tv Real Money With Ali Velshi Al Jazeera September 7, 2014 5:00pm-5:31pm EDT
missed earth by 25,000 miles, zooming high over new zealand a couple of hours ago. i'm richelle carey, "real money" is next. check out the website aljazeera.com. thanks for your time. . >> the streak is over, hiring in august falls to the lowest part of the year. don't despair, i'll tell you why many believe it's a fluke, and there are reasons to be optimistic. india's prime minister marks 100 days in office. i show you hits and misses and why he's a sell e ebb rity in the united states. drugs help americans save millions. there's a spike in the price of previptions. i'll show you why a lot are not
the bargain they used to be. i'm ali velshi, and this is real money. >> this is "real money," are the most important part of the show. tell me what is on your mind by tweeting me or hit me up at facebook.com. the streak is over, the 6-month run of generating 200,000 jobs came to an end in august. in a moment ildiscuss whether or not this new ( -- i'll discuss whether the news should change our economic recovery. figures show a gain of 142,000 jobs last month. preliminary becomes important. i tell you why later. economists expected 225, 230,000 new jobs. before we talk about why the august number may not be as bad as it sound, i'll satisfy your security and tell you that the important unemployment rate fell
a tenth of a point to 6.1%, because more people gave up looking for a job. in other words, not reason to cheer. i want to talk about the interesting reasons that the number of jobs created in august fell short of expectations, but may rebound this month. >> market basket - remember the story we told you about, a new england grocery store chain where hundreds walked out in protest when the c.e.o. was fired. it created havoc. the chain cut the hours of part-timers to zero. the bureau of labour statistics said food and bev rimming stores lost 17,000 jobs in august. the industry was affected by employment disruptions at a company they told us was market basket. the situation has been resolved. the old c.e.o. is buying the company. customers are back, and insists say the food and bev rimming category could see a gape of
30,000 jobs in september. here is a reason a month the data should not shake our confidence in the u.s. economic recovery. the month we are talking about is august. a month when fewer people respond to government data collectors - many are on vacation - and there are significant revisions to august job data, which is why back will i said preliminary numbers are important. economists at bank of america, merrill limping say that august -- lynch say that august payroll growth has been revised higher in 12 of the last 15 years by an average of 31,000 and. >> that sounds like good advice. >> tom perez is the u.s. secretary of labour, and joins us from washington d.c. with more. good to see you and have you on the she. we averaged about 207,000 jobs
per month for the last year. in noneconomic and nontechnical terms, that's better than medium but not quite high. we go back to the last 54 months, and we across the 10 million job threshold. we are moving in the right direction. we need to pick up the pace of growth and see great progress. the tech tore with the most growth is professional services, over 600,000 jobs. these are architects. acts, it specialists. when i hear the recovery is low wage, those that say that are not looking on the facts. >> let's such on wages. >> average earnings grew 2.1%,
changing a trend we have seen. we have seen little growth in severing hourly earnings. 2.1% is not bad. we see inflationary concerns. this underscores a problem going back decades, and that is wage earners are at risk of not making more money than inflation. >> this trend as you point out has been going on for decades. take 1979 as a bench mark. productivity rose over 90%. and wage growth has been 3%. i'm a big believer in shared prosperity and sacrifice. during the recession we had shared sacrifice, during files that are better, we should have shared prosperity. too many workers are not sharing
in the prosperity. the market basket is a good champ. arth you are t -- arthur t stand for the fact that you should reward workers. that is what the action was about. wage fairness, and you see fast food workers on strike. it's about wage fairness, you can't make a living on $7.25 an hour. >> let's talk about the shared prosperity. in an election season the words are latched on to by other people, the same people that didn't like redestruction. it sounds like redirection of wealth. we had an unequal recovery. half americans feel better than they were before the recession, and half are not. if you are not in the stock market and don't own a house, you are not feeling great. >> and i'll tell you.
it's not redistribution of wealth, it's smart economic policy. it's taking care of the middle class, it's making sure that businesses have the customer base to grow. wage and equality is as big a threat to long-term growth as anything. because 70% of g.d.p. growth is consumption. if people don't have money in their pockets. they don't spent it. >> you said visitors need for customers. that's a way of saying "i have enough stock, workers and plant", there's a theory that we have been building capacity for so long, the workers, plant, materials, and now we are over capacity, and there's no way we'll see more robust hiring until we burn off the overcapacity, until we are short of workers, factories and goods. do you agree? >> no, i - what i'm hearing
from - look at the auto industry. i mean, sales are at the highest levels since 2006. you look at consumer confidence, highest levels since some time in 2006. auto sales are brisk. companies - the average person in manufacturing is working 42 hours a book. we are seeing progress in this area. what we see is that you look at inflation adjusted spending by the top 5% suns the end of the recession. it increased 15-16%. look at inflation adjusted spending increasing 1%, because we had flat wages, because they just don't have money in their pockets. this is all about henry ford. 100 years ago he doubled the wages for people on the assembly line. he did so for two reasons. he had 60% attrition.
