• American Airlines delegates responsibility for flight quality to passengers

      image from the article linked below

    American Airlines' new ad campaign is a little baffling: "Do you want to be one of the World's Greatest Flyers?" The campaign doesn't identify or create a need in consumers. It doesn't highlight and differentiate the services and quality provided by American Airlines in relation to other airlines.  Instead, the campaign suggests that the "Great Flyers" who use American Airlines are better people than other airlines' passengers--more compassionate, more resilient, more adaptable, and more considerate. It seems to imply that the passenger has the responsibility to make a flight more pleasant--not the airline. I'm sure that there are other interpretations.

    Various observers are reacting to the campaign: UpGrd travel blogs, the Consumerist, the Chicago Business Journal, and Adweek, for example. In any event--American Airlines has made a big commitment to this campaign. The Tuesday, August 30th home-delivered print editions of both the Los Angeles Times and New York Times were encased in a glossy full page ad asking: "If you could sit by anyone on a plane, would you choose you?" 

    Source: "Great Fliers Make the 'Best of Their Situation,' American Airlines Suggests," by Martha C. White, New York Times, August 29, 2016.

    Follow up: Discuss the pros and cons of the American Airlines media campaign. What was their intent? How might they measure success?

  • Risk Management in Banking

      image from Bloomberg News

    What is easier to protect from theft: A student essay printed out on paper...or the ideas contained in the paper? How easy is it to protect the document that was saved to Google Docs?  At the very least, it is easier to know whether something has been stolen if one is dealing with the physical essay.  Risks increase when intellectual property and virtual records are involved.

    In 2016, banks' assets are not primarily physical assets: there are no stacks of gold and dollar bills totaling up to a banks' deposits sitting in vaults at the corner bank branch. A bank's assets and liabilities are kept track of virtually, by computer. Moreover, the assets are invested--even in the most straightforward example of community commercial banking. This linked scene from "It's a Wonderful Life" illustrates how banking works at its essence. The film also delineates banking risks. But risks in money and banking today are influenced by several additional factors:

    Fin-tech companies: These are financial technology companies that have no physical presence. Traditional banks use their services, but some also operate directly to consumers. The data that these companies collect about the customers may not have the same level of integrity as the individual data collected in a face-to-face banking transaction. 

    Brazen cyber-attacks: Sophisticated programmers, operating sometimes on multiple fronts, have staged hacks (for example, in Bangladesh) of unprecedented scale--possible because of the vast amount of data that is processed electronically. 

    Inadequate implementation of regulations: Regulations, some of which were instituted in reaction to the 2008 crisis and recession, have not been fully implemented or fully enforced. A recent study by McKinsey, "The Future of Bank Risk Management," notes these problems...and addresses six trends that must be addressed to ameliorate the risks.

    Source: "Recent Trends in Risk Management in Banks," by Raymond Michaels, International Banker, August 2, 2016.

    Follow up: Read the linked McKinsey report. What is the biggest risk to the banking system? What are the six trends that must be addressed by bank risk managers?

  • Big Pharma leadership and profit-taking: the EpiPen pricing debacle

      Heather Bresch, CEO of Mylan Pharmaceuticals
      image from the NYT story, taken by Andrew Heatherington, Redux Pictures  

    Price-gouging by Big Pharma has been in the news more than once this year. These stories have not made drug manufacturers look good. Taking advantage of individuals who are sick by opportunistically raising drug prices dramatically has made headlines and has inspired op-ed essays. Various constituencies have made the case that standards of business ethics applied to corporations involved with health care may exceed the standard of delivering the highest-possible short-term profits to shareholders.

    Mylan manufacturers the EpiPen, which is a device carried by individuals with allergies, to be used in an emergency. It differs from many products (and is similar to insurance) in that it is purchased with the hope that it will never be needed. It also differs from many drug products in that it is prescribed to many children with allergies. It is not a pen at all--it is an injection device that can be safely carried and used by children (and adults) in the event of a life-threatening allergic response. 

    Parents got on the public-relations bandwagon when the price of a two-pack of EpiPens was raised to $600. (The product costs about $15 per dose to make.) This particular Big Pharma story played out differently than other recent situations, because the CEO, Heather Bresch, took immediate action to ameliorate the price problem for consumers. 

