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Slate Money
The Ticking Time Bomb Edition
00:37:44
Slate Money on arbitration, the Pope, and customer returns
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- [00:00]
A
The following podcast contains explicit language. Hello, and welcome to the ticking time bomb edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon. And you just to make this official, this is the crew now. Anna Shymansky.
- [00:33]
B
Hello.
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A
Emily Peck.
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B
Hello.
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A
And me. We are the Slate Money crew. For the foreseeable. This is going to be the good ship Slate Money, at least until in sort of Theseus's ship form it changes. But for the time being, Slate Money is Felix and Anna and Emily and of course, Dan Schrader, who's producing, who's sitting behind the piece of glass and who is going to bring on all manner of important and fabulous people. He has a list. It's very exciting. So there's gonna be important and fabulous people coming on, but this week we are just gonna talk about the Pope. We don't need important and fabulous people to talk about the Pope. The Pope came out with a very long encyclical. Good. Congratulations to you. If you read the whole thing all. So we'll talk about what the Pope thinks about capitalism in general and of course, credit default swaps, because the Pope has opinions on credit default swaps. We are going to talk about customer service and whether it can be gamed and corporate policies and all of this kind of thing in the context of Amazon cutting, cracking down on people who return too much and also maybe movie purse. We will see if we can get a movie purse reference in there. But the main thing I think we have to talk about today is there was a very big and important Supreme Court decision. And this is going to have massive repercussions for 60 million employees in America. Emily.
- [02:13]
B
Yes. So I think on Monday, the Supreme Court ruled in a 5, 4 decision with the conservatives taking the day that it was okay for your employer to force you into individual arbitration if you have a complaint against against the company.
- [02:28]
A
The idea being that when you join a huge proportion of the companies in America, part of the employment contract is you sign away your rights to take them to court and you are forced to take them individually into arbitration.
- [02:43]
B
Yes. And so some of these agreements, the employees are required to also waive their right to file class action suits. So that's what this case was about. It was three different lawsuits, all involving stolen wages. The employer had basically not paid the employees for the work that they did. So they sued and they wanted to take these as class action cases. And there was a circuit split and the court led by Gorsuch said, no, it's totally fine. The arbitration Agreements stand. He placed this federal arbitration law over federal labor laws, which seemed to indicate there could be a way around the claims.
- [03:23]
A
So basically, the piece of paper that these people signed said, we can't bring a class action. If there were 10,000 employees who were systematically underpaid under the terms of the paper that they signed, they needed to individually take the company to arbitration, and then the company would individually arbitrate each individual case. And then each individual case, at the end of the day may or may not come up with like a fistful of dollars. Right.
- [03:55]
B
And the way you're saying it, I mean, it totally. It doesn't take a lot of analysis to understand why that's completely messed up. I mean, if everyone's being underpaid by like $1,000 individually, those claims are pretty meaningless. And most workers aren't going to take their employer to court over them, certainly, and most lawyers aren't going to take those cases.
- [04:13]
A
But most employees aren't going to take their employers to arbitration over that. Oh, right.
- [04:19]
B
There's also one professor calls it the black hole of arbitration. Essentially, the employer has a complaint and they're subject to an arbitration clause, but they don't even go to arbitration because the. It's just a pain in the ass and like, why would you even do it kind of a thing. So, you know, we're just not going to hear about a lot of cases going forward. I think it's a big blow to, to working people.
- [04:41]
C
So correct me if I'm wrong, but doesn't this case still leave open the possibility that Congress could outlaw these forced arbitration agreements?
- [04:50]
B
Yes, 1,000%. It leaves open that possibility. Gorsuch in writing, it said as much. But, and there is, there is one bill sort of floating around that like Gretchen Carlson's behind that would ban forced arbitration, but only in sexual harassment and discrimination cases. I mean, we all know what's up with Congress right now. It's just not going to happen. Right. So I think the hope in filing this, and it's a case that's like eight years in the making, it started with Obama. The Obama administration was on the other side of this. And you could easily see could have gone the other way, you know, if.
- [05:22]
A
Merrick Garland had been appointed.
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B
Right, if Merrick Garland had been appointed of Hillary Clinton, whatever. So.
