TIME Food & Drink

Kraft Recalls American Singles Cheese Slices

Beef to Tomato Send July 4 Food Cost to Record
Packages of Kraft Foods Group Inc. sliced American cheese sit on display for sale in a supermarket in Princeton, Illinois, July 2, 2014. Daniel Acker—Bloomberg/Getty Images

No customer illness has been reported

Kraft Foods Group voluntarily recalled nearly 8,000 cases of its American Singles cheese Friday because a supplier “did not store an ingredient used in this product in accordance with Kraft’s temperature standards,” according to a Kraft Foods press release. At total of 7,691 cases of the pasteurized cheese product have been recalled.

“Consumers who purchased any of these products should not eat them,” says the release, which advises people to return the slices to the store where they bought them. Kraft says it has no reports of sick customers and described the recall as a “precaution” to avoid premature spoiled food and related illness. All affected products have a “Best When Used By” date of either February 20, 2015 or February 21, 2015.

The cheese was produced at the company’s Springfield, MO manufacturing plant.

TIME Gadgets

Watch the Evolution of Apple’s iPhone in a Single GIF

Apple; Gif by Joseph C. Lin—TIME

From 2007 to 2014

It seems like ages since Steve Jobs first announced Apple’s first iPhone in 2007. At the time, the heavy, 4GB device seemed like a technology miracle, but today it looks just a little dated compared to the iPhone’s latest iteration — and who knows what it’ll look like compared to the iPhone 6, which is just around the corner.

TIME captured the evolution of the iPhone in just a few seconds.

TIME Video Games

The Head of the Company Behind Angry Birds Is Flying the Coop

CHINA-FINLAND-INTERNET-GAMES-PARK
A visitor walks through Shanghai's first Angry Birds Activity Park at Tongji University in Shanghai on October 31, 2012. Peter Parks—AFP/Getty Images

The CEO of Rovio, the video game developer behind the mobile megahit Angry Birds, will step down at the end of the year, the company announced Friday. Mikael Hed, who has led the Finland-based Rovio since Angry Birds first hooked millions of smartphone users in 2009, will hand the reins over to Pekka Rantala, currently the CEO of Finnish beverage maker Hartwall.

Rantala will take over a company in the midst of a tough transition in the mobile environment: Freemium games like Candy Crush Saga, wherein users are pushed to make lots of in-game purchases, have come to dominate the mobile landscape, and Rovio has yet to develop another hit with anything close to the impact of Angry Birds. The company’s profit dipped by more than 50% last year to around $35 million, and its overall revenue in 2013 increased only slightly from the previous year, to around $206 million. About half the company’s revenue now comes from merchandise licensing rather than games.

Despite its challenges, Rovio is continuing to get a lot of mileage out of the Angry Birds brand. The games in the series have racked up more than 2 billion downloads collectively, and the characters are featured in a currently-running animated series and a feature film planned for a 2016 release.

TIME Fast Food

McDonald’s Objects to Russia Restaurant Closures

RUSSIA-UKRAINE-CRISIS-US-TRADE-FOOD-MCDONALDS
People sit on the terrace of a closed McDonald's restaurant, the first to be opened in the Soviet Union in 1990, in Moscow on Aug. 21, 2014. Alexander Nemenov—AFP/Getty Images

The Russian government says conditions in some of the chain's restaurants are unsanitary

McDonald’s on Friday objected to the Russian government’s decision to close 12 of its restaurants in the country, following weeks of highly publicized investigations into health and safety at the fast food giant’s locations.

“We are closely studying the content of the agency documents to determine what should be done to re-open the restaurants as soon as possible,” the company said in a statement. “We do not agree with the court’s decision and will appeal against it in accordance with the procedures established by the law.”

The investigations come as the United States and Russia face heightened tensions over the crisis in Ukraine. While Russian authorities maintain that the restaurants have been closed for health reasons, critics say the closures are a response to U.S. sanctions against Russia.

