Marketplace - Let’s get productive

Episode Date: September 26, 2024

Good job, everyone! We’re working harder — or at least, more efficiently. Despite a cooling labor market, we’re producing more product per hour, which has major economic benefits. In the long run, that should boost the economy and heat up hiring — hopefully. Also in this episode: The military tries lowering its aircrafts’ carbon footprint; Shanghai modernizes its e-payments for visitors; and while women are a growing Formula One fan base, they aren’t yet in the driver’s seat.    

Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today though, there's another threat out there, climate change. This could be the warmest year on record. Climate change is here.

Temperatures here are warming faster than anywhere on earth. And while the threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season, we go to the front lines of the climate crisis to see how the military is preparing for the threat. Listen to how we survive wherever you get your podcasts.

On the program today, the A-list economic indicator out this morning and why you, yes you get the credit. then we'll go for an electric helicopter ride. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Thursday today, the 26th of September. Good as always to have you along everybody. Take everything that happens in this economy, every widget made, every service rendered, everything. Add it all up. We're talking dollar amounts here. And what you get is those three little letters we have talked about oh so many times on this program, G, D, and P,

Gross Domestic Product. How much an economy grows or doesn't is obviously of interest to all, which is why this morning's report from the Bureau of Economic Analysis was greeted with some degree of relief. In the second quarter of 2024, that is April through June, the U. the US economy grew at an annualized rate of 3% on the nose in q1 1.6 percent Wave the labor market out of that virtually all the big picture indicators look pretty good and despite that cooling employment picture GDP going up the way it did means by definition That American workers are getting more productive and as marketplace is Justin Ho reports to get us going, that is a good thing. Let's unpack that definition of productivity. It's really a ratio of how much stuff we make

and do compared to how much time we spend making and doing it. In other words, it's a measure of efficiency. The more we can produce for a given hour of work, the better off we are. That's George Perks, macro strategist with Bespoke Investment Group. He says a more productive economy can make more stuff in the same amount of time, or can produce the same amount faster. Either way, changes in labor productivity are overwhelmingly what drives economic growth in the long term.

Right now, productivity is being boosted on both sides of the ratio. The economy is continuing to grow, and the amount of hours people are working has been coming down. Skanda Amarnath, executive director of the research group Employ America, says that's partly because of the kinds of jobs that are being created right now. They're probably in sectors where it's maybe a little more common to have part-time work or a more constrained number of hours per job. And so the average workweek has gone down.

Amarnath says those sectors include health care and leisure and hospitality. Think fast food as the broader labor market has started to loosen up. These sectors are the ones kind of picking up some of the slack. They're the ones hiring a little bit more easily, as other sectors may have backed away a bit. Meanwhile, those other sectors are relying on workers they hired back when job growth was booming. And after you work a job for a few years, you probably get better at it. I think we're probably seeing some of the dividends of that aggressive hiring and people who are now in positions where they're more experienced, they're better trained. You don't need to go add another worker to get more from the same person.

There's another factor that could keep boosting productivity, especially now that interest rates are starting to come down. Business investment. George Perks of Bespoke Investment Group says right now there's already a lot of investment in advanced manufacturing. Think EV batteries, solar panels, semiconductors. In other words, valuable products that don't require a lot of labor. If you're producing a lot of stuff and it doesn't require a ton more hours to do that,

that's going to mean everybody is better off ultimately because there's more income flowing around. It means that we have a higher standard of living. That means workers will have more money to spend. Perk says that's how the economy keeps growing in the long run. I'm Justin Ho for Marketplace. One more thing about this morning's report

that is worth a mention here. As it does every year, the Commerce Department also released this morning revised estimates of GDP for the prior five years, which I mentioned because it turns out that this economy recovered even faster from the pandemic than we had thought it did, which is to say the economy grew faster and more consistently than originally thought. That is something that held true through 2021, 2022, and 2023. Here, near the end of the third quarter of 2024, Wall Street is feeling pretty good about things. We'll have the details when we do the numbers. Let's have you jump into the seat, the pilot seat, and we're going to have you scoot forward

and I'm going to ride along behind you. What could possibly go wrong, Kai? What could possibly go wrong? In this instance, thankfully, not much can go wrong. I'm in an office in Washington, D.C. in a flight simulator for a sort of minimalist electric helicopter. Our aircraft, when you look at it off the cuff, a lot of people will say, this looks like a drone. And I will say, this is not a drone.

