Moneybox
A blog about business and economics.

March 31 2015 5:04 PM

Amazon Made a Real-Life “That Was Easy” Button

Perhaps one of the best marketing stunts of the last decade was the Staples “easy button.” The now-iconic red plastic buttons hit stores in late 2005. They took two batteries and, when pressed, announced to listeners, “That was easy!” That’s all they did. Customers loved it. By June 2006, Staples was on track to sell its millionth one. Still, the easy button was an idea before its time—a fantasy that the mere push of a button could, in fact, be enough to make something happen easily.

Nearly 10 years later, Amazon is introducing a button that actually does what Staples only imagined. Amazon’s version, called the “Dash Button,” is about the size of a thumb drive and facilitates preset orders of a product with a single touch. To accomplish this, each dash button is tied to a specific brand—current choices include Bounty, Huggies, Clorox, Tide, and Gatorade. They come with adhesive on the back and connect to your Wi-Fi. So you might stick your Tide dash button on your laundry machine and your Gatorade dash button inside your fridge. Then, when that stock of Glacier Freeze starts to run low, you simply push the button to initiate a refill. Two days later, Amazon drops the order off at your house.

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So, yes, it's a real-life easy button. You don’t need to punch in your order online. You don’t need to enter an address or credit card information. Button, push, done. Right now, Amazon says the dash button is a limited-time, invitation-only offer for Amazon Prime members. To request one, you can click here and sign into Prime.

For Amazon, filling homes with dash buttons promises to make its addictively easy shopping platform even easier. It’s also clearly a way to build brand loyalty and get consumers to pay premiums. Need laundry detergent now? Sure, another brand might be a little cheaper, but why spend five minutes price comparing when you could spend five seconds hitting a button by your machine? Amazon has actually been testing its dash buttons for the past year, but this is the first time it’s making them widely available to Prime members.

Amazon is also taking things one step further, launching what it calls the “Dash Replenishment Service.” The idea is that companies can essentially build sensors into their products that will set off refills when the product level gets too low. You can imagine, for example, a smart coffee dispenser that automatically orders more beans when you only have a few days’ worth left. Eventually, such sensors would eliminate the need for Amazon’s dash buttons altogether. If only they’d eliminate our need to press buttons that say funny things as well.

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March 31 2015 4:15 PM

Why More Bachelor’s Degrees Won’t Solve Inequality

From time to time, you'll hear economists argue that the best long-term solution to economic inequality is education. There is an enormous, and growing, pay gap between those with a college degree and those without. Push more people further through school, the thinking goes, and you'll close the divide. MIT's David Autor has pressed this point recently. And even though he's better known for advocating a global tax on wealth, so too has Thomas Piketty. "So at the end of the day, the main policy to reduce inequality is not progressive taxation, is not the minimum wage," the author of Capital in the Twenty-First Century has said. "It’s really education. It’s really investing in skills, investing in schools."

What these analyses usually lack is a clear picture of what the world might look like if we successfully increased college graduation. But today, economists Larry Summers, Melissa Kearney, and Brad Hershbein have stepped up to offer an answer in a short paper for the Hamilton Project. The team finds that, yes, boosting bachelor's degree attainment would decrease inequality a bit, mostly by bringing lower-income workers a bit closer to the middle class. But it wouldn't do much at all to shrink the growing gap between the very rich and everybody else. In other words, if you're worried about the power of the 1 percent (or .1 percent), expanding higher ed isn't the solution you're looking for.

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In their analysis, Summers, Kearney, and Hershbein run a simulation in which they give a bachelor's degree to 1 out of every 10 working-age men who never went to college. "To be clear, this would be a tremendous accomplishment," they write. "It is only slightly less than the observed increase in the college share over the entire 34-year period of 1979 to 2013." What happens as a result? First, overall pay for college graduates goes down, since there are more of them on the labor market. However, all those new degree holders would see their pay go up substantially. As a result, earnings would ultimately rise, with bigger gains going to those near the bottom of the income ladder than the top, and the distance between low-earners and the middle class would shrink. According to the paper, the median American would earn about 4.25 times as much as someone at the 25th percentile, as opposed to 5.57 times, as much like they do today. The middle and upper-middle class would be crunched closer together, as well.  

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Hamilton Project

But income distribution would still be extremely uneven across the economy. The researchers find that the U.S. Gini coefficient—a standard measure of inequality—would barely drop, slipping from 0.57 to 0.55. The reason, Hershbein told me, is that the richest Americans would continue to take home an incredibly outsize chunk of the national paycheck.

