WBEZ | Economy http://www.wbez.org/tags/economy Latest from WBEZ Chicago Public Radio en How a too-strong dollar might lead to a too-weak world http://www.wbez.org/news/how-too-strong-dollar-might-lead-too-weak-world-111346 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/ap851119269057_wide-c3b91a4ad0260c6a4fdac02dae45ec8b89c83482-s600-c85.jpg" alt="" /><p><p>It&#39;s flattering to be King of the Hill.</p><p>And these days, the U.S. dollar is wearing the crown. It has climbed to its highest point in 11 years, with global investors pushing it ahead of the euro and other major currencies.</p><p>But while it&#39;s a compliment to have a strong dollar, the honor is not without its downsides. When the dollar rises against other currencies, it increases risks to U.S. manufacturers.</p><p>So economists are looking for signs that a good thing may be starting to go too far. These questions and answers may help explain what&#39;s happening.</p><p><strong>First, has the dollar really moved that much?</strong></p><p>Yes, the WSJ Dollar Index, which tracks the dollar&#39;s performance against 16 other currencies, had a 12 percent rally in 2014. In these early days of the new year, the dollar has been continuing to rise.</p><p><strong>Why is this happening?</strong></p><p>Currency traders are betting the U.S. economy will be growing so quickly in 2015 that the Federal Reserve will nudge up interest rates from recent historic lows.</p><p>The opposite is likely to happen in Europe. There, growth is weak and Greece&#39;s political troubles are creating uncertainties.</p><p>So if you were a saver, where would you put your money &mdash; in a strong, stable country offering rising interest payouts, or in a region with a shaky economic outlook and falling interest rates? Common sense says more people will turn to the United States as a safe haven.</p><p>&quot;As dollar assets become more attractive, more money comes into the U.S., pushing up the value of the dollar,&quot; said Nariman Behravesh, chief economist for IHS Global Insight. &quot;And as more money leaves Europe, it pushes down the value of the euro.&quot;</p><p><strong>So what&#39;s wrong with having people love the United States?</strong></p><p>It is good to have everyone wanting to stash their savings in the United States. But investors&#39; embrace of the dollar can start to feel like a death grip if it goes too far. Here&#39;s why:</p><p>U.S. companies that make goods and equipment want to compete on a global stage. If the dollar gets too expensive, U.S. exports can get priced out of the market. For example, if a customer in Brazil wants to purchase an earth mover, it could buy one from Caterpillar, or it could turn to companies in Germany or Japan.</p><p>If the dollar&#39;s value is very high, then it could tip the Brazilian&#39;s decision in favor of the Germans or Japanese.</p><p>It&#39;s not just U.S. manufacturers who worry about the rising dollar. The U.S. tourist industry also could take a hit if Germans, Brits and others can no longer afford to visit Florida this winter.</p><p>&quot;A strong dollar is a double-edged sword that could hurt a lot of U.S. companies,&quot; said Lindsey Piegza, chief economist for Sterne Agee.</p><p><strong>How is this likely to play out over time?</strong></p><p>It could turn out just fine over the next year or two. In this good scenario, the European Central Bank would lower interest rates just enough to encourage European companies to borrow money and expand. With energy being so cheap now, this could indeed be the perfect time to take a chance on expanding a plant.</p><p>That would lead to more hiring, which would help consumer spending in Europe. Once growth picked up, the euro&#39;s value would rise. In the end, the United States would have a healthy trading partner again and a more reasonably priced currency, allowing for fair global competition.</p><p>But there could be a bad scenario: Europe&#39;s economy could keep shrinking, with the euro becoming unstable and the dollar getting way overpriced. The bottom line would be less business for U.S. manufacturing and tourism, and the U.S. economy would start to sink too.</p><p><em>&mdash; <a href="http://www.npr.org/2015/01/06/375201124/how-a-too-strong-dollar-might-lead-to-a-too-weak-world" target="_blank">via NPR</a></em></p></p> Tue, 06 Jan 2015 15:08:00 -0600 http://www.wbez.org/news/how-too-strong-dollar-might-lead-too-weak-world-111346 In 'up-and-coming' area, what's the tipping point for gentrification? http://www.wbez.org/news/and-coming-area-whats-tipping-point-gentrification-111236 <p><p>On a recent weekday, Reid Mackin of the Belmont Central Chamber of Commerce shows off one of the main commercial strips in the Belmont Cragin neighborhood on the Northwest Side.</p><p>There&rsquo;s a Cricket wireless store on the corner, A&amp;G Fresh Market down the street and a Polish restaurant that nods to the area&rsquo;s past.</p><p>&ldquo;We used to have a lot of franchise foods, but because of the independent restaurants, the franchise food places couldn&rsquo;t compete with those folks,&rdquo; Mackin said.</p><p>But these aren&rsquo;t the restaurants you&rsquo;d find in a destination neighborhood like Logan Square. Over the years, that neighborhood has obviously gentrified. The rent&rsquo;s gone up and the white population has increased. The median home price for 2013 was $360,000, above its previous peak.</p><p>Belmont Cragin isn&rsquo;t experiencing anything like Logan Square&rsquo;s turbo-charged economy. But as it comes back from the housing crisis, some wonder: is this healthy redevelopment or the beginnings of gentrification?</p><p>&ldquo;I can&rsquo;t tell you how many clients that have started in Logan Square or they&rsquo;ve started in Humboldt Park and they end up looking in Belmont Cragin,&rdquo; said <a href="https://www.redfin.com/real-estate-agents/clayton-jirak">Clayton Jirak, Redfin realtor</a>.</p><p>Jirak says new buyers are attracted to the neighborhood&rsquo;s bungalow belt. They like the solid housing stock and prices ranging from around $150,000 to $300,000.</p><p>&ldquo;The other big factor in Belmont Cragin has been the redevelopment and the renovation that&rsquo;s been going on with a lot of distressed properties that were left over from the real estate recession,&rdquo; he said.</p><p>Belmont Cragin hasn&rsquo;t fully recovered, but in 2013 its median home price was up nearly 24 percent from its lowest point after the housing crash. At the high end of the market, a newly flipped home was recently listed at $435,000.</p><p>Those types of sales worry Julio Rodriguez. He&rsquo;s the director of financial education for the Northwest Side Housing Center.</p><p>He says some longtime residents are getting priced out because of those investors.</p><p>&ldquo;Our goal is to have it community owned and have community residents involved. But it&rsquo;s kind of hard to accomplish that when we have so many developers coming in buying, flipping it and renting out for a couple of years and selling it once home prices go up,&rdquo; he said.</p><p>The organization&rsquo;s executive director James Rudyk points to Logan Square where a small number of investors own a lot of property.</p><p>&ldquo;What may have started off as a good idea &mdash; let&rsquo;s get some new apartments, let&rsquo;s create loft space, or lets put in new retail or a coffee shop. Great, great, great. But when that happens then all of a sudden folks who have been renting for $800 and now have to pay $1200 or have to leave their home or lose their home, it&rsquo;s not affordable,&rdquo; Rudyk said.</p><p>He finds himself asking where the line is between redevelopment and gentrification.</p><p>&ldquo;How many new condos are too many? How many Starbucks are too many? So I think there&rsquo;s a tipping point a neighborhood has to reach. What it is? I don&rsquo;t know,&rdquo; he said.</p><p>But not everyone in this neighborhood thinks that tipping point is imminent.