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Long road for short-haul truckers

Thu, 2014-05-01 13:01

Short-haul truckers move freight around town, often to and from a port. Some complain that they have been misclassified as independent contractors, even though they are treated like employees.

“They classify us as an independent contractor, basically, to get out of paying certain taxes. They put a lot of the expense on the drivers,” says Carol Cauley, a short-haul trucker in Savannah, Georgia.

As an independent contractor, Cauley says she’s forced to pay unreasonable expenses, like the cost for tires that belong to the shipping company.

But a representative for short-haul trucking companies says truckers don’t have to work as independent contractors.

“If a driver prefers to be an employee, there is certainly companies that he or she can go work for. In fact, there is a drastic shortage of company drivers,” says Alex Cherin, executive director of the Harbor Trucking Association.

Employee truckers earn less money he says, but they have more steady work.

Cherin says his organization will assist state regulators in weeding out companies that intentionally misclassify their truckers as independent contractors.

Why Domino's is replacing pizza crust with chicken

Thu, 2014-05-01 11:56

Not too long ago, we mentioned that chicken was becoming a hot commodity because of rising beef and pork prices--so hot, in fact, that some restaurants are beginning to use them in just about anything they can think of.

"You can do a lot with it and flavor it in a lot of different ways," says Roxanne Swamba, pizza chef for Domino's Pizza. "So it's becoming more popular than it has been."

Thus, Domino's "Specialty Chicken" was born. Not the fried chicken-crust that some had initially thought, the dish consists of 12 bite-sized pieces of chicken, served with a blend of sauces and pizza toppings.

"You can top pizza however you like, but sometimes you don't want pizza," Swamba said. "This happened to be an idea that we tossed around and we started making for lunch a lot, and I came up with a variety of flavors."

Despite the high demand for chicken, Swamba says there haven't been any problems with obtaining the necessary ingredients.

"We work very closely with our supply chain center and find out what the availability is going to be for the year when we plan on launching it," she says. "We knew we could do it."

Looking for venture capital? Be careful what you wish for

Thu, 2014-05-01 11:08

The amount of venture capital money being pumped into start-ups is at its highest level since 2001, but it’s still nowhere near what it was like at the heyday of the tech bubble era. Raising money is hard to begin with, and it’s the lifeblood of a new business. On the other hand, you also have to be careful what you wish for. If you are one of the lucky companies who makes it to the level where big investors want a piece of you, then...you have a whole new problem to think about.

Wendy Nguyen and a couple of friends founded HealthyOut, an online and mobile app to help people find healthy restaurant food. As Nguyen puts it: “We want to get people healthy restaurant food in two clicks, to make that choice really convenient and easy to do every day."

Two years ago, Nguyen went from investor to investor trying to get money to make her dream happen. 

“Everyone says ‘maybe’ and ‘comeback later’ ... which is actually a 'no'.”

Eventually, Nguyen and her friends boot strapped, a.k.a. they used their savings and built the app themselves. It did well – very well, in fact – and investors started to notice. HealthyOut ended up raising $1.2 million.

While this was the break Nguyen desperately needed, for many businesses, it’s a moment that is fraught with tough decisions. 

“Venture capitalists exist ultimately for one reason – to make money for their limited partners,” explains Josh Lerner, professor at Harvard Business School. “The only way to make money is to exit their investments.” 

That translates to selling their stake and/or the company as a whole. So that could mean a startup company goes public one day. It could also mean the company gets packaged up and sold to Google or Yahoo, who may or may not actually do anything with it. It could mean changing a company’s target market or even fundamental things about what the company does. If the startup and the major investor aren’t on the same page with all of this, it’s not good. 

“The greatest fear is you pick wrong. And that venture firm, because they now have a large say in your company, directs your company in a direction you don’t think is right,” says Matthew Amsden, who helped start Proof Pilot, an online tool to launch and manage clinical trials and longitudinal research studies. 

Amsden is quick to add that any startup should be so lucky as to have the luxury of choice. 

All the same, getting money means giving up control, so when Amsden talks with investors, he tells them, “It’s dating, frankly. Getting investment is like dating. You’re looking for compatibility.”

Which means finding an investor with expertise in your field, whom you can trust as a mentor.

“It’s not only about the check,” says Amsden. “What else can that particular investor bring to the table?”

