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On the program today, the high and the low ends of retail. And more power to the power grid. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Monday today, the 19th of August. Good as always to have you along, everybody. Hey, so you're going to listen, right? To the speech? The one laying out our future? What's in store? Where this country and this economy might be going?
I mean, I know it's not till Friday, but oh, wait, sorry. You thought I meant the speech tonight from President Biden or Thursday from Vice President Harris?
I mean, all right. Watch them if you want. I, however, am talking about Fed Chair Jay Powell's speech Friday at its big symposium in Jackson Hole, Wyoming. It will be, I tell you, a time for maximum tea leaf reading as we all try to figure out what's in store for interest rates come the central bank's September meeting. No offense to politicians or political reporters intended, by the way.
A corporate headline now to give us some insights into a slice of the global economy that has been doing pretty well the past couple of years. Estee Lauder reported this morning that sales for the fiscal year just ended were off from the year prior. The high-end cosmetics company is facing a slowdown in both mainland China and North America, noting on its earnings call today that it is dealing with, quote, global prestige volatility.
Marketplace's Stephanie Hughes spent some time today figuring out what that decreased spending on indulgences might mean for the global economy.
Sometimes you have to step back and ask yourself the really important questions in life. Is a $300 bottle of retinol cream better than a $200 bottle? Brian Spillane is an equity research analyst with Bank of America. That's a question being asked by some consumers in the U.S., as well as in China, where he says demand for luxury goods has been high for the past decade. Now, Estee Lauder's decline shows that may be changing.
It really demonstrates for the first time in a long time that the prestige beauty market and frankly, the luxury market in general in China has slowed. Spillane says luxury skincare and makeup did well overall when pandemic lockdowns ended. But now with the price of everything up, consumers globally are reassessing whether they can keep spending that kind of money. Right.
I can't afford this. You know, like this was great, but it's more discretionary than it may be for other people. Chinese consumers have good reason to pull back on luxuries these days, says Jie Hizheng, a professor of fashion and apparel studies at the University of Delaware. Their unemployment rate is quite high now. So many people are looking for jobs. And of course, that affects consumption.
Jung says Chinese consumers are buying some high-end items secondhand. That doesn't work so well for makeup. So they're looking for domestic options. You know, maybe they can buy the same type of product at a much more reasonable price.
So what does all this tell us about lipstick sales as an economic indicator? I do think the lipstick economy is real, right? Susan Scafidi is founder of the Fashion Law Institute at Fordham. But she says these days people might be adjusting their idea of what a luxury lipstick is. But maybe you'll just buy the one at the drugstore as opposed to the one at the beauty counter in the department store. And when people stop buying luxury brands, Jiehi Zheng at the University of Delaware points out, it creates a kind of reverse peer pressure.
When people don't see others buying the latest and greatest, they don't feel the need to either. I'm Stephanie Hughes for Marketplace. On Wall Street on this Monday, perhaps not luxury brands, but traders were indeed in a buying mood. We'll have the details when we do the numbers. With technology and all of its conveniences comes a challenging reality.
With our increasingly digital economy, we need more and more electrical power, about which some good news.
It comes to us from the Department of Energy and its preliminary monthly electric generator inventory, which reported today that the U.S. electricity grid added more than 20 gigawatts of generation capacity in the first half of this year. That's about 20 percent more than was added in the first half of last year. And more than half of the new capacity is from solar. Most of the rest is battery storage and wind power and electricity.
The Energy Information Administration says it expects another 42 gigawatts to be added in the second half of this year. Now, is that going to be enough?
We asked Marketplace's Samantha Fields to find out. For much of the last 20 years, demand for electricity in the U.S. was actually relatively flat because a lot of things were getting more efficient. But Kyrie Baker at the University of Colorado Boulder says now... We have all these new technologies like electric vehicles and people using more AI models and data center training. ...which all use a lot of electricity.
As demand has increased, power companies have been adding more capacity to the grid. But, Baker says, Is it enough? Uh, not really. Part of the issue is that even as companies are adding new solar and wind projects to the grid, they're also taking old power plants, namely coal, offline. And, One gigawatt of solar is not the same as one gigawatt of coal or gas capacity.
Eric Gimont at the think tank Energy Innovation says that's because solar panels only generate energy when it's sunny and wind turbines only when it's windy. Still, lots of new projects are getting built and... We're in a good position right now, but we need to do more to get ready because we're going to probably go through several decades of steady need for growth. Finding the space to build all these new projects and building more transmission lines are two key pieces of the puzzle.
