Marketplace - American Public Media

The history of the marketing of Cinco de Mayo

Tue, 2014-04-29 15:23
Friday, May 2, 2014 - 04:05 Bryan Steffy/Getty Images for Bud Light

Party goers enjoy the poolside Bud Light Lime 'Lime -A - Rita' Cinco de Mayo party on May 5, 2012 in Las Vegas, Nevada.

Technically, Cinco de Mayo falls on a Monday this year. But beer companies want people to get an early start, celebrating over the weekend.

But celebrating what, exactly? What does Cinco de Mayo mean for marketers and consumers?

Many in Los Angeles celebrated Cinco de Mayo last weekend. Tens of thousands of Latinos attended a street fair that big corporations saw as a marketing opportunity, even if their message was a little fuzzy.

At the Ford booth, I spoke with Marie, a 'brand ambassador.' I asked her to make the connection between the car company and Cinco de Mayo.

"Ford, to me, is about the people. And people need to drive to get around this city and Ford is a great way to do that," said Marie.

She struggled to make the connection. But, to be fair, it is sort of a hazy holiday.

After all, May 5 commemorates an obscure battle where the Mexican underdogs defeated the French.

"In Mexico, we don't really do Cinco de Mayo," said Marie. "It's more of an American-ized holiday."

In this case, 'American-ized' meant commercialized. Festival goers moved from line to line, waiting for free samples and gift bags. A fiesta of freebies from McDonald's and Palmolive and Colgate.

"The consumer products companies have been the early-adopters of understanding that this is the market that is going to move the needle, and they've really fought hard to create brand recognition," said Xavier Gutierrez with Meruelo Group, one of the event's sponsors.

While some companies try to connect with Latinos, beer companies try to get everyone to party.

According to Nielsen, the market research company, Americans bought more than $600 million worth of beer last year for Cinco de Mayo. That's more beer than was sold for the Super Bowl or St. Patrick's Day.

"Beer companies have been largely responsible for the commodification of Cinco de Mayo. I mean, they spend millions and millions of dollar in Spanish-language advertising," said Jose Alamillo, a professor of Chicano studies at California State University Channel Islands.

Alamillo said the beer industry ignores alcohol related health issues that affect the Latino community.

He'd like to see Cinco de Mayo promoted as a history lesson, instead of -- as critics allege -- an excuse to sell booze.

Marketplace Morning Report for Friday May 2, 2014Story Byby Jeff Tyler and Shea HuffmanPodcast Title The history of the marketing of Cinco de Mayo Story Type FeatureSyndication SlackerSoundcloudStitcherSwellApp Respond No

Frontier Airlines will charge to use overhead bins

Tue, 2014-04-29 14:29

You've got your low cost airlines, and then you've got your ultra-low cost airlines.   Frontier has a new pricing structure. Base fares are going down. But if you want to use the overhead bin, it'l be $20 for frequent fliers who book online, and $50 for those who wait until they get to the gate.   That space at your feet under the seat in front of you: Still free... for now.  

Yahoo's making content of its own

Tue, 2014-04-29 13:41

Original online content is still in its infancy, but boy, is it a crowded crib.

Beyond the TV and the movie screen, there's YouTube, Netflix, HBO GO, Vimeo, Vice, Vevo and Hulu -- and now there's Yahoo, too. 

Courtesy of a new deal with Live Nation, Yahoo will air live concerts every day starting this summer. It'll also offer two new comedy series: "Other Space," a so-called galactic adventure set a hundred years from now, and "Sin City Saints," about a fictional pro basketball team. Yahoo is getting into this business because video ads command much higher prices than typical banners and popup ads, but it's a costly strategy.

Whether it pays off ultimately depends on how good the shows are, how much visibility they get and how well they're marketed to the public. Otherwise, they risk sinking without trace.  

A Texas-sized bankruptcy for giant Texas energy deal

Tue, 2014-04-29 13:39

Texas was dealt a blow by the U.S. Supreme Court Tuesday, via a ruling that the Environmental Protection Agency can order states to cut down on emissions if those emissions are drifting over to neighboring states.

Texas has the highest CO2 emissions of any state in the country. Texas also consumes the most energy, which brings us to the second major blow dealt to Texas: The state’s largest electricity provider, Energy Future Holdings Corp., filed for bankruptcy.

In 2007, Goldman Sachs and private equity firms acquired TXU for $45 billion, making it the biggest leveraged buyout ever. There were lots of reasons to believe that owning the largest provider of electricity in the largest state in the continental U.S. had lots of potential for growth, so private equity firms loaded the company -- renamed "Energy Future" -- with debt.