This is a beautiful electric aircraft. You'll notice there are six propellers. And those propellers can either tilt up or forward or anywhere in between. And they are independently controlled by the flight control computer. My flight instructor for the day is Greg Bowles. He's head of government policy for the company that makes this machine, Joby Aviation.

Their hope is to create a new kind of aerial ride share or air taxi service. The Air Force has a $131 million contract with Joby for aircraft like this one. It's all shiny and white, black on the top, fits five people total. So we're gonna have you, and I don't think you've flown helicopters before,

is that true? I did once and it was very ugly. Okay. I mean, I didn't last more than five minutes, true, literally, true. I think this will be a very different experience for you. Very different indeed. I'm a fixed wing guy, flew in the Navy back in,

you know, a while ago while ago this season our climate podcast How we survive is all about how the institution that shaped me the American military is going to shape our climate future Let's go ahead and lift up so take me to 30 or 40 feet in the air So we're just gonna get manhattan's laid out on the screen in front of me as I hover above a helipad on the East River And there's 120 your airplane skills are coming back to you. There we go. It feels, uh, controls are a little stiffer than I would have thought, actually, but that's probably simulator stuff as opposed to actual stuff. We do a little tour of the harbor, the rippling water below, and then I go out across Brooklyn,

the Verrazano Bridge, way off to the right. Go ahead and give me a bank turn. So bank that, uh, let's go, let's go right. Yeah, that's great. So it's a bank and a twist, right? Just a bank,. Let's go right. Yeah, that's great. So it's a bank and a twist, right? Just a bank actually. If you twist you'll be on coordinate. I ended up doing pretty well until I have to try to land back at that helipad. So look, this is we're in a what? 260 foot hover. So I'm gonna nudge forward. Come on, man. Oh, there it is. Well, it's tricky, right? Because you can't. I mean this is this is a simulator issue, right?

I can't see the actual so what well, it's actually pretty real right to be clear It was indeed a simulator issue the screen wraps around but not below me stop one second Let's afford a little bit. Yeah, see I told I said it for the record I said it so I missed the helipad by a couple of feet Maybe would have ended up in the harbor in real life, but I adjusted on the second approach. There you go. That was cool.

That was cool and I didn't kill us. So that's a plus. This simulator and the actual aircraft that Joby is making is an example of the Department of Defense investing in climate-friendly technology. The Pentagon is the biggest institutional source of greenhouse gases in the world. That's according to a study from Brown University back in 2019. The Biden administration has set a goal of completely decarbonizing the federal government

by 2050, including obviously the Department of Defense. It is an aggressive goal. What's the Air Force going to do with these things? I think we're all going to say, wow, it's clean and zero emission. it is an aggressive goal. What's the Air Force gonna do with these things? I think we're all gonna say, wow, it's clean and zero emission, that's important to the US military and the Department of Defense. But in addition, electric introduces aircraft

that are extremely quiet, aircraft that are extremely reliable and redundant with very, very low operating cost. Electrifying these small aircraft, which aren't gonna replace fighter jets or big cargo planes, isn't gonna drastically cut the military's carbon emissions. But it is the kind of technology the DoD has invested in through something called the Defense Innovation Unit. In about 2016, the Defense Innovation Unit, DIU, engaged with Joby, and they were with

us when we started our very first transitional flights with a full-scale aircraft back then. Since then, we've been able to build contracts and access to bases and testing. The DIU, which started back in 2015, is kind of a Silicon Valley accelerator for commercial technology that DOD sees as promising. Energy is one of their priorities. Today, we've got an aircraft at Edwards Air Force Base. A next aircraft is delivering there shortly. Two aircraft after that will be going to McDill Air Force Base. That's a SOCOM base, a Special Forces command base. So we're moving from testing phases and getting interested in understanding the technology, that's what's happening at Edwards, to actually figuring out how do we put these to use.