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C
But yeah, and I think it's important also, if you think about sexual harassment discrimination, what we've seen this year is that when things are kept secret, systemic problems continue because people don't know that they're happening.
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B
Exactly.
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A
And so this is actually a really important part of this whole underpayment case as well. It's not just sexual harassment, is that if you find out that you've been underpaid and you take your employer to arbitration and you win, which is not easy, and there's a good chance you won't. But even if you wind up winning and getting paid, that win is going to come encrusted with a bunch of confidentiality clauses, which basically mean that you can't go around telling everyone else in the company, hey, we've all been underpaid, and you should all go through this arbitration, right?
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B
And also, you're out of the court system. So any kind of ruling, even if it was public somehow from arbitration, which it's not going to be, but even if it were, there's no precedent set, so there's no standards. And Ginsburg said this in her dissent also. It's like you might have, like, 50 different kinds of wage cases decided 50 different ways. No one knows. There's no standard or precedent set. It's like basically taking all this stuff out of the public system. And it does a real disservice, I think, for everyone.
- [06:43]
A
And remember that the way that arbitration works is that the arbitrators make their money by being asked back by the company, basically. So they have a strong incentive to arbitrate in favor of the company, because if they regularly arbitrate and decide against the company, then the company will just stop using them.
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C
And is there any possibility that the negative attention to these types of agreements is going to cause companies themselves to change their policies?
- [07:18]
B
Great question. There has been a little movement there because Uber is the most recent example. They were roundly criticized, excoriated for making women who said they were raped, sexually assaulted by Uber drivers go to arbitration. Because for consumers, this is an issue too. Like, when you download Uber, you agree to go to arbitration. No one would even be aware of this. So I think it was last week Uber said, okay, we won't force women or anyone who's been sexually assaulted to go to arbitration individually, but we retain our right to waive class actions. So, I mean, companies are going to do a little bit to get to seem like they're good actors, but, like, let's keep in mind, they're not.
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C
And hasn't Microsoft also.
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B
Yes. Yes.
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A
What did Microsoft do?
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B
Microsoft said it would no longer force arbitration for women who've been discriminated against or sexually assaulted. Although that's not a huge problem for Microsoft. I don't the, the assault part.
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A
The, the lawyers here are playing a very important role because if you are the general counsel of any large company, or even outside counsel for that matter, and the company, you, it is basically incumbent upon you as a lawyer to tell the companies, especially in the wake of the Supreme Court ruling, to make sure that there are class action waivers in all employment contracts. It's a no brainer for you. In fact, it would be almost malpractice not to advise the company that way.
- [08:51]
C
And this certainly has become a norm. It used to be that these clauses were in like 2% and now they're in I think over 50%.
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B
Yep. And I think lawyers now, there were some, I guess sitting on, I mean it's pretty widespread forced arbitration already, but I guess there were some that were sitting on the sidelines waiting for this. So you can expect more of these waivers going forward.
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A
Yeah. So I mean, that's the thing which, which troubles me is that there's really, even if there's goodwill on the part of the C Suite, ultimately the general counsel is going to say, listen, you have to do this. It's just like it's, it's way too much of a risk if you don't. And it's just not realistic to expect that even the friendly, like non evil companies will allow class actions going forwards. It's just fiscally insane. It would be, it would violate their fiduciary duty to their shareholders.
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B
And companies really like arbitration. I did a story last month about Facebook. You know, I asked them like, well, Microsoft's not doing this anymore for women. You, Sheryl Sandberg, you Facebook, you're really into women. You really seem to be supporters. So I mean, you're gonna do this too. And they were like, well, and they really like argued with me for like weeks about why arbitration is good for women and privacy is good for women and it's really fine. And Uber also, they tried to argue that in class actions the lawyers get most of the money anyway. And I was like, but without those lawyers getting most of the money, these people can't even afford to sue. And it was just, they like it. So it's not like they think this is good anyway and they'll do it. Like it's, I think they really like it. It's good for them.
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A
So this is a, I mean, and to be clear for all that, this is a very bad ruling from the Supreme Court. And it cuts off the one conceivable sort of circuitous route that employees might have had to be able to Bring a class action. The fact is that it has been this way for a while. And even before this ruling, it was already very bad. And after this ruling it will remain bad and probably get even worse. It's clear which direction we're moving in in this country. And as far as I can make out, again, with the possibility at the margin of some sexual harassment carve outs, like, there's no real realistic chance that we're gonna. That the pendulum is gonna start swinging back anytime soon, because there's no force which will do that. And as you said, except legislation.
