Moneybox
A blog about business and economics.

April 6 2015 11:41 AM

People Left $674,841 in Spare Change at U.S. Airports Last Year

Ever gone through airport security in such a rush that you left something behind? Maybe a couple of cents that you really didn’t miss? You wouldn’t be the only one. In the latest fiscal year, travelers at U.S. airports left behind $674,841.06 in spare change, according to new figures released by the Transportation Security Administration. That was up about $37,000 from the previous year, when TSA collected a total of $638,142.64 in pocket change forgotten by harried flyers.

What happens to all that extra money? It goes to the TSA! “TSA makes every effort to reunite passengers with items left at the checkpoint, however there are instances where loose change or other items are left behind and unclaimed,” TSA press secretary Ross Feinstein explained via email. “Unclaimed money, typically consisting of loose coins passengers remove from their pockets, is documented and turned into the TSA financial office.”

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Data from TSA. Chart by Alison Griswold.

Congress gave TSA the power to put travelers’ unclaimed money toward security operations in 2005. TSA plans to put the money it collected in fiscal year 2014 toward expanding its expedited TSA Pre-Check program (well, most of the money—per the agency’s report to Congress, it spent $3.87 on “administrative overhead” in 2014).

TSA defines unclaimed change as “money passengers inadvertently leave behind at airport screening checkpoints.” The agency says this typically means coins that passengers take out of their pockets to go through security, and forget to put back. Not surprisingly, the busiest U.S. airports also seem to wind up with the most extra funds. New York’s John F. Kennedy International Airport racked up the most accidental donations with $42,550 left on screening tables. Los Angeles International Airport was close behind with $41,506.64 in spare change.

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Data from TSA. All figures for FY 2014. Chart by Alison Griswold.

What would really be interesting to know is how the $674,841.06 that TSA pooled last year breaks down. Was it mostly nickels? Dimes? Is it possible that for the TSA the penny still has value? At any rate, next time you rush through airport security, check to make sure you return all those coins to your pockets. If not, it’s going right back toward that annoying screening process—and it adds up.

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April 3 2015 6:03 PM

Bud Light Wants Tinder Users to Come to Its Secret Party Town

Bud may be failing to reach millennials, but Bud Light is winning. Last year, following the success of its “Up for Whatever” ad spot in the 2014 Super Bowl, Bud Light turned an entire town in Colorado into “Whatever, USA” and in September invited 1,000 millennials to party there for a weekend. The campaign leading up the mysterious rager included fake news reports produced by the Onion’s creative team and listicles published on BuzzFeed. “We’re reaching approximately 50 percent of 21- to 27-year-olds every week via Facebook,” David Daniels, Bud Light’s brand director, told AdWeek at the time. “And we should reach about 80 percent of the 21- to 27-year-old population an average of 50 times throughout the summer.”

Now, though, Bud Light is launching what might be the ultimate in millennial marketing offensives: an in-app advertising campaign for Whatever, USA, on Tinder. The “It’s a Match” ads, which will reportedly only be viewable by Tinder users who are 21 and older, will appear between swipes on the popular dating app. Tinder users will be able to play and pause the video as they like, or follow a link to Bud Light’s external site to learn more. “There’s a lot of synergies between the Tinder audience and the audience we’re looking for,” Bud Light’s Hugh Cullman tells AdWeek. Because really, what could possibly be a better match than cheap beer, a millennial-focused dating service, and a secret party town with box-car racing and Vanilla Ice

At any rate, Bud Light is aiming to repeat its 2014 success with another Whatever, USA, party to which it will invite another 1,000 fans for the last weekend in May. Aspiring attendees can enter for a chance to win through Tinder, Twitter, Facebook, and Instagram. The bash will also take place in a new, yet-to-be-determined Whatever, USA, location. Because keeping Whatever, USA, in the same place as the previous year doesn’t really say, you know, whatever.