Give me a use case. Let's say you're in, I don't know, some Air Force base up in Alaska or Oklahoma or whatever. What am I going to do with this thing? Or in a contested airspace. So today everyone needs to move equipment. Logistics is a huge deal. I think the logistics conversation has come to light more than ever before. Supply chains, getting stuff where it needs to go, it's not only something that could be more eco-friendly. In Iraq and Afghanistan in the mid-2000s, fuel was a logistics and a security nightmare. It cost an estimated $400 a gallon to get that gas where it needed to be. And fuel convoys became easy targets for roadside bombs.

Hundreds of soldiers were killed protecting those trucks. Joby's aircraft have a range of about 100 miles. So think short hops or maybe surveillance. But not needing fuel could make the military less vulnerable. Also, stealthier. This is like on the order of 100 times less acoustic noise. Very, very quiet

To give you an example Kai like as I'm talking to you. I'm pretty dorky with noise nowadays I am 67 decibels talking to you in this room Okay And so if the aircraft was hovering a hundred meters away like my conversation is louder than that Oh, that's interesting. We should say just to point out your geekiness. You checked your Apple watch on the decibels thing I did as You went out your geekiness, you checked your Apple watch on the decibels thing. I did. As Joby delivers more aircraft, there are going to be certifications and testing and training and eventually mission planning.

But we do know that the road to electrification in this economy is not so smooth. I'm an EV driver and I don't know whether you are or not, but you know as well as I do the challenges we're having in the EV charging grid infrastructure problem, right? So we're a long ways away from me being able to go mindlessly and just drive from LA to San Francisco. I imagine we're as far away for this. So the nice difference as well is aircraft are nodal in nature, right?

So we don't move across the surface, we move from spot to spot. And because we move from spot to spot, we have a very known set of locations to electrify. And that challenge is much easier. And that challenge is underway. So part of what happened during IRA was providing the Affiliation Reduction Act was providing opportunities for the US to electrify more. There is the FAA has opportunities to provide grants to local communities to begin to plan and figure out how they're going to work down this path.

And we're just the beginning of this new age of electric aircraft. So that's a really good place to be. The catch of course, is that right now the American military is not in a really good place. It's a huge source of carbon emissions. And yet the climate change that those emissions are contributing to is complicating by a lot how the Pentagon gets its missions done.

So the DOD is trying to change that on the margins by investing in innovation. Joby, as we've been talking about, and on the next episode of How We Survive, high-tech sustainable aviation fuel. A whole Marine Corps air station that can disconnect itself from the electricity grid for up to three weeks and keep its planes flying. And then we'll end up at the Pentagon itself. How We Survive, episode three, out now.

Follow us on the platform of your choice. Coming up. Formula One has grown exponentially and a big part of that is women who are fueling that growth. Women's sports, gang. That's all I'm saying. First, though, let's do the numbers. Dow Industrials rose 260 points today, 6 tenths percent finished at 42,175. The NASDAQ gained 108 points, also 6 tenths percent, 18,190.

The S&P 500 improved 23 points, 4 tenths percent, 57.45. We've got a couple of blasts from the past for Porting's earnings after the market closed today. Scholastic Corporation, which is responsible for those book fairs that help popularize kids' books, including The Babysitter's Club and Goosebumps, analysts expect its earnings to be down. Nevertheless, its stock expanded 1.7% today. Analysts also project earnings for BlackBerry Limited, once the maker of the once essential electronic devices,

now as it turns out a cybersecurity firm. They expect earnings are gonna be down, albeit just slightly. BlackBerry nonetheless ascended 6.8% today. CarMax reported earnings today and beat estimates for revenue, coming in about 2.6% ahead of projections, but it reported a decline in lending income as it adjusted

to losses from consumer loans. Pay attention to that. Losses from loans. Shares surged just under 5%. Bonds down. Yield on the 10-year T-note. 3.79%. You're listening to Marketplace.