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C
Right. And I think, as we all know, that that may seem unlikely, but hey, I don't know, a lot of things have seemed unlikely in the last few years that have happened. So maybe it could happen in a good way.
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A
Okay, let's talk about the Pope. Yep. Yeah. Okay. So the. So he came out with this long thing. He put it on the Internet in some weird language. What language was that?
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C
So I was describing it to a friend. It's like if you took every speech that Bernie Sanders and Elizabeth Warren gave in the last 10 years, put it in a blender, then translated that into Latin, then translated that back into English using Google Translate, you would get this document that's accurate.
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B
I think that's how it happened.
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A
It was like people tried to find the original Latin and they couldn't. I mean, like, Matt Levine was looking because he's a classicist, he actually can read Latin. He's like, maybe this will make more sense in the original Latin. But he couldn't find the original Latin.
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C
It's so bizarre to read because you're reading it and then you're like, oh, wait, is he talking about payday lenders?
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A
It was so. It's very weird. The thing it reminded me most of, weirdly, is this thing called International Art English. That was a wonderful essay in Triple Canopy. You should all Google it and. And read Triple Canopy's essay on international Art English. It's basically the language of art gallery press releases which, which, like, no one knows what language it's in. This is a little bit the same. It makes. Whereas most railers against the capitalist system love to be very blunt and plain spoken, this is just the opposite of that.
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B
But should we say what it says?
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A
It does rail against the capitalist system. And this shouldn't come as a great surprise to anyone who understands who this Pope is and where he comes from in Argentina and his theology, but he is a genuinely anti capitalist Pope.
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C
Yeah, it was interesting to me reading it because he seemed to be trying to make this distinction between the good, real economy and the bad, unethical economy.
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A
Right. There's the real economy of people working hard and making money and trading and adding value. And then there's the financialized capitalist economy, which is bad.
- [13:47]
B
I don't know. I mean. Okay, so the Pope speaking up about credit default swaps a decade after the financial crisis seems late. Seems a little irrelevant. But that said, I mean, the points.
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C
He made, I'm just. Yeah, yeah, I'll disagree with. Not to, not to jump on you, but she's jumping on.
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A
Yeah, she's jumping on. Like, anytime anyone says anything bad about credit default swaps, you know that Anna is going to ride to the rescue.
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C
Yes, exactly.
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B
Prepare for the reader now.
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C
Yeah, exactly. Yeah. Poor, sad credit default swaps, which are a much smaller market now. The ticking time bomb went off 10 years ago. So. Okay, this is something that actually frustrates me with both the sometimes far left and far right, where I think they often come together. Not to say, you know, far left or far, but just continue.
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B
Yes, okay.
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C
Point is, I think sometimes people fetishize this idea of, like, manufacturing making real things, and then like the financial economy. And people don't seem to understand that one does not happen without the other. And I can think many people can make a pretty strong argument about how in the absence of finance, you do not have businesses unless you have extremely wealthy people starting businesses. Finance serves a very real purpose. Now, does that mean that there aren't excesses? Does that mean that there shouldn't be regulation? Of course, I think most of us would agree with that. But I think this idea that the financial economy is somehow fake and unethical, and while you're benefiting from someone else's loss, well, everyone's benefiting from other people's losses.
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A
So I, you know, I'll come back. Now, I think it's fair to say that the Pope is probably to the left of someone like Adair Turner, but even Adair Turner is going to push back on that one. What we have seen since, call it 1980. Like, there was a lot of value created in the global economy up until 1980, from, like the Industrial Revolution all the way until like the mid 20th century. And. And we managed to do that as a global society by using financial capitalism. Yes, but not to excess. And then in recent decades, the growth of finance has far outpaced the growth of the broader economy. And most of what has happened to the world of finance has been, in Adair Turner's phrase, Socially useless. It's financial people moving money between each other and lending money to real estate and basically not really making value in the economy.