April 3 2015 11:06 AM

Manischewitz Makes Terrible Food and Wine. How’d It Become So Popular?

If you happen to be headed to a Passover seder this weekend, there is a strong chance that your meal will feature at least one product manufactured by the most famous name in kosher foods, Manischewitz. The 127-year-old brand is as much a fixture of the American pesach table as bitter herbs and haroset. Which is a pity, because the company's products are despicably bad.

Manischewitz's sins against taste are by now familiar. Its sickly sweet wine is all but undrinkable unless used as a cocktail mixer. Its oddly dense gefilte fish, with its aromatic hints of cat food, has turned off an untold many to a dish that, made properly, should be the Jewish answer to the proud French quenelle. And its matzo—its marquee product, the foodstuff that launched a kosher empire—is little but a pale, bland, rabbi-approved water cracker, lacking any hint of the dark, oven-baked char that gives handmade matzo or superior Israeli mass-market versions their flavor. And yet my fellow Jews and I pass these foods on from generation to generation, as though making the youngest kid at the table sing every year weren't enough of a Passover hazing ritual.

So why does Manischewitz endure? As Brandeis University historian Jonathan Sarna has documented, the company’s rise is a tale of immigrant ingenuity and the triumph of industrialized food production. Its founder, Dov Behr Manischewitz, came to the United States from his native Prussia in 1886, and shortly thereafter opened a small matzo factory in Cincinnati. At the time, the flatbread was generally produced locally in each city, often by hand, and efforts to automate the process were controversial. While a contraption for rolling matzo dough existed by 1838, Hasidic rabbis clashed on whether machine-made matzo could ever be considered kosher. Beyond that, they disagreed on the eternal question of whether it was good for the Jews. According to Sarna, many "feared that machine-made matzo, like so many other innovations in matters of religious tradition, would become a dangerous instrument of modernity leading inevitably to assimilation, Reform, and apostasy."

Manischewitz had no such qualms. In Cincinnati, he went about building the first fully automated matzo plant, capable of kneading, rolling, and cutting the dough, complete with a conveyor belt. Those innovations transformed the uneven baked oval flatbread of tradition into a uniform square, a shape that was convenient for cutting and boxing, and thus easy to ship. It is not a stretch to argue, as its supervising Rabbi now does, that "Manischewitz did for matzo what Henry Ford did for the automobile."

But, as Sarna recounts, some of the company's true genius lay in marketing. Initially, it played to Jewish class aspirations, calling its product "fine matzos" and selling it in a "cigar-type box" that "protected its contents and projected an aura of affluence." (Again, for a modern equivalent, think about fancy labels on water crackers). Beyond that, the company sought to allay fears about whether industrial matzo was sufficiently kosher by inviting rabbis for factory tours to win their endorsements and cultivated relationships with religious leaders living in the future Israel, even funding a yeshiva (or Jewish religious school) bearing the Manischewitz name. To some degree, this may have been unnecessary; the Orthodox rabbis who were suspicious of machine-made matzo were less prevalent in the United States than in Europe, and some old-country rabbis had allowed that industrial flatbread might be necessary to supply America's rapidly growing Jewish community.

Nonetheless, the religious ties helped build the brand's reputation and gave it an air of legitimacy when it advertised its product, dubiously, as "the most kosher matzo in the world."

When I called him on the phone, Sarna emphasized one other key to Manischewitz’s ascent. It was the first company to build a truly national, and later international, distribution network for kosher food. This became especially important when it began adding additional products to its portfolio, from the execrable but conveniently bottled gefilte fish to its wine. “They use that network subsequently for distributing all sorts of other things that the Jewish housewife will want,” Sarna said. “They know the stores. They figure out where Jewish customers are likely to be found.” In short, the company ensured that the kosher aisle in most American grocery stores would more or less amount to the Manischewitz aisle. At the same time, management also kept up its knack for canny marketing, hiring Sammy Davis Jr. as a pitchman for the wine, thus appealing to both the black and Jewish communities. In the end, its products were well known and easy to find.

