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Monday, September 30, 2013

NYC Inmate Almost as Costly as Ivy League Tuition

Story first appeared on CNBC.com.

 New York is indeed an expensive place, but experts say that alone doesn't explain a recent report that found the city's annual cost per inmate was $167,731 last year — nearly as much as it costs to pay for four years of tuition at an Ivy League university.

They say a big part of it is due to New York's most notorious lockup, Rikers Island, and the costs that go along with staffing, maintaining and securing a facility that is literally an island unto itself.

"Other cities don't have Rikers Island," said Martin F. Horn, who in 2009 resigned as the city's correction commissioner, noting that hundreds of millions of dollars are spent a year to run the 400-acre island in the East River next to the runways of LaGuardia Airport that has 10 jail facilities, thousands of staff and its own power plant and bakery.

The city's Independent Budget Office annual figure of $167,731 — which equates to about $460 per day for the 12,287 average daily New York City inmates last year — was based on about $2 billion in total operating expenses for the Department of Correction, which included salaries and benefits for staff, judgments and claims as well as debt service for jail construction and repairs.
 But there are particularly expensive costs associated with Rikers.

The department says it spends $30.3 million annually alone on transportation costs, running three bus services that usher inmates to and from court throughout the five boroughs, staff from a central parking lot to Rikers jails and visitors to and around the island. There were 261,158 inmates delivered to court last year.

A way to bring down the costs, Horn has long said, would be to replace Rikers Island with more robust jails next door to courthouses. But his attempts to do that failed in part because of political opposition from residential areas near courthouses in Brooklyn, Manhattan and elsewhere.

"My point is: Have you seen a whole lot of outcry on this? Why doesn't anything happen?" Horn said of the $167,731 annual figure. "Because nobody cares."

"That's the reason we have Rikers Island," he said. "We want these guys put away out of public view."

New York's annual costs dwarf the annual per-inmate costs in other big cities. Los Angeles spent $128.94 a day, or $47,063 a year, for 17,400 inmates in fiscal year 2011-12, its sheriff's office said. Chicago spent $145 a day, or $52,925 a year, for 13,200 inmates in 2010, the most recent figures available from that county's sheriff's office. Those costs included debt-service and fringe benefits.

Experts note that New York's high annual price tag is deceiving because it reflects considerable pensions and salary responsibilities, debt service and the expensive fixed costs. The DOC says 86 percent of its operating costs go for staff wages.
 New York's system differs from other cities in some other costly ways — it employs 9,000 relatively well-paid, unionized correction officers, for example, and is required by law to provide certain services to inmates, including high quality medical care within 24 hours of incarceration.

Nick Freudenberg, a public health professor at Hunter College, said the latest city figures show that declining incarceration rates haven't translated into cost savings.

In 2001, when the city had 14,490 inmates, the full cost of incarcerating one inmate at Rikers Island for a year was $92,500, or about $122,155 adjusted for today's dollars — that means the city spent $45,576 more in 2012 than it did 11 years ago.  "To my mind, the main policy question is: How could we be spending this money better?" Freudenberg said. "What would be a better return on that investment?"

Another contributing factor to the inmate price tag is the length of stay for prisoners in New York's criminal justice system. Some inmates have waited years in city jails to see trial. The DOC said in 2012 that the average length of stay for detainees was 53 days and 38.6 days for sentenced inmates.

"Not only is that a miscarriage of justice, it affects your operations," said Michael Jacobson, a former commissioner of the city's Department of Correction and probation who serves as director of the CUNY Institute for State and Local Governance. "You want to save big money? Take a quarter out just by improving the process they go through when they're in the system."

Monday, September 23, 2013

Is Halloween Cereal Junk Food?

Story first appeared in USA TODAY.

Count Chocula may have finally met his match: nutritionists.

Even as General Mills rolls out a record five Halloween-theme "Monster Cereals" this month, three nutritional experts are speaking out to warn that parents should think twice before carting the seasonal cereals home, adding to the Halloween season's sugar overload.

At issue: too much sugar, too many dyes and not enough fiber. The cereals, which sell for about $2.50 a box, go by the kid-friendly names of Count Chocula, Franken Berry, Boo Berry, Frute Brute and Fruity Yummy Mummy.

"Amidst Halloween's tsunami of junk foods, kids certainly shouldn't be encouraged to consume even more sugar, refined flour and artificial colorings in the form of breakfast cereals," says Michael Jacobson, executive director at the Center for Science in the Public Interest.

For major food companies such as General Mills, holidays are a unique opportunity. For the stagnant, $7.7 billion ready-to-eat cereal industry, Halloween-theme cereal is a way to create excitement. But in a nation increasingly concerned with nutrition, some seasonal promotions that have been popular for years are now getting second looks.

"Maybe they hope that moms will be happy the products aren't candy and snap up the boxes," says Marion Nestle, professor of nutrition at New York University. "But the cereals sure look like candy to me: sugar and marshmallows."

General Mills executives declined to be interviewed. But Carla Vernon, marketing director for the General Mills "Big G" cereals line, says, in an e-mail, that 60% of the consumption of Count Chocula, Franken Berry and Boo Berry is by adults, not kids.

There is no direct advertising support for Monster cereals. But the promotion is getting at extra lift at Target stores, which is selling the cereal in special "retro" packaging.

Six years ago, General Mills reduced the amount of sugar in Monsters Cereals from 15 grams per serving to 9 grams. "So, a cereal like Count Chocula has 100 calories and 9 grams of sugar per serving," Vernon says in the e-mail. All the cereals contain at least 8 grams of whole grain per serving and are fortified with calcium and vitamin D.

While the nutritionists generally applaud the sugar reduction, they remain critics of the cereals.

Jacobson, at CSPI, notes that nearly one-third of the cereal is still sugar, and much of the flour is refined — meaning the ingredients are low in fiber. Also, he says, the dyes "trigger hyperactivity in some children."

At a time when many food makers are responding to consumer concerns about empty calories and questionable ingredients, "this Halloween promotion looks like business as usual," laments Kelly Brownell, dean of the Sanford School of Public Policy at Duke University.

Nestle, the nutrition professor, advises parents who want their kids to eat healthy to abide by her general rule: Never buy a food product with a cartoon on the front.

Friday, September 20, 2013

Starbucks New Policy Does Not Cause Gun Groups Concern

Story first appeared in USATODAY.

The nation's largest gun rights groups have this early response to Starbucks no longer "welcoming" guns in its stores: Yawn.

Sure, the blogosphere has been on fire over the past day, with plenty of individual Twitter and Facebook posts slamming the policy shift by Starbucks. One angry Twitter follower named Victor Morton summed it up this way in his tweet to Starbucks: "I say two words that rhyme with 'duck stew.' "

But even with CEO Howard Schultz asking gun owners to leave their guns at home, several key groups contacted on Thursday that represent gun owners have not called for any actions against the world's largest coffee chain.

No boycotts. No mass protests planned. (The largest such group, the National Rifle Association, did not respond to several phone calls and e-mails on Thursday.) Starbucks says it heard nothing from any pro-gun groups as of late Thursday afternoon.

"It's business as usual," says Starbucks spokesman Zack Hutson. "We don't expect to satisfy any of the extremes," he adds.

But, for the most part, gun advocacy groups had little negative to say on Thursday.

"I think most of the firearms community is going to keep doing whatever they're doing," says Dave Workman, a spokesman for the Citizens Committee for the Right to Keep and Bear Arms, a non-profit advocacy group that claims 650,000 members and supporters. "The majority (of gun owners) are saying: 'This is their business decision, and if that's what they want, that's the way it is.'"

What's more, says Workman, "There are quite a few people in the firearms community who say some of our own guys brought this on themselves."

Other gun advocacy groups took a similar stance.

"We are not calling for any action on our part," says Erich Pratt, spokesman for Gun Owners of America, a non-profit gun advocacy group that claims 375,000 members. "Our understanding is that there is really no change to the policy. He's making a request — not an outright ban."

Some gun advocates may be disappointed in Starbucks, says Mike Stollenwerk, co-founder of OpenCarry.org, an advocacy group, "but I'm not," he says, in an e-mail. "I would hope the gun carriers react to Starbucks' new non-policy by continuing to patronize Starbucks — while armed."

But one university professor who specializes in corporate strategy says that Starbucks executives should not rest easy. "They will eventually face some push-back," says David Primo, associate professor of political science at University of Rochester. "They won't remain unscathed."

Everything, he says, depends on what happens with the issue on social media over the next several weeks.

It doesn't really matter what the organized special interests groups do — or don't do, Primo says. Rather, he says, it's all about grass-roots actions. "What matters is what the consumers who can organize themselves in social media do."

Monday, September 16, 2013

3D Printing

Story first appeared on economist.com

Peek through the inspection windows of the nearly 100 three-dimensional (3D) printers quietly making things at RedEye, a company based in Eden Prairie, Minnesota, and you can catch a glimpse of how factories will work in the future. It is not simply that the machines, some as big as delivery vans, run day and night attended by just a handful of technicians. Instead it is what they are making that shows how this revolutionary production process is entering the manufacturing mainstream.

3D printers make things by building them up, a layer at a time, from a particular material, rather than removing it by cutting, drilling or machining—which is why the process is also called additive manufacturing. There are many ways in which this can be done (see article), and with only a tweak of software each item can be different, without the need for costly retooling of machines. This has made 3D printing a popular way to make one-off items, especially prototype parts, mock-ups, gadgets and craft items.
And that is about all that 3D printers are good for, reckon the doubters. Chief among them is Terry Gou, the boss of Foxconn, the world’s largest contract manufacturer of electronic goods, which makes many of Apple’s products in China. He thinks 3D printing is just “a gimmick” without any commercial value in the manufacture of real finished goods, and he has vowed to start spelling his name backwards if proved wrong.