“The problems, of course, are when the business becomes less valuable, or there are meaningful hiccups,” says Peter Cowan, managing director of Clear Capital Advisors.

Those meaningful hiccups can be caused by a larger economic downturn, or from changes within the industry. In this case it was both. The 2008 recession caused an overall decline in energy use. And then came the fracking boom, which drove the price of natural gas down, along with the utility’s profits. When Energy Future filed for bankruptcy today, its total assets were $36.4 billion. Its debt was nearly $50 billion. 

Barbarians at the Gate and the other largest LBO that you might have heard of 

by Tobin Low

It was the largest buyout in U.S. history. At the time, the 2007 purchase of Energy Future Holdings for $45 billion was called that.

But credited with creating the LBO environment of the next 20 years, the 1989 purchase of Nabisco was both contentious and dramatic. The food company sold for $31.1 billion at the time, and when adjusted for inflation, the sale price is closer to $55.38 billion. With the adjusted price of Energy Future coming in at around $47.23 billion, Nabisco's sale wins by almost $7 billion.

Plus, as dramatic as Energy Future's end may be, Nabisco's LBO started out with a bidding war that has since been immortalized in book and on screen. F. Ross Johnson, then executive of the company, partnered with with a buyout firm to attempt an in-house purchase of the company. Enter Kohlberg, Kravis, Roberts & Company (also involved in Energy Future's purchase). KKR started a bidding war that continued to hike the price of Nabisco higher and higher. At the end of the day, Johnson lost out, and ultimately left the company. 

To this day, it is still considered to be "one of the most game-changing deal in American financial history."

How Donald Sterling won 'humanitarian' awards

Tue, 2014-04-29 13:37

Among the sanctions NBA Commissioner Adam Silver loaded on Los Angeles Clippers' owner Donald T. Sterling today for what can charitably be described as Sterling's racist remarks, was a lifetime ban from the NBA, and a $2.5 million fine. The NBA will donate the money to organizations that "promote anti-discrimination and tolerance."

Those groups, though, have actually already gotten a fair amount of money from Sterling and his charitable foundations. This comes as no surprise if you live in Los Angeles and still read the newspaper. The Los Angeles Times periodically prints giant ads that Donald Sterling designs himself, promoting his donations to, and awards from, all sorts of community groups.

Just this weekend he took one out celebrating his pledge to UCLA to support kidney research. (Today, UCLA rejected that pledge.) Past ads have celebrated Sterling's honors from the Black Business Association, and his first lifetime achievement award from the Los Angeles chapter of the NAACP.

Sterling has "contributed to a lot of minority charities, including the NAACP," Leon Jenkins, president of the Los Angeles NAACP chapter, said at a press conference on Monday, explaining why his chapter had planned to give Sterling another life time achievement award next month—a move they thought better of this week.

Sterling has been accused of racist behavior several times over the course of his career. But that shouldn't make his donations to groups that promote tolerance, or their celebration of his donations, all that surprising, says Rob Reich, co-director of Stanford's Center on Philanthropy and Civil Society.

"Philanthropy has too frequently been a form of 'reputation laundering,'" Reich says, adding that using charitable gifts to "wash" one's reputation has a long history. Think: an oil company that gives a university money for a clean energy research center.

In the case of Sterling, he's known for small donations to dozens of community groups—a strategy that has the benefit of maintaining your social status in the local circles where you do business, Reich says. "Because one stands in actual relationships with people in the local area, the philanthropic donations one makes goes to sustain ones local relationships."

Regardless of Sterling's motivations, or his racist comments, Augustin Pantoja, the financial manager at Jefferson High School in south Los Angeles, is glad for Sterling's local charity.

"He's helping our community," Pantoja told me when I reached him by phone at the school, which has a largely black and Latino student body. Pantoja says he won't refuse the annual $5,000 that Sterling gives to help Jefferson students go to college, many of whom "have the capacity to further their education, but because of lack of money they don't pursue that."

"I'm a minority," Pantoja tells me, cautioning that he doesn't want to wade too deeply into the controversy around Sterling's comments. But, he says of Sterling's charity, "at least he's doing something."

The economics of Korean pop

Tue, 2014-04-29 13:17

When you hear the term K-Pop, chances are Gangnam Style by Psy pops in your head. (Editors' note: And we're sorry, because it will now probably stay there all day.)