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In some ways, Summers, Kearney, and Hershbein may be too optimistic about the impact of education on inequality. For instance, their model assumes that as the number of college graduates rises, all current bachelor's holders would see their earnings fall by about 9 percent. That seems a bit unrealistic. If more  students start finishing degrees at average four-year schools, it might bring down their classmates' pay. But I doubt those same B.A.'s will be competing for jobs with the alums of selective institutions. Brooklyn College grads might feel the pinch. High-earning engineers who went to Georgia Tech might not.

Another slightly technical but important point: The researchers assume that their new batch of graduates will be a completely random assortment of students from across the whole income distribution. That, too, seems a bit far-fetched. If extra Americans start graduating from college, they're more likely to be middle class than poor.

All that said, the broad strokes of this paper are useful. Expanding educational opportunity could, theoretically, be a way to increase standards of living and make the country slightly more egalitarian. It just wouldn't do much about the rise of the very rich. 

March 31 2015 12:23 PM

Amazon Home Services Could Take Uber’s Iffy Labor Model to a Whole New Level

On Monday, Amazon officially launched Home Services, a new marketplace for odd jobs and professional help. Among its 700 (very diverse!) offerings: Plumbing, TV wall mounting, iPhone repair, voice lessons, tire installation, grill assembly, gutter cleaning, goat grazing. Yes, goat grazing. The notion, in a nutshell, is that Amazon has already become a ubiquitous seller of things. Now it wants to be a catch-all facilitator of around-the-home help, too.

For Amazon customers, this all sounds very convenient and incredibly helpful. Need a plumber? No more Yellow Pages! But for the workers marketing their services, it could amount to Amazon’s endorsement of the kind of economy that the rise of start-ups like TaskRabbit, Instacart, and, yes, Uber have augured: one in which more and more people don’t have full-time jobs, but instead scrape together gigs through various online platforms.

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Amazon is describing Home Services as an “invite-only marketplace” for those service providers. It’s also promising to price all its services upfront, and to match cheaper local rates if customers come across them. Here’s more from the Verge, which talked to Peter Faricy, vice president for Amazon Marketplace:

A big part of the sales pitch from Amazon is that they are doing the hard work of figuring out who you can trust. “We’re very excited to see if we can solve what today is a real pain point. It’s tough to quickly find someone who is qualified,” says Faricy. Amazon says it accepts an average of three out of every 100 service professionals in each metro area. It makes sure each business is licensed, insured, and passes a five-point background check, with a further six-point background check for each technician. You will never need to worry about hiring a sub-par goat grazer again.

Once Amazon does the initial verification legwork, it’s hoping customers will do the rest. People who’ve used a service will be able to write “verified reviews” of their experiences, which will be visible to anyone who visits the site. Customer reviews are one of the things that’s made Amazon’s traditional platform for selling goods so successful; the company is probably hoping that reviews will do the same for its services marketplace as well. Amazon plans to take a 10 percent to 20 percent cut of each service booked through its site.

If Amazon’s latest venture sounds kind of Uber-esque, that’s because it is—not in the will-bring-you-a-car-in-six-minutes way, but in the will-get-you-a-service-quickly-and-conveniently way. Amazon says customers can browse, buy, and schedule services on its new platform in “less than 60 seconds.” In other words, Amazon is entering the “on-demand economy” in a big way. Already, there are lots of other platforms that offer versions of what Amazon Home Services is promising. TaskRabbit, which has partnered with Amazon on Home Services, lets users describe a task and hire someone to do it for them. Handy helps people book cleaning services or handymen. Instacart offers on-demand grocery shopping and delivery. Most of these services run on labor from contract workers, which is why they're sometimes referred to collectively as the “1099 economy.”

Amazon’s entrance into this field would seem to legitimize this contract-style work, in which people run their own businesses and arrange jobs through various third-party platforms in exchange for a fee, in a way TaskRabbit and Instacart and Handy cannot. Where those apps are still essentially startups, Amazon is an established public company. We don’t yet know if gig-based jobs are good or bad for workers, but they’re already the subject of plenty of lawsuits, and it’s an open question whether 1099-style work will last or be sued to death. Amazon Home Services is one more indication that the independent-contractor model might be here to stay.