Mr Gou (or should that be Uog?) is right about one thing: additive manufacturing is not about to replace mass manufacturing. Even though the technology is improving, the finish and durability of some printed items can still fall short of what producers require. And nor can 3D printers crank out zillions of identical parts at low cost, as mass-production lines can. Nevertheless, 3D printers have their virtues, which is why they are starting to be used by some of the world’s biggest manufacturers, such as Airbus, Boeing, GE, Ford and Siemens.

The market for 3D printers and services is small, but growing fast. Last year it was worth $2.2 billion worldwide, up 29% from 2011, according to Wohlers Associates, a consultancy. As producers become more familiar with the technology, they are moving from prototypes to final products. Last year Wohlers reckons more than 25% of the 3D-printing market involved making production-ready items.

Some of those parts are taking shape in RedEye’s printers. In many cases they are low-volume items, such as components used to build specialist pharmaceutical or paper-making equipment. Other components, such as 3D-printed tools and jigs, will actually enhance mass-production: BMW’s assembly-line workers design and print custom tools to make it easier to hold and position parts. 3D-printed plastic moulds and dies are also being printed to help set up and trial new production lines. Some of these printed parts are even used as temporary stand-ins for broken steel tools, which can take weeks to replace.

Hard-to-find spare parts are also being 3D printed, in one case helping a large American airline to get some of its aircraft back into the air. The carrier was frequently having to ground its ageing McDonnell Douglas MD-80 jets because of leaking toilets. Production of these aircraft ceased long ago, and the airline was struggling to find spare parts. Its new plumbing is now being 3D printed in an aerospace-grade plastic (which does not ignite or produce noxious fumes if burned).

As 3D printers get better and printed materials improve, the quality and finish of prototypes is becoming harder to distinguish from things made in traditional factories, says Tim Thellin, RedEye’s manager. Despite the hype around desktop 3D printers aimed at hobbyists and consumers, it is the big, industrial-grade printers that are working the hardest as demand grows for printing large items, which are tricky to make with conventional methods such as plastic injection-moulding, says Mr Thellin. One example is body panels for specialist cars. These can have complex shapes, consolidating individual components that previously had to be assembled.

The inspection windows of some of RedEye’s 3D printers are covered, because these machines are making defence-related items, or their work is commercially sensitive. One that is on view is a machine printing parts for the 3D printers produced by RedEye’s parent company, Stratasys. It and another firm, called 3D Systems, are the market leaders in 3D printers.

3D Systems, based in South Carolina, also has plenty of examples of ways in which 3D printers are being used to produce finished products. An early adopter of the technology has been the health-care industry—a field in which mass customisation is useful, because every patient is different. Millions of hearing-aid shells have been 3D-printed from scans of patients’ ear canals, says Cathy Lewis, 3D Systems’ marketing chief. Initially the shells were cast from 3D-printed moulds, but with the development of printable biocompatible plastics that do not irritate the skin, they are now printed directly.

In another example, 3D Systems has worked with Align Technology of San Jose, California. Instead of using metal braces for straightening teeth, Align produces sets of transparent plastic “aligners”. A scan of the patient’s mouth is used to devise a treatment plan, which in turn generates a digital file which is used to 3D-print a set of 20 or so moulds. Each mould is slightly different, and from them a series of clear plastic braces is cast. When worn over several months, each brace steadily moves the patient’s teeth into the desired position. Last year Align 3D printed 17m of them.

Flying high

The aerospace industry, with relatively low volumes, is also embracing 3D printing. Production parts tend to be non-critical items, but that will change. Today, a typical F-18 fighter jet is likely to contain some 90 3D-printed parts, even though the F-18 has been in service for two decades—since before 3D printing took off. This is because replacement bits, like parts of the cockpit and cooling ducts, are now 3D printed. The F-35, a new strike aircraft entering service in America, has around 900 parts that have been identified as suitable for additive manufacturing, says 3D Systems.

The world’s biggest manufacturer, GE, has no doubt about how important additive manufacturing will be in many of its divisions, from energy to health care. And it intends to keep much of that technology in-house to maintain a competitive edge. In November 2012 GE bought Morris Technologies, a firm based in Cincinnati which has been one of the leaders in providing additive manufacturing services to industry. Among other things, Morris has made lightweight parts for unmanned aerial vehicles. What attracts GE to the technology is its potential to make complex, lightweight components, which are not easily manufactured by traditional means, out of exotic materials. By 2020 GE is expected to be printing tens of thousands of parts for its jet engines alone.

None of this is lost on the Chinese. Officials in Beijing see additive manufacturing as a way to upgrade their own manufacturing base as the country’s labour costs increase and some offshored production moves back to America and Europe. Although it is not yet as advanced as America in 3D printing, China has big ambitions.
“3D printing is not competing with conventional manufacturing, but is hybridising with it.”

Plenty of 3D printing in China dovetails with traditional factories. Beijing Longyuan Automated Fabrication System, for instance, uses a form of 3D printing called laser-sintering to produce moulds out of specially treated foundry sand. The moulds are then sent to a traditional foundry to cast metal parts in the old-fashioned way. The use of 3D printing means all the parts needed for a prototype car engine can be produced in a couple of weeks instead of several months.

Some of the world’s biggest 3D printers can be found in China. Its astronauts sit in 3D-printed seats which are shaped specifically to their bodies. Engineers working on a Chinese rival to the short-haul jets made by Boeing and Airbus are using giant 3D-printing machines, one of them 12 metres long, to print parts (including wing spares and fuselage frames) in titanium.

Powering up

The value of 3D printing as a production tool will increase further with systems that are capable of printing electrical circuits directly onto or into components. Disney and Xerox are experimenting with such processes, as is GKN Aerospace, a British firm. In a joint project with the University of Warwick, GKN has developed a printing material called “carbomorph”. This has piezoresistive properties, which means its electrical resistance changes when it is squeezed. It can be used to print functioning switches, buttons and sensors.

Optomec, based in Albuquerque, has come up with a way to print electronics which it calls Aerosol Jet. This works by atomising liquid electronic materials into a dense aerosol, which is then focused by a sheath of gas into a beam and deposited in layers. It can produce electrical circuits and components, including wires, resistors, capacitors and semiconductors, with features as small as 10 microns across (a micron is one millionth of a metre). Optomec has been working on printing LED lighting onto wallpaper and control circuits onto the wings of a small drone (which itself was 3D printed by Stratasys).

The company is also working with a number of mobile-phone manufacturers to print circuits directly into handsets. The latest smartphones have multiple aerials for cellular radios, Wi-Fi, Bluetooth, GPS and so forth. They are usually made with a chemical-plating process which is environmentally unfriendly. Optomec can print them directly into the case using a conductive silver ink. A trial system was recently installed on a production line in China.

Eventually it will be possible to print most electrical components directly into a product, predicts Michael Renn, the director of Optomec’s development laboratory. But although the system can print transistors, and could thus produce logic circuits, it cannot print the billions of tiny transistors found in microprocessors and other chips. Those chips would still need to be manufactured in the usual way and incorporated into a 3D-printed product—though Dr Renn is quick to point out that he can use his Aerosol Jet to wire them up.
Additive manufacturing has other limitations. It can be slow—taking several hours to print, say, a body panel for a car. But speed is relative. What may be too slow for a large production run might be fine for a one-off item which would take weeks to make in a machine-shop.

Material costs are also high. Acrylonitrile butadiene styrene, better known as ABS, is the most common 3D-printing material. A mass manufacturer using plastic injection moulding might buy ABS in bulk for about $2 a kilo, but as a bespoke powder or filament for 3D printing it can cost as much as $80 a kilo, says Anthony Vicari of Lux Research, a Boston company that tracks emerging technologies.

In part the price difference is due to higher standards of purity and composition required for 3D printing. But mostly it is because 3D-printer manufacturers require users to buy materials from them and mark up the price, as with the inks for 2D inkjet printers. Mr Vicari thinks this strategy is not sustainable long term as third-party suppliers enter the business. Moreover, some big manufacturers, like GE, are developing bespoke 3D-printing systems which are not dependent on a single supplier of equipment or material.

One spur to the development of the 3D-printing industry has been falling prices and increased competition, after some of the early patents on fused-deposition modelling expired in 2009, notes a recent report by the McKinsey Global Institute. This is what has brought the price of some printers down to below $1,000.

The industry is also consolidating as it scales up. Last year Stratasys merged with Objet of Israel, and in June the company bought MakerBot, based in Brooklyn. In July 3D Systems bought an 81% stake in Phenix Systems, a French provider of laser-sintering in metal, which is something of a European speciality (the leader in laser-sintering is EOS of Germany). Another phase of innovation and increased competition may begin in 2014 when some of the patents on laser-sintering expire. Because laser-sintering is capable of printing things in plastic, metal and ceramics to high levels of detail, it is often used to make finished products rather than mere prototypes.

At your service

Meanwhile, 3D printing is becoming more readily available to people with no equipment of their own through service providers that print objects on demand from digitised plans, such as Shapeways, based in New York, Sculpteo, based in France, and Materialise, based in Belgium. It prints medical implants for surgeons, models of buildings for architects, lampshades for interior designers, custom-made knobs for cabinet-makers and lightweight parts for industrial robots.

If Mr Gou of Foxconn ever has a spot of bother with his own production lines, these firms might be able to help. Clément Moreau, Sculpteo’s boss, tells of a large Chinese manufacturer which was setting up a new production line, but found it was missing some small plastic parts which should have been ordered from an injection-moulding company. Faced with weeks of delay it looked at 3D printing the bits instead. Sculpteo had the first batch of 5,000 parts on their way to China within days. It is yet another example of how 3D printing is not competing with conventional manufacturing techniques, but is instead complementing and hybridising with them to make new things possible. When 3D printing can come to the rescue of mass manufacturing, its place in the factory of the future is assured.

