In his State of the Union address last week, President Barack Obama cheered rising wages. What he didn't mention is that much of the income gained since the recession has gone into the pockets of the richest Americans.
In 39 U.S. states, the top 1 percent of earners gobbled up at least half of all of the income gains between 2009 and 2012. And in 17 of those states, the top earners got every bit of the income growth in those years. That's according to a new paper released Monday by the Economic Policy Institute, a think tank focused on labor issues.
In all states, the rebound in income in the three years after the recession pretty much all went to the richest of the rich, the EPI found.
"Over this period, the average income of the bottom 99 percent in the United States actually fell (by 0.4 percent)," the paper states. "In contrast, the average income of the top 1 percent climbed 36.8 percent."
The EPI paper, using state-level tax data from the IRS, builds on older research by economists Thomas Piketty and Emmanuel Saez, who analyzed income gains captured by the top 1 percent to illustrate broader trends in economic inequality. The French economist Piketty got famous last year for his book, Capital In The Twenty-First Century, which warned that inequality was only going to get worse without government intervention.
The map below shows where the richest 1 percent captured the greatest percentage of the overall income gained between 2009 and 2012. The darker orange and red shades show where the largest share of income growth went to the 1 percent.
Among the states where the 1 percent got the biggest share of the income gains were Delaware -- where they got 301 percent of income growth -- and Florida, where they got about 260 percent.
Nevada was arguably one of the most-unequal states in the country during that stretch: The income of the top 1 percent jumped nearly 40 percent, while the income of the rest fell 16 percent. But because total state income fell -- the only state in which this happened -- it doesn't register on the map, which measures the 1 percent's share of income gains.
West Virginia was the least-unequal state in the country during that stretch: It's the only state in which the 1 percent suffered falling income while the 99 percent enjoyed rising income.
Since the recession ended more than five years ago, wages have been one of the slowest parts of the economy to recover. In his speech last week, Obama applauded the 11 million new private-sector jobs created since 2009 and claimed that "Wages are finally starting to rise again."
But wage growth is still a lot slower than it was before the recession. And it's still too slow to keep up with the growth enjoyed by the 1 percent, who typically don't have to beg employers for raises.
Alexis Tsipras, leader of the left-wing Syriza coalition, is about to become prime minister of Greece. He will be the first European leader elected on an explicit promise to challenge the austerity policies that have prevailed since 2010. And there will, of course, be many people warning him to abandon that promise, to behave “responsibly.”
Jan 22 (Reuters) - JPMorgan Chase & Co paid Chief Executive Jamie Dimon a first cash bonus in three years, part of a total 2014 pay package of $20 million that was unchanged from the year before.
Dimon received a $7.4 million cash incentive bonus, JPMorgan said in a regulatory filing, atop a base salary of $1.5 million and $11.1 million in restricted stock. His 2013 package comprised the same base salary plus $18.5 million in restricted stock. (http://bit.ly/1E7BcMe)
JPMorgan did not explain its compensation decision. The board is expected to provide an explanation in a proxy statement to be filed ahead of the company's annual meeting in May.
The bank's 2014 net income rose 21.4 percent to $21.76 billion. Total net revenue, however, fell about 2.5 percent to $94.21 billion.
JPMorgan is the biggest U.S. bank, with $2.6 trillion in assets. Dimon, 58, is the most outspoken of big bank CEOs and has recently bristled at public criticism that JPMorgan is too big and complex to manage safely and efficiently.
On a call after JPMorgan reported results last week, the chief executive - who was treated for throat cancer last year - said banks were "under assault" from regulators.
In 2012, Dimon's pay was halved to $11.5 million after JPMorgan traders handling company accounts lost $6.25 billion in the so-called "London Whale" derivatives transactions.
Dimon was paid $23 million in 2011 and the same amount in 2010.
In the filing on Thursday, JPMorgan said the base salaries of other operating committee members were unchanged at $750,000, except Daniel Pinto, the London-based chief of corporate and investment banking.
The terms and composition of Pinto's compensation reflect applicable UK legal standards, which require at least half of incentive compensation to be paid in equity with the remainder paid in cash, according the latest proxy statement by the bank.
Chief Financial Officer Marianne Lake and asset management chief Mary Erdoes received an increase in total compensation. Pay was unchanged for other operating committee members.
Bonuses for Dimon and all operating committee members, except Pinto, comprised 60 percent restricted stock and 40 percent cash.