March 30 2015 6:52 PM

McDonald’s Is Finally Making the One Big Menu Change That Could Save Its Business

The past two years were not McDonald’s finest. Sales declined; promotions fell flat; ugly labor disputes drew public ire. In January, Don Thompson stepped down as the company’s chief executive, and his replacement, Steve Easterbrook, was handed the monumental task of trying to turn the struggling chain around. Easterbrook finally might be onto a solution—in bacon, egg, and cheese form.

On Monday, McDonald’s said it will begin testing daylong breakfast—that means the Egg McMuffin, hash browns, and various other items—at certain restaurants near San Diego. Should the initial tests go well, the menu switch could end up being what McDonald’s desperately needs to get its business back on track. That’s because, by and large, people love McDonald’s breakfast. Matt Yglesias once wrote in Slate of the Sausage McMuffin With Egg: “Asking whether McDonald's can make a better breakfast sandwich than the Sausage McMuffin With Egg is a bit like asking whether God could make an object so massive that he couldn't move it.” Business Insider’s Sam Ro has declared a photo of an Egg McMuffin so “perfect” that it inspired him and two colleagues to order McDonald’s on Seamless.

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In short, McDonald’s breakfast has somehow escaped the widespread consumer skepticism weighing down sales of most other items on the menu. It’s hard to know exactly why this is. Perhaps it’s because McDonald’s has been more successful at marketing its breakfast as fresh—as Thompson said last April, “we actually crack eggs.” Or maybe it’s because with breakfast, it’s easier to believe that marketing. As anyone who’s ever had an Egg McMuffin knows, it looks and tastes authentic in a way that the standard McDonald’s burger just doesn’t. Or maybe it’s simply that McDonald’s breakfast really does taste pretty good.

“Arguably, the two most craveable items on the McDonald’s menu are its French fries and breakfast items such as the various McMuffin permutations and the utterly delicious McGriddles,” Mark Kalinowski, an analyst at Janney Capital Markets, wrote in a Monday note to clients that announced the news of McDonald’s planned breakfast test. “Having those breakfast items available to sell all day would also serve as a reminder to customers (and the media ... and Wall Street ...) that McDonald’s does indeed have craveable food to sell.”

Whatever the reason, breakfast has remained a bright spot for the chain even as other sales have flailed. Breakfast makes up an estimated 25 percent of McDonald’s sales, which in 2014 would have translated to some $4.5 billion at company-operated restaurants. In 2012, food and restaurant research firm Technomic estimated the U.S. market for fast-food breakfast at $31.7 billion. Since then, breakfast sales have continued to grow, but competition has, too.

Considering how popular and successful McDonald’s breakfast is, it might seem odd that the company has historically offered it only until 10:30 a.m. The company says that’s because the grills in its kitchens aren’t big enough to accommodate both breakfast and lunch cooking. “Their equipment has been designed for efficiency,” says Darren Tristano, executive vice president at Technomic. “So you’re looking at taking a very efficient and space-confined kitchen, and looking at 14,000 stores, and how you’re going to increase the griddle space for breakfast and burgers. It’s a major challenge.”

That said, McDonald’s is probably ready to try anything at this point. “They’re in a funk right now and for the last two years,” Tristano says. “Any move that gives your customers what they want, when they want it ... is a strong and positive move.” For once, this seems like a case where customers have spoken clearly. They want the Egg McMuffin. They don’t want to be asked to dance for it. And they want to be able to order it any time—not just until 10:30 a.m.

March 30 2015 4:37 PM

American Oil Production Grew by the Most in Recorded History Last Year

Just how explosive has the American oil boom been? The U.S. Energy Information Agency offers some context today. Last year, production jumped by 1.2 million barrels per day, the most “since recordkeeping began in 1900.” Though this graph only dates back to 1960, you can see how the recent surge simply dwarfs other increases during the modern era.

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U.S. Energy Information Administration

In the end, U.S. crude production grew by about 16 percent during 2014, which the EIA notes was the most in "more than six decades." (Relatively large increases were more common in the early days of drilling.)

