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The Shaky Future Of Diesel Fuel In America

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Volkswagen’s cheating on emission tests for its diesel vehicles has not only stirred a controversy; it has also raised a question: Is there life left for diesel in the U.S.?

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ARI SHAPIRO, HOST:

The epic scope of the Volkswagen scandal brings this question into focus. Is there a viable future for diesel cars in the United States? NPR’s Sonari Glinton took that question to some experts.

SONARI GLINTON, BYLINE: For this story about diesel cars, we have to talk as much about science as business. But don’t worry. You don’t have to be an engineer. We got plenty.

MARGARET WOOLDRIDGE: Hi. I’m Margaret Wooldridge, and I’m a professor at the University of Michigan in mechanical engineering.

GLINTON: To be more specific, Wooldridge studies and tests engines. So first, she’s going to help us understand some of the basics about diesel engines.

WOOLDRIDGE: The primary advantage of a diesel engine versus a gasoline engine is the efficiency. So it’s fundamentally higher efficiency than your gasoline engine.

GLINTON: It also has greater low-end torque, which means you have more power at low speeds, but that higher efficiency comes at a cost. The higher efficiency means higher pressure, and the higher pressure results in higher temperatures. So the hotter the burn, the more byproducts you get – things like soot or nitrogen oxide or NOx which are bad for air quality. So the fundamental challenge is…

WOOLDRIDGE: The things that we do to increase the efficiency intrinsically make more air toxic emissions.

GLINTON: Wooldridge says while some of the science to make diesel clean and perform well is difficult, it is still doable.

WOOLDRIDGE: It’s a good technology. It really is a good technology from a fundamental, thermodynamic standpoint. The diesel image is what we have to overcome.

RICH JOSWICK: They’re not the diesel cars that I remember from 1980 that were these sputtering, black-smoke-spilling things. They really are efficient and powerful.

GLINTON: Rich Joswick is with the PIRA Energy Group. They consult car companies, oil companies, governments – you name it – about energy, especially oil and diesel. He says the extra cost of diesel cars puts it at a disadvantage. And with low gas prices that look to be staying low for a while, that’s an extra hit. He says there are just fewer and fewer compelling reasons today to buy a diesel.

JOSWICK: It doesn’t look like it’s saving you money. Or you want to do it for green reasons, in which case, you might want to buy an electric car instead. An electric car is cleaner than a diesel. Or you are just, you know – you like the lure of some of these powerful European cars.

GLINTON: Joswick says demand for diesel is already very, very low, and growth – if there’s any – will be slow. He says he expects diesel to remain niche.

So much of the problem with Volkswagen’s diesels is that they were sold as environmentally friendly. Roland Hwang is in charge of transportation at the Natural Resources Defense Council, an environmentalist group.

ROLAND HWANG: When people ask me personally, should I buy that diesel vehicle, I’ve told them that you should go ahead and buy that vehicle; drive that vehicle because those vehicles meet our standards. I’ve told that to acquaintances of mine, given that advice to acquaintances of mine in the past.

GLINTON: Hwang says it’s clear VW wasn’t meeting standards. The Environmental Protection Agency announced today that it will revamp the way they test for emissions and fuel economy across the board – gas and diesel, a move Hwang applauds. But…

HWANG: I think we do have to question whether diesel engines or any other internal combustion engine vehicle really can get us to where we need to be in meeting our air quality and energy goals.

GLINTON: Hwang says gasoline engines are getting more efficient, and there are plenty of other clean and efficient options.

HWANG: We don’t care if – whatever that technology is – whether its diesel, whether it’s running on gasoline or peanut butter – we don’t care what it’s running on as long as it’s clean.

GLINTON: Hwang says the real challenge is not just to make sure diesel is clean but that all cars are clean and that we can rely on the manufacturers. Sonari Glinton, NPR News.

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The Next Phase In Migrant Crisis: Helping The Newly Settled Land Jobs

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Once European countries get Syrian refugees settled, they will need to help them get jobs. But that process might be easier than you think.

