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Will Student Stipends Hurt Employment?

26 Jun
student interns

Are student interns hurting the job market?
Image: Shutterstock

Summer internships for college students are seen as essential for resume building among most college students, whether they can afford it or not.  As colleges come under increasing criticism about the disconnect between earning a degree and finding a job, most institutions are hungry for any employer willing to help students build professional skills and experience.  Some Universities are even paying employers as rich as General Motors to let students do work that companies need done without paying for the work at all, or paying only half the wage.

Of course, this practice makes the university look good and students love the allowance for being able to gain what they consider valuable work experience.  However, in a time of cutbacks, layoffs and high unemployment, many firms are dancing along the edge of federal labor laws, which require that unpaid internships to do not provide immediate financial benefit for the company.  As most companies are operating at a bare bones employment structure, most unpaid interns would likely be beneficial.  However, the number of students willing to work for free in exchange for the resume bullet has only increased, as competition for jobs becomes more intense.  Some students are even willing to do work that is unrelated to their field of study just to get the experience.

Some students, however, are lashing out.  Several lawsuits have been filed, specifically in the entertainment industry, against employers that are not willing to pay for assistance from students.  It is difficult to determine whether the practice of unpaid internships is beneficial.  On one hand, many students are willing to do work they consider valuable for free.  Universities need better relationships with employers, and many employers need a future workforce with practical skills.  However, it may be dangerous to the economy if employers are not held accountable for respecting the value of a strong labor force because they take any free labor they can get.  How likely is a firm to hire a new employee, after all, when they can get a constant stream of desperate job seekers at no cost?

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Diversity Making Little Progress in the Business World

24 Jun
workplace segregation

Despite everything, many workplaces are still segregated by gender and race.
Image: Shutterstock

The Harvard Business Review (HBR) recently published a study tracking the segregation of women and minorities in the workplace.  Even though you have most likely been through a diversity training in the last six months, you may find that your co-working population looks a lot like you.  It turns out that equal opportunity has stalled for thirty years.  After the Civil Rights Act of 1964, government and social pressure on firms to reduce segregation created more equal opportunity for minorities, most significantly for white women.  However, the levels of jobs where women and blacks work side by side with white males has leveled out, and in some cases lowered, since the 1990s.

workplace diversity

Only 1 in 6 private businesses hold managers accountable for professional development of minorities.
Image: Shutterstock

For example, over 70% of black women in the workforce today would need to switch careers in order to have an even representation in all major occupational fields.  This is down only about 10% from 1970, and the line has been nearly flat since 2000.  Black males have been sitting on a 50% segregation rate for thirty years, and while white women’s segregation has come down the most significantly, it has tapered off in the last decade.  The study concluded that the reasoning for these results has been from a shift from accountability and outspoken public opinion to trainings and vague policies built into the company handbook.  HBR found that today, only about 1 in 6 private businesses actually hold managers accountable for professional development of minorities.

This study may prove valuable evidence to the decisions on affirmative action currently being weighed in the Supreme Court.  Many people believe we should end the practice of requiring a certain percentage of minorities to be chosen for university programs or jobs.  While affirmative action is slightly different than equal opportunity, the decision could affect how people feel about progressing underrepresented groups in the workplace.  The data shows that something needs to change, but perhaps the programs need innovation to integrate our workforce into a true reflection of our population.

Sony Makes Brilliant Move

13 Jun
Sony Playstation

Sony made brilliant use of Xbox’s PR fumbles.
Image: Shutterstock

If you aren’t a gamer, you may not be aware of the recent waves in the gaming industry as the next generation of console development is rolling out.  It began with Microsoft’s announcement of the Xbox One in late May.  Microsoft has fumbled the promotion of the new console, not only upsetting the gaming community with its lackluster game development but with a feature that many game enthusiasts have long feared.  Not only will the system require an online connection to play, but will essentially render used or borrowed games useless without a significant fee to Xbox for a new verification code.  While Microsoft scrambled to clarify the online features and announce more game titles, the sour taste from the original announcement is still fresh in consumer minds.