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U.S. Energy Information Administration

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As Tom Randall notes at Bloomberg Business, these charts show how U.S. producers essentially crashed the price of oil by dumping a massive amount of product on the market. But I think they also tell us something slightly more subtle about how unconventional oil exploration has fundamentally changed the oil world. American drillers have been able to mobilize at practically unprecedented speed, in part because hydraulic fracking doesn't require enormous lead time. Because of that, OPEC may simply not be able to manage the price of oil as it's done in the past. It can cut its production to bring up prices, but that will quickly bring on another stampede of small drillers to Texas and North Dakota—and fast. The fact that Saudi Arabia has chosen to maintain its production, cratering prices with hope of dissuading future oil exploration, was probably in part a recognition of that reality. At the same time, the pace at which frackers can start pumping from their fields is one reason why it may be very hard to do lasting damage to U.S. oil infrastructure. The bust of the last few months might discourage some long-term investment contingent on years and years of high prices. But in the states, pumping oil doesn't necessarily require much long-term planning.

March 30 2015 2:37 PM

The “Bright Side” of the Ellen Pao Trial Isn’t Very Bright

This post originally appeared in Inc.

The Ellen Pao ink-blot test of Silicon Valley sexism ended Friday, and most jurors saw a clear white page. It’s hard for me to read that as any sort of victory for workplace equality.

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My heart sank Friday afternoon, as the news about the jury’s complete—if temporarily math-challenged—rejection of Pao’s claims flooded my Twitter feed. However imperfect a victim Pao was, whatever the shortcomings of her allegations or the merits of her case against former employer Kleiner Perkins, it’s been difficult to watch Pao take on a painfully common set of professional circumstances and not root for her.

By suing her former employers for retaliation, Pao unquestionably raised awareness about the subtle but pervasive sexism most professional women regularly run up against. Pao, now the interim CEO of Reddit, was not a model victim of gender discrimination (though, as my Inc. colleague Kimberly Weisul pointed out last week, such a thing rarely exists). But the case, and its outcome, resonated far beyond her particular situation at Kleiner Perkins and even beyond the relatively rarefied venture capital and tech worlds.

Those are famously boys clubs, but it’s hard to be a professional woman in any setting and not nod knowingly at the insidious double standards Pao says she faced. (Speak up more! Don’t be too pushy! Be more aggressive! Don’t be abrasive!)

That’s where the message of Pao’s case, to any woman who hopes to win a similar battle, gets particularly depressing. Whatever the merits of her lawsuit, Pao let her name, her personality, and her dirty laundry be dragged through the press, the Valley, the Twittersphere, the Reddit threads that she oversees—and came up with a big fat pat on the head and a "You're imagining things, dear."

It's hard not to see that as a setback, or to think that so much effort sacrificed for this sort of verdict is going to make it all the more difficult for the next Ellen Pao—or Tinder co-founder Whitney Wolfe or former Facebook employee Chia Hong or whomever—to successfully pass through the gantlets of money and power in tech.

It's a sinking feeling reinforced by Claire Cain Miller’s New York Times interviews about the verdict with venture capitalists. When asked what they learned from the whole experience, they told Miller the case had taught them to:be less overtly sexist in work emails; formalize human resources standards; and be less hasty about declining to fund female entrepreneurs so quickly.

Big progress, right? I mean, those are all good things, but shouldn’t they pretty much be table stakes at this point? When you have to remind yourself to not write down your sexist comments in work emails, you know your industry has a long way to go.

VC investors also told Miller that the trial could provoke a backlash, by making women less interested in becoming venture capitalists—or by making men more reluctant to hire them. Yes, apparently one of Ellen Pao’s lessons to some observers is: don’t let the girls into the boys clubs because they’re going to be buzzkills once they get there.

Maybe this is focusing too much on the negative. Since the verdict came back, there’s understandably and perhaps constructively been a lot of emphasis on the silver lining, starting with Pao herself.

“If we do not share our stories and shine a light on inequities, things will not change,” she tweeted. “Hopefully my case will inspire the venture capital industry to level the playing field for everyone, including women and minorities.”

Similar hopes became the main angle of verdict analysis over the weekend. Pao “disrupts how Silicon Valley does business,” Farhad Manjoo argued at the New York TimesWired’s Davey Alba, speaking to NPR, called the Kleiner Perkins trial a “game-changer,” which “has blown wide open these subtle biases that women deal with all the time in the workplace and more so within the Valley.” And at Recode, which has been closely tracking every in and out of the case, Liz Gannes concluded that “in submitting herself to be torn apart on the stand, [Pao] ratcheted up a meaningful and necessary public conversation.”

I really hope so. And I agree that Pao at the very least made that conversation harder to ignore. But I also fear that the jury’s verdict will make it all the more difficult for the next Ellen Pao to mount her case—or raise her voice at work, or make the case to give funding to more than a handful of female CEOs—and ultimately to make the next desperately needed inroads in most professional boys clubs.

