Professors on food stamps

The shocking true story of academia in 2014

Forget minimum wage, some adjunct professors say they’re making 50 cents an hour. Wait till you read these stories

Professors on food stamps: The shocking true story of academia in 2014
(Credit: domin_domin via iStock/Roobcio via Shutterstock/Salon)

You’ve probably heard the old stereotypes about professors in their ivory tower lecturing about Kafka while clad in a tweed jacket. But for many professors today, the reality is quite different: being so poorly paid and treated, that they’re more likely to be found bargain-hunting at day-old bread stores. This is academia in 2014.

“The most shocking thing is that many of us don’t even earn the federal minimum wage,” said Miranda Merklein, an adjunct professor from Santa Fe who started teaching in 2008. “Our students didn’t know that professors with PhDs aren’t even earning as much as an entry-level fast food worker. We’re not calling for the $15 minimum wage. We don’t even make minimum wage. And we have no benefits and no job security.”

Over three quarters of college professors are adjunct. Legally, adjunct positions are part-time, at-will employment. Universities pay adjunct professors by the course, anywhere between $1,000 to $5,000. So if a professor teaches three courses in both the fall and spring semesters at a rate of $3000 per course, they’ll make $18,000 dollars. The average full-time barista makes the same yearly wage. However, a full-time adjunct works more than 40 hours a week. They’re not paid for most of those hours.

“If it’s a three credit course, you’re paid for your time in the classroom only,” said Merklein. “So everything else you do is by donation. If you hold office hours, those you’re doing for free. Your grading you do for free. … Anything we do with the student where we sit down and explain what happened when the student was absent, that’s also free labor. Some would call it wage theft because these are things we have to do in order to keep our jobs. We have to do things we’re not getting paid for. It’s not optional.”

Merklein was far from the only professor with this problem.



“It can be a tremendous amount of work,” said Alex Kudera. Kudera started teaching in 1996 and is the author of a novel about adjunct professorship, “Fight For Your Long Day.” “When I was an adjunct, I didn’t have a social life. It’s basically just work all the time. You plan your weekend around the fact that you’re going to be doing work Saturday and Sunday — typically grading papers, which is emotionally exhausting. The grading can be tedious but at least it’s a private thing. It’s basically 5-10 hours a day for every day of the week.”

One professor from Indiana who spoke to Salon preferred to remain anonymous. “At some point early in my adjunct career, I broke down my pay hourly. I figured out that I was making under minimum wage and then I stopped thinking about it,” he said. “I can’t speak for everyone, but I essentially design my own courses. And sometimes I don’t find out how many courses I’m going to be teaching until maybe Thursday and they start Monday. … So I have to develop a course, and it’s been the case where one summer I taught English 102 where the course was literally dropped in my lap three days before it started and I had to develop it entirely from scratch. It didn’t even have a text book. That was three 16-hour days in a row developing a syllabus. … You’re expected to be in contact with students constantly. You have to be available to them all the time. You’re expected to respond to emails generally within 24 hours. I’m always on-call. And it’s one of my favorite parts of my job, I don’t regret it, but if you factored those on-call hours in, that’d be the end of it. I’d be making 50 cents an hour.”

Being financially secure and teaching at an institute of higher education are almost mutually exclusive, even among professors who are able to teach the maximum amount of courses each semester. Thus, more than half of adjunct professors in the United States seek a second job. Not all professors can find additional employment. An advanced degree slams most doors shut and opens a handful by the narrowest crack.

Nathaniel Oliver taught as an adjunct for four years in Alabama. He received $12,000 a year during his time teaching.

“You fall in this trap where you may be working for less than you would be at a place that pays minimum wage yet you can’t get the minimum wage jobs because of your education,” Oliver said.

Academia’s tower might be ivory but it casts an obsidian shadow. Oliver was one of many professors trapped in the oxymoronic life of pedantic destitution. Some professors in his situation became homeless. Oliver was “fortunate” enough to only require food stamps, a fact of life for many adjuncts.

“It’s completely insane,” he said. “And this isn’t happening just to me. More and more people are doing it.”

“We have food stamps,” said the anonymous adjunct from Indiana. “We wouldn’t be able to survive without them.”

“Many professors are on food stamps and they go to food donation centers. They donate plasma. And that’s a pretty regular occurrence,” Merklein told Salon.

Life isn’t much easier for those lucky enough to find another income stream. Many are reduced to menial service jobs and other forms of first-world deprivation.

“I ended up applying for a job in a donut shop recently,” said an Ohio professor who requested to go by a pseudonym. Professor Doe taught for over two decades. Many years he only made $9600. Resorting to a food service job was the only way he could afford to live, but it came with more than its expected share of humiliation.

“One of the managers there is one of the students I had a year ago who was one of the very worst writers I’ve ever had. What are we really saying here? What’s going on in the work world? Something does not seem quite right. I’m not asking to be rich. I’m not asking to be famous. I just want to pay my bills.”

Life became even more harrowing for adjuncts after the Affordable Care Act when universities slashed hours and health insurance coverage became even more difficult to obtain.

“They’re no better off than people who work at Walmart,” said Gordon Haber, a 15-year adjunct professor and author of “Adjunctivitis.”

Perhaps not surprisingly, other professors echoed this sentiment.

“There’s this idea that faculty are cheap, renewable labor. There’s the idea that student are customers or clients,” said Joseph Fruscione, a former adjunct of 15 years. “And there are some cases where if a student is displeased with a grade, there’s the notion where they’re paying for this, so they deserve an A or a B because of all this tuition.”

“The Walmart metaphor is vivid,” Kudera said. “There are these random schools where they’re just being terrible. But as some of the schools it seems like there’s some enlightened schools and it doesn’t seem like every single person who speaks up loses their classes. It varies school to school. They’re well aware some of their adjuncts may not afford toothpaste at the end of the month or whatever those kinds of tragedies may be.” He suggested looking at the hashtag #badmin to see transgressions and complaints documented in real time.

Robert Baum, a former adjunct and now a dean, was able to provide insights from both sides of the problem.

