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YOUR MONEY

Low-Wage Recovery; Help from a Stranger; Paula Deen Cooks Up a Comeback; Monster Merger Hits Cable; The Business of Being Jimmy Fallon

Aired February 15, 2014 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, CNN ANCHOR: We need more jobs. Millions more. And they need to pay better.

I'm Christine Romans. This is YOUR MONEY.

It's the dirty little secret of this economic recovery. Jobs are coming back, but they aren't paying as much as the ones we lost. And Washington is fighting over how to treat the symptoms instead of curing the disease. This week President Obama signed an executive order raising the minimum wage for a sliver of federal workers.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm issuing an executive order requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour.

(END VIDEO CLIP)

ROMANS: Certainly important for the food service workers, the janitors working for federal contractors, no question, but largely symbolic. The action likely to affect fewer than half a million workers.

Home Depot just announced it's hiring 80,000 workers for spring, but the typical U.S. retail worker makes around $10 an hour.

Amazon is hiring 2500 warehouse workers to sort, pack and ship your orders. Amazon boasts these jobs have benefits. They pay 30 percent more than traditional retail jobs. If you do that math, that's about 13 bucks an hour. Far less than the dependable middle class jobs we lost in the recession.

Look, I will never knock a company for creating a job, but these are not jobs you can raise a family on. Two of the fastest growing occupations are personal care aides and home health aides. We're talking about median pay of $19,000 or $20,000 a year often with no benefits.

So how do we fix it? Our political leaders are fighting over raising the minimum wage or extending jobless benefits, but neither of those addresses the real problem. That we need more good-paying job.

Milly Silva is the executive vice president of 1199 SEIU, the country's largest health care workers local union. Andrew McAfee is a research scientist at the MIT's Sloan School of Management. He's the co- author of an incredible new book, "The Second Machine Age."

Milly, you organize health care workers. You know, old guard union folks say stronger unions would be the answer to this, right? But you've got to admit that unions have mistakes in the past, lost some of their relevance. How do you get better pay for this explosion of low-wage jobs without having the unions or if unions can't recapture their old sort of position of power?

MILLY SILVA, EXECUTIVE VICE PRESIDENT, 1199 SEIU: Well, one of the realities is that in fact unions are the way in which to rebuild the middle class and to make sure that Americans have an opportunity for good jobs. Union workers are earning $200 more per week than nonunion workers and often have the opportunity to be able to have health insurance benefits and other benefits that are provided by employer.

What unions have to do is to understand that there is an opportunity here to welcome nonunion workers and also to work in coalition with groups across the country who understand that America will only succeed unless we are building an economy that provides an opportunity for all.

ROMANS: I mean these workers that you represent are the workers that you talk to. I mean, they're working their fingers to the bone, really, more than 40 hours a week and barely, barely able to get by.

SILVA: You're absolutely right. In fact the Bureau of Labor Statistics issues a report last month that showed that over the next decade, the occupations in which you're going to see the most growth of jobs --

ROMANS: Right.

SILVA: -- are in fact five occupations which include retail, food preparation, and home health aides.

ROMANS: And that's the kind of growth we're looking at here. You're looking at the growth of the job market that are not the same wages of jobs that we've seen before. Some of those jobs are also fast food jobs. A lot of growth there.

And we've seen a movement, Andrew McAfee, to unionize these food workers. But will those jobs even exist in 10 years? Is technology going to replace them? Are we -- are we sort of looking at the low- wage job explosion, Andrew, with the 20th century brain?

ANDREW MCAFEE, CO-AUTHOR, "THE SECOND MACHINE AGE": Not quite. Even though the technologies that I study and that Eric and I wrote about in "The Second Machine Age" are pretty astonishing, they're still not ready to take over from all human workers yet. So what's interesting about the job growth categories that you mentioned, they're all in areas where even our most advanced robots are still really lousy, and even though those robots are getting better very quickly, I don't see them taking over all those jobs in the next 10 years even. ROMANS: Well, you know, it's so interesting, Andrew, because you've talked before about technological unemployment, you know, where technology starts to run ahead of you and then you've got people who are left behind.

Should we be concerned about that? You don't think we should be concerned about that in these low-wage jobs.

MCAFEE: I think we should be a little bit less concerned about that. This phenomenon of technology racing ahead and leaving a lot of people behind is a very real phenomenon. But when you look at what a lot of those people in low-wage jobs do, they're interacting with the physical world. A restaurant bus boy is not a high prestige, high paying job but that person is doing things that robots are still a long, long way from.

For example, there's no robot anywhere in the world right now that can do anything just like this. Where it's just beyond the reach of current knowledge.

ROMANS: But the restaurants are putting iPads on the table. So that maybe the first two steps that were handled by someone who is working low-wage worker are going to be handled by the iPad instead, Andrew.