Furniture Brands files for Chapter 11 bankruptcy

Story originally appeared on USA Today.

Oaktree Capital to buy bulk of Thomasville, Broyhill, Lane and Drexel Heritage brands.

ST. LOUIS (AP) — The maker of furniture brands such as Thomasville, Broyhill, Lane and Drexel Heritage said Monday that it has filed for Chapter 11 bankruptcy protection.

Furniture Brands International said it hopes to sell the bulk of its business to investment firm Oaktree Capital Management.

The St. Louis-based company, which also runs the Thomasville chain of furniture stores, struggled like many other companies after the collapse of the housing market. But unlike some of its peers, its business has not rebounded with the recovery in home sales and the broader economy.

Furniture Brands reported in August that it widened its fiscal second-quarter net loss to $40.8 million on weaker revenue and major charges to write down the value of its brands. It also said that it would cut costs and pursue the sale of some of its assets.

CEO Ralph Scozzafava said Monday that the company determined filing for bankruptcy protection was the best way to address its liquidity challenges and strengthen its operations.

The company, which filed with the U.S. Bankruptcy Court in Delaware, said that it has reached an agreement to sell it nearly of its assets, except the Lane brand, to Oaktree under an auction process. The court must approve the plan and other bidders may emerge.

Furniture Brands said that Oaktree will provide $140 million in debtor-in-possession financing, which is also subject to court approval. The company said the financing will enable it to operate its business uninterrupted and meet all its financial obligations, such as employee wages.

The company also said that it is considering the sale of its Lane business and has received several "indications of interest" from potential acquirers.

Shares of Furniture Brands fell almost 47% to close at 30 cents Monday. Its stock value has been falling fairly steadily since 2002, when it was trading at nearly $300.

Friday, September 13, 2013

Generation X To Face Insurance Woes

Story first appeared in USATODAY.

In the wake of the 2008 financial crisis, middle-aged Americans are increasingly overlooking life insurance due to shaky personal finances.

A New York Life survey released Thursday shows Americans born from 1965 through 1976, commonly known as Generation X, reported life insurance needs almost $449,000 greater than what their current coverage provides.

And that's just the typical gap. According to New York Life, 20% of Gen Xers reported zero life insurance coverage. That's up from just 5% with no coverage in a similar 2008 survey.

"When you're hurting for every discretionary dollar, this is one thing people can justify (cutting)," said Chris Blunt, president of the insurance group at New York Life.

A survey of 1,000 Americans ages 37 to 48 reported median coverage of just $260,000 vs. a self-reported need of $708,996 — a difference of $448,996. That gap is up about 24% from a similar study in 2008 that showed a self-reported shortfall of about $363,000.

Blunt noted that it's not just a decline in policies that helped the gap grow so much in just five years. People have fewer resources, in general, to fall back on, which naturally leaves them more exposed should the unexpected happen.

"During the Great Recession, people's homes got creamed, the stock market got hammered," he said. "If your financial assets are down, almost by definition your insurance gap has gone up because that's part of the calculation."

Taking a big risk

Blunt said that while a shortfall is typical between self-reported needs and self-reported coverage, the size of the gap New York Life uncovered was alarming.

"As a rule, most of us weren't as focused on life insurance when we were younger. That's natural, normal psychology," he said. But, he said, it's very risky to fall so short of your family's true life insurance needs.

Ted Bovard, managing director at Fort Pitt Capital Group, a wealth management firm in Pittsburgh with $1.4 billion in assets under management, says it's "universally true" that families underestimate what they need in insurance. And he adds that the median coverage of $260,000 reported in the New York Life survey isn't even close to adequate for most families.

"You have a mortgage for you and your wife; you have your own college loans that still exist because you can't seem to get out of school now without some serious college loans; and on top of that you've got two small kids," Bovard said. "It adds up in a hurry."

But most people don't bother to do the math, Bovard said, because it's uncomfortable to dwell on issues like mortality or bad financial decisions, such as credit card debt or an underwater mortgage.

Beyond the bills, it's also important to look at lost income. Larry Rosenthal, president of Rosenthal Wealth Management Group outside of Washington, D.C., and a financial adviser with two decades of experience, says the right coverage can easily top $1 million for a middle-class family.

This is especially true for Generation Xers, who are in their peak earning years.

"As a rule of thumb, at a minimum you need to have five to 10 times your income in life insurance for most Americans out there," Rosenthal said. So, if you and your spouse collectively make in excess of $100,000 a year as a pair, he notes, a million-dollar policy may not even be enough.

Getting the right policy for you

If your ideal coverage plan is out of reach because times are tight, there are still options. The bottom line is that some kind of life insurance is always better than nothing.

"Do whatever you can do; do whatever you can afford," said Blunt of New York Life.

It pays to start looking sooner rather than later, he adds. Rates are lower the younger and healthier you are, so it can save you big money to lock in a long-term policy in your 30s.

"It's ironic that when the most you need (life insurance), the least psychologically attuned you are to getting it," Blunt said.

One place to start is through a group plan at your workplace, because these plans can be very affordable. The downside is that frequently benefits are small, and policies are only good for as long as you work for that specific employer.

That's why Bovard of Fort Pitt Capital advocates starting with basic term life insurance — that is, a locked-in monthly payment that gives your family a fixed benefit across a fixed time frame should you die. It's easy to understand, Bovard said, and is cheap for Generation Xers in good health.

"Younger people, particularly if they are married and have children, simply need to have insurance," Bovard said. "And about 90% of the time, that should be term insurance."

If you're looking for insurance that will retain some value even if you have the good fortune to live a long and healthy life, Rosenthal said, there are some good alternatives to term life that can be very attractive.

"When you look at whole life or universal life or variable life, the advantage there is forced savings that builds up equity inside it and grows up tax-deferred and you can take out a loan if need be tax free as long as the policy stays in force," Rosenthal said.

While he admitted these can sometimes be a bit more expensive or complicated, Rosenthal said that if you do your homework or talk with an adviser you can easily ensure your policy doesn't get loaded with hidden fees or interest. And the bottom line is that if you don't really understand life insurance or what your family needs, the best policy is to sit down with a financial planner to hash things out.

"For people trying to do this on their own, there's a lot of nuance," Blunt said. "If you simplify it to something someone can do in 12 minutes on a website, something gets lost."

Monday, September 9, 2013

Gender Equality Case Study

Story first appeared in the New York Times.

When the members of the Harvard Business School class of 2013 gathered in May to celebrate the end of their studies, there was little visible evidence of the experiment they had undergone for the last two years. As they stood amid the brick buildings named after businessmen from Morgan to Bloomberg, black-and-crimson caps and gowns united the 905 graduates into one genderless mass.

But during that week’s festivities, the Class Day speaker, a standout female student, alluded to “the frustrations of a group of people who feel ignored.” Others grumbled that another speechmaker, a former chief executive of a company in steep decline, was invited only because she was a woman. At a reception, a male student in tennis whites blurted out, as his friends laughed, that much of what had occurred at the school had “been a painful experience.”

He and his classmates had been unwitting guinea pigs in what would have once sounded like a far-fetched feminist fantasy: What if Harvard Business School gave itself a gender makeover, changing its curriculum, rules and social rituals to foster female success?

The country’s premier business training ground was trying to solve a seemingly intractable problem. Year after year, women who had arrived with the same test scores and grades as men fell behind. Attracting and retaining female professors was a losing battle; from 2006 to 2007, a third of the female junior faculty left.
Some students, like Sheryl Sandberg, class of ’95, the Facebook executive and author of “Lean In,” sailed through. Yet many Wall Street-hardened women confided that Harvard was worse than any trading floor, with first-year students divided into sections that took all their classes together and often developed the overheated dynamics of reality shows. Some male students, many with finance backgrounds, commandeered classroom discussions and hazed female students and younger faculty members, and openly ruminated on whom they would “kill, sleep with or marry” (in cruder terms). Alcohol-soaked social events could be worse.

“You weren’t supposed to talk about it in open company,” said Kathleen L. McGinn, a professor who supervised a student study that revealed the grade gap. “It was a dirty secret that wasn’t discussed.”

But in 2010, Drew Gilpin Faust, Harvard’s first female president, appointed a new dean who pledged to do far more than his predecessors to remake gender relations at the business school. He and his team tried to change how students spoke, studied and socialized. The administrators installed stenographers in the classroom to guard against biased grading, provided private coaching — for some, after every class — for untenured female professors, and even departed from the hallowed case-study method.

The dean’s ambitions extended far beyond campus, to what Dr. Faust called in an interview an “obligation to articulate values.” The school saw itself as the standard-bearer for American business. Turning around its record on women, the new administrators assured themselves, could have an untold impact at other business schools, at companies populated by Harvard alumni and in the Fortune 500, where only 21 chief executives are women. The institution would become a laboratory for studying how women speak in group settings, the links between romantic relationships and professional status, and the use of everyday measurement tools to reduce bias.
“We have to lead the way, and then lead the world in doing it,” said Frances Frei, her words suggesting the school’s sense of mission but also its self-regard. Ms. Frei, a popular professor turned administrator who had become a target of student ire, was known for the word “unapologetic,” as in: we are unapologetic about the changes we are making.

By graduation, the school had become a markedly better place for female students, according to interviews with more than 70 professors, administrators and students, who cited more women participating in class, record numbers of women winning academic awards and a much-improved environment, down to the male students drifting through the cafeteria wearing T-shirts celebrating the 50th anniversary of the admission of women. Women at the school finally felt like, “ ‘Hey, people like me are an equal part of this institution,’ ” said Rosabeth Moss Kanter, a longtime professor.

And yet even the deans pointed out that the experiment had brought unintended consequences and brand new issues. The grade gap had vaporized so fast that no one could quite say how it had happened. The interventions had prompted some students to revolt, wearing “Unapologetic” T-shirts to lacerate Ms. Frei for what they called intrusive social engineering. Twenty-seven-year-olds felt like they were “back in kindergarten or first grade,” said Sri Batchu, one of the graduating men.