Ultimately, Manischewitz excelled at industrial production, marketing, and logistics, the skills that midcentury corporate America was built upon. But in later years, it also resorted to less savory tactics. In 1991, a judge handed the company a $1 million fine, the maximum possible, for conspiring with two other competitors over at least five years to fix the price of matzo. Manischewitz acquired one of its co-conspirators while the case was unfolding, guaranteeing it would face less competition in the future without breaking any antitrust laws.

Today, Manischewitz, which operates out of Newark, New Jersey, remains the king of the matzo market and is gunning for a more mainstream audience. Kosher food sales have been rising, as non-Jews have been buying the products for “health and safety reasons,” treating the designation sort of like a Hebraic alternative to going organic. Last year, Bain Capital bought Manischewitz with the hope of tapping into that trend. But while the brand may be about to become even more ubiquitous, there’s no reason to subject your guests to it at the seder table. (I carve out an exception for its matzo meal, which is still the standard for making matzo balls for soup.) Kosher wines have had a renaissance and, when the polar vortex isn’t causing trouble, fresh gefilte fish is readily available in cities with large Jewish populations. As for matzo itself? Yehuda, a brand made in Israel, is cheaper and consistently scores higher in critics’ taste tests. There’s no reason that eating the bread of affliction should be such a boring experience.

April 3 2015 9:32 AM

An Ugly, Ugly Jobs Report

So, the monthly jobs report. It wasn't too good this morning. Employers added a mere 126,000 workers to their payrolls in March—way below expectations—snapping a yearlong streak in which the economy tacked on at least 200,000 jobs per month. Worse yet, the Bureau of Labor Statistics revised its estimates for job growth in January and February down. Over the most recent quarter, the U.S. has averaged just 197,000 new jobs per month.*

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Jordan Weissmann

Meanwhile, the total has been trending down since November.

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Other indicators, like the unemployment rate (5.5 percent), labor force participation rate (62.7 percent), and wages (up 2.1 percent year over year), were basically unchanged.

Where does that leave us? Well, the economy may in fact be weakening. Winter weather hasn't helped lately (cold and snow aren't great for business). But perhaps more importantly, the rising U.S. dollar is making it harder for U.S. companies to sell their goods abroad. Meanwhile, consumer spending at home has been soft. The Federal Reserve Bank of Atlanta thinks that gross domestic product didn't grow at all in the first quarter. There was some sense that employers might keep up the pace of hiring despite the headwinds. But apparently not. For a while, the most interesting story about the labor market was all about wages—specifically, why they weren't rising faster, despite the declining unemployment rate. Perhaps we need to start worrying about jobs again, too.

*Correction, April 3, 2015: This post originally misstated that the U.S. has been averaging just 197 new jobs per month. If true, that would obviously have merited a much stronger headline. It's 197,000 new jobs per month.

April 2 2015 6:05 PM

No One Wants to Buy What’s Left of Motorola

Motorala Solutions, a company that makes two-way radios and other communications devices, has reportedly failed to find a buyer after several months of searching. Sources tell Bloomberg that Motorola has approached private-equity firms, big industrial companies, as well as “strategic buyers” Honeywell International and Tyco International without any success. One source suggested that Motorola Solutions has “proved too large a target for any single buyout fund.” Another told Bloomberg that companies are worried Motorola’s technology could soon become obsolete.

Shares of Motorola Solutions fell 6.24 percent on Thursday to $62.51. A previous Bloomberg report in early February noted that the company has weathered several poor earnings reports and expects revenue to be flat or fall slightly in the current year. Motorola Inc. split up four years ago into Motorola Solutions and Motorola Mobility, a handset business that was initially sold to Google.

