Moneybox
A blog about business and economics.

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.

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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.”

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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.  

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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.

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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.

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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.

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.

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