MCAFEE: Yes, that's absolutely right. And what we observed is that clever innovators and entrepreneurs chip away at costs. And one of those costs is labor costs. So just as you say, when I take the shuttle for New York back up to Boston, I stop off and get a quick meal and a glass of wine at place. I do my ordering and my paying entirely via iPad.

ROMANS: Wow. All right, so, Milly, what about worker -retraining? How important is this? I mean we have to be able to re-train workers for jobs that pay more then. If we're going to have this explosion of low-wage jobs, and they're going to keep paying these low wages, what do we do in terms of worker retraining?

Used to be that unions and companies do that together. Now I hear companies complaining that they don't have a work force that's got the right skills.

SILVA: I think that we're all going to have to chip in in making sure that we are retraining our work force to keep up with 21st century jobs. In particular when you look at the health care industry, at 1199 SEIU, one of the things we've been able to do is actually create a training fund that is funded by the employers.

It is jointly administered between management and the union. And it really is about making sure that the employers are able to identify what is the skill set that those workers need.

ROMANS: Andrew, how do we know that we're not creating sort of just this huge sea of low-wage jobs and this much smaller sort of very top niche of innovation related jobs and then there's this vast middle where we're consumers of this second machine age, but were not necessarily employment beneficiaries of it. MCAFEE: Well, that's exactly what's going on. There's been a lot of very careful work done to illustrate the polarization or the hollowing out of the economy. The classic American middle class worker is not doing manual labor, but they're also not doing extremely high end knowledge work. They're doing fairly routine information processing. That's the stuff that technology is already really good at and getting better very, very quickly.

ROMANS: All right. We'll talk about this issue again.

Thanks so much, Andrew McAfee, the book is fantastic. Milly, nice to see you. Thank you.

SILVA: Great to see you.

ROMANS: All right. Meet the most powerful woman in the world. Janet Yellen. By saying something or by not saying something. She can move markets. That's what happened on Tuesday when Yellen testified for the very first time in front of Congress since becoming Fed Reserve chief.

Investors on that day, they liked what they heard from the Fed chief. The Dow ended up 192 points that day. Crossed above 16,000 for the first time since late January.

Here's what Janet Yellen said in the form of a word cloud. Bigger words here are those she said more frequently in her testimony. No surprise. She utters the word the Federal Reserve, the Fed's open market committee, inflation. No surprise there.

But a few other words are telling. Employment. Labor and unemployment. Those are clues about Yellen's core focus. A jobs market that she says is still not strong enough.

Here is what she sees. Forty-eight percent of Americans are working full-time. Another 11 percent are working part-time. Most voluntarily but some because they can't find full-time work. About 4 percent are looking for work. Nearly 40 percent of them unemployed for more than six months. And 37 percent of Americans, 91 million Americans are not even in the labor force.

Some are retired, some are students, some are stay-at-home parents but many have just plain given up looking.

Now Janet Yellen called on Congress to fix the unemployment problem, but the Fed can't do it alone. And Congress has done nothing. Still, you don't need to be the world's most powerful woman or a billionaire to make a difference in this job market.

Lee Bissell does not have thousands of dollars to spare. She is a federal worker supporting a sick husband and two children. Lee recently read a CNN Money article about this woman, Jean Windsor. She lost her job as a home health care worker about a year ago. Her extended unemployment benefits ran out at the end of last year.

She considered selling her living room furniture to help make her mortgage payment. Help didn't come from Congress to the Fed? It came from Lee Bissell who read Jean's story on CNN Money and wrote her a check to pay off a month of her mortgage. This story really struck us and clearly it struck you, too.

Lee, what was it about Jean's story that made you want to do something?

LEE BISSELL, PAID FOR UNEMPLOYED WORKER'S MORTGAGE: She's a health care worker. And she takes care of people like my husband. My husband has a rare form of dementia. And he's now in the end stage. And since he has lived in assisted living it's been people like Jean Windsor who have taken care of him and what I came to experience was that they didn't just take care of my husband and the other residents, they took care of us as well. And so I realized that that is a profession that's a calling.

ROMANS: What did Jean say when you told her you wanted to reach out to her?

BISSELL: Well, I was put in touch with her through CNN. And I wrote her an e-mail. And I just said I hope that she would let me do this for her because I feel very blessed to be able to and she needs -- she clearly deserves a helping hand.

ROMANS: It's so wonderful to see people helping people. And it's wonderful that you reached out. And we wish you and your family the very best.

Lee, thank you.

BISSELL: Thank you.

ROMANS: I'm happy to report Jean got a new job working from home for the College Bound Network, matching students with schools. She's going to make $9 an hour plus bonuses. And most importantly Jean tells us she is happy.

All right. After the show cancellations, sponsor losses and tearful apologies come the comeback. Paula Deen is back y'all. I'll show you what she's got cooking up next.

