Marketplace on WVTF, RADIO IQ & RADIO IQ w/BBC News
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.
Friday, March 27, 2015 7:40pm
If you see a vacant building for lease in the neighborhood, chances are there was a bank there at one point. We’re seeing it at financial institutions big and small — from Citigroup, now operating in fewer cities, to FirstMerit, which is closing 16 branches in four states.
Between direct deposits and ATMs, walking into a bank isn’t something a lot of people do anymore. Loans are now more by-the-numbers.
Charles Kahn, who teaches finance at the University of Illinois, says it makes sense that banks are closing branches to cut costs — specifically, real estate and personnel costs. Also, Kahn says banks have a lot more competition, from credit card companies and brokerage firms, for instance.
What’s lost when a branch closes? A lot of hand-holding for people who find banking confusing, says Paul Noring, managing director in the Financial Risk Management practice at Navigant, a consulting firm. Noring says a branch is like an ad, "the best way that banks can still reflect their brand with their customers."
Friday, March 27, 2015 4:41pm
In the last 30 years, presidents, governors, mayors and others have delegated to me the unenviable task of putting a value to the lives of people who are already dead.
After the 9/11 terrorist attacks, General Motors ignition switch failures, the Boston Marathon bombings, the Virginia Tech shootings and other tragedies, I had to determine what a life was worth and how much compensation should be paid to individual victims and their families.
These assignments require me to make mathematical calculations tied to the size of the available compensation fund, what the victim most likely would have earned over a lifetime but for the tragedy, and additional amounts for pain and suffering and other extraordinary circumstances.
In taking on these tasks, I have come to realize that, whatever your personal wealth, money is a poor substitute for loss. It neither tempers the grief accompanying traumatic death or physical injury nor fills the void left after tragic loss of life. During my administration of the September 11th Victim Compensation Fund, I recall one mother responding to the $3 million she would receive for the death of her son.
“I have a better idea,” she said. “Keep the money and bring my son back.”
I have also become much more fatalistic, which has influenced my own personal financial planning. In effect, I’ve received on-the-job training for managing my own wealth and protecting it for my wife and family. After the 2001 attacks, I sought the advice of a financial planner, having witnessed firsthand what can happen when people don’t have expert financial advice.
The 9/11 fund offered free financial advice to all claimants receiving compensation. Goldman Sachs, JPMorgan Chase and others stood ready to help, but only 78 of 5,300 eligible claimants took advantage of the opportunity. “We don’t need any expert advice,” was the overwhelming response. One Virginia Tech claimant bought 100 pairs of women’s shoes with her compensation, while another took surviving family members to Disney World.
After meeting with the planner, I updated my will, something I had been putting off. Over half the victims on 9/11 did not have one. Given that they were relatively young and in good health with excellent jobs, they seem not to have thought it was necessary. I suddenly found it necessary. I also selected a law firm specializing in trusts and estates that knows exactly how I want my wealth distributed after my death.
It was also important to me to avoid the problems I occasionally confronted after 9/11, when angry siblings, parents and relatives declared war with one another over the victim’s assets and argued over the 9/11 fund compensation. When millions of dollars are suddenly available for distribution, family members, fiancés and same-sex partners sometimes engage in bitter arguments. So I made sure that my wife and three children had a clear understanding of who gets what by providing each of them a detailed memorandum listing all of my assets and an explanation of how my wealth should be distributed after my death.
I also bought substantial additional life insurance. I bought a mix of term- and whole-life insurance, because I wanted short-term protection in the event of my untimely death and a long-term investment vehicle. I was astounded to learn that over half the victims of the Sept. 11 attacks had no life insurance. Were it not for the 9/11 fund, such a grievous oversight would have placed many victims’ families at financial risk.
When it came to my investments, long-term safety and gradual growth suddenly seemed far more important than any short-term profits and quick gains. I wanted to be assured that the bulk of my wealth would be available for my wife, children and grandchildren.
Finally, in managing my individual portfolio, I have become a firm believer in the “cushion” theory of investment. I have saved more of my annual income than many people would consider to be necessary. Hundreds of 9/11 victims failed to set aside sufficient funds to provide for their families, believing that future earnings would be available to make up for any current shortfall. But the terrorist attacks interrupted such plans. Saving today is a hedge against unknown events tomorrow.
Nobody is immune from life’s misfortunes. It need not be a terrorist attack or the acts of the gunmen at Virginia Tech, Newtown, Connecticut or Aurora, Colorado. We all face uncertainty and risk. All the more reason to pause today and carefully plan for tomorrow.
Friday, March 27, 2015 4:14pm
With the job market getting tighter, employers are starting to report shortages of skilled workers, especially in manufacturing and the construction trades—for jobs like welder, electrician, carpenter and machinist. The Manufacturing Institute, part of the National Association of Manufacturers, predicts there will be two million unfilled jobs at American companies by 2025 due to the so-called "skills gap." The American Welding Society estimates that the building and manufacturing industries will need 290,000 additional welders, welding instructors and the like by 2020.