Students were demanding more women on the faculty, a request the deans were struggling to fulfill. And they did not know what to do about developments like female students dressing as Playboy bunnies for parties and taking up the same sexual rating games as men. “At each turn, questions come up that we’ve never thought about before,” Nitin Nohria, the new dean, said in an interview.
The administrators had no sense of whether their lessons would last once their charges left campus. As faculty members pointed out, the more exquisitely gender-sensitive the school environment became, the less resemblance it bore to the real business world. “Are we trying to change the world 900 students at a time, or are we preparing students for the world in which they are about to go?” a female professor asked.

The Beginning

Nearly two years earlier, in the fall of 2011, Neda Navab sat in a class participation workshop, incredulous. The daughter of Iranian immigrants, Ms. Navab had been the president of her class at Columbia, advised chief executives as a McKinsey & Company consultant and trained women as entrepreneurs in Rwanda. Yet now that she had arrived at the business school at age 25, she was being taught how to raise her hand.

A second-year student, a former member of the military, stood in the front of the classroom issuing commands: Reach up assertively! No apologetic little half-waves! Ms. Navab exchanged amused glances with new friends. She had no idea that she was witnessing an assault on the school’s most urgent gender-related challenge.
The administrators had no sense of whether their lessons would last once their charges left campus. As faculty members pointed out, the more exquisitely gender-sensitive the school environment became, the less resemblance it bore to the real business world. “Are we trying to change the world 900 students at a time, or are we preparing students for the world in which they are about to go?” a female professor asked.

The Beginning

Nearly two years earlier, in the fall of 2011, Neda Navab sat in a class participation workshop, incredulous. The daughter of Iranian immigrants, Ms. Navab had been the president of her class at Columbia, advised chief executives as a McKinsey & Company consultant and trained women as entrepreneurs in Rwanda. Yet now that she had arrived at the business school at age 25, she was being taught how to raise her hand.

A second-year student, a former member of the military, stood in the front of the classroom issuing commands: Reach up assertively! No apologetic little half-waves! Ms. Navab exchanged amused glances with new friends. She had no idea that she was witnessing an assault on the school’s most urgent gender-related challenge.
Women at Harvard did fine on tests. But they lagged badly in class participation, a highly subjective measure that made up 50 percent of each final mark. Every year the same hierarchy emerged early on: investment bank and hedge fund veterans, often men, sliced through equations while others — including many women — sat frozen or spoke tentatively. The deans did not want to publicly dwell on the problem: that might make the women more self-conscious. But they lectured about respect and civility, expanded efforts like the hand-raising coaching and added stenographers in every class so professors would no longer rely on possibly biased memories of who had said what.

They rounded out the case-study method, in which professors cold-called students about a business’s predicament, with a new course called Field, which grouped students into problem-solving teams. (Gender was not the sole rationale for the course, but the deans thought the format would help.) New grading software tools let professors instantly check their calling and marking patterns by gender. One professor, Mikolaj Piskorski, summarized Mr. Nohria’s message later: “We’re going to solve it at the school level, but each of you is responsible to identify what you are doing that gets you to this point.”

Mr. Nohria, Ms. Frei and others involved in the project saw themselves as outsiders who had succeeded at the school and wanted to help others do the same. Ms. Frei, the chairwoman of the first-year curriculum, was the most vocal, with her mop of silver-brown hair and the drive of the college basketball player she had once been. “Someone says ‘no’ to me, and I just hear ‘not yet,’ ” she said.

After years of observation, administrators and professors agreed that one particular factor was torpedoing female class participation grades: women, especially single women, often felt they had to choose between academic and social success.
One night that fall, Ms. Navab, who had laughed off the hand-raising seminar, sat at an Ethiopian restaurant wondering if she had made a bad choice. Her marketing midterm exam was the next day, but she had been invited on a very business-school kind of date: a new online dating service that paired small groups of singles for drinks was testing its product. Did Ms. Navab want to come? “If I were in college, I would have said let’s do this after the midterm,” she said later.

But she wanted to meet someone soon, maybe at Harvard, which she and other students feared could be their “last chance among cream-of-the-crop-type people,” as she put it. Like other students, she had quickly discerned that her classmates tended to look at their social lives in market terms, implicitly ranking one another. And like others, she slipped into economic jargon to describe their status.

The men at the top of the heap worked in finance, drove luxury cars and advertised lavish weekend getaways on Instagram, many students observed in interviews. Some belonged to the so-called Section X, an on-again-off-again secret society of ultrawealthy, mostly male, mostly international students known for decadent parties and travel.

Women were more likely to be sized up on how they looked, Ms. Navab and others found. Many of them dressed as if Marc Jacobs were staging a photo shoot in a Technology and Operations Management class. Judging from comments from male friends about other women (“She’s kind of hot, but she’s so assertive”), Ms. Navab feared that seeming too ambitious could hurt what she half-jokingly called her “social cap,” referring to capitalization.

“I had no idea who, as a single woman, I was meant to be on campus,” she said later. Were her priorities “purely professional, were they academic, were they to start dating someone?”

As she scooped bread at the product-trial-slash-date at the Ethiopian restaurant, she realized that she had not caught the names of the men at the table. The group drank more and more. The next day she took the test hung over, her performance a “disaster,” she joked.

The deans did not know how to stop women from bartering away their academic promise in the dating marketplace, but they wanted to nudge the school in a more studious, less alcohol-drenched direction. “We cannot have it both ways,” said Youngme Moon, the dean of the M.B.A. program. “We cannot be a place that claims to be about leadership and then say we don’t care what goes on outside the classroom.”

But Harvard Business students were unusually powerful, the school’s products and also its customers, paying more than $50,000 in tuition per year. They were professionals, not undergraduates. One member of the class had played professional football; others had served in Afghanistan or had last names like Blankfein (Alexander, son of Lloyd, chief executive of Goldman Sachs). They had little knowledge of the institutional history; the deans talked less about the depressing record on women than vague concepts like “culture” and “community” and “inclusion.”

As the semester went on, many students felt increasingly baffled about the deans’ seeming desire to be involved in their lives. They resented the additional work of the Field courses, which many saw as superfluous or even a scheme to keep them too busy for partying. Students used to form their own study groups, but now the deans did it for them.

As Halloween approached, some students planned to wear costumes to class, but at the last minute Ms. Frei, who wanted to set a serious tone and head off the potential for sexy pirate costumes, sent a note out prohibiting it, provoking more eye rolls. “How much responsibility does H.B.S. have?” Laura Merritt, a co-president of the class, asked later. “Do we have school uniforms? Where do you stop?”

A few days before the end of the fall semester, Amanda Upton, an investment banking veteran, stood before most of her classmates, lecturing and quizzing them about finance. Every term just before finals, the Women’s Student Association organized a review session for each subject, led by a student who blitzed classmates through reams of material in an hour. Some of the first-years had not had a single female professor. Now Ms. Upton delivered a bravado performance, clearing up confusion about discounted cash flow and how to price bonds, tossing out Christmas candy as rewards.

Like many other women, Kate Lewis, the school newspaper editor, believed in the deans’ efforts. But she thought Ms. Upton’s turn did more to fortify the image of women than anything administrators had done. “It’s the most powerful message: this girl knows it better than all of you,” she said.

Breaking the Ice

One day in April 2012, the entire first-year class, including Brooke Boyarsky, a Texan known for cracking up her classmates with a mock PowerPoint presentation, reported to classrooms for a mandatory discussion about sexual harassment. As students soon learned, one woman had confided to faculty members that a male student she would not identify had groped her in an off-campus bar months before. Rather than dismissing the episode, the deans decided to exploit it: this was their chance to discuss the drinking scene and its consequences. “They could not have gone any more front-page than this,” Ms. Boyarsky said later.

Everyone in Ms. Boyarsky’s classes knew she was incisive and funny, but within the campus social taxonomy, she was overlooked — she was overweight and almost never drank much, stayed out late or dated. After a few minutes of listening to the stumbling conversation about sexual harassment, she raised her hand to make a different point, about the way the school’s social life revolved around appearance and money.

“Someone made the decision for me that I’m not pretty or wealthy enough to be in Section X,” she told her classmates, her voice breaking.

The room jumped to life. The students said they felt overwhelmed by the wealth that coursed through the school, the way it seemed to shape every aspect of social life — who joined activities that cost hundreds of dollars, who was invited to the parties hosted by the student living in a penthouse apartment at the Mandarin Oriental hotel in Boston. Some students would never have to seek work at all — they were at Harvard to learn to invest their families’ fortunes — and others were borrowing thousands of dollars a year just to keep up socially.

The discussion broke the ice, just not on the topic the deans had intended. “Until then, no one else had publicly said ‘Section X,’ ” Mr. Batchu said. Maybe it was because class was easier to talk about than gender, or maybe it was because class was the bigger divide — at the school and in the country.

That was only one out of 10 sessions. At most of the others, the men contributed little. Some of them, and even a few women, had grown to openly resent the deans’ emphasis on gender, using phrases like “ad nauseam” and “shoved down our throats,” protesting that this was not what they had paid to learn.

Patrick Erker was not among the naysayers — he considered himself a feminist and a fan of the deans. As an undergraduate at Duke, he had managed the women’s basketball team, wiping their sweat from the floor and picking up their dirty jerseys.

But as he silently listened to the discussion, he decided the setup was all wrong: a discussion of a sex-related episode they knew little about, with “89 other people judging every word,” led by professors who would be grading them later that semester.

“I’d like to be candid, but I paid half a million dollars to come here,” another man said in an interview, counting his lost wages. “I could blow up my network with one wrong comment.” The men were not insensitive, they said; they just considered the discussion a poor investment of their carefully hoarded social capital. Mr. Erker used the same words as many other students had to describe the mandatory meetings: “forced” and “patronizing.”

