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Show F2 TheSalt Lake Tribune BUSINESS Sunday, January14, 1996 Corporate Layoffs Fuel Rise in Companies’ Stock Prices THE MEDIA KNI oon EVANS grown 190 percent, including two stock splits. $68, before dropping to $66.88 on Friday @ American Home Products Corp., which announced a cut of 6,000jobslast January after merging with American CyanamidCo. Its stock has risen nearly 49 percentsince. In the mid-1980s, says James Solloway, head ofresearch Utah news Hardware Now Making the Bridal Registry year-old boy abandonedby his parents at a downtownbus de was Christmas Day It was a poignant human in- Associated Press version was carried by HE media across the country was an outpouring “bliz ding. aard boy The only problem was that the story was a hoax ed by Hoaks. a woman who said she just want edaplace to stay, The story has left Utah journalists feeling be trayed. not only by the person they thought they were helping but also by state officials It turned out t Hoaks had pulled similarruses in Vermont and Monta In fact, a Ver mont journalist alerted Utah media to the potential problem when the wire story was so simi lar to what had happened in his state Journalists always have been susceptible to hoaxes, and some pranksters have even devoted their lives to tricking mediainto publishing false stories. Two well-known hoax artists. Joey Ska and Alan Abel, have tricked some of the best news. organizations in the country into publishing stories on such topics as a company called the Fat Squad, who could be hired to keep vou on your diet physical force. and aresear by who discovered that cockrog hormones are effective treat ments for such ailments as acne and menstrual cramps Journalists are trained to en sure accuracy by verifying ev erything. There’s an old saying that dramatizes that edict: “If your mother tells you she loves you, check it out So how did Utah journalists get fooled by the blizzard boy? The timing was perfect — Christmas. when we're all more susceptible to stories that ap: peal to sentimentality It was a chance to do the kind ofstory that gets people to help someone else,” says Amy Donaldson, who was involved in Deseret News coverage | Services officials, she says. When the call from Vermont raised doubts. Donaldson went back to the Division of Family Services spokesperson and asked if the “boy” —— ed vices Couples that are starting out a lot of them don’t have alot of money.” said Ray Sword, special services visor at Home De. pot’s Aurora store I've seen people mentionthis. Why get all this china and towels whenwe can get something we really, need? really The registrie work just like bridal registries at more conven- tional retailers. through the A person goes store and makes a list. which is entered into the computer system Gift-buyers, with access to the list at every store. make their purchases, which are jobs paying “high school” wages, some popular items from the hardware store's bridal registry. up from 10 percent in 1970. Hecker’s article was quickly store.” Swearingen said Builders Square's gift registry programis about two years old Both stores recently linked the registries in their stores by com puter HomeDepot's program is billed as a bridal registry. Builders Square's is simply a gift registry Both are used for more than just The computerized system is now offered at all of the chain's 377 U.S. stores So nowa customer cangointo any store and shop for a person who has registered at any other ime er’s Day gifts,” Home Depot's Swearingen said. People have registered forjust about every occasion.” Spokeswoman Michele Autenrieth said Builders Square's pro- shoppers. “Theylike that it’s not onlyfor the bride or the groom,” she said ‘It’s also great for people whoare working on their second or third marriages. They've already got the chinaandthey needthings for around the house and | think that’s wherethis comesin handy You get the person what they want and there's no messing around with returns or exchanges Autenrieth said people register the demand, which was lagging behind But nowthree researchers have come to more encouraging conclusions feature of the regis- chase an item at one store and Home Depot customers can pur- Frank Levy, an economist at pickit up at anotherstore er, the pull-cart, the spray tank, the wheel weights. It cost some- the Massachusetts Institute of Technology, and Richard Murname, a professor at the Harvard University School of Education, along with graduate student John Tyler, found that the latte bar phenomenonis largely confined to very young college graduates. While the median wage for a 23year-old college graduate was only slightly above that of high school graduate of the same age, the difference widened rather quickly by the time the two had ere up around $4,000 or 0. reached the age of 30. Their messageto college gradu- I had a customercomeinthat bought a gift certificate for their daughter and future