The median American household income for 2013 was $51,939, according to a report from the Census Bureau in September. (Editing by Savio D'Souza and Robin Paxton)
SkyMall, a company known mainly for trying to sell you things no one needs while you sat on an airplane, filed for bankruptcy on Thursday.
The company didn't sell much from the catalog in recent years. Instead it sold a good chunk of its products online. But it still relied on people looking at the catalog on the plane to drum up interest in its website. And, with in-flight wifi, that was happening less and less.
SkyMall built a business on boredom, and people are less bored on planes than they used to be.
The Internet was instantly nostalgic about the imminent disappearance of the SkyMall catalog and responded by listing things you could have bought from SkyMall -- but hopefully never did.
All of these lists published Friday morning.
1. 11 Of The Most Ridiculous Items Sold By SkyMall (Business Insider)
2. We found the most insane item on SkyMall (Fusion)
3. 28 Essential Things You’ll Never Be Able To Buy From SkyMall Again (BuzzFeed)
4. In memoriam of SkyMall products: A lost national treasure (Mashable)
5. 18 Fantastic Products from SkyMall, America's Final Great Bastion of Innovation (Yahoo)
6. 5 things journalists actually could have used from SkyMall (Poynter)
7. As SkyMall files for bankruptcy, the Internet memorializes its crazy products (Daily Dot)
8. Here Are 12 of SkyMall’s Weirdest Products (Time)
9. THE BEST (=WORST) OF SKYMALL (Thrillist)
10. Our 6 Favorite Health and Beauty Products From SkyMall (Health)
11. 22 ICONIC SkyMall Products to Buy Before It's Too Late (Cosmopolitan)
And of course, The Huffington Post has been doing this for years, here, here, and here.
Last year Wired went out a limb and predicted what SkyMall will look like in the year 2040.
The McDonald’s menu could be getting even smaller.
Mike Andres, McDonald’s U.S. CEO, hinted on a conference call with analysts Friday that the chain may cut more menu items.
“This menu rationalization process is clearly ongoing,” Andres said. “As we look forward, we’ve added quite a number of products over the last 18 months or so, so we’re rationalizing that.”
Andres was responding to a question from an analyst about whether the chain would be willing to keep cutting the menu if the recent decision to slash eight items proved successful. As part of the test, McDonald's went from four quarter pounders with cheese to one, three premium chicken sandwiches to one and three snack wraps to one.
CNBC reported Friday that according to more than one franchisee, the Bacon Habanero Ranch Quarter Pounder, Bacon and Cheese Quarter Pounder, Premium Chicken Club Sandwich and Premium Ranch BLT Chicken Sandwich will be nixed.
So far, the company's menu changes have led to improved sales and better throughput -- a measure of how many orders are processed in a given period of time -- in test markets, Andres said on the call.
McDonald’s could use the help. The chain’s profits plunged 21 percent from the same quarter a year ago, according to the fourth-quarter earnings report released Friday. The past few months also marked the fifth quarter in a row that McDonald’s reported a drop in sales at U.S. stores open at least a year, an important metric of a restaurant's health.
Analysts, the media, franchisees and even McDonald’s executives have blamed the chain’s bloated menu for its poor performance in recent months. The menu -- which had just nine items in the 1950s -- ballooned to more than 100 items over the past several years, ranging from things like Egg McMuffins to a few McWrap varieties to smoothies.
The complicated menu has made it harder for McDonald’s to deliver what it’s known for: cheap and quick food. It also comes at a time when Americans are turning increasingly to chains like Chipotle and Five Guys, which have a handful of menu items but offer diners the ability to customize their orders.
McDonald’s is rolling out its own customizable options for burgers, called Create Your Taste, at 2,000 locations nationwide. Diners can pick from fancy toppings like creamy garlic sauce, guacamole and pepper jack cheese. Andres hinted on the call that the program could make it easier for the fast food giant to cut even more from its menu.
“That offers unlimited variety to our guests, they can now choose whatever they want, so it takes some of the pressure off a lot of the other menu items,” he said.
CNN's Fareed Zakaria sat down with HuffPost Live at Davos on Wednesday, where he called out Rupert Murdoch for his comments on the recent terror attacks in Paris.
"I think it was outrageous to claim that moderate Muslims, or Muslims in general, are responsible for the attacks," Zakaria said. "If you had a significant portion of the Muslim world up in arms against the West... we'd have a lot of attacks every day."