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ARI SHAPIRO, HOST:

Syrian refugees who’ve made it to Europe want to work. Yet even with impressive credentials, this is not easy. Stacey Vanek Smith from our PLANET MONEY podcast reports.

STACEY VANEK SMITH, BYLINE: One month ago, Omran Kassar (ph) was taking his last final exam at Damascus University in Syria in macroeconomics.

OMRAN KASSAR: It was pretty difficult. Sometimes I had to just memorize the words without even understanding them (laughter). I just wanted to pass.

SMITH: He did pass and got his degree. But finishing college meant Kassar could no longer put off his mandatory military service in the Syrian Army, which meant fighting his fellow Syrians and ISIS. So the next day, Kassar’s parents and sister put him on a plane. He says the airport was full of young men who had just passed their last college exam.

KASSAR: It was obvious. It was obvious. Everybody who passed his last exam – the next day, the next week, you’ll find him out of Syria.

SMITH: So there are two ways you could look at Kassar. You could see him as one of those people you see on TV walking over country borders, taking a harrowing late-night boat trip, someone who needs food and shelter and help. And all of that is true, but there is another way to look at Kassar. He is an incredibly smart man with a college degree in economics who is ready to work. Ian Goldin is economist at Oxford. He says refugees like Kassar are an economic gift.

IAN GOLDIN: They’ve come across incredibly hazardous journeys to make it into Europe, so one should assume that these people are not lazy. They are certainly not scared of seizing opportunities, and those are exactly the sort of people you want in societies.

SMITH: Goldin says historically, the countries where refugees settle end up benefiting.

So why aren’t European countries, like, fighting each other over the refugees?

GOLDIN: Well, I think there’s a problem of short-term and long-term.

SMITH: Short-term, it costs a lot to get refugees settled – around $14,000 per person. But long-term, refugees contribute a lot more than they cost, often within just a few years. Dozens of companies in Europe have already figured this out.

RAINER HUNDSDORFER: My name is Rainer Hundsdorfer, and I’m the CEO of ebm-papst.

SMITH: Not Pabst the beer. Ebm-papst makes cooling systems in Germany, and it’s pushed itself to the front of the line and launched a program to hire Syrian refugees.

HUNDSDORFER: We intended to help those people but also help us finding good, qualified people amongst those refugees.

SMITH: Do you have a hard time finding workers to fill your jobs?

HUNDSDORFER: Yes.

SMITH: Hundsdorfer hopes to hire hundreds of Syrians in the next couple of years. For Omran Kassar, the economist refugee, things are looking up. The day he arrived in France, he was greeted by the president, Francois Hollande. It was a photo op, but Kassar says it made him optimistic. Stacey Vanek Smith, NPR News.

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Turing Pharmaceuticals Retreats From Plan To Raise Price Of Daraprim

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Turing Pharmaceutical CEO Martin Shkreli has backed down on his plan for an astronomical price increase on a drug used to treat a deadly parasitic infection. The company did not say what the new price would be, but presumably less than the $750 a pill it had planned to charge. The move illustrates how Shkreli is more Wall Street speculator than pharmaceutical entrepreneur.

Transcript

KELLY MCEVERS, HOST:

We’re going to learn more now about the CEO of Turing Pharmaceutical. The company came into focus after a New York Times story this week detailed how it raised the price of a drug that’s been on the market for more than 60 years – and not a small increase, a 5,000 percent increase. The company has now backed down, but as NPR’s Jim Zarroli reports, the controversy hasn’t.

JIM ZARROLI, BYLINE: Turing didn’t develop Daraprim. It simple bought the drug and then raised its price from $13 a pill to $750. Since then, the backlash against the company has been fierce. Its 32-year-old Martin Shkreli has been mocked and criticized by doctors, other biotech companies and even Hillary Clinton.