Getting back to Motorola Solutions’ current situation, the real question seems to be who still uses two-way radios. Motorola’s website suggests that these devices “reliably connect command centers and first responders, employees in the office or off-site, and consumers wherever they roam.” Bloomberg says the company’s customers include Volkswagen, Ford, and the U.S. government. An analyst told Bloomberg that Motorola might be able to drum up buyer interest from wireless carriers looking to improve their relationships with emergency-service providers. Even so, the “might become outdated” point seems like a valid concern.

April 2 2015 4:15 PM

Uber Just Showed Us Its Trump Card: Leaving Town

As Uber campaigns for control of the global ride-hailing market, a unique skirmish is playing out in San Antonio. On Tuesday, Uber announced on its blog that it would mark its first anniversary in San Antonio by suspending operations there after April 1. “City officials have created a regulatory climate that makes it impossible for us to meet the high standard of service that riders from over 170 cities across the U.S. have come to expect,” Uber’s blog post stated. “By adopting these rules, San Antonio officials have eliminated thousands of jobs and a safe transportation alternative from their city.”

That Uber is facing regulatory scrutiny from local officials is nothing new. But the way it’s responding in this case is notable. Typically, Uber deals with unfriendly regulations by ignoring them and brashly continuing to operate. In this case it’s taking the opposite tactic. Essentially, Uber is abandoning San Antonio in protest until the city adopts regulations that it finds more palatable. And the company is betting that with the right amount of politicking plus some good ol’ fear of missing out, it can get the people of San Antonio to succeed in changing local policies where its own representatives failed.

To state the obvious, the rules San Antonio’s City Council passed to regulate so-called transportation network companies are much stricter than Uber would like. Under San Antonio’s ordinance, Uber drivers must supplement Uber’s background check by submitting their fingerprints and comply with random drug testing; Uber has estimated that complying with all of the city’s regulations would cost drivers about $300 apiece. The company must also meet stringent insurance requirements and pay a nonrefundable annual fee of up to $25,000 to the city for its drivers to operate. Back in December, a few days before San Antonio’s city council voted on the proposed rules, Uber threatened that adopting the regulations would “likely result in Uber closing their operations” in the area. Now it’s making good on that.

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Map by Slate

Uber has tried a strategy along these lines in three other U.S. cities: Boise, Idaho; Las Vegas; and Portland, Oregon. The situation in Boise is perhaps most comparable—in late February, Uber general manager Bryce Bennett announced the company would suspend operations in Boise as the city “is headed down a long path that would lead to unworkable and outdated regulations.” Boise’s proposed regulations were “unworkable and onerous” he wrote on Uber’s blog. “To be clear,” he added, “we are not opposed to regulations, nor are we closing the door on future conversations.”

So if Uber isn't closing the door but is also refusing to operate under existing regulations, what is it doing? Turning the conversation over to the voters. At the bottom of its Boise and San Antonio blog posts, Uber encourages its supporters to sign petitions and turn out for city elections to vote. The Boise petition has garnered 2,178 signatures; the San Antonio one more than 13,000. As BuzzFeed’s Johana Bhuiyan observed in February, Uber's millions of riders in the U.S. have “given it some of its best leverage.” For evidence, she cites Uber’s stunning coup in Illinois, where the company rallied 90,000 customers to petition the governor to veto ride-hailing rules from the Illinois House and Senate (he did) and then publicly released contact information for legislators who might attempt to override that veto. This past January, Illinois Gov. Pat Quinn signed legislation that Uber dubbed “the most progressive” in the U.S. “Uber didn’t just win,” Bhuiyan writes, “it ran the field.”

When Uber was first getting started, it routinely fought cease-and-desists to get off the ground. But now that Uber is everywhere, it has much more clout. So when regulators try to get in the way, Uber plays its trump card—halting service and letting thousands of irate locals do the rest. In San Antonio, we probably won’t know the outcome of that strategy until the city’s elections come around in May. If Uber’s march across the rest of the U.S. is any example, though, chances are it will win.