And Jesse Jenkins at Princeton says another is getting consumers to shift their electricity usage. For example, I have an electric vehicle that I bought a couple years ago. You know, that's a big new increase in electricity demand in my household. But my utility offers me an incentive program such that it's about 60 percent less expensive if I charge on nights and weekends. When there's less demand on the grid, he says that can also make a big difference.
And Paul DeBar at Columbia's Center on Global Energy Policy says for all the challenges that come with increasing electricity demand... It's because things are growing in the country, and that's generally a positive thing. You're seeing environmental improvement. You're seeing economic growth that needs electricity. And he says that is good news for job creation, for productivity, and for the economy. I'm Samantha Fields for Marketplace. ♪
There are very few legal documents that have the notoriety of the nondisclosure agreements. Once upon a time, they were used to control business information, right? And later and more famously in toxic and abusive, and this is in air quotes, professional relationships. Now, though, they are everywhere and in situations you would least expect. That is the thesis of a story I saw in New York Magazine the other day, the headline of which is how the NDA became the defining legal document of our time.
Reeves Weidman is the journalist who wrote that piece. Reeves, it's good to talk to you again. Thanks for having me, Kai. So let's answer the question in the headline. How did NDAs become the defining legal document of our time? Slowly and then all at once, like many things. You know, the long story short, I think, is that this document has creeped into more and more parts of
of our lives over the past couple of decades. Um, you can look at a couple of different sort of moments that have, have led to booms in NDAs, um, social media, um, and the ease with which people can go out and, and talk about things has led more and more people to want to prevent people from talking about them. And then in, in sort of an ironic twist, um,
unfortunately ironic, one of the sort of vestiges of Me Too was we learned how powerful these NDAs could be in silencing people. And as I talked to more and more lawyers, a lot of them said that one of the effects of Me Too and some of the backlash to Me Too has been
people using them more and more and more because they have seen what can happen if their misdeeds become public. There is, you know, there's the corporate history of these things, right? At the executive level and then as, you know, sharing of technology and this and that. But now, as you alluded to,
where it is so easy to get information out about other people on social media and on the Internet and where so many people are protective of their influencer status or their brands. Right. I mean, that's part of what's driving this.
Yeah, I mean, celebrities are corporations in a certain way themselves. Their brand and who they are and the public perception of them is kind of a lot of how they make a living. And so, you know, yes, the NDA for decades was pretty exclusively something that existed in corporate life. One of the places that it sort of started to leap over into personal lives was through celebrities.
And that happened in celebrity divorces when you break up with someone and don't want them to talk anymore.
badly about you because you're worried about what that's going to do to your, your public perception. And so celebrities have used these, um, you know, for at least the past decade to giving them out to kind of anyone who, who they come into regular or even just momentary contact with. And, and it's only more recently that kind of, um, you know, from celebrities, it goes to, to wealthy people and then eventually down to, uh, kind of normal folks. Yeah.
Well, I mean, there's an example in this piece of a couple that's dating and asks mutually to sign an NDA or something. I mean, it's crazy. Yeah. I mean, that couple in particular, they're sort of young actors. They're not super famous, but they're kind of early in their careers. They're having some success and they meet someone that they think might be the love of their lives. But they're also worried might be someone they don't know all that well who
might break up with them one day and then go say lots of nasty things about them and kind of scuttle their career. So it's kind of crazy when, when to, to sort of think about that and try to explain that. But it's at least becoming something that a certain kind of person is, is now thinking about. We should say here, they didn't wind up marrying that couple. They did. It's a, it's like an NDA love story. Yeah. Love story and other phrases you never thought you would hear. It, it, it,
So, all right, to change the mood just a little bit, it does all smack of a little bit of, you know, setting aside for a second, the really, really toxic ones, right? Harvey Weinstein, of course, comes to mind. It does, their proliferation into other aspects of life does smack a little bit of cynicism, no? No.
I think there is this level at which we, you know, we don't trust each other. And then I think there's a certain sadness to it when you look at it from this, this angle of like, you know, do we trust anymore? Can you trust your friends? And I, and I think you'd like to think, yes, otherwise they, they probably shouldn't be your friends or a person in your relationship with that you're in a relationship with. But,
you want these things to not have to exist. And yet they are just more and more common. No NDAs were signed in the brush in this interview. I'll tell you that Reeves Weideman at New York magazine. Reeves, thanks a lot. Thanks, Scott. Do you remember the days before the internet and our digital economy when the radio or maybe a borrowed cassette tape was the way you discovered new music? You couldn't just search on Spotify or Apple music or let the algorithm guide you and listen to something instantly. No.
Well, did you ever wonder then how cover bands or musicians whose job it was to learn and perform those latest hits, how did they do it in the days before streaming? Here's today's installment of our series, My Analog Life. My name's Margo Krimmel. I'm a musician. I play the harp. I teach the harp. And I live in Boulder, Colorado. In the 80s, I got a job in Vail playing the harp in a wonderful resort called
six nights a week, four hours a night. I was in my mid-30s and I pretty much felt like I had won the jackpot. I was in heaven. I had this four hours a night to play music, which I loved doing. And then I had the whole day to ski. So when I was playing, I would get lots of requests for songs. Many of them I would know
Maybe Greensleeves, Pachelbel's Canon, Stairway to Heaven, those kinds of things. And then sometimes people would request something that I didn't know. So I started getting requests for memories from the Broadway musical Cats.
But I'd never heard the song Memories and had no idea how it went. There was really no way to find the sheet music to this or even to listen to it. It wasn't playing on the radio. So I get off work.
And the night is still young. So I trot over to the lodge where Mickey is playing. And Mickey is this fantastic master of piano bar. And he can play cats just fine. So I go up to Mickey and I say, Mickey,
Would you play me Cats? And I'd listen and I would leave the bar right away and I would sing as much of that song as I could. And I would get, you know, a little bit of it. I'd go home, I'd figure that out on the harp. And then the next night I'd trot over to Mickey's and I'd learn a little bit more of this song.
Now I'm a harpist and a harp teacher, and I have lots of students that want to learn songs that maybe I've never even heard of. And I can go to the Internet, go onto YouTube and find the song and help them learn it. A lot of times if it's pretty well known, something like, I don't know, John Legend, All of Me, you know, you can find 15, 20, 30 harpists doing a cover of that. You can watch their fingers even and see what they're doing.
That is definitely a new thing. Marco Krimmel in Boulder, Colorado. If you want to tell us about an analog job from your past or maybe the one you're still doing right now, write to us, marketplace.org slash myanaloglife. Coming up. Like the cost of living in Los Angeles keeps going up. It's only fair that our wages keep going up. It ain't cheap out here, I'll tell you that. First, though, let's do the numbers.
Dow Industrials grew 236 points today, 6 tenths percent, finished at 40,896. The NASDAQ was up 245 points, that is 1.4 percent there, 17,876. The S&P 500 gained 54 points, 1 percent, 56 and 8. We heard from Stephanie Hughes about Estee Lauder reporting lower than expected earnings. Estee Lauder down nearly 2.25 percent today. Competitor Cody was down 7 tenths percent.
General Motors announced it's laying off more than 1,000 people around the world, focusing on those working in software and services. It comes after the company went on something of a hiring spree in recent years. GM grew 1% today. Ford Motor Company sped up 2%. Toyota pulled ahead by 0.6%. Bond prices went up. The yield on the 10-year T-Note thus went down 3.87%. You're listening to Marketplace.
This is Marketplace. I'm Kai Risdahl. From Stephanie Hughes up near the top of the program today, we got an update on the state of the global market in luxury goods. We will turn now to the decidedly not luxury market of convenience stores.
The Quebec-based company Cousteau has made a bid to buy the parent company of 7-Eleven. It already owns the Circle K and Holiday brand. Snapping up 7-Eleven would thus give it yet more sway in a market that took in nearly $860 billion in 2023. That data is according to Big Convenience, also known as the National Association of Convenience Stores. We had Marketplace's Henry Epp run in for a quick look at where the convenience store market does stand in this economy right now.
The convenience store business model of a few decades ago could be summed up in just a couple of words. Smokes and Cokes. Abby Lewis is vice president of content strategy at Informa Connect. You know, people would go, they'd get their fuel, they'd get their beverage, they would get their cigarettes, and that would be it. But not nearly as many people are smoking these days, and gasoline demand can be volatile. So convenience stores have really upped their food offerings, which used to be a joke, says Jeff Leonard at the National Association of Convenience Stores.
40 years ago, the movie National Lampoon's Vacation, there was a funny line where Clark Griswold said, I'm so hungry I could eat that sandwich from the gas station. Now, he says, you're increasingly seeing the industry move from a gas station that, oh, by the way, had food.
Buying that sandwich or cup of coffee at a convenience store might be cheaper than at a quick service restaurant, says Bobby Stevens, a principal at Deloitte. Plus, he says the stores are convenient. Even if you maybe could afford to spend a little bit more on fresh food or higher priced items,
Convenience stores offer comparatively shorter wait times and lower prices, and that has helped the sector do relatively well in the last few years. Stevens says it has seen flat to slightly rising sales while other retail categories have declined.
But convenience stores have seen rising costs, too, for labor, gas and all of the ingredients that go into those sandwiches, which Stevens says is helping drive consolidation in the industry. To allow for the buying power of larger organizations, the ability to have multiple stores, the ability to sort of weather regional trends on a global basis.
In other words, economies of scale, allowing stores to offer something more than a sweaty hot dog spinning on those rollers for who knows how long. I'm Henry Epp for Marketplace. The federal minimum wage, as you may know, is $7.25 an hour, unchanged since 2009.
States are, of course, free to set their own higher minimums, and many have. And states may set different minimums for different categories of workers. Here in California, fast food workers are some of the highest paid in the country with a new mandatory minimum wage of $20 an hour as of April 1st of this year. Enter now the age-old debate over whether the worker benefits of better pay outweigh the corporate costs of that pay.
KCRW's Megan Jamerson is on it. In a McDonald's restaurant south of Los Angeles' Koreatown, it's almost lunchtime. A new batch of fries is in hot oil, and a conveyor belt carries a steady stream of wrapped sandwiches to a worker putting them in bags.
Owner Carrie Harper Howey looks on. This is what we call our heated landing zone. Harper Howey and her sister own 21 McDonald's franchises in L.A. County and employ around 1,500 people. In April, they increased those workers' wages from about $16 to $20 an hour. Restaurant locations in California that are part of a chain with more than 60 locations nationwide have to honor the new age.
We're happy, of course, always to comply with the law and do the things that we have to do, but it definitely comes with its challenges. When Harper Howey ran her second quarter numbers, profits were down 5%, with the first negative sales and guest counts in over a decade. It is significant for any business, you know, period. And people don't understand that it's not billion-dollar-making corporate McDonald's. This is our family business.
It's not just wages eating away at thin margins, says Harper Howey. Inflation has upped the price of supplies and insurance is more expensive. She's concerned about pricing out low-income customers. A Big Mac meal at this store is $10.49. So we can't raise prices that would allow us to pay for this minimum wage increase because our customers would literally not be able to afford the food.
Still, many franchise owners like Harper Howey are retaining employees and even hiring. According to the Bureau of Labor Statistics, between January and June, California added nearly 20,000 jobs to the fast food industry. This is similar to what happened when California raised the minimum wage to $15 an hour in 2022, says Open Markets Institute economist Brian Kalachi. Businesses adjusted.
We didn't really see negative employment effects. California kept adding jobs. Some chains, like Rubio's Coastal Grill, blamed the rising cost of business when it closed 48 restaurants in California. Others, like Fatburger, are planning to open 40 new locations there over the next decade. Meanwhile, for the fast food workers, the higher wage makes it easier to pay the bills. It's
It's exciting. Like I saw my check and I'm like, oh, you can see the difference in your check.
That's Jaylene Lubet. She's a cashier at a McDonald's in Northeast L.A., at a franchise that is not owned by Harper Howey. Before the pay raise, Lubet made $17.25 an hour. With the high cost of living in L.A., that's not enough to support herself and her parents. They're both out of work because of medical issues and all live together in a one-bedroom apartment. I'm the one main caretaker of my family.
Her mom is supposed to eat more fresh fruits, veggies, and lean meat for her health, but
The wage increase is helping pay those higher grocery bills, says Lubet. I definitely am happy with the $20, but I still feel like we have a long way to go, especially if the cost of living in Los Angeles keeps going up. It's only fair that our wages keep going up. And sure enough, the California Fast Food Workers Union is asking the state for another raise in 2025. In Los Angeles, I'm Megan Jamerson for Marketplace. ♪
This final note on the way out today, a genuine economic data point and then a trivia curiosity to go along with it. Gold hit an all-time high on Friday, better than $2,500 a troy ounce. The shiny yellow stuff, as you might know, has been on a tear this year, up 20% since January. Part of that is the whole safe haven thing, of course. Also, global central banks have been buying more of it. So that's the news. The trivia is,
is that with gold bars weighing, give or take, 400 troy ounces, one gold bar, should you be able to get your hands on one, is now, for the first time, worth a million dollars. Trot that one out at your next dinner party if you want to impress people. Works for me every single time. Our daily production team includes Andy Corbin, Elise Hassan, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdahl. We will see you tomorrow, everybody.
This is APM. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future.
Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money decisions. Listen to Financially Inclined wherever you get your podcasts.