    Nevertheless, industry observers at New York Magazine have noted that Bresch's compensation (now at about $19 million) has increased 671% since 2007...while the price of the EpiPen has increased 400%. Ironically, the binder on Bresch's desk in the photo above is about Compensation Review for the CEO.  

    Source: "Painted as EpiPen Villain, Mylan's Chief Says She's No Such Thing," by Katie Thomas, New York Times, August 26, 2016.

    Follow up
    ---  What two other stories from 2016 regarding Big Pharma are discussed in the article? What was the effect on drug price? What happened to the CEO?
    ---  How would you evaluate the leadership demonstrated by Heather Bresch with respect to the EpiPen--both in being part of the original price-setting decision, and in reacting quickly to the public outcry?
    ---  What tools did consumers use to protest this pricing decision? Why were they effective?

  • "Verizoned": setting a low bar for customer service

         Cartoon by Ted Goff, 2005

    These days, everyone has an anecdote about at least one poor customer service experience. Delia Ephron, in a recent op-ed piece, described her experience with Verizon, which is not atypical. Any change in service--in her case, the discontinuance of one of two landlines--can result in other services being affected instead. She lost her internet for about a week, which is a serious issue for a freelance writer. It also took several hours of her time to get the problem resolved. She expressed her dismay that these were losses for which there would be no compensation.

    Customer service did not used to be like that. Several years ago, when a utility service was disrupted, it was a matter of standard practice to credit the customer for the days when service was down (without being asked). This honored the basic contract that had been entered into by both parties: a certain price for a certain number of days of service. Now, contracts usually require that customers "Agree" to pay for service no matter what unanticipated downtimes occur. (Via that all-too-familiar checkbox.)

    The voicemail menus that create a moat around human contact cut costs for companies, but increase the helplessness of the consumer. They often serve the company rather than the customer. The electronic menus and service representatives that lack the authority-to-act have the primary purpose of creating the "appearance" of customer service, without addressing the "substance" of customer service.  Even those representatives that are earnest and dedicated see their job mission as educating the customer about the limited legal responsibilities of the company, rather than acting as the intermediary that resolves customer problems. In an environment of cost-cutting where few alternative products are competing, these practices create higher short-term profits. 

    By the way, none of the follow-up letters to the editor that were published by the NYT defended Verizon. One letter-writer, in fact, coined a new term, which I personally hope will become "genericized" and as embedded in common usage such as "Kleenex" or "Xerox":

    Sources: "Love and Hate On Hold With Verizon," by Delia Ephron, New York Times, August 19, 2016.
    "Let's Commiserate about Verizon," letters to the editor, New York Times, print edition August 24, 2016. 

    Follow up:
    --- How does an environment of robust competition affect customer service? Describe a product with a reputation for good customer service. Why has this company made service a priority?
    --- Do you have another company whose customer service you would like to commemorate by coining a word? Describe your experience and create the word to describe it.

  • Excessive compensation and accounting misstatements at an organic food company

    The "halo effect": In psychology, this means "a cognitive bias in which an observer's overall impression of a person, company, brand, or product influences the observer's feelings and thoughts about that entity's character or properties."  When a company (like Hain Celestial) sells organic products to a niche market of tea-drinkers and cold-pressed oil and nut butter aficionados, an observer or customer might think the company is in the "do-gooder" camp. This is an example of the halo effect. 

    Hain Celestial, the makers of Rudi's whole wheat bread and Greek Gods yogurt, has trademarked the phrase, "A Healthier Way of Life since 1993." Its behavior in terms of executive compensation and accounting practices, however, have not been healthy for the company. Paying an executive an exorbitantly high salary is not a "healthy way of life" if stockholders object (and they have). Not following the GAAP accounting rules in order to overstate corporate income is not healthy for stockholders or potential investors. This has been the pattern for Hain Celestial for several years. Stockholders have voiced objections to the exorbitant pay--particularly for Irwin D. Simon (President, CEO and Chairman of the board). His salary averages $18.1 million per year, which is much higher than executive salaries for other companies of the same size.