</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/BC%20gentrification%201.jpg" title="Peggy Mejias stands outside her Belmont Cragin home. Her family was the second Latino household on the block. Although more whites are moving in, she doesn’t think the neighborhood is gentrifying. “These are just average families,” she says. (WBEZ/Susie An)" /></div><p>Peggy Mejias has been living in this house in Belmont Cragin since the 1980s, when home prices were near $50,000. Back then her household was the second Latino family on the block. Over the years she&rsquo;s seen the neighborhood shift from mostly white to mostly brown.</p><p>&ldquo;Now it&rsquo;s more Mexican. But now I&rsquo;m starting to see more Anglos in the area,&rdquo; Mejias said.</p><p><iframe frameborder="0" height="320" scrolling="no" src="http://interactive.wbez.org/gentrification/widget/19/" style="float: left; clear: left;" width="400"></iframe></p><p>Mejias says there are more businesses opening up, like a busy laundrymat that she calls &ldquo;nice and expensive&rdquo; and a Dunkin Donuts that&rsquo;s packed in the mornings.</p><p>Then there&rsquo;s the vacant bar near her house. It&rsquo;s been converted into a trendy-looking hot dog eatery that&rsquo;s set to open next month.</p><p>&ldquo;I caught one of the construction guys and he said the person who purchased it, he&rsquo;s been working for him for a long time. He&rsquo;s an investor and he goes into neighborhoods that he sees are up-and-coming. And I walked home thinking, &lsquo;Oh yeah, up-and-coming. Here we go,&rsquo;&rdquo; she said.</p><p>Mejias doubts this shop will be wildly successful. She knows values in the neighborhood are going up, but she considers that normal redevelopment rather than the early signs of gentrification.</p><p>&ldquo;Gentrification is kind of bringing in a completely different class of people. The artistic. Like you see in, West Town, Bucktown when you saw all of that, it was the hipsters. It was all of that. These are just average families,&rdquo; she said.</p><p>That kind of stable growth is the same thing the Northwest Side Housing Center is seeking. It offers things like foreclosure prevention and financial education programs to keep the neighborhood affordable.</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/BC%20gentrification%202.jpg" title="Gloria Valencia cooks dinner in her Belmont Cragin home. With the help of the Northwest Side Housing Center, she was able to buy her home last year. (WBEZ/Susie An)" /></div><p>Gloria Valencia took advantage of some of those services by taking a free homeownership class. She then applied for a loan from the Federal Housing Administration that allowed her to buy a four-bedroom house in the neighborhood last year.</p><p>The Northwest Side Housing Center even helped her start a block club.</p><p>&ldquo;We talk about what&rsquo;s going on with our block, our neighborhood and the whole city of Chicago. It could be small things like, &lsquo;I&rsquo;m missing a blue recycling bin&rsquo; to other things that are a little more important to our neighborhood and our block, such as gang violence,&rdquo; Valencia said.</p><p>James Rudyk says affordability doesn&rsquo;t mean housing values have to remain stagnant or that certain people or businesses should stay out.</p><p>&ldquo;If residents on Diversey and Laramie really do want a Starbucks, then let&rsquo;s put in a Starbucks. If they really do want a Trader Joes, then let&rsquo;s put in a Trader Joes. If they&rsquo;re really fine with the fruit market, let&rsquo;s leave the fruit market. So the question is, who makes that decision?,&rdquo; he said.</p><p>Rudyk hopes it&rsquo;s the people who live here, and not outside investors. He says that may determine whether Belmont Cragin redevelops or gentrifies.</p><p><em>Susie An is WBEZ&rsquo;s business reporter. Follow her</em><a href="http://twitter.com/triciabobeda"> <em><u>@soosieon</u></em></a><em>.</em></p></p> Tue, 16 Dec 2014 07:37:00 -0600 http://www.wbez.org/news/and-coming-area-whats-tipping-point-gentrification-111236 Russia's economic dilemma http://www.wbez.org/programs/worldview/2014-12-08/russias-economic-dilemma-111200 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/AP24510104665.jpg" alt="" /><p><p>Russia&#39;s oil production strategy and Western sanctions have led to a decline in the value of the Russian ruble. Jan Kalicki, a public policy scholar for the Kennan Institute at the Wilson Center, joins us to explain the problems the Russian economy is facing.</p><div class="storify"><iframe allowtransparency="true" frameborder="no" height="750" src="//storify.com/WBEZ/worldview-russia-s-economic-dilemma/embed?header=false&amp;border=false" width="100%"></iframe><script src="//storify.com/WBEZ/worldview-russia-s-economic-dilemma.js?header=false&border=false"></script><noscript>[<a href="//storify.com/WBEZ/worldview-russia-s-economic-dilemma" target="_blank">View the story "Worldview: Russia's economic dilemma" on Storify</a>]</noscript></div></p> Mon, 08 Dec 2014 11:01:00 -0600 http://www.wbez.org/programs/worldview/2014-12-08/russias-economic-dilemma-111200 Financial burden of Ebola falls to African diaspora http://www.wbez.org/news/financial-burden-ebola-falls-african-diaspora-111031 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/Ebola shipping.JPG" alt="" /><p><p>Members of Chicago&rsquo;s West African diaspora say they are struggling under the pressure of supporting large extended families in Ebola-stricken countries, where the public health crisis has taken a <a href="http://www.worldbank.org/en/news/press-release/2014/10/08/ebola-new-world-bank-group-study-forecasts-billions-in-economic-loss-if-epidemic-lasts-longer-spreads-in-west-africa">serious economic toll</a>. Some have turned to neighbors, government assistance programs and faith organizations for help -- not just to send back to their motherland, but to sustain their families in the U.S. during this period.</p><p>&ldquo;You know, to take care of five persons in America, at the same time to take care of more than 25 persons (in Africa), it&rsquo;s not easy,&rdquo; said David Young, &ldquo;and on a low income, it&rsquo;s terrible.&rdquo;</p><p>Young, a Liberian who came to the U.S. two years ago and was recently joined by his wife and three children, worries that his family might perish -- of starvation -- in Chicago&rsquo;s Chatham neighborhood on the South Side. The family receives free housing from the Chatham Fields Evangelical Lutheran Church, where Young is Music Director. Young says his take-home pay, about $1000 a month, is already low for a family that size. But lately, they&rsquo;ve had to make do with less, as he&rsquo;s been wiring about $600 montly back to his family in Liberia.</p><p>&ldquo;Because there&rsquo;s no work now in Liberia -- everything is shut down economically,&rdquo; Young explained, &ldquo;So, they tell me that they are not working.&rdquo;</p><p>The <a href="http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/09/17/000470435_20140917071539/Rendered/PDF/907480REVISED.pdf">World Bank </a>and <a href="http://documents.wfp.org/stellent/groups/public/documents/ena/wfp268458.pdf">other international aid groups</a> confirm those reports. People in Ebola-stricken countries, afraid of catching the often-fatal virus, are staying home to avoid human-to-human interaction. This has left many households without income.</p><p>&ldquo;I am telling you that almost everyday they make a call,&rdquo; Young said about his family in Liberia. &ldquo;They have to call and tell us no food, no this one, no this, no that. They are not working. There&rsquo;s no jobs.&rdquo;</p><p>The amount that Young feels obligated to wire abroad has left him desperate for help feeding his family here. Trying to get help, Young said he has attempted twice to qualify for food stamps in Illinois. He was denied because he&rsquo;s lived in the U.S. fewer than five years. Because of the nature of his work visa in the U.S., an R-1 temporary visa for religious workers, Young also faces restrictions on what type of additional work he may seek to augment his income.