The Russian government is continuing “microbiology tests, sanitary and chemical tests” at other McDonald’s restaurants in Russia, according to reports.

TIME Basketball

How Shelly Sterling Got Steve Ballmer to Overpay for the Clippers

Celebrities At The Los Angeles Clippers Game
Rochelle Sterling attends an NBA playoff game between the Golden State Warriors and the Los Angeles Clippers Noel Vasquez—GC Images/Getty Images

Shelly Sterling lived in her estranged husband and real estate mogul Donald’s shadow for decades. But shortly before her 80th birthday, Shelly proved to the world that she, too, has a strong business acumen, by getting former Microsoft CEO Steve Ballmer to overpay for the Clippers, she said in a Thursday interview.

Sterling might have had no idea who Ballmer was when he approached her to buy the basketball team, but she told the Associated Press that she knew she had an eager customer.

“He was a like a little child,” she said. “He was so excited, so happy.”

Although Sterling said that they “sort of connected” and she “felt he would be good for the team,” that also didn’t stop her from getting what the AP declared an “unprecedented” offer for the team.

Sterling had first received an offer of $1.65 billion for the team from potential buyer David Geffen, but after talking to Ballmer, he offered her $1.9 billion. But Sterling wasn’t done: After Ballmer had tried to move the Sacramento Kings to Seattle, she made him promise he would keep the Clippers in Los Angeles.

“I told him, ‘you won’t have to build an arena or a practice field.’ So he was getting a bargain,” Sterling told the AP. “And I told him, ‘We have great players, a great coach and you’ll never have the chance to buy a team in Los Angeles again.'” An inspired Ballmer upped the offer to $2 billion and offered Sterling floor seats to every game as owner emeritus. “He really really wanted the team,” Sterling said.

According to leaked court documents that ESPN got its hands on, $2 billion was more than the Clippers’ actual worth.

Ballmer’s $2 billion final bid is 12.1 times the expected 2014 revenues of the team, according to the numbers given to the bidders by Bank of America, which conducted the sale on behalf of the Sterling trust. . .

“No team in the history of sports has sold for six times total revenues, so that should give you an idea of how crazy this purchase price is,” said a sports banker who was not involved in the transaction.

While money might have been a non-issue for the tech mogul and he would have paid the figure regardless, Sterling deserves serious credit for closing a huge deal — particularly after rising above her disgraced husband’s racist antics that cost him the team.

“I was given the task and I did it,” Sterling said. “I just did what I had to do.”

[AP]

MONEY Saving

This App May Let You Retire on Your Spare Change

Acorn App
Acorn

The new Acorns app rounds up card purchases and invests the difference for growth, with no minimums and low fees.

Americans spend $11 trillion a year while saving very little. So it makes sense to link the two, as a number of financial companies have tried to do over the past decade. The latest is the startup Acorns, which hopes to hook millennials on the merits of mobile micro investing over many decades.

Through the Acorns app, released for iPhone this week, you sock away “spare change” every time you use your linked credit or debit card. The app rounds up purchases to the nearest dollar, takes the difference from your checking account, and plunks it in a solid, no-frills investment portfolio. So when you spend, say, $1.29 for a song on iTunes, the app reads that as $2 and pushes 71¢ into your Acorns account. With a swipe, you can also contribute small or large sums separate from any spending.

The Acorns portfolio is purposely simple: Your money gets spread among six basic index funds. The weighting in each fund depends on your risk profile, which you can dial up or down on your iPhone. More aggressive settings put more money in stocks. But you always have some money in each fund, remaining diversified among large and small company stocks, emerging markets, real estate, government and corporate bonds. The app will be available for Android in a few weeks and through a website in a few months.