"We're talking about a small number," Zakaria added.
Tweeting after the terror attacks in France that left 20 dead, Murdoch said Muslims must "recognize and destroy their growing jihadist cancer," and "they must be held responsible."
"We don't hold Rupert Murdoch responsible for every crazy, radical, quasi-fascist statement made by a television host -- oh, wait a minute, I guess we do in the case of Rupert Murdoch because he hires most of them," Zakaria joked.
Zakaria pointed out the hypocrisy of Murdoch's comment.
"He has no responsibility for the hacking scandal that was done by his employees, but yet Muslims in Indonesia who are moderate are somehow responsible for what some guy in France does," Zakaria said.
Below, more updates from the 2015 Davos Annual Meeting:
live blog
Oldest
Newest
Share +
Today 5:35 AM ESTHickenlooper On The Next Four Years
Hickenlooper said he's excited about the next four years, which will be his last as governor of Colorado because of term limits.
"There is a sense of liberation that in these next four years we can go out and, we want to be the healthiest state," Hickenlooper said.
Hickenlooper said he's hoping to make progress on trails, schools, jobs and business, among other things.
"There's just so much out there," Hickenlooper said.
Share this:
Tweet
Share
tumblr
Share +
Today 5:32 AM ESTHickenlooper At Davos
Colorado Gov. John Hickenlooper on HuffPost Live
Share this:
Tweet
Share
tumblr
Share +
Today 5:32 AM ESTHickenlooper Hopes To Work With NRA
"We would never try to take anyone's guns away," Hickenlooper said.
Hickenlooper said he's "hopeful" he'll be able to work with the NRA to encourage them to throw their support behind universal background checks, which the group used to support.
Share this:
Tweet
Share
tumblr
Share +
Today 5:29 AM ESTHickenlooper On Pot
Hickenlooper spoke about life after marijuana legalization in Colorado.
"We passed it two years ago, so we had a year to try to put the regulatory framework together," he said.
"It's interesting, we've obviously learned a tremendous amount, the whole team has been going at light speed," Hickenlooper added.
Hickenlooper said he'd advise other states to wait before legalizing pot, so that others can see what the "unintended consequences" of legalization are in his state. He also spoke about his opposition to legalization, saying he now has a more open mind about the regulation of pot sales.
"I didn't want it to be legalized," Hickenlooper said. "If I had a magic wand the day after the election and could reverse the election, I would have done it."
Hickenlooper said the war on drugs is a "dismal failure," and he's looking forward to seeing how marijuana legalization evolves in his state over the next two years. His hope is to get rid of the black market for marijuana.
Share this:
Tweet
Share
tumblr
Share +
Today 5:25 AM ESTGov. Hickenlooper On SOTU
Colorado Gov. John Hickenlooper (D) talked to HuffPost Live about U.S. President Barack Obama's State of the Union address.
"He sounds like he's willing to sit down and work together with Congress," Hickenlooper said.
Share this:
Tweet
Share
tumblr
Share +
Today 4:53 AM ESTSalovey On Campus Sexual Assault
Salovey spoke out against victim-blaming, saying alcohol or similar factors are never an excuse for someone to be sexually assaulted.
"People have a right to expect that they are not going to be subject to unwelcome sexual advances," Salovey said.
"There are ways we can learn to prevent those kind of situations, prevent the conditions that give rise to that very unwelcome kind of behavior happening," Salovey added.
Share this:
Tweet
Share
tumblr
Share +
Today 4:50 AM ESTSalovey On The Berkeley/Bill Maher Controversy
Salovey spoke on free expression on campuses, reflecting on the incident at Berkeley where students protested comedian Bill Maher's appearance at a graduation ceremony because of comments he made about Muslims.
"It's very difficult. You see this controversy playing out on many different campuses over the last couple of years," Salovey said.
Salovey said he thinks people want to live in an environment where others are respectful and they're not offended, but being offended can be a learning experience.
Share this:
Tweet
Share
tumblr
Share +
Today 4:46 AM ESTPeter Salovey On Emotional Intelligence
Peter Salovey, President of Yale University, told HuffPost Live about "emotional intelligence" and a model he pioneered 25 years ago.
"The idea behind emotional intelligence... is that our emotions are a source of information," Salovey said. "They help us make decisions, they help us regulate ourselves, they help us solve problems."