</p><p>Still, Young feels compelled to continue to reach into his household&rsquo;s meager resources to scrounge whatever they can for his network in Liberia. In a front room of his house, a large blue barrel sits, half-full with items like hand sanitizer, soap, toothpaste, disinfectants, shampoo, and rice. All are items one can find in Liberia, but Young says his sons there tell him that pantry staples and basic household cleaning products have shot up in price since the outbreak began.</p><p>&ldquo;If you ask for a bottle of Clorox right now, it&rsquo;s very expensive,&rdquo; said Young.</p><p>Just across the street from Young&rsquo;s house, at the Chatham Fields Evangelical Lutheran Church, Pastor Kenety Gee helps lead a congregation with many Liberians. He said the financial toll of supporting family back home has hit them all.</p><p>&ldquo;It&rsquo;s really hard to look at the pictures, look at the stories, and ignore your family members,&rdquo; Gee said. &ldquo;It&rsquo;s really, really hard, so you got to stretch yourself.&rdquo;</p><p>Gee said he&rsquo;s no exception: one of his sisters in Liberia has a successful wholesale business, and never required Gee&rsquo;s support. But with Liberia&rsquo;s economy on hold, things have changed.</p><p>&ldquo;I send them $300 every week. That&rsquo;s $1200 a month,&rdquo; said Gee. &ldquo;But that&rsquo;s the kind of strain that is put on us here in the U.S.&rdquo;</p><p>The World Bank hasn&rsquo;t yet analyzed recent remittances to Liberia, Guinea and Sierra Leone. Wiring services Western Union and Moneygram weren&rsquo;t able to share data. But people from all three communities share similar stories: that they&rsquo;re constantly transferring money, and that many have shifted away from shipping goods.</p><p>Artemus Gaye used to collect goods monthly to ship to Liberia. But his last 40-foot long container was sent in March. Since then, the business has dried up.</p><p>&ldquo;Who will you send it to now everyone has been quarantined, people are not moving around,&rdquo; said Gaye. &ldquo;The markets are very empty.&rdquo;</p><p>Today, Gaye&rsquo;s collecting protective medical gear and hospital supplies, which he hopes to ship in November. This isn&rsquo;t the usual stuff for this time of year. Normally, Gaye would be shipping Christmas presents. Still, he&rsquo;s optimistic that the market will be back to normal by the holiday</p><p>Gaye&rsquo;s encouraged by recent reports that Ebola is leveling off in Liberia.</p><p>&ldquo;We might be having a good Christmas season,&rdquo; said Gaye. &ldquo;You know, it&rsquo;ll be reflective, but at least people will be out there to do what they do best - interact with each other.&rdquo;</p><p>Many hope their family members in Africa will also be able to return, safely, to work. That could help ease finances for the diaspora in Chicago to celebrate the holidays, too.</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her <a href="https://twitter.com/oyousef">@oyousef</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>.</em></p></p> Fri, 31 Oct 2014 08:19:00 -0500 http://www.wbez.org/news/financial-burden-ebola-falls-african-diaspora-111031 Rauner, Quinn battle for African-American votes http://www.wbez.org/news/rauner-quinn-battle-african-american-votes-110940 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/AP911111007939.jpg" alt="" /><p><p dir="ltr" id="docs-internal-guid-6f97a6f2-1582-0782-483a-897455cafe20">As the clock ticks down to election night, Gov. Pat Quinn and Republican challenger Bruce Rauner continue to battle over what&rsquo;s best for Illinois&rsquo; future. The top candidates have now faced off in two televised debates.</p><p>The focus of Tuesday&rsquo;s debate, three weeks ahead of the election, was mostly African-American voters, and issues they&rsquo;ll be thinking about in the polling booth. The panel of journalists posing questions to the candidates focused on jobs, the economy, the minimum wage, public safety and the state&rsquo;s finances.</p><p>And it was obvious by their responses that both candidates on stage at the DuSable Museum of African American History realized the importance of getting those votes.</p><p>&ldquo;My investments and my donations to the African-American community have totaled tens of millions of dollars,&rdquo; Rauner said, when asked about his recent <a href="http://abc7chicago.com/politics/rauner-promises-$1m-to-south-side-credit-union-/231631/">million dollar donation</a> to a South Side credit union.</p><p>&ldquo;We&rsquo;ve opened up the doors to many more contracts&mdash;I think it&rsquo;s up to a thousand contracts&mdash;for African-American owned businesses,&rdquo; Quinn said, to a question about government hiring.</p><p>The two also wasted no time trying to cut their opponent down to size&mdash;a recurring theme in both televised debates and on the campaign trail. Quinn accused Rauner of not hiring any African Americans in his company.</p><p>&ldquo;My opponent had 51 executives in his company, no African Americans, not one,&rdquo; Quinn said.</p><p>Rauner shot back that Quinn was &ldquo;taking the African-American vote for granted. He&rsquo;s talking but not delivering results.&rdquo;</p><p>Rauner also accused Quinn of kicking Stephanie Neely, Chicago&rsquo;s city treasurer who is black, off the list of running mates. Neely was rumored to be on the short list of Quinn&rsquo;s choices for lieutenant governor. Quinn later countered that his choice of Paul Vallas was due to Vallas&rsquo; experience with schools and budgeting.</p><p>&ldquo;African-American families are suffering in Illinois: brutally high unemployment, deteriorating schools, lack of proper social services and rampant cronyism and corruption that&rsquo;s taking away job opportunities from African Americans,&rdquo; Rauner said.</p><p>The candidates spent a lot of time in this debate talking about public safety and gun control. Rauner wouldn&rsquo;t say if he supported a ban on assault weapons. He said he believed the conversation about gun control should instead be on getting guns out of the hands of criminals and the mentally ill, and creating jobs. Rauner said it was the lack of opportunity that has lead to the state&rsquo;s issue with crime.</p><p>Quinn came out in support of banning assault weapons and called for a limit on high capacity ammunition magazines.</p><p>The ongoing conversation about the minimum wage also surfaced in this debate. Rauner was pressed by the panel to explain his position, as there has been much back and forth about whether he wants to <a href="http://politics.suntimes.com/article/springfield/rauner-admits-he-once-favored-eliminating-minimum-wage/thu-09042014-113am" target="_blank">ditch</a> the minimum wage all together, or raise it.</p><p>Rauner reiterated he wanted to see a national hike to the minimum wage, so Illinois could remain competitive, but he would support raising Illinois&rsquo; minimum wage (currently at $8.25) if it came with &ldquo;tort reform, tax reduction [and] workers comp reform.&rdquo;</p><p>Quinn said he&rsquo;d work to raise the minimum wage to $10 by the end of this year, though he faced questions from both Rauner and the debate panel about why he hadn&rsquo;t boosted it in his six years in office. Quinn responded that &ldquo;you have to build a majority for anything in life&rdquo; and brought up President Barack Obama&rsquo;s tactics with passing the Affordable Care Act as an example.</p><p>The end of the debate featured a special opportunity for the candidates: Rauner and Quinn were able to ask one question of their opponent. You can listen to that exchange here:</p><p><iframe frameborder="no" height="20" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/172278238&amp;color=ff5500&amp;inverse=false&amp;auto_play=false&amp;show_user=true" width="100%"></iframe></p><p>The candidates are scheduled to face off in at least one more debate before the election on November 4.</p><p><em>Lauren Chooljian is a WBEZ reporter. Follow her on Twitter <a href="https://twitter.com/laurenchooljian" target="_blank">@laurenchooljian.