Especially now that Sony has swiftly used the bad PR to its advantage with its announcement of the Playstation 4 console. Not only did Sony include a montage of new games during their announcement at a major electronics conference, but also practically bragged that it would be a hundred dollars less than the Xbox.  Two complete its One-Two punch to Microsoft, Sony made a twenty-two second instructional video on how to share used games (you hand your game over to your friend).

Sony stocks spiked right after the Xbox announcement, indicating that Xbox may have some trouble peddling its new wares to the market.  However, it ultimately seems that Xbox is targeting another market entirely.  The promotion for the device has heavily stressed its cloud computing capabilities, indicating the ability to streamline a wide variety of media consumption at record speeds.  Television and movies are more important to the Xbox One marketing strategy, and may attract buyers who are not as upset about not being able to buy used games.  Meanwhile, Playstation is executing a pro-gamer strategy perfectly, using everything from pricing to humor to rake in loyalty. It will be interesting to see which one pays off.

The Death of Room Service

6 Jun
Room Service

Room Service
Image: Trevor H. via Flickr

Room service always seems to be integral to the image of a fancy hotel.  The server waltzing in with white gloves and tailored jacket pushing a clothed cart topped with a silver tray is an iconic indicator of excellent service.  However, New York’s largest hotel, the Hilton Midtown, will be shutting down the service and replacing it with a cafeteria-like eatery this summer.  The move will cut 55 jobs from the hotel and is just the biggest move in the beginning of an industry trend.  Another Hilton in Hawaii has already ended room service, and several other large hotels in Chicago and New York have cut back on food offerings.

Apparently the age old tradition of ordering food delivered to your hotel room actually hurts the bottom line.  Consultants and managers for the Hilton and other hotels have advised a cutback, saying there has been a steady decline in room service in recent years.  Part of it may be that people are cutting back after the decline in the economy, but the other part may be due to the rise in affordable restaurants.  Chain and mid-scale restaurants are among the first industries to recover from the recession. One consultant says that no hotel is making a profit from offering room service because of the high labor cost.

Competitors are ready with the rebuttal, however.  A Mariott spokesperson said the hotel company has no plans to reduce or eliminate room service, saying that the offering is a consumer expectation for hotels of a certain caliber and reputation.  If late night snack or champagne and strawberries is important to your hotel experience, keep an eye on who is keeping the service around.  More than likely the move will look the way the airline industry’s movement to charge for bags did—people will complain at first, until it becomes the new normal.

Hulu Bids Are In: But Will They Sell?

30 May
hulu

Is Hulu up for grabs?
Image: Hulu

The subscription TV service Hulu is potentially up for grabs, and everyone seems to be rushing to get a bid in. Last year the company brought in nearly $700 million in revenue from ads and paying subscribers (of which there are about 4 million), so it’s likely that they will be looking for bids of $1 billion or more.

Hulu is currently owned by three different companies: News Corp., Walt Disney Co., and Comcast Corp. While Comcast operates as a “silent” partner, Walt Disney and News Corp. have disagreed on a strategy for the company. This difference in opinion has likely been a main driver in the sale. The shared ownership makes for a tricky situation for buyers, since one, two, or all three can independently decide whether or not to sell.

So who is knocking on Hulu’s door? Everyone is, it seems. Yahoo, who recently acquired Tumbler for a pricey $1 billion, has put in a bid, as has Silver Lake Management teamed with WME Entertainment. Private equity firm KKR, led by business leaders Henry Kravis and George Roberts, has also reportedly put in a bid.

netflix

Hulu, like Netflix, is a leader in next generation television.
Image: Netflix

Time Warner Cable, DirectTV, the Chernin Group, and Guggenheim Digital Media have all also shown an interest, according to inside sources. For each of the bidders and potential bidders, there is a wide array of benefits to acquiring Hulu. Yahoo likely sees this as a chance to get more involved with video media, as Google has done with YouTube. Cable and media companies would probably use the service as a way to distribute media in the future, and companies like Henry Kravis’ KKR are likely interested in the growth potential of Hulu as compared to competitor Netflix.

