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Fast and Flawed Inspections of Factories Abroad

September 1, 2013 by

But unknown to the inspectors, none of the playful items, including reindeer suits and Mrs. Claus dresses for dogs, that were supplied to Walmart had been manufactured at the factory. Instead, Chinese workers sewed the goods — which had been ordered by the Quaker Pet Group, a company based in New Jersey — at a rogue factory that had not gone through the certification process set by Walmart for labor, worker safety or quality, according to documents and interviews with officials involved.

To receive approval for shipment to Walmart, a Quaker subcontractor just moved the items over to the approved factory, where they were presented to inspectors as though they had been stitched together there and never left the premises.

Soon after the merchandise reached Walmart stores, it began falling apart.

Fifteen hundred miles to the west, the Rosita Knitwear factory in northwestern Bangladesh — which made sweaters for companies across Europe — passed an inspection audit with high grades. A team of four monitors gave the factory hundreds of approving check marks. In all 12 major categories, including working hours, compensation, management practices and health and safety, the factory received the top grade of “good.” “Working Conditions — No complaints from the workers,” the auditors wrote.

In February 2012, 10 months after that inspection, Rosita’s workers rampaged through the factory, vandalizing its machinery and accusing management of reneging on promised raises, bonuses and overtime pay. Some claimed that they had been sexually harassed or beaten by guards. Not a hint of those grievances was reported in the audit.

As Western companies overwhelmingly turn to low-wage countries far away from corporate headquarters to produce cheap apparel, electronics and other goods, factory inspections have become a vital link in the supply chain of overseas production.

An extensive examination by The New York Times reveals how the inspection system intended to protect workers and ensure manufacturing quality is riddled with flaws. The inspections are often so superficial that they omit the most fundamental workplace safeguards like fire escapes. And even when inspectors are tough, factory managers find ways to trick them and hide serious violations, like child labor or locked exit doors. Dangerous conditions cited in the audits frequently take months to correct, often with little enforcement or follow-through to guarantee compliance.

Dara O’Rourke, a global supply chain expert at the University of California, Berkeley, said little had improved in 20 years of factory monitoring, especially with increased use of the cheaper “check the box” inspections at thousands of factories. “The auditors are put under greater pressure on speed, and they’re not able to keep up with what’s really going on in the apparel industry,” he said. “We see factories and brands passing audits but failing the factories’ workers.”

Still, major companies including Walmart, Apple, Gap and Nike turn to monitoring not just to check that production is on time and of adequate quality, but also to project a corporate image that aims to assure consumers that they do not use Dickensian sweatshops. Moreover, Western companies now depend on inspectors to uncover hazardous work conditions, like faulty electrical wiring or blocked stairways, that have exposed some corporations to charges of irresponsibility and exploitation after factory disasters that killed hundreds of workers.

The Rana Plaza factory collapse in Bangladesh, which killed 1,129 workers in April, intensified international scrutiny on factory monitoring, and pressured the world’s biggest retailers to sign on to agreements to tighten inspection standards and upgrade safety measures. While many groups consider the accords a significant advance, some longtime auditors and labor groups voice skepticism that inspection systems alone can ensure a safe workplace. After all, they say, the number of audits at Bangladesh factories has steadily increased as the country has become one of the world’s largest garment exporters, and still 1,800 workers there have died in workplace disasters in the last 10 years.

“We’ve been auditing factories in Bangladesh for 20 years, and I wonder: ‘Why aren’t these things changing? Why aren’t things getting better?’ ” said Rachelle Jackson, the director of sustainability and innovation at Arche Advisors, a monitoring group based in California.

Keith Bradsher contributed reporting.

Article source: http://www.nytimes.com/2013/09/02/business/global/superficial-visits-and-trickery-undermine-foreign-factory-inspections.html?partner=rss&emc=rss

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‘Duck Dynasty’ Season Opens to Record Ratings

August 15, 2013 by

The backwoods reality show “Duck Dynasty” drew 11.8 million viewers Wednesday night on AE, the largest audience ever for a nonfiction telecast on cable television.

That total, which included 6.3 million viewers in the advertiser-preferred demographic of 25- to 54-year-olds, built on the high ratings won in April, at the conclusion of Season 3, when the audience reached 9.6 million.

The series follows the travails of the Robertson family of West Monroe, La., and their company, Duck Commander, which makes duck calls for hunters. The show mixes commerce, family life, the great outdoors and beards suitable for members of the band ZZ Top — sported by the patriarch of the family, Phil, and three of his sons.

“The Robertsons represent a lot things we as Americans cherish,” said David McKillop, the general manager and executive vice president of the network: “self-made wealth, independence, three generations living together.”

Though a reality show, Mr. McKillop said, “Duck Dynasty” fits nicely with the themes of classic family television. “When the show came in, the direction I gave: This is not a hunting show, make this like ‘The Waltons.’ ”

The show’s popularity extends beyond TV. At a recent Walmart meeting, the company announced that “Duck Dynasty” T-shirts were the best sellers in its men’s, women’s and boys’ sections.

