Incomes Flat in Recovery, but Not for the 1%

WASHINGTON — Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but barely at all for everybody else, according to new data.

The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings rose by just 0.4 percent.

Mr. Saez, a winner of the John Bates Clark Medal, an economic laurel considered second only to the Nobel, concluded that “the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.”

The disparity between top earners and everybody else can be attributed, in part, to differences in how the two groups make their money. The wealthy have benefited from a four-year boom in the stock market, while high rates of unemployment have continued to hold down the income of wage earners.

“We have in the middle basically three decades of problems compounded by high unemployment,” said Lawrence Mishel of the Economic Policy Institute, a left-of-center research group in Washington. “That high unemployment we know depresses wage growth throughout the wage scale, but more so for the bottom than the middle and the middle than the top.”

In his analysis, Mr. Saez said he saw no reason that the trend would reverse for 2012, which has not yet been analyzed. For that year, the “top 1 percent income will likely surge, due to booming stock prices, as well as retiming of income to avoid the higher 2013 top tax rates,” Mr. Saez wrote, referring to income tax increases for the wealthy that were passed by Congress in January. The incomes of the other “99 percent will likely grow much more modestly,” he said.

Excluding earnings from investment gains, the top 10 percent of earners took 46.5 percent of all income in 2011, the highest proportion since 1917, Mr. Saez said, citing a large body of work on earnings distribution over the last century that he has produced with the economist Thomas Piketty of the Paris School of Economics.

Concern for the declining wages of working Americans and persistent high levels of inequality featured heavily in President Obama’s State of the Union address this week. He proposed raising the federal minimum wage to $9 from $7.25 as one way to ameliorate the trend, a proposal that might lift the earnings of 15 million low-income workers by the end of 2015.

“Let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty,” Mr. Obama said in his address to Congress.

Mr. Obama’s economic advisers say that he has been animated by the country’s yawning levels of inequality, and the administration has put forward several proposals to address the gap. Those include higher taxes on a small group of the wealthiest families and an expansion of aid to lower- and middle-income families through programs like the Affordable Care Act.

The data analyzed by Mr. Piketty and Mr. Saez shows that income inequality — as measured by the proportion of income taken by the top 1 percent of earners — reached a modern high just before the recession hit in 2009. The financial crisis and its aftermath hit wealthy families hard. But since then, their earnings have snapped back, if not to their 2007 peak.

That is not true for average working families. After accounting for inflation, median family income has declined over the last two years. In 2011, it stagnated for the poorest and dropped for those in the middle of the income distribution, census data show. Median household income, which was $50,054 in 2011, is about 9 percent lower than it was in 1999, after accounting for inflation.

Measures of inequality differ depending on whether they are measured after or before taxes, and whether or not they include government transfers like Social Security payments, food stamps and other credits.

Research led by the Cornell economist Richard V. Burkhauser, for instance, sought to measure the economic health of middle-class households including income, taxes, transfer programs and benefits like health insurance. It found that from 1979 to 2007, median income grew by about 18.2 percent over all rather than by 3.2 percent counting income alone.

In an interview, Mr. Burkhauser said his numbers measured “how are the resources that person has to live on changing over time,” whereas Mr. Piketty and Mr. Saez’s numbers measure “how are different people being rewarded in the marketplace.”

“That’s a fair question to ask, but it’s a very different question to ask than, ‘What resources do Americans have?’ ” Mr. Burkhauser said. Notably, many of the Obama administration’s progressive policies have been aimed at blunting the effects of income inequality, rather than tackling income inequality itself.

Mr. Saez has advocated much more aggressive policies aimed at income inequality. “Falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented,” Mr. Saez said in his analysis.

The recent policy changes, including tax increases and financial regulatory reform, he wrote, “are not negligible but they are modest relative to the policy changes that took place coming out of the Great Depression. Therefore, it seems unlikely that U.S. income concentration will fall much in the coming years.”

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Doctor and Patient: Afraid to Speak Up to Medical Power

The slender, weather-beaten, elderly Polish immigrant had been diagnosed with lung cancer nearly a year earlier and was receiving chemotherapy as part of a clinical trial. I was a surgical consultant, called in to help control the fluid that kept accumulating in his lungs.

During one visit, he motioned for me to come closer. His voice was hoarse from a tumor that spread, and the constant hissing from his humidified oxygen mask meant I had to press my face nearly against his to understand his words.

“This is getting harder, doctor,” he rasped. “I’m not sure I’m up to anymore chemo.”

I was not the only doctor that he confided to. But what I quickly learned was that none of us was eager to broach the topic of stopping treatment with his primary cancer doctor.