“That pressure [to make money] has been on higher education forever,” he said. “A lot of the time when I was an adjunct, things were very black and what I’m finding is that the graying is happening a lot. I’m losing track of the black and white.” Still, Baum noted that the current system was hardly ideal, and that change was necessary. “The Walmart model is based on the idea of putting the burden on taking care of the worker on either the state or on the worker’s credit card or on the worker’s family. And that is no different than what I’ve experienced across my adjunct life. No different. Zero difference.”

Ana Fores Tamayo, an adjunct who claims she was blacklisted over her activism, agreed with the latter parts of Baum’s assessment.

“Walmart and the compartmentalized way of treating faculty is the going rate. The way administration turns around and says, for instance, where I was teaching it was probably about 65% adjunct faculty. But the way they fix their numbers, it makes it looks as if it’s less when they show their books because the way they divide it and the way they play with their numbers it shows that it’s less.”

“As soon as they hear about you organizing, they go on the defensive,” Merklein said. “For instance, at my community college, I am being intimidated constantly and threatened in various ways, hypothetically usually. They don’t like to say something that’s an outright direct threat. … They get really freaked out when they see pamphlets around the adjunct faculty office and everyone’s wearing buttons regardless of what professional organization or union it is. They will then go on the offensive. They will usually contact their attorney who is there to protect the school as a business and to act in an anti-labor capacity.”

The most telling phrase in Merklein’s words are “the school as a business.” Colleges across the country have transitioned from bastions of intellectual enlightenment to resort hotels prizing amenities above academics. Case in point: The ludicrously extravagant gyms in America’s larger universities are home to rock climbing walls, corkscrew tracks, rooftop gardens, and a lazy river. Schools have billions to invest in housing and other on-campus projects. Schools have millions (or in some cases “mere” hundreds of thousands) to pay administrators.  Yet schools can’t find the money to hire more full-time professors. If one follows the money, it’s clear that colleges view education as tertiary. The rigor of a university’s courses doesn’t attract the awe of doe-eyed high school seniors. Lavish dorms and other luxuries do.

Despite such execrable circumstances, professors trek onward and try to educate students as best they can. But how good can education provided by overworked, underpaid adjuncts be? The professors Salon spoke to had varying opinions.

Benay Blend has taught for over 30 years. For 10 of those years, she worked in a bookstore for $7.50 an hour because she needed the extra income.

“I don’t want to fall into the trap that the media use that using adjunct labor means poor education,” Blend said. “I have a PhD. I’ve published probably more than full-time people where I teach. I’ve been teaching for 30 years. I’m a good teacher.”

“On the whole, teaching quality by adjuncts is excellent,” said Kane Faucher, a six-year adjunct. “But many are not available for mentoring and consultation because they have to string together so many courses just to reach or possibly exceed the poverty line. This means our resources are stretched too thinly as a matter of financial survival, and there are many adjuncts who do not even have access to a proper office, which means they work out of coffee shops and cars.”

The anonymous adjunct professor from Indiana expressed a similar sentiment.

“I definitely don’t want to go down the road of ‘Adjunct professors, because of the way we’re handled, are not able to be effective teachers.’ I think some of us are more effective teachers than people who get paid a lot more than we do. Some of us aren’t for really good reasons which have to do with not having the resources. I mean if you’re working at three different colleges, how can you possibly be there?”

Ann Kottner, an adjunct professor and activist, agreed.

“The real problem with the adjunct market right now is that it cheats students of the really outstanding educations they should be getting,” she said. “They’re paying a lot of money for these educations and they’re not getting them. And it’s not because they have bad instructors, it’s because their instructors are not supported to do the kind of work they can do.”

The situation reached such a flashpoint that Kottner and several colleagues (some of which spoke to Salon for this article) penned a petition to the US Department of Labor’s Wage and Hour Division. The petition calls for “an investigation into the labor practices of our colleges and universities in the employment of contingent faculty.” Ana Foryes Tamayo has a petition as well, this one to the US Secretary of Education, Arne Duncan. They both have over 8,000 signatories.

When asked about the petition’s impact, Kottner said it was “just one tactic in the whole sheath of a rising adjunct response to contingency.” Other tools included unionization, which is difficult in many states. Kottner said the most powerful force was information. “I think our biggest weapon now is basically making the public aware of what their tuition dollars are not paying for, and that is professor salaries and professor security.”

When asked if there was any hope about the future, no consensus was reached among the adjuncts Salon spoke with. Some believed things would never change. Others thought the tide would turn if enough people knew how far the professoriat had fallen.

http://www.salon.com/2014/09/21/professors_on_food_stamps_the_shocking_true_story_of_academia_in_2014/?source=newsletter

“Dying in America” report

Latest volley in campaign to slash heath care costs

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By Kate Randall
19 September 2014

A panel appointed by the Institute of Medicine released a report Wednesday titled “Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life.” The 500-page report focuses specifically on those people with “a serious illness or medical condition who may be approaching death.”

The report identifies as a burning issue facing America the fact that people are living longer into old age and exorbitant sums of money are being lavished on them to keep them alive. The panel’s recommendations are both sweeping and sinister. They expose the reactionary character of the current overhaul of the US health care system—championed by the Affordable Care Act—whose basic aim is to slash health care spending at the expense of the lives and well being of the vast majority of the population.

The Institute of Medicine is a research arm of the National Academy of Sciences (NAS), which was establish by an Act of Congress signed into law by President Abraham Lincoln in 1863. According to its mission statement, “the NAS is charged with providing independent, objective advice to the nation on matters related to science and technology.” A sampling of the 21-member panel tasked with producing the “Dying in America” reveals that it is, in fact, populated with pro-corporate figures, a number of whom have served in government.

Among the doctors, nurses, insurers, religious leaders and experts on hospice and palliative care included on the panel is co-chair David M. Walker, former US comptroller general and founder and CEO of the ultra-conservative Comeback America Initiative. Committee member Leonard D. Schaeffer of the University of Southern California, Santa Monica, has served in various capacities at WellPoint Health Networks Inc., pharmaceutical Amgen, America’s Health Insurance Plans, and on numerous health industry boards. He was also assistant secretary for management and budget of the Department of Health, Education and Welfare under the Carter administration.