Wednesday’s episode, the premiere of Season 4, followed the Robertson children as they planned a wedding ceremony for Phil Robertson and his wife, Kay, who were married 48 years ago by a justice of the peace.

It also added a new character to the show: Beardless Robertson Male, as Neil Genzlinger described him in a recent review. He is Phil and Kay’s eldest son, Alan, a minister who performed the wedding.

With its nearly 12 million viewers, “Duck Dynasty” eclipsed the veiwership totals of other intensely popular reality shows like “Jon Kate Plus 8,” which in 2009 drew an audience of 10.6 million viewers to hear Jon and Kate Gosselin confirm that they were splitting up.

Article source: http://www.nytimes.com/2013/08/16/business/media/duck-dynasty-season-opens-to-record-ratings.html?partner=rss&emc=rss

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New ‘Great Gatsby’ Book Carries a Hollywood Look

April 26, 2013 by Leave a Comment

Now the novel is dividing the nation’s booksellers with dueling paperback editions: the enigmatic blue cover of the original and the movie tie-in book that went on sale Tuesday, a brash, flashy version with Leonardo DiCaprio front and center.

The new edition is timed with the 3-D film adaptation, directed by Baz Luhrmann and starring Mr. DiCaprio, that will arrive in theaters on May 10.

So far this year, sales of the paperback with the original jacket art — a glowing cityscape and a pair of floating eyes — have been extraordinary. On Thursday, it was the top-selling book on Amazon.com. At Barnes Noble stores last week, no other paperback book sold more copies. It has landed on best-seller lists for independent bookstores.

The new edition, with its Art Deco glitter, presents a stark choice for readers, as well as retailers who are trying to gauge the tastes of their customers.

At stores like Barnes Noble, with its nearly 700 outlets, both editions will be available. But at Walmart, only the movie tie-in edition will be stocked, a tacit acknowledgment that the discount chain’s customers want books that appear fresh and new (even if they happen to have been released in 1925). And at independent booksellers like McNally Jackson in SoHo, customers who want “The Great Gatsby” can purchase only the original: not a single copy of the new, cinematic edition will be for sale.

“It’s just God-awful,” Kevin Cassem, a bookseller at McNally Jackson, said on Tuesday. “ ‘The Great Gatsby’ is a pillar of American literature, and people don’t want it messed with. We’re selling the classic cover and have no intention of selling the new one.”

Movie tie-in editions are issued regularly in the book business, but rarely has the contrast between two covers of the same title been so pronounced.

The original art, by Francis Cugat, was completed before the manuscript, according to Scribner, a practice that is common in modern publishing but was rare at the time. The art was initially dismissed as “garish” by Ernest Hemingway, who wrote in his memoir “A Moveable Feast” that he was “embarrassed by the violence, bad taste and slippery look of it.”

“It looked the book jacket for a book of bad science fiction,” Hemingway wrote.

F. Scott Fitzgerald, he wrote, told him “not to be put off by it, that it had to do with a billboard along a highway in Long Island that was important in the story.” (Close readers of the book will also see a visual parallel in the narrator Nick Carraway’s reference to the “girl whose disembodied face floated along the dark cornices and blinding signs.”)

While “Gatsby” has been subject to dozens of cover redesigns — and translated into 42 languages, producing covers that read “El Gran Gatsby” and “Gatsby le Magnifique” — it is the original cover that Scribner has kept in print.

Scribner, an imprint of Simon Schuster, typically sells 500,000 copies each year, but in 2013 it has already shipped 280,000 copies, according to the publisher.

E-book sales have been skyrocketing, too: in 2012, about 80,000 e-book copies of “Gatsby” were sold. So far this year, sales have surpassed 125,000.

Those numbers suggest that “The Great Gatsby,” frequently described as the greatest American novel ever, will be among the top-selling books of 2013, a literary palate cleanser to follow 2012, when the American book-buying public gorged on the “Fifty Shades” erotica series.

But Scribner also has high expectations for the movie tie-in edition: it is printing more than 350,000 copies.

The tie-in edition is likely to appeal to “the new reader,” said Nan Graham, the publisher of Scribner.

“The repeat reader is going to buy the classic cover,” she said in an interview. “A person who is more likely to buy the movie tie-in is reading it for the first time. In Walmart, this is the book you’re going to see.”

Cathy Langer, the lead book buyer at the Tattered Cover in Denver, said that by issuing two covers, publishers are trying to reach two audiences that may not overlap.

“It really depends who you are — if you think it’s cool to have the movie star on the cover, then that’s what you’ll buy,” she said. “The more readers a publisher can bring to a book, the better it is for everyone.”

Sales history for movie tie-in editions of novels has been mixed. Original covers typically outperform tie-ins because they are on sale longer and because many consumers are reluctant to make a book purchase that appears to be inspired by the local multiplex.