(SOUNDBITE OF ARCHIVED RECORDING)

HILLARY CLINTON: That’s price gouging, pure and simple. And pharmaceutical companies that acquire an existing affordable drug that people rely on it and then turn around and charge a fortune for it just bet on the fact that desperate people will find some way to pay for it.

ZARROLI: This isn’t the first time that Shkreli has been on the hot seat. A few years ago, he started his own biotech company, but he was kicked out after a financial dispute with the board. Shkreli also sold some biotech stocks short. That is, he bet the stocks would lose value, then he would try to persuade federal regulators not to approve the drugs they had in development. Noah Bookbinder is with Citizens for Responsibility and Ethics in Washington.

NOAH BOOKBINDER: Then he would go publicly and put out these statements saying these companies are going to lose value because the FDA is going to take an adverse action. And that actually did have the effect of knocking down the stock value, which made a whole lot of money for Shkreli.

ZARROLI: Regulators have never taken any action against Shkreli, and he has stopped giving interviews. So he wasn’t available for comment. But earlier this week, as the controversy over Daraprim mushroomed, he defended his decision to raise the price on CBS News.

(SOUNDBITE OF ARCHIVED RECORDING)

MARTIN SHKRELI: The drug was unprofitable at the former price. So any company selling it would be losing money, and at this price, it’s a reasonable profit – not excessive at all.

ZARROLI: Shkreli said raising the price would allow his company to research new drugs. It’s an argument that doesn’t sit well with Steve Schondelmeyer of the University of Minnesota. He says drug companies typically recoup their research costs after a drug is released. They don’t raise their prices to pay for research they might do down the road. Because Turing has a lock on Daraprim, customers have to pay whatever it charges. Daraprim is a generic, and other companies can try to compete by bringing out their own version of it. But Schondelmeyer says doing so isn’t easy.

STEVE SCHONDELMEYER: You can’t just start marketing a new genetic tomorrow. You have to get it approved by FDA and have them inspect your plan and your processes.

ZARROLI: Schondelmeyer says the FDA is so backed up it could take six years to bring another drug to market. He says something is broken in the drug industry that needs to be fixed.

SCHONDELMEYER: And I think companies certainly need their reward for innovation, but this isn’t innovation in a clinical sense. It might be in a financial market sense, but it’s not in a clinical, therapeutic sense.

ZARROLI: Meanwhile, the controversy over Daraprim has thrust the issue of drug prices into the spotlight, just as the presidential campaign is heating up. Senator Bernie Sanders has called for an investigation into Turing’s actions, and Hillary Clinton yesterday unveiled a new plan she says will hold down the cost of prescription drugs. Jim Zarroli, NPR News, New York.

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Happy Birthday To Us All — Judge Rules Tune Is Public Domain

Good Morning to You Productions has won a lawsuit challenging the copyright of "Happy Birthday To You."

Good Morning to You Productions has won a lawsuit challenging the copyright of “Happy Birthday To You.” iStockphoto hide caption

itoggle caption iStockphoto

No more sitcom characters standing around a cake, singing “For He’s a Jolly Good Fellow.” No more Applebee’s servers clapping along to “Happy happy birthday, from Applebee’s to you!”

Well, they can if they want, but not because they’d have to pay the copyright holders of the popular “Happy Birthday To You” song. A federal judge in Los Angeles has ruled that Warner/Chappell Music’s claim to the rights, which earned them an estimated $2 million dollars a year, is not valid.

Warner had been collecting royalties on the song since the 1980s when it bought Birch Tree Group, the successor to Clayton F. Summy Co., which claimed the original copyright.

According to the Los Angeles Times:

“Judge George H. King ruled Tuesday afternoon that a copyright filed by the Summy Co. in 1935 granted only the rights to specific arrangements of the music, not the actual song itself.

“‘Because Summy Co. never acquired the rights to the Happy Birthday lyrics,’ wrote King, ‘defendants, as Summy Co.’s purported successors-in-interest, do not own a valid copyright in the Happy Birthday lyrics.'”