</a></em></p></p> Wed, 15 Oct 2014 15:28:00 -0500 http://www.wbez.org/news/rauner-quinn-battle-african-american-votes-110940 Iraqi musicians continue to play, despite conflict http://www.wbez.org/programs/worldview/2014-06-18/iraqi-musicians-continue-play-despite-conflict-110371 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/AP817556148506.jpg" alt="" /><p><p>Iraqi musicians have been the target of attacks by extremists who have bombed music shops and forced many concert halls to close, but they have continued to play.On this week&#39;s Global Notes we&#39;ll listen to Iraqi folk and pop.</p><div class="storify"><iframe allowtransparency="true" frameborder="no" height="750" src="//storify.com/WBEZ/worldview-iraqi-musicians-continue-to-play-despite/embed?header=false&amp;border=false" width="100%"></iframe><script src="//storify.com/WBEZ/worldview-iraqi-musicians-continue-to-play-despite.js?header=false&border=false"></script><noscript>[<a href="//storify.com/WBEZ/worldview-iraqi-musicians-continue-to-play-despite" target="_blank">View the story "Worldview: Iraqi musicians continue to play, despite conflict" on Storify</a>]</noscript></div></p> Wed, 18 Jun 2014 11:27:00 -0500 http://www.wbez.org/programs/worldview/2014-06-18/iraqi-musicians-continue-play-despite-conflict-110371 Refugees raise vegetables, put down roots at urban garden http://www.wbez.org/news/refugees-raise-vegetables-put-down-roots-urban-garden-110149 <p><p>On a recent afternoon in Chicago&rsquo;s Albany Park neighborhood, Linda Seyler chirped at a small crew of helpers from Nepal: &ldquo;Stay there,&rdquo; she said to a group ranging from small boys to grown men. Seyler pulled out a measuring tape as she knelt in a tarp-covered ditch. &ldquo;From here to here is two feet&hellip;&rdquo;</p><p>Seyler was helping two more refugee families measure out their new vegetable plots at the Global Garden Refugee Training Farm, located on busy Lawrence Avenue. It was a cool Sunday, but several families were there, eager to start preparing their long, skinny garden beds for spring planting.</p><p>Janet Saidi, a Congolese refugee who came to Chicago more than a year ago stood next to her family&rsquo;s plot, number 95, rattling off what she&rsquo;s grown. &ldquo;Onion, okra, beans,&rdquo; she said. &ldquo;The name of this one I don&rsquo;t know. It&rsquo;s like mushroom? Yes.&rdquo;</p><p>Saidi and the other refugees who garden here all farmed in their native countries. Most hail from conflict-ridden places like Bhutan and Burma, and often don&rsquo;t know any English when they arrive. With the language barriers and the sense that their farming skills have no use in a big, American city, many battle feelings of isolation as they try to settle in.</p><p>&ldquo;Being here (in the city) they feel themselves really worthless,&rdquo; said Hasta Bhattarai, a Bhutanese refugee who now volunteers as an an interpreter for some of the gardeners. &ldquo;But once they are here (in the garden) and once they are able to produce something, that really makes them happy from inside,&rdquo; he continued, &ldquo;and they feel themselves (like) they are back home, and that gives them some kind of spiritual happiness.&ldquo;</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Refugee-Garden-2.jpg" title="Janet Saidi, a refugee from the Congo, grows okra, onions and beans on her small plot. She said she never imagined she would grow her family’s food in the U.S., as she did in her native country. (WBEZ/Odette Yousef)" /></div><p>The garden began with a grant from the Refugee Agricultural Partnership Program, under the federal Office of Refugee Resettlement. Seyler, at the time working for the Coalition of Limited English Speaking Elderly in Chicago, applied for the three-year, nonrenewable grant. In its first year, the garden had 42 families with plots.</p><p>Now in its third growing season, the garden has more than 100 vegetable beds jammed haphazardly against each other, with additional areas reserved for new commercial plots and a quarter-acre reserved for use by the Peterson Garden Project. In all, the refugees use about one acre of the 1.33 acre area. They grow bittermelon, bok choy, okra, mustard greens, and roselles -- a plant related to hibiscus. It&rsquo;s a cheap and convenient way to find the vegetables that they traditionally use for cooking, which may be less common in U.S. supermarkets.</p><p>&ldquo;This garden, it&rsquo;s really changed my life,&rdquo; said Mary Thehtoe, a Burmese refugee whose family had a large farm in her native country. Thehtoe got a plot at the garden when it began, during her first year in the U.S., in 2012.&nbsp; She said at that time she knew no English, and cried every night after she came to the U.S., until she met her refugee case worker. That was the first person she met in Chicago who spoke her language.</p><p>&ldquo;If I don&rsquo;t have garden, I always go to the appointments,&rdquo; Thehtoe said through an interpreter. &ldquo;I have a lot of appointments, like medical appointments, And I stay working at home, and just do house chores, take care of my kids, those kinds of thing. When I got the garden, all the sickness and stress, depression, go away, Because I always think about the garden.&rdquo;</p><p>Thehtoe said she comes to the garden every day.</p><p>Saidi said she never imagined that in the U.S. she would be growing her own food, as she did in the Congo. &ldquo;When I came here, I said, &lsquo;Oh my God, I don&rsquo;t know (if in) America, if they have fresh food,&rsquo;&rdquo; she said. &ldquo;Yes, they are also farming, and I said &lsquo;Oh my God,&rsquo; it was exciting.&rdquo;</p><p>The garden&rsquo;s success has earned attention from the Governor&rsquo;s office, which wants to replicate it in places like Rockford, Elgin and Aurora. Meanwhile, the grant that started the garden has run out. Its organizers are planning to make the garden self-sustaining with commercial production and an expansion of the farm&rsquo;s community supported agriculture program, which allows individuals to buy &ldquo;shares&rdquo; in the garden&rsquo;s seasonal produce.</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her <a href="https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2Foyousef&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNHKQ6bayggMubwgs9U53FsOML-b9A">@oyousef</a> and <a href="https://www.google.com/url?q=https%3A%2F%2Ftwitter.com%2FWBEZoutloud&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNGciFiqidUKx7xm655BDbaPU9eB3g">@WBEZoutloud</a>.</em></p><p><em>Correction: This article incorrectly referred to the Peterson Garden Project. It has been corrected.</em></p></p> Wed, 07 May 2014 15:56:00 -0500 http://www.wbez.org/news/refugees-raise-vegetables-put-down-roots-urban-garden-110149 7-Eleven warns Chicago franchisee who criticized company http://www.wbez.org/news/7-eleven-warns-chicago-franchisee-who-criticized-company-110064 <p><p>&nbsp;</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Syed.jpg" style="margin: 4px 0px 0px 0px; float: right; height: 263px; width: 300px;" title="Hashim Syed, owner of a 7-Eleven franchise on the city’s North Side, received a written warning from the Dallas-based company eight days after WBEZ aired his grievances. (WBEZ/Shannon Heffernan)" />7-Eleven Inc. is coming down on a Chicago franchisee who criticized the Dallas-based company on WBEZ.</p><p>Hashim Syed, who has run a 7-Eleven in the city&rsquo;s Rogers Park neighborhood since 1990, invited two WBEZ reporters to his store for an interview. He told them how the world&rsquo;s largest convenience-store chain has tightened rules for its franchisees over the years.</p><p>Syed said the company, a subsidiary of the Japanese conglomerate Seven &amp; I Holdings Co., had dumped its employment responsibilities on franchisees.</p><p>&ldquo;We are nothing more than a glorified manager,&rdquo; Syed said in the <a href="http://www.wbez.org/news/bigger-burgers-and-fries-franchising-blamed-low-wages-109978" target="_blank">WBEZ report</a>, broadcast April 8. &ldquo;I take the heat from the customer if anything goes wrong. I take the heat from the workers if something goes wrong.&rdquo;<br /><br />One week after the broadcast, 7-Eleven officials inspected his store. Syed said the inspection took place without notice. He identified the officials as Bill Engen and Ena Williams, both senior vice presidents based at the Dallas headquarters.