When both editions of “Eat, Pray, Love” by Elizabeth Gilbert were displayed side by side in bookstores in 2010, the original paperback won out over the movie tie-in, which featured a picture of Julia Roberts eating gelato on a park bench.

“I think the great thing is that there are some people who are reading all the time, and there are people who only read selectively,” said Patrick Nolan, editor in chief and associate publisher of Penguin Books, which released “Eat, Pray, Love,” “but the books work on both kinds of readers.”

One exception was “Revolutionary Road” by Richard Yates, a novel originally published in 1961 that only began attracting hordes of readers — eventually selling 700,000 copies — when the movie tie-in edition was released in 2008 (with Kate Winslet and Mr. DiCaprio on the cover).

Anne Messitte, executive vice president of Knopf Doubleday, part of Random House, said publishers were trying to reach readers who might be more tuned into what was happening in Hollywood than what was on the best-seller lists. (They may also have discovered the book through the “Gatsby”-themed merchandise showing up at retailers like Tiffany and Brooks Brothers.)

“As publishers we’re always looking for new readers, and the transformation of a book into a film can exponentially increase consumer awareness,” she said. “It begins with early press coverage of casting and shooting, and continues through to the film’s prerelease marketing campaign and theatrical run.”

As to whether the new, DiCaprio-ed edition of “Gatsby” would be socially acceptable to carry around in public, Mr. Cassem of McNally Jackson offered a firm no. “I think it would bring shame,” he said, “to anyone who was trying to read that book on the subway.”

Article source: http://www.nytimes.com/2013/04/26/business/media/new-great-gatsby-book-carries-a-hollywood-look.html?partner=rss&emc=rss

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Walmart Strains to Keep Grocery Aisles Stocked

April 4, 2013 by Leave a Comment

Walmart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company grappling with low customer confidence in its produce and poor quality. “Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”

Walmart is addressing the grocery concerns with measures like a new inventory system and signs that will help employees figure out what is fresh and what is not, Jack L. Sinclair, Walmart United States executive vice president for food, said in an interview. Brooke Buchanan, a company spokeswoman, said Walmart felt its stores were fully staffed.

Before the recession, at the start of 2007, Walmart had an average of 338 employees per store at its United States stores and Sam’s Club locations. Now, it has 281 per store, having cut the number of United States employees while adding hundreds of stores.

“In its larger supercenter stores, Walmart can’t keep the shelves stocked, and that is driving customers away,” said Terrie Ellerbee, associate editor at the grocery industry publication The Shelby Report, in an e-mail.

She traced the problem to 2010, after Walmart reduced the range of merchandise it carried in an attempt to make stores less cluttered. Customers did not like the change, and Walmart added merchandise back, but with declining sales then, it did not add back employees, she said. “Without enough labor hours to get those items back, not to mention to do routine stocking, shelves were left bare,” Ms. Ellerbee said.

Walmart charged into the grocery market about two decades ago, realizing that frequent trips by grocery shoppers could help improve traffic. Grocery made up 55 percent of Walmart United States sales in 2012, which was flat from the previous year. The company’s grocery prices are usually about 15 percent below competitors’, according to Supermarket News.

Grocery has also been a centerpiece of its corporate responsibility strategy, as the company has trumpeted its support from Ms. Obama in selling healthy foods in underserved, low-income communities.

At the event with Ms. Obama in Springfield, Mo., the company said it had saved customers $2.3 billion on fresh fruits and vegetables in two years.

Ms. Obama’s office said that Walmart “has been a strong partner” on the healthy-food front. “There’s still more to be done, but we look forward to continuing working with Walmart and others,” said Sam Kass, executive director of Let’s Move!, Ms. Obama’s anti-obesity program.

Yet growth has been slowing, analysts say.

“They’re still growing share and aisles at a tremendous rate, but not at the rate they were, in part because many of the established operators that are left today are pretty strong,” said Mark Hamstra, retail and finance editor of Supermarket News.

Walmart does well in dry goods, but fresh food requires more manpower to stock and rotate goods, involves more waste and is a higher-cost operation, he said.

According to the notes from the Walmart meeting last month in Orlando obtained by The New York Times, while Walmart has 20 percent of the market share in dry grocery, it has 15 percent in fresh (areas like produce, meat, deli and bakery).

Safeway customers are 71 percent confident in its fresh produce, the notes said, while Walmart customers are 48 percent confident in Walmart’s produce. In the interview, Mr. Sinclair of Walmart said he did not know where that data came from, but that “we believe that we can improve the perception of quality of produce for Walmart customers.”