if you don't treat the workers well they'll leave. secondly he wanted to sell more cars. he thought the people that make the cars ought to be able to buy them. when we put money in people's pockets, they consume it. a woman i met in houston texas, who has been a jan iter and makes $8 an hour, to no benefits. you give her a raise to $10.10. she's not going to offshore that, she'll spend it. >> she went do an inversion. thank you for joining us. those packing maddison square garden like a rock star. i don't need to tell you the cost of generic drugs are going up. that and more as "real money" conditions. keep it right here -- continues, keep it right here.
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india's p.m. narendra modi makes his first official visit to the united states later this month. all signs point to a rock star's welcome. it begins with a speech in new york on september 28th, on maddison square garden, a 20-seat arena usually reserved. demand is so high that the tree tickets will be rewarded by lottery. after the gored ep, the prime minister -- garden, the prime minister heads to the white house for a politician forbidden to set foot on u.s. soil. narendra modi was barred in 2005 for failing to stop deadly anti-muslim demonstrations when he was the chief minister of his home state. barely 100 days into his new role as prime minister. he's hailed as an important strategic partner for the united states, and a hero at home. >> his elections sparked a celebration and hope for better
days. in his bid to become prime minister, narendra modi vowed to role out the red carpet, not the red tape to investors. cutting red tape is needed. everything from building roads to rails and factories was stalled because of government regulation, making it difficult to buy land is a problem. it's estimated that the sluggish growth and side-line projects have cost india 104 billion in investments. >> you hear stories about indian companies choosing to invest outside the country, or sitting on piles of cash, waiting until the government was a bit more business friendly before investing. >> reporter: foreign investment is lower than years ago. narendra modi supporters are optimistic, pointing to his track record for clearing projects if his home state. some economists say expectations need to be tempered since it will be tougher for narendra modi to accomplish on a national
level what he did in his home state. with his first 100 days in office behind him. the question is whether he has delivered in the first 100 day. according to a poll by "the times" in india, 40% say yes, 20% say the promises were empty, the rest say it's too early. i spoke to the idea editor at quarts. she came back from a trip to india, setting up an indian unit. she says india needs to hit the reset button on policy making and he hasn't done that. >> narendra modi is project focussed. he unrolled something to get indians to have bank acts. very successful initiative. he was voted in to hit the reset button on the economy. create 50 million jobs, get
foreign vestment and open up sector after sector that's been strangled by red tape. i think there is great expectations and that was his campaign promise, that good times are coming. he literally was promising good times. >> he has the rock star thing going on like president obama had. he'd go around and stadiums would be filled. this is what is going on. >> he had successful project. projects do not create a reset button. this is the left and right wing. he agrees that india needs investment. >> when you speak to indians about politics, they sound like americans, complaining about bureaucracy, unfriendly environment and a political system strangled on to itself. they have the issue of financial corruption pile on to that a
legal system which drags major initiatives and infrastructure projects to a halt. how does this guy do it. he did it in his home province, india is a complicated place. >> some of it is by opening up the sectors and being aggressive. that is an answer. the other - the judiciary system is a stranglehold on the economy. there was an initiative that has been a political football, where he's taken supreme court appointments and put them under the executive branch. that has been controversial. on the one hand it shows him to be in power and control, feeding a rock star. >> it's a rock star democracy, not china. >> he has been talking the tough talk in some ways like china. but india is not china, and that is one of india's greatest strengths. >> things have to go though parliament and the judiciary. he's wasting no time in letting people know that he doesn't like
china, it shouldn't be everyone's darling. he was in japan, and called china's view of the world 18th century expansionist and embecaused the japanese. -- embraced the japanese. >> his first 100 days are marked by india looking outward. the criticism of india which wants to be in the security council over and over again is what is your foreign policy. you don't wade into issues of war. here narendra modi is going out and saying japan, we need you, you need us. he's trying to get infrastructure development going. he's creating political alliances that will be important to him going forward. >> india suffers - people want to vest in india because it has a great growing market. you mention people that get bank accounts. it's hard for non-indian companies to invest.