"Some people pay attention to this, and some people ignore it, and some people try to suppress it," Salovey said.
Salovey said teaching people how to read the emotional signals of themselves and others will give them "a leg up."
At @bcg bfast w @AshishJThakkar @amcafee & @nathanblec from @airbnb staying in a #Davos Airbnb w its own funicular! pic.twitter.com/yeOt1Gt2z9
— Arianna Huffington (@ariannahuff) January 23, 2015
Share this:
Tweet
Share
tumblr
Share +
Today 4:31 AM ESTGelles On 'McMindfulness'
David Gelles said he devotes a chapter in his book to "McMindfulness," or a watered-down version of mindfulness practices.
"Inasmuch as people are really practicing and doing the work, it's still going to work its magic," Gelles said.
Share this:
Tweet
Share
tumblr
Share +
Today 4:29 AM EST'We All Have Time'
Gelles said everyone should be able to make time for mindfulness practices.
"I think we all have time. If we all have time to check our smart phones and browse the web, we likely all have time for more virtuous activities," Gelles said.
Share this:
Tweet
Share
tumblr
Share +
Today 4:27 AM ESTDavid Gelles On Mindfulness
New York Times reporter David Gelles, who authored an upcoming book called Mindful Work: How Meditation Is Changing Business From The Inside Out, stopped by the HuffPost Live studio at Davos on Friday.
Gelles spoke on how mindfulness practices are able to reduce stress, increase focus and even make people more kind and compassionate.
"Our minds are totally inclined to race ahead and dwell in the past, but a lot of people would find that if we actually slow down and be in the present moment, a lot of good things will happen," Gelles said.
Share this:
Tweet
Share
tumblr
Share +
Today 4:19 AM EST'We've All Got A Responsibility'
"We've all got a responsibility to repair this broken world, to lift morale in a skeptical world that says, financial services and banking, you have overused the good will of the rest of the world," Balkin said.
Share this:
Tweet
Share
tumblr
Share +
Today 4:17 AM ESTJeremy Balkin At Davos
Jeremy Balkin at Davos
Share this:
Tweet
Share
tumblr
Share +
Today 4:15 AM ESTBalkin On Using Finance For Good
Jeremy Balkin, founder of Give While You Live, stopped by HuffPost Live at Davos to talk about using finance for good.
"Absolutely finance is a force for good," Balkin said.
Balkin said there must be change in the banking industry, and it has to come from within.
"I'm not sure you can impose from the outside, cultural change... I think it has to come from within, I think it has to be organic," he said.
Balkin addressed the negative feelings many people have about the failures of banking.
"I think we've been in a really unique period of history where we've had moral and ethical failure... the difference is, we feel finance much more because it's an empty pocket, it's money... these other ethical failures, the tangible results of those failures we don't necessarily feel as directly," Balkin said.
Sandberg said she's been working at getting more sleep, noting she watched how her kids act when they're lacking sleep and realized she often has the same kind of reaction.
"I really do prioritize sleep and it made a huge difference," Sandberg said.
Share this:
Tweet
Share
tumblr
Share +
Today 3:48 AM ESTSandberg On The Problem With 'Office Housework'
Sandberg said it's an issue that women do more work than men.
"Women do more everywhere they are," Sandberg said.
Sandberg noted women do more work even in the office, saying "office housework" often falls to women in the workplace.
Share this:
Tweet
Share
tumblr
Share +
Today 3:47 AM ESTSandberg's Favorite Lean In Circle Story
Sandberg said her favorite story of a lean in circle was a group in D.C. who lobbied to get a 23 percent discount for women on Equal Pay Day, since women get paid 23 percent less on average than men.
Share this:
Tweet
Share
tumblr
Share +
Today 3:45 AM ESTArianna & Sheryl Sandberg At Davos
Arianna and Sheryl Sandberg at Davos
Share this:
Tweet
Share
tumblr
Share +
Today 3:44 AM ESTSandberg On How Lean In Circles Can Help Women Reach Their Goals
Sandberg revealed her New Year's resolution for 2015.
"My resolution this year... is to meditate," Sandberg said.
She said her girlfriends are helping her with the goal. They formed a "lean in circle" that meets the first Tuesday of every month to discuss how their resolutions are going.
"When we have the support of our friends, we're not there alone," she added.
"So far it's been three weeks and I'm there," Sandberg added.
Sandberg said women around the world are using lean in circles to improve their lives.