</p><p>The next day, a 7-Eleven &ldquo;letter of notification&rdquo; accused Syed of violating his franchise agreement because some products were out of stock and because he allegedly was not using one of his hot-dog grills as required. The letter was accompanied by 17 photos showing spots on Syed&rsquo;s shelves where products were sold out. The letter did not mention his statements to WBEZ.</p><p>Warning letters from franchisors are not uncommon. The franchisees usually have a chance to fix the problems. But a letter could also lead to trouble, even a 7-Eleven takeover of the store.</p><p>&ldquo;This is nothing but retaliation,&rdquo; said Jas Dhillon, a 7-Eleven franchisee in Los Angeles and vice chair of the National Coalition of Associations of 7-Eleven Franchisees. &ldquo;We carry over 2,500 items in our store, from soda pops to candies to hot dogs to magazines to lottery tickets. Being out of stock of 17 &mdash; that&rsquo;s less than 1 percent. Any given day, not just at 7-Eleven, at any of the other stores, you&rsquo;re going to have items that we run out of, especially when you just had a hot weekend.&rdquo;<br /><br />Dhillon said 7-Eleven was trying to silence Syed and pointed out that the Chicago franchisee once won a national award from the company because, Dhillon said, &ldquo;he ran the best store in the country.&rdquo;<br /><br />Engen and Williams did not respond to WBEZ requests for comment on Syed&rsquo;s case. Neither did the Chicago-area 7-Eleven official who issued Syed the warning letter.</p><p>Company spokeswoman Margaret Chabris sent a written statement that said her company &ldquo;does not discuss publicly matters concerning our relationships with individual 7-Eleven franchisees.&rdquo; Asked whether the 7-Eleven letter to Syed came in response to his WBEZ interview, Chabris did not answer.<br /><br />The interview was not the first time Syed had criticized 7-Eleven. He publishes a <a href="http://7-elevenfoac.com/data/newsletter/FOACMay2013FinalNewsletter.pdf" target="_blank">newsletter</a> for Chicago-area 7-Eleven franchisees that questions how the company treats them.<br /><br />In the WBEZ report, Syed blamed 7-Eleven policies and the franchise model for his store&rsquo;s low wages. &ldquo;That worker who is working also thinks &mdash; and I know it for a fact &mdash; that I am just greedy and I want to keep all the money in my pocket instead of giving him fair wages,&rdquo; he said.<br /><br />The report included competing claims by economists about how franchising affects wages and jobs.</p><p>In the report, Chabris and another 7-Eleven official said workplace conditions were the responsibility of franchisees.</p><p>Chabris added that Syed had a right to speak out. &ldquo;It&rsquo;s freedom of speech,&rdquo; she said. &ldquo;That&rsquo;s fine.&rdquo;</p><p>Syed, meanwhile, is planning to board a Thursday flight from Chicago to Japan, where he will meet with other 7-Eleven franchisees. He said he is working to strengthen ties between 7-Eleven franchisees around the world so they have more power to stand up to the company.</p><p><em><a href="http://www.wbez.org/users/cmitchell-0">Chip Mitchell</a> is WBEZ&rsquo;s West Side bureau reporter. Follow him on Twitter <a href="https://twitter.com/ChipMitchell1">@ChipMitchell1</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>, and connect with him through <a href="https://www.facebook.com/chipmitchell1">Facebook</a>, <a href="https://plus.google.com/111079509307132701769" rel="me">Google+</a> and <a href="http://www.linkedin.com/in/ChipMitchell1">LinkedIn</a>.</em></p></p> Wed, 23 Apr 2014 18:02:00 -0500 http://www.wbez.org/news/7-eleven-warns-chicago-franchisee-who-criticized-company-110064 Bigger than burgers and fries, franchising blamed for low wages http://www.wbez.org/news/bigger-burgers-and-fries-franchising-blamed-low-wages-109978 <p><p><iframe frameborder="0" height="310" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/playlists/29724231&amp;color=ff5500&amp;auto_play=false&amp;hide_related=true&amp;show_artwork=false" width="100%"></iframe></p><p><br /><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchising%201%20FINAL_sh.jpg" style="margin: 4px 0px 0px 0px; float: right; height: 233px; width: 350px;" title="Hashim Syed, owner of a 7-Eleven in Chicago, says company rules make it hard for him to cut costs so he could pay employees more. (WBEZ/Shannon Heffernan)" />When we asked what it is like to own a franchise of the world&rsquo;s largest convenience-store chain, Hashim Syed took us to a cramped back room of his store, a 7-Eleven on Chicago&rsquo;s North Side.</p><p>Sitting next to a wall of tubes filled with bright-colored syrup for the soda machine, Syed recalled a young man working the graveyard shift a few years back. This employee wanted to be with his father, who was gravely ill.</p><p>&ldquo;Where we come from,&rdquo; said Syed, 71, who was born in India, &ldquo;it&rsquo;s very important that you spend the final days with parents for the comfort.&rdquo;</p><p>But the worker could not afford to take unpaid leave. And Syed could not afford to replace him. &ldquo;I&rsquo;d have had to have somebody else do his work,&rdquo; Syed said, his voice becoming faint. &ldquo;I would have ended up paying two wages.&rdquo;</p><p>The employee kept most of his shifts and, to this day, Syed regrets it. &ldquo;I wish I would have given him some time off,&rdquo; he said.</p><p>In Syed&rsquo;s nearly quarter century as a 7-Eleven franchisee, he has worked brutally long hours, his profits have fallen far short of his expectations, and the Dallas-based chain has imposed tighter rules on how he runs the store.</p><p>But something that particularly steams Syed is his role as an employer. He says all of those 7-Eleven rules limit his ability to cut costs and free up resources to treat his workers better. &ldquo;When I lived in Bombay,&rdquo; Syed said, &ldquo;this is not what I thought they meant by the American Dream.&rdquo;</p><p>An array of signs suggests Syed is not the only one questioning how franchising affects the workplace.</p><p><iframe allowfullscreen="" frameborder="0" height="400" src="//www.youtube.com/embed/6fidL51oakg?list=UUkpMCLrDFxb1n74GOOw81-w" width="600"></iframe></p><p>Franchisees are pushing several states to clamp down on allegedly predatory franchisor practices. Web sites such as <a href="http://www.bluemaumau.org/">Blue MauMau</a> and <a href="http://www.unhappyfranchisee.com/">Unhappy Franchisee</a> have sprung up to connect these small business owners and give them a voice.</p><p>In one industry, &ldquo;franchisees&rdquo; have won a string of class-action lawsuits claiming that they are really employees and that their employers are using the franchise model to skirt wage-and-hour laws.</p><p>Franchises, especially those serving fast food, have also become frequent protest sites for a movement demanding higher wages and benefits such as paid sick leave. Those protests have grown louder as some politicians, ranging from Illinois Governor Pat Quinn to President Barack Obama, call for raising the minimum wage.</p><p>And, while many economists and business groups praise franchising as efficient, the model is taking hits from some scholars, including an Obama nominee to head the U.S. Department of Labor&rsquo;s Wage and Hour Division. That nominee says franchising is part of something much bigger &mdash; something bad for the workplace.</p><p><strong>How Franchising Works</strong></p><p>Franchising dates back to the 19th century, when manufacturers such as the Singer Sewing Machines Company developed the model for sales representatives. By the 1960s, franchising was ubiquitous, thanks to fast-food chains such as McDonald&rsquo;s and Burger King. Today franchising takes place in a dizzying range of industries, from tax services to child care, from real estate to car repair.