One could ask why insurance executives and former government budget bureaucrats are sitting on a committee tasked with overhauling end-of-life care for America’s seniors. It is precisely because this panel is concerned first and foremost with cutting costs, and realigning what is already a class-based delivery of medicine into an even more stratified system of health care aimed at cutting costs for government and increasing the profits of the health care industry.

Of central concern for the panel is the fact that life expectancy is increasing, and the costs for care at the end of life consume what they consider an unacceptable proportion of health care spending. From 1995 to 2011, average life expectancy at birth increased from 75.8 years to 78.7 years—a 3.8 percent increase. The report projects that the number of Americans 85 years or older will increase to 4.2 percent of the population by 2050, from the 1960 figure of 0.5 percent.

The report notes, “In the future, the aging US population is likely to experience large increases in certain diseases that are costly to treat,” and despite “stable or slightly falling rates of illness, the growing number of people in the higher-risk age groups means the number of cases will grow,” along with the associated costs to treat these diseases. The solution? Stop expensive hospital treatments for terminal conditions such as heart disease and cancer, and shift elderly patients to palliative care and hospice, with adequate pain management.

The panel attempts to paint this recommendation as the humane response to the needs of patients and their families. What person facing imminent death wouldn’t want to spend his or her last days at home, as free of pain as possible, surrounded by loving family members? But the real reasoning behind this recommendation becomes clear when the report points to the cost of treating some of the most prevalent chronic conditions suffered by the elderly, such as heart disease, diabetes, stroke, chronic kidney disease, chronic obstructive pulmonary disease, Alzheimer’s and cancer.

The report finds that in 2010, expenditures for Medicare patients suffering from six or more chronic conditions averaged $32,658. Approached from the mindset of the cold-blooded actuary, these costs must be slashed. If the committee were to state their objectives honestly, they would say that this is too much to spend on someone who is eventually going to die anyway. Better sooner than later.

The real meat of the “Dying in America” report comes with its call for a “major reorientation and restructuring of Medicare, Medicaid and other health care delivery programs” and the elimination of “perverse financial incentives” that encourage expensive hospital procedures. Leonard Schaeffer, the above-mentioned panel member, expounded on this at a public briefing on the report, saying there needs to be a shift away from fee-for-service medicine, which reimburses doctors for medical procedures, to more emphasis on financial rewards for doctors who talk to patients about their end-of-life care preferences.

In macabre fashion, the panel recommends that such “end of life” discussions begin as early as teenage milestones such as getting a driver’s license or heading to college. The objective is clear: people should be conditioned from an early age to accept that herculean efforts to save their lives, utilizing the latest medical technologies, will not be undertaken. What goes unsaid in the report is the fact that the wealthy, and members of the political and corporate establishment such as those represented on the panel, will always have access to the best medical care, as they will be able to pay out of pocket for the most advanced treatments, even if it “only” saves them a few extra days, months, or years of life.

Tellingly, the report notes that younger, poorer and less-educated individuals tend to be less likely to have end of life conversations with their doctors. In the panel’s opinion, it is this working class population that is sapping vital health care dollars in old age as they seek treatment to prolong their lives. Rather, they should be sent home for a “dignified” death free from unnecessary medical intervention.

Not surprisingly, nowhere to be found in the report are any references to the profits of the insurance industry and drug companies. But the truth is that the central financial and moral danger to American society is not the spending on medical care for the elderly working class population, but the capitalist profit system itself.

The Affordable Care Act, Obamacare, is aimed at restructuring the health care system in America in line with the rapacious aims of the ruling elite. It is a regressive attack on the social right to health care in the guise of “reform.” The Institute of Medicine’s “Dying in America” report and its recommendations are the latest volley in this campaign to realign health care in the interests of the ruling elite.

US safety regulators aided GM in cover-up of deadly defects

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By Shannon Jones
18 September 2014

The National Highway Traffic Safety Administration (NHTSA), the supposed government watchdog over the auto industry, failed to order a recall of General Motors vehicles with deadly ignition defects even though it had evidence for years demonstrating the cars were not safe to drive. Instead, the agency gave Chevrolet models involved in a massive safety recall earlier this year its highest five-star safety rating.

A report by the US House of Representatives Committee on Energy and Commerce investigating the GM scandal documents that the NHTSA brushed aside reports indicating that several GM models, including the Chevrolet Cobalt and Saturn Ion, were prone to sudden engine stalling. Due to low torque in the key cylinder, the ignition could easily be jarred out of the run position killing power to the engine and steering, and disabling airbags in the event of a crash.

GM knew of the problem since at least 2001, but did not issue a warning to customers or order a recall. However, the cover-up by the company was aided and abetted by the NHTSA, which repeatedly turned a blind eye to evidence of fatal crashes involving non-deployment of air bags in the Cobalt.

As early as 2007, “NHTSA had ample information to identify a potential safety defect,” the House report notes. The agency did not identify similarities in three independent investigations it commissioned into frontal crashes involving Cobalts where the airbags did not work. The report further stated that the NHTSA appeared to have been unaware of the basic workings of the airbag systems it was supposed to be regulating, not recognizing the airbags would not deploy if the ignition was turned off.

In particular, the report drew attention to the investigation carried out by a Wisconsin state trooper in 2007 into a fatal crash involving a 2005 Cobalt in which airbags failed to deploy. The trooper stated, “The ignition switch on the [subject’s] vehicle appears to have been in the accessory position when it impacted the trees preventing the airbags from deploying.” It noted that the NHTSA website had posted five complaints by Cobalt owners of the engine suddenly switching off while the car was running. However, no one in NHTSA appears to have drawn any conclusions or taken any action.

A report in the September 15 edition of the New York Times notes that by 2014, when GM finally initiated its recall, the NHTSA had received more than 2,000 complaints related to stalling in the Cobalt and other recalled vehicles.

The NHTSA’s refusal to act in the case of GM is part of a pattern of indulgence shown to all the major car manufacturers. In fact the New York Times reports it has been 35 years since the NHTSA last used its legal authority to force a manufacturer to recall cars.