To arrive at his decision, the judge considered a 1922 songbook which features a version of the birthday song called “Good Morning and Birthday Song,” written by sisters Mildred and Patty Hill. That iteration of the tune includes the familiar “happy birthday to you” lyrics and is listed as appearing through “special permission” of the Summy Company with no mention of a copyright.

The lawsuit was filed against Warner by two filmmakers making a documentary about the song’s origins. The publisher charged $1,500 to use it.

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Former Peanut Company Executive Sentenced To 28 Years In Prison

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A former peanut company executive has been sentenced to 28 years in prison for his role in a salmonella outbreak that killed nine people and sickened dozens more.

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Quiz: Are You Smarter Than A South African High School Student?

Do you keep up with international news?

This quiz will give you a chance to find out.

The Interschool Quiz made its debut in 1993. It’s a project of the Western Cape Branch of the South African Institute of International Affairs (SAIIA), designed to boost interest in global matters. This year, 55 schools participated after ten days of reading articles from the Cape Times and special articles from the SAIIA online “Diplomatic Pouch” articles. The winning team earned a cash prize for their school and an invitation to the annual SAIIA Young Leaders Conference. All schools received books for their library.

P.S.: Don’t feel bad if you flame out. An NPR staffer who covers global topics scored a four out of 13.

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Awesome Tips, Dude: Denver May Allow Pot In Bars, Restaurants

Partygoers attend a Prohibition-era themed New Year's Eve party celebrating the start of retail pot sales, at a bar in Denver on Dec. 31, 2013.
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Partygoers attend a Prohibition-era themed New Year’s Eve party celebrating the start of retail pot sales, at a bar in Denver on Dec. 31, 2013. Brennan Linsley/AP hide caption

itoggle caption Brennan Linsley/AP

Imagine a city with hundreds of liquor stores but no bars to drink in. That’s the situation for marijuana in Denver.

Pot is legal in Colorado, but the capital city has outlawed pot bars like those in Amsterdam, leaving the tourists who flock to Denver to get high with no legal place to do so. But the city is trying to find a solution.

On a recent Friday afternoon at LoDo Wellness Center, a recreational pot store downtown, budtender Delaney Mason is talking up a Parmesan-scented marijuana strain called Space Queen.

There’s dizzying array of pot for all tastes. Anything a customer could want — except a place to use it, if you don’t have a home in Colorado.

Mason has to inform tourists there’s no smoking in the store or on the street or in parks or in most hotels.

“So I tell them it’s up to their discretion as to what they want to do with that information, basically,” she says. “I can’t tell anybody to break the law. That would not be a very good employee.”

Consequently, many tourists have turned to edible marijuana, which is more discrete — nearly 5 million edibles were consumed in Colorado last year.

But Tom Shoulders, who road tripped to Denver with a friend from California, wants to smoke it.

“I’d be polite about it, you know,” Shoulders says. “I wouldn’t be doing it obnoxiously on this tourist street out front, but I’ll just go around the corner. No one’s going to care, dude.”

Actually, the police department cares. Officers handed out more than 1,000 public consumption citations last year.

This is not what pot advocates had in mind when they promoted legalized marijuana. So they collected signatures to put yet another measure on the ballot, this time allowing pot use at many bars and restaurants in Denver.

“Our intention with pursuing this initiative was to reduce the likelihood that adults would consume marijuana publically, on the streets or in parks and instead consume it in private establishments,” says Mason Tvert, with the campaign, standing in front of city hall.

But in an odd twist, Tvert was there to pull the measure from the ballot. That’s because the city surprisingly came to his group looking for a negotiated solution, he says.

“It’s been too many years that it’s been the people trying to pass these laws and the city resisting it,” Tvert says. “We were very excited to be able to work with the city together to create a policy that everyone agrees is the best step forward.”

It was city Councilman Albus Brooks — with lots of nervous bar and restaurant owners in his district — who reached out to the marijuana advocates. They got his attention — and now the city is working on crafting a pot club ordinance. Brooks wouldn’t go into detail about what he envisions. And it’s still not clear how the city will address concerns about stoned driving.