March 30 2015 1:35 PM

There’s a $17,000 Way to Skip the Line for an Apple Watch

When Apple debuted the gold-cased Apple Watch Edition in early March, it made clear it was selling prestige and luxury. The Apple Watch Edition line starts at $10,000 and runs up to $17,000 for the top-of-the-line version. As Will Oremus wrote in Slate at the time, the elite who purchase the fanciest Apple Watch will “get the chance to own an Apple product that the plebes can’t afford. They aren’t paying for a device, really. They’re paying for prestige.”

It looks like that prestige extends to the Apple’s notorious waits for its new devices, according to new details from 9to5Mac. “Apple has developed a unique Apple Store purchasing experience just for the 18-karat gold Apple Watch Edition,” the site reports. “When a customer interested in the Apple Watch Edition enters the store, he or she will be given no-wait access to a dedicated Expert, who will provide a personalized ‘journey’ from the beginning of the appointment until the end, as much as one hour later.” Only two gold Apple Watch Edition models will be brought out simultaneously, and stores will have private stations for trying the premium device on.

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With their purchase of an Apple Watch Edition, customers will gain access to an exclusive, 24/7 Apple Watch Edition support line for two years (to start out it will only be offered in English). Sources also tell 9to5Mac that the Apple Watch Edition will initially only be available in Apple’s “largest markets” but will slowly come to other stores.

One thing to ponder: Could such private, hands-on treatment ultimately help Apple not just in selling luxury to its richest consumers, but also in avoiding offending its middle-of-the-road ones? After all, it’s a bit harder to resent the guy buying a $17,000 watch—not to mention the store selling it—if you don't have to witness the spectacle of him cutting the queue and trying on such an opulent timepiece in front of all the other customers. Until the device hits stores, it’s hard to know whether that will be the case. For now, this basically looks like a $17,000 way to skip that most annoying thing for Apple early adopters: the line.

March 27 2015 6:48 PM

Why Would Companies Ever Think a Campaign Like #AskSeaWorld Is a Good Idea?

In an effort to improve its tanking image, SeaWorld launched a new advertising campaign this week to educate the public about its “leadership in the care of killer whales” and other work to protect whales in captivity and in the wild. “There’s been a lot of misinformation and even lies spread about SeaWorld, and we recognize that it has caused some people to have questions about the welfare of killer whales in human care,” David D’Alessandro, SeaWorld’s interim CEO, said in a release. “This long-term campaign will address those questions head on.”

As part of that head-on initiative, someone at SeaWorld decided to invite Twitter users to pose their questions to the company directly using the hashtag #AskSeaWorld. I’ll give you one guess as to how that went over.

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As easy as it is to make fun of SeaWorld here, the real question is why any company still thinks hosting an open Twitter forum could be good for public relations. Let’s review some of the times this has backfired, starting with the infamous McDonald’s #McDStories Twitter campaign of January 2012. Rather than prompting customers to share their heart-warming McDonald’s anecdotes, the hashtag gave critics a highly visible forum to share their top McDonald’s horror stories. McDonald’s pulled the campaign, but the damage was done. “#McDStories: When a Hashtag Becomes a Bashtag,” Kashmir Hill quipped in Forbes.

Next up: In October 2013, British Gas set the Internet alight when it announced a major price increase in annual energy bills and then offered to field customer concerns on Twitter with the hashtag #AskBG. The company was quickly inundated with tweets demanding to know why prices had risen so much and why British Gas was so greedy. “My office has a window where the sun comes in and makes the side of my head really hot. How much do I owe you?” one user complained.

Just one month after that debacle, JPMorgan announced a “#TwitterTakeover” headlined with its first live Q&A. People were encouraged to submit their question using the hashtag #AskJPM. But before Jimmy Lee, JPMorgan’s vice chairman, could take the virtual stage, the bank started getting flooded with, er, pointedly critical queries from its audience. Here are a couple of the best ones:

JPMorgan canceled the Q&A.

I emailed SeaWorld to ask who at the company had dreamt up the #AskSeaWorld part of the new campaign; so far, no one’s responded. Meanwhile, the company’s PR team is clearly having a tough time. “We are trying to answer your questions but we have a few thousand trolls and bots to weed through,” SeaWorld’s main account tweeted, with a somewhat-disturbing GIF of a baby attached. Before that: “Jacking hashtags is so 2014. #bewareoftrolls” with a decidedly creepy GIF of a masked man frantically typing at a laptop, and “No time for bots and bullies.”