(COMMERCIAL BREAK)

ROMANS: Are you ready to buy a house? How about a little help with your closing costs? Fannie Mae is offering to cover up to 3.5 percent of closing now for some buyers. You've got to buy one of the foreclosed homes the government owns. Fannie Mae owns more than 23,000 of these foreclosed homes for sale in the 27 states where this closing cost incentive is available.

You also have to buy through Fannie's First-Look Program. That gives buys 20 days to bid on a property and there's no competition from investors. The closing cost offer is available through the end of March. Good luck.

If you're not shopping for a steal, we may have the home deal for you. Give me 60 seconds on the clock. It's "Money Time."

(BEGIN VIDEOTAPE)

ROMANS: You can buy Al Capone's Miami Beach hideaway if you have $8.5 million. Public enemy number one died in the house which he bought back in the '20s for $40,000.

Eat more chicken. Without the antibiotics. Chick-fil-A is switching to antibiotic-free chicken. Kraft is taking artificial preservatives out of Kraft Singles. That's thanks to the power of the conscious consumer.

Attention drivers. Higher gas prices ahead. Gas Buddy says pump prices are likely to rise 15 to 40 cents a gallon between now and Easter Sunday.

Buckle up. Graco recalling 3.7 million child car seats. The problem, the seat's harness can be difficult to unlatch. The government would even like a bigger recall of millions more.

A big week for bathing suits. Air New Zealand's new in-flight video features "Sports Illustrated" models. Meanwhile, Barbie is featured in the new swimsuit edition. The doll that started it all is unapologetic for how she looks. Critics outraged, calling the campaign sexist and bad for young women's body image.

(END VIDEOTAPE)

ROMANS: All right. Paula Deen has cooked with butter. She has cooked up controversy now she's trying to cook up a comeback.

Our own Nischelle Turner has been following the story for us.

Hi.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Hi. You know, she's been laying low for a little bit. We haven't heard much from her. But now she's trying to make this comeback. And the thing is, though, this is a bit of a gamble for Paula Deen, Christine, because the questions is, is it time for her to make a comeback or are we still not ready to see her on television again?

(BEGIN VIDEOTAPE)

PAULA DEEN, CELEBRITY CHEF: Here we go. How is this, y'all?

TURNER (voice-over): If Paula Deen has things her way, she'll soon return to being known for cooking up delicious southern meals.

DEEN: Is that heaven, kids, or what?

TURNER: And not for cooking up controversy.

Private investment firm, Najafi Media, is reportedly infusing between $75 million and $100 million into Paula Deen Ventures, which will encompass deals on all things Deen including restaurants, cookware, food and TV shows.

PETER SHANKMAN, BRAND AND SOCIAL MEDIA CONSULTANT: Paula Deen has a brand. She has a very loyal audience. So I think that investing in her, assuming nothing else is unearthed, I think it's a pretty safe bet.

DEEN: Do you mind if I double dip?

UNIDENTIFIED MALE: No, ma'am.

TURNER: Deen's image suffered a devastating blow last summer during a lawsuit from a former employee who accused her of racism and discrimination. Deen was on the defense after it was revealed she had used the N word in the past. And many of her endorsers responded to the public outcry by quickly dropping her.

DEEN: I want to apologize to everybody.

TURNER: Despite two tearful online apologies, the Food Network pulled the plug on her shows and other deals including QVC, Wal-Mart and Sears were quickly canned as well.

The lawsuit was dismissed after an agreement by both sides, but the damage was done. Deen still apologizing at her first public appearance following the scandal last summer.

DEEN: It was an opportunity to learn. I learned a lot about myself and I've certainly learned a lot about my business.

TURNER: But experts say enough time has passed that the public may be ready to embrace her once again.

SHANKMAN: If you look at any celebrity who's come back after disaster, they've apologized. They've appeared contrite, they've gone on TV to express their apologies. They've gone away and then they come back. And when they come back we tend to welcome them with open arms.

DEEN: Hi. I'm back.

(END VIDEOTAPE)

TURNER: Now what Paula Deen does have going for her is what you just saw there. The very loyal fan base. She's got more than a million followers on Twitter, four million on Facebook, and her company has said that her subscription or magazine subscriptions have gone up 40 percent in the last year. So it seems like her fans have definitely been sticking around and sticking by her through this.

ROMANS: Her sponsored bailed. The fans never bailed.

TURNER: That kind of relatable, down home girl next door, everybody's mother is what attracted this loyal fan base to herself. We'll have to see what happens because if she doesn't need those sponsors anymore with this influx of money.

ROMANS: Right.

TURNER: Then she may just be OK.

ROMANS: All right, Nischelle, we'll keep watching it. Thank you.

TURNER: Sure.

ROMANS: A $45 billion cable media merger. Social media outrage. The bill you hate to pay for the service many of you can't stand is likely to rise. So how much and what are your options? Answers next.