Employer groups, labor unions, women’s advocacy groups and government policymakers all see women as part of a potential solution to the coming blue-collar labor shortage. But so far, progress to recruit more women to training programs and jobs in the construction trades has been slow.
“We’ve seen the desegregation of many occupations—bus driver, mail carrier, firefighter, police officer,” says Lauren Sugerman, director of the National Center for Women’s Employment Equity, a research and advocacy program of the Washington, D.C.-based group Wider Opportunities for Women. “But we have not seen the same movement of women into the construction trades.”
Sugerman says that is a significant failure because such occupational segregation leaves women out of lucrative jobs that require skill and training but not necessarily an expensive four-year college degree. Construction jobs — often through unions — also frequently come with health coverage and a pension. She says the difference between traditionally male-dominated blue-collar jobs and traditionally female-dominated "pink-collar" jobs can lead to “between a $900,000 and $2 million gap in earnings over a lifetime.”
WOW has compared the top occupations (by participation) of men and women, and found big gaps in pay (see chart). The top three occupations for women include secretary ($665 median weekly wages), registered nurse ($1,086), and cashier ($368). For men, they are truck driver ($736 median weekly wages), manager ($1,409) and first-line supervisor of retail workers ($792).
And, says Sugerman, women are poorly represented in jobs such as roofer, carpenter, electrician, and ironworker. All of those jobs can pay $40/hour or more once a worker reaches journeyman status. “Women are now 2.6 percent of the construction workforce,” says Sugerman, “so there’s been very little progress.”
Making progress on that gender gap starts in a smattering of nonprofit pre-apprenticeship and skills-training programs around the country. They’re supported by unions, employers, and community colleges, and teach women basic tool use, applied math, and work site job safety.
Holly Huntley owns Environs, a small construction firm in Portland, Oregon, and regularly brings women onto the job site to train them through a pre-apprenticeship she teaches in that is run by the nonprofit group Oregon Tradeswomen. Huntley has hired two graduates from the program. Once they reach journeyman status they’ll make $26/hour.
Huntley says she’s glad to be able to offer a woman-run construction workplace.
“I know a lot of women in the trades that experience harassment on a daily basis,” she says. “I think it’s history, it’s a male-dominated culture with the catcalls and racial slurs and gender-based slurs and jokes. And I can’t have that, I have a really low tolerance for that.”
Journeyman carpenter Dan Ewing is the lone man on Huntley’s crew. “When I mention that everybody else in the company is a woman, people tend to raise their eyebrows,” says Ewing. “But it’s really nice. Men are fine, but we tend to be pretty crass. Everyone here is just more civilized.”
Where there are pre-apprenticeship programs, like in Oregon, the number of women making it to construction apprentice and journeyman is rising. Unions and employers often support the programs—to boost women’s participation and counter discrimination, and also to deal with a growing shortage of skilled workers.
That support has made a big difference for Heather Mayther. She’s 32. Last year she did a free training program with Oregon Tradeswomen, went on to another training program and is now an apprentice in the local carpenter’s union.
Mayther has three-year-old triplets and she has been earning $19.69 an hour, plus getting family health insurance. “Gender-wise, I didn’t really notice any discrimination or anything like that,” says Mayther of the construction sites she’s worked on so far. “The crew was great, they were more than willing to show me what I needed to know.”
She says she has been catcalled, and propositioned for dates. She says her supervisor has her back when she complains. “I’m not here for a husband, I’m here to work. I’m here to work my butt off, and to take home a paycheck that I can live on.”
Friday, March 27, 2015 3:56pmUpdated March 27, 2015. This story originally aired Jan. 20, 2104.Clothing company American Apparel is known for making their products in the U.S. and for paying their employees more than minimum wage. It's also known for eccentric CEO Dov Charney:On pushing boundaries“It’s important that every generation, there are going to be certain people that push boundaries. And those are my people."On using sex to sell clothes
“Sex is inextricably linked to fashion and apparel. And it has been and always will be. And our clothing is connected to our sexual expression so of course, advertising related to clothing, there’s going to be a sexual connection forever, whether it’s Calvin Klein, American Apparel, or brands we haven’t even contemplated."Kai Ryssdal: Do you ever look at one of your billboards and go: Whoa, alright wait, we went too far?
Dov Charney: Absolutely.
KR: And then what do you do?
DC: We put up another one.On the importance of Made-in-USA
“I don’t think it’s very important to the customer and I’m glad that it’s not.” He clarifies that the "made in LA" aspect of the brand “brings flavor and it should also call attention to the fact that we make the merchandise ourselves which is very important.”On his biggest weakness
“My biggest weakness is me. I mean, lock me up already! It’s obvious! Put me in a cage, I’ll be fine. I’m my own worst enemy. But what can you do—I was born strange.”Inside American Apparel's factoryCharney opened his first retail store in 2004, in Los Angeles. The bulk of American Apparel manufacturing happens in an immense warehouse in the city's downtown district. Employees from all departments work together out of the bright pink building. "We have sellers, marketers, photographers, computer programmers, IT experts, production, product design, scheduling, forecasting, retail development, everybody is connected to this building," Charney says.The last few years have been financially difficult for the company. "Right now, we’re retrenching a little bit because it’s unclear what the future of bricks and mortar retail is," says Charney. He has plans to build up the company's presence online and to expand the business in the future.Charney's no stranger to personal difficulties as well. He's faced several sexual harassment lawsuits from past employees, most of which have been dropped. He's also faced criticism for the sexual images American Apparel uses on billboards that promote the brand.