April 1 2015 4:52 PM

McDonald’s Fortunes Are So Dire, It’s Doing a Decent Thing for Its Workers

McDonald’s will raise wages for workers by more than 10 percent beginning July 1, the Wall Street Journal reports. The increase will bring hourly pay at least $1 above the local legal minimum for roughly 90,000 employees of the approximately 1,500 stores McDonald’s owns in the U.S. It will also boost the average hourly rate for those employees to $9.90 from $9.01. By the end of 2016, McDonald’s plans for that hourly figure to climb above $10, per the Journal’s report.

In addition to upping wages, McDonald’s will allow workers who have been at the company for at least a year to accumulate up to five days of annual paid time off. This is huge. As my colleague Jordan Weissmann explained in Slate last July, service workers don’t just need more money—they also desperately need some vacation. In most other developed countries, PTO for workers isn’t a benefit, it’s a national requirement. But in 2014, the Bureau of Labor Statistics reported that only 55 percent of service workers reported having access to paid vacation. The years immediately prior weren’t much different.

The McDonald’s announcement follows similar decisions from other major U.S. employers, most notably in retail. Over the last few months, Target and Walmart both said they would raise minimum hourly pay for workers to $9 by April. GapIkea, and TJX, the parent of T.J. Maxx and Marshalls, have also announced wage increases. One important caveat about McDonald’s decision is that it only applies to employees of company-owned stores. Roughly 90 percent of the 14,350 U.S. McDonald’s are operated by franchisees, who are free to set their own pay policies. Steve Easterbrook, the company’s chief executive since March, told the Journal that McDonald’s would “absolutely not” consider requiring franchisees to raise pay or add benefits to their workers’ contracts.

Beyond facing competitive pressure, McDonald’s has been under fire from labor activists to boost pay and reform its working conditions. Just a few weeks ago, the chain confronted a slew of health and safety complaints from restaurant employees who said they suffered serious burns on the job and were told by managers to “just put some mustard on it.”  

The most vocal of these activist groups, the Fight for 15, has coordinated several national protests against fast-food companies and has another wave planned for April 15. The goal, as Steven Greenhouse wrote in the New York Times earlier this week, is to “turn the fast-food workers’ fight for a $15 hourly wage into a broad national movement of all low-wage workers that combined the spirit of Depression-era labor organizing with the uplifting power of Dr. King’s civil rights campaign.” In a statement sent around Wednesday afternoon, Kwanza Brooks, a McDonald’s worker affiliated with Fight for 15, called the change “too little to make a real difference” and a “weak move for a company that made $5.6 billion in profits last year.”

McDonald’s, for its part, is framing the move not as a response to critics but an effort to improve a flailing operation and stay competitive. “What we need to underpin that is highly motivated teams in our restaurants,” Easterbrook told the Journal. “Motivated teams deliver better customer service and delivering better customer service in our restaurants is clearly going to be a vital part of our turnaround.”

April 1 2015 12:50 PM

So You Got Rejected by Harvard. Guess What? It Doesn’t Matter.

Rejection is harsh, and elite universities, unfeeling bureaucracies that they are, just love to dole it out. This year, Harvard University admitted only 5.3 percent of its 37,307 applicants, an all-time low. The other Ivies took in anywhere from 6.1 percent of hopefuls (Columbia University) to 14.9 percent (Cornell University). Silicon Valley's favorite finishing school, Stanford University, had a rock-bottom acceptance rate of 5 percent.

Somewhere, the student body president of an affluent suburban high school is weeping into her prematurely purchased crimson sweatshirt.  

But she can take heart. Even if prestigious colleges are saying thanks but no thanks to more kids than ever, the majority of top students still have great odds of getting into at least one very competitive school. Moreover, the evidence suggests that for the typical kid with dreams of spending her undergrad years in Cambridge, Massachusetts, it doesn't really matter whether she attends the most exclusive university possible, at least when it comes to her future earnings potential.