Article source: http://www.nytimes.com/2013/04/04/business/walmart-strains-to-keep-grocery-aisles-stocked.html?partner=rss&emc=rss

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Strong Retail Sales Bolster Economic Outlook

March 13, 2013 by Leave a Comment

WASHINGTON (AP) — Americans spent at the fastest pace in five months in February, pushing up retail sales by 1.1 percent from January. About half the increase reflected higher gasoline prices, but even excluding fuel purchases, retail sales rose 0.6 percent.

The report from the Commerce Department on Wednesday showed that Americans kept spending last month despite higher Social Security taxes that took effect this year.

Core retail sales, which exclude the volatile categories of purchases of gasoline, autos and building supplies, rose 0.4 percent in February compared with January.

Economists were encouraged by the stronger-than-expected gain in retail sales. Some said the increase means the economy may be growing faster in the January-March quarter than they had forecast.

“This all suggests that the hit to spending from the payroll tax cut and higher gasoline prices, which reduce the amount of cash available to spend on other items, hasn’t been too bad,” said Paul Dales, senior United States economist at Capital Economics. “The recent pickup in both employment and earnings growth bodes well for consumption growth later in the year, too.”

Auto sales rose 1.1 percent after a 0.4 percent January increase. The February gain was the biggest since December. Sales at gas stations surged 5 percent, the biggest advance since a 6 percent rise in August.

Sales at general merchandise stores, a category that includes major department stores such as Macy’s and big discount stores such as Walmart and Target, rose 0.5 percent in February. But the department store category as a whole fell 1 percent.

The solid increase in retail sales showed that Americans kept spending despite a payroll tax increase that has lowered take-home pay this year for most workers. A person earning $50,000 has about $1,000 less to spend in 2013. A household with two high-paid workers has up to $4,500 less.

The economy grew at a rate of only 0.1 percent in the fourth quarter, but many analysts believe the American economy will grow a modest 2 percent this year.

In a separate report, the Commerce Department said businesses increased their inventories by 1 percent in January from December, an encouraging signal that they expect consumers will spend more this year. That increase is up from 0.3 percent growth in December and the biggest gain since May 2011.

Total business sales fell 0.3 percent in January after a slight 0.1 percent rise in December.

Retail inventories increased 1.5 percent. Wholesale inventories grew 1.2 percent, the biggest gain in 13 months. Inventories held by manufacturers rose 0.5 percent.

Finally, the Labor Department reported Wednesday that import prices rose 1.1 percent in February after a 0.6 percent gain the previous month. Fuel imports jumped 4.9 percent. Excluding fuel, import prices were flat.

Low import costs have helped hold down inflation in the United States. Even with the last two months of increases in oil costs, import prices have fallen 0.3 percent in the 12 months ending in February.

Export prices rose 0.8 percent in February from January, pushed up by higher prices for agricultural goods. In the past year, export prices have increased 1.5 percent, led by a 13.4 percent jump in farm goods.

Article source: http://www.nytimes.com/2013/03/14/business/economy/us-retail-sales-jump.html?partner=rss&emc=rss

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Stocks Mostly Hold Firm

February 16, 2013 by Leave a Comment

Stocks were mixed on Friday, lifted by a strong report on consumer sentiment but pulled down in late trading by what was said to be an internal report of weak Walmart sales at the start of February.

The Standard Poor’s 500-stock index fell in late trading, with Wal-Mart Stores leading the way down after the report on February sales, but the index remained higher for the week and extended its streak of weekly gains to seven. The last such run was from December 2010 to January 2011.

Equities were little changed for much of the session, with investors finding few reasons to make big bets after an extended rally on Wall Street.

Interest rates were steady. The Treasury’s benchmark 10-year note fell 2/32, to 99 31/32, and the yield rose to 2.01 percent from 2 percent late Thursday.

Wal-Mart Stores dropped 2.2 percent to $69.30 after Bloomberg News reported a weak start to February sales, citing internal company e-mails. The stock was the biggest decliner on the Dow Jones industrial average. The S. P. retail index fell 0.5 percent.

“When a retailer of this size comes out with this kind of lousy news, the whole market can fall off, especially on a Friday afternoon,” said Mike Shea, of Direct Access Partners in New York. “However, I’m not worried that this is indicative of any larger macro issue with retail.”

The Dow Jones industrial average was up 8.37 points, or 0.06 percent, at 13,981.76. The Standard Poor’s 500-stock index was down 1.59 points, or 0.1 percent, at 1,519.79. The Nasdaq composite index was down 6.63 points, or 0.21 percent, at 3,192.03.

For the week, the Dow and Nasdaq fell 0.1 percent each, while the S. P. rose 0.1 percent.

“There’s no news that suggests the strong underpinning for stocks isn’t appropriate,” said Mark D. Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “We may have gotten ahead of ourselves, but there’s also an absence of bad news.”

Many investors are looking ahead to a debate in Washington over the automatic, across-the-board spending cuts put in place as part of a larger Congressional budget fight. The cuts are set to kick in on March 1 unless lawmakers agree to an alternative.