That week, Andrew Levine, the director of the annual spoof show, was notified by administrators that he was on academic and social probation because other students had consumed alcohol in the auditorium after a performance. (His crime: dining with visiting family instead of staying as he had promised in a contract.) He was barred from social events and put on academic probation as well.

That was just what students needed to believe their worst suspicions about the administration. Ms. Frei had not made the decision about Mr. Levine and worked to cancel his academic probation, he said later, but students called her a hypocrite, a leadership expert who led badly. Hundreds of students soon wore T-shirts that said “Free Andy” or “Unapologetic.”

“Daddy, why are the students hating on you?” Mr. Nohria’s teenage daughters asked him, he told students later.

A few days before commencement, Nathan Bihlmaier, a second-year student, disappeared while celebrating with classmates in Portland, Me. He had last been seen so inebriated that a bartender had asked him to leave a pub. When the authorities told students that Mr. Bihlmaier’s body had been dredged from the harbor, apparently after a fall, Mr. Nohria and Ms. Moon were standing beside them.

The first year of their experiment was ending with a catastrophe that brought home how little sway they really had over students’ actions. Mr. Bihlmaier had not even been the drinking type. In the spirit of feminist celebration, Ms. Sandberg gave a graduation address at the deans’ invitation, but during the festivities all eyes were on Mr. Bihlmaier’s widow, visibly pregnant with their first child.

Amid all the turmoil, though, the deans saw cause for hope. The cruel classroom jokes, along with other forms of intimidation, were far rarer. Students were telling them about vigorous private conversations that had flowed from the halting public ones. Women’s grades were rising — and despite the open resentment toward the deans, overall student satisfaction ratings were higher than they had been for years.

A Lopsided Situation

Even on the coldest nights of early 2013, Ms. Frei walked home from campus, clutching her iPhone and listening to a set of recordings made earlier in the day. Once her two small sons were in bed, she settled at her dining table, wearing pajamas and nursing a glass of wine, and fired up the digital files on her laptop. “Really? Again?” her wife, Anne Morriss, would ask.

Ms. Frei been promoted to dean of faculty recruiting, and she was on a quest to bolster the number of female professors, who made up a fifth of the tenured faculty. Female teachers, especially untenured ones, had faced various troubles over the years: uncertainty over maternity leave, a lack of opportunities to write papers with senior professors, and students who destroyed their confidence by pelting them with math questions they could not answer on the spot or commenting on what they wore.

“As a female faculty member, you are in an incredibly hostile teaching environment, and they do nothing to protect you,” said one woman who left without tenure. A current teacher said she was so afraid of a “wardrobe malfunction” that she wore only custom suits in class, her tops invisibly secured to her skin with double-sided tape.

Now Ms. Frei, the guardian of the female junior faculty, was watching virtually every minute of every class some of them taught, delivering tips on how to do better in the next class. She barred other professors from giving them advice, lest they get confused. But even some of Ms. Frei’s allies were dubious.

At the end of every semester, students gave professors teaching scores from a low of 1 to a high of 7, and some of the female junior faculty scores looked beyond redemption. More of the male professors arrived at Harvard after long careers, regaling students with real-life experiences. Because the pool of businesswomen was smaller, female professors were more likely to be academics, and students saw female stars as exceptions.

“The female profs I had were clearly weaker than the male ones,” said Halle Tecco, a 2011 graduate. “They weren’t able to really run the classroom the way the male ones could.”

Take the popular second-year courses team-taught by Richard S. Ruback, a top finance professor, and Royce G. Yudkoff, a co-founder of a private equity firm that managed billions of dollars. The men taught students, among other lessons, how to start a “search fund,” a pool of money to finance them while they found and acquired a company. In recent years, search funds had become one of the hottest, riskiest and most potentially lucrative pursuits for graduates of top business schools — shortcuts to becoming owners and chief executives.

The two professors were blunt and funny, pushing a student one moment, ribbing another one the next. They embodied the financial promise of a Harvard business degree: if the professors liked you, students knew, they might advise and even back you.

As Ms. Frei reviewed her tapes at night, making notes as she went along, she looked for ways to instill that confidence. The women, who plainly wanted to be liked, sometimes failed to assert their authority — say, by not calling out a student who arrived late. But when they were challenged, they turned too tough, responding defensively (“Where did you get that?”).

Ms. Frei urged them to project warmth and high expectations at the same time, to avoid trying to bolster their credibility with soliloquies about their own research. “I think the class might be a little too much about you, and not enough about the students,” she would tell them the next day.

By the end of the semester, the teaching scores of the women had improved so much that she thought they were a mistake. One professor had shot to a 6 from a 4. Yet all the attention, along with other efforts to support female faculty, made no immediate impact on the numbers of female teachers. So few women were coming to teach at the school that evening out the numbers seemed almost impossible.

As their final semester drew to a close, the students were preoccupied with the looming question of their own employment. Like graduates before them, the class of 2013 would to some degree part by gender after graduation, with more men going into higher-paying areas like finance and more women going into lower-paying ones like marketing.

Ms. Navab, who had started dating one of the men — with an M.D. and an M.B.A. — from the Ethiopian dinner, had felt freer to focus on her career once she was paired off. She was happy with her job at a California start-up, but she pointed out that she and some other women never heard about many of the most lucrative jobs because the men traded contacts and tips among themselves.

This was the lopsided situation that women in business school were facing: in intellectual prestige, they were pulling even with or outpacing male peers, but they were not “touching the money,” as Nori Gerardo Lietz, a real estate private equity investor and faculty member, put it. A few alumnae had founded promising start-ups like Rent the Runway, an evening wear rental service, but when it came to reaping big financial rewards, most women were barely in the game.

At an extracurricular presentation the year before, a female student asked William Boyce, a co-founder of Highland Capital Partners, a venture capital firm, for advice for women who wanted to go into his field. “Don’t,” he laughed, according to several students present. Male partners did not want them there, he continued, and he was doing them a favor by warning them.

Some women protested or walked out, but others said they believed he was telling the truth. (In interviews, Mr. Boyce denied saying women should not go into venture capital, but an administrator said student complaints prompted the school to contact the firm, which he had left decades before.)

The deans had not focused on career choice, earning power or staying in the work force; they felt they first needed to address campus issues. Besides, the earning gap posed a dilemma: they were hoping fewer students would default to finance as a career. “Have the courage to make the choices early in your life that are determined by your passions,” Mr. Nohria told students.

Plenty of women had taken Mr. Ruback and Mr. Yudkoff’s classes on acquiring and running businesses, including Ms. Upton, who had delivered the crackerjack finance presentation. She counted 30 to 40 classmates planning search funds, all men except for a no-nonsense engineer named Jennifer Braus. The professors eventually decided to finance and advise Ms. Braus, hoping other Harvard women would follow.“Nothing succeeds like success,” Mr. Ruback said.

Ms. Upton decided to take a far lower-risk job managing a wealthy family’s investments in Pittsburgh, where her fiancé lived. “You can either be a frontier charger or have an easier, happier life,” she said.

Looking Ahead

Of all the ceremonies and receptions during graduation week, the most venerated was the George F. Baker Scholar Luncheon, for the top 5 percent of the class, held in a sunny dining room crowded with parents who looked alternately thrilled and intimidated by what their offspring had achieved.

In recent years, the glory of the luncheon had been dimmed by discomfort at the low number of female honorees. But this year, almost 40 percent of the Baker scholars were women. It was a remarkable rise that no one could precisely explain. Had the professors rid themselves of unconscious biases? Were the women performing better because of the improved environment? Or was the faculty easing up in grading women because they knew the desired outcome?

“To my head, all three happened,” Professor Piskorski said. But Mr. Nohria said he had no cause to think the professors had used the new software, and the subjective participation scores, to avoid gender gaps. “Sunshine is the best disinfectant,” he said, a phrase that he said had guided him throughout his project.

One of the Baker scholars was Ms. Boyarsky, the classroom truth-teller. Two hours after the luncheon, she stepped up to a lectern to address thousands of graduates, faculty members and parents. Of the two dozen or so men and only 2 women who had tried out before a student committee, she had beaten them all, with a witty, self-deprecating speech unlike any in the school’s memory.

“I entered H.B.S. as a truly ‘untraditional applicant’: morbidly obese,” she said.

The theme of her speech was finding the courage to make necessary but painful changes. “Courage is a brand new H.B.S. professor, younger than some of her students, teaching her very first class on her very first day,” she said. “Courage is one woman” — the one who reported the groping episode — “who wakes the entire school up to the fact that gender relations still have a long way to go at H.B.S.”

And, Ms. Boyarsky continued, she had lost more than 100 pounds during her final year at Harvard. “Courage was then me battling the urge to be defensive — something I believe I had been for a long time about this particular issue — and taking a hard, honest look within myself to figure out what had prevented change,” she said.

Even before she finished, her phone was buzzing with e-mails and texts from classmates. She was the girl everyone wished they had gotten to know better, the graduation-week equivalent of the person whose obituary made you wish you had followed her work. She had closed the two-year experiment by making the best possible case for it. “This is the student they chose to show off to the world,” Ms. Moon said. For the next academic year, she was arranging for second-year students to lead many of the trickiest conversations, realizing students were the most potent advocates.

The administrators and the class of 2013 were parting ways, their experiment continuing. The deans vowed to carry on but could not say how aggressively: whether they were willing to revise the tenure process to attract more female contenders, or allow only firms that hired and promoted female candidates to recruit on campus. “We made progress on the first-level things, but what it’s permitting us to do is see, holy cow, how deep-seated the rest of this is,” Ms. Frei said.