 And, just like in romantic dating, matches don't always go well.  Helena Plater-Zyberk is the CEO of SimpleTherapy, a company that designs online exercise therapy for people who can’t get to a clinic. She recalls instances where “I’ve been asked within the first two minutes of meeting someone what my endgame is.” In other instances she’s been “very pointedly told that the conversation doesn’t need to continue unless I have an exit strategy up front -- before they even understand what it is we’re trying to achieve and who we’re trying to help.”

Of course, sometimes the company founder really does need to rethink things. Like in relationships, they often have to ask, “am I the crazy one?”

Katie Rae, a veteran entrepreneur and chair of TechStars Boston as well as manager of a small venture seed fund called Project 11, says founders who haven’t gained a certain amount of perspective are likely to end up facing challenges getting the right funder. “Lots of teams hold back what they’re working on for a long time before showing people,” she says. “In my experience, the best founders don’t share with the public, but they do share with knowledgeable people their point of view, how they’re thinking, show them the product, and get active feedback.” 

“If you don’t talk to smart people, that’s a very tough mistake – it slows you down, you don’t learn as much, you don’t get as much feedback from smart people who would send you in a slightly different and better direction. They sometimes get funded by the wrong people with a very strong point of view opposite from your point of view.” 

In other cases, a startup’s founder may not have the background for approaching investors. That was the case for Helena Plater-Zyberk’s company, Simple Thearapy. She’s serves as the CEO, but she wasn’t the original CEO.

“Our service wasn’t conceived as a money making endeavor,” she says. “Our team of doctors created these therapeutic exercises as a result of patient need.” 

In other words, the doctors were thinking about patients, not how to grow the business. Which is why Plater-Zyberk was brought in as the new CEO. “We want to be able to balance that type of value system with the needs of an investor who is looking for a return in a set time frame; It’s a difficult conversation to have," she says.

It’s a conversation that Wendy Nguyen, with the Healthy Out App, had to have as well. Before landing the big the $1.2 million investment, she had to answer big questions for investors with big expectations. “Are you guys going to be a $50 million company in five years? Because that’s the type of return that a venture capitalist is looking for,” says Nguyen. If you’re not prepared to go big, then go home. Or at least to a smaller investor than a venture capitalist.

Nguyen thought about it, and considered the fact that the money would cost her a degree of control over her company. She trusted her funders, “and so we said...let’s do this!”

Nguyen and colleagues in New York with former Mayor Michael Bloomberg.

Courtesy of Wendy Nguyen

HealthyOut is expanding its model, branching out to help people design personal detox diets now, and is trying to bring its ordering service beyond New York City.

 As with all startups, it’s not just about the idea, and it’s never just about the money – it’s about where you get the money, and what you do with it.

Time to mourn the minibar

Thu, 2014-05-01 11:00
Friday, May 2, 2014 - 05:58 Wikimedia Commons

Good-bye, midnight Snickers bar. Adios, Pringles cylinder. Sayonara, bourbon nightcap.

They may never go away completely, but the hotel minibar can certainly be considered a rare and endangered species.

Why are minibars vanishing?

"In Las Vegas, a little bottle of vodka can cost you more than $14. And in Washington D.C., if you want a bag of peanuts, be prepared to pay over $7," says Kevin Carter with the travel planning website TripAdvisor.

A recent TripAdvisor survey found just 7 percent of U.S. travelers even remotely care about a minibar in the room. Not surprisingly, PKF Hospitality found that between 2007–2012 minibar revenue fell by nearly 30 percent.

Disappearing minibars is just one of several changes in modern-day U.S. hotel rooms. Woodworth says what hotels lose in certain antiquated amenities, companies hope to make up in room rates.

"If I can get you to pay an extra dollar for your room tonight, about 90 cents of that is pure profit," says Woodworth. "The energies and management focus has been really optimizing room revenues."

TripAdvisor found travelers want a lot of stuff that starts with the word "free": Free wifi. Free breakfast. Free parking.

Oh, and we want outlets – lots and lots of electrical outlets.     

5 more "amenities" disappearing from your hotel room

PKF Hospitality President Mark Woodworth says hotels are recalculating what makes them money. Here are five services on the chopping block: 

1. Dry cleaning.

There will still be ironing boards, but you'll have to push them yourself.

Hulton Archive/Getty Images

2. Telephone services. 

Perhaps wake up calls will be rerouted to cell phones.

