'Business Report': Impact of IBM deals in Midwestern cities debated
In May 2010, state and local officials in Columbia proudly announced one of Missouri's biggest economic development wins in recent history: IBM was coming to town to open a technology service delivery center that would create 800 permanent jobs, put Columbia on the radar of cutting-edge tech companies, and transform the local economy. "Today is a great day for IBM and the state of Missouri," Gov. Jay Nixon said at the time. Sound familiar? Earlier this spring, state and local officials here made a similar announcement when they welcomed IBM to Baton Rouge. As in Columbia, the deal promises to be a so-called game changer that will create 800 jobs, ramp up computer science education at LSU and other universities, and transform the local economy and downtown riverfront at the same time. "This will impact our state's future while continuing to position us as a leader in the global technology sector," gushed Gov. Bobby Jindal at the March 27 announcement. But will IBM really be able to deliver on all the hype? The experience in Columbia—and also in Dubuque, Iowa, which welcomed Big Blue to its community of 95,000 residents in much the same manner in 2009—suggests that although IBM has been good for those cities, the expectations were, at the very least, unrealistic. "These towns think it's Christmas when they land IBM, but not very many towns in the U.S. are up to the task of looking deeply and analytically at what IBM is really doing," says Paul Sturtz, who served on the Columbia City Council when that city signed its IBM deal. Read the full story by Editor Stephanie Riegel from the current issue of Business Report here.
Gas prices slowly inching up in B.R.
For the past three weeks now, the average price for a gallon of regular, unleaded gas has been slowly rising. As of this morning, a gallon was selling for $3.30 on average in the city, up one penny on the week, according to the AAA Daily Fuel Gauge Report. Over the two weeks previous, prices rose 5 cents and 1 cent, respectively. The recent rise follows a nine-week period in which prices steadily declined from a high this year of around $3.65 a gallon. Seven cents over three weeks isn't exactly skyrocketing prices, and Louisiana is still enjoying some of the lowest prices in the nation. Just four states—Alabama, Mississippi, South Carolina and Tennessee—have a lower average than Louisiana's $3.32. Motorists in several states are now paying more than $4 per gallon. The U.S. average as of this morning is $3.65, up 8 cents from a week ago. You can find the complete AAA Daily Fuel Gauge Report here. Meanwhile, a survey by Bankrate.com says despite lower prices this year, most people are not increasing their spending elsewhere. About 80% of the 1,000 people Bankrate surveyed said they have not increased their discretionary spending in response to lower prices. CNN has the full story here.
BRAC working to bring more local alumni back home
BRAC is trying to lure far-flung LSU alumni back to Baton Rouge. It's part of a nascent program to develop the region's talent pool and to help draw business to the area. In addition to personalized regional tours to potential employers, BRAC has been attending LSU alumni crawfish boils around the country, telling them, among other things, "Here's a free koozie. … We're trying to get people to move back to Baton Rouge," says Phillip LaFargue, BRAC's senior vice president of marketing. "And then their eyes light up." LaFargue says many of the alumni they meet want to come home; they just don't think the jobs are available. Those who are interested can provide their résumés to be added to a database. The résumés are then matched to employers. BRAC has been using the talent development program for about a year and a half. In addition to working to bring LSU alumni back home, BRAC also signed agreements with alumni associations from Southern University as well as several local high schools to partner in promoting the Capital Region and job opportunities within it at various events. The goal of those partnerships is also to increase the number of résumés included in the online talent database, which BRAC has been building as part of its five-year strategic plan. Those interested in learning more about the database and being a part of it can find more information here. —April Castro
Jindal says guilty IRS officials deserve to be jailed
Speaking to the Virginia GOP on Friday, Gov. Bobby Jindal says recent national controversies—the IRS's scrutiny of conservative groups, the Obama administration's handling of the Benghazi attacks, and the Justice Department's subpoenas of Associated Press phone records—are the "inevitable fruits of a federal government that has grown so big and so intrusive," The Washington Post reports. As for the IRS controversy, Jindal suggests those responsible should see jail time. In the prepared remarks he shared with Politico, Jindal says: "You cannot take the freedom of law-abiding Americans, whether you disagree with them or not, and keep your own freedom. When you do that, you go to jail." Jindal also urged Republicans nationwide to stop "hand-wringing" and "navel-gazing" and move forward with the project of reshaping their message. "As a party we just need to get over ourselves. I'm tired of all the public confessions. I'm tired of all the psychoanalysis."