</p><p>The number of U.S. franchise jobs in recent years has grown, now totaling more than 8.1 million &mdash; about 7 percent of private-sector jobs, according to data from payroll processor ADP. Franchise employment growth has outpaced jobs growth in the economy as a whole for 12 consecutive months, the data show.</p><p>In Illinois, franchise employment totals almost 345,000, according to the<a href="http://www.franchise.org/"> International Franchise Association</a> Educational Foundation. As of January, 1,152 companies had active registrations to sell franchises in Illinois, the state attorney general&rsquo;s office says.</p><p>Here is how the model works. A company thinks it has a good thing going and decides to expand. But it may not be familiar with the new places and may be short on capital. It also does not want to employ the necessary workers. It would rather have someone else do that &mdash; someone with skin in the game.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchising%202%20FINAL_sh.png" style="margin: 4px 0px 0px 0px; float: left; height: 244px; width: 350px;" title="Amjad “AJ” Haj, who co-owns three Al’s Beef franchises in Chicago, praises the company’s support to run them. (WBEZ/Shannon Heffernan)" />&ldquo;A franchisee will do the best job,&rdquo; said David Howey, who bought an old Chicago sandwich brand, <a href="http://alsbeef.com/">Al&rsquo;s Beef</a>, and stepped up the chain&rsquo;s franchising. &ldquo;Instead of a large company having a bunch of managers who are running the stores, a franchisee buys into the system and it becomes their business. It becomes their life. So the brand is represented properly by people who really care.&rdquo;</p><p>For the franchisees, the model allows them to run their own business and take advantage of company resources for things such as property, equipment, training and marketing.</p><p>The franchisees also pay an upfront sum known as the franchise fee, typically five figures. Once in business, they pay a specified royalty &mdash; often 5-10 percent of sales &mdash; and fees for things such as advertising, management and insurance.</p><p>Amjad &ldquo;AJ&rdquo; Haj, who owns three Al&rsquo;s Beef franchises with his brother, says he appreciates being able to focus on day-to-day tasks. &ldquo;You do not have to go test 20 different burgers to see which one you want to sell,&rdquo; Haj said. &ldquo;They&rsquo;ve already done that. They&rsquo;ve tested out all the different mayos for you.&rdquo;</p><p>Successful franchising depends on a good brand &mdash; which means, above all, consistency. At all 16 locations of Al&rsquo;s Beef, the sandwiches not only taste the same, they drip the same, thanks to a uniform recipe for their <em>jus</em>.</p><p>What protects the brand is the franchise agreement, which spells out franchisee rules on topics such as operating hours, dress codes, supply vendors and payroll processes.</p><p>Despite paying all the fees and following the rules, a franchisee has no guarantee the unit will flourish. Franchises go belly up about as often as independent businesses in their industry, according to the<a href="http://www.sba.gov/"> U.S. Small Business Administration</a>.</p><p>Many franchisees do hang on &mdash; some for decades, like Syed, the 7-Eleven operator. A third of franchisees run multiple units, usually two or three, according to Franchise Business Review.</p><p>&ldquo;We see that this is successful &mdash; businesses being franchised &mdash; simply by the fact that they exist all around us,&rdquo; said <a href="http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000119727">Francine LaFontaine</a>, a University of Michigan professor of business economics and public policy. &ldquo;And then consumers are voting with their feet by consuming the goods and services that are offered this way. That means we&rsquo;ve made that sector more efficient.&rdquo;</p><p>That efficiency can lower prices, said LaFontaine, a&nbsp;<a href="http://books.google.com/books/about/The_Economics_of_Franchising.html?id=HaZuDYzXLSYC">leading researcher</a>&nbsp;on franchise economics. &ldquo;That&rsquo;s good for consumers. It probably also means we consume a bit more of these things, which means there are more jobs in this sector than there would be otherwise.&rdquo;</p><p>But the model is fraught with tensions. When a franchise agreement expires, companies sometimes take the opportunity to increase the royalty or impose tighter rules. If the franchisee does not follow the rules, the company might take over that unit. Last summer, 7-Eleven ousted franchisees from several Chicago stores for alleged franchise-agreement violations.</p><p>The company, for its part, has reasons to establish rules &mdash; and enforce them. Making all franchises buy from the same supplier can help bring down costs. Higher fees can fund more advertising. Quality standards help keep franchisees from freeloading on the brand.</p><p>Other tensions stem from the wages and work conditions of franchise employees &mdash; the workers who flip the burgers or ring up the Slurpees.</p><p>Last June, federal <a href="http://www.justice.gov/usao/nye/pr/2013/2013jun17.html">authorities seized</a> fourteen 7-Eleven stores in New York and Virginia and arrested the franchisees for allegedly employing illegal immigrants, forcing them to work long overtime hours, paying them for just a fraction of their work and forcing them to live in substandard housing owned by the franchisees. After the arrests, the corporation said it planned to step up its franchisee monitoring.</p><p>This March, McDonald&rsquo;s workers in California, Michigan and New York <a href="https://drive.google.com/folderview?id=0BwU-XxSsYz21eXluRzFpVFFzMFE&amp;usp=sharing">filed lawsuits</a> claiming that the Oak Brook-based corporation is responsible for alleged wage-and-hour violations, even at franchises. A company statement about the suits said McDonald&rsquo;s was committed &ldquo;to the well-being and fair treatment of all people who work in McDonald&rsquo;s restaurants&rdquo; and that it would investigate the allegations and &ldquo;take any necessary actions.&rdquo;</p><p><img alt="" class="image-original_image" src="http://llnw.wbez.org/styles/original_image/llo/insert-images/book cover.jpg" style="margin: 4px 0px 0px 0px; float: right; height: 296px; width: 200px;" title="A Boston University economist likens franchising to outsourcing." />Economists disagree about what causes such work conditions. Some cite the low-skilled jobs in many heavily franchised industries. They point to cutthroat competition. &ldquo;It&rsquo;s more the industry that determines the working conditions of the employees than it is the way in which this is organized,&rdquo; said LaFontaine, the University of Michigan economist, defending the franchise model.</p><p>Other experts tie the low wages to the franchising. When a company franchises, they point out, it is adding extra owners and a new layer of competition. That means more people taking slices of the pie and more pressure to cut costs such as wages. &ldquo;Each different business is operating on a thinner margin,&rdquo; said David Weil, the Labor Department nominee, who is a business professor at Boston University.</p><p>Weil co-authored a study that found that fast-food restaurants operated by a franchisee are more likely to violate wage-and-hour laws than eateries the big corporation runs itself.</p><p>When workers earn less, a related argument goes, they also consume less &mdash; a drag on the economy.</p><p>In a <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674725447">new book</a>, Weil acknowledges the benefits of franchising for businesses that want to expand, but he also likens the model to&nbsp;various forms of outsourcing. He says they are all ways for big companies to shed employment responsibilities.</p><p><strong>The Slurpee Economy</strong></p><p>Syed says he bought his 7-Eleven franchise in 1990. &ldquo;I was very excited,&rdquo; he said. &ldquo;I could buy everything from where I wanted to.&rdquo;</p><p>After a while, however, Syed decided that being a franchisee was not all it was cracked up to be. It was not just the long hours. The company allowed another 7-Eleven to open just a few blocks away. Then it changed the terms of his franchise agreement.