Keystone/Hulton Archive/Getty Images

3. Renting movies on hotel TVs. 

Enough guests prefer their own screens. 

Jimmy Sime/Hulton Archive/Getty Images

4. Room size.

The smaller the room, the bigger the hotel's profit. And the closer you are to your cell phone, which is what you care about anyway. 

Hulton Archive/Getty Images

5. Coffee makers.

For now, the coffee makers are still there -- but you have to pay for anything you brew

Hulton Archive/Getty Images Marketplace Morning Report for Friday May 2, 2014Why do luxury hotels charge for Wi-Fi, but cheap hotels don't?Hotels seek added revenue in service feesHow does a $25 room service burger not make money?by Dan GorensteinPodcast Title Time to mourn the minibarStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Elon Musk, Tesla plan 'Gigafactory' site

Thu, 2014-05-01 10:54
Friday, May 2, 2014 - 05:48 Guus Schoonewille/AFP/Getty Images

A view of a fully electric Tesla car on an assembly line at the new Tesla Motors car factory in the Netherlands during the opening and launch of the new factory, on August 22, 2013.

 

Nevada, New Mexico, Texas, or Arizona? There can be only one home for the Gigafactory

Or possibly two... if two are built.

The Gigafactory is a massive battery plant, built by the electric car maker Tesla, that will take up to 1,000 acres and will include its own on-site wind and solar energy plants. Tesla has narrowed down its choice of location to four states, but rather than pick one now, it will prepare to build in two or three (or potentially all four), CEO Elon Musk announced on Wednesday.

Replicating engineering work, design work, site selection, connection to power and utilities, and permitting is a costly strategy, says Ben Kallo, senior equity analyst with Robert W. Baird.

"You can talk about millions and even tens of millions [of dollars] to do this" for just one extra site, according to Kallo.

But the cost of not doing it could be much greater. Tesla plans to have 500,000 electric cars on the road by 2020. This would include more of its Model S sedans, a new SUV, and a more affordable car (at $35,000, it might be described as 'less unaffordable'). Tesla also plans to expand into electricity storage to the wind and solar industries, says Kallo. And the gigafactory is the foundation of that plan. A delay could damage Tesla's competitive advantage as a first mover, and could damage investor confidence. Aside from its own share holders, Tesla needs investors to finance the $5 billion behemoth project.

Jakki Mohr teaches marketing at the University of Montana and has followed Tesla closely. She says having multiple possibilities to site the gigafactory is a savvy negotiating move.

"States give huge incentives to get this kind of business in their regions," says Mohr, and this is a way of "playing one state against another to receive better incentives to locate there."

There's also one critical but underappreciated concession Tesla wants, according to Charles Hill, professor of management at the University of Washington's Foster School of Business. Tesla wants to sell cars itself, not through dealerships.

"It may be that Tesla picks a state that's initially hostile to that – Texas would be an example – as a way of getting leverage for them to change that policy as well," says Hill.

"The political issue around whether Tesla should have a direct sales model as opposed to selling through dealers is almost as big of an issue as the battery plant, and I don't think the two are totally separable."

The more back up plans you have, the more arms you can twist.

Marketplace Morning Report for Friday May 2, 2014Marketplace Tech for Friday, May 2, 2014by Sabri Ben-AchourPodcast Title Elon Musk, Tesla plan 'Gigafactory' siteStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Funding an album in a jazz-improv kind of way

Thu, 2014-05-01 09:07

Over the years on Marketplace we've tried to cajole artists to talk business. It's not easy -- many are more comfortable talking about inspiration and passion than getting their hands dirty with money.

But if you want to bring a creative project to fruition, there are money choices to be made. For instance, jazz musician Lauren Kinhan decided to go online to crowdsource the money for her newly released solo album called "Circle in a Square."

Some people might use a spreadsheet to set their fundraising goal when crowdsourcing cash. Lauren Kinhan tells Marketplace Morning Report host David Brancaccio that she did it in a more jazz-improv kind of a way. 

The changing face of the money transfer business

Thu, 2014-05-01 09:00

Western Union, by far the biggest player in the money transfer business, has new competition from Walmart, which recently added a store-to-store money transfer service in the U.S. Both companies know that to grow in this industry, you have to keep adding new customers – which means the face of the money transfer business is changing a bit.

To understand how the sector is trying to attract customers one by one, meet two guys who recently sent money through Western Union. Customer No. 1 is Carlos Galvez.