The classic academic work on this subject comes to us from economists Stacy Dale and Alan Krueger, who studied 1976 and 1989 freshmen from 27 different selective schools, ranging from state flagships like Penn State up to Ivies like Yale and Columbia.* On the whole, the pair found that once you took into account where students applied to college, actually attending a more selective institution, measured by factors like their average SAT scores and guidebook rankings, didn't increase their earnings after graduation. In other words, if a young woman was smart, hard-working, or plain-old ambitious enough to take a shot at Princeton, but ended up going to Wesleyan or Georgetown or Northwestern or Xavier instead, her income didn't suffer. Going to a fancy school was just as good as going to an exceptionally fancy school.1

There were two big exceptions to that finding, however. Minorities and undergrads whose parents never went to college did seem to benefit from attending increasingly competitive schools. How come? The authors hypothesized that networking might be the answer. While affluent white kids could rely on their families and friends for help in the job hunt, black, Hispanic, and lower-income alums may have needed the connections provided on the most elite of elite campuses.

Of course, these results are based on students who started college more than a quarter century ago. My hunch is that, as the Common Application has allowed ever-larger numbers of loosely qualified 18-year-olds to apply to schools like Harvard, the act of merely submitting your name for consideration may not be quite as good an indicator of your future career prospects as in the past. But if you're one the many, many perfectly adequate white, upper-middle-class students rejected by the Ivy of your fantasies (and maybe even all of the Ivies) thanks solely to the caprice of the admissions gods, well, don't sweat it.

Meanwhile, maybe the country's most exclusive colleges could strive the tiniest bit harder for some racial and economic diversity. After all, those minority and first-generation college student could actually use their help.

1 Sadly, Harvard itself was not included in the sample of schools. But I think Yale and Princeton serve as good enough proxies here to justify my headline. Any who disagree are encouraged to express themselves in the comments section. And, for your curiosity, here's the full list of colleges covered in the study: Bryn Mawr College, Duke University, Georgetown University, Miami University of Ohio, Morehouse College, Oberlin College, Penn State University, Princeton University, Stanford University, University of Michigan, University of Pennsylvania, Vanderbilt University, Washington University, Wellesley College, Wesleyan University, Williams College, Xavier University, and Yale University.

*Correction, April 1, 2015: This article originally misstated that the study’s subjects graduated college in 1976 and 1989. They began college in those years.

April 1 2015 12:13 PM

Investors Are Super Into GoDaddy’s Market Debut

GoDaddy’s life as a public company is off to a roaring start after shares popped 30 percent a few hours into its market debut Wednesday. The Web-hosting company, which priced its shares at $20 on Tuesday night, was trading slightly above $26 by late morning. That’s well above the $17 to $19 range that GoDaddy set for itself in an amended initial public offering filing in mid-March. The broader market was edging down, with the Dow and the NASDAQ both off a fraction of a percent. GoDaddy, which is trying to shed a sleazy, immature image, looks pretty grown up right now.

GoDaddy has spent the better part of a decade working toward an IPO. In August 2006, the company pulled its first attempt at going public amid a turbulent market. GoDaddy filed new paperwork last June, but then settled into a waiting pattern as the tech sector steadily sold off and other companies, like cloud storage startup Box, repeatedly delayed their own debuts. That GoDaddy has finally gone public and is receiving such an enthusiastic response from investors is a double victory.

On the other hand, the first day of GoDaddy’s public trading is just that—the first day. Box and Lending Club, a peer-to-peer finance company, also enjoyed significant share-price jumps in their recent market debuts. Since then, though, both stocks have fallen. Lending Club is down about 20 percent from where it closed on its Dec. 11 market debut and has tumbled 30 percent from the high of $27.90 it hit a few days later. Box’s share price has slipped 19 percent from the $23.23 it closed at after its Jan. 23 debut. GoDaddy is up a ton right now. The question is, can it stay there?

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.

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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