</p><p>Franchisees learned they had to buy 85 percent of supplies from approved vendors. &ldquo;Now everything will be controlled by 7-Eleven Company,&rdquo; Syed said. &ldquo;They will decide what to buy, where to buy.&rdquo;</p><p>Other franchisees complain that 7-Eleven goes as far as to remotely control the temperature in their stores, even the volume on their televisions.</p><p>Many of 7-Eleven&rsquo;s rules do help protect the brand. And the company has reasons to make franchisees purchase supplies from an approved vendor. For one, 7-Eleven can use the collective buying power to keep costs down, a company official said.</p><p>Something 7-Eleven does not control are employment decisions, including the amount Syed pays his workers. Syed said one of his half-dozen employees, the manager, makes $10.50 an hour. He said the rest earn less &mdash; in a state where the minimum is $8.25.</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/banner-edited.jpg" title="Syed, the 7-Eleven franchisee in Chicago, calls himself a 'front man' for the Dallas-based corporation. (WBEZ/Shannon Heffernan)" /></div><p>Syed said he can hardly blame employees who are upset about the pay, but he insisted he is not getting rich either. Last year, his 23rd at the store, Syed took home $53,866, he said. That was one of his best years, he added.</p><p>To Syed, the whole franchise model feels like a setup. &ldquo;We are as much of a victim in it as the workers are,&rdquo; he said. &ldquo;We are nothing more than a glorified manager.&rdquo;</p><p>7-Eleven officials declined to get specific regarding the company&rsquo;s agreements with its approximately 6,200 franchises. But Jay Mitchell, a franchise-sales manager at the Dallas headquarters, said 7-Eleven was not going to take responsibility for wages or work conditions.</p><p>Franchisees are &ldquo;going to be independent operators so they are going to be responsible for employing people and determining what they pay those people as well,&rdquo; Mitchell said. &ldquo;While we will provide them guidance, it is completely up to [the franchisees] how they pay their employees.&rdquo;</p><p>Questioned about such employment policies, 7-Eleven spokeswoman Margaret Chabris said the company provides franchisees &ldquo;very comprehensive&rdquo; training and said the franchise agreement requires them to follow the law.</p><p>But Syed said the rest of the agreement makes it too hard for him to cut costs, leaving him little room to pay his employees more. &ldquo;That worker also thinks &mdash; and I know it for a fact &mdash; that I am just greedy and I want to keep all the money in my pocket instead of giving him fair wages,&rdquo; he said.</p><p>It might have been harder for Syed to run a convenience store without the 7-Eleven brand, said LaFontaine, the economist. &ldquo;Independent businesses or franchises fail all the time. That is just a reality of these kinds of small businesses.&rdquo;</p><p>Syed, who publishes a <a href="http://7-elevenfoac.com/data/newsletter/Final_FOAC_December_2012_Newsletter.pdf">newsletter</a> for Chicago-area 7-Eleven owners,&nbsp;says state and federal lawmakers should do more to protect franchises from the companies that own their brand.</p><p>To date, just 17 states have any laws governing franchisor-franchisee relations, according to Dean Heyl, who directs state government affairs for the <a href="http://www.franchise.org/">International Franchise Association</a>.</p><p>Those states include Illinois, which enacted its&nbsp;<a href="http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2381&amp;ChapterID=67">Franchise Disclosure Act</a>&nbsp;in 1987. That law regulates how franchisors treat prospective franchisees and requires franchisors to have &ldquo;good cause&rdquo; for terminating a franchise.</p><p>Last week, Maine&rsquo;s state Senate voted down a bill that would have, among other things, required franchisors to provide a franchisee a 60-day notice to resolve a problem before termination. The bill also would have allowed franchisees to leave their business to a spouse, partner or heir.</p><p>Heyl said such legislation, if enacted, would &ldquo;hurt franchisees who are playing by the rules.&rdquo;</p><p><strong>Franchising</strong>&rsquo;<strong>s New Frontier</strong></p><p>As franchising has spread, some industries have pushed the model to the extreme. In commercial-cleaning franchising, the customers that need the service usually come through the franchisor. They also make their payments to the franchisor. The franchisee gets just a portion of the payments in periodic checks from the franchisor &mdash; after deductions for insurance, royalties, management and so on.</p><p>In Chicago, the commercial-cleaning franchisees include hundreds of Mexican immigrants. One of them is a woman we will call Gloria Pérez. We agreed not to use her real name because she fears retribution from her franchisor. Pérez entered the commercial-cleaning business four years ago.</p><p>Back then, she and her husband were both unemployed, they had three kids at home and a mortgage, and they were burning through their savings. Pérez saw a newspaper ad placed by CleanNet of Illinois, part of<a href="http://www.cleannetusa.com/"> CleanNet USA</a>, based in McLean, Virginia.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchise%203_sh%20%28CM%20credit%29.JPG" style="margin: 4px 0px 0px 0px; float: right; height: 233px; width: 350px;" title="A CleanNet janitor works after hours in a Chicago-area car dealership. Treated like a franchisee, she says her pay amounts to less than Illinois’s minimum wage. (WBEZ/Chip Mitchell)" />The ad said she could have her &ldquo;own business.&rdquo; Pérez, interviewed by WBEZ in Spanish, said it seemed like &ldquo;a good opportunity because we did not have any other work.&rdquo;</p><p>Pérez went in for an appointment. CleanNet gave her more than 150 pages of legal disclosures &mdash; all in English, she said. She did not understand much except some numbers on a chart the company gave her. &ldquo;It said I could make $6,000 a month if I bought a franchise for $21,000,&rdquo; she said.</p><p>After a discount, Pérez said, she managed to put in $19,000. Since then, she said, she has never come close to earning the monthly $6,000. &ldquo;Every month they take out 20 percent of what I earn&rdquo; and CleanNet does not give her enough customers within range of her home, Pérez said.</p><p>&ldquo;It&rsquo;s a scam,&rdquo; said Chicago attorney Christopher Williams, who filed a class-action lawsuit against the company in March on behalf of janitors such as Pérez. &ldquo;CleanNet is trying to say, &lsquo;We have no unemployment obligation to them. We have no workers-comp obligations to them. We do not pay payroll taxes. We are not their employer. And these are people who need public assistance because they&rsquo;re making so little money. They can&rsquo;t afford health care. If they get injured on the job, they have no workers compensation insurance.&rdquo;</p><p>If a customer falls behind on its payments, CleanNet warns it could deduct that money from paychecks too.</p><p>Another way CleanNet makes money off its janitors is by loaning them money when they cannot afford the franchise fee &mdash; the upfront payment from the workers. Paying off that loan means yet more paycheck deductions.</p><p>&ldquo;All they&rsquo;re left with after that agreement is debt,&rdquo; Williams said.</p><p>The suit against CleanNet, filed in federal court, claims hundreds of the company&rsquo;s Illinois janitors are not franchisees but employees. It accuses the company of violating state and federal laws regulating wages and work hours.</p><p>CleanNet officials did not respond to our requests for comment about the suit. When janitors in Massachusetts filed a similar claim against the company, CleanNet denied any liability or wrongdoing. It did settle with those janitors last November, agreeing to pay out $7.5 million.