Some of the toughest moments we'll experience in life often come with the hardest financial decisions, like how much to spend when your pet is dying, or what to do if you want to Some of the toughest moments we'll experience in life often come with the hardest financial decisions. Like how much to spend when your pet is dying. Or what to do if you uncover a loved one's financial secrets after they've passed. It's like having this albatross, this monkey on your back that you don't want amongst everything else. I'm Rima Grace, host of This Is Uncomfortable, a podcast from Marketplace. This season, we've got a wide range of stories

about life and how money messes with it, including the unexpected ways money can shape our journeys through loss and grief. Listen to This Is Uncomfortable wherever you get your podcasts. This is Marketplace. I'm Kai Rizdal. If you don't speak the language, China is just not an easy place to travel. Never has been. But it's gotten even harder since the pandemic.

If you want to pay for something or order food at a restaurant or call a cab, it's all mostly done through Chinese payment apps WeChat and Alipay. Catch is that it's hard to participate in China's digital economy. Apps we normally use here are mostly blocked in China, but this year, cities like Shanghai have been making a big push to be more visitor friendly. Marketplace's Jennifer Pak spoke to an American executive about his recent trip. It's a couple of days before U.S US businessman Sasha is traveling to Shanghai for a conference. We're not using his last name to avoid identifying his company, which could potentially face

repercussions in China. I'm the kind of guy who likes to be prepared before I travel. So on the recommendation of some of my friends, I downloaded WeChat, Alipay. Those are China's key mobile payment apps. Users can send and accept payments using a specialized QR code. The apps have now simplified their setup for visitors. Sasha only needs his US cell number and credit card to register. He sends me voice notes as he tries to set up the apps.

The process takes him about 10 minutes. So now it looks like I have Alipay and WeChat set up. Now the question is, are they going to work when I get to China? Well, I made it to Shanghai. I'm tired, but I'm excited. Let's see if I can buy a ticket for the Maglev. That's the bullet train that takes him closer to the city centre. First there was a machine that wanted me to scan a QR code.

Didn't work, but it did work when a staffer scanned Sasha's WeChat QR code. Same problem when he connects to the subway. Okay, so now I'm stuck at Long Yang Road station because I forgot to get cash out and my WeChat pay doesn't work on the vending machine. So that's really frustrating. Sasha has US credit cards on him, but most places in China don't accept foreign credit cards, partly because of the high fees. Sasha persists. And 10 minutes later? I figured it out. I'm very proud of myself. To get the metro ticket, I had to scan the

barcode on the screen with the Alipay app. And later that evening... I bought some toothpicks at a 7-Eleven by scanning my WeChat QR code and I felt like a hero. For toothpicks and any purchases $28 or less, Alipay and WeChat will absorb the credit card fees for users. Over the next few days, Sasha doesn't use cash once. I just paid for a really nice Thai yellow curry in the basement of a department store by scanning a barcode with my Alipay app. I'm getting the hang

of this. Ladies and gentlemen, welcome to our one-stop international service station. For those who need extra help, the Shanghai government opened an information desk at the airport this summer. Staff can help tourists set up Alipay and WeChat. They also sell data cards, though that's only partially helpful. And so does this have VPN on it? No VPN.

Okay. A VPN, or virtual private network, is what allows you to access banned apps like Google, Instagram, and X. When I meet Sasha, he says he has a VPN from work. Still, he's having email problems on and off. This morning I had a whole hour-long drama where I could not download any of the work files I needed. Another issue?

Maps. I've been trying to use Google Maps and it loads, but everything in it is wrong. That's because Google Maps doesn't have a license to work here. China has Gao De Maps, but the results are all in Chinese. Apple Maps works here, but Sasha can't download it. I have an Android phone. Sasha is tech savvy, but he's still stumped

about the Maps. This is the last message he sent before leaving. Hey Jennifer. I am being just fried by the mapping problem. Yesterday I tried to go to a store that wasn't there, and then I tried to go to a restaurant that wasn't there. I'm really frustrated. So he can pay for stuff, he says, but navigating to find the stuff is still tricky. In Shanghai, I'm Jennifer Pak from Marketplace. Football fans still have that early season glow of thinking their team could make a run

deep into the playoffs. Baseball fans? Well, they pretty much know who's in and who's out by now. And if you're an auto racing fan, Formula One specifically, Austin, Texas is next up on your calendar, the United States Grand Prix on the 20th of October. Lots of flash, lots of money in F1 races. Something you won't see though in the cars, most particularly, women. Glenn Hill wrote in the Washington Post the other day about how F1 is missing the boat on women