Friday, March 27, 2015 3:14pm
After I spent a weekend packing away toys that my children had outgrown, Elizabeth, Felicity, Julie, Kaya, Kirsten and Kit were nestled safely in plastic bins.
If you don’t recognize those names, you probably don’t have a young daughter or granddaughter — or at least not one who plays with dolls. They are all American Girl poppets, and the six of them — plus others like the Bitty Twins, the brand’s dolls for younger girls — consumed an inordinate amount of my family’s toy budget over the past decade.
Actually, “budget” is a bit of a fib, implying that there was some sort of rational limit to what I’d spend on American Girl items. I’d conservatively estimate that the dolls in those containers, and their outfits, furniture, “pets,” hair brushes, books and accessories, are worth $2,500.
That’s a sum larger than our monthly mortgage payment. It’s more than a year of tuition at some community colleges. And that doesn’t include related spending, like hairstyling visits to the doll salon at the American Girl store.
In my defense, the money wasn’t spent in a lump sum on one child, but on two girls, over seven years or so. Santa might bring a doll for Christmas; then Mommy and Daddy would follow up, with a gift of clothing or a related item on the next birthday.
Still, $2,500 is a lot of money. How did that happen? I wanted to delight my girls, yes. I had them relatively late in life, and my parents died before they could do much fussing over their granddaughters. But, as my perceptive husband noted, the dolls were as much about me and my own childhood experience. “You’re the one who wants this stuff,” he observed.
Indeed, I did. When I was a little girl in the 1960s, I would await, with exquisite anticipation, the arrival of the holiday catalog from F.A.O. Schwarz. Leafing through its pages was magical — picture after picture of wonderful toys, with detailed descriptions. One year, I was captivated by a doll named Elise, who had a trunk full of clothes. (Elise was introduced by the renowned Madame Alexander Doll Company in the late 1950s and came in different versions throughout the 1960s into the 1980s, according to the very helpful Pat Burns, a collector who edits the Madame Alexander Doll Club’s magazine.)
Then, on a window-shopping excursion to the F.A.O. store in Boston, I spied Elise and her trunk, posed majestically on a shelf. So close, yet so far!
Elise went on my Christmas list. Then she went on my birthday list — repeatedly, I recall. But, alas, she never arrived as a gift.
Why not? My parents aren’t around to ask, so I can’t say for sure. Perhaps my mother intuited that if I actually had Elise, our F.A.O. outings wouldn’t be so special. Maybe she worried that, as the only girl in my family, I was becoming spoiled; she had grown up poor, while I had toys aplenty and numerous doting relatives. (One night, when I was inconsolable after forgetting my baby doll outside, a platoon of aunts and uncles scoured the neighborhood with flashlights to find her.)
Most likely, Elise was simply too expensive. A collectors book indicates Elise and her trunk of couture (“Elise Takes a Trip”) sold for $65 in 1969. That’s more than 400 inflation-adjusted dollars today — probably beyond the means of my insurance salesman dad and registered nurse mom, especially if they had to spend comparable sums on my two brothers to keep things fair.
Still, I recall that crushing feeling of realizing that you are really, truly not getting something that you so desperately desire. So when my girls began poring over American Girl catalogs, I was ready to splurge. I liked that the dolls offered a veneer of history and had back stories. As a journalist, I had a soft spot for Kit Kittredge, Girl Reporter. We had fun picking doll get-ups that reflected the girls’ interests, like soccer and basketball uniforms.
Yes, several dolls per child was excessive. But even I had limits: A holiday sleigh ($159) and Julie’s Volkswagen Super Beetle ($350), which my girls coveted at one point, seemed over the top.
I wasn’t as extravagant with other things. I have said no, for instance, to Ugg boots, even if the girls wanted to pay with their own money, because they would quickly be outgrown. And when they were old enough to understand how much the doll attire cost, I had them pay for part of the ensembles with their allowance, if it was a non-birthday purchase. (I don’t recall my parents suggesting that.) That tempered their enthusiasm — along with the inevitable process of growing up, and a budding interest in cellphones. My youngest bought her last American Girl outfit when she was 10; she played off and on with the dolls and their horses for about another year. I consider a half-dozen years or so of use a good deal for the money. And maybe their own girls will play with them someday.
Last fall, when the catalog arrived, the girls, now 13 and 11, ignored it. I gazed wistfully at the Pretty City horse carriage ($275, jingle bells included) before tossing the glossy volume in the recycling bin.