Let’s be honest: This is all a very bad idea. The “haters gonna hate strategy” is never particularly effective when you’re a brand under fire, and while puppies might help, weird GIFs don’t do much for the cause. So maybe SeaWorld’s social and PR folks just really have no idea what they’re doing. Even so, you’d think they’d have learned from the corporate failures before them. Twitter Q&As are a terrible idea. A well-meaning hashtag gives critics an easy way to assemble and voice their complaints in a public forum. Why companies still try them is a great mystery. Maybe they’ll all finally learn from SeaWorld and give this one horrible PR trick up for good.

March 27 2015 1:35 PM

Marijuana Is Changing the Workplace. Here’s How Employers Should Deal With It.

This post was originally published in Inc.

With medical marijuana legal in 23 states and Washington, D.C., there are now millions of card-carrying cannabis users working at companies across the U.S. While four states and the District have legalized recreational marijuana use, pot is still illegal under federal law, and many business owners still subscribe to the plant's Reefer Madness stigma and don't want to allow people to smoke on the job. For some of those owners, that can mean getting sued for failing to accommodate an employee who has a medical condition.

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Regardless of how you feel about marijuana, there are certain rules employees and employers need to follow when it comes to drugs in the workplace. If you make a mistake, you could find yourself in court. Todd Wulffson, a partner at California-based employment and labor law firm Carothers DiSante & Freudenberger, is one of the many lawyers who have been busy defending employers in these types of cases. Wulffson says that to protect your business you need to update your employment policies and human resources programs, and train all managers.

First, employers need to be familiar with the laws that have been passed in their states and consider a drug policy that doesn't prohibit employees from using cannabis on their own time. With 86 percent of Americans supporting medical marijuana, an overly restrictive policy may chase some of your workers to another employer. Marijuana, while still classified as a Schedule I drug without medical use, does have medical benefits, and a bipartisan bill to make medical marijuana legal on the federal level has been introduced in the Senate. 

Until then, employers need to take steps to avoid becoming a target of an employee lawsuit (whether the employee would have a strong case or not). "There are four scenarios that play out in these types of lawsuits that I see over and over again," Wulffson says.

1. Innocent inquiry

The first scenario is when an employee or an applicant innocently asks the question "'I just wanted to know, would you accommodate my use of medical marijuana?'" "That's a loaded question because you have to accommodate the underlying disability of the medical condition," Wulffson says. "But you don't have to accommodate being stoned at work."

If the query is put to the human resources department, the HR person should tell the employee that the company will accommodate his condition. At the same time, the employee should explain his condition, the treatment, and exactly what kind of accommodation he needs so you can have a dialogue about it. Where most companies falter is when a manager doesn't know the company policy and speaks out of turn.

"If an employee asks a line manager, they could easily say, 'Hell no! We don't accommodate stoners! You can't be stoned at work!' " Then the employee says, "Gee, I got glaucoma and I was hoping you'd accommodate my condition." If the manager doesn't tell the employee to go talk to HR and fires them, Wulffson warns, the result may be a lawsuit.

2. An ill employee stoned at work

The second scenario, Wulffson says, is when an employee with a serious disease is under the influence at work and gets called on the carpet: "The employee will say, 'I am getting treated for cancer and I am going through chemo. The only thing that helps is medical marijuana and I had to smoke a bowl at lunch to keep from throwing up. I am really sorry, I'll do something light until it wears off.' " Wulffson says that although you may have sympathy for the employee's situation, the only way to protect yourself from litigation is to institute a zero-tolerance policy for the use of any drugs, including medical marijuana, while at work.

Keep in mind, however, that if you are in a state that mandates employers accommodate medical marijuana (i.e., Arizona, Delaware, or Minnesota) you cannot fire a medical marijuana card-holding employee for a positive marijuana test. While it is indeed advisable to have a drug policy prohibiting marijuana use during work hours, you don't need to know about what employees are doing on their own time.

3. The future smoker

Wulffson says he's currently representing three clients who are in this situation: The employee comes to you and says she's suffering from anxiety or glaucoma and needs to deal with the symptoms. She tells you she's about to go outside, walk 50 feet away from the building, smoke, and come back. "They're telling you they're going to do it, but they are not stoned right now, so you don't have the right to fire them right now," he says. "But, invariably, the manager says, 'No, no, no, no. Go home, stay home, you're fired.' " 

Wulffson says you should not allow the employee to smoke while at work, but you can make allowances. Say something like this: "We will reasonably accommodate your condition, but we cannot allow you to be under the influence while on the clock—it's too risky for the company. You can go home for the rest of the day and come back tomorrow."