The students were fanning out to their new jobs, full of suspense about their fates. Because of the unique nature of what they had experienced, they knew, every class alumni magazine update and reunion would be a referendum on how high the women could climb and what values the graduates instilled — the true verdict on the experiment in which they had taken part.

As Ms. Boyarsky glanced around her new job as a consultant at McKinsey in Dallas, she often noticed that she was outnumbered by men, but she spoke up anyway. She was dating more than she had at school, she added with shy enthusiasm.

“I am super excited to go to my 30th reunion,” she said.

Student Loans Are No Longer Coming From JPMorgan Chase

Story first appeared in USATODAY.

JPMorgan Chase is exiting the student loan business as more families opt for government-backed loans, which are generally cheaper and have more protections.

The New York bank had already been scaling back its role in student lending. In the spring of 2012, it stopped making student loans to borrowers who weren't already Chase customers.

Chase made just $200 million in student loans last year, down from $6.9 billion in 2008.

The lender said Thursday that it won't accept student loan applications after Oct. 12.

In a memo to colleges, Chase noted it would continue to work with students, co-signers and schools to process loan applications received before that date. It also asked administrators to schedule all final loan disbursements before March 15.

"We just no longer see meaningful growth in this market and have decided to invest our resources in our other business, like auto lending, where we do see some real future potential," said Trish Wexler, a JPMorgan Chase spokeswoman, in an interview.

The bank had 12,500 customers with Chase student loans last year, a fraction of the 56 million people that it counts as consumers.

"So this really has become a very small part of our portfolio," Wexler said.

Wexler noted that many students have been increasingly relying on government-backed education loans, a trend that's reduced the private market for student loans by 75% in the last five years. Private student loans issued by banks tend to have higher, variable interest rates than the loans issued by the U.S. Department of Education. They also do not come with the same guaranteed protections, such as deferment for unemployment or economic hardship.

Other major lenders continue to offer education loans, including Discover Financial Services, which saw its private student loans grow 5 percent from a year earlier in the April-June quarter. Sallie Mae, formally named SLM Corp., has seen an increase in demand for student loans as higher education costs continue to rise.

JPMorgan shares ended regular trading up 24 cents at $52.11.

Tuesday, September 3, 2013

Verizon, Vodafone in advanced talks for $130B deal

Story originally appeared on USA Today.

Vodafone said Sunday it is in advanced talks to sell its 45% stake of Verizon Wireless to Verizon Communications for $130 billion in cash and stock.

Verizon, a telecom giant that offers Internet, TV and phone service, owns 55% of Verizon Wireless and has wanted to buy the rest for years. "There is no certainty that an agreement will be reached. A further announcement will be made as soon as practicable," Vodafone said in a statement.

At $130 billion, the deal would be the third largest mergers and acquisition transaction ever and would boost worldwide telecom deals to $224.3 billion this year, according to Thomson Reuters. Currently, the telecom deals that have been announced worldwide total $94.3 billion, up 28% from the same period last year.

Verizon's desire to fully own the wireless unit by buying the 45% stake it doesn't own has intensified in recent years as consumers' demand for all things mobile grows unabated. Meanwhile, Vodafone's revenue has been declining, prompting the U.K.-based telecommunications company to seek cash and focus on operations in Europe and emerging markets.

While nearly all adults in the U.S. carry a mobile phone, demand for other home devices that may require wireless connections — such as tablets, thermostats, refrigerators, home security equipment and cameras — is growing.

In responding to the trend, U.S. wireless carriers have rolled out data-sharing plans that can be accessed by all family members, and they will make up for the losses in voice and text revenues.

"Even in the saturated market, (Verizon Wireless) continues to post growth figures," said Bill Menezes, an industry analyst at research firm Gartner. "They don't even post average revenue per user numbers anymore. They post average revenue per account. They're looking at a world where growth is coming from these ancillary devices."

Verizon Wireless was formed in 2000 after what was then Bell Atlantic formed a joint venture with Vodafone for a wireless carrier service in the U.S. During the formation of the wireless venture, Bell Atlantic merged with GTE to form Verizon Communications.

The two companies were close to a deal in April but couldn't pull the trigger, analysts said. When the two companies were negotiating in April, analysts said Verizon was looking to pay about $100 billion for the stake, while Vodafone was holding out for about $130 billion.

But favorable conditions in the financing market could be pushing Verizon to pick up its pace. "Interest rates are going up and that could be the driver," said Roger Entner, a wireless industry analyst at Recon Analytics. "Financing the deal becomes increasingly expensive. Verizon might be willing to give a little more in expectation of higher rates."

Still, the $130 billion valuation for a 45% stake — or eight times the company's earnings before interest, taxes and other items — may be too high for Verizon shareholders, according to Christopher King, an analyst at Stifel Nicolaus. "It's an attractive valuation for Vodafone," he said. "If I were (Vodafone), I wouldn't want to sell it for less than that."

The rate of mobile device adoption is slowing from its early years in the U.S., but seizing full control of the largest U.S. carrier would give Verizon multiple strategic options for future growth.

In the most recent quarter, Verizon Wireless' service revenue grew 8.3% year-over-year as the total number of connections exceeded 100 million. Its 4G LTE coverage — the fastest data network type available in the U.S. — is available in 500 markets across the U.S.

Once Verizon can bring Verizon Wireless fully under its umbrella of operations, it can integrate the wired and wireless units more deeply, particularly in back-end operations and IT systems, Entner said. "They can also seamlessly bundle the bill. They can do more joint marketing," he said.

Verizon set up its "Enterprise Solutions" unit to target business customers, but the limited ownership of the wireless service has kept it in check, Menezes said. "They can offer more unified offerings. It took a long time to structure (the enterprise unit). In talking to businesses, customers say they still have to talk to two different companies," he said.

Verizon Wireless has plans to expand into Canada by buying the rights to some of the country's wireless airwaves, or spectrum, but having to continuously report to Vodafone - which is looking to narrow its market focus to Europe and other emerging areas - could complicate matters, he said.

Vodafone has its own share of financial issues that are driving the decision to unload the share. The company's service revenue fell 3.5% in the most recent quarter, and "there's a lot of pressure" to reassess its priorities on where to expand and shrink business exposure, said Chetan Sharma, an independent wireless industry analyst in Seattle. "They have more incentives to make a deal," he said. "If the economic conditions in Europe were better, it'd have let (its stake in Verizon Wireless) continue to grow. But it needs to consolidate its core markets."

Meanwhile, the competitive landscape in the wireless industry is shifting as smaller competitors tighten their operations, introduce aggressively low pricing and seek out deals to combat larger carriers.

In June, Japan's Softbank paid $21.6 billion to buy 78% of Sprint, giving the Overland Park, Kan.-based company a much-needed cash infusion to grow its wireless network and greater bargaining leverage against phone makers.

T-Mobile struggled for years as the fourth largest carrier in the U.S., but its business outlook has brightened in recent months following the acquisition of MetroPCS this year that added about 9 million customers.

T-Mobile said in August that it added 1.1 million customers in the second quarter (after accounting for those who dropped the service). Its post-paid plans, considered the most profitable part of the wireless business, drew 688,000 new customers during the quarter.

Can Kodak reinvent itself after bankruptcy?

Story originally appeared on USA Today.

The iconic company has a strategy to change its fortunes, but its prospects remain uncertain.

ROCHESTER, N.Y. -- It looks like a magic trick. A sheet of ordinary office paper rotates rapidly on a spinning drum. In literally the blink of an eye, the sheet is covered in black text, using drops of ink measured in picoliters — a picoliter being a millionth of a millionth of a liter.

Eastman Kodak Co. scientists are tinkering with the technique, called Stream Inkjet Technology, to improve performance. Nearby, scientists are working on further perfecting SquareSpot laser-writing technology and potentially toward breakthroughs in spatial atomic layer deposition, bonding an atomic-level layer of film onto the contours of a surface.

Done right, such work could find its way into even higher-speed printing presses and products such as foldable smartphones, a new generation of solar cells and wearable gadgets that monitor vital signs.

More immediately, the hope is that this kind of technology can save a 121-year-old company emerging from 20 months of bankruptcy this week.

The question of whether Kodak can succeed will take years to answer. But, sink or swim, the company is now officially entering its next era with a much smaller workforce, dramatically cut costs and a narrower focus on a specific set of markets and offerings.

The new old technology

Stripped to its basics, the company has always been one of the world's foremost experts at coating. It became a household name by layering a plastic base with light-sensitive chemicals and selling it in little yellow boxes by the billions. Essentially, Kodak's plan for survival is to continue putting stuff atop other stuff.

Kodak has bet its immediate survival in part on commercial printing. But for tomorrow, it has that atomic layer research and other similar technology, bonding microscopically thin materials to surfaces.

It's a fitting technology for Kodak. For the company that brought photography to the masses, smartphones and computer tablets were too rich a realm to pass up.

The company has signed agreements with Kingsbury Corp. and Uni-Pixel Inc. to churn out miles worth of thin sheets of touch sensors at Eastman Business Park in Rochester to be used in screens of consumer electronic devices. The touch-sensor module market is expected to reach $32 billion by 2018, according to Kodak.

Likewise, Kodak wants to turn semiconductor production on its head. Today, making these building blocks of virtually all digital products is an onerous, laborious process. Big, industrial clean rooms are needed, with work done in sterile vacuum chambers. The staff is often covered head to toe in special protective clothing to eliminate the chance of even the slightest mote of contamination or dirt.

A breakthrough in spatial atomic layer deposition could fundamentally change how semiconductors are produced, essentially "printing" them onto circuit boards and eliminating the need for those vacuum chambers.

'On the top' in printing

When Mercury Print Productions Inc. of Rochester installed its first Kodak Prosper press in April 2011, "it was a train wreck," said company President Christian Schamberger. "They were on the bottom on image quality."

But then came a series of upgrades and new inks. "Now," he said, "they're on the top."