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B
I don't know, you see that with, I mean to back up, the Pope argues for regulated markets and you yourself just said that's a good idea. And we see, I mean just this week that we are moving away from that idea and I think that's problematic. That's got us into trouble a decade ago. So that's. First of all, second of all, I think it's true that the finance industry has blown up to sort of into an obscene kind of place where I mean, Matt Levine has been covering these credit to vault swaps that Hovnanian is using that are just like insane. It defaulted on its own debt in order to pay out CDS for Blackstone or something. It's just you, you don't have to be like a finance wizard to read about that and think, ick. It's just like, you know, it's, it's, it's money out of nothing. It's just gambling. It's not. Finance does serve a purpose to, you know, fund companies and invest in companies. But this isn't, I'm disagree with, yeah.
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C
I'm going to disagree with that. And I'm, I think the idea that somehow finance is not funding companies. If you're a venture capitalist and you're giving money to cash starved companies, you need to get that cash from somewhere. The idea that the financial system is somehow not involved in funding companies makes very little sense.
- [17:41]
A
That's a straw man. Anna, let's be, let's be clear about this. We have, you know, I'm perfectly happy to concede that finance does fund companies. I'm just saying that the majority of finance does not fund companies and that the, I mean even you would have to admit that like Pre crisis in 2006, 2007, when the, you know, banking sector made up 25% of the market capitalization of the S&P 500. That was insane. And there's no reason why finance should be that big of a part of the economy.
- [18:15]
C
I'm not going to disagree that during the lead up to the financial crisis there is a big problem. I'll certainly agree with that. But I think the idea that secondary market trading serves no purpose, I'm going to thoroughly disagree with that. I think price discovery is important. I also think anyone who has a 401k, people who have pensions, people who like going to universities where there are endowments, people who are public sector workers My mother's pension. How do these things make money? They make money through the market. And also derivatives do serve a very real purpose, credit default swaps. Although, yes, there's a very small part of the market that Matt Levine has talked about, but that's not the vast majority of credit default swaps. They make the market more efficient because they provide information to the market. They also allow risk to be spread around, which helps to keep everyone's rates low. These serve very real purposes, but I.
- [18:59]
B
Think they need to be very closely watched because I think the Pope isn't wrong. They are kind of ticking time bombs. And if they're not closely watched or regulated, they tend to spin out of control. And it's not, it's not the finance industry really that gets hurt. Like, I mean, to go back, the financial crisis is such an easy thing to talk about, but to go back to it, I mean, when it exploded, like, who got hurt? All the people holding the mortgages who were foreclosed on, like all the people who lost their jobs, blah, blah, blah. It sounds bleeding heart and sounds obvious, but, like, when these markets aren't regulated and things are allowed, reasonable things, as you've articulated, are allowed to spiral out of control, there's real risk.
- [19:38]
A
And I would just jump in and add that the idea that derivatives help to spread risk or place risk in the hands which really want the risk is a very attractive one in theory. And I kind of even believed it before the crisis. And then the thing that I learned in crisis was that that just wasn't true, that what the derivatives really did was hide the risk and allowed people to create CDOs and things like this, which were ostensibly AAA securities and would make the risk seemingly disappear. And people thought, oh, well, no, there's a mezzanine tranche which is being held by people who really want the risk, but often that tranche just didn't exist. And this is the thing which really annoys me about the financialization of the economy is that while you are right in theory, that it can have positive effects and while you are right in practice that it does have some positive effects, those small but real positive effects could, could happen with a vastly, vastly smaller financial sector, like 10% of what it is.
- [20:55]
C
I disagree with that. And I will also say that, yes, it is certainly true. I think we're all in agreement that the lead up to the financial crisis, a lot of bad things happened. I think we can all pretty much safely say that was the case. But a lot of the problem there was that and this is a problem in derivatives is that often you're relying to value something on other people's valuation of different assets and ratings. And if those are faulty, yes, that can create a lot of problems. And that's why I do think there.
- [21:19]
B
Needs to be mentions that he does.
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C
Yes, the Pope is on it. He read too big to fail.