    The recent loss of $1.5 billion in market capitalization--an investor reaction to the recently disclosed accounting error--makes the salary even more out-of-line.

    The accounting error was one of "counting chickens before they hatched"--a classic manipulation of earnings. Hain Celestial was found to have recognized sales (and income) when they were shipped to distributors...rather than at the later date when they would be sold to customers. This violates GAAP and overstates earnings in an earlier accounting period. 

    The issue of "accountability" regarding the overpaid CEO has not yet been addressed by the board of directors. 

    Source: "Bloated pay came before Hain Celestial's Error," by Gretchen Morgenson, New York Times, August 19, 2016.

    Follow up:
    ---  What are the range of reactions that a customer may have when he or she identifies with a product because it is "good," then finds out that the company is not always acting in ethical ways? Would this kind of thing matter to you? What products might be particularly vulnerable to a negative reaction?
    ---  "Halo effect" has a meaning that is specific to marketing. What is it? What is its opposite? Give some examples. 

  • Highest starting salaries, by major

       #11 on the list: Finance--from the online article on starting salaries in Forbes magazine. 

    Forbes magazine published the occupations in which the highest starting salaries were earned for 2016. According to their research, the highest starting salaries were those earned by individuals with engineering and computer degrees. Salaries ranged up to $100,000, but the highest average salary--for chemical engineers--was $63,389.

    The highest-ranked strictly-business degree was Finance, at #11 (averaging $48,785), but Accounting and Human Resources also made the top twenty. 

    Salaries vary significantly by city and company, but these statistics represent an overview, and may be relevant on a relative rather than absolute basis.  

    Source: "The 20 College Majors with the Highest Starting Salaries in 2016," by Karsten Strauss, Forbes magazine: Leadership, August, 2016. 

    Follow up:  
    ---  "Construction" as a major ranked #10. Why do you think that major ranked higher than business majors?
    ---  How much do you expect to make next year? What was your major? Is potential earning power a major or minor factor in your decision about what to study?

  • Big Pharma's deadly sales pressure

    Abbott Laboratories, a global pharmaceutical company, puts so much sales pressure on its sales representatives that one rep, Ashish Awasthi, age 27, could no longer take it. Awashti rode his motorcycle in front of a train, where he died instantly.

    He left behind a wife and two young children. By the way, Awashti was one of Abbott's top salespeople in India.

    Other reps and former sales reps corroborate the tale of extreme pressure to sell: one said that an Abbott manager had pressured him to buy a material amount of pharmaceuticals with his own money so that his group could meet their sales targets. Sales reps from other companies also report extremely negative personal consequences for not meeting sales goals. 

    Sometimes emotional abuse combined with perceived peer pressure can make a person feel as though they have "no choice". Creative strategies can be learned to help individuals in difficult situations to see that there are usually other options.

    It is, unfortunately, too late for Mr. Awashti and his family.

    Source: "Driven to Suicide by an 'Inhuman and Unnatural' Pressure to Sell," by Geeta Anand and Frederik Joelving, New York Times, August 10, 2016. 

    Follow up:
    ---  Recall a time when you have done something that was (or might have been) harmful to yourself because you felt pressured. It might be staying up all night to finish a term paper. It might be driving under the influence when leaving a party. It might involve a person-to-person interaction. If you felt that you "didn't have a choice" in the situation, rethink it. Write a short paragraph about the incident, then list three choices you had in that situation, and the pros and cons of each choice. 
    ---  What is "normal pressure" to motivate a sales force? What would constitute extreme sales pressure? If you have ever worked in sales, give examples from your experience.
    ---  What should be the consequences, if any, for a corporation putting extreme sales pressure on its employees?

  • Cicret: the smartphone in your forearm

      the IMAGE above is from a video review by sigma technologies on YouTube

    Some smartphone users have joked that it would be more convenient if their phone was just implanted in their body. As it turns out, the next-best-thing: "pico projection" is a technology that projects your phone onto your forearm.  The Cicret Bracelet is ramping up production now, and the product should be available before the holiday season, 2016.