“This had been far enough out to not yet become an impediment for stocks, but it will start to move into the forefront,” Mr. Luschini said.

The Federal Reserve Bank of New York said manufacturing in New York State expanded for the first time in seven months. A preliminary Thomson Reuters/University of Michigan reading of consumer sentiment rose, beating expectations. But manufacturing fell in January.

Wall Street’s gains thus far in 2013 have been driven largely by strong corporate earnings. A surge in merger and acquisition activity, with more than $158 billion in deals announced so far in 2013, has given further support to the equity market as it points to healthy valuations and bets on the economic outlook.

Herbalife shares cut earlier gains to rise 1.2 percent on Friday, to $38.74. Late on Thursday, the billionaire investor Carl C. Icahn disclosed that he owned 13 percent of Herbalife and was ready to put it in play.

MeadWestvaco, a packaging company, climbed 12.5 percent to $35.65, making it the biggest percentage gainer on the S. P. index, after the activist investor Nelson Peltz’s Trian Fund Management said it had bought about 1.6 million shares of the company.

Article source: http://www.nytimes.com/2013/02/16/business/daily-stock-market-activity.html?partner=rss&emc=rss

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La Comay of ‘SuperXclusivo’ Stirs Anger Over Comments on Man’s Death

December 16, 2012 by Leave a Comment

In October, Big Bird was dragged into the presidential debate over PBS funds and in November, Kevin Clash, the puppeteer behind Elmo, left Sesame Street after allegations that he had sex with minors.

The latest puppet scandal involves a gossipy, big-haired crone puppet in Puerto Rico, known as La Comay, who has become one of the most controversial media figures on the island — and one of the most watched. On a recent show, the puppet commented on the murder of a 32-year-old publicist by pointing out that the victim was in an area frequented by prostitutes and wondered whether he was “asking for this.”

The reaction was swift. A Facebook page calling for a boycott of La Comay has drawn more than 72,000 signatures, and prominent advertisers like Walmart and ATT withdrew their ads from “SuperXclusivo,” the program that features her.

The outrage was in part because of fears over a growing crime wave on the island and a reaction to La Comay, a puppet version of the television program “TMZ” with gossipy segments about celebrities, politics and crime.

La Comay (roughly translated as “the godmother”) was created by Antulio Kobbo Santarrosa, a former comedian and television personality. Since 1999 the show has been broadcast on WAPA Television, an independent Puerto Rican network owned by the private equity firm InterMedia. Before WAPA, Mr. Santarrosa had shows with similar characters on other networks including Telemundo.

“SuperXclusivo” is broadcast on the island but also on the mainland in states with large Puerto Rican populations like New York and Florida. On the hourlong show, La Comay frequently asks viewers to call her show with crime tips, which producers investigate. “We tried to use her to bring out issues that other mediums would not touch,” said Jose E. Ramos, the president of WAPA.

In the last Puerto Rican race for governor, two of the candidates visited the show the night before the election, Mr. Ramos said. “People will report incidents and things that happen on the island to La Comay instead of going to the police and going to the newspapers,” he said.

“She ensures that the police and the government cover the main issues and are on top of the issues, and she does it in a way that is very entertaining, that’s what offends some people,” Mr. Ramos said.

In an e-mail, Mr. Santarrosa said: “We respect our audience and it was never my intention to offend anyone with the information we presented, which had already been presented in other media.” The comments were similar to the ones made by La Comay on her show in the days after the controversy where she tried to apologize to the audience.

The uproar began when, on Dec. 4, “SuperXclusivo” featured a segment on the publicist José Enrique Gómez Saladín, whose disappearance had been extensively covered by local media. On Nov. 29, according to published reports, Mr. Gomez Saladín attended a meeting in San Juan and then called his wife to tell her he was on his way home.

Instead, Mr. Gomez Saladín’s body was found four days later. He had been doused with gasoline, burned and then bludgeoned to death. The case is being handled by the United States Attorney’s Office in Puerto Rico. Four people were arrested on Dec. 4 in connection with the crime. They have been charged on two counts, carjacking resulting in murder and bank fraud. A preliminary hearing is set for Wednesday. The crime, which came less than two weeks after the shooting death of the boxer Hector Camacho, rattled the island.

After the news of the murder, residents began a social media protest for peace called “Todos Somos José Enrique” (We are all José Enrique).

Details of what happened that night remain unclear, with some reports saying Mr. Gomez Saladín had been a victim of a carjacking. But in her Dec. 4 segment, La Comay raised another issue: Mr. Gomez Saladín was on Padial Street in Caguas, a town near San Juan. The street, La Comay said, is “a center of male and female prostitution.”

Couching her statements with the phrase “apparently and allegedly,” La Comay asked, “Was this man, José Enrique, asking for this?” Of the four suspects in the case she asked, “Was he friends with these people? Did he used to be a client of these people?” At the end of her remarks she called for Puerto Rico to reinstate the death penalty.