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A
So. So everyone go out and read. Okay, we're going to give a prize to any listener who manages to read this entire Pope essay all the way to the end and can come back to us and say, I actually did that, and I did. My brain didn't melt in trying to read this language. If you can work out what language it is in or whether it came from Latin or something, do let us know. It's slate, moneylate.com. just please don't write to us in that particular language because none of us understand it. So there was a fun story in the Wall Street Journal this week. I have written about it on slate, actually, about Amazon.com where, out of the blue, seemingly certain customers of Amazon.com have received notice from Amazon that they are banned. And the reason seems to be that Amazon has determined, or some algorithm somewhere has determined, that they have returned too many items. And if you return too many items, that's bad for Amazon. So they're like, yeah, we don't need you. We're just going to stop you from shopping with us anymore.
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C
I will say there are a few things that really, truly terrify me, but this truly terrified me, the idea of being banned from Amazon. I literally, like, went. And I was like, wait, how many things have I returned in the last year?
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A
And the problem is that it's completely opaque. They don't give you any warning. And what's more, they have very clear return policies. And you'll say, I want to return this. Like, sure, return it, no problem. And then they're like, what? We didn't tell you about this? Sure, return. And no problem. Bit is we can just like, decide, ex post that that was a bad thing and we're going to ban you. And this seems to happen quite a lot with clothing. I mean, you know, you order clothes, they don't fit, you send them back. And then Amazon's like, well, you've been sending back a lot of clothes, so we're not going to send you, you know, toothpaste anymore. We're not going to allow you to watch Mr. Robot anymore. It seems crazy.
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C
And this I actually think is interesting because Amazon's really been trying to get into fashion because Although people do buy clothing on Amazon. They buy like socks and T shirts. They don't buy fashion. And part of the reason for that is because normally you want to try things on. And if you're a woman, you often have to try on different sizes. And if Amazon really wants to move forward in fashion, they can't have a policy which says you can't return items.
- [23:39]
A
And they don't have that policy. They, but they, but they do have an algorithm which kind of is a shadow policy. And I think what we're seeing here is a couple of things. One is that Amazon is too big to be able to have this kind of policy if it was just a clothes store or a bookstore or any other just little place on the Internet where you order stuff. Then if you wind up getting banned from some random store on the Internet, it's no harm, no foul.
- [24:10]
B
But Amazon, that one guy in the story who got banned, he was like, for the next year, so and so's life was in chaos. He attempted to go to very different sites and figure out where to buy things and he couldn't even read his Kindle books. And it was just like, wow, yeah, they're too big to be. To ban you. It's almost like they're a public utility.
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A
They're a public utility, exactly. They need to be regulated, but they need to accept that they are now such an integral part of people's lives that they have some kind of. They're serving a public service and they can't just be quite as, you know, just do things on a whim as you can when you're small.
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C
It also seems like it could slightly hurt them as a company too, if people start to think, oh, well, I was going to purchase this thing, but now I'm not so sure because if I have to send it back, is that going to put me on a bad list? It could actually limit people's purchases and that.
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A
And I think, again, that's why they made it so quiet, right? This is why they never said that they would ban you if you return too much, because they don't want to say that they can ban you if you return too much. And I'm quite sure that given the hundreds of millions of people around the world who use Amazon, the number of people who have been banned in this fashion is tiny. And the number of people who have, you know, you can make a very good case that they shouldn't have been banned is even tinier still. But we live in a world of like, social virality and stories on the front page of the Wall Street Journal where like, even if it's a fraction of a fraction of 1%, those stories get out and people start thinking, you know, as you say, like people don't have a real feeling for how likely or unlikely it is that this might happen to them.
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B
There's also the Journal is doing a good job covering return policies. I noticed there was a story, I think it was last month. Apparently Amazon isn't the only retailer to use an algorithm to analyze its customers returns and judge them accordingly.
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A
I would be shocked if there was any which didn't.
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B
So apparently all these companies like Best Buy, CVS and a few others are using some outside third party company to analyze returns and give customers ratings based on how often they return. And then maybe it wasn't outright bans because it would be hard to ban someone from cvs, but there's like someone returned something, I think it was to Sephora or something and was told like in the next 60 days you're not allowed to return anything.
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C
They went to Sephora Purgatory.
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B
Yeah, Sephora Purgatory.
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A
I bought a pair of shoes in a, in a physical store last week and, or this week actually. And I noticed they have this whole return policy about like this is how, this is how you're allowed to return shoes if you haven't returned anything in the past 60 days. But if you have, then like we change the rules on you.
- [27:05]
B
I feel like for online stores too, like I guess with brick and mortar you can try stuff on. So I mean it would make sense to have a more strict return policy. But the whole thing with online is like you don't really know until you have it in your hands. And this is more lax about returns.
- [27:19]
A
It's worth remembering that Amazon spent $1.2 billion in stock, which is now worth $16 billion to buy Zappos. And Zappos has the most generous return policy in the world. Like you can return any shoe anytime, for any reason. You can return them within a year and they will sit on the phone and they encourage you to return things if you don't love it. And so it's a weird like cognitive disconnect.
- [27:45]
C
It seems like a lot of these companies, a lot of online retailers were able to gain a lot of market share because of these types of return policies. But now I think a lot of them have a lot more power and they are also see that some people are misusing these policies so now they have the ability to pull back.
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B
And something else is happening too because in talking about doing the segment, we mentioned L.L. bean going back on its lifetime guarantee. And now it's used to be any time after you bought a product at L.L. bean could be 15 years. You could go back and get a new pair of duck boots or whatever, raincoat. But then I think earlier this year, they said, nope, no more, it's only a year now. You only have a year to return. And they blamed social media on making people take advantage of the system. I guess there's some kind of, like, amplification effect where more and more people learned about it and more and more people were gaming the system.
- [28:35]
C
And I think also it used to be like 15, 20 years ago that it was kind of annoying to send things back or to return things so people were less apt to do it. So you could have a lifetime return policy because no one was going to use it. Whereas now people are used to returning things, so they're more likely to do it.
- [28:51]
B
Although I'll say I never return anything because I really dislike doing it. I find it over overwhelming. Much rather Write like a 10,000 word feature than return a pair of shoes.
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A
Yeah, but I mean, also, nothing lasts forever. You know, you can make a promise that you can come back and do things in the future, but, like, who knows what the future is going to look like? You know, WhatsApp can make a promise that they'll never use your information, and then the CEO resigns in high dudgeon, and now WhatsApp is using your information. It's, you know, I just ran out of mustard. I went to this lovely mustard store on Broadway and 20th street where they had mustard on tap, and they would, like, refill your mustard pot. You would buy a little mustard pot and they would refill it. I loved it. And then I was like, I need to refill my mustard pot. But the store has closed down. So now I just have this lovely mustard pot but nothing to fill.
- [29:47]
C
I wonder why there wasn't a huge market for artisanal mustard.
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B
I can't believe it went out of business. This is shocking. Why are you not doing a segment on this?
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A
I was so disappointed. You have no idea. I was like the only person to buy a refillable mustard, but it seemed like a good idea at the time.
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C
Speaking of things that seemed like a good idea at the time, Movie Pass.
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B
That's also too good to be true, right?
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A
Yes.
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C
Yes.
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A
Yeah. So, I mean, that's, that's the thing, right? People are using Movie Pass right now precisely because. And they're using it a lot right now because they have this feeling that this is too good to be true and it's clearly going to go bust.
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B
Wait, do people know what MoviePass is?
- [30:25]
A
You pay $10 a month for. Basically, you can go to an unlimited number of movies.
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B
So amazing.
- [30:31]
A
Where if you live in New York City and a movie costs $17, you know, it pays for itself with half a movie. And people are going every day and MoviePass is losing tens of millions of dollars a month. And you know the Mitch Lowe, the guy who runs it? I listened to a podcast interview with him where he was explaining that, yeah, this is like a customer acquisition cost, that you. You burn out. This whole idea of going to the movies every night pretty quickly, and then you go into a normal pattern, and then in the normal pattern, we'll be able to make it work because people don't go to the movies every month. But the fact is that right now, everyone's just like, I need to use up my movie pass as much as I can because no one believes it's going to last.
- [31:15]
C
Yeah. And that plan doesn't work if no one buys your thesis and nobody gives you money like investors don't give you money to fund your company.
- [31:23]
B
I think it could work because do. Do you two remember Class Pass? It was the same exact thing, except for fitness classes. And it also was too good to be true. To start, I think it was like $100 for unlimited fitness classes. I don't remember. But it was amazing. And everyone did it. And then, of course, the party ended and they introduced tiered pricing, and it wasn't as good. But I did a very informal survey yesterday. I asked some coworkers if they use it, and they said, yes, people still use it. So. And it's still around. It still gets money. It still has a pretty high valuation. So I think it's possible. The MoviePass strategy that he's telling you about, I think it's not a bad.
- [31:58]
A
I mean, yeah, but I think the.
- [31:59]
C
Burn rate for ClassPass was never the burn rate for exactly. The MoviePass.
- [32:03]
A
Exactly. ClassPass had deals with these various fitness studios where they wouldn't necessarily pay full price for every class. MoviePass is trying to do deals with the theaters to say, can we maybe pay a little bit less in full price? Because we're driving all of this traffic to you, and the movie theaters are like, nope, you're paying us full price.
- [32:24]
B
Well, that's dumb. Movie theaters aren't doing so well lately anyway. And, I mean, don't they make most of their Money from the, the snacks.
- [32:32]
A
So this is, this is the mood, this is the movie argument is that if you go for, quote unquote free, if your marginal cost of attending the movie is zero, which it is, if you have a movie pass, then according to MoviePass, you will then spend more on at the concession stand. And the theater companies are just, they're loving it. They're like, great, we get more money from the concessions and we're getting full price. Why would we share that with you right away?
- [33:00]
B
Well, that's a mistake.
- [33:01]
A
Yeah. Let's have a numbers round. Anna, what's your number?
- [33:05]
C
My number is 16.5%. That is a 300 basis point increase from 13.5%. This is the new key interest rate in Turkey. This is similar to what we were talking about a few weeks ago with Argentina, where the Turkish lira, I don't know if you've been paying attention but is getting killed, lost like 20% of its value this year. And it's another instance of where we're starting to see some more difficulties in em now. Right now it seems to be the weakest, most vulnerable countries, but it should be a little worrisome.
- [33:41]
A
Turkey's, you know, Turkey has a lot of problems.
- [33:44]
B
Yeah, Yikes.
- [33:46]
A
My number is 25,000, which is the number of Indian rupees that the Wildlife Trust of India started giving fishermen who had sliced open their fishing nets in order to release whale sharks who had been caught in the net. There was this huge problem. Fishermen in Gujarat were catching the whale sharks and selling them for oil. And then the oil market dried up. But then they realized they could sell them for the fins. And each shark was worth about 50,000 rupees. And this was decimating the population of whale sharks. And so the Wildlife Trust of India tried to work out how they were going to do this. And it's interesting to me, they gave every fisherman a camera and they were like, if you find a whale shark in your net, slice it open, let the whale shark go free, take a photograph and we'll give you 25,000. That's less than it's going to cost you to repair the net. It's less than the 50,000 you could get by selling the shark. But they care about these fish and they did it anyway. And it really worked. And it was combined with a big sort of public education campaign and they had this we love sharks thing going on in all of the local schools. And it worked. And so you don't need to completely cover the fishermen's cost in order to get them to change their behavior. And by the way, 25,000 rupees is ish. $350.
- [35:35]
B
Okay, so my number, your number is $22,179,961. That is Walmart CEO Doug McMillan's salary. It's very big. And that was reported today in a New York Times Equilar report in the Times. And so compared to his $22 million salary, the median wage of a Walmart worker is $19,000. So that's a big difference. Just pointing that out. The pay ratio. The pay ratio is, yeah, 1,188. And the starting minimum wage at Walmart is now $11 an hour. And what really upsets me, I think, when thinking about this, is that the company was celebrated for that. Oh my God, Walmart's raising its pay to $11 an hour. They're so generous. They're really coming around for the little guys. Meanwhile, the CEO is making $22 million a year and a lot of the employees are relying on public benefits to even out things for themselves. I just think it's sad. On which read the piece in the Times.
- [36:41]
A
So on which sad note, we are going to wrap this up. I think we're going to have a Slate plus segment about the man with a million dollars of student loans. If you think your student loan situation is burdensome and problematic and you have too much in the way of student loans, you're probably right. But at least you don't have $1.06 million in student loans. We're going to talk about that on Slate plus. And with that, I think it wraps it up. So thank you for listening. Keep the emails coming to slatemoneylate.com Many thanks to Dan Schrader for producing and we will talk to you next week on Slate Money.