a lot is buy design. he's trying to change it. he wants foreign investment into india. he does. the sectors he needs to focus on for employment, manufacturing, infrastructure, they are things where you can get low-skilled jobs and millions of jobs in those sector. sectors like media, which i was interested in. will he open that up. seem to be less a priority, but could usher in great sentiment, and it's psychological. we have not seen a lot. he said he's probably not going to do that. very much the mum and pop is the heart of the indian economy, and added protection for them. again, there's hope that he will open up, remember this is a socialistic economy that is kind of tiptoeing its way out of something. sometimes it's not right. >> 100 is too quick to evaluate
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talking about everything from hospital bills to insurance premiums. it's been one way for americans to save money. generic helped americans shave 8-10 billion from their bills, making up 80% of prescription medicine in the united states. >> as reported, in the last year, generic drugs have seen a spike in prices. >> generic drugs can be a life saver for americans in need of former medicine. former drugs from lipitol dropped to $0.50 a both after the patent expire and genetics manufacturers join the fray. >> the difference is like the difference between the price of bread and a luxury car. >> reporter: usually dependable costs of generic drugs are on the rise, some to astronomical heights. an analysis found half of all
retail drugs became more expensive. one out of every 11 drugs doubling in costs. >> for example, the price of the popular antibiotic tetra cycling used to treat pneumonia to lime disease jumped 17,000%. it's a dangerous precedent for patients depending on the medications for serious conditions like breast cancer or heart disease. >> when they go to pick up the medication, and it turns out to be 10-20 times what they think it is, they don't pick up the medication, they go without the medication. >> at the end of the day we stand at the counter, facing our customers, patients, the elderly, who are wrestling, particularly in my community, with the affordability of their prescription drugs. >> reporter: pharmacists say they feel the squeeze of drugs, and had to absorb some of the
costs, because reimbursements from companies have not kept up. >> 98% of revenues are generated by pharmaceuticals. my business suffered cash no, making it difficult for me to meet my financial obligations to my suppliers. >> a survey of community pharmacists found 84% found losses are having a significant impact on the ability to remain in business. chains like walgreens had to lower earnings by 1.1 billion in july due to increased costs. producers blame manufacturing issues such as a shortage of raw materials. analysts say a likely cause is a lack of market completion. in part due to a frenzy of mergers. that leaves companies one of two
major suppliers, heart medicine, whose average price triples, reaping the profits. companies reported sales, and it quadruples in a few months, according to company calls, some experts say growing manufacturers may help others produce generics. others are not holding out hope. >> i don't see the marketplace addressing this in a responsible manner on its own and fixing it. the only one suffering is the small business person and the patients. >> the national community pharmacist association called for a congressional hearing on drug prices. a survey by the group found patients are not taking their medications because of rises prices and report that a trend forced seniors into a gap and doughnut hole, where they must by out of hire costs.
>> i spoke to economist from truman health analyticnalytics, research firm. he says the demand for cheap generic drugs will grow as the baby boomers get older. i ask why the prices have not come down. >> i think sometimes markets can be slow to react to emerging situations. you had a cop influence of a lot -- confluence of a lot of different thing happening in the marketplace. part is that individual pharmaceutical companies are seeing a wave of many products going off patent, and they are embarking on generics programs, trying to keep the brands alive. some are going out and buying ge generic houses and you have knowneric drug houses to --
generic drug houses mainstreaming into drug development, with the dr readies, and others. there's a lot of things happening and economic principals suggest, of course, that if there is enough profit out there, you'll get market entrance there. there are barriers to entry in this whole thing. >> you and i can't just start up and a"hey, look, we are paying too much for dijoxin let's start a company and make it." >> it's not as easy as that. you have manufacturing, testing and so forth to meet good manufacture ouring practices -- manufacturing practices, and it takes time and funny. the market can be slow to react. >> what is happening on the demand side. there are arguments that we are not all that picky, we are not smart enough to be picky. if the doctors prescribes a drug, we don't know to ask for
something else or provide pressure that would bring prices down. >> that certain has been the paradigm for some time. we are starting to see changes with that, with the evolution of consumer driven health care, and more and mar - i know i have -- and more, i know i have a plan, when my physician prescribes something i ask questions. maybe as a health economists i'm savvy a little more about what drugs are right for the situation than the observing consumer -- average consumer. information is available on the internet and advertising on tv, fairness are aware of options. at some point people will react to market signals. i heard on the introduction, for example, the pharmacist who was talking about patients who - if the price is too high, they leave the drug there. we see that in our
administrative claims databases where patients reverse basically the claims that have been submitted, and a lot of times it's due to sticker shock. >> good to talk to you thank you for joining us. it's an interesting topic we'll talk more about it. mason russell, vice president of strategic consulting. coming up this week - apple sent out invitations for an event on tuesday. speculation is high it will unveil the iphone 6. if it does we'll show it to you. real money airs week nights. 7:00pm eastern, 4:00 pm pacific, that's our show. thank you for joining us.