The remarks created protests against the puppet, her show and the network.

“We didn’t know that this was going to explode the way it did,” said Carlos Rivera, an unemployed I.T. specialist from Puerto Rico who created the Facebook page calling for the boycott of La Comay by advertisers and viewers.

Mr. Ramos of WAPA said the boycotts have not hurt the show’s ratings. “If anything they have increased,” he said. “People want to see what’s going on.”

Article source: http://www.nytimes.com/2012/12/17/business/media/la-comay-of-superxclusivo-stirs-anger-over-comments-on-mans-death.html?partner=rss&emc=rss

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Strategies: A Holiday Shopping Stampede, but Maybe No Economic Jolt

December 2, 2012 by Leave a Comment

THE holiday shopping season started early, and with a roar. Whether that will help the sagging economy is another matter.

“Spending may well be strong, and that could help us get through another Christmas,” said William R. Emmons, an economist at the Federal Reserve Bank of St. Louis. “But the economy is unbalanced and we’re still in an enormous crisis.”

So, despite the early crowds at shopping malls, it’s worth noting that much of the consumption is being financed indirectly — through the expansive monetary policies of the Fed, and through deficit spending that has created an enormous budget gap. “At some point, we can’t go on like this,” Mr. Emmons said.

For now, the nation’s retailers are doing their best to infuse the holidays with the spirit of consuming. “Door-busting” bargains began on Thanksgiving Day instead of on Black Friday, as had been the custom. Online discounts started weeks ago, and Cyber Monday, formerly a one-day event, is morphing into a consumption extravaganza unbound by space or time.

“We’re keeping the Cyber Monday party going all week long,” Amazon.com said on its site on Thursday afternoon. Walmart declared that its site was “the only place to go” for Cyber Week. “Shop now while supplies last,” it said. And Target offered rapture: “Get online-only deals all week. Oh joy!”

Over all, the efforts have yielded a mixed harvest. Some reports suggest that the early shopping has been robust, if not extraordinary. A survey for the National Retail Federation found that 247 million people did some shopping in the four days starting on Thanksgiving, up 9.2 percent from last year. Total spending reached $59.1 billion, up nearly 13 percent.

But a report on Thursday showed that overall sales at 16 retailers — including chains like Macy’s, Nordstrom, Kohl’s and Target — increased only 1.6 percent in November for stores open at least a year. Those figures included early holiday sales.

Furthermore, the financial crisis, the recession and the anemic recovery have constrained the appetites of many voracious consumers.

“History shows that people only have so much money to spend during the holidays,” said Paul Dales, an economist at Capital Economics, a private forecasting group. “And if they spend more of it on Black Friday, they’ll probably spend less of it later in the season.”

In other words, while the hoopla of early sales may offer hints about the competitive advantages of specific retailers — Amazon.com or Walmart, for example — it may not mean much about consumer spending as a whole.

Real income is stagnating, and consumer spending dropped 0.2 percent in October, the Commerce Department reported on Friday. Even so, consumer spending accounts for 70.6 percent of gross domestic product, Mr. Emmons said — a higher proportion than before the recession. That suggests a predicament for policy makers, he said, because high levels of consumer spending are associated with a relatively low pace of economic growth.

The economy needs more exports and investment, and less consumer spending, he said. “We really could use a consumption tax to help increase household saving,” he said. But with the economy as weak as it is, he acknowledged, such a tax would not be very popular in Washington.

Consumption during the holidays should be curbed for ecological, cultural and ethical reasons, said Kalle Lasn, co-founder of the Adbusters Media Foundation. He advocates transforming Black Friday into Buy Nothing Day — “a day to return to the roots of the holiday, to the frugality — to living lightly — which is really the essence of Christianity and of all great religions.” Mr. Lasn, who helped start the Occupy Wall Street movement, called overconsumption a cause of climate change and other ills. “It needs to stop,” he said, “before we destroy this planet.”

But efforts to curb consumer spending, especially in the holiday season, may run counter to deep habits and traditions. American holidays have been defined by an uneasy alliance among business, religion and politics, said Leigh Eric Schmidt, author of “Consumer Rites: The Buying and Selling of American Holidays.”

“Commerce and religion and patriotism are all part of what we have come to know as the holidays,” said Mr. Schmidt, a professor of humanities at Washington University in St. Louis.

“Consumption during the holiday season has come to have a kind of patriotic quality in the United States,” he said. In fact, extending the holiday season, and exhorting people to spend, has sometimes been a matter of public policy.

IN 1939, during the Great Depression, President Franklin D. Roosevelt called Thanksgiving “a perfectly movable feast” — and he moved up the holiday by one week, from its traditional date on the last Thursday of November. He thus proclaimed that Thanksgiving would be on Nov. 23 that year, not Nov. 30.

His agenda was transparent. The economy needed help. As an experiment, he said, he would try to give retailers a boost by extending the holiday season. But public opinion was no more unified then than it is now, and his policy was not universally welcomed.