(COMMERCIAL BREAK)

ROMANS: A $45 billion deal, a deal that reaches right into your living room. Comcast merging with Time Warner Cable pending government approval, of course. Regulators got to look at this one. But what does it mean for the service you're paying to watch right now?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: They can crush you --

ROMANS: Heads up, couch potatoes. The monster merger between the country's two largest cable providers means you could pay more for your favorite shows and Internet service.

Yes, the bill you hate to pay for the services you can't live without is likely to rise.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: The price you pay for cable and Internet every month was already rising. It's been rising for years.

ROMANS: The average bill for basic cable in the U.S. climbed from $38 a month in the year 2000 to $78 a month in 2013. Those fees are forecast to reach $110 a month in the year 2020 and that's before tacking on costs for premium channels and Internet.

The Comcast/Time Warner Cable merger could also limit choices when shopping for cable providers especially in some states like Florida and North Carolina where they already dominate the market.

Politicians like Senator Al Franken calling the merger unfair for consumers.

SEN. AL FRANKEN (D), MINNESOTA: I think we seriously need to look at this. And my concerns are that what it means for consumer is going to higher prices, worst service, worst choice.

ROMANS: If that happens, it could mean more enraged customers who might more attempted to cut the cord. That could be good news for content companies like Netflix and over-the-top cable provider Roku. But don't expect a massive exodus of cable addicts. Americans are still spending more than four hours a day in front of the warm glow of their televisions. They'll just have to pay more for it in the world of cable consolidations.

(END VIDEOTAPE)

ROMANS: Now regulators could make Comcast agree to certain conditions to prevent anticompetitive behavior. That's what happened during Comcast's last big merger when it brought -- bought NBC Universal back in 2011.

Another big change on your TV. The iconic "Tonight Show" has a new host. It's not easy to replace a legend like Jay Leno but that hasn't stopped Jimmy Fallon yet. The business of being Jimmy Fallon next.

(COMMERCIAL BREAK)

ROMANS: Johnny Carson, Jay Leno, and now Jimmy Fallon. Fallon set to take over one of the most coveted time slots in all of television and make a lot more money.

(BEGIN VIDEOTAPE)

ROMANS: From "Saturday Night," Jimmy Fallon, to "Late Night," to "Tonight." A native New Yorker, Jimmy Fallon is bringing "The Tonight Show" back home. More than 40 years after Johnny Carson took it out West. Adding one's name to the list of TV legends has a nice pay day. Fallon more than doubling his salary making a reported $12 million a year.

JIMMY FALLON, HOST, "THE TONIGHT SHOW": Hey, must be the money.

ROMANS: Fallon always dreamed of being on "Saturday Night Live."

FALLON: Yes, who doesn't?

ROMANS: In 1998, at just 24, that dream came true.

FALLON: My god.

ROMANS: He anchored "Weekend Update" alongside Tina Fey and was known for cracking up during his sketches.

ROMANS: The funny man left "SNL" in 2004 to pursue a career in movies. But his big screen dreams flopped.

FALLON: Hey, buddy, how's it going?

UNIDENTIFIED BOY: I hate taxi.

ROMANS: So Fallon returned to NBC to take over "Late Night."

FALLON: This is freaking awesome.

ROMANS: Bringing his witty pop culture references --

FALLON: The Barackness monster ain't buying.

ROMANS: Spot-on impressions. And famous friends. FALLON: I'm the real Cookie Monster. I said --

ROMANS: The host made a reported $5 million a year.

During the day, Fallon writes books, plays pitch-man.

FALLON: Yes.

ROMANS: Even won a Grammy for Best Comedy Album.

FALLON: Come on, everyone, Tebow, come on, everyone, Tebow.

(APPLAUSE)

ROMANS: Fallon wrote this song --

And donated its proceeds to Fisher House to help military family. He's hoping for more laughs on the "Tonight Show."

FALLON: Are you ready for this?

ROMANS: But the business of being Jimmy Fallon is --

No laughing matter.

(END VIDEOTAPE)

ROMANS: And stay right here because coming up next in the "CNN NEWSROOM" hear from a man who knows Fallon's comedic craft better than anyone. His former "SNL" co-star Horatio Sanz.

Then make sure to join us for a brand-new YOUR MONEY. We're coming back 2:00 p.m. Eastern. I'm going to be joined in the search for solutions to income inequality. Candy Crowley and Christiane Amanpour.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Joseph Stiegel said this is the most unequal of the major industrialized societies. Not just in income but in opportunity.

(END VIDEO CLIP)

ROMANS: Plus, why an outspoken member of the top 1 percent wants more money to equal more votes.

That's also coming up at 2:00 p.m. on our all-new YOUR MONEY.

"CNN NEWSROOM" starts right now.