Kodak today often sends prospective customers to Mercury to see the Prosper technology in action; Mercury has two Prosper presses for its textbook and educational material printing work. Mercury owner John Place is hoping that Kodak will further formalize its relationship with Mercury, making it a test site for new Kodak printing technology.

"They need someone like that," Place said. "That's one of the problems Kodak's always had. They've got to give (prospective customers) a wow experience. They need a partner to show a wow experience. They're very bad at that. They're very good at technology, but bringing it to the market …"

Added Schamberger, "We always joke, they've been a company of engineers. They just don't know how to market it."

However, Place said, Kodak's technology is good enough to ensure its survival in the commercial printing industry. "They're really the top in a lot of areas," Place said. "They're positioned very well for the future."

Even if the company itself stumbles and falls, he added, "I think their technology is that good; somebody will buy it out."

And as functional printing — layering materials, not ink — becomes a bigger part of Kodak, Place said he sees it becoming a bigger part of Mercury's business. "We're going to hook right onto Kodak and be their guy."

While it has banked for some years on its high-speed inkjet printing presses to be one of its success stories, sales have not been inspiring. Kodak last year had only about 5 percent of the market, according to industry watcher Infotrends.

And in such realms as black-and-white digital presses and toner color presses, Kodak also lags well behind such competitors as Xerox Corp., Hewlett-Packard Co., Ricoh Co. Ltd. and Canon Inc. in market share, according to Infotrends.

The printing industry itself is in the midst of a steep decline. Commercial printing in the United States in 2012 was a $78 billion industry — down more than 20 percent from a 2001 peak of $101 billion, according to the National Association for Printing Leadership. Consider that Xerox has seen its traditional printing technology business eclipsed by its foray into business services, which now accounts for more than half of the company's sales.

Even if the print market is declining, Kodak Chief Technology Officer Terry Taber said, the digital printing portion is growing. "We're well-positioned for that transformation," he added.

In printing, particularly the high-speed inkjet world, "I think it's their market to lose," said Frank Romano, professor emeritus at Rochester Institute of Technology's School of Print Media. Kodak has sold many digital inkjet printheads that attach onto traditional, non-digital printing presses. "They're ahead of most of their competition because of their experience in inkjet."

Big plans

If all of Kodak's plans pan out, it will stop a slide in revenues that dates back to 2005 — the last year Kodak grew. Kodak projections have it bottoming out this year with sales of $2.5 billion, and then slowly growing to $3.2 billion in 2017.

And by one measure of profitability, Kodak expects to be in the black this year after two consecutive years of losses, and then grow from there. That growth, the company told U.S. Bankruptcy Court, is expected to be the result "of both Kodak's increase in the installed base of new products introduced in the last four years ... plus a strong focus on new growth markets and new product introductions that drive higher gross profits, as well as the concerted actions to reduce corporate cost structure."

Post-bankruptcy, "Kodak is not for the most part a big revenue growth story at all," testified David Kurtz, global head of the Restructuring Group of Lazard Frères & Co. LLC, one of Kodak's bankruptcy consultants, in U.S. Bankruptcy Court last month. But where the company does expect to see big growth is in its cash flow through tighter control of expenses and as it shifts its business mix, Kurtz said.

However, the company has a lengthy history of promising that it's finally turned the corner and starting next year, things are going to be better. In early 2011, CEO Antonio M. Perez told a crowd of financial analysts that 2012 would be a profitable year for Kodak. "It's almost inevitable we get to that point (of sustained profitability). This is going to happen."

Perez, who has been in charge since 2005, has announced plans to step down within the next 12 months, though he will remain as a paid consultant. He declined requests to be interviewed for this special report.

That printing-centric strategy is one of Perez's key legacies, one he latched onto when he came to Kodak in 2003 and saw the inkjet technology the company had in its labs, said Art Roberts, head of the Kodak retiree group EKRA Ltd. And the strategy largely reversed steps Kodak took in the 1990s that jettisoned printing from the mainstream of Kodak as the company was expanding its presence in China with photographic film and paper plants, Roberts said.

Kodak has argued that bankruptcy gave it the ability to essentially catch its breath and unload a variety of costs — including retiree health care coverage and some pensions — and it is ready to soar. Now comes the challenge of taking that revamped and slimmed-down Kodak and making it into something the old Kodak has not been for years: consistently profitable.

Confidence and doubt

"I'm not sure my job will change" with the end of bankruptcy, said Pablo C. Biggs, who was hired in fall 2011, just a couple of months before the bankruptcy, to oversee strategic alliances and partnerships for Kodak's business solutions and services group. But, he added, "I think it'd be a good place to have a long-term opportunity."

Even though Kodak has made big changes, it's not automatic that it will be successful this time.

At least statistically speaking, it's not inconceivable that Kodak might end up in Chapter 11 bankruptcy again in a few short years. According to the University of California at Los Angeles LoPucki Bankruptcy Research Database, roughly one in five companies ends up back in bankruptcy in five years.

While a court approving a reorganization plan, as happened with Kodak on Aug. 20, is supposed to be an indicator that the company is on solid financial ground, "I think what happens frequently is that in the reorganization process, the underlying pathology that led the debtor to Chapter 11 in the first place has not really been rectified," said Robert Rock, senior counsel with the bankruptcy practice at Tully Rinckey PLLC.

"The core problem Kodak had was that its core business no longer existed," Rock said. "Nobody uses film anymore. My suspicion is that Kodak has a very good chance of succeeding because its underlying pathology ... was abundantly obvious and has been dealt with. The question becomes, is what is left independently economically viable?"

Moody's Investors Service in July was fairly pessimistic as it rated the odds of Kodak defaulting on its various bonds.

While printing gives Kodak "the most promising opportunity to resume revenue growth," its future is also tied to an ongoing decline of printed materials, Moody's said. And while Kodak has slashed billions of dollars worth of liabilities, "there is limited visibility in whether the company has sufficiently stabilized its operations and cut expenses … to stem further weakening of its financial obligation."

"Jack Welch, the very successful CEO of General Electric, had a rule of thumb of GE that if you can't be number one or number two in market share, you're not going to be successful," said retired Kodak Vice President Terry Faulkner. "That's going to be the problem (for Kodak) as I see it. It will be limited on its resources; how is it successfully going to compete with these other (commercial printing) companies that are much larger and much richer?"

But Kodak also has its champions who see big potential and opportunities.

David King McMullin, president of WhiteSand Research LLC, an investment firm that specializes in companies in bankruptcy and turnaround, said that while Kodak faces competitive challenges in its business-to-business strategy, its recent cost-cutting should help its business focus. "Should the newly appointed CEO effectively execute the company's go-forward business plan, we believe Kodak would have nearly all the necessary ingredients needed for success — a patent-differentiated business model ... growth prospects, a streamlined cost structure and a well-capitalized balance sheet."

EKRA's Roberts said that if anything gives retirees confidence in the company's future, it's that different investment groups bought the IOUs of unsecured creditors at more than what Kodak was going to pay — the implication being that those investment groups wanted the IOUs because it gave them a way of buying stock in the new Kodak before it begins trading openly.

"There's some analysis these places are doing that says there's value, and they've got access to a lot deeper kinds of analysis than any one of us do," Roberts said. "If they're saying, 'We're willing to buy (one of those IOUs) for 17 cents or 18 cents on the dollar' … while Kodak is saying the claims are going to be paid out at about 5 percent ... there are some financial markets that are valuing Kodak. So that would say to me they don't look at it as a fool's errand or else their jobs are in jeopardy. That gives you a little confidence, a little wind in your sail, if you will."

Always a challenge

Even in promising technology, the challenge for Kodak and its partners Kingsbury and Uni-Pixel is that a number of other companies — such as an old film nemesis, FujiFilm — also are looking at that touch-sensor market, said Kingsbury CEO Bill Pollock. But given the potential size of that industry, he said, "Neither of us is going to dominate. We want very much to succeed, so we want Uni-Pixel to succeed."

As far as Kodak's Taber is concerned, the company is ready for its comeback story. "We believe in what we're doing. We have creative, innovative people. We have strong technology platforms. We've been able to maintain and encourage and motivate (during the bankruptcy), and that passion is going to be unleashed."

The latest generation of Kodak employees is trying to focus on the potential, not the pain of downsizing and lost glory. Maria Celeste "Cel" Tria of Greece started with Kodak in the summer of 2011 as a research scientist specializing in functional printing.

At the time, the company already was dealing with growing rumors about its potential insolvency. And the bankruptcy definitely "dampened the mood," she said.

"At first I was worried. But the way I see how we've progressed during the bankruptcy ... and we have the right direction and focus. Now I can really see the brighter future."

D.C. still has worst drivers; who has the best?

Story originally appeared on USA Today.

A new report finds America's safest drivers are in Fort Collins, Colo., while the least-safe are in the nation's capital.

In the 2013 edition of Allstate Insurance's annual Allstate America's Best Drivers Report, the Colorado city about 65 miles north of Denver earns the safest title among the 194 cities ranked.

The insurer says its study found drivers in Fort Collins should average 13.9 years between collisions, which is 28.2% less likely than the national average. Boise, Idaho; Sioux Falls, S.D.; Brownsville, Texas; and Madison, Wis., round out the top five best-driver cities, with accident frequency ranging from 12.5 years to 13.9 years.

"We know that about the national average for the time a driver has [an accident] is about every 10 years," Allstate spokeswoman Kate Hollcraft told us. "We're looking at drivers in all of those cities as compared to the national average."

Fort Collins was No. 3 in Allstate's 2012 report, but it held the top spot in 2010 and 2011 — and placed second from 2006 to 2009.

By contrast, Washington, D.C., had the worst drivers in the 2013 report, with a predicted average of just 4.8 years per driver between accidents. That's 109.3% higher than the national average.

