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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.
Monday, July 28, 2014 2:22pm
Tom Crady wants high school kids across the country to think about attending Gustavus Adolphus College, even if they mangle the name.
"Some won't say the name at all. They just say, 'Tell me how you pronounce the college's name,'" says Crady, vice president of enrollment at the college, which is pronounced gus-TAY-vus uh-DOLPH-us.
The liberal arts college, perched on a bluff in southern Minnesota, is seeing fewer applicants from its home state, as well as other Midwestern states. So Crady is courting potential students from far-flung places like Texas and even India.
"We go farther and longer distances than ever before," Crady says.
Crady says the changes are occasioned by big demographic shifts. In the '90s, birth rates fell nationally. On top of that, lots of people migrated south and west. That all spells a decline in high school graduates in the Northeast and Midwest today. That's according to Brian Prescott, who directs research at the Western Interstate Commission for Higher Education.
"You can't grow 18-year-olds or high school graduates in a laboratory," Prescott says.
Prescott estimates there's been a 7 percent drop in high school grads in the middle of the country just over the past six years.
Colleges as far away as Dartmouth and Harvard have noticed fewer Midwestern applicants. But experts say the demographic changes are not a big deal for elite institutions with fat endowments and kids lined up at the door. Small, liberal arts colleges that are not household names will likely suffer more as tuition dollars shrink.
"It's very tough right now not only finding the number of your potential applicants dropping but knowing that there are others competing with you to try to get those graduates," says Diane Viacava, vice president in the higher education division at the credit rating agency Moody's Investors Service.
Viacava says many small Midwestern colleges are struggling with the shifting demographics. Among those rated by Moody's rates, a couple dozen have seen two consecutive years of declining enrollments.
Many are bumping up their recruiting budgets and offering big discounts on tuition.
"What we're finding is that some of the Midwest colleges are discounting over 50 percent to get a student to come to the college," Viacava says.
That's true at Gustavus Adolphus. On average, the college cuts its $40,000 annual tuition by about half.
But, Viacava says, as revenue falls, colleges have to figure out how to cut costs in other areas, like faculty.
"Given that many of them could have a somewhat inflexible expense structure, that can prove very challenging for operations," Viacava says.
Even some public institutions are feeling the pain. Minnesota State University Moorhead recently blamed changing demographics when it announced plans to eliminate several low-enrollment programs.
If there are any winners in this scenario, they may be the Midwestern high school students who are in such short supply. Brayden Yel begins her senior year of high school in a St. Paul suburb this fall. On a recent visit to Gustavus Adolphus, Yel said she's received a lot of emails and letters from Midwestern Colleges.
"Absolutely," Yel says. "Lots of asking for tours and stuff like that."
So far Yel doesn't seem to mind all the attention.
Region Class of 2008 (actual) Class of 2014 (projected) % change Midwest (IL, IN, IA, KS, MI, MN, MO, NE, OH, WI) 705,639 656,022 -7 Northeast (CT, ME, MA, NH, NJ, NY, PA, RI, VT) 552,289 526,820 -4.6 South (AL, AR, DE, DC, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV) 1,031,773 1,051,890 2 West (AK, AZ, CA, CO, HI, MT, NV, NM, ND, OR, SD, UT, WA, WY) 711,636 700,086 -1.6
Source: Western Interstate Commission for Higher Education
Monday, July 28, 2014 10:00am
Dollar Tree announced on Monday that it is buying rival discount chain Family Dollar for approximately $8.5 billion in cash and stock. The combined company will have 13,000 stores in the U.S. and Canada.
The deal promises big cost-savings as operations are consolidated. Both companies have reported earnings that underperformed analysts’ predictions in recent quarters. Family Dollar has also been under pressure from investor/activist Carl Icahn, who has called for the chain to be sold.
During the recession, consumers flocked to these super-discount stores. But now, says economist Chris Christopher at IHS Global Insight, consumers’ balance sheets are improving, and moderate to middle income families may be drifting away from the deepest discounts.
“Wages are starting to gain a bit of traction,” says Christopher. “And in addition, there is a little bit of migration of people from the discount stores to the middle-tier retailers.”
Christopher says the super-discount stores — all of Dollar Tree’s items sell for $1 or less; Family Dollar has a wider range of goods reaching slightly higher price-points — can’t raise prices very much. So their margins are being squeezed as inflation starts to pick up at the wholesale and retail level.
Monday, July 28, 2014 7:00am
More on the news that Dollar Tree will purchase Family Dollar for $8.5 billion, and what it means for both businesses moving forward. Plus, Nissan is hoping to turn over a new Leaf; While the company most likely loses money on its electric car, it hopes that it will see profits in the longrun. Also, the Muslim American community adds billions to the U.S. economy, especially during Eid Al Fitr, which follows Ramadan. So why haven't marketers caught on?
Monday, July 28, 2014 6:00am
On Monday, the nation gets a new secretary for the department of Housing and Urban Development.
Julian Castro is the former mayor of San Antonio, and HUD has served as an economic backstop during the financial meltdown.
“HUD is very important for people who are in some sort of credit recovery,” says Mark Goldman, who teaches real estate at San Diego State University.
And some expect big things from Castro because he served as a mayor; a political office known for hands-on, take-charge kinds of leaders.
“So they are proactive people once they get into federal office,” says Sheila Crowley is president and CEO of the National Low Income Housing Coalition.
But she says even the best leadership can’t bypass Congress.
“When you’ve got programs that are being starved, it’s just very hard to make progress,” says Crowley.
Monday, July 28, 2014 6:00am
Nissan reports its second quarter earnings on Monday. The company has been one of the pioneers in the electric car business with its Leaf. The Leaf is one of the most critically acclaimed electric cars out there, but the business model is still up in the air.
"The cost of those batteries is still too high," says David E. Cole, founder of AutoHarvest. Estimates put the batteries between $10,000 - $16,000. They also need to be replaced every 10 years or so. Nissan is offering Leaf owners replacement batteries for $5,500, which means the company is probably losing money on those batteries.
"Everybody’s working on these batteries," says Cole. "A variety of different technologies are being explored, but the cost has just not come down the way we would like to see it."
In fact, Nissan is probably losing money on every Leaf it sells. Still, it could pay off.
"People criticized Toyota for years for losing money on every Prius it sold," says John O’Dell, senior editor for fuel efficiency and alternative vehicles at Edmunds.com. "And now Toyota makes a ton of money on every Prius it sells, and it also dominates the hybrid market because it was willing to invest with losses into a long term strategy."
O’Dell estimates electric cars won’t catch on in a mainstream way for another five years.
December 19, 2013