“Well, I just sent $370 right now,” says Galvez, coming out of a small Western Union retail location in Washington.

You could call Galvez a traditional Western Union customer. He’s an immigrant who makes enough selling tamales to send money to cousins in El Salvador.

“We can’t send money every time,” says his son, Armando Menjivar, “but at least once a month, or when it comes to a big emergency.”

Now, meet Customer No. 2, who is not traditional.

Will Tjernlund, a self-described “third-generation Minnesotan. The 23-year-old buys and sells things on Amazon and eBay, and he used Western Union to send money to China.

But what’s actually different about Tjernlund’s story is where he sent the money from.

I googled Western Union to find the nearest location to me,” he says. “And the nearest location was inside a U.S. Bank.”

Over the last five years, the number of bank branches offering Western Union services has almost quadrupled, to more than 10,000 in the U.S. and Canada, according to the company. U.S. Bancorp, SunTrust Banks Inc., and Regions Financial Corp. are among its biggest partners.  

Analysts say banks used to resist this kind of partnership. Some didn’t want to advertise a branded service that wasn’t their own.

Plus: “Western Union traditionally served the underbanked and the underserved,” says analyst Wayne Johnson with Raymond James, which has investments in this sector.

But the majority of Western Union senders today are banked, according to Frank Lockridge, the vice president of strategic accounts for Western Union in the U.S. That means those customers have bank accounts, even if their relatives back home don’t.

“Some of our bank partners have realized that they’ve seen their customers getting the money out of the bank ATMs, getting the cash out of the branch, and walking next door to conduct that money transfer,” says Lockridge.

So now banks are trying both to retain their customers’ business, and draw new underserved clients into mainstream financial services.

Western Union won’t say how well the strategy of partnering with banks is paying off. But it does say people who transfer money from banks tend to send more than people in retail locations.

The bulk of the money Western Union sends is to and from foreign countries. But it does have a new domestic competitor: a service called Walmart-2-Walmart.

“It’s available at all 4,200 of Walmart branded locations,” says Daniel Eckert, Walmart U.S.’s senior vice president of services.

Eckert says simplified, inexpensive money transfer services are especially useful to people displaced from their families, like military personnel and shale oil workers.

“Even just in the first few days of Walmart-2-Walmart being up and running, our primary transaction stores were Williston, North Dakota, which is right out by the oil fields, and Killeen, Texas, which is just outside of an active duty army base,” he says.

And that’s how it goes in the money transfer business – adding customers bit by bit.

March to the beat of your own... tuba

Thu, 2014-05-01 08:48

From the Marketplace Datebook, here's a look at what's coming up Friday, May 2:

In Washington, the Labor Department reports on the employment situation for April.

The Commerce Department reports on March factory orders.

Will it rain? Shine? Snow? Hurricane? The Weather Channel debuted on this date in 1982. How did we get dressed without it?

And in 1936 Sergei Prokofiev's symphony, "Peter and the Wolf," premiered at the Moscow Children's Musical Theater.

Sticking with our musical theme: it's International Tuba Day.

Despite strong jobs report, wages still flat

Thu, 2014-05-01 08:30
Friday, May 2, 2014 - 05:19 John Moore/Getty Images

A job applicant and a potential employer shake hands at the 'Denver Hires Job Fair' in Denver, Colorado.

[UPDATED: FRIDAY, MAY 2, 2014, 9:58am ET]: The April 2014 jobs report from the Department of Labor shows much stronger employment growth than economists expected, and a significantly lower unemployment rate. The unemployment rate fell 0.4 percent to 6.3 percent in April.

Nonfarm private- and public-sector payroll jobs rose by 288,000 in April. The consensus expectation was 215,000. Job gains came across the board, in white- and blue-collar jobs: Professional and business services (+75,000), temporary employment (+24,000), retail trade (+35,000) with car dealerships particularly strong. Bars and restaurants added 33,000 jobs and construction added 32,000 jobs, a welcome recovery for a housing sector that has seemed weak in recent months. Health care and mining also rose strongly. Manufacturing and government jobs were both essentially unchanged.

The unemployment rate decline appears very favorable on its face -- 6.3 percent is the lowest unemployment rate since September 2008, as the financial crisis was raging. It hit a peak of 10 percent in October 2009, before beginning its painstakingly slow, steady decline to April 2014’s level.