The New York Times of Aug. 15, 1939, captured the mood: “Roosevelt to Move Thanksgiving; Retailers for It, Plymouth Is Not. Football Schedule Makers Also Get a Headache, With Season Set to End With Fifth Thursday in November.”

The president’s home state, New York, went along with the change, but Connecticut was among many that didn’t. Families were divided. Eleanor Lucy Blydenburgh, a student at the Pratt Institute in Brooklyn, said that while her school holiday would be Nov. 23, her parents would celebrate on Nov. 30. “Really, this situation makes my heart ache,” she wrote the president, in a letter held by the Franklin D. Roosevelt Presidential Library.

What’s more, as Roosevelt ruefully acknowledged in 1941, the extra days didn’t stimulate the economy. There was no net increase in sales. “The experiment had not worked,” The Times reported in May 1941. People shifted their shopping days but didn’t buy more.

Congress resolved the issue in time for Thanksgiving in 1942. It legislated that the holiday would henceforth be on November’s fourth Thursday, which isn’t always the last one.

That’s why Thanksgiving this year was on Nov. 22, not last Thursday. So, once again, there are extra shopping days, as well as endless consumption opportunities online — and reason to doubt that they will mean much for the economy.

Article source: http://www.nytimes.com/2012/12/02/your-money/a-holiday-shopping-stampede-but-maybe-no-economic-jolt.html?partner=rss&emc=rss

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Your Money: Suze Orman to Offer Her Own Prepaid Debit Card

January 9, 2012 by Leave a Comment

Never before, however, has she built a financial product from scratch and urged her considerable number of fans to use it frequently. That changes with the introduction on Monday of her Approved card, which works a lot like a bank debit card but does not come with a checking account. It is a prepaid debit card, and companies that offer similar cards have drawn criticism for sky-high fees and poor disclosure.

The hip-hop mogul Russell Simmons, American Express and the Kardashian sisters are among those who have piled in with their own cards, and they are nearly ubiquitous at drugstores and other retailers. The target customers are most often people who have little credit history — or credit so bad that banks will not come near them.

Ms. Orman seeks to broaden the debit card market by charging low fees and offering new services, including unlimited access to credit reports. She has put more than $1 million of her own money into the venture and is prepared to add more, since the product may not break even right away. But her move also raises so many questions that it is hard to even know where to start.

How can the Approved card make money charging fees on par with those on Walmart’s cut-rate MoneyCard, while also paying a credit bureau for access to its services? Also, can it really be just fine with CNBC, where Ms. Orman has a weekly show, that her card will compete with products from companies she discusses frequently with viewers? And will her followers care that she is pushing purple pieces of plastic that will help her make money from their everyday spending?

“I couldn’t be more proud of this card if I tried,” she said. “And it doesn’t really matter what I say. It matters what happens when somebody uses this baby.”

Their choice to use it may be colored by the opportune moment in which Ms. Orman finds herself. Big banks have offended scores of consumers with new fees and account balance minimums. People seeking alternatives may well find what they are looking for in prepaid cards.

That might not have been the case several years ago, when most prepaid card issuers marketed them to teenagers, or as gifts, or to people with poor credit who needed a way to make online purchases or visit a merchant without wads of cash.

More recently, companies like Green Dot (a partner with Walmart) and NetSpend have emerged. They persuade consumers to buy the cards first, in part through their availability in 300,000 locations, including grocery and convenience stores, according to the Mercator Advisory Group. Then, they try to persuade people to reuse them. Services like direct deposit and online bill payment have helped some. Still, 43 percent of the cards are never reloaded or are reloaded only once, according to Mercator.

These cards differ from checking accounts in other ways. There is no checkbook, nor do they have their own network of A.T.M.’s, though some prepaid card issuers have agreements with networks to offer free withdrawals. And different regulators govern them, which can mean fewer consumer protections under certain circumstances. (It could also mean that the new Consumer Financial Protection Bureau will swoop in and make tougher rules.)

The biggest difference from a regular bank account, however, is the fee structure on the debit cards. Prepaid-card holders must often pay to buy the card and put money on it. There is often a monthly fee. Bill paying, phone help — even making a purchase can cost a dollar or two.

Ms. Orman watched this unfold and vowed to build something better. Her fees for the Approved card for things like A.T.M. withdrawals are about as low as they come, though she was not able to fulfill her goal of avoiding a $3 monthly fee, which is deducted from the remaining balance.

Whether consumers could do better with a free checking account (and yes, plenty still exist) would depend on whether they value paper checks and in-person service. Financially, they would most likely do worse if they bounced those checks or used overdraft services and paid $20 or $30 for each transaction.

The Approved card, like most leading prepaid cards, generally does not let people spend more than they have.