"The key principle is creating your own little tribe," Arianna noted.
Share this:
Tweet
Share
tumblr
Share +
Today 3:42 AM ESTSheryl Sandberg On Speaking While Woman
Sheryl Sandberg, chief operating officer of Facebook, sat down with Arianna on HuffPost Live at Davos, where she offered her thoughts on how women can help change the world.
"I think more women in power is how we would get to peace," Sandberg said.
Sandberg referenced a piece she wrote after a December 2014 press conference, when President Barack Obama only called on women and made headlines.
"Even with all the progress we've made, it's still hard to speak in a professional setting as a woman," Sandberg said.
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:25 PM ESTHow HuffPost Is Working With Global Citizen
Hugh Evans and Jordan Hewson from Global Citizen, along with Arianna, sat down on HuffPost Live at Davos to share how HuffPost and Global Citizen are working together to help end global poverty.
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:24 PM ESTHow Mobile Money Is Transforming Africa
Lesley Silverthorn Marincola, CEO of Angaza Design, writes for HuffPost:
I live in the heart of Silicon Valley and am still dependent on a piece of plastic I have to carry around with me everywhere. From gas to groceries, I pay with my credit card.
With the introduction of Apple Play only six months ago, Americans are only now starting to experience the smartphone-enabled proliferation of US mobile money services. Yet, perhaps because not every buyer has an iPhone 6 and not every vendor has a near field communication terminal, credit cards dominate the US market and will continue to do so for the foreseeable future.
Read more here.
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:23 PM ESTStoffels On The Challenges Of Fighting Disease
Stoffels said two major challenges of many diseases include the basic science and the cost.
"Developing a drug is expensive, developing a vaccine is expensive," he said.
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:17 PM ESTDebunking A Big Ebola Myth
"One of the misconceptions is that Ebola is only really transmitted when you really touch a patient," Paul Stoffels said. "It's not that transmittable."
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:15 PM ESTPaul Stoffels On Johnson & Johnson's Efforts To Fight Ebola
Paul Stoffels, chief scientific officer of Johnson & Johnson, said his company is working with different partners on an effort to get out into the field and fight Ebola.
"We immediately decide to put an investment of 0 million into [an Ebola vaccine]," Stoffels said.
Stoffels said his company has been working since 2008 on an Ebola vaccine, when the virus was far less wide-spread but considered a potential threat of bioterrorism.
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:10 PM ESTErtharin Cousin: 'There's Room For Everybody' In Giving
"I don't believe in competition in providing to meet the needs of those who are poorest in our community," Cousin said. "There's room for everybody."
Share this:
Tweet
Share
tumblr
Share +
01/22/2015 12:05 PM ESTWhat Refugee Women Teach Us About Resilience
Artist Lynette Wallworth writes:
Last September I brought my film Coral the Ocean Dome to Tianjin, this year in Davos I am presenting "Evolution of Fearlessness" an immersive, interactive artwork that responds to touch.
To experience the work you first read the stories of 10 women who are primarily political refugees now residing in Australia. The stories of these women verge from the horrendous to the terribly sad. Most have experienced extreme acts of violence and worse. But the work is not about what has happened to the women, it is about who they have become. After reading their stories the viewer approaches a doorway in a darkened room and places a hand on the glass portal. This action causes the activation of a life-sized video of one of the women who steps forward and places her hand on your hand. The work creates a moment of video touch. What you experience from looking into these women's eyes is not their devastation, but rather and perhaps surprisingly, their love.
In his State of the Union address Tuesday night, President Barack Obama is expected to propose throwing a lifeline to America's middle class. It could really use one.
His ideas -- including tax increases for the wealthy and tax cuts for the middle class -- might or might not be the right ones. The Republicans that run Congress likely won't be amenable to many of them. But there should be little doubt that the middle class is in serious trouble. Here are six charts that prove it.
1. and 2. Middle-Class Wages Are Stagnant
A lot has been written about how wage growth has been in a funk since the Great Recession. But this is mainly a problem for the non-affluent classes, and it's been going on for a lot longer than just the past six years. Here's a chart from a recent study by the Economic Policy Institute (EPI), a think tank focused on labor issues:
The only boost middle- and low-income families have gotten since 1979 came during the tech boom of the 1990s. It's been a Sea of Suck otherwise. For the richest Americans, wages have done nothing but climb.