son-in-law,’ Swordsaid. “It was for $1,000 to- ward the purchase and installa- tion ofcarpet The most expensive itemI've ever seen was a riding lawn mow- er andtractor with a snowblade. They special-ordered all the at- tachments, the fertilizer spread- Qnen Your ewspaper and co MUONeNTTels “SQ Aren't You Tired of Your $8 Computer? U<@bP Grade Your System For a Down GradePrice. (x MB Memory 72 Pin... MB Memory 72 Pin. @ 486 Dx4-100 Motherboard & CPU. @ 586 100 Motherboard, CPU & Controller. @ Pentium - 75 Motherboard, CPU & Controll @ Pentium - 100 Motherboard, CPU & Controller Service, Repair, All Other Parts Available Nokia ¢ Audiovox Airtime by US West Cellular 10 Yr-6.9: over $1. millior Oquirrh Valley Cellular Ed Terpening 968-7109 or 699-8722 this week. Levy andhis team puta slightly different spin on the data. Theincrease in the percentage of college graduates taking “high school” jobs largely reflects, they argue, a 1970s phenomenon in which a glut of college-educated baby boomers was suddenly duinped on the market.It is these “older” college graduates — age 45 and up — who areincreasingly earning high school graduates wages because they are in excess supply, largely as a result of corporate restructuring and downsizing. For the recent, young college graduate, Levy & Co. find a rosier picture. While as many as one third of college graduates, age 25 to 34, earnedless than the median income of high school graduates in 1979, that figure had fallen to one quarter by 1989. dents of an imbalance between the supply of college graduates, which was growing rapidly, and .. Never need a pay phone again! to Refinance APA RTMENT LO. Good Another it for a bridal registry, but there are lots ofother things it gets used for, like Father's Day and Moth- ‘The majority of the peopleuse the declining fortunes of Ameri- Lawn mowers and WeedEater those kinds of things.” she said One woman registered for a chain sawbecauseshehad alot of woodto cut andit madeit easier.” tries is convenience. Swordsaid quests and remains popular with well in It depends on whereyoulive and the season. Weget alot of requests for gardening things. wedding gifts. the chains said gram grew from customer re- It did phenomenally picked up and popularized by a press and public anxious about for a widevariety of items program was developed bya store south Florida,” she said. “Customers kept asking for it and we rolled it out to someof theother stores and high earnings,” Hecker said cent of Americans with four-year college degrees were working in Jeanna Jacquart, of Builders Square in Aurora, Colo., shows off marked off the list Home Depot's bridal registry manager in south Floridain 1991 said spokeswoman Jennifer Swearingen can workers. Hecker himself used data. Hecker found that 18 per- Joe Mahoney/The AssociatedPress for offer nationwide. gift registry ser- the data to warn high school stu- capture these anecdotes in the crystal Both Builders Square and Home Depot computerized the case during the postwar “golden years.” In 1960, less than 8 percent of the adult population had a college degree, while today it’s closer to 22 percent, with another 7 percent holding a twoyear associate degree. Hecker and his colleaguespredictthat the percentage ofthe work forcewith college degrees will continue to increase, with the numberofcollege diplomasoutpacing the number of new “college” jobs by about 31 percent. “What we want people to understandis that a college degree is not a guarantee of a good job cafelattes for $7.50 an hour at the corner Starbucks. Several years ago, Daniel Hecker, an economist at the Bu reau of Labor Statistics, published an article that seemed to provement chains. No longer are couples limited tures and garden tools as well. them with their diplomas, as was lish literature who nowserves up tionwide hardware and home-im- wedding presents. Now they can dicker over table saws, light fix- ates and their anxious parents: Just be patient and it’s likely it will all work out. There is no question that college graduates can nolonger expect the goodlife to be handed to THE WASHINGTON POST Nearly everyone has a story. The promising child who moves back home after college, unable to get a job that pays a living wage. The Phi Beta Kappain Eng- store? No, the wedding gifts came from bridal registries at two na- and linen when they register reputation for cutting, says Solloway. Al Dunlap, who took over Scott PaperCo. in Philadelphia,is a perfect example, he said. “The guy’s a hatchet man, and everyone knew it, says Solloway. Theresult: Scott Paper Co. shares climbed almost immediately when he was named. And investors were right: “He cut tremendously,” and turnedScott into an attractive purchase, he says. Of a Decent-Paying Job BoM ay Another was given a certifi- to arguing about china, attuned Others say investors have simply become more with a to short-term gains. They look for new managers , Degree No Guarantee cate for $1,000 worth ofcarpet and