That doctor was a rising superstar in the world of oncology, a brilliant physician-researcher who had helped discover treatments for other cancers and who had been recruited to lead our hospital’s then lackluster cancer center. Within a few months of the doctor’s arrival, the once sleepy department began offering a dazzling array of experimental drugs. Calls came in from outside doctors eager to send their patients in for treatment, and every patient who was seen was promptly enrolled in one of more than a dozen well-documented treatment protocols.

But now, no doctors felt comfortable suggesting anything but the most cutting-edge, aggressive treatments.

Even the No. 2 doctor in the cancer center, Robin to the chief’s cancer-battling Batman, was momentarily taken aback when I suggested we reconsider the patient’s chemotherapy plan. “I don’t want to tell him,” he said, eyes widening. He reeled off his chief’s vast accomplishments. “I mean, who am I to tell him what to do?”

We stood for a moment in silence before he pointed his index finger at me. “You tell him,” he said with a smile. “You tell him to consider stopping treatment.”

Memories of this conversation came flooding back last week when I read an essay on the problems posed by hierarchies within the medical profession.

For several decades, medical educators and sociologists have documented the existence of hierarchies and an intense awareness of rank among doctors. The bulk of studies have focused on medical education, a process often likened to military and religious training, with elder patriarchs imposing the hair shirt of shame on acolytes unable to incorporate a profession’s accepted values and behaviors. Aspiring doctors quickly learn whose opinions, experiences and voices count, and it is rarely their own. Ask a group of interns who’ve been on the wards for but a week, and they will quickly raise their hands up to the level of their heads to indicate their teachers’ status and importance, then lower them toward their feet to demonstrate their own.

It turns out that this keen awareness of ranking is not limited to students and interns. Other research has shown that fully trained physicians are acutely aware of a tacit professional hierarchy based on specialties, like primary care versus neurosurgery, or even on diseases different specialists might treat, like hemorrhoids and constipation versus heart attacks and certain cancers.

But while such professional preoccupation with privilege can make for interesting sociological fodder, the real issue, warns the author of a courageous essay published recently in The New England Journal of Medicine, is that such an overly developed sense of hierarchy comes at an unacceptable price: good patient care.

Dr. Ranjana Srivastava, a medical oncologist at the Monash Medical Centre in Melbourne, Australia, recalls a patient she helped to care for who died after an operation. Before the surgery, Dr. Srivastava had been hesitant to voice her concerns, assuming that the patient’s surgeon must be “unequivocally right, unassailable, or simply not worth antagonizing.” When she confesses her earlier uncertainty to the surgeon after the patient’s death, Dr. Srivastava learns that the surgeon had been just as loath to question her expertise and had assumed that her silence before the surgery meant she agreed with his plan to operate.

“Each of us was trying our best to help a patient, but we were also respecting the boundaries and hierarchy imposed by our professional culture,” Dr. Srivastava said. “The tragedy was that the patient died, when speaking up would have made all the difference.”

Compounding the problem is an increasing sense of self-doubt among many doctors. With rapid advances in treatment, there is often no single correct “answer” for a patient’s problem, and doctors, struggling to stay up-to-date in their own particular specialty niches, are more tentative about making suggestions that cross over to other doctors’ “turf.” Even as some clinicians attempt to compensate by organizing multidisciplinary meetings, inviting doctors from all specialties to discuss a patient’s therapeutic options, “there will inevitably be a hierarchy at those meetings of who is speaking,” Dr. Srivastava noted. “And it won’t always be the ones who know the most about the patient who will be taking the lead.”

It is the potentially disastrous repercussions for patients that make this overly developed awareness of rank and boundaries a critical issue in medicine. Recent efforts to raise safety standards and improve patient care have shown that teams are a critical ingredient for success. But simply organizing multidisciplinary lineups of clinicians isn’t enough. What is required are teams that recognize the importance of all voices and encourage active and open debate.

Since their patient’s death, Dr. Srivastava and the surgeon have worked together to discuss patient cases, articulate questions and describe their own uncertainties to each other and in patients’ notes. “We have tried to remain cognizant of the fact that we are susceptible to thinking about hierarchy,” Dr. Srivastava said. “We have tried to remember that sometimes, despite our best intentions, we do not speak up for our patients because we are fearful of the consequences.”

That was certainly true for my lung cancer patient. Like all the other doctors involved in his care, I hesitated to talk to the chief medical oncologist. I questioned my own credentials, my lack of expertise in this particular area of oncology and even my own clinical judgment. When the patient appeared to fare better, requiring less oxygen and joking and laughing more than I had ever seen in the past, I took his improvement to be yet another sign that my attempt to talk about holding back chemotherapy was surely some surgical folly.