</p><p>In Illinois, CleanNet is among at least eight commercial-cleaning firms registered to offer franchises, according to the state attorney general&rsquo;s office. The biggest is Jani-King International, based in Addison, Texas.</p><p>Jani-King says it pioneered franchising in the commercial cleaning industry. Asked whether ducking wage-and-hour laws was a big factor in deciding to sell franchises to janitors instead of employing them, the company emailed a statement that did not directly answer the question.</p><p>&ldquo;Franchise owners, like all business owners, have control over their day-to-day operations as well as their profitability,&rdquo; the Jani-King statement said. &ldquo;They can solicit and bid their own business, and they can accept or decline the right to service accounts offered by Jani-King. They can hire employees to clean accounts, or they can clean themselves. They buy all of their own equipment and supplies. The franchise owners receive all revenue generated by their business (less Jani-King&rsquo;s fees).&rdquo;</p><p>But Weil, the Boston University business economist, said the franchise model enables the cleaning companies to shortchange the janitors. &ldquo;If you start doing the math, you realize that people are being paid way below the minimum wage or being denied overtime payment and are really being subjected to inappropriate expenses by another company for, essentially, being an employee of that company,&rdquo; he said.</p><p>In the cleaning industry, it is not just the &ldquo;franchisees&rdquo; who are vulnerable to wage-and-hour violations. Those workers often bring other people to help them with jobs. Pérez gets part-time help from her husband, a son and a neighborhood friend. &ldquo;I can&rsquo;t afford to pay them minimum wage,&rdquo; she said.</p><p>Court rulings in Massachusetts have upended franchising by janitorial companies. &ldquo;Several have closed down or stopped operating the way they were operating,&rdquo; said attorney Shannon Liss-Riordan, who filed the key suits. Now the companies are either treating their janitors like employees or &ldquo;not charging workers upfront for a job,&rdquo; she said.</p><p>&ldquo;My hope is that some of the rulings that we&rsquo;ve gotten [in Massachusetts] will spread,&rdquo; Liss-Riordan said.</p><p>That prospect worries Heyl, the <a href="http://www.franchise.org/">International Franchise Association</a> lobbyist. If lawsuits drive franchised cleaning companies out of business, there will be less competition and increased prices, he warned.</p><p>Heyl also sees a threat to franchising in all industries. &ldquo;We&rsquo;re just coming out of a recession, and banks are very skittish and, if they start looking at a franchise system and open up the [newspaper] and say, &lsquo;Look, some of these franchisees are employees,&rsquo; and there&rsquo;s litigation to follow, there&rsquo;s numerous negative economic impacts.&rdquo;</p><p><em>Follow <a href="http://www.wbez.org/users/cmitchell-0">Chip Mitchell</a> at <a href="https://twitter.com/ChipMitchell1">@ChipMitchell1</a>.&nbsp;Follow <a href="http://www.wbez.org/users/shannon-0">Shannon Heffernan</a> at <a href="https://twitter.com/shannon_h">@shannon_h</a>.&nbsp;</em><em>This report, edited by <a href="http://www.wbez.org/users/djohn">Derek John</a>, is part of WBEZ</em>&rsquo;<em>s&nbsp;</em>&ldquo;<em>Front and Center</em>&rdquo;<em>&nbsp;series, funded by the Joyce Foundation,&nbsp;</em>&ldquo;<em>Improving the quality of life in the Great Lakes region and across the country.</em>&rdquo;</p></p> Mon, 07 Apr 2014 05:01:00 -0500 http://www.wbez.org/news/bigger-burgers-and-fries-franchising-blamed-low-wages-109978 Millennials, risk and the economy http://www.wbez.org/blogs/leah-pickett/2013-10/millennials-risk-and-economy-108886 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/niala.PNG" alt="" /><p><p><em>Above is a Google hangout between fellow WBEZ blogger Britt Julious and Afternoon Shift host Niala Boodhoo, discussing how millenials are taking risks in today&#39;s economy.</em></p><p>Oh, those millenials. Generation Y, made up of people born between the late &#39;70s and early &#39;90s, is often called the&nbsp;<a href="http://www.nytimes.com/2011/11/13/opinion/sunday/the-entrepreneurial-generation.html?pagewanted=all&amp;_r=1&amp;" target="_blank">&quot;entrepreneur generation,&quot;</a>&nbsp;due in large part to the plucky startup models, risk-taking mentalities and personal branding strategies that have come to define success at work in the new millennium. Rapidly transitioning from one career to another also has emerged as a frequent practice for Gen Y, and <a href="http://finance.yahoo.com/blogs/daily-ticker/born-digital-millennials-change-workforce-much-more-115241544.html" target="_blank">&quot;sidepreneurism,&quot;</a> the increasingly popular trend of employees creating and running their own businesses while still engaged in a full-time job, is perhaps even more common.&nbsp;</p><div class="image-insert-image ">However, millennials of the Internet Age also have been dismissed by think piece writers, political pundits, and baby boomers ad nauseam. They have been labeled lazy, bratty, pretentious, entitled and self-absorbed. Framed in a stereotype, the millennial&#39;s fingers are perpetually glued to an electronic device, watching life go by through the glow of a smartphone screen.&nbsp;</div><div class="image-insert-image ">&nbsp;</div><p>I am 24, and clearly a millennial, but not a single one of the condescending &quot;kids these days&quot; stereotypes applies to me. I was raised to work hard, take responsibility for my actions, embrace change, and never burn bridges. I spend more time reading books then scrolling through filters on Instagram. I also have learned that failure&mdash;big, crushing, spectacular failure&mdash; is often a necessary pathway to success.&nbsp;</p><p>So, which scenario carries more risk for millenials in today&#39;s economy: starting a business from scratch or climbing the corporate ladder? Personally, I would relish the opportunity to work my way up at an organization that fulfills my needs as a young professional&mdash; especially since post-grad <a href="http://www.thefiscaltimes.com/Articles/2011/01/02/Permalancing-The-New-Disposable-Workforce" target="_blank">permalancing</a>, while popular among the twenty-something set,&nbsp;is not the most financially stable of pursuits. Health benefits are frustratingly difficult to come by, and nearly impossible to obtain as a freelancer. Any semblance of job security? Even less so.</p><p>Still, I find myself drawn to the romance and excitement of innovation. I am propelled by Chicago&#39;s recent crowning by Forbes as the new <a href="http://www.forbes.com/sites/johnhall/2013/08/30/why-chicago-is-a-new-hot-spot-for-entrepreneurs/" target="_blank">&quot;hot spot for entrepreneurs</a>,&quot; and inspired by the dream teams who came before us. I think of&nbsp;Steve Jobs and Steve Wozniak building the first Apple computers in Jobs&#39; Los Altos garage, ushering in a new wave of&nbsp;<a href="http://www.businessweek.com/innovate/content/jun2010/id20100610_525759.htm" target="_blank">startup culture</a>&nbsp;and a new generation of people&nbsp;working to&nbsp;elicit powerful, meaningful, and life-altering change from their own backyards, and on their own terms.</p><p>Perhaps millennials need to learn how to fall down in order to get back up again: to create, innovate, and <em>try </em>with boundless enthusiasm. After all, isn&#39;t putting ourselves out there&mdash;at least being able to say that we tried, that we didn&#39;t settle&mdash;better than remaining frozen in stifling, unfulfilling work environments for the rest of our lives, wondering, &quot;What if?&quot;</p><p><em>Leah Pickett writes about popular culture for WBEZ. You can find her on&nbsp;<a href="https://www.facebook.com/leahkristinepickett" target="_blank">Facebook</a>,&nbsp;<a href="https://twitter.com/leahkpickett" target="_blank">Twitter</a>&nbsp;and<a href="http://hermionehall.tumblr.com/" target="_blank">&nbsp;Tumblr</a>.</em></p></p> Thu, 10 Oct 2013 13:00:00 -0500 http://www.wbez.org/blogs/leah-pickett/2013-10/millennials-risk-and-economy-108886