A slew of East Coast cities — among them Baltimore, Philadelphia, New York City, Providence, R.I., and Newark, N.J. — ranked in the bottom 25.

The nation's capital has harbored the worst drivers from 2008 to 2012, according to Allstate. In fact, in the study's nine years, Washington ranked last all but twice.

"They've got a lot of people and a lot of cars in a small space," Hollcraft said. "There are always a lot of factors that go into [the rankings], so we can't say that it's one or two. But there's absolutely something to be said for cities that are more compact or more densely populated."

Still, sprawling Southern California had a few cities among Allstate's bottom 25, including Los Angeles and two suburbs (Fullerton and Glendale). Perhaps traffic promotes bad driving. Traffic information provider INRIX named Los Angeles the country's most-traffic congested city in 2013. And six of INRIX's most congested 10 cities ranked in the bottom 35 of Allstate's study.

Allstate says it excluded all of Massachusetts due to limited data availability, so we don't know how Boston — INRIX's 10th most congested city — rates. The insurer claims to have about 10% of all U.S. auto insurance policies. It based the study on two years' data to minimize the effects of phenomena like a bad winter or a long summer construction season, and the list reflects weighted averages of property-damage claims.

"Damage [is] not necessarily to property but to the car," Hollcraft said. The insurer weeded out theft or incidental damage, like a tree branch falling on a parked vehicle, "so we're really looking at someone's driving habits."

Top 10 disappearing jobs in the U.S.

Story originally appeared on Freep.

Because of a major decline in jobs during the recession, the number of nonfarm workers is up just 5% the past 10 years. While the past decade's painful recession and the slow job growth that has followed have negatively affected most Americans, certain occupations have experienced job losses that were especially severe.

24/7 Wall St. compared employment figures published by the Bureau of Labor Statistics (BLS) for hundreds of occupations from May of 2002 and May 2012. In that time, the estimated number of advertising and promotions managers fell by nearly two-thirds. Because of the housing crisis, many occupations in the construction sector were disproportionately hurt, while many manufacturing trades lost jobs due to structural changes in the economy. These are America's disappearing jobs.

According to Martin Kohli, chief regional economist for the BLS, "most of these occupations were concentrated in industries that hemorrhaged jobs during the Great Recession and have not yet bounced back to their job levels of 2002."

This is the case in the construction industry where, according to a 2011 BLS study, 1.5 million jobs were lost from December 2007 to June 2009. This nearly 20% drop in construction-related jobs was the largest of any other major sector. Three of the five occupations with the largest decline in employment are in the construction sector, where job totals are still well below pre-recession levels.

The number of workers in other occupations has been greatly reduced because of technological improvements. Jobs in several manufacturing occupations have been made expendable because of advances in automation. For drilling and boring machine operators working with metals and plastics, as well as for textile workers, automation has helped contribute to a more than 50% decrease in jobs between 2002 and 2012. Work in several fields, including prepress technicians and computer operators, has also been cut by improved software and automation of processes that specialists once had to do by hand.

Several occupations on this list also have suffered from companies moving jobs abroad. U.S.-based semiconductor processors jobs fell by half between May 2002 and May 2012, partly because of the lower labor cost in other countries. Similarly, more than half of textile jobs were cut due to the combination of outsourcing and improved automation.

To determine the jobs with the highest percentage decline in employment, 24/7 Wall St. compared data from the BLS' Occupational Employment Statistics program for both 2002 and 2012. We included only jobs with an estimated 20,000 employees or more. The figures are estimates subject to sampling error and do not count self-employed workers. Data are collected by the program over several years. We considered only occupations that existed in both 2002 and 2012, and excluded any occupations split-up or consolidated between these periods. The textile workers occupation is a combination of two similar occupations listed by the BLS. The bulleted data is for one of these categories, but we make reference to both in the description. Further information on each occupation came from the Occupational Outlook Handbook and O*Net OnLine.

10. Semiconductor processors

> 10-year job decline: -22,250, 51%

> Total employed (2012): 21,380

> Median annual pay (2012): $33,020

Semiconductor processors have a poor job outlook despite the steady growth in the use of electronic devices. Technology has allowed semiconductors to become too small to be built efficiently by human hands, and production has become more automated and less manual as a result. The high standard for cleanliness in semiconductor work environments also makes robots more desirable. Already, the number of processors shrank by more than 51% from an estimated 43,630 in 2002 to only 21,280 in 2012. Another reason for the job losses is outsourcing. This trend should continue as companies look to lower operating expenses.

9. Prepress technicians

> 10-year job decline: -47,950, 54%

> Total employed (2012): 41,420

> Median annual pay (2012): $37,260

Prepress technicians work primarily with print publications. But as more content is being consumed through online media, the printing industry has been shrinking and printing occupations have been on the decline. The bleak forecast, however, may be tempered by increased demand for print marketing and print logistics, which include labels, wrappers and packaging products, according to the BLS. Still, traditional prepress tasks can now be accomplished on word processors in advertising offices and public relations agencies and no longer need to take place at the printing press. The quantity of those employed has declined dramatically in the past decade, by more than 50%.

8. Word processors and typists

> 10-year job decline: -112,640, 54%

> Total employed (2012): 96,560

> Median annual pay (2012): $35,270

The number of word processors and typists declined by 54% between 2002 and 2012. While this wasn't the largest percentage drop, it translated to more than 100,000 jobs lost — the highest amount among the 10 disappearing jobs. Word processors spend a lot of their time typing and transcribing letters and other documents. Advances in computers and new technology, as well as the growing popularity of electronic business transactions, may make the administrative and support tasks associated with word processors and typists virtually obsolete. Additionally, many office workers today are very familiar with word processing software.

7. Textile knitting and weaving machine setters, operators and tenders

> 10-year job decline: -28,300, 57%

> Total employed (2012): 21,110

> Median annual pay (2012): $26,540

Textile knitting and weaving machine workers are primarily employed to set up, monitor and operate machines used in the manufacturing of textile products. Decreases in textile worker employment have been largely the result of advancements in manufacturing technology, in addition to the growing tendency to outsource production activity to countries with cheaper labor, according to the BLS. However, while many Americans have blamed the low cost of labor abroad for the loss of such manufacturing jobs, a recent report from the McKinsey Global Institute noted that the majority of manufacturing jobs lost between 2000 and 2010 were due to increases in productivity.

6. Computer operators

> 10-year job decline: -101,080, 59%

> Total employed (2012): 71,560

> Median annual pay (2012): $38,390

Computer operators refers in general to individuals who operate computer terminals and are responsible for monitoring data processing systems. Workers in this occupation must ensure the machines they work with are functioning properly, which involves checking and responding to error messages, as well as recording and documenting problems. However, the number of workers in these fields is declining because automation and improved computing reduce the need for dedicated operators, according to the BLS.

5. Brickmasons, blockmasons, stonemasons, tile and marble setters — helpers

> 10-year job decline: -36,430, 60%

> Total employed (2012): 24,310

> Median annual pay (2012): $28,220

Helpers for contractors work in the construction sector and are typically employed to assist in at least one or more phases of a construction project, ranging from laying the building foundation to applying the finishing touches. Typically, they work under masons and setters, but perform tasks that require less skill. These helpers are one of the occupations that have been extremely damaged by the housing crisis. According to two of the nation's most widely followed home price indices, the S&P/Case-Shiller 20-City Composite and the Federal Housing Finance Authority's House Price Index, home prices still remain well below pre-crisis levels.

4. Drilling and boring machine tool setters, operators, and tenders, metal and plastic

> 10-year job decline: -31,070, 60%

> Total employed (2012): 20,660

> Median annual pay (2012): $33,940

According to the BLS, drilling and boring machine workers "set up, operate, or tend drilling machines to drill, bore, ream, mill, or countersink metal or plastic work pieces." Such jobs often require knowledge of the properties of specific types of metals and plastics, so that materials are fed to the machine at the proper speed and cut to the necessary specifications. However, an increase in automation likely has contributed to declines in employment of these occupations. In the 10 years ending in May 2012, the number of workers handling such machines has fallen from an estimated total of more than 50,000 to just over 20,000.

3. Plasterers and stucco masons

> 10-year job decline: -33,250, 61%

> Total employed (2012): 21,040

> Median annual pay (2012): $37,130

Plasterers and stucco masons apply coating to walls and other surfaces for decorative and functional purposes. Because plasterers and stucco masons work in the construction sector, "workers in this trade can expect periods of unemployment when the overall level of construction falls," according to the BLS. Unfortunately, home construction plunged during the housing crisis, and new housing starts — a measure of the volume of construction nationwide — remain well below historical levels. However, employment in these occupations may rise as construction activity recovers, the BLS notes.

2. Carpenters' helpers

> 10-year job decline: -62,030, 63%

> Total employed (2012): 35,870

> Median annual pay (2012): $25,550

Carpenters' helpers assist in cutting timber and lumber, setting up scaffolding and smoothing surfaces, among other roles. They help carpenters by generally performing lower-skilled tasks. There were close to 98,000 carpenters' helpers in 2002, but by May 2012, that number had fallen to less than 36,000. In that time, the number of carpenters also fell considerably. The estimated number of carpenters in 2012 was 34% lower than the estimated number for 2002. Jobs for carpentry workers were decimated by the housing crisis, and they may recover if the housing market improves and home building returns to pre-recession levels.

1. Advertising and promotions managers

> 10-year job decline: -52,670, 65%

> Total employed (2012): 28,420

> Median annual pay (2012): $88,590

No occupation has lost a higher proportion of its jobs than advertising and promotions managers. Such managers help determine the media in which to advertise, conduct market research and help plan advertising campaigns. Likely a major factor in the decline of such positions has been the decline of advertising in print media, such as newspapers, according to the BLS. Kohli added, "during the recession, advertising for cars and many durables plummeted, and this contributed to [job] losses" in both print publishing and advertising.