But there is so much more to K-Pop than Psy, and chances are you’ll soon start hearing more proof.

South Korea is now the 11th biggest music market in the world. The most recent figures show the country raked in over $187 million in 2012, and the three big companies behind K-Pop are making a big international push.

Mark James Russell is a music journalist living in Seoul. His new book “K-Pop Now! The Korean Music Revolution” outlines the explosion of Korean pop music in the 1990s, and chronicles the acts that have kept it growing for the past three decades.

Our first question to Russell: What exactly is K-Pop, anyway?

“There’s usually upbeat dance music, it’s very loud, it’s very flashy," he said. "To use the old Spinal Tap reference, this one goes up to 11, in Korea, they start at 11 and they go up from there.”

Russell says “Gangnam Style” isn’t exactly the best song to represent K-Pop as a whole, but its success showed South Korea that its music was exportable. The video for the song is the most viewed YouTube video of all time, closing in on 2 billion views. To Russell, that represents a shift in the American public’s view toward Asian culture.

“Asia occupies a strange mental place with people in the West. Some people think it’s exotic or weird or goofy. Often they’re laughing at it. But when people enjoyed “Gangnam Style”, it felt like they were laughing with it.”

Boy bands and girl bands called "idol groups" similar to The Backstreet Boys or The Spice Girls are the biggest sellers in Seoul. And Russell says Korean pop stars and super groups are not only expanding their reach over borders, but are actually starting to compete with other music markets before songs are even recorded.

“K-Pop from very early on was looking to get out of Korea. It was looking to become more international. So they brought in songwriters from other places. They buy a lot of music from Scandinavia. Universal Music Europe sells a lot of stuff to Korea...I’ve talked several times to the head of A&R (Artists & Repertoire) there... he has taken away songs from American artists and given them to K-Pop artists because he feels the right combination could be more profitable in Korea.”

Russell says Korea’s embrace of K-Pop doesn’t just show an evolving taste in music, it represents a political and economic turnaround for a country that just a few decades ago looked drab and isolated.

“It’s been a whole series of changes that go back quite a ways. From the rise of democracy and the Olympics in ’88 (to) the country just opening up, it’s become a much more lifestyle-oriented country. For many years people worked very long hours six days a week. But now people have more money and more free time, and they want to fill that time with fun things.” 

Donor-advised funds: A controversial form of charity

Tue, 2014-04-29 12:27

Each year, the Chronicle of Philanthropy releases a list of the American charities that have raised the most money from private donors. United Way topped the most recent list; the Salvation Army took the third spot. At number two was Fidelity Charitable, named for the giant financial services corporation which sponsored the creation of the charity and still provides investment and technology services. 

Fidelity Charitable helps people set up donor-advised funds, which offer a twist on traditional charitable giving. For example, rather than writing a check to the Salvation Army, a donor would put that money into a Fidelity Charitable giving account. The money can then be invested or granted right away, explains Amy Danforth, president of Fidelity Charitable. 

"Granting is when they turn to the causes they care about, and log in to our website, or contact us by phone, and make a grant to the charity they care about: [their] alma mater, their church, the Red Cross, a food bank," Danforth said. 

Which sounds a lot like traditional charitable giving. So, why not just give the money directly to the food bank? Danforth says donor-advised funds work best for people who give to more than one charity a year.

"I would say if you are only giving to one charity, one time a year, that a donor-advised fund would not be the right solution," Danforth said. "Many people give to multiple charities, and multiple times in a given year." She says choosing  donor-advised funds can cut down on both paperworth and confusion. And they are not just for cash. You can donate assets -- like, say, property -- and Fidelity Charitable will help expedite what can be a complicated process. 

Compared to many other charities, donor-advised funds are booming.

"They are growing like gangbusters," said Stacy Palmer, editor of the Chronicle of Philanthropy. "The rest of the charity world is growing very slowly, but donor-advised funds are seeing giant increases."

The funds are seeing growth among all kinds of donors. 

"It's a mix of average people and very wealthy people," Palmer said. "You can put as little as $3,000 into one of these accounts, or you can put in many millions."

The benefit of the fund is that once the money is deposited, the donation can be written off on the donor's taxes. And that's why the funds are controversial, because even as the tax break is given, there's no deadline for when the money must be given away. 

"There is no time limit at all," said Ray Madoff, a professor at Boston College Law School, "so the money can stay in the fund for a decade, a century, or many centuries."

Madoff says some donor-advised funds  are even marketed as family foundations, for people to pass the spirit of charitable giving on to kids and grandkids. 

"The problem is," said Madoff, "there's a difference between the spirit of charitable giving and real charitable giving." 

For its part, Fidelity Charitable does insist that donors give away some part of their fund within seven years. But as with any donor-advised fund, even a small fraction of the money can be granted, while the donor still recieves a tax deduction for the full amount. 

Why the EU and the U.S. target different individuals

Tue, 2014-04-29 12:04

The European Union today slapped sanctions on 15 more people it accuses of aggravating the crisis in Ukraine. This follows yesterday’s move by the U.S. targeting another seven individuals and 17 companies. This may suggest a degree of coordination between the U.S. and Europe -- a kind of one-two punch. But look a little closer, and you'll see a big difference between the American and the European measures.

The EU has now imposed travel bans and asset freezes on a total of 48 people, and all of them have one thing in common: They’re all directly implicated in the Ukrainian crisis. That’s not the case with the U.S. sanctions.

“The American approach has been much more targeted on Mr. Putin’s inner circle, and on businesses that are believed to be controlled by those individuals,” says John Lough, Associate Fellow at the Chatham House think tank in London. 

Take one of the principal victims of the American asset freeze announced on Monday: Igor Sechin, head of the Russian energy giant Rosneft. He is not believed to have been involved in the alleged attempt to destabilize Ukraine. But he is a very close ally of President Putin . 

Meanwhile the Europeans today penalized – among others – several Ukrainian separatists and the head of Russian military intelligence.

“You could say the Europeans are pussy-footing around in the sense that they are being more legalistic. They are going after the instruments of this policy rather than going for the most sensitive area of the Russian elite, the people on whom President Putin depends,” says Nick Redman of the International Institute for Strategic Studies.

The softer European approach is not surprising. The EU does ten times as much trade with Russia as the US does. Europe also depends on Russia for 30 percent of its natural gas. Redman says don’t expect the Europeans to hit the Russians where it really hurts - say in the energy sector - for fear of Russian retaliation. 

“Obviously sanctions that would be more effective and would go further, would impose costs on the imposing nations," he says. 

Adam Silver, NBA will try to force Clippers' sale

Tue, 2014-04-29 11:33

To billionaire Donald Sterling -- the owner of Los Angeles Clippers who was banned, chastised and fined today for racist comments -- a $2.5 million penalty may seem like chump change.

And if NBA Commissioner Adam Silver succeeds in forcing him to sell the Clippers, Sterling could way away with quite a bit more cash in his pocket.

"The Clippers could sell -- the numbers you’re hearing bounced around are $1 billion to $1.5 billion," says ESPN.com NBA editor Kevin Arnovitz. "If you're looking for a glass half-empty here, he bought the team for $12 million. He's looking at a payday here of maybe $1 billion."

Weaker teams in smaller markets have sold for $500 million, Arnovitz says, and he thinks the results of this controversy will only strengthen the Clippers' brand – they're in the play-offs, playing action-packed games and and they've got star players like Chris Paul and Blake Griffin.

Sterling will only have to sell the team if a majority of owners agree to force an ouster -- but, in the meantime, the NBA has effectively cut Sterling out of the team's day-to-day operations. He can't attend games or talk to sponsors (many of whom have already made it clear that they don't want to talk to him, either). 

In sum, Arnovitz says: "Sterling has to disappear... The product has never been better.This was a cloud and now it seems lifted."  

Why some rural patients wait all night to get a tooth pulled

Tue, 2014-04-29 11:02

The Affordable Care Act is intended to provide insurance for America’s poorest. It was supposed to control healthcare costs by getting people to doctors for routine visits. But for many low-income -- and especially rural -- Americans, healthcare needs are still not being met.

At a fairground just outside downtown Knoxville, Tennessee, hundreds of people wait in line. They come from nearby cities and small towns with names like "Coalfield" and "Deer Lodge". Inside a giant auditorium converted to a mobile clinic for the day, dozens of dentists clean teeth. The two-day clinic, called Remote Area Medical, offers free medical services -- from dental to vision to yearly checkups.

James Barlow is 47-years-old. He received his first pair of glasses two years ago at the clinic. Today he is waiting in line for a new pair of reading glasses from a volunteer student studying optometry. 

“I was struggling and running out of reading glasses. It was just getting too weak,” he says.

Barlow says he needs health insurance. In 2008, he was hospitalized for a heart attack. He says as soon as he walked into the emergency room, they knew he couldn't afford care, but they made him stay in the hospital anyway. Now, he's grateful -- he says would have "probably died."

Barlow had another heart attack this past year. His medical bills have cost tens of thousands of dollars. But like a lot of people at the clinic, he still can’t afford to buy his own insurance, even with subsidies. And Barlow lives in Tennessee, a state that opted out of Medicaid expansion through the Affordable Care Act.

A number of people came the night before -- sleeping in their cars for the services offered today.

“I don’t know a whole lot of people who would stand in a line for 24 hours if they had a better plan, if they had an easier way to get what they needed,” says Amy Smith, a nurse and volunteer here.

That’s the case with Britanny and Dustin Scalf, both in their mid-20s.

“When I was in high school, I was going to the dentist all the time. After that, it just stopped. It literally stopped right in its tracks.  Lost insurance,” says Dustin Scalf. His wife Brittany Scalf finished his thought: “When I turned 18, I got pregnant. And I don’t know, I just quit going.”

Brittany hasn’t gone to the dentist in six or seven years. A lot of people here are used to not having health insurance in their family.

“His mom’s on disability; my dad’s on disability,” says Brittany. “She never really tried to get it until she got sick and had to go the doctor...and then it was too late.  She already owed thousands and thousands of dollars.”  

A few hours later, Brittany’s finally in the dental chair.  The dentist removes four teeth from the back of her mouth. The couple hopes procedures like this one are a thing of the past, because Dustin has a new job that comes with health insurance.

Finally, the two head to their camper to make the two-hour trip back to Hawkins County, Tennessee. As for so many people here, this trip is a painful reminder of the past few years without health insurance.

“I’m just ready to get home,” says Brittany.

“I know...It’s been a long day,” says Dustin.

Weather clear and cool at the first inaugural ceremony

Tue, 2014-04-29 10:11

From the Marketplace Datebook, here's a look at what's coming up Wednesday, April 30, 2014:

PODCAST: A case of the Mondays for BofA

Tue, 2014-04-29 06:55

Bank of America stock lost more than six percent of its value on Monday after it revealed it made a big mistake on its stress tests, which is the Federal Reserve's system to see if banks have the wherewithal to survive a future crisis without a bailout. BofA blames an internal communications error for miss-stating the amount of money it had in certain locations on its balance sheet. Marketplace's Mitchell Hartman joins us to explain.

Meanwhile, starting Tuesday, you can stroll into Starbucks for a Chai Tea with Oprah’s name on it – Teavana Oprah Chai, to be exact. Oprah Winfrey's product and book endorsements used to send sales through the roof. But will the "Oprah Effect" hold, now that she's teamed up with a corporate giant?

And, you may have missed this a while back in the MIT Sloan Management Review, volume 52, number three. They call them "dormant ties" but it's really about the business value of connecting with old flames, or at the very least, re-connecting with someone whom you used to know, to paraphrase Gotye. Wharton business school professor Adam Grant keeps an eye on the business journals for us and joins us to explain

Government targets millions for job training programs

Tue, 2014-04-29 05:47

U.S. Secretary of Labor Thomas Perez has announced $150 million in new funding for states to develop and expand job-training programs. Since January 2014, a total of $1 billion in federal spending has been targeted to workforce development and employment opportunities for people suffering the lingering effects of the Great Recession.

The money is authorized under the Workforce Investment Act of 1998. States can apply for the newly released money to help fund apprenticeships, on-the-job training, partnerships with employers, and industry certification programs. The overall goal, according to the U.S. Department of Labor, is to train people—especially the long-term unemployed—in industries where there is now increasing demand for skilled labor.

As manufacturing picks up and Baby Boomers retire from middle-class blue-collar jobs, there’s plenty of need for additional workers, said machine-tool instructor Keith Knight at Mount Hood Community College near Portland, Oregon.

“As far as industries looking for these jobs—Boeing, Oregon Iron Works, the majority of industries—they’re starting to see more and more work showing up,” said Knight. The community college’s programs for machine-tool operator, automotive technician, and welder all fill up quickly, and many students are able to line up jobs before they graduate, instructors said.

Knight said job training can help someone with only a high school diploma, or a two-year associate’s degree, land a higher-skilled or better-paying job.

That’s what attracted Andrew Stevens, 27, to the community college program. “This is 'Plan F,'” said Stevens ,as he sat at his workbench disassembling and rebuilding a Chrysler transmission in the bright, clean automotive classroom. “I’ve done many things—from guiding fishing in Alaska, to laying ceramic tile—which is no fun—to being a prosthetics technician—I made fake arms and legs. I was pretty much at the top of my pay scale, making as much as I was going to make, and decided that wasn’t enough.”

Stevens’ instructor, Steve Michner, said auto technicians can ultimately earn $45,000 to $55,000 per year.

Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University, said job-training programs can help individual workers boost their earnings and job opportunities, and they can help companies fill positions that require specific skills. But they can’t necessarily address high local or regional unemployment—for instance, in old industrial cities or depressed urban areas.

“The fancy term is ‘spatial mismatch’—people live in the wrong part of the country from where the jobs are,” explained Van Horn. “There might be lots of jobs in Southeastern Louisiana. But the people who used to work in the construction industry in New Jersey either can’t, or don’t want to, move there. Or, go to the Dakotas, which is another place that’s booming.”

Van Horn pointed out that sometimes the spatial mismatch is hyper-local. Some neighborhoods in New Orleans, for instance, have high poverty and unemployment, even though oil refineries and chemical plants may need skilled workers just a couple hours away.

Many economists say skills training is important at this point in the economic recovery, so employers can fill jobs in regions and industrial sectors that are growing strongly. But also, employers need to generate more jobs overall, in more places, to pick up the slack in the labor market nationwide.

Government targets $1 billion for job training

Tue, 2014-04-29 05:47

U.S. Secretary of Labor Thomas Perez has announced $150 million in new funding for states to develop and expand job-training programs. Since January 2014, a total of $1 billion in federal spending has been targeted to workforce development and employment opportunities for people suffering the lingering effects of the Great Recession.

The money is authorized under the Workforce Investment Act of 1998. States can apply for the newly released money to help fund apprenticeships, on-the-job training, partnerships with employers, and industry certification programs. The overall goal, according to the U.S. Department of Labor, is to train people—especially the long-term unemployed—in industries where there is now increasing demand for skilled labor.

As manufacturing picks up and Baby Boomers retire from middle-class blue-collar jobs, there’s plenty of need for additional workers, said machine-tool instructor Keith Knight at Mount Hood Community College near Portland, Oregon.

“As far as industries looking for these jobs—Boeing, Oregon Iron Works, the majority of industries—they’re starting to see more and more work showing up,” said Knight. The community college’s programs for machine-tool operator, automotive technician, and welder all fill up quickly, and many students are able to line up jobs before they graduate, instructors said.

Knight said job training can help someone with only a high school diploma, or a two-year associate’s degree, land a higher-skilled or better-paying job.

That’s what attracted Andrew Stevens, 27, to the community college program. “This is 'Plan F,'” said Stevens ,as he sat at his workbench disassembling and rebuilding a Chrysler transmission in the bright, clean automotive classroom. “I’ve done many things—from guiding fishing in Alaska, to laying ceramic tile—which is no fun—to being a prosthetics technician—I made fake arms and legs. I was pretty much at the top of my pay scale, making as much as I was going to make, and decided that wasn’t enough.”

Stevens’ instructor, Steve Michner, said auto technicians can ultimately earn $45,000 to $55,000 per year.

Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University, said job-training programs can help individual workers boost their earnings and job opportunities, and they can help companies fill positions that require specific skills. But they can’t necessarily address high local or regional unemployment—for instance, in old industrial cities or depressed urban areas.

“The fancy term is ‘spatial mismatch’—people live in the wrong part of the country from where the jobs are,” explained Van Horn. “There might be lots of jobs in Southeastern Louisiana. But the people who used to work in the construction industry in New Jersey either can’t, or don’t want to, move there. Or, go to the Dakotas, which is another place that’s booming.”

Van Horn pointed out that sometimes the spatial mismatch is hyper-local. Some neighborhoods in New Orleans, for instance, have high poverty and unemployment, even though oil refineries and chemical plants may need skilled workers just a couple hours away.

Many economists say skills training is important at this point in the economic recovery, so employers can fill jobs in regions and industrial sectors that are growing strongly. But also, employers need to generate more jobs overall, in more places, to pick up the slack in the labor market nationwide.

Which brand is bigger: Oprah or Starbucks?

Tue, 2014-04-29 02:58

Starting Tuesday, you can stroll into Starbucks for a Chai Tea with Oprah’s name on it – Teavana Oprah Chai, to be exact. Oprah Winfrey's product and book endorsements used to send sales through the roof. But will the "Oprah Effect" hold, now that she's teamed up with a corporate giant?

"No," says marketing consultant Jonathan Salem Baskin.

He says it's been a while since Oprah was a TV regular. But he says any sales are a win-win for Oprah, since proceeds help her youth education work.

"The only potential downside exists for Starbucks," he says. "However sincerely they want to help Oprah support her schools, their goal is to sell a boatload of cups of tea."

Brand-building expert Denise Lee Yohn thinks Starbucks, known for its coffee, may have this incentive to use Oprah's name.

"Tea may be perceived as being more exclusive, more upscale," she says. Oprah's known for her taste, but, "she also has very mainstream appeal. So this may be a way for Starbucks to make tea seem more accessible and relevant to the average person."

Toyota of Texas

Tue, 2014-04-29 02:45

Toyota is moving its North American headquarters – all three of them. To Plano, Texas, just north of Dallas.

Right now the car company has its sales headquarters near Los Angeles, its manufacturing headquarters in Erlanger, Kentucky, and another headquarters in New York.

The move is part of reinvention at the company, says Columbia Graduate School of Business professor Rita Gunther McGrath.

"With the problems following on their latest recall and all the problems they had with unintended acceleration, they were in the process of rethinking a lot of things that had been taken for granted in that company, including things like location," she says.

Moving a large company offers a rare opportunity to alter a business's "social architecture" says McGrath. "It breaks through inertia, shakes up existing power relationships, and it changes the way people share information."

Old rationales for being located in different places were no longer as relevant as they were before. Los Angeles for example, where Toyota has its sales and marketing headquarters, no longer has the draw it once did.

"Once upon a time," says Kelley Blue Book analyst Karl Brauer, "the coast of California was the closest part of the mainland U.S. to Japan physically and that mattered," whether for transfer of people or cars. Now, the bulk of Toyotas in the U.S. are built in the U.S., from West Virginia to Indiana.

But why Plano, Texas?

It's closer to Toyotas plants, including its newest, most expensive one in San Antonio. Texas has tried to brand itself as a business-friendly place, and there were undoubtedly economic incentives offered by some constellation of state and or local governments.

But it's not just about the business. Toyota has to convince 4,000 people with families and hobbies and lives to move as well.

"This is difficult – this is a life event for a lot of people," says Dave Sullivan with Auto Pacific. People have to move their families, find new school districts, it's stressful. When Nissan moved to Nashville in 2005, many employees did not follow, creating significant challenges for the company.

Plano, part of greater Dallas, is more palatable than other options.

"Its mild climate, central location, transportation, quality of education – all of that is very desirable," says Kelley Blue Book's Brauer.

Texas also has no state income tax, which, when combined with the lower cost of living than Los Angeles or New York, is a powerful incentive in its own right.

Toyota says offices will move in stages and gradually, and that the move won't be complete until 2017.

Cities want to make your rooftop gardens profitable

Tue, 2014-04-29 02:18

On a recent Saturday morning in the Lincoln Heights neighborhood of Los Angeles, the city's River Revitalization Corporation is showing off a plan to add green space to an area that's now dominated by heavy industry. And Lee Christie of architecture firm Perkins+Will is explaining some options.

"You'd be looking at more raised beds or more greenhouses," she says, "which really opens up the possibility for rooftops."

Rooftops have a lot of hidden potential. A new EPA study predicts that as cities grow hotter, replacing flat black rooftops with plants could cool the cities back down.

According to Phil Morefield, one of the co-authors of that study, "any sort of well-designed, well-maintained green roof will give some benefit for the building that it's installed on."

Those benefits include reversing urban warming, absorbing rain before it overburdens sewers, and providing habitat for butterflies.

There's just one problem: green roofs come with a big up-front cost. So now, some cities are experimenting with financial encouragement.

For example, Austin lets developers build more floor space if they include green roofs. And Seattle gives out credits and discounts for rooftop gardens.

"Properties that take advantage of that credit range from single family homes to a regional airport," says Seattle Urban Designer Dave LaClergue, "so they're very different in size and scale."

The gardens on top of the Chloe Apartments in Seattle. That's the Space Needle on the right.

Courtesy of Dave LaClergue/City of Seattle

But it's been a learning process. Many of Seattle's first rooftop gardens died, since they were designed with assumptions based on what worked in east-coast cities. And a garden that cools one city might have less of an effect in another.

"There really isn't a 'one-size fits all' strategy," says Britta Bierwagen, another co-author on that EPA study. "And there are a lot of things to consider."

Financial incentives are similarly fickle. In Nashville, a credit of $10 per square foot of green roof hasn't attracted a single taker. But Portland, Oregon, got an overwhelming response to a credit of just half that much.

That's because green roofs need to be customized to what the market in each city wants, as much as to the weather. One market might respond best to grants, while another prefers tax credits.

Courtesy of Dave LaClergue/City of Seattle

For example, in Portland, the incentive amount was determined in part by the region's damp climate and sewers that combine wastewater with stormwater. "It was the amount that we could apply that essentially would cost less to manage a gallon with a green roof than it would with a pipe," explains Portland Environmental Program Coordinator Matt Burlin.

And green roof incentives aren't just for major cities. In tiny Saluda, North Carolina, the Polk County Community Foundation provided a $6,000 grant for a green roof on the new restrooms at Pearson's Falls.

On a recent afternoon, foundation President and CEO Elizabeth Nager stopped by to see how the plants are filling in. It's looking good: "The roof resembles the forest floor in the glenn below the waterfall," she observes. "There are smooth rocks that fill the space where you expect to see traditional gutters."

It's more than just a few rocks and sage bushes, of course. It's part of a national experiment that's happening right over our heads.

Hiding pregnancy from the marketing machine

Tue, 2014-04-29 01:00

When couples find out they are expecting, they usually spread the news to family and friends as soon as possible. When Janet Vertesi, an assistant professor of sociology at Princeton University, found out she was pregnant, she made a very similar call to family and friends, but with very different intentions.

Those close to Vertesi and her husband were told not to post anything on social media sites that would reveal the couples' pregnancy. Vertesi had decided to take her pregnancy off the grid, not because she wasn't overjoyed, but because marketing bots that figure out when a woman is pregnant become relentless in their targeted advertising.

Vertesi says the project was inspired by the invasiveness of data driven marketing that seems to go unchecked. So for the last nine months, she and her husband have paid for all baby-related expenses in cash, avoided social media, and used Tor, a browser that lets you use the internet anonymously, to visit sites like Babycenter.com and Namberry.com. 

"So many of those websites also have trackers and cookies that know that you’re visiting so they can follow you around with advertising afterwards," says Vertesi. What she noticed in hiding her pregnancy from marketing bots was that her activity looked more like someone involved in illegal activity than someone about to have a baby. Tor, for example, is notoriously used for drug deals.

While she wouldn't recommend the experiment to others, Vertesi says it raised some interesting questions:

"What I would recommend is thinking seriously about how and where you want your data to go...That doesn’t mean, 'Don’t participate in social networks' or 'Don’t buy anything online.' But it does mean it’s time to think seriously about how and where we want to engage in these kinds of transactions."

A post mortem for the 'worst video game ever'

Mon, 2014-04-28 15:00

On Saturday, near the New Mexico town of Alamagordo, a group of video game enthusiasts, excavation specialists, and filmmakers started digging a hole in a desert landfill. Why? You may remember some months ago we talked about the legend that in the early 1980s, video game maker Atari secretly dumped tons of video games into a hole in the middle of the desert.

The reasons for this particular move remain a bit of a mystery, but certainly the game maker was in financial trouble. That's in part because of one particular game -- it was based on the movie E.T., and it did poorly. So poorly, in fact, that it's still described as the worst video game in history.

The man who designed Atari's E.T. game is Howard Scott Warshaw. He was there when the video game treasure trove was uncovered. Listen above for the post mortem. 

Will Jupiter align with Mars?

Mon, 2014-04-28 14:18
Monday, April 28, 2014 - 14:09 Wikimedia Commons

From the Marketplace Datebook, here's a look at what's coming up Tuesday, April 29th:

In Washington, the Federal Reserve begins a two-day meeting on interest rates. It's one of eight scheduled over the course of the year.

The Conference Board releases its April Consumer Confidence Index.

46 years ago, in the Age of Aquarius, "Hair" opened on Broadway. Let the sunshine in.

Newspaper publisher William Randolph Hearst was born on April 29, 1863. He built a media empire and a giant castle which you can tour in San Simeon, California.

And what's the deal with birthdays? Comedian Jerry Seinfeld turns 60.

Marketplace for Monday April 28, 2014by Michelle PhilippePodcast Title Will Jupiter align with Mars? Story Type BlogSyndication SlackerSoundcloudStitcherSwellPMPApp Respond No
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