Why Millennials Are the Target

Micro investing via a mobile device clearly targets millennials, who show great interest in saving but have been largely ignored by financial advisers and large banks. Young people may not have enough assets to meet the minimum requirements of big financial houses like Fidelity, Vanguard, and Schwab. With Acorns, there are no minimums. There are also none of the commissions that can render investing in small doses prohibitively expensive. “We want small investors who can grow with us over time,” says Acorns co-founder Jeff Cruttenden.

This approach places Acorns in the middle a rash of low-fee, online financial firms geared at young adults—including Square, Betterment, Robinhood, and Wealthfront. Such firms hope to capitalize on young adults’ penchant for tech solutions and lingering mistrust of large financial institutions. Cruttenden says a third of Acorns users are under age 22. They like to save in dribs and drabs—and manage everything from a mobile device.

Acorns charges a flat $1 monthly fee and between 0.25% and 0.5% of assets each year. The typical mutual fund has fees of 1% or more. Yet many index fund fees run lower. The Vanguard S&P 500 ETF, which invests in large company stocks, charges just 0.05%. If you have a few thousand dollars to open an account, and the discipline to invest a set amount each month, you might do better there. But remember that is just one fund. With Acorns you get diversification across six asset classes—along with the rounding up feature, which seems to have appeal.

Acorns has been testing the app all summer and says the average account holder contributes $7 a day through lump sums and a total of 500,000 round ups. Cruttenden says he is a typical user and through rounding up his card purchases has added $521.63 to his account over three months.

A New Twist on an Old Concept

Mortgage experts tout rounding up as a way to pay off your mortgage quicker. On a $200,000 loan at 4.5% for 30 years your payment would be $1,013.38. Rounding up to the nearest $100, or to $1,100, would cut your payoff time by 52 months and save you $26,821.20 in interest. Rounding up your card purchases works much the same way—only you are accumulating savings, not cutting your interest expense.

Bank of America offers a Keep the Change program, which rounds up debit-card purchases to the nearest buck and then pushes the difference into a savings account. Upromise offers credit card holders rewards that help pay for college. But Acorns’ approach is different: the money goes into an actual investment account with solid long-term growth potential.

One possible drawback is that this is a taxable account, which means you fund the Acorns account with after-tax money. Young adults starting a career with a company that offers a tax-deferred 401(k) plan with a match would be better served putting money in that account, if they must choose. But if you are like millions of people who throw spare change in a drawer anyway, Acorns is a way to do it electronically and let those nickels, dimes, and pennies go to work for you in a more meaningful way.

Read more on getting a jump on saving and investing:

 

TIME Aviation

Malaysia Airlines to Cut 6,000 Staff in Overhaul

Malaysia Airlines announced the overhaul on Friday to revive its damaged brand, after double passenger-jet disasters

(KUALA LUMPUR, Malaysia) — Malaysia Airlines will cut 6,000 workers as part of an overhaul announced Friday to revive its damaged brand after being hit by double passenger jet disasters.

The staff reduction represents about 30 percent of its current workforce of 20,000. A search for a new CEO for the airline is underway.

Khazanah Nasional, the state investment company that owns 69 percent of the airline, said the overhaul includes the establishment of a new company that will take over the existing Malaysia Airlines business and its reduced staff.

The revamp and new investment in the carrier will cost about 6 billion Malaysian ringgit ($1.9 billion).

“The combination of measures announced today will enable our national airline to be revived,” said Khazanah managing director Azman Mokhtar.

The airline will be taken completely under the wing of the government. Khazanah previously announced that it plans to take 100 percent ownership.

A substantial revamp has long been on the cards for Malaysia Airlines, which was struggling with chronic financial problems even before it was hit by the double disasters this year.

Investigators continue to scour the southern Indian Ocean for Malaysia Airlines Flight 370 which veered far of course while en route from Kuala Lumpur to Beijing on March 8 with 239 people on board. In July, 298 people were killed when Flight 17 was blasted out of the sky as it flew over an area of eastern Ukraine controlled by pro-Russian separatists.

