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Opening Bell: 8.28.06

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At, Lots of Glitter but Maybe Not So Many Visitors (New York Times) bills itself as the biggest business news source in the world but a closer look reveals that its numbers are inflated by attention getting lifestyle pieces—like last week’s “Don’t Marry A Career Woman” and “America’s Drunkest Cities”—and a popular automotive site featuring lots of pictures of cars. To make things worse, lots of the visitors to its auto site are from abroad, suggesting that they really may just be looking at the pictures and be unable to read the English language editorial content or, perhaps more importantly, respond to advertisements aimed at English readers.
Why The Minimum Wage Doesn’t Matter (Fortune Small Business)
Are we really still arguing about minimum wage? In most labor markets in the United States, the minimum wage is irrelevant because it is currently below the actual wages paid to almost all workers. But at least half a million workers currently earn the minimum wage, which suggests that there are quite a few people set to lose their jobs if the minimum wage increases. Why? Because many of these people do jobs that just aren’t worth doing if higher wages must be paid to get people to do them. That’s why this line in the FSB article—“To be sure, the half-million Americans who earn the minimum would welcome a raise.”—is borderline insane. Of course, everyone would welcome a raise. But how many of those half-million would find themselves out of a job if the minumum got hiked. Can we be “sure” they’d “welcome” the raise?
She's a saver. He's a spender. (Money)
We’re going a bit meta on this one. If you want, click through the link and get a journalist's advice on how to save your marriage. It’s the post-marriage equivalent of those articles your mother used to clip out of the paper and mail to you (now she forwards you links). What caught our eye is the extremely non-typical and perhaps misleading nature of the headline and the set-up of the article—the premise that the husband is spending more than the wife. While this situation has been known to occur in nature, it is rare. As the article itself later admits, it occurs in only around 1/3 of marriages. It is a lot more common for wives to be the spenders—probably because they are often charged with keeping the household stocked with the things that make life comfortable. But why use a non-standard example as the premise? Probably because so many journalists and editors are uncomfortable publishing stories that tend to “reinforce stereotypes”—even if those stereotypes happen to be true.
A Big Star May Not a Profitable Movie Make (New York Times)
We’ve always liked the theory that the star system—paying big movie stars out-sized sums despite statistical evidence that they have little effect on the box office bottom line or the financial performance of the studios—is due to agency costs. Studio executives find casting big stars is a way of reducing risk to them personally—if a Tom Cruise movie flops no one will blame the executives for giving the movie the go-ahead.