    Product development in technology areas have been about innovation, convenience, features, and the "wow" factor. Marketing a product properly to the "first adopter" population means identifying which needs are satisfied (or created and satisfied) by the new technology. There has been a serious amount of advance information about this product directed at those most interested in "wearable technologies."

    Nevertheless, it almost sounds as though it could be a hoax, so it has been investigated and evaluated by snopes.com.  What do you think? It certainly has taken a few years to bring it this close to market.

    Sources: "Cicret Bracelet," Wearable Technologies Conference, Munich, January 2016; published on YouTube February 13, 2016. 
    "Your Skin is Your New Touchscreen."

    Follow up
    ---  Discuss how you react to this product and why. Would you buy it? What is your price point? Might you be an early adopter...or a slightly or much later adopter? Give your reasons. 

  • # My First Seven Jobs

    As a college professor, I have often told my students that their careers will unfold in ways that they probably cannot predict. I have been given a boost in this discussion by the current twitter hashtag #MyFirst7Jobs. While many of the twitter posts are poor attempts at humor (and, warning, sometimes vulgar), some of them are instructive in terms the wide range of a progressively-successful career path.

    Here are some examples: 

    The turning point in my career path actually arose from being audited by the IRS when I was 23 years old.  I said to myself: "Time to go to business school and learn business and accounting vocabulary--since I am going to be filing taxes every year for the rest of my life..." Every job after that was accounting or business-related, but that is not where I started out. 

    Here are my first 7 jobs, beginning when I was in high school:
    -- nursing assistant at a geriatric nursing home (I gave 2 weeks notice the first day I was there)
    -- stock clerk at a Topp's (similar to Walmart) opening in my hometown
    -- retail clerk at a local department store
    -- soda jerk at a Kresge's fountain in downtown Ann Arbor
    -- library assistant, bibliographic searcher and biochemical lab assistant as a student worker at the University of Michigan
    -- long-term substitute teacher, middle school, Detroit Public School System
    -- spot welder, Dodge Main plant, Hamtramck--female affirmative action hire in the body shop

    I clearly had not "made it" by job number seven. The rest of my jobs, however, have been accounting or business related. Here is a list of my business and accounting-related jobs:
    -- accounts payable clerk, Foster Chemicals Detroit
    -- staff to senior accountant, Coopers & Lybrand, Detroit
    -- Internal Auditor, CBS, Inc.
    -- Internal Auditor, Los Angeles Olympic Organizing Committee, 1984; concurrently started a tax practice and consultancy
    -- Professor, Santa Monica College (34 years; 3 part time; 31 full time)

    Could I have predicted this career when I graduated from the University of Michigan in 1975? No way. Has it been great? YES. Everyone's story is different. 

    Sources: "MyFirst7Jobs," by Meldron Sandrow, Sherman Oaks Review of Books, August 12, 2016.
    a fairly random YouTube VIDEO in service of the #MyFirst7Jobs twitter hashtag 

    Follow up:
    --- Have you had seven jobs yet? List the jobs you have had. What do you predict (or hope) your next three jobs will be?
    --- Check out the "Corner Office" column by Adam Bryant that appears each weekend in the New York Times. Which stories speak to you? What you want your journey to look like?

  • Amazon, logistics, drones, and growth

       Image above is from video linked here: CNBC -- Amazon Prime Air drone prototype

    Amazon is making news this week because of its new Amazon-branded Boeing 747 airplanes. These Amazon Prime Air vehicles are part of Amazon's strategy regarding control of its distribution channels. Amazon's growth has been good for delivery companies like UPS and FedEx--but since delivery costs are a significant part of its expenses, and "fast delivery" a pillar of its marketing niche, gaining control over the logistics of product transportation is a major operational objective. Also, control over distribution may also prevent the delivery failures that have occurred during peak holiday periods when Amazon business has overwhelmed third-party providers. Amazon is also on the forefront of developing drones for delivering packages to their ultimate consumer/user.