One force driving the unemployment rate down is a decline in the labor force participation rate -- to 62.8 percent in April. The number of people in the civilian labor force -- those either working, or unemployed and actively looking for work -- declined by 806,000, after increasing by 503,000 in March. Data from the household survey -- the source of labor force measures -- is considered more volatile than the job-creation numbers derived from the Establishment Survey, and it might be a few months before these trends settle out more clearly.

Job gains turn out to have been better than previously reported during the winter, when the economy slowed dramatically amid severe weather events. February’s figure was revised up from +197,000 to +222,000, and March was revised from +192,000 to +203,000. That puts the three-month average at 238,000. That could signal a moderate, but significant, acceleration of job-creation in the economy. At some point, faster wage growth could even follow.

Marketplace Morning Report for Friday May 2, 2014by Mitchell HartmanPodcast Title Finally, April was probably a 'pretty good' month for jobsStory Type News StorySyndication SlackerSoundcloudStitcherSwellApp Respond No

PODCAST: LinkedIn's secret (no cat pictures!)

Thu, 2014-05-01 08:28

The U.S. economy nearly stalled out from January through March. While that might be a snapshot of what was then, it is not what is now.

Twitter's stock hit a new low this week, and it seems that right now Wall Street doesn’t have much love for the social-media sector. Despite revenue growth, the sector is seeing a slowdown in users signing up and in advertising sales. Could LinkedIn weather the storm better than its competitors? 

Just a few months ago health care navigators wanted desperately to get young people to sign up for the Affordable Care Act. There was an all-out advertising blitz aimed towards young people between the ages of 18 and 34 to get them to sign up for health insurance. But it seems like everybody forgot something. None of the famous people who made commercials for Obamacare mentioned the part of the law that lets young people who aged out of foster care sign up for extended Medicaid, and keep it until age 26. 

Former FCC head Michael Powell talks future of cable

Thu, 2014-05-01 08:20

Big cable companies continue to just get bigger. In response to Comcast and Time Warner's merger earlier this year, AT&T and DirecTV are thinking of doing the same. Which got former FCC chairman Michael Powell thinking: Why are all these mergers happening?

"One of the things I think is a serious issue is that the economy has been strained," he said. "I think the model has to find a way to find more affordable, more accessible packages, given the strains of the economy."

A la carte, however, is not one of the ways to get around the strain.

"True a la carte...would actually cost consumers a lot more," he said. "If something like ESPN--which is sold to the cable system for a little over $5 a [subscription]--had to be sold a la carte, that product would be sold for $20 or $30."

One of the possible solutions, of course, might lie in the ubiquity of the internet. But Powell--now the CEO of the National Cable and Telecommunications Association--says the so-called internet "fast lane" the FCC had considered is not the answer.

"[Netflix] can't afford to have jittery or interrupted bits," he said. "You want to watch a two hour movie that is uninterrupted, so making sure the network can handle that level of quality is what the buyer wants."

Powell, however, still likes to consume his programming on the big screen, via video on demand. True Detective in particular.

Chancellor Merkel goes to Washington

Thu, 2014-05-01 06:16

German chancellor Angela Merkel will meet with President Obama on Friday to discuss possible economic sanctions against Russia. But Germany's business relationship with Russia complicates the situation.

"So far, Germany seems to have supported the latest EU sanctions, which are targeting far more political officials. But not, like the U.S. sanctions, targeting specific businesses," says Angela Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University.

Germany depends on Russia for about a third of its energy needs. And Germany is also Russia's biggest trading partner in Europe.

"There are more than 6,000 German companies that are actually operating, producing in Russia," says Anders Aslund, a senior fellow at the Peterson Institute for International Economics. "The German business community is very strongly opposed to sanctions against Russia."

AT&T reportedly pursuing acquisition of DirecTV

Thu, 2014-05-01 06:13

AT&T is reportedly discussing an acquisition of DirecTV, according to a story in today’s Wall Street Journal.

Comcast already has a $45 billion merger pending with Time Warner Cable -- it’s being scrutinized for anti-trust implications by the Federal Communications Commission. Comcast would end up with 30 million subscribers if the merger is approved. AT&T would reach approximately 26 million pay-TV subscribers with DirecTV, the biggest satellite TV provider, ahead of rival Dish Network. DirecTV could cost $40 billion to purchase, according to the Journal.