Here's another EPI chart that slices income growth even thinner and adjusts it for inflation:
See that sad light blue line at the bottom of the stack? That is middle-class wage growth, lagging every other class.
3. Inequality Is Basically Robbing The Middle Class
More income going to the wealthy could mean less going to the not-wealthy, along the lines of what French economist Thomas Piketty has warned -- in his view, wealth tends to grow more quickly than wages, vacuuming up an ever-greater share of the world's total income. The EPI recently estimated that inequality is robbing the middle class of roughly $18,000 in annual income:
4. Middle-Class Costs Are Soaring
Meanwhile, costs that affect the middle class the most are outpacing paltry wage gains -- particularly child care and education, two things the middle class really needs to help it avoid slipping further behind. Here's a chart from a recent Brookings Institution study:
5. and 6. Middle-Class Wealth Has Disappeared
The middle-class share of the U.S. wealth pie roughly doubled between the Great Depression and the early 1980s. But since then, the middle-class share has shrunk back to its lowest level since 1947, according to a study last October by Emmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics. Here's a chart from a blog post they wrote about the study:
You might quibble with this chart, pointing out that the "bottom 90 percent" is not quite the same as the "middle class." One response is that most of the wealth held by the bottom 90 percent has typically been held by the middle class.
But to help bolster the case, here's a shorter-term chart, from a June 2014 study by Fabian Pfeffer, Sheldon Danziger and Robert Schoeni of the Russell Sage Foundation, with income groups sliced more narrowly, to help make the case:
Median wealth -- a proxy for the wealth of the middle class -- has fallen 20 percent since 1984.
WASHINGTON, Jan 20 (Reuters) - When President Barack Obama called attention on Tuesday to rising U.S. wages, he noted employers had not planned so many raises in years. But what he left out is that government data suggests actual wage increase are stuck in low gear.
"Today, thanks to a growing economy, the recovery is touching more and more lives," Obama said in his annual State of the Union address.
The president was not entirely triumphant in his speech, calling on Washington to help lift more Americans out of poverty by raising the minimum wage. He also said reforms to the country's education system were needed to help more people get high-paying jobs.
But in making a case that America had broken out of the economic doldrums, he said: "Wages are finally starting to rise again."
While it is true that earnings are rising, the problem with that statement is that multiple government surveys suggest income growth remains much slower than before the 2007-09 recession.
Average hourly earnings in the private sector rose just 1.7 percent in the year through December, according to the U.S. Labor Department.
On the eve of the recession, which began in December 2007, earnings were growing more than 3 percent every 12 months. Since 2010, they have averaged about 2 percent growth.
Obama also noted that a bigger share of small-business owners planned to raise wages than at any time since 2007.
That was an apparent reference to data from the National Federation of Independent Business from December, which genuinely lifted hopes workers were poised to get a pop in their paychecks.
But even relatively upbeat data on actual earnings suggests workers are not getting much in the way of raises.
A separate Labor Department survey on employment compensation showed wages growing 2.1 percent in the third quarter compared with a year earlier. That was the fastest pace since 2009, but still well below growth rates in 2007, when they were consistently above 3 percent. (Reporting by Jason Lange; Editing by Peter Cooney)
This story was originally published by 24/7 Wall St.
To be truly hated, a company must alienate a large number of people. It may irritate consumers with bad customer service, upset employees by paying low wages, and disappoint Wall Street with underwhelming returns. For a small number of companies, such failures are intertwined. These companies managed to antagonize more than just one group and have become widely disliked.
The most hated companies have millions of customers. With such a large customer base, it is critical to keep employees happy in order to promote high-quality customer service. Poor job satisfaction among employees can lead to unsatisfied customers. McDonald’s and Walmart have risked alienating workers, and therefore also customers, by not adequately addressing protests against their employees’ low wages. While pay may be low enough to put some workers below the poverty line, executives at these companies often make millions. The total compensation of McDonald’s CEO Donald Thompson, for example, was nearly $9.5 million in 2013 and nearly $13.8 million in 2012.
Layoffs, or even the prospect of layoffs, can also contribute to low employee morale. Sprint announced it would cut 2,000 jobs late last year. Workers at Comcast can reasonably expect layoffs should its planned merger with Time Warner Cable receives government approval.