at the highest level of big time motor sports. Glenn, welcome to the program. Thanks for having me. Could you in a nutshell give us the sort of the feeder system how you get from the lower levels of racing all the way up to F1, please? Yeah, that's a great place to start. So I envisioned a pyramid,

and then we're gonna start from the bottom going up. At the bottom of that pyramid is karting, as in go karting. From there, you graduate to Formula 4, or what is called a Formula 3 regional series. And then from there, the next step would likely be Formula 3. The difference between Formula 3 and Formula 3 regional is that the latter is regional championships, as the name suggests. So Formula Three Regional Japan, Formula Three Regional Middle East, and then Formula Three Proper is an international racing series a bit more akin to Formula One. And so you go up from Formula Three to Formula Two to Formula One at the top.

And there has not been a woman racing in Formula One in, I want to say decades, but it's been like 50, 60 something years. It's been a long time, yes. How come? So, there's a myriad reasons. Part of it is that I don't think Formula One was really interested in or investing in women. And so for decades, I think that was part of the story. The other part of it is,

I think, a broader issue, right? Before we even get started, we need to mention that this is not, you know, travel soccer or even Little League baseball. This is an extremely cost prohibitive sport. And so that in and of itself, limits the people who can participate. And even if you can muster the resources to participate, it greatly affects how long you can participate in the sport. So I think that's a huge part of it as well. And that's something that affects everyone. Talk to me then about this F1 Academy, how it started and what it is supposed to be doing.

So just to give you some brief history, there was a league that preceded F1 Academy called the W Series, and that tried to address the very financial concerns that I just hinted at. That lasted from 2019 to 2022. It ultimately essentially followed for bankruptcy. F1 Academy sort of emerges as the W Series is folding folding and it's trying to essentially create a pipeline for women at the point where they tend to struggle most in their motorsports careers, which is in that sort of F4, F3 regional window as they're transitioning up from karting.

So they're trying to provide resources. It's not quite the same as W Series, but they have substantial backing from Formula One and Formula One's owner, Liberty Media, to try to provide the resources to create this pipeline for women to succeed in the sport, or at least elevate a bit further. Right, and that gets me to the business model of this thing, right? Liberty Media is a business, F1 is a business, we've all seen Drive to Survive on Netflix, and if you haven't, you should check it out because it's super interesting, but it's all guys, right? It's all male drivers. And now comes F1 Academy at a time when women's sports

are really hot, women's soccer, women's basketball, with Caitlin Clark. I mean, this is truly a business opportunity if they do it right. Oh, absolutely, I mean, that's a huge part of this story is that over the last decade, Formula One has grown exponentially, and a big part of that is women who are fueling that growth. They make up 42% of Formula One's fan base and young women

specifically make up its fastest growing demographic within that fan base. So yeah, I mean, part of this is, and F1 CEO Stefano Domenicolli will say as much, part of this is in response to people asking these questions. Where are the female drivers? Why don't I see greater representation? All right, so put up or shut up a question. Do you think this is gonna work? I mean, it's gonna take years,

but do you think it's gonna work? I would say I'm cautiously hopeful, cautiously optimistic. Fair enough, Glenn Hill at the Washington Post. Good piece on women in F1. Glenn, thanks a lot. Thank you. This final note on the way out today, a follow-up to the item last week about Postmaster Lewis DeJoy saying the Postal Service isn't going to raise rates this coming January, saying,

and this is a quote, our strategies are working and projected inflation is declining. Well, not so fast. Saw this on CNN that according to paperwork submitted to the Postal Regulatory Commission, starting next July, the price of first-class postage is going to go up twice a year, provided regulators agree. So what do you think? A dollar for a first-class stamp in a couple of years? John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Peacher and Stephanie Sieck are the marketplace editing staff. Amir Bibawe is the managing editor and I'm Kai Rizdal. We

will see you tomorrow everybody. This is APM. Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today, though, there's another threat out there, climate change. This could be the warmest year on record. Climate change is here. Temperatures here are warming faster than anywhere on earth. And while the

threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season we go to the front lines of the climate crisis to see how the military is preparing for the threat. Listen to How We Survive, wherever you get your podcasts.