A merged Comcast-Time Warner Cable would become the nation’s biggest cable company (Comcast already has the largest number of subscribers), and would also be a dominant player in the broadband internet market. AT&T already has a mid-sized pay-TV business, as well as delivering video to its large mobile-phone subscriber base. If AT&T were to absorb DirecTV, it would have a bigger national footprint for delivering mobile television and video to smart-devices.

Regulators and lawmakers are scrutinizing the proposed Comcast-Time Warner deal. An AT&T-DirecTV deal, if it happened, would likely raise significant antitrust concerns as well.

On the plus side, AT&T could argue that a merger will enable the company to better compete with a new cable-broadband internet giant, Comcast-plus-Time-Warner. On the other hand, fewer pay-television providers nationwide would shrink the competitive playing field and leave consumers in many markets with few providers to choose among, says technology analyst Carl Howe, vice president at the Yankee Group.

“The FCC is faced with a very difficult choice,” says Howe. “They can try to prohibit such mergers, which leaves a lot of smaller companies that may not be terribly competitive in the market. Or, they can allow these mergers and end up with monopolies. Neither choice is necessarily great for consumers.”

Howe says we could end up with a big-three of internet-telephone-cable-TV companies in the end -- Comcast, AT&T, and Verizon -- just like there were once three over-the-air broadcast networks -- ABC, NBC and CBS -- that dominated media delivery to American households. The new media-telecom behemoths could bundle all their services together for one low -- or not so low -- price, says Howe.

Google heads to Hacker School

Thu, 2014-05-01 04:44

There's an urban legend in the tech community that goes like this: The School of Computer Science at Carnegie Mellon University used to keep track of how many of their undergraduates were men named Dave versus how many were women. And it was considered an accomplishment when they got the ratio down to one Dave for every woman. Here is the latest installment in our series about the tech industry's diversity challenges called “I am not a Dave”.

Hacker School is not as dangerous as it sounds. In fact, it is a 12 week program based in New York which takes 60 participants who want to learn how to be better programmers. Students work on everything from developing their own operating system, to designing apps, to understanding the tools that make complex integrated circuits. Rose Ames is one such student.

Ames is from a small, rural town in Ontario, Canada with a population of only about 700 people. She found a love of math and programming through MOOCs (Massive Open Online Courses), and eventually learned enough to apply and be accepted to Hacker School. Participants attend the program for free, but New York is not an inexpensive place to live. Ames, a mother of four, says she would not have been able to attend were it not for the $5,000 grants given to qualified female programmers by Google. It's part of an effort to address the notorious imbalance of men and women in the tech industry.

For her part, Ames does not think that getting the tech industry to hire more women would drastically change how things are done. To her, it just makes sense that if companies want to have the best programmers, they have to open the field to as many candidates as possible:

"I think you have to judge each person on their own merits. I don’t think you’re going to see a huge difference in tech by getting it to be 50 percent female, except of course overall you’re choosing from a bigger pool so you’re going to have more talent available to you."

Health care for foster youth, if they can find it

Thu, 2014-05-01 04:32

Just a few months ago health care navigators wanted desperately to get young people to sign up for the Affordable Care Act. There was an all-out advertising blitz aimed towards young people between the ages of 18 and 34 to get them to sign up for health insurance.

More than 6 hours of Obamacare commercials on YouTube? That smells like desperation. 

But it seems like everybody forgot something. Not LeBron James, not  Zak Galifianakas, and not JLo's mom or the other famous people who made commercials for Obamacare mentioned the part of the law that lets young people who aged out of foster care sign up for extended Medicaid, and keep it until age 26. 

Kimberly Waller researches the ACA and foster care. She says the provision came about as an issue of fairness. "Advocates started realizing hey, what happens when the state's your parent?" she says.

When the state is your parent, you should now be able to get on their plan -- that's Medicaid -- until age 26. But states don't have to do any outreach about the provision. Waller says many young people don’t know they’re eligible, and that, "a right is only empowering if you know about it."

Kamille Tynes aged out of foster care in Michigan. She’s 23 now and in college. She’s good at navigating the ins and outs of government programs. Even she found the process confusing.

"I initially applied through, what is it, the market health care something website," she remembers.

That would be the heathcare.gov. Every state is different, but in Michigan, kids who age out of foster care need to apply for healthcare through the agency that runs foster care. (It's not an intuitive process. If you need it, here are tips and a more detailed walk through the application).