As Brooks sits on a bench in a park near his home, children are playing on a nearby swing set, adults are at picnic tables and the smell of marijuana is in the air. Kids, he says, shouldn’t be exposed to this.

“The ones playing in the playground right here are the ones I think about, and we are … putting together legislation for their future so it has to be thoughtful,” Brooks says.

Which means it could take months, leaving many with nowhere to use.

Like Nick Kissinger, from Wisconsin. He left the LoDo Wellness pot shop confused as to what to do with his purchase.

“To remain within the confines of the law, yeah that’s a problem,” he says. “I guess you got to break the law, I mean they should change that.”

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Federal Reserve Decides Not To Raise Interest Rates

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The U.S. Federal Reserve has decided not to raise interest rates, despite the fact that the economy has been gaining strength. Economist Megan Greene has advice for how to handle the decision.

Transcript

ROBERT SIEGEL, HOST:

Not yet – that’s the call today by the Federal Reserve. Short-term interest rates are going to stay right where they are near zero at least until the Fed meets again next month. Part of the reason for staying put – questions facing the global economy, especially China’s slowdown. For reaction to the Fed’s inaction, we turn to Megan Greene. She’s managing director and chief economist at Manulife Asset Management, and she joins us from Boston. Welcome to the program once again.

MEGAN GREENE: Thanks.

SIEGEL: First, what do you think about the Fed leaving the rates untouched?

GREENE: I think it was absolutely the right call and for two of the reasons that Yellen actually cited. One was that there seems to be a lot of slack lesson left in the labor market. And secondly, she’s concerned about events happening outside the U.S., and I think that’s the right way to look at things.

SIEGEL: You mentioned the labor market. Three years ago, the Fed said it would hold rates near zero until unemployment fell below 6-and-a-half percent. It’s now 5.1 percent. What makes the Fed so much more cautious than they thought they would be by this time?

GREENE: Well, technically, the Fed has ticked off one of its two mandates, which is the unemployment side of things. But it hasn’t come anywhere close to achieving its target on the inflation side of its mandate. That’s its second mandate.

Inflation is around 0.2 percent. That’s well below the Fed’s target of 2 percent. And even if you strip out lower oil prices, it’s still not quite at 2 percent. And I think that Yellen is afraid that as the U.S. dollar continues to get stronger, actually, the U.S.’s biggest import will be deflationary pressures. And also, you know, Yellen has said that she thinks that oil prices are transitory, but oil prices have been low for quite a while now. So at what point does transitory become actually the new normal?

SIEGEL: Megan, you have to explain that a bit more. The Federal Reserve actually wants there to be more inflation than there is right now. Why?

GREENE: That’s right. There’s sort of a sweet spot for central banks on inflation. If inflation is too high and prices are rising too quickly, people can’t afford to buy things. But if it’s too low, then, actually, people will wait to buy things because they can put it off, especially if there’s deflation. It will get cheaper in the future, so they might as well wait. And both are bad for the economy. So the Fed would like to see prices rising at about 2 percent year on year.

SIEGEL: They decided at their September meeting to keep things as they are. What’s likely to change so much next month that they wouldn’t make the same decision obviously?

GREENE: Well, I don’t think anything will change in the next month. In fact, I don’t think anything will change in the next few months. I think that probably, we’ll continue to see slack in the labor market, and we’ll continue to see inflation stubbornly stuck on the floor well into next year.

And I think that, you know, people are looking towards the Feds’ next meeting – October, now – for the next hike. I don’t think it will happen in October, least of all because there’s no press conference scheduled to explain it. And the Fed needs to manage the message really carefully.

But I don’t think it will happen at the next meeting in December, either. I think the Fed may well have to wait until next year to start hiking. And then you look at the fact that, you know, GDP data’s always really bad in the U.S. in the first quarter, so the Fed might have to wait through that. And eventually, there’s an election coming, so there are a lot of considerations.

