radio stations, including WNYC in New York, WHYY in Philadelphia, KPCC in Los Angeles and KQED in San Francisco. (Disclaimer: KPCC, like Marketplace, is part of American Public Media.) 

Pinder is looking at the provider side of the ledger too. MedPage Today, which reaches some 670,000 physicians, has also agreed to work with Pinder.

That said, even with access to about 2.5 million consumers and doctors to help crowd source, Pinder says it’s beyond her scope to list every price for every procedure performed by every doctor out there.

“We don’t pretend to be exhaustive or comprehensive, it’s a sampling so that you can have an idea how big the price range is to orient yourself in the marketplace,” she says.

The effort is really just a start: Through the help of some outrageous stories, it aims to pressure doctors, hospitals and insurance companies to do more than what they do today, but there is some cause for guarded optimism. The professional group Healthcare Financial Management Association has launched a campaign for greater price transparency. The group says most hospitals do something on transparency, from the simple to the sophisticated. In Seattle, Virginia Mason Health System has built a tool that it says estimates out-of-pocket expenses based on someone’s actual insurance plan.

It's good business, says Vice President of Finance Steve Schaefer. “In every retail experience, every consumer weighs two variables: personal cost and quality. And they will make purchasing decisions based on those two variables,” he says.

That thinking about consumer behavior is a dawning realization for many in healthcare. That may be the most powerful benefit that comes from all the attention transparency is getting; by talking about prices, we begin a conversation about value. And if you think talking about prices was hard…

Dov Charney seeks $40 million in lawsuit

Fri, 2015-03-27 09:01

Earlier this week, the now former CEO of American Apparel, Dov Charney, decided to move forward with a $40 million wrongful termination lawsuit.

Charney, you might remember, was fired after much strurm und drang and questionable conduct, I think you could say — much of it sexual in nature.

The interview I did with Charney was from almost a year ago ... you gotta hear it to believe it. Really.

American Apparel CEO Dov Charney on pushing boundaries and his biggest weakness




Commercial drones have tailwind overseas

Fri, 2015-03-27 08:54

Mark Zuckerberg, the founder and CEO of Facebook, put up a post yesterday confirming that his company has been testing drones over in the United Kingdom.

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As part of our effort to connect the world, we've designed unmanned aircraft that can beam internet access...

Posted by Mark Zuckerberg on Thursday, March 26, 2015

The basic idea is to beam internet service down from drones that will eventually have a wingspan wider than a Boeing 737. Amazon, meanwhile, is also looking to the U.K. to develop its drone delivery service.

In the U.S., the FAA has proposed rules that would allow some commercial drone use, such as only flying during the day and at certain heights. The agency says it needs to balance safety and privacy with the economic potential these drones might represent.

While waiting for the rules to be finalized and implemented, permission to use unmanned aircraft commercially has to be given on a case by case basis. That’s largely grounded the real estate agents, photographers, farmers, and other professionals who might want to use drones at work, says Jon Resnik with DJI, a company that makes drones for personal and commercial use.

U.S. regulations are lagging behind European countries, Australia, and Canada, says Brendan Schulman, head of the Unmanned Aircraft Systems practice at the law firm Kramer Levin. But the FAA’s proposal is a good start, says Brian Wynne, the president of Association for Unmanned Vehicle Systems International. Still, he says the sooner drones can get off the ground, the sooner the industry can start contributing to the economy.