For her part, Tynes just kept trying to apply. "I was told how you mention that you were in the foster care system and you aged out," she says. But, "I got denied."

She's not really sure why that happened, because she does qualify. Tynes just wants to go to the doctor and not rack up debt to do it. Former foster care youth like her have a lot more health care needs than others their age. But Tynes hasn't been to the doctor in over two years.

In Michigan, foster care advocates are working to draw attention to the glitches in the sign up process. Tynes did end up getting some help on her application from an advocate she knows.

It made a difference. Kamille Tynes sighs and says she's "finally!" insured. But she also laughs happily as she mimes holding her new health insurance card up high. She's already made her first doctor's appointment. 

How LinkedIn is trying to stay afloat

Thu, 2014-05-01 03:46

Twitter's stock hit a new low this week, and it seems that right now Wall Street doesn’t have much love for the social-media sector. Despite revenue growth, the sector is seeing a slowdown in users signing up and in advertising sales.

Could LinkedIn weather the storm better than its competitors? 

One a chunk of its revenue comes from corporate recruiters and member fees. 

But Geoffrey James says he thinks LinkedIn is safe because it focuses on what nearly all of us do: work. "And that's its beauty," he says. "It's work. It's the lack of the funny cat pictures," he says. 

Sharing cat pictures may come and go, but sharing who we are as workers, James says, has staying power.

When the best advice comes from the worst sources

Wed, 2014-04-30 13:56

Would you trust business advice from a CEO that watched his company go bankrupt? Or relationship advice from someone who was accused of murdering their spouse?

Zac Bissonnette, author of the book "Good Advice from Bad People", says there are plenty of people who think they can give this type of advice through speeches or books. Usually, it’s when these people are at the height of their careers. And sometimes, they speak too soon.

"It just struck me about a year ago, how easy it is to become an inspirational icon or a self-help expert and that kind of thing," says Bissonnette. "And how often, the people who we look to for wisdom are terrible at following their own advice."

While in the process of writing, Bissonnette noticed a trend in his research.

"Most of the CEOs that I found were cultivating personality-driven brands right at the apex of their careers, right before it all goes to hell," says Bissonnette.

But the desire for self-help books, guides and products in our modern society is significant. Despite the recession in 2008, America spent $11 billion on self-improvement products.

"In our desperate need for motivational figures, we make almost no effort to vet them," says Bissonnette.

Who wants to be bigger than the U.S.? Not China!

Wed, 2014-04-30 13:52

A new World Bank report suggests China's economy could surpass America's this year (by one measure, at least). But far from taking a triumphant tone, China's government is rejecting the numbers. Chinese leaders are wary about how their country's rise to the top could increase pressure on them to make concessions on carbon emissions, trade policy, currency and international aid.

There's another reason for China's muted response to this news: trumpeting strong growth numbers likely wouldn't be well received by the hundreds of millions of Chinese still living in poverty.

"The Chinese government usually reacts in a very quiet way," says Yale University finance professor Zhiwu Chen. "They realize that China overall, it's still a developing and a poor country."

All this is not to say that Chinese officials aren't privately excited about economic growth. Just don't look for any champagne, or Moutai toasts on camera.

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Mark Garrison: China tends to downplays news like this because of global politics, says Peterson Institute senior fellow Nicholas Lardy.

Nicholas Lardy: It certainly puts pressure on them to do more in the international arena.

When the numbers say you’re a bigger deal, other countries push you harder to give aid, change trade policy and stop screwing around with your currency. Dartmouth business school associate dean Matt Slaughter explains that rising in the ranks also brings attention to Chinese industrial pollution.

Matt Slaughter: The faster is China’s growth, the more the world legitimately looks to China for any meaningful carbon reduction.

China also worries about how economic news plays domestically, where hundreds of millions still live in poverty. Yale finance professor Zhiwu Chen says trumpeting growth numbers wouldn’t go over well at home.

Zhiwu Chen: The Chinese government usually reacts in a very quiet way, because they realize that China overall, it’s still a developing and poor country.

Remember, Lardy adds, China tops another important chart.

Lardy: All of the measures are in a sense a little bit artificial, because they’re a function to a considerable extent of the fact that China has 1.3 billion people.

Spread over its giant population, the swelling GDP isn’t much per person. Now all this doesn’t mean Chinese officials aren’t excited about economic growth, says Milken Institute managing director Perry Wong.