    Amazon started in 1994, but I became a customer in 2001--when I viewed it as an online bookstore. It took me a while to adjust to its role as a purveyor of pots and pans. And clothing. And appliances. And furniture. Then I started seeing the United States Postal Service trucks on Sundays--Amazon was renting them on their "off" day to deliver Amazon packages instead of the mail. My Amazon Prime membership--which I purchased for free shipping--suddenly became a source of free videos. My twenty-something daughter does much of her grocery shopping by way of Amazon Prime Now. Amazon has developed quite a reach. 

    I notice that Amazon's stock price was $26.07 per share on August 11, 2016. And as of August 11, 2016, the price is $771.24. That seems like a considerable amount of growth. I wonder where it will be in ten years? 

    Sources: "Think Amazon's Drone Idea is a Gimmick? Think Again..." by Farhad Manjoo, New York Times, August 10, 2016.
    CNBC video 

    Follow up
    ---  When you picture a drone delivery, what do you picture? How big is the "carrier"? Is a person or a computer controlling the drone in real time? These are all factors in distribution efficiency and costs: can you develop a logistics plan? According to the video, who will be the primary customers for drone deliveries? 
    ---  Calculate the percentage growth in the Amazon stock price over the last ten years. What do you think Amazon, the company, will look like ten years from now? Are you a customer? An investor? Why or why not?
    ---  What is the effect of a company like Amazon on small "mom-and-pop" retail stores? How are their customer demographics the same and different?

  • Advice to women in the workplace: a parody that is not very funny

      from the Cooper Review article linked below--PLEASE DO NOT TAKE THIS SERIOUSLY!!
         NOTE from blog author: this is probably not funny to women in the workplace.

    Using humor in business situations can be very tricky. The parody illustrated above attempts to give advice to women about how to communicate in a subservient way, which is supposed to be ironically bad advice. As a humor piece, it is on thin ice in a couple of ways. First--the humor is so subtle that it almost seems like good advice. Some might say that the series of cartoon situations represent techniques that could be used by either sex to avoid problems with a difficult personality. However, the piece is directed at women specifically, and implies a difference in status and workplace expectations.  

    Second--whenever there has been a pattern of historical discrimination against a group, it is always good to err on the side of caution regarding humor. Since different workplace standards for women and men have caused offense in the past, it may be best to avoid humor altogether. It could be misinterpreted as perpetuating the problem. There are numerous situations where caution might apply for the same reason. Attempts at humor may not be perceived as funny--especially to the group being targeted. 

    The Cooper Review website tries to side-step the conflict by claiming to use humor to illustrate things that are too true to be really funny. They are attempting to say that there is still more work to be done on the problem. Nevertheless, a piece like this, taken out of the context of the website as a whole, can be misunderstood.

    To provide some perspective regarding the beyond-the-pale "norms" of workplace discrimination that existed fairly recently, read the second source listed below.  An example from the Collector's Weekly piece is this ad from Eastern Airlines (that appeared after I graduated from college):

      ...you might also want to note how ethnically diverse this ad is NOT...

    The tolerance for discrimination is changing, however. Recently, the American Bar Association has considered serious penalties for the courtroom use of words like "honey" directed at female attorneys by male counterparts. Language equality is an important factor in workplace equity. 

    Sources: "9 Non-Threatening Leadership Strategies for Women," by The Cooper Review, via Satellite Sisters, July 27, 2016.
    "Selling Shame: 40 Outrageous Vintage Ads that Any Woman Would Find Offensive," by Lisa Hicks, Collector's Weekly for Mental Floss, September 1, 2015. 
    "Bar Association Considers Striking 'Honeys' From the Courtroom," by Elizabeth Olson, New York Times DealBook, August 4, 2016. 

    Follow up:
    ---  Comment on the parody: Do you find it funny? Why or why not?
    ---  In what other situations regarding past discrimination might humor be too risky to be appropriate? Does this apply in casual after-hours situations as well as in-office? Explain.
    ---  Discuss this blog in a single-sex, non-diverse small group. What comments arise? Is humor involved? What is the underlying subtext of the conversation? What does this anecdotal experiment say, if anything, about workplace equality?