Many of the most hated companies angered the public because of quality issues with their products.. Comcast has long been one of the worst companies in America in terms of customer service and satisfaction. Another example is the General Motors recall scandal. GM announced a recall in early 2014 due to faulty ignition switches in a number of its cars, now believed to have cost 42 people their lives. The company’s problems were compounded by the realization that it had known about the defect for over a decade.
Nothing harms the long-term reputation of a company in the eyes of investors more than a steep drop in its share price. In the past 12 months, shares of Sprint have fallen by more than 50%, as hopes for a tie-up with rival T-Mobile were dashed while the company had little success in retaining customers.
It is worth noting that some of the companies on the list may have performed very poorly by some measures but relatively well by others. A few of the most hated companies have had good stock performances. Others have relatively satisfied customers. All of these factors were taken into account in compiling the final list.
Click here to see America’s most hated companies
Several companies from last year list have improved their public perceptions enough to be removed from this year’s list. For example, J.C. Penney is in the midst of a modest turnaround. Abercrombie & Fitch’s controversial long-time CEO Michael Jeffries resigned last December. However, the retailer still has problems attracting teenage customers.
To identify the most hated companies in America, 24/7 Wall St. reviewed a variety of metrics on customer service, employee satisfaction, and share price performance. We considered consumer surveys from a number of sources, including the American Customer Satisfaction Index (ACSI) and Zogby Analytics. We also included employee satisfaction based on worker opinion scores recorded by Glassdoor.com. Finally, we reviewed management decisions and company policies that hurt a company’s public perception.
Marriott announced Wednesday it will stop blocking guests' personal Wi-Fi devices, after a flood of complaints about the practice.
"Marriott International listens to its customers, and we will not block guests from using their personal Wi-Fi devices at any of our managed hotels," the company said in a statement posted on its website.
The Federal Communications Commission fined the hotel chain $600,000 in October for blocking guests from using personal Wi-Fi hotspots in conference rooms and meeting spaces, calling it a violation of federal communications law. Marriott claimed its actions were legal and that it was just trying to protect against cyber attacks. It asked the FCC to be allowed to continue to block Wi-Fi devices in its hotels.
"The question at hand is what measures a network operator can take to detect and contain rogue and imposter Wi-Fi hotspots used in our meeting and conference spaces that pose a security threat," Marriott said in a statement released earlier this month. The hotel noted it wasn't blocking the devices in guest rooms or lobbies.
Marriott's petition to the FCC was supported by the American Hospitality and Lodging Association, which is the lobbying organization for the hotel industry, as well as Hilton Worldwide.
Customers were quick to speak out against Marriott's actions, and many said Marriott was only blocking Wi-Fi devices in order to milk more money out of its guests. The hotel has charged anywhere from $250 to $1,000 to access its conference room wireless network, according to the FCC.
Personal Wi-Fi devices, which allow you to establish an Internet hotspot on your smartphone or mobile device, are useful in hotel conference rooms and meeting areas, especially when the hotel's network is overwhelmed by the number of people trying to use it. Marriott was using Wi-Fi jammers to prevent guests from using these devices.
"We will continue to look to the FCC to clarify appropriate security measures network operators can take to protect customer data, and will continue to work with the industry and others to find appropriate market solutions that do not involve the blocking of Wi-Fi devices," Marriott said in its statement on Thursday.
NEW YORK (AP) — The Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an effort to keep its remaining teen clothing stores open.
The announcement Friday comes a little over a week after the chain said that it was closing 338 stores, or about two-thirds of its total.
Fellow teen clothing retailers Delia's Inc. and Deb Stores filed for Chapter 11 bankruptcy in December, further evidence of trouble in a business being hurt by tough competition and changing tastes among teenagers.
Wet Seal had warned last month that it might need to file for bankruptcy protection if it did not resolve its cash issues after reporting another quarter of losses.
Wet Seal and other chains are being hurt by stores like H&M and Forever 21 that are wooing young people with fast-changing selections of low-priced fashion. Teens are also more interested in outfitting themselves with the latest tech gadgets than new jeans.
The retailer began in 1962 as a bikini shack in Newport Beach, California. It was acquired by Canadian retailer Suzy Shier in 1984. The company, which today sells clothing, shoes and accessories aimed at teenage girls, went public in 1990.
Wet Seal expanded with additions such as Contempo Casuals, Arden B. and Zutopia. Wet Seal acquired Contempo in 1995, adding 200 Contempo Casuals stores. All of those stores were converted to the Wet Seal name by 2001.