Last year, the NHTSA did somersaults to accommodate Chrysler over the recall of Jeep models with gas tanks prone to explode in rear impact collisions. After initially suggesting a 2.7 million-vehicle recall, the agency reduced its request to 1.6 million vehicles. Further, the NHTSA agreed to Chrysler’s proposal to install a trailer hitch on the rear of the vehicles to provide additional protection to the gas tank rather than changing the position of the gas tank, a far more expensive fix.

At least 51 deaths are tied to the gas tank defect and the number could be as high as 160, according to the consumer group Center for Auto Safety. After arranging the deal, former NHTSA head David Strickland resigned from the agency to take a job with a law firm that lobbies on behalf of Chrysler and other automakers.

The new acting head of the NHTSA, David Friedman, vigorously defended the agency’s actions in relation to the GM recall in hearings before the Senate on Tuesday. Friedman rejected any suggestion of negligence or failing on the part of government regulators in the GM ignition scandal. Friedman denied anything was amiss at the agency, attempting to shift the entire blame for the debacle onto GM, which, Friedman claimed, should have provided more information.

Under questioning by the Senate panel, Friedman also rejected the suggestion that engine stalling was a safety issue independent of its effect on airbag deployment. “If a consumer can safely pull a vehicle over to the side of the road and restart that vehicle, that’s a situation where the consumer can be safe,” Friedman claimed.

GM had classified engine stalling a “customer satisfaction” issue rather than a safety issue, in order to avoid bringing the Cobalt ignition switch issue to the attention of the NHTSA. In this context, Friedman’s remarks amounted to agreement with GM’s cover-up.

Under further questioning, Friedman was unable to state the number of times the agency had issued subpoenas to auto manufacturers for information relating to safety issues over the past 10 years. In fact, the issuance of subpoenas by the NHTSA is a rare occurrence. At a Senate committee hearing in April, Friedman claimed he did not even know the safety agency had subpoena powers.

Friedman went on to defend provisions of a 2000 law that requires automakers to report any claims of serious death or injury as a result of vehicle defects, but makes the response of automakers to questions about the cause of the accident voluntary. As a consequence, in the vast majority of cases the auto companies choose not to answer.

Summing up the NHTSA’s attitude Friedman declared, “we don’t want to hinder innovators.”

The NHTSA chief’s responses painted a picture of a government agency in thrall of the companies it is charged with regulating. No one has been held to account by the agency for its failure to red flag the ignition defect or order a recall.

Despite election year posturing by House and Senate members who presented themselves as defenders of the travelling public, no serious proposals for reform were forthcoming from either body. The House report merely chastised the NHTSA for lack of “focus and rigor.”

For their part, Senate investigators did not propose any sanctions against NHTSA, let alone demand that Friedman be dismissed. Over the past decades both Democrats and Republicans have systematically dismantled government oversight of consumer and occupational health and safety, in the process converting bodies such as NHTSA into little more than public relations fronts for the businesses they are supposed to monitor.

The NHTSA spends about one percent of its budget, $10.61 million in 2014, on safety defect investigation. That is considerably less than GM CEO Mary Barra’s annual compensation package. A much larger portion of NHTSA’s funds go to support the activities of the police and courts, in the form of grants to the states for traffic enforcement.

As for NHTSA’s vehicle safety rating program, it is a favorite marketing tool for the auto companies. NHTSA has reportedly issued its top 5-star rating to two-thirds of the 2015 models it has rated so far. From 2001 to 2010, 87 percent of all ratings were four or five stars.

DIGITAL MUSIC NEWS

Pandora Finalizes Publishing Deal With BMG

 

Handshake      Not content to wait for the greater music industry to enact significant changes, Pandora last week announced it has signed a direct deal for music rights with BMG, the world’s fourth-largest music publisher. The arrangement includes the portions of its catalog represented by ASCAP and BMI, the two major licensing groups that have long handled the rights for millions of songs in the U.S. As reported by The New York Times, BMG’s large roster includes songwriters who have written major hits for such performers as Adele, One Direction, Beyoncé, and Frank Sinatra; the company is part of German media conglomerate Bertelsmann.

Even though BMG remains a member of ASCAP and BMI, Pandora bypassed them by making the direct deal for what analysts believe is a higher royalty rate than those two organizations – which are governed by decades-old federal regulation – are able to obtain on their own. In exchange, the deal gives BMG and its songwriters unspecified “marketing and business benefits,” according to a statement issued by Pandora.

Last month Pandora struck a similar deal with Merlin, which represents thousands of independent record companies in digital licensing negotiations. That agreement is expoected to pay the record labels slightly better royalty rates than would be available through the compulsory licensing terms available to Pandora under United States copyright law, and also give the labels access to valuable marketing insights from Pandora’s vast collection of user data. “We believe direct deals with labels offer better content cost visibility in the longer term, and we think they improve relations between Pandora and the artists,” Nomura analyst Anthony DiClemente wrote in a research note following the BMG announcement. 

Liberty CEO: Sirius XM Is Eyeing Streaming

Expansion To Drive Competitive Growth

 

Sirius XM      It appears Sirius XM finally may be realizing digital streaming technology is leap-frogging right past satellite radio distribution. While the Liberty Media-backed company entered the streaming audio space several years ago, recent comments made by President/CEO Greg Maffei indicate the satcaster is studying the growth curves of other streaming music services and determining how to compete on a major scale.

“We are watching what happens in streaming,” Maffei said at the Goldman Sachs Communacopia conference in New York last week. “Taking Sirius XM’s unique content beyond the car in the home and in the office, it’s an opportunity we’ve not yet attacked.”

His comments make it clear that Sirius XM, which depends heavily on subscribers getting satellite-radio receivers in their cars, is interested in becoming a bigger player in the internet-based streaming space. According to the New York Post, subscribers who prefer to listen to the service on their mobile devices can get a stand-alone online radio package for $14.99 a month, less than the current “all-access” package, which costs $18.99. 

No Big Surprise, Really: Clear Channel

Changes Its Name To iHeartMedia

 

     Yesterday’s announcement that Clear Channel Media & Entertainment was changing its name to iHeartMedia seemed to cause a heart attack throughout the broadcasting industry, but a few analysts actually saw the change coming months ago. The company increasingly was using the “iHeartRadio” line to brand its stations on the local level, and the Clear Channel name – associated with billions of dollars of debt – was considered clunky by many folks inside the radio business and on Wall Street. While the “heart” part of iHeartMedia itself may seem a decade out of date, the name change re-brands the company among younger listeners (and ostensibly, media buyers) who associate it with the iHeartMusic Festival which, not coincidentally, begins Friday (Sept. 19) in Las Vegas.

The name-change is “a reflection of  the fact that the company has changed radically over last several years,” Clear Channel Chief Executive Robert Pittman said in a statement. “We have massive consumer reach and influence across our platforms because we know how to program the live content people want to hear. Right now we are the largest mobile media company in existence, and we deliver more live programming than any other media company today.”

Indeed, the aforementioned iHeartRadio Festival attracts tens of thousands of fans each year, and the TV broadcasts last year drew millions of viewers. Also televised are the iHeartRadio Jingle Ball, iHeartRadio Pool Party, and several iHeartRadio concerts a year. Additionally, Clear Channel’s inaugural iHeartRadio Music Awards on NBC in May attracted 5.5 million viewers.

As reported by the Wall Street Journal, much of the public has come to equate the Clear Channel name with corporate consolidation of the radio and concert industries. However, according to a recent study released by Edison Research, iHeartRadio’s brand is second in recognition in audio streaming, behind Pandora’s 31% share with 9%, and ahead of iTunes Radio’s 8% share. While the name change affects all former Clear Channel radio stations and its digital audio platform, the company’s outdoor business will retain the name Clear Channel Outdoor. 

Apple’s U2 Music Giveaway Breaks Bad

 

     It all began with U2’s appearance with Apple Inc. CEO Tim Cook last week. As the company made its predicted announcement of the new iPhone 6 and a new wearable wrist device, the company blundered into what Upstart Business Journal called an “unforced error” with its decision to automatically add the band’s new album “Songs of Innocence” to 500 million iTunes accounts. This meant that, if a user’s device was set to automatically download newly-purchased music, the brand-new U2 album would be sitting on the iPhone, iPad, etc.

One week later, in the midst of a massive backlash from angry iTunes customers, Apple has been forced to put up a special page for users who want to erase “Songs of Innocence” from their libraries with a removal tool that indicates how wrong a seemingly good idea can go. “Nothing pisses off the audience more than pushing something they don’t want and didn’t ask for,” media analyst Bob Lefsetz said in a newsletter. “They’d have been better off releasing it on YouTube; that’s where the digital generation goes for music. iTunes is a backwater. It may be the number one sales outlet, but it’s not the number one music platform… not even close.”

The stunt did little to help U2’s chart prospects, either. Billboard last week announced its refusal to count the album release on its charts, even though Apple paid $100 million to get it there. “While U2 surprised the music world by releasing its new album, ‘Songs of Innocence,’ as a free download to iTunes Store account holders and for streaming on Beats Music, you won’t see it on the Billboard 200 albums chart for another month and a half,” the industry magazine said in a statement.

“Free or giveaway albums are not eligible for inclusion on Billboard’s album charts and do not count toward sales tracked by Nielsen SoundScan. “Once ‘Songs of Innocence’ goes on sale beginning Oct. 14, it will then set its sights on Billboard’s sales charts. On that date, the album will be available in both standard and deluxe editions to physical and digital retailers, as well as on streaming services other than Beats. Until then, only current or new iTunes or Beats account holders will have access to the album.”

 

Deezer Launches High-End Audio Service

To Compete With Spotify And Beats

 

     French music streaming company Deezer has launched an elite service with what it calls higher sound quality for audiophiles as it tries to differentiate itself from rivals Spotify, Pandora, and Beats Music. According to the Financial Times, the company said it plans to launch the service in the U.S. through a partnership with Sonos, the speaker manufacturer that specializes in wireless audio.

Deezer ostensibly is betting that high-fidelity audio will enhance its appeal in an increasingly crowded and competitive market. The new service, to be called Deezer Elite, will stream “lossless” audio files at a standard of 1,411 kilobits per second. The higher the bitrate of a file, the more detailed the sounds, and Deezer’s high rate is more than four times the top bitrate of Spotify. The service will cost up to $19.99 a month, twice the $9.99 a month Spotify charges.

In a statement, Deezer North America chief executive Tyler Goldman said the company was “focused on super-serving the needs of underserved market segments” such as audio enthusiasts. Many audiophiles have shunned streaming services because their sound quality is usually inferior to that of high-quality downloads, vinyl albums, or CDs, he said.

Still, the market for high-end audio streaming may be limited, because of higher subscription and bandwidth charges costs, and the fact that most people stream music through smartphones and computers, which do not have the capability for high-end audio.

 

Warner Music Consolidates Biz-Dev Unit

 

     Warner Music Group this week consolidated its global business development functions under a single leadership team, with COO Rob Wiesenthal overseeing the company’s digital business development efforts while continuing to report to CEO Steve Cooper. At the same time, the label promoted Jonathan Dworkin to EVP of digital strategy and business development. Dworkin will report to Wiesenthal and continue working on “building global-minded partnerships that expand WMG’s success with artist development.”

As reported by Billboard, Cooper said the new unified structure will give artists a portfolio of “unmatched” innovative services and opportunities. “This move recognizes that digital technology is a driving force across all aspects of our business, and that the pace of change – both globally and locally – requires nimble experimentation,” he said in a statement.

Wiesenthal joined WMG in early 2013 to oversee the company’s partnership with Shazam, and also spearheaded the deal with Clear Channel to become the first U.S. major label to receive artist performance royalty payments when their master recordings are played on the radio. This new role at the label creates an opportunity to “establish new business approaches for artists, and build on WMG’s reputation as the most ambitious and progressive music company in the world,” he said in a statement.

 

A publication of Bunzel Media Resources © 2014

 

 

Leading tech investors warn of bubble risk ‘unprecedented since 1999′

Snapchat CEO Evan Spiegel
Snapchat CEO Evan Spiegel, whose company was valued at $10bn despite having never turned a profit. Photograph: Jae C. Hong/AP

Two of the world’s leading tech investors have warned the new wave of tech companies and their backers are taking on risk and burning through cash at rates unseen since 1999 when the “dotcom bubble” burst.

Bill Gurley, partner at Silicon Valley-based investor Benchmark, sounded the horn of doom on Monday warning that “Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now.”

In an interview with the Wall Street Journal Gurley, whose investments include OpenTable, Uber and Zillow, said startups were taking on risks in a way “unprecedented since ‘99”.

Gurley said that “more humans in Silicon Valley are working for money-losing companies than have been in 15 years”, and they’re burning through huge piles of cash.

“In 01 or 09, you just wouldn’t go take a job at a company that’s burning $4m a month. Today everyone does it without thinking,” he said.

His comments were backed up Tuesday by Fred Wilson, the New York-based co-founder of Union Square Ventures who has backed companies including Twitter, Tumblr and Zynga.

Burn rates – the amount of money a startup is spending – are “sky high all over the US startup sector right now”, he wrote in a blog post.

“We have multiple portfolio companies burning multiple millions of dollars a month. Thankfully its not our entire portfolio. But it is more than I’d like and more than I’m personally comfortable with,” he wrote.

“I’ve been grumpy for months, possibly for longer than that, about this. I’ve pushed back on long term leases that I thought were outrageous, I’ve pushed back on spending plans that I thought were too aggressive and too risky, I’ve made myself a pain in the ass to more than a few CEOs.”’

The comments come after a new generation of tech companies have attracted record levels of investments at levels that give the profitless businesses eye-watering valuations.

In August Snapchat, the social messaging service, was valued at $10bn after a new round of funding. The free service’s fans send 500m self-deleting messages a day, but Snapchat has yet to declare how it intends to make money. Among the other big tech valuations in recent months are Uber, the taxi app service, which was valued at $18bn after its last round of funding in June, and Airbnb, the short term rentals service, which was valued at $10bn in April.

But the valuations are not the immediate issue, according to the sceptical tech investors. “Valuations can be fixed. You can do a down round (investing at a lower valuation), or three or four flat ones, until you get the price right,” writes Wilson. “But burn rates are exactly that. Burning cash. Losing money. Emphasis on the losing.”

Asked if investors, and the people working for the companies, were distracted by the potential for reward, Gurley said: “Yeah, it’s a whole bunch of things. But you just slowly forget, and half of the entrepreneurs today, or maybe more – 60% or 70% – weren’t around in ‘99, so they have no muscle memory whatsoever.”

http://www.theguardian.com/technology/2014/sep/16/tech-bubble-warning-investors-dotcom-losing-money

Uber may be a bum deal for drivers and cabbies alike, threatening the future of full-time work

How Uber’s Efforts to Squeeze Drivers Have Compelled Them to Fight Back

Last week in Long Island City, a waterfront neighborhood in western Queens, over 1,000 Uber drivers went on strike, protesting against several recent policy changes that directly cut into their wages. LIC is cab country, home to countless car service companies, and it can sometimes feel like every passing vehicle is a taxi of some sort: a classic yellow cab, a town car, a green taxi or, more likely than not, a ridesharing car. So it came as no surprise that drivers who work for Uber—a smartphone app that connects drivers with people looking for a ride—chose the company’s Long Island City headquarters to protest their labor practices.

One driver grievance was the decision to extend a summer discount, where the base price for standard rides was slashed from $12 to $8, into the fall, requiring drivers to work more hours to make the same money. The other is slightly more complex, but just as damaging to workers’ earning potential. There are several distinct tiers of Uber service (UberX and Uber XL, the cheapest services offered in New York City, and UberBlack and UberSUV, the higher-end black car services), and drivers for the higher-end versions earn more, in part to compensate for the higher costs of their vehicles, which they must supply themselves. Without any advance warning, the company told drivers for “Black” and “SUV” that they would now be sent cheaper fares as well, and that declining those fares could lead to their deactivation from the service.

The coordinated outcry from their workers got Uber’s attention, and, in an abrupt turnaround late on Friday morning, the company sent a mass email to their New York drivers giving them permission to decide if and when to receive UberX requests. Though this conflict may seem like a minor technical issue, it speaks to the increasingly fraught dynamic between the San Francisco-based company and its international network of independently contracted drivers.

Uber has built its reputation on providing reliable, safe rides at any time and at any location in the urban centers where it operates. In 205 cities in 45 countries across the world, it is now possible to take out your phone, select a car from a map showing nearby Uber vehicles, and have a cab waiting at your doorstep in under five minutes. Because customers’ accounts are linked to their debit or credit cards, payment is seamless. The convenience and usability of the app have inspired devoted fans, and few would argue against the practicality of Uber and its ever-expanding list of peers, including Sidecar, Lyft, SheTaxis and Halo. But in their focus on customer service, ridesharing companies have pushed the concerns of their workers aside.

* * * * *

Since it’s founding in 2009, Uber has become the poster child for the sharing economy, a nebulous concept that basically boils down to companies taking on the role of middlemen. Companies like Uber, Airbnb and Snapgoods use technology to connect people to various goods and services (apartments, cars, ball gowns, bikes) that they can rent temporarily. The sharing economy has been heralded as a resource-saving, efficient, collaborative system that allows people to make a profit from items they wouldn’t otherwise be using. In another light, it can be seen as a sign of our economically insecure times. People who don’t make enough at their day jobs can try to cover expenses by renting out an extra room of their apartments, or driving strangers around a few afternoons per week. It is evidence of the fragile finances of people who are underpaid for minimum wage work or cobbling together full-time schedules from an assortment of temporary and seasonal gigs.

Investors love this economic model, for obvious reasons. Because these service providers are tech companies first and foremost and do not own the products being rented, much of the business risk, from upkeep to scheduling, is shifted to the workers. Companies like Uber—which received a valuation of $18.2 billion back in June—can make enormous profits while washing their hands of any responsibility to their employees.