SIEGEL: So for people in the financial sector, today was like NFL draft day for football fans – something like that – big deal. Who was really thrilled with this, and who’s upset about it today?

GREENE: Well, I think that, you know, borrowers are thrilled with this. Anybody with a mortgage, anybody, you know, having stumped up their house as collateral for a loan is excited about this because they’re borrowing costs will continue to be lower. Savers and investors, on the other hand, won’t be thrilled about it. The reality is, though, that most of us are both borrowers and savers, actually. So in net, it’s hard to say exactly how we all come out.

SIEGEL: Megan Greene, managing director and chief economist at Manulife Asset Management, spoke to us from Boston. Thanks for talking with us.

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Inside The Vacant Caverns Of St. Louis' Other Beer Baron

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Anheuser-Busch managed to survive Prohibition by diversifying, while its nearby competitor in St. Louis, Lemp Brewery, failed. But Lemp’s legacy remains in the caves where it used to chill its beer.

Transcript

ROBERT SIEGEL, HOST:

The fact that the name Anheuser-Busch is still in use at all is a tribute to its old owners, the Busch family. When August Busch Jr. addressed the American people by radio in 1933, he personified a remarkable piece of corporate survival – the survival of 13 years of prohibition.

(SOUNDBITE OF ARCHIVED RECORDING)

AUGUST BUSCH JR.: April the 7 is here, and it’s a real occasion for thankfulness, marking a newfound freedom for the American people, made possible by the wisdom, foresight and courage of a great president, with the corporation of an understanding Congress. There is a song in our hearts. Happy days are here again.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: This Bud’s for you.

UNIDENTIFIED CHOIR: (Singing) This Bud’s for you.

SIEGEL: It took a clever brewer to survive the national ban on alcohol. From the start, the Busch family had acted with confidence that it would outlast the 18th Amendment. They diversified into soft drinks and refrigerated railroad cars. They brewed low-alcohol beer and Budweiser barley malt syrup. More on that in a moment. I saw one measure of Anheuser-Busch’s cleverness. I saw what happened to the local competition that wasn’t so confident or clever.

Let your Gothic imagination run wild. We are deep underground in dank caves and basements that could be the set of a horror movie. Not far from Anheuser-Busch headquarters in St. Louis is where the Lemp family used to brew Falstaff beer. And last year, we were given a rare tour of the caves and chambers underneath the complex which hasn’t produced beer since Prohibition began. Before artificial regeneration, this is where lager beer was kept chilled.

SHASHI PALAMAND: So we’re headed into the third basement of building five, which is the oldest building in the complex and was used, basically, for the heart of the operation, which was the actual brewing of the beer.

SIEGEL: Shashi Palamand is the current owner of what’s left of the Lemp Brewery complex – 23 buildings. The place has been shut down since the family gave up brewing. In 1922, the president, William J. Lemp Jr., shot and killed himself. Lemp’s father had shot himself 18 years earlier. His sister shot herself, and years later, his brother would do the same. In the years before Prohibition, the Lemp’s were among the richest beer barons in St. Louis.

PALAMAND: So these are the old lagering chambers. This area we’re in was part of the natural caves but has been heavily modified.

SIEGEL: These are virtually semi-circular chambers that run down – oh, my gosh – it must be 40 yards or so.

PALAMAND: Barrel vault – that’s the best way to describe them.

SIEGEL: The Lemps even turned one part of a cave right under their mansion into a luxurious recreation center.

PALAMAND: This was a natural chamber that was converted into a theater for entertainment of the Lemp family and their friends. There’s a door in the back there you can see, and that led to a spiral staircase that goes to the surface, which was the location of the first Lemp mansion. And back in the days when there was really no air conditioning in houses, the Lemp family, I’m sure, entertained the high-powered people of St. Louis and decided to – after their dinner, perhaps – to retire to this nice and cool chamber. And they would have plays down here. And you can see the evidence of the lights – the old light fixtures here. And the debris you see is actually not debris. It was old sets.