The tragedies have scarred the airline’s brand, once associated with high-quality service. Travelers on recent long-haul flights have posted photos on social media of nearly empty cabins and departure lounges. The airline says passengers fell 11 percent in July from the year before.

In releasing its latest quarterly financial result, a loss, on Thursday, Malaysia Airlines said the worst impact from the disasters will come in the second half of this year.

Khazanah said at a press conference that it has begun a search for a new chief executive for the airline, which is likely to be completed by the end of this year.

Current CEO Ahmad Jauhari Yahya will continue to head Malaysia Airlines until its new incarnation is established in July next year.

The state investment fund said it aims to restore Malaysia Airlines to profitability by the end of 2017.

TIME Business

Labor Day: Raising the Minimum Wage Stiffs the Poor

Demonstrators take part in a protest to demand higher wages for fast-food workers outside McDonald's in Los Angeles on May 15, 2014.
Demonstrators take part in a protest to demand higher wages for fast-food workers outside McDonald's in Los Angeles on May 15, 2014. Lucy Nicholson—Reuters

There are at least three better ways to help low-income workers — and few ways that are worse

Another Labor Day, another bold plan to increase the minimum to help the working men and women of America!

On Monday, Los Angeles Mayor Eric Garcetti will announce a proposal to jack his city’s minimum wage from $9.00 all the way up to $13.25 over three years. That puts him ahead of President Obama, who has called for goosing the federal minimum wage from $7.25 to $10.10.

Increasing the minimum wage is typically sold as a way of aiding poor people — LA business magnate and philanthropist Eli Broad says Garcetti’s plan “would help lift people out of poverty.” But it’s actually a pretty rotten way to achieve that for a number of reasons.

For starters, minimum-wage workers represent a shrinking share of the U.S. workforce. According to the Bureau of Labor Statistics (BLS), the percentage of folks who earn the federal minimum wage or less (which is legal under certain circumstances) comes to just 4.3 percent of hourly employees and just 3 percent of all workers. That’s down from an early 1980s high of 15 percent of hourly workers, which is good news — even as it means minimum wage increases will reach fewer people.

What’s more, contrary to popular belief, minimum-wage workers are not clustered at the low end of the income spectrum. About 50 percent of all people earning the federal minimum wage live in households where total income is $40,000 or more. In fact, about 14 percent of minimum wage earners live in households that bring in six figures or more a year. When you raise the minimum wage, it goes to those folks too.

Also, most minimum-wage earners tend to be younger and are not the primary breadwinner in their households. So it’s not clear they’re the ones needing help. “Although workers under age 25 represented only about one-fifth of hourly paid workers,” says BLS, “they made up about half of those paid the federal minimum wage or less.” Unemployment rates are already substantially higher for younger workers — 20 percent for 16 to 19 year olds and 11.3 percent for 20 to 24 year olds, compared to just 5 percent for workers 25 years and older — and would almost certainly be made worse by raising the cost of their labor by government diktat. While a number of high-profile economists such as Paul Krugman have lately taken to arguing that minimum wage increases have no effect on employment, the matter is far from settled and basic economic logic suggests that increases in prices reduce demand, whether you’re talking about widgets or labor.

Finally, there’s no reason to believe that people making the minimum wage are stuck at the bottom end of the pay scale for very long. According to one study that looked at earning patterns between 1977 and 1997, about two-thirds of workers moved above the minimum wage within their first year on the job. Having a job, even one that pays poorly, starts workers on the road to increased earnings.

If we want to actually raise the standard of living for the working poor via government intervention, the best way to do it is via transfer payments — food stamps, housing subsidies, or even plain cash — that directly target individuals and families at or below the poverty line.

University of California sociologist Lane Kenworthy, a progressive who has called for a more generous social safety net, argues that virtually all increases in income for poor families in the U.S. and other wealthy countries since the late 1970s have been a function of “increases in net government transfers — transfers received minus taxes paid.” That’s partly because workers in poor households often have “psychological, cognitive, or physical conditions that limit their earnings capability” and partly because today’s “companies have more options for replacing workers, whether with machines or with low-cost laborers abroad.”

To be sure, arguing that you want to increase direct aid to poor families doesn’t give a politician the same sort of photo-op as standing with a bunch of union leaders on Labor Day and speechifying about the urgent need to make sure an honest day’s work is rewarded with a living wage.

But making just such a case could have the benefit of actually helping poor people in the here and now. Certainly a savvy politician could sell that to voters who know the value of hard work — and the limits of economic intervention.

 

TIME Companies

Here’s Why Abercrombie & Fitch Is Ditching Its Logos

The retailer's earnings are falling as logos become less fashionable in North America

Abercrombie & Fitch was “the brand of the moment” a decade and a half ago. Sales of its preppy clothes had jumped into the billions, teens had ranked it as the sixth coolest brand, and its newly launched surfer-lifestyle line, Hollister Co., was an instant sensation. But now, with stores like H&M and Zara turning white tees into fashionable pieces, Abercrombie wants to win back its base.

The retailer reported its 10th straight decline in quarterly sales on Thursday, with net sales decreasing by 6% to $891 million, according to an earnings conference call. Shares dropped as much as 8.5% after the announcement.

CEO Mike Jeffries said in the announcement that while Abercrombie’s clothes have made “great progress” in evolving their fashion component, the company is now rolling up its sleeves to reduce its use of logos.

“In the spring season we are looking to take the North American logo business to practically nothing,” Jeffries said on the call.

Higher pricing at Abercrombie stores have kept customers back, according to the Chicago Tribune, as stores like Forever 21 are selling jeans for less than $10 while similar items at Abercrombie can go for $75. Jeffries said that Abercrombie has been cutting costs, which is allowing it to achieve lower prices, the Wall Street Journal reports.

The shedding of logos on most Abercrombie clothing is the company’s latest rebranding effort as it regains its footing from a over decade of bad publicity. Abercrombie settled for $50 million in 2004 after being sued for discrimination against racial minorities. Last year, quotes made by Jeffries during a 2006 interview resurfaced; he had said the brand targeted “cool, good-looking people,” a statement that generated heavy, even viral backlash. (And earlier this year, researchers suggested that its crowded, cologne-filled stores may actually cause anxiety.)

What’s next for Abercrombie? While the company has said it plans to close 60 stores this year after leases expire, Jeffries is hoping that Abercrombie’s back-to-school clothing line and logo-free options will allow it to escape the climate of declining popularity and earnings that is also being faced by rivals like American Eagle and Aéropostale.

“We are confident that the evolution of our assortment will drive further improvements going forward,” Jeffries said in the announcement. “We remain highly focused on returning to top-line growth and driving long-term value for our shareholders.”

TIME Companies

Apple Wins Patent for Its Glass Cube Store Design

Apple Wins Patent on Glass Cube Store Design
A general view of the glass cube facade of the Fifth Avenue Apple store in front of the Plaza Hotel on February 9, 2012 in New York City. Ben Hider—Getty Images

The 14-year patent will protect the building's "ornamental design"

The U.S. Patent and Trademark Office approved Apple’s application this week to patent its iconic glass cube design at its flagship Fifth Avenue store in Manhattan.

Filed in 2012, the 14-year patent sanctions the “ornamental design” of the 32-foot cube, which underwent a $6.7 million remodeling in 2011 to achieve a cleaner look with 15 glass panels instead of 90, according to Apple Insider. Apple had applied in 2010 to trademark the “distinctive design of the building” but that has not yet been approved.

The glass staircases inside Apple Stores were also patented last year, according to documents published by the USPTO. Apple previously won a patent in 2012 for the glass cylinder design of its flagship store in Shanghai.

The cube was designed by several people including former Apple CEO Steve Jobs, who died in 2011, according to the patent application. Jobs had reportedly paid for the construction of the glass cube himself and owned the structure.

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