  • Nuclear fusion: investment possibility or science fiction?

        image from science news. org

    Nuclear FISSION is the atomic process underlying the atomic bomb and nuclear energy production facilities. The downside of this process is the radioactive waste given off. Also, the tremendous heat produced has to be mitigated in order to keep the reaction controlled.

    Nuclear FUSION, sometimes called "cold fusion," is an atomic reaction that results in unstable elements combining into one atomic nucleus and giving off energy that can be harnessed for use in lieu of carbon fuels. It is far from being a cost-effective reality at this point. Those who are trying to combat climate change (believed to be the heating of the planet via burning the rapidly-diminishing store of fossil fuels), are hopeful that nuclear fusion can produce a sustainable energy alternative. The sun, for example, operates on nuclear fusion. It is "clean." It can fuel desalinization plants that can solve our water-shortage problems. 

    Princeton's plasma physics lab is doing some research into making nuclear fusion practical. Who is paying for the research? Will the investment pay off? Listen to the podcast to answer some of the questions that arise regarding this possibility--and the risks involved. 

    Source: "A machine to save the world," by Sabri Ben-Achour and Tim Fernholz, for Actuality by Marketplace APM and Quartz, May 4, 2016. [podcast]

    Follow up:
    ---  Research the internet for stories of scientists claiming to have resolved the cold fusion process. What natural resources would have been a good investment opportunity if those stories had been reality?
    ---  What are the upside possibilities and the downside risk to the billionaire investors in today's nuclear fusion projects?

  • What is the mission of a corporation?

            introduction to the series on public corporations and profits
                          by Marketplace APM and Business Insider

    Corporations are legal entities set up to make raising money easier for businesses, as well as to protect investors from losses due to customer and creditor lawsuits. Private corporations can only raise money from friends, family, and others who can read and understand a financial prospectus. Public corporations sell stock to third parties on public stock exchanges, so they must abide by several federal laws, and oversight by the Securities and Exchange Commission. 

    In either case, a for-profit corporation is set up to produce a product or service and also provide a "return on investment" to the shareholder/investors. But which is more important? Viewed from the standpoint of corporate CEOs, the main mission has changed over the last few decades:

    What has changed? 

    For decades, middle-class investors--with 401K and IRA savings for retirement or 529 accounts to send their kids to college--are invested for the long term. This long-term view used to be aligned with corporate management, who often viewed their products as positive influences on people's lives, and felt a fiduciary responsibility to their long-term, loyal employees. The long-term view was eroded as global competition increased. But a major factor in the short-term focus of CEOs and boards of directors has been the investing dominance of hedge funds demanding immediate and increasing profits. 

    Businesspeople who read quarterly reports on the internet or news publications can see a headline like, "Stock price falls: growth rate this quarter lower than last year." What it says is: company revenue is higher than it was last year, but it has not grown as much as it did in the previous year."  Today's big investors' expectations keep rising.   

    It is interesting to note that some of the big accounting scandals (Enron, WorldCom, HealthSouth) have arisen because of profit expectations and the pressure those expectations put on corporate management. Nevertheless, the focus on short-term profits is a reality, and the focus has effects that are addressed in the series, 'The Price of Profits," by Marketplace APM and the Business Insider.

    Sources: "2016: A Corporation Odyssey," by Paddy Hirsch and other Marketplace staff in conjunction with Business Insider, June 15, 2016.

    "The Price of Profits," from the same series.

    Follow up
    ---  In your own words, describe how pressure from hedge funds for short-term profits influence corporate priorities. Discuss how these priorities influence the American economy as whole, and the quality of life for middle managers and workers.
    ---  How is a public corporation different from a private corporation? Why are private corporations not relevant to the trend toward short-term profit-taking?

  • The difficulties of producing goods "Made in the USA"

    Pad & Quill, owned by Brian and Kari Holmes, is a business that makes beautifully-crafted cases and other accessories for Apple products. When deciding to sub-contract the production operation to a company in the United States (such as Softline, pictured above, or Trendex), Holmes valued the benefit of excellent craftsmanship over the lower cost of outsourcing the operation to a manufacturing facility overseas. Many entrepreneurs, using cost/benefit analysis, locate their operations overseas, to lower costs and therefore be able to sell their goods at a lower price.