SIEGEL: The Lemp Brewery ended up looking like a maze of vacant catacombs under a mansion that the locals declared haunted. Meanwhile, Budweiser became a national favorite. One especially shrewd piece of diversification by Anheuser-Busch was that corn malt syrup. It was sold together with baker’s yeast, and the label said this. Warning – do not add the yeast to the other ingredients or risk fermentation. Needless to say, many took the warning for exactly what it was – instructions to brew your own. And needless to say, it sold well and helped keep Anheuser-Busch in business until Prohibition was over.

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Giving More Workers Overtime Could Have Downsides, Employers Say

New federal rules would make millions more workers eligible for overtime.
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New federal rules would make millions more workers eligible for overtime. Gary Waters/Getty Images/Ikon Images hide caption

itoggle caption Gary Waters/Getty Images/Ikon Images

The Labor Department is considering changing rules that define who qualifies for overtime pay and who does not, and businesses say it would have far-reaching consequences that may not be good for workers.

Currently, the rules say you have to make less than $23,660 a year to be eligible for overtime, but the Labor Department’s proposal would more than double that required salary level to $50,440. That would mean an estimated 6 million more people would be eligible for overtime pay.

Worker advocates say the current rules open up millions of workers to abuse. Many earn relatively low salaries but are asked to work many extra hours without pay because they’re exempt from overtime rules, says Vicki Shabo, vice president of the National Partnership for Women and Families. She says some research shows women, who would make up about 3.2 million of those workers, would especially benefit.

“Either people will get an increase in their wages and will be paid for the overtime hours that they’re working, or they won’t be forced to work overtime hours without pay anymore, and they’ll be able to spend more time taking care of their other responsibilities in life,” Shabo says.

But employers do not believe it would be a windfall for workers. They say they will be forced to cut costs in other ways if the proposed rules take effect as written — and that workers may not like those changes.

The Michigan Health and Hospital Association employs 107 people, more than half of whom are currently salaried, and some of whom put in extra hours, especially during emergencies.

“It only takes one bus accident, or one fire or something like the Ebola crisis,” says Nancy McKeague, chief of human resources.

She says her nonprofit can’t afford overtime, but it also can’t forgo having people work as needed.

“The last thing you want to do in the health care setting is to look at your watch and say, ‘You got your eight [hours], you’re out,’ ” she says.

McKeague says more work will fall to managers. The rules will also require her to review tasks associated with every job to see whether the position qualifies for overtime. Plus, she’ll have to spend more administrative time on things like clocking employees in and out.

Cecilia Boudreaux is human resources director for the Regina Coeli Child Development Center, a Head Start program in Robert, La. Under the new rules, Boudreaux says, 26 of her 35 salaried employees would qualify for overtime pay, in the event of a building emergency or if a parent is late for pickup. But increasing salaries would cost at least $74,000 extra a year — meaning she’d have to cut costs elsewhere.

“Our grants stipulate how many children we have to have per classroom, so even to increase it we’d have to get permission,” she says.

Boudreaux says she’d have to furlough employees. Or convert some salaried positions to hourly, then cut the hourly rate, which she dreads doing.

“Who would want to come to work the following day, saying that ‘We have to move you to hourly, and oh, by the way you’re not gonna make as much as you would make normally. You have to work this minimum number of hours if you want to still make the same amount,’ ” she says.

Tony Murray, HR director for Diamond B Construction, also based in Louisiana, says many workers would consider going from salaried to hourly a demotion.

“When I was younger, all I [wanted] to do was get to a salaried position just simply because you knew what was going to be coming in each week and you did have the flexibility,” he says, including the ability to go to soccer tournaments or work late to make up for doctor’s appointments. Murray says under the new rules, those converted back to hourly status wouldn’t be able to do that.

“Millennials take into account more than anything workplace flexibility,” he says. “And of course who do you think is in that entry-level management … millennials more than anything.”

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