But a couple of days later, the humidified oxygen mask came back on. And not long after that, the patient again asked for me to come close.

This time he said: “I’m tired. I want to stop the chemo.”

Just before he died, a little over a week later, he was off all treatment except for what might make him comfortable. He thanked me and the other doctors for our care, but really, we should have thanked him and apologized. Because he had pushed us out of our comfortable, well-delineated professional zones. He had prodded us to talk to one another. And he showed us how to work as a team in order to do, at last, what we should have done weeks earlier.

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Doctor and Patient: Afraid to Speak Up to Medical Power

The slender, weather-beaten, elderly Polish immigrant had been diagnosed with lung cancer nearly a year earlier and was receiving chemotherapy as part of a clinical trial. I was a surgical consultant, called in to help control the fluid that kept accumulating in his lungs.

During one visit, he motioned for me to come closer. His voice was hoarse from a tumor that spread, and the constant hissing from his humidified oxygen mask meant I had to press my face nearly against his to understand his words.

“This is getting harder, doctor,” he rasped. “I’m not sure I’m up to anymore chemo.”

I was not the only doctor that he confided to. But what I quickly learned was that none of us was eager to broach the topic of stopping treatment with his primary cancer doctor.

That doctor was a rising superstar in the world of oncology, a brilliant physician-researcher who had helped discover treatments for other cancers and who had been recruited to lead our hospital’s then lackluster cancer center. Within a few months of the doctor’s arrival, the once sleepy department began offering a dazzling array of experimental drugs. Calls came in from outside doctors eager to send their patients in for treatment, and every patient who was seen was promptly enrolled in one of more than a dozen well-documented treatment protocols.

But now, no doctors felt comfortable suggesting anything but the most cutting-edge, aggressive treatments.

Even the No. 2 doctor in the cancer center, Robin to the chief’s cancer-battling Batman, was momentarily taken aback when I suggested we reconsider the patient’s chemotherapy plan. “I don’t want to tell him,” he said, eyes widening. He reeled off his chief’s vast accomplishments. “I mean, who am I to tell him what to do?”

We stood for a moment in silence before he pointed his index finger at me. “You tell him,” he said with a smile. “You tell him to consider stopping treatment.”

Memories of this conversation came flooding back last week when I read an essay on the problems posed by hierarchies within the medical profession.

For several decades, medical educators and sociologists have documented the existence of hierarchies and an intense awareness of rank among doctors. The bulk of studies have focused on medical education, a process often likened to military and religious training, with elder patriarchs imposing the hair shirt of shame on acolytes unable to incorporate a profession’s accepted values and behaviors. Aspiring doctors quickly learn whose opinions, experiences and voices count, and it is rarely their own. Ask a group of interns who’ve been on the wards for but a week, and they will quickly raise their hands up to the level of their heads to indicate their teachers’ status and importance, then lower them toward their feet to demonstrate their own.

It turns out that this keen awareness of ranking is not limited to students and interns. Other research has shown that fully trained physicians are acutely aware of a tacit professional hierarchy based on specialties, like primary care versus neurosurgery, or even on diseases different specialists might treat, like hemorrhoids and constipation versus heart attacks and certain cancers.

But while such professional preoccupation with privilege can make for interesting sociological fodder, the real issue, warns the author of a courageous essay published recently in The New England Journal of Medicine, is that such an overly developed sense of hierarchy comes at an unacceptable price: good patient care.

Dr. Ranjana Srivastava, a medical oncologist at the Monash Medical Centre in Melbourne, Australia, recalls a patient she helped to care for who died after an operation. Before the surgery, Dr. Srivastava had been hesitant to voice her concerns, assuming that the patient’s surgeon must be “unequivocally right, unassailable, or simply not worth antagonizing.” When she confesses her earlier uncertainty to the surgeon after the patient’s death, Dr. Srivastava learns that the surgeon had been just as loath to question her expertise and had assumed that her silence before the surgery meant she agreed with his plan to operate.

“Each of us was trying our best to help a patient, but we were also respecting the boundaries and hierarchy imposed by our professional culture,” Dr. Srivastava said. “The tragedy was that the patient died, when speaking up would have made all the difference.”

Compounding the problem is an increasing sense of self-doubt among many doctors. With rapid advances in treatment, there is often no single correct “answer” for a patient’s problem, and doctors, struggling to stay up-to-date in their own particular specialty niches, are more tentative about making suggestions that cross over to other doctors’ “turf.” Even as some clinicians attempt to compensate by organizing multidisciplinary meetings, inviting doctors from all specialties to discuss a patient’s therapeutic options, “there will inevitably be a hierarchy at those meetings of who is speaking,” Dr. Srivastava noted. “And it won’t always be the ones who know the most about the patient who will be taking the lead.”