Wet Seal has dealt with a long-running series of problems. The company restructured in 2013, closing stores, cutting jobs and changing management.
The executive shuffle included hiring retail-industry veteran John Goodman in January 2013 to help refocus the company after it fired former CEO Susan McGalla in July 2012 amid falling sales. Goodman resigned in September 2014, and Wet Seal brought back Ed Thomas, a former president and CEO, to lead the company.
In addition, Wet Seal dealt with a proxy battle in 2012 with an investment group that wasn't happy with its financial performance. And in 2013 the retailer agreed to pay $7.5 million to settle a federal racial discrimination lawsuit filed by three former employees.
Last year, year Wet Seal decided to shut down its Arden B chain, closing some stores and converting some to the Wet Seal name.
"Wet Seal failed for two reasons: a company that failed to stay in tune with their customers and new rivals like H&M that were able to get cooler merchandise to the stores quicker and with slightly better quality than Wet Seal," Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, said.
Bigger retailers like J.C. Penney Co. and Kohl's Corp. also "upped their games" in teen girls clothing, Sozzi said.
Wet Seal hopes to keep operating during bankruptcy. The Foothill Ranch, California-based company was running 173 stores in 42 states and Puerto Rico as of Thursday.
The retailer said that it has arranged a $20 million term loan facility through B. Riley Financial Inc. to help it keep paying its vendors and landlords. That funding still needs to be approved by the U.S. Bankruptcy Court for the District of Delaware.
The agreement would make B. Riley the majority stockholder of Wet Seal once the retailer exits bankruptcy.
Wet Seal estimates its assets to be between $10 million and $50 million, according to its bankruptcy filing. Liabilities are estimated between $100 million and $500 million. The company's largest creditor is Hudson Bay Master Fund Ltd. Other big creditors are primarily its shopping-mall landlords.
Shares of the company tumbled about 3 cents, or 40 percent, to 5 cents in Friday afternoon trading. Companies' common stock often becomes worthless in a bankruptcy reorganization.
It's a great time to own an NBA team. And an even better time to sell one: A bad team losing money in a big city is ten times more valuable than it was just five years ago.
Take Russian oligarch Mikhail Prokhorov: He wants to sell the Brooklyn Nets, Bloomberg reported this week. The Brooklyn Nets are not good (they're 16-23). They lost $144 million last year, too.
Yet the Nets are also worth somewhere between $1.3 and $2.7 billion, according to various estimates.
How can such an bad, money-losing team be worth so much money? Television.
The Nets, like all teams in the NBA, get money from the league's revenue-sharing agreement, which parcels out the proceeds of national TV rights, taking money from rich teams and giving it to poorer ones. As part of that deal, every team gets an equal share of the TV money. That share was about $30 million this year. It will be more than twice that amount once a new nine-year, $24 billion deal takes effect in 2016.
And that’s just national media money. The Nets have their own local TV rights deal in the New York City area. It expires next year and is worth $20 million a year. Which is actually not all that much money -- it’s not unrealistic to think the Nets could get ten times more from a renegotiated deal. After all, the Los Angeles Clippers, who play in the country's second-largest media market, are expected to get $200 million a year when their current $20 million-a-year deal expires in 2016.
The Nets are losing money right now because they’re loaded up with silly expensive contracts for aging, poorly performing players that put them way over the league's salary cap. For breaking that cap, the team had to pay a league-record $90 million in luxury taxes for the 2013-2014 season.
Those player contracts are bad, financially and on the court, but they’re far shorter than media rights deals. Phase them out, sign a new, much-improved local TV deal, add in the soon-to-double league TV checks, and the Nets start looking like a pretty decent business: almost fixed revenue, slashed costs, and no real competition.
It’s actually more than a decent business model, it’s a great one -- unless you’re a basketball fan. Jay Z, former part-owner of the Nets, wasn’t just bragging when he said, “the Nets could go 0-for-82 and I look at you like this shit gravy.”
He was right. That’s just how the economics of owning an NBA team work: The costs of putting a team on the court are variable and under your control, while revenue is set in stone. The best way to make the most money is to spend as little money on players as possible in as big a media market as possible. Owners in such a market have an incentive to put a minimally viable product on the court: just good enough not to be a complete joke, but not much more. And even if you are spectacularly bad for a few seasons, high draft picks help you out.
Once the new owner sunsets the most expensive players, the Nets will be what they always should have been: a great business, regardless of how bad a team they are.