4. Social media smokers

Here, an employee goes on Facebook or Twitter and sees pictures of an applicant smoking a joint. The employee then emails the hiring manager to discourage him from hiring the person. When the candidate finds out you saw the photos, Wulffson says, "that's when they claim you didn't hire them because of either a perceived disability" and/or because you don't want to provide an accommodation for them. 

You might find this is frivolous, but there are lawyers out there looking to cash in. "There is a cottage industry of lawyers that do nothing but bring claims related to medical marijuana against employers," Wulffson says. "Google 'medical marijuana rights' and you'll find 50 lawyers who write well-written letters about how you didn't accommodate the employee and you're getting sued for hundreds of millions of dollars, but today they'll take $15,000 to go away."

Wulffson says these lawsuits are catching a lot of employers off guard because of the confusion over medical marijuana laws. "It may be legal in many states, but it's still a federal crime," he says. California and other states will not prosecute someone with a medical card who is carrying less than a certain amount, but that's not a blanket permission. "You can't go on federal property, you can't work for a federal employer," he says. "'Don't work for a federal contractor because you could be fired and maybe jailed."

When it comes to drug use at work—whether it is an employee with cancer smoking marijuana or one popping Xanax to deal with anxiety—Wulffson suggests you should adopt a simple, straightforward company policy that reads something like this: "We don't allow the use of, the possession, or being under the influence of any illegal drug in the workplace. 'Illegal drug' is defined as 'the abuse of over-the-counter medication, prescription medication, medical marijuana, and alcohol.' "

Additionally, Wulffson says, make sure you train all of your managers to answer questions. "If anything from any employee looks, sounds, or smells like they have a medical condition or medical marijuana issue, refer them to HR," he says. "The biggest issue I see is that companies don't get the word out and the line managers say and do things that get the company sued."

March 27 2015 12:20 PM

How to Make Americans Love the “Death Tax”

By all rights, the federal estate tax should be an extremely popular piece of policy. Most Americans believe that the wealthy should pay more of their money to the IRS. And while not everybody agrees on what constitutes affluence these days, the government only taxes estates worth at least $5.43 million dollars. In 2013, 2.6 million people died in this country, and only 4,700 of them had to pay any taxes as a goodbye gift to Uncle Sam. We're talking about a levy on the 0.2 percent.

And yet the estate tax is not popular. Polls frequently show that most Americans would like to reduce or repeal it. When the House Ways and Means Committee, led by Rep. Paul Ryan, voted in favor of a bill that would scrap the tax altogether, it was, oddly, both a sop to the rich and probably good politics.

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There may be a simple reason for this. And no, it's not because Republicans started calling the estate tax the “death tax,” or because the public believes that heirs have a God-given right to inherit their parents' second home in the Hamptons without paying a fee. Rather, Americans seem to vastly misunderstand how many families are subject to the tax. And it's possible that simply providing them with better information might actually boost support for increasing it.

At least, that's what one experiment by economists Ilyana Kuziemko, Michael Norton, Emmanuel Saez, and Stefanie Stantcheva suggests. In it, the team surveyed 10,000 individuals about how the government should respond to rising inequality. One group of participants was shown a presentation beforehand about the history and extent of income gap, which included information on how many households actually pay the estate tax. The other group took the survey cold. While the educational exercise did make people more concerned about inequality, it didn't seem to change their minds much about policy. The two cohorts offered similar answers when asked, for instance, what the top income tax rate should be, or whether the government should increase funding for food stamps. However, the presentation did seem to affect opinions on two issues. It drove up enthusiasm for a higher minimum wage, but only slightly. And it more than tripled support for hiking the estate tax.

Why the huge swing? In a follow-up experiment, the researchers found that participants who saw the presentation were much, much more likely to accurately answer how many families are subject the estate tax. This suggested that many people disliked the policy because they overestimated how many households were paying it.

To be fair, the response may not have been entirely rational. The researchers found that simply presenting survey-takers with facts about the estate tax made them a little more likely to support an increase. Showing them the same facts next to a picture of a mansion, it turned out, was far more effective. Democrats, take note.

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