Uber has exploited their position as middleman in two principal ways, both of which have a serious impact on people who drive cabs for a living. One, they claim that they are “disrupting” the overly regulated, outmoded taxi industry in the name of competition and the free market. What goes unmentioned are the thousands of full-time taxi drivers, many of whom belong to associations that help them fight for decent wages and other benefits, being put out of work by the rise of ridesharing companies. Furthermore, for a company that so values competition, Uber has systematically worked to quash their rivals in cities across the country, engaging in underhanded tactics to poach drivers from other car services.

The other way Uber takes advantage of their middleman status is in their treatment of workers. Uber drivers are not technically considered employees. Instead, they are “independent contractors,” meaning that they don’t receive any of the benefits or protections employers are typically expected to provide. The company tries to play this both ways. On the one hand, they claim that Uber drivers—or “partners,” as they’re known—typically work part-time, and drive as a way to make some extra cash. Yet the company also markets itself as a job creator and promises drivers the opportunity to make up to $90,000 a year in places like New York—no one’s idea of pocket change, if it is in fact true.

The contractor model has been tested by a number of corporations that want to do away with the inconvenience of having to be accountable to their labor force. In one recent example, FedEx Ground lost a landmark court case for misclassifying their drivers as “contractors,” saddling them with the burden of providing their own healthcare, FedEx-brand equipment, gas, insurance and much more. FedEx may now have to pay hundreds of millions in backpay. By shifting much of the risk and cost of operations onto the workers, companies like FedEx and Uber are relieved of the responsibility of dealing with the day-to-day hazards of running a business. In a blog post about the downsides of the sharing economy, Maureen Conway of the Aspen Institute, a centrist think tank, writes:

“If someone gets sick in the car and that driver has to spend the rest of the day cleaning the car, that’s not Uber’s problem….The risks associated with illness, injury or just the ups and downs of customer demand are largely borne by workers.”

Uber drivers use their own vehicles, pay for their own gas, parking and repairs, receive no benefits or worker’s compensation, and, once they are hired, have hardly any interaction with the company for which they work. Taken together, these additional costs make a significant dent in what workers bring home at the end of the day. Yet the company and its acolytes promote Uber as a source of well-compensated, stable employment. Uber CEO Travis Kalanick announced last week that they are adding 50,000 new “driver jobs” each month, and they have hundreds of thousands of drivers in their network. In promotional materials, Uber brags that their drivers can make salaries in the upper five figures in particularly busy markets like New York and San Francisco, and that they earn far more on average than taxi drivers. This would all seem to imply that the company acknowledges that drivers operate vehicles for Uber as their primary source of income. As the recent protests in New York City (and Los Angeles, and Santa Monica) suggest, many of the people who work for Uber consider driving their full-time job and are struggling to make ends meet.

Yet the company also markets itself as a form of part-time employment, a stopgap measure between full-time jobs or a way for grad students or stay-at-home moms to make a few extra bucks. This is certainly the case for some drivers, who enjoy the ability to create their own schedules and serve as their own employers. Nina Beck, a sunny 26-year-old from the Bay Area, told me in a phone interview that she started working for Uber because she was getting married and needed a job with flexible hours. Maria Vargas, an Uber driver who lives in Brooklyn’s Borough Park neighborhood, began working for the company when her kids moved out and she no longer needed to work at her full time job sewing for a garment factory.

“I love it,” she said. “You can go on vacations. They don’t care if you’re working or not. The money is never enough, but for me, it is.”

For many others, it is not. Haroon, a Pakistani immigrant who has been working for Uber for two years, told me that he works 12-hour shifts six days per week in order to support his wife and two young sons. Most of the drivers who he knows from Uber, and from a previous stint working for Lyft, work full-time, often clocking far more than 40 hours per week. Anyone hoping to earn a decent income as a ridesharing driver should expect to treat it as a full-time job, whether or not the company admits it. Though Uber is surely aware that casual part-time workers aren’t the reason the company has been able to move into scores of new markets at a blistering pace. No corporation would function with a labor force of individuals who only worked for an hour or two a day. Uber’s popularity is based on its reliability and availability, and the company needs knowledgeable, friendly drivers working on a steady basis to ensure that they maintain it.

Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance, NYC’s union for yellow taxicab drivers, put it to me this way: “Ridesharing companies like Uber are informalizing driver labor. Throughout the world, whenever workers’ labor is deprofessionalized, they lose protections and rights…As much as Uber supporters talk about their model being something modern, I really think it seems quite backwards as far as workers’ rights are concerned.”

* * * * *

The ability to make “enough” as a ridesharing driver depends largely on where Uber drivers are located geographically. They can earn much more in cities with high customer demand, like San Francisco and DC, but the issue has become more complicated by Uber’s recent fare cuts. As a means of boosting ridership and offering customers the cheapest possible rates, Uber has drastically cut fares in many states, including New York and New Jersey. Customers are understandably thrilled by the cheaper prices, but a lower fare translates to a pay cut for drivers, who earn 80% of the cost of each Uber ride. The company says that drivers will benefit from this system since they will get many more trips as a result of the spike in rider interest. Drivers don’t seem so sure.

“You can’t keep cutting people’s rates in half and telling them, ‘Oh, you’re going to get twice as many customers!’” Jonathan Cousar, a part-time Uber driver who runs the website Uber Driver Diaries, told me in a phone interview. “There are only so many people that you can physically drive around in one hour. It basically translates to drivers doing more work for more time while making a smaller profit.”

Another barrier to earning a decent wage is the surplus of drivers. Because Uber is desperate to prevent other ridesharing services from hiring new drivers, and because their business model relies on providing people with cab rides anywhere and at any time, the company has far more drivers than Uber workers say they actually need. This cuts into business both for traditional cab drivers and for ridesharing drivers. The Uber driver thread on Reddit is flooded with posts by drivers upset about their lack of trips. “I haven’t had a single fare this weekend (sixteen hours online),” user ImagineFreedom, who is based in San Antonio, fumed in a posting. “All of a sudden it seems like driver numbers have quadrupled and ads are still being posted for drivers.” On a recent afternoon, my Uber app showed six available cars in a two-block vicinity on a quiet corner in the Brooklyn neighborhood of Crown Heights.

Cousar, who operates in northern New Jersey, told me that when he first joined the company, he easily made his goal of $500 per week to supplement the income he made from his web hosting business. But now it’s impossible to make that much thanks to the combination of fare cuts and the surplus of drivers on the road.

“It makes me wonder how reliable this is as a future full-time or even part-time income. They’ve already brought in far more drivers than the market can support, and they’re still recruiting so aggressively.”

This is where the lack of accountability comes in. Uber doesn’t care if drivers are only getting one fare an hour, as long as all of their customers are getting picked up on time. It’s not their problem if drivers have to work longer hours to make the same money, or to waste hours waiting around for a trip that never comes. Uber’s concerns are customer satisfaction and profit, and in those regards, they’re doing as well as any company could hope to.

* * * * *

If Uber drivers are fed up with this lack of consideration, traditional taxi drivers are in despair. The highly regulated industry has strict requirements that determine standards for licensing, rates and training. Uber isn’t subject to these regulations, meaning its drivers have a significant advantage over taxi drivers who have to comply with county and state regulations that specify when and how a for-hire car can be booked. Kalanick, the CEO, has scoffed at the taxi industry as a “protectionist scheme,” and blames excessive regulation for strangling competition in the field.

There is certainly some merit to his claims, and customers have plenty of legitimate complaints about the traditional cab industry (the difficulty of finding a ride at odd hours, high prices, a lack of options). Ask why people use Uber and they’ll respond with complaints about cabbies talking on the phone while driving, taking unnecessarily long routes to jack up the fare, or subjecting them to unwanted flirtations.

Beck, the San Francisco-based Uber driver, told me, “Personally I’m not really concerned about taxi drivers losing their jobs. I can’t tell you how many creepy cab drivers I’ve had in my life; it’s just like ‘good riddance.’ They never innovate. I guess that’s not the fault of individual cab drivers but the industry itself.”

This last line is key. Why are we blaming individual taxi drivers for the effects of strict regulations they had no part in creating? And isn’t it a bit unfair for people to write off an entire industry based on a few negative experiences? Imagine passing judgment on the food service industry based on the one time a waiter happened to be rude to you. Moreover, most of the regulations that “encumber” the taxi industry are designed to protect consumers. Taxi commissions exist to control fares, enforce training, licensing and safety standards for drivers, and to provide a platform for customers to file complaints or report lost property. Most of the negative press about Uber has involved customer complaints: female riders being sexually harassed by drivers or passengers being charged exorbitant rates under the surge pricing system, where fares go up, sometimes dramatically, during times of increased demand. In August, Uber riders in San Francisco took to social media to rail against the $400-plus fees they were being charged to get to and from a popular local music festival. Clearly, consumers expect some degree of liability and oversight from the companies with which they do business.

So who are the people who are so vigorously applauding Uber’s fight against industry requirements? A March Daily Beast article, which recounts a visit from Republican Senator Marco Rubio to Uber’s DC office, gives us some indication.

“Regulation,” Rubio told the gathered group of Uber employees, “should never be a weapon used by connected and established industry to crowd out innovation and competition, and this is a real world example.”

* * * * *

Uber’s cutthroat tactics are not restricted to the taxi industry. In a remarkable scoop at The Verge, Casey Newton details the underhanded methods the company uses to hurt the business of other ridesharing services. The anecdotes read like the pages of Roald Dahl’s Charlie and the Chocolate Factory, except instead of sending spies to steal recipes from rival candy manufacturers, Uber sends undercover “brand ambassadors” to convince drivers from Lyft and Sidecar to switch companies. Their campaign against Lyft, their main competitor, is particularly underhanded and systematic. CNN reported in August that the company had employees around the country order and then cancel 5,560 Lyft rides, disrupting the company’s operations and causing Lyft drivers to lose business.

Cousar, the Jersey-based driver and blogger, expressed his discomfort with these aggressive tactics. “I think they’ve done some terrible things. From a moral standpoint they make me cringe, and they make me less proud and more leery about working with them.”

For now, at least, the legality of Uber’s tactics hasn’t been seriously questioned. As any defender of the company will tell you, all competing companies try to hire each other’s workers and undercut each other’s business. But Uber is already the colossus of the ridesharing industry, with a budget and international presence that far surpass any of its rivals. Though Kalanick and other Uber reps constantly preach the gospel of competition to reporters, their methods are as anti-competitive as they come. As Andrew Leonard at Salon puts it, “There’s little doubt that Uber is the closest thing we’ve got today to the living, breathing essence of unrestrained capitalism….This is how robber barons play.”

After all, wasn’t the whole reason that Uber came into being to shake up the taxi industry monopoly and open it up to new ideas and innovations? Basic economics tells us that competition is essential to provide companies with an incentive to keep prices reasonable, ensure quality and moderate supply. So do we really want Uber to be our only option?

People lover Uber because it’s reasonably priced, it’s reliable and it’s easy to use. But we love plenty of products and services that depend upon the exploitation of workers: disposable fashion from H&M and Forever 21, fast food from Wendy’s, discount furniture ordered on Amazon. The traditional taxi industry may suffer from an excess of regulation, but regulations exist for a reason. If we want workers to be protected from exploitation, have stable, full-time jobs, and benefit from decent working conditions, we need to treat them like the employees that they are. If Uber turns out to be the industry-transforming technology it claims to be and becomes the new universal model for hiring taxis, we need to seriously consider some of these questions. Because if the sharing economy is the way of the future, the future of full-time, permanent work is at stake.

Allegra Kirkland is AlterNet’s associate managing editor. Her writing has appeared in the Chicago Reader, Inc., Daily Serving and the Nation.

http://www.alternet.org/corporate-accountability-and-workplace/how-ubers-efforts-squeeze-drivers-have-compelled-them-fight?akid=12245.265072.efeL2-&rd=1&src=newsletter1019485&t=5&paging=off&current_page=1#bookmark