But the most noteworthy part of the Approved card is Ms. Orman’s efforts to make her customers more aware of their credit histories. All users get unlimited access to their credit reports and credit scores from TransUnion, though not the more widely used FICO scores. They will also get free credit monitoring and identity theft protection. (Ms. Orman is quick to point out how much these services would cost if her customers bought them separately. But most wouldn’t do that, and you shouldn’t either, since they are generally overpriced and often unnecessary.)

The real question is whether any debit card can help a cardholder become more creditworthy. The three major credit bureaus — TransUnion, Equifax and Experian — generally do not use debit card spending data to determine whether someone is qualified for loans.

“There is something radically wrong here,” Ms. Orman said. “We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.”

So she has persuaded TransUnion to collect spending data from Approved card customers. Perhaps it will look at other companies’ data too. And in a few years, it will see whether there is any proof that prepaid debit users deserve recognition for good behavior.

Until then, this is mere vaporware. The data may prove meaningless, and even if there are patterns, TransUnion probably would not give people more than a handful of points’ worth of credit on their scores.

Article source: http://feeds.nytimes.com/click.phdo?i=87c65820d0f19c3cc4efd4b3e4b678b6

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Wal-Mart Workers Try the Nonunion Route

June 15, 2011 by Leave a Comment

The group, Organization United for Respect at Walmart, or OUR Walmart for short, says it has quietly signed up thousands of members in recent months, and it is going public this week with a Web site, ourwalmart.org, and a Facebook page. Organizers say they have more than 50 members at some stores, and they hope to soon have tens of thousands of members. Wal-Mart has nearly 1.4 million workers nationwide.

Although the Web site of OUR Walmart depicts the organization as a grass-roots effort by Wal-Mart workers, the United Food and Commercial Workers has provided a sizable sum — the union will not say how much — to help the group get started. The union has also paid hundreds of its members to go door to door to urge Wal-Mart workers to join the group.

In addition, the organizers are receiving help from ASGK Public Strategies, a consulting firm long associated with David Axelrod, President Obama’s top political strategist.

In recent weeks, OUR Walmart has organized gatherings of 10 to 80 workers in Dallas, Seattle, Los Angeles and other cities, meeting inside churches, fast-food restaurants and employees’ homes, where the workers chewed over how they would like to improve Wal-Mart. One big concern, they said, was low wages.

“I’m hoping that OUR Walmart will make a difference in the long run,” said Margaret Van Ness, an overnight stocker at a Wal-Mart store in Lancaster, Calif., about 60 miles north of Los Angeles. Ms. Van Ness earns $11.40 an hour after four years of working there.

“The managers at our store and others are running over their associates as if they didn’t exist,” she said. “They treat them like cattle. They don’t seem to care about respect for the individuals. We need to bring back respect.”

Unlike a union, the group will not negotiate contracts on behalf of workers. But its members could benefit from federal labor laws that protect workers from retaliation for engaging in collective discussion and action.

Wal-Mart officials say that the new organization is essentially a stalking horse for eventual unionization, and they say the retail union is intent on pushing up Wal-Mart’s wages and slowing its expansion to help protect the union’s members at other retailers from competition.

“There’s nothing new about the fact that labor unions want to unionize Wal-Mart,” said David Tovar, a Wal-Mart spokesman. “This is an effort to attract media attention to further their political agenda.”

The new group is the latest iteration of worker groups aimed at pressuring Wal-Mart. Earlier groups included Walmart Watch and Wake-Up Wal-Mart, both backed by unions, as well as the Wal-Mart Workers Association, a short-lived and foundation-backed group composed of Florida Wal-Mart employees.

Officials from the United Food and Commercial Workers are vowing that the new organization will be bigger and better than previous Wal-Mart groups.

“We’ve got Wal-Mart associates in large numbers coming to us and saying, ‘We need a voice. This company is mistreating us. We want to stay here, but we need to be able to change the way we’re being treated,’ ” said Dan Schlademan, director of Making Change at Wal-Mart, a division of the union. “The best thing the U.F.C.W. can be is a catalyst to help associates build an organization.”

OUR Walmart does not go out of its way to disclose its ties to the union or to Mr. Axelrod’s former firm, although officials at the union and the consulting firm say they disclose their roles if asked.

Wal-Mart employees say that store managers around the country have made clear at meetings that OUR Walmart has no affiliation with the company, the world’s largest retailer.

Mr. Tovar, the Wal-Mart spokesman, said the company “provides associates with a work environment based on respect, dignity and future partnership in the business.”

“The fact is our wages and benefits typically exceed those provided by the majority of our competition,” Mr. Tovar added. “As a result, our associates have concluded time and again that they are better off with the pay, benefits package and opportunities for advancement provided by Wal-Mart and have chosen to reject unions.”

Union officials say they hope OUR Walmart will embolden workers and someday pave the way for successful unionization drives at Wal-Mart.

Article source: http://feeds.nytimes.com/click.phdo?i=01fd7e2896b011460a13662d9974a7dc

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