It is the potentially disastrous repercussions for patients that make this overly developed awareness of rank and boundaries a critical issue in medicine. Recent efforts to raise safety standards and improve patient care have shown that teams are a critical ingredient for success. But simply organizing multidisciplinary lineups of clinicians isn’t enough. What is required are teams that recognize the importance of all voices and encourage active and open debate.

Since their patient’s death, Dr. Srivastava and the surgeon have worked together to discuss patient cases, articulate questions and describe their own uncertainties to each other and in patients’ notes. “We have tried to remain cognizant of the fact that we are susceptible to thinking about hierarchy,” Dr. Srivastava said. “We have tried to remember that sometimes, despite our best intentions, we do not speak up for our patients because we are fearful of the consequences.”

That was certainly true for my lung cancer patient. Like all the other doctors involved in his care, I hesitated to talk to the chief medical oncologist. I questioned my own credentials, my lack of expertise in this particular area of oncology and even my own clinical judgment. When the patient appeared to fare better, requiring less oxygen and joking and laughing more than I had ever seen in the past, I took his improvement to be yet another sign that my attempt to talk about holding back chemotherapy was surely some surgical folly.

But a couple of days later, the humidified oxygen mask came back on. And not long after that, the patient again asked for me to come close.

This time he said: “I’m tired. I want to stop the chemo.”

Just before he died, a little over a week later, he was off all treatment except for what might make him comfortable. He thanked me and the other doctors for our care, but really, we should have thanked him and apologized. Because he had pushed us out of our comfortable, well-delineated professional zones. He had prodded us to talk to one another. And he showed us how to work as a team in order to do, at last, what we should have done weeks earlier.

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Media Decoder Blog: Indian Music Service, Taking Page From Spotify, Goes Pro

Western music fans have no shortage of digital music services to choose from, and that abundance is spreading around the world. Apple’s iTunes is now in 119 countries, and others are racing to plant their digital flags everywhere. This week, for example, Spotify opened in Italy, Poland and Portugal, bringing its reach to 23 countries.

But just as interesting, and in the long run perhaps as significant to competition, is the rise of services that serve regional markets intensely. One is Saavn, a Spotify-like streaming service that specializes in Indian music, and has garnered 10.5 million monthly users with advertising-supported free listening. This week it will announce that it has taken another page from Spotify’s book, by offering a premium version at $4 a month that eliminates the ads, lets users listen to songs offline and will eventually add other features like higher quality audio.

Saavn, which has offices in New York, India and Mountain View, Calif., has a catalog of 1.1 million songs in nine languages and is available in more than 200 countries, with about 70 percent of its consumption within India, said Rishi Malhotra, one of its founders. Like Spotify, iHeartRadio and other Western services, it is an official partner of Facebook. About 80 percent of its use is on mobile devices, Mr. Malhotra said, and when the premium service, Saavn Pro, is opened in March, it will at first be available only for Apple devices.

The pricing is significantly lower than Western services. “We wanted to make it globally acceptable,” said Mr. Malhotra, who is based in New York. “The $10 price point that you see from a lot of music services we use here is way out of reach from what would fly in India or a lot of other emerging markets.”

Saavn believes it can succeed in India not only through its catalog of Bollywood hits, but through technological touches that may be meaningful only to Indian listeners. One example is the ability to search for a Bollywood song based on the actor who lip-synchs it — often more memorable to fans than the “playback” singer who actually provided the voice.

If successful, Saavn Pro could give the company an advantage in India’s quickly developing digital music market, which already has a handful of streaming services, like Dhingana, as well as a strong presence in downloads from Nokia. Yet that market is still tiny for a country of India’s size and overall media spending. According to the International Federation of the Phonographic Industry, recorded music had only $141 million in trade (or wholesale) value in 2011. A recent report by Ernst & Young said that music and radio combined count for only 2.4 percent of India’s media and entertainment spending, which for 2011 it estimated at $18 billion.

Part of the reason for music’s small proportion of India’s media economy is that popular music in India is dominated by the film industry. But a greater reason is piracy; the federation estimates that 55 percent of Internet users in India go to unlicensed music services on a monthly basis. That is slowly starting to change, music executives say, as courts there crack down on infringement and legitimate digital services proliferate. Apple’s iTunes opened there in December, and Nokia says it sells 1.4 million songs a day at its download store in India.

