Marketplace on RADIO IQ

Weekdays at 6:30 p.m. on RADIO IQ
Kai Ryssdal

Marketplace with host Kai Ryssdal produced and distributed by American Public Media focuses on the latest business news both nationally and internationally, the global economy, and wider events linked to the financial markets.

The only national daily business news program originating from the West Coast, Marketplace is noted for its timely, relevant and accessible coverage of business, economics and personal finance. 

Marketplace, weekdays at 6:00 pm on WVTF and 6:30 pm on our RADIO IQ and RADIO IQ With BBC News networks.

Be sure to check out the  Marketplace Morning Report weekdays at 9:51 on RADIO IQ andRADIO IQ With BBC News.

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Program Headlines

  • Monday, July 6, 2015 6:00am

    The city of Chicago is cutting its public school budget by $200 million, after making a major payment into its teachers' pension system.

    The move comes just a couple of years after the city closed almost 50 elementary schools, in what was at the time a historic number of public school closures.

    Still, the school district's budget problems persist.

    "Chicago Public Schools faces a significant budget crisis," says Sarah Wetmore of the Chicago-based Civic Federation, a government watchdog group. Wetmore says the city's schools have had deficits that won't go away.

    "The structural deficit has been in existence for some time, and it's been papered over by ... accounting gimmicks to balance the budget," she says.

    The Chicago Public Schools' cash crunch got worse last week when the city had to make a pension payment of more than $600 million. The budget cuts followed a day after, including layoffs in mostly administrative positions.

    "This could be the tip of the iceberg," says Jackson Porter of the Chicago Teachers Union. "The city hasn't laid down its hand to exactly spell out: is this the first of a wave of cuts?"

    Chicago Mayor Rahm Emanuel is asking state lawmakers to change the pension system to relieve some of the city's burden. Emanuel is also floating the idea of a property tax hike to increase school funding.

    The fate of those initiatives may decide whether there are further school budget cuts in the Fall.

  • Monday, July 6, 2015 6:00am

    Styrofoam is perfectly recyclable. There are machines the size of a refrigerator which can melt it down into blocks that can then be shipped to China and used to make patio furniture. Manufacturers who deal with large amounts of the stuff do recycle it, but in general, consumers don’t.

    Why not? The economics just don’t work.   

    Its density is so low, it’s often dirty, and the price one can get for those blocks shipped off to China is not particularly lucrative to motivate cities or recyclers to collect and recycle it.

    Recycling could not be what it is today without the good will and conscientiousness of people all over the world. But recycling is made possible in the first place by markets. Aluminum, glass, and plastic from recycling plants are sold by the ton as a raw material just like steel or wheat. 

    “This industry is based on creating markets for those recyclables — today's plastic bottle can become tomorrow’s carpeting,” says Sharon Kneiss, CEO of the National Waste and Recycling Association. Aluminum cans can go from recycling bin to new cans full of soda on store shelves in about forty days. 

    But recyclers don’t set the prices at which they sell their materials. Those prices are set by the global market, and they have fallen drastically over the past year. 

    “On a lot of recyclables, the economics are starting to challenge it,” says Kneiss. “We have heard that from our industry over the past year plus. That because it is a commodity market, and the commodities are significantly challenged right now, the economics of recycling are also challenged.”

    Robert Anderson is regional business development manager for the Northeast and mid-Atlantic regions for ReCommunity Recycling. He’s been in the waste industry for 30 years. “The current market environment has been the most difficult of my career,” he says.

    He offers up a litany of price shocks to make the point: “We’ve seen highs in aluminum at $2,000 per ton until recently it was $1,800 per ton, and today we’re less than $900 per ton. Corrugated cardboard has gone from $200 per ton to $80 per ton. PET, the plastic water bottles, were $699 per ton, now $250.”

    Anderson says the current downturn is different from previous ones — the recession saw similar price falls. “In the past they were brief and we were able to sustain it and work our way through it and wait till commodity markets return,” he says. But he now worries this could be the new normal, “which means we need to rethink our business.”

    There are other phenomena undermining recycling’s profitability — and even viability in some circumstances.

    Many companies have made significant progress in reducing the amount of material used to make packaging, a practice called lightweighting. 

    “Today’s PET water bottle is 30-40 percent lighter than its brothers and sisters from even five or ten years ago,” says Anderson. It’s a boon for resource conservation, but another burden for recyclers. “It takes 11,000 more aluminum cans to make a bale today due to lightweigthting than it did five or ten years ago.”           

    Lightweighting has meant that the makeup of the stream of recyclable content has become less lucrative. More and more of it, by mass, is made of glass these days — one of the least remunerative recyclables. 

    The combined pressures have contributed to several recycler bankruptcies and plant closures. 

    Those pressures have also started to change the cost-benefit analysis of recycling versus old fashioned throwing away. In urban areas, recycling has long been cheaper than landfill dumping (which has its own fees associated with it) because the value of the material subsidizes the costs of disposal and landfill fees are high (as much as $150/ton). New York, for example, saves 20 percent on recycled waste versus non-recycled waste that goes to landfills or incinerators.   

    As recyclable materials have lost their value, landfills look more cost competitive, particularly in regions of the country where landfill fees are cheaper, such as in the Midwest where landfill fees can be as low as $20 per ton according to Anderson.

    In some instances, it has also contributed to commodities that have long been staples of recycling starting to go the way of styrofoam. The city of Harrisburg, Pennsylvania is among several municipalities that have stopped recycling glass altogether. 

    If prices stay low, towns and cities will have to pay more to recycle, or recycle less.   

  • Monday, July 6, 2015 6:00am

    The fallout from Greece's vote on Sunday has continued into Monday morning, with Greek Finance Minister Yanis Varoufakis stepping down from his position. Here's an update on the situation in Greece:

    -On Sunday, Greeks took to the polls to vote on a bailout deal, deciding against European austerity. As the New York Times reports, although the results may mean an even tougher road ahead for negotiations, it certainly solidifies Greeks' confidence in Prime Minister Alexis Tsipras.

    -Monday morning, Greek Finance Minister Yanis Varoufakis announced his resignation, citing reports that the Eurogroup had expressed they would prefer not to negotiate with him any longer. As the Wall Street Journal reports, Varoufakis became known for a confrontational style that did not win him many allies in negotiations.

    -Banks in Greece remain closed Monday. "The banks are the first fire that has to be put out. They're absolutely depleted of cash. They do not have a source of liquidity," says reporter John Psaropoulos of The New Athenian.

    -The BBC reports that eurozone leaders have called an emergency meeting for Tuesday.

    -TL;DR: Is Greece solvent yet? Nope.

    Click the media player above to hear reporter John Psaropoulos' update on the situation in Greece from Athens.

  • Friday, July 3, 2015 7:27pm

    Most people aren't paying for things with their phones just yet. If you are, maybe you're just getting used to using your fingerprint to authorize a transaction.

    MasterCard is blazing right ahead with an app that will let you pay for items with your face.

    Technically, you pay using your MasterCard, obviously. But to authorize your mobile payment, you look at your camera's selfie cam and blink once to prove you're a human.

    This story has everything America loves: buying stuff, cell phones and selfies.

    Happy Fourth of July, everyone!

  • Friday, July 3, 2015 5:24pm

    The Federal Communications Commission has now been in the business of enforcing net neutrality for a little less than a month and it's been busy. The FCC promptly fined AT&T $100 million for throttling some users unlimited data access. Sprint said it would stop doing the same thing now that the new rules are in effect. 

    One formal net neutrality complaint has already been filed, and businesses and the government are trying to figure out what the Internet service game looks like now.

    FCC Chair Tom Wheeler explains how the government agency suddenly has a lot more going on:

    “Let’s face it, the Internet is redefining all of our lives. It’s an incredibly personal experience for all of us. When you put rules in place that say that there’ll be no blocking, there’ll be no throttling and there will be no paying for some kind of special priority treatment, we’ve established the rules for the road. We’re not going to tell the players how to play the game. We’re not going to get in there and micromanage like old time regulation used to, but we’re going to be on the field ready to throw a flag if there’s a foul.”