Economists predict increase in consumer spending
Consumer spending is likely to pick up this year while government spending declines at a faster rate, according to a survey of business economists. The economists predict that the U.S. economy will grow 2.4% this year and 3% next year. That's unchanged from the most recent forecast issued in February. But they are more bullish on consumer spending and housing than they were three months ago, in part because of more positive data on unemployment. The survey was released today by the National Association for Business Economics, which periodically surveys economists for banks, manufacturers and universities. The group of 49 economists who were questioned between April 16 and April 30 predicted that consumer spending will rise 2.3% this year, up from a forecast of 1.9% in February. They were also more upbeat about the auto market, predicting 15.4 million vehicles sales, an increase of 1 million over 2012. The economists predicted home prices will rise 4.4% this year and 4% next year, and that residential housing investment will jump 15% this year, boosted by new construction. Corporate profits after taxes they foresee rising 5.3% in 2013 and 7.5% next year. Both of those are more bullish forecasts than the economists offered in February. The Associated Press has more details from the survey in the full story here.
Should robots offset dearth of workers in elder care?
If the number of care workers for the elderly across America fails to grow alongside the aging baby boomer generation, many people might end up being cared for by robots, The New York Times reports. According to the Health and Human Services Department, there will be 72.1 million Americans over the age of 65 by 2030, which is nearly double the number today. According to the Bureau of Labor Statistics, the country will need 70% more home aide jobs by 2020, a decade before that bubble of retirees. But filling those jobs is proving to be difficult because elder care salaries are low. In many states, in-home aides make an average of $20,820 annually. "There are two trends that are going in opposite directions. One is the increasing number of elderly people, and the other is the decline in the number of people to take care of them," said Jim Osborn, a roboticist and executive director of the Robotics Institute's Quality of Life Technology Center at Carnegie Mellon University. "Part of the view we've already espoused is that robots will start to fill in those gaps." The technology is nearly there, as several universities have shown. But some researchers worry about a more fundamental question: Should we entrust the care of people in their 70s and older to artificial assistants rather than doing it ourselves? Read the full story here.
News roundup: Yahoo targets youth market with $1.1 billion buy of Tumblr … A look at Facebook, one year after IPO … Many fliers willing to pony up for better seats, poll finds
The big deal: Yahoo is buying online blogging forum Tumblr for $1.1 billion as CEO Marissa Mayer tries to rejuvenate an Internet icon that has fallen behind the times. The deal announced this morning represents Mayer's boldest move yet since she left Google 10 months ago to lead Yahoo's latest comeback attempt. And it marks Yahoo's most expensive acquisition since the Sunnyvale, Calif., company bought online search engine Overture a decade ago for $1.3 billion in cash and stock. The Associated Press has the full story here.
Happy anniversary? After a market debut marred by technical glitches and a deep dive in the company's stock price, Facebook has spent the past year focused on its biggest weaknesses: how to make money and keep its more than 1 billion users tethered to the social network. As The Washington Post reports, the results have been mixed. The company's stock price has recovered some of its worst losses, and Facebook has announced several moneymaking initiatives. But the circumstances surrounding the IPO are still under investigation by the U.S. Securities and Exchange Commission, and some investors remain unconvinced the social network has staying power. The full story is here.
Sky high: Most of us will put up with a cramped middle seat on a short flight. But on trips longer than three hours, we are ready to crack open our wallets and pay for a window or aisle seat. That's just one of the findings of a recent Harris Interactive poll of 2,276 adults on the subject of airline pet peeves and passenger fees. On a flight shorter than two hours, 33% of those surveyed said they would pay for extra legroom. If a flight lasts more than three hours, 58% said they would be willing to pay. Thirteen percent said they'd pay more than $25. The Los Angeles Times has more survey findings in the full story here.
Today's poll question: On a flight longer than three hours, would you be willing to pay a fee to secure a window or aisle seat?