Perry Wong: To be ranked #1, they may celebrate in private.

But any champagne, or Moutai toasts won’t be done on camera. I'm Mark Garrison, for Marketplace.

New York parents opt out of high stakes tests

Wed, 2014-04-30 13:37

Last year, Amelia Costigan watched as her twin sons and their fourth-grade classmates prepared for the new state tests. It was the first year New York’s assessments were based on the Common Core, the nationally standardized curricula that many states have adopted in recent years. And, a lot was at stake in New York. The kids literally worried themselves sick. 

“My kids had trouble sleeping,” Costigan says. “Other kids had stomach aches. Kids were going to the doctors, and the doctors were saying it looked like it was stress from the test.”

The tests determined whether her sons advanced to the next grade, or got into a top middle school. Scores also played into teacher evaluations and school rankings. This year, Costigan and the parents of eight other kids at her school decided they didn’t want their kids to participate. 

“It was a hard decision that some of them had. They cried. They worried they weren’t going to go to graduation, but in the end, all 10 kids opted out,” she says. 

Parents’ groups estimate about 1,000 kids in New York City won’t be taking the Common Core assessments this year. Statewide, it’s about 35,000. Those numbers are hard to verify and they represent just  a tiny fraction of the total number of kids sitting down for the math tests this week.  

But opting out is the most drastic—and visible—part of a growing protest movement in New York and nationwide. Parents, teachers, and other critics have been holding rallies, trying to put an end to the standardized tests. 

Dan Bobkoff/Marketplace

At a rally in Lower Manhattan last week, Liz Rosenberg says her fourth grade daughter wasn’t scared of the tests at first.  

“She was super psyched to take it,” she says.

But Rosenberg was anything but psyched. Part of her objection is that questions and answers are not released after the test, so it’s hard for kids to know what they don’t know. She convinced her daughter that the tests are a bad idea. This year, she’s opting out. 

“It’s important to stand up. It’s important to talk back,” Rosenberg says.

Many teachers and critics believe the math is confusing and the English questions are too hard. Fourth graders are being asked to assess middle school level reading, some say.  

“We felt the questions did not actually assess whether children were reading with understanding, which we thought was really important to assess,” says Elizabeth Phillips, principal of PS 321 in Brooklyn.  

She’s not anti-testing or against the Common Core, but she say seeing the English exams turned her off. 

Phillips was also concerned that so much was riding on these tests. Like other critics, she held protests. And, to some degree they worked.  

“Up until a few weeks ago, there really was a lot at stake,” she says. 

Dan Bobkoff/Marketplace

Recently, New York officials scrambled to lower the stakes. No longer will test scores go on students’ permanent records. And, they won’t be used as the major determinant of whether kids go onto the next grade. 

Officials think that change will go a long way to placate many nervous parents.

“Knowing that the state test will only be used as one of multiple factors has eased some of those concerns,” says Emily Weiss, senior executive director of performance at New York City Department of Education

At some point, if too few students take the tests, some schools could lose funds.

That’s still far off, but with opposition to the tests mounting, New York’s fight could be coming to a state near you. 

Dan Bobkoff/Marketplace

If Clippers are for sale, what's the franchise worth?

Wed, 2014-04-30 13:35

As the next step in the public punishment of Los Angeles Clippers owner Donald T. Sterling, the NBA says it’s going to try to force him to sell his team. But this isn’t exactly a fire sale.

The traditional profit-focused reasons for buying a sports franchise are well established says Michael Leeds, a sports economist at Temple University. “I mean, you can go back to the 19th century," he says. "People would buy baseball teams because they owned a tavern nearby and they wanted to sell their beer.”

Nowadays, Leeds notes, owners are more likely to buy shares in media networks, but he says the payoff for ownership can come in different forms.

“When you own a sports franchise, you join a very exclusive club," he says. "As George Steinbrenner once said, 'Before I bought the Yankees, I was just some ship builder in Tampa.'”

Leeds says there’s a rush that comes with seeing your name in the paper, and some buyers are willing to pay a premium for that. Celebrities from David Geffen to Oprah Winfrey are reported to be interested in buying the Clippers. And all that buzz can drive prices up. While Donald Sterling  bought the Clippers for only $12 million dollars more than 30 years ago, one currenet estimate is $575 million

 

 

 

 

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