    To achieve the same profit, the Pad & Quill goods must be sold at a higher price. Actually the prices are about double what a similar item might cost: their marketing niche is high-end. 

    Nevertheless, Pad & Quill only makes 70% of its products in the United States. Holmes seeks out the best manufacturer for each product. Check out this example:  

    Source: "Challenges of Getting a Product Made in the U.S.A." by Gregory Schmidt, New York Times, July 27, 2016.

    Follow up
    ---  What is cost/benefit analysis?  Describe a decision in your own life where you might apply this analysis and make a decision based on COST.
    ---  Describe a decision in your own life where you might apply cost/benefit analysis and make a decision based on BENEFITS...or perceived qualitative factors. Explore how cost/benefit analysis works in your own life...or how you might see it operating in the future. 
    ---  Does where a product is made have any bearing on your purchase decisions? Explain your position. 

  • Flip-flops: an old product that has a boom every summer

    The flip-flop sandal has been around for centuries...and still constitutes a $2.6 billion business. Havaianas, a Brazilian company, re-popularized them and glamorized them in the 1990's. But to many people, they are a shoe that means "summer."

    Unfortunately, this type of shoe was known as a "thong" when I was a kid (the article uses the word as well). Since the word now more frequently refers to a clothing item that was NOT popular when I was young, we had a few embarrassing moments at our house, years ago. On a few occasions, I called upstairs to a friend of my teenage daughter, "You left your thongs down in the kitchen."  Dead silence ensued. Oops. 

    Source: "The Surprising Story Behind the Rise of Flip-flops,"  by Reema Khrais and Kai Ryssdal, Marketplace, American Public Media, August 3, 2016. 

    Follow up:
    --- What is the secret to the flip-flop success? Will it continue? Read the article for details.
    --- What is your personal experience with the product? Include the number of pairs you have owned over your lifetime.
    --- Comment on the various names for the product, and the effect on product marketing. 

  • How the gender wage gap statistic is misleading

      image from the article linked below

    Like most statistics, the gender wage gap of "79 cents for women for every dollar paid to men" doesn't tell the whole story. As noted in the line-drawing above, the wage gap for pharmacists is only 5 cents--not 21 cents. The many factors that contribute to a different gap in different jobs are addressed in the linked article. Read the article to find out the one factor that seems to be the most highly correlated with a small gender wage gap. 

    In addition, the addition of children to a family is also a factor, as it turns out. The "79 cents" statistic is an average, over a sampling of jobs, and does not take into account the arc of a person's career earnings. 

    Many of the statistics quoted and illustrated in the article come from a study partially conducted and written up by Claudia Goldin, formerly a president of the American Economics Association and currently an economist at Harvard University. Marianne Bertrand was the primary author of this study and Lawrence F. Katz also participated. 

    Source: "The truth about the gender wage gap," by Sara Kliff, with Ezra Klein, Alvin Chang and Javier Zarracina, Vox.com, August 1, 2016.

    Follow up:
    ---  According to the article, what is the MAJOR FACTOR correlated with women's pay being more equal to a man's pay in the same business or industry? Do you agree?
    ---  What, according to the article, would be a more enlightening comparison grouping, rather than only men's pay vs. women's pay? Do you agree, considering the other statistics cited in the article?

  • New study and quiz: College students and Financial Literacy

    According to a new study by SallieMae, college students have a lot to learn about basic personal finance. Only 1/3 of students 18-20 years old could answer the above three questions correctly, and even fewer--25%--of students 23-24 got them right. Even more puzzling: the students who rated their financial literacy skills as "excellent" (page 39 of the study) did worst of all. 

    How do you rate in comparison? The information in the study may help you improve your understanding. 

    The good news from the study is that there are some positive money-management skills that are practiced by a majority of college students:


    Sources: "Can You Pass a Simple Credit Quiz That Most College Students Failed?" by Beth Braverman, The Fiscal Times, March 10, 2016.
    SallieMae Study

    Follow up:

    ---  Take the quiz above.
    ---  Read the SallieMae study linked above and review your quiz answers there, on page 21. 
    ---  What is SallieMae?