installation. giveaway at the hardware After getting a tip about the abandoned boy, journalists ver ified it with Division of Family PRESS Wien, a managing director and investment strategist at Morgan Stanley& Co. Inc. in New York. “The stock market seemsto thinkthat management's recognition of past mistakes is a good thing.” you had put together a portfolio of nine newlyweds received a garden tractor andaccessories valuedat more than $4,000 for their wed- public sympathy, and the Dese et News even organized a fund for contributions to the ASSOCIATED DENVER — One lucky set of of Bell, which an- Returns Can Exceed Dow Average:In fact, if at the first of 1995, iys Larry Rice, chief investment officer of Josephthal carried the storyofa 13- a regional Baby Appear Unperturbed: Whetherres-tructurout very eeeeratwork aead manyaren't spelled at first. Any kind clearly — investors usually buy, at least says Byron of restructuring is interpreted positively,” companies announcinglarge layoffs in the first half of the year, you wouldhavehad areturn of 47 percent, far above the 37 percent return on the DowJonesindustrial average for theyear. (These numbers assumeyouinvested the dividends in the equivalent of Treasury bonds.) Evenif you bought the stocks “after” they announced the layoffs, you would have beaten the Dowduring the equivalent period, making 33 percent compared to29 per- Lyon & Ross. pot. To make things even more wrenching, the boy's birthday There @BellSouth Corp., expected.” nouncedplans to cut 11,300 jobs last March. Its stock has returned56 percentsince It was only around 1987 that investors learned to love the idea of a company undergoing a radical restructuring Two days: of it you It depends on whether you get the earnings out @ Boeing Co., whichhascut nearly a third of its work force, or 52,000 jobs, since 1989. In that time, its stock has ones which promptedinvestors to dump stock. not buy it Unless you've been in a holi day-induced stupor. you're fa- terest story and the 40.000 jobs. many of them white-collar managers in New Restructuring Seen As A GoodSign: Actually. say market watchers, what's odd about Wall Street's seeming love of layoffsis that it’s relatively new, Announcements of restructuring used to be viewed as admissions of failure. feel like idiots, including Utah journalists media had their stock price rise. Theyinclude: — buy the stock of their own company, say, so that if they're laid off at least their savings will grow? I'm not the kindof person to before Christmas. In the last year, there have been dozens of examples of companies who announcedrestructurings and promptly offs, its stock price rises. Is this just more proof that Wall Street has no heart? Or should Americans just shrug and learnto be practical go around making people feel like idiots,” a tearful Birdie Jo Hoaks told a circuit court judge. But she had made people : to climb, long after the announcements. cements is The reason stocks jump with layoff announ simple, say it’sanalysts. “Mostly. straight-math th formula. formula. Youcutcosts, : and Mostly, it’s a straig) les Schelke, an analyst c whofoly .”” says Char! York.“Is it sustained? New in Barney jows AT&T atSraith ing embraceofchange. Jersey. thanits stock price rose about 5 percent, to over Fell Hard for ‘Great Story’ ly continue coinpanies general cent. Stocks of restructuring at Argus Research in NewYork, “it was the beginning of manufacturers’ addressing the problemof global competition” that turned restructuring from a shameinto a brac- DER NEWS It happenedagain with AT&Tlast week. No soonerdid the behemoth telephone company announce it was axing Journalists muiliar with the story. By Cynthia Mayer NEW YORK — There’s not much that’s predictable about Wall Street, but one chain of events has been practically paint-by-number for the last few years: Nearly every time a major corporation announces large numbersof lay- STOR TAR REED peers ee a) had been giv en a physical exam. She speci fied that she had information that the “boy was really any Happy Returns. a woman Donaldson was assured that the person had been given a complete physical exam and wasdefinitely a boy. Donaldson foundout later that some Divi sion of Family Services officials had doubts about the boy” The from “blizzard the outset 6-Montu CD 24-Montu CD 12-MontH CD situation was especially embar for the Deseret News, ¥ deadline meant that the newspaper was caught still acceptin boy” after the announced hoa story at an afternoon news confer ence Donaldson says she was left feeling ‘emotionally off” byt icident ripped & | 19 ne will be much n skeptical in the future. “I'll ask the same ques: APY* different I'm always Ir eld APY) 1 vest Rate 6.05 based on quarterly compounding $50,000 or more, of interest and is AIB also offers attractive i crest rates for CDs arly withdrawal. These interest rates are subject i s currently offered are as anuary A 4@ AMERICAN INVESTMENT BANK , x - 11, t 1996, =a e |