Will Hulu’s owners actually sell? The bids would have to be high, but we already know that some companies (like Yahoo) are willing to pay a big chunk of money for future investments, so long as they see it paying off in the long term.

When Big Companies Trick Kids

28 May
McDonald's logo

9-Year-Old Hannah Robertson gave McDonald’s a piece of her mind.
Image: McDonald’s

Nine-year old Hannah Robertson doesn’t think tricking kids is okay, and she’s not afraid to tell people so. Last Thursday, McDonalds Corporation held its annual shareholder meeting, and the pint-sized public speaker gave CEO Don Thompson a piece of her mind.

“Something that I don’t think is fair is when big companies try to trick kids into eating food that isn’t good for them by using toys and cartoon characters,” she said during a Q&A session. “If parents haven’t taught their kids about healthy eating then the kids probably believe that junk food is good for them because it might taste good.”

Hannah’s mother, Kia, is a member of Corporate Accountability International. She also created an interactive nutritional game called “Today I Ate a Rainbow,” is a nutritional blogger, and makes healthy cooking videos with her daughter.

“It would be nice if you stopped trying to trick kids into wanting to eat your food all the time,” Hannah said, continuing on to close with her question: “Mr. Thompson, don’t you want kids to be healthy so they can live a long and happy life?”

There were probably a few intakes of breath after Hannah’s speech finished, and I imagine Mr. Thompson was probably sweating bullets. An impressive fourth grader, to be sure. But he handled the question as well as he could have.

Hannah Robertson

Hannah and her mother Kia make healthy cooking videos.
Image: TodayIAteARainbow

Thompson first thanked Hannah for her question and said it was a pleasure to have met her earlier. Then he went on to refute her insinuation that he doesn’t care about keeping kids healthy.

“First off, we don’t sell junk food, Hannah,” he said, continuing on to talk about his own children and their cooking habits at home (fruits & veggies included!). Then he went on to say that McDonalds had made a lot of healthy changes over the years, like adding apples, side salads, and fat-free milk to Happy Meals and the $1 menu—and he says they’re hoping to “sell even more” of those healthy items in the coming years.

While those claims are all true, Hannah’s mother, Kia Robertson, is calling for “genuine change” at McDonalds. Both she and her daughter brought up the issue of childhood obesity, citing unhealthy eating habits as a major factor—habits they say are worsened by the fast food industry’s child-targeted marketing.

“CEO Thompson, don’t you think a good place to start would be to leave our children alone and let us parents decide what’s best for them?” she asked.

Bitcoin Shows Promising Future

23 May
bitcoin

Bitcoin online currency is stabilizing at $120 per Bitcoin.
Image: Zach Copley / Flickr CC

Born out of online shopping habits and the desire for less regulatory control in finance, the Bitcoin is making some pretty serious progress with early adopters.  Although the currency is four years old, Bitcoin recently gained public attention when the trading price skyrocketed to over $230 dollars each.  The online currency has now stabilized to $120 dollars per bit coin, a massive increase over this time last year when it traded around $5.00 per Bitcoin.

Last weekend, about 1,000 Bitcoin enthusiasts gathered for Bitcoin 2013, a conference on the virtual currency in Silicon Valley. Attendees included a flood of start-ups, venture capitalists, Bitcoin vendors and exchange providers, and libertarians looking for more freedom in commerce.  Rather than using credit cards to make online purchases and deal with having to give companies personal information, Bitcoin works like a virtual cash, where only the money is verified rather than your identity.  Other benefits of using Bitcoin include the ability to back up your cash funds, a reduced risk of fraud, and short verification time for transactions.

Cameron and Tyler Winklevoss were on site at the conference as star investors in the new currency.  The twin brothers are credited with giving Mark Zuckerberg the idea for Facebook.  Along with the director of the Bitcoin Foundation Peter Vessenes, they called for the standardization, support and regulatory policies necessary to make Bitcoin thrive.  Right now, about $45 million in Bitcoin transactions take place daily, and that number is only expected to increase.  As more people adopt the currency, the price is expected to stabilize. For now, the Bitcoin foundation is preparing to hire a lawyer to work with Congress on better regulation for the new currency.