And Indian record companies are approaching digital business without the baggage that has been complicating deals with Western labels and services for more than a decade, Mr. Malhotra added.

“The labels in India are not reluctant about digital,” he said. “It’s not like they are protecting against some established, older revenue stream. It’s all found revenue for them.”

---

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

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Britain Says Equine Drug May Have Entered Food Chain

PARIS — The scandal over horse meat in the European food chain widened Thursday from a case of mislabeling to one of food safety as public health authorities in Britain said that a powerful equine painkiller, potentially harmful to human health, “may have entered the food chain” in France.

British officials sought to reassure the public that the drug — phenylbutazone, or bute, an anti-inflammatory used commonly on lame horses — was found only in trace amounts in a small number of British horse carcasses. Out of 206 carcasses, 8 tested positive for bute, and just 6 of those carcasses were exported to France.

The drug is also used to treat arthritis in humans, and very large doses can cause a potentially fatal blood disorder, aplastic anemia, in which the bone marrow fails to produce enough blood cells.

Even before the discovery, the scandal had plunged the European food industry into crisis. Frozen foods, including hamburger, lasagna, spaghetti Bolognese and moussaka, have been withdrawn from supermarket freezers in Britain, Ireland, Sweden, France and Germany.

But the positive tests for the equine drug have raised fresh concerns, even in countries like France, where eating horse meat is more acceptable than in Britain, where it is taboo. Unlike cattle, which are raised for slaughter in controlled conditions, the lame horses or former plow animals that are sometimes slaughtered for consumption do not carry the same guarantees of origin or quality.

“Unscrupulous criminal elements have been profiting from these unfortunate animals by exploiting a hopelessly flawed horse passport scheme, lax animal export controls at ports and slaughterhouses willing to compromise animal welfare and public safety for a quick profit,” said David Wilson, the spokesman for the Ulster Society for the Prevention of Cruelty to Animals, in Northern Ireland. Suspect frozen beef hamburgers discovered in Ireland first triggered the crisis.

“Many horses that are either valueless or in suffering are being corralled in remote farmyards and packed into vehicles for transport to abattoirs in Ireland and the U.K.,” he said. “After slaughter, many are processed and find their way effortlessly into the European food chain.”

Health experts said that at the level found, a human would have to eat 500 or 600 burgers a day of 100 percent horse meat to be adversely affected.

The police investigating allegations that horse meat was mislabeled as beef said Thursday that they had arrested two men in Wales and another man in West Yorkshire, England, on Tuesday and were holding them on suspicion of fraud.

Checking food safety “from farm to fork” in Europe has been a persistent worry for two decades, since the crisis of mad cow disease in Britain threw the continent into a crisis and prompted a ban on British beef exports to Europe and the United States.

The current scandal has laid bare a supply chain for meat so murky and complex that officials and experts say it is easily susceptible to fraud and manipulation by organized crime. The convoluted route from slaughterhouse to plate has highlighted a weak system of accountability in a vast single market of almost 500 million people, where retailers use layers of meat traders to find the cheapest deals and no regular tests are conducted to authenticate meat products.

“In a cash-rich business like the meat industry, there is ample opportunity for criminals to bribe bureaucrats,” said Misha Glenny, an expert on organized crime in Europe. “Market opportunities create criminal opportunities.”

After days of investigation, French authorities announced on Thursday that they suspected fraud at a French company, Spanghero, which supplied meat — including large quantities of horse meat — to Comigel, a French-owned company whose Luxembourg factory used the meat to make frozen meals sold in supermarkets in 16 countries across Europe, including Britain and Sweden. They said they would suspend Spanghero’s operating license. The company denied any wrongdoing.

The French investigators said that the meat Spanghero sold to Comigel had originated in two Romanian slaughterhouses, in a shipment they said showed clues of containing horse meat. It was then bought by a Dutch food trader who sold it to a Cypriot-registered food trader who sent it to Spanghero.

“The investigation shows that Spanghero knew that the meat labeled as beef could be horse,” Benoît Hamon, France’s junior minister for social economy, said Thursday. “There was a strong suspicion.” Mr. Hamon added that the fraudulent meat sales had been going on for several months, and involved 28 companies and 13 countries.

Mr. Hamon said that Comigel should have suspected something was amiss. While Comigel maintained it did not realize the meat was not beef, he said, anyone in the business should have been able to tell the difference.

In a statement, Spanghero said that it was the victim, not the perpetrator, of the fraud. “Spanghero confirms having placed an order for beef, having been led to believe it received beef, and having sold back what it thought was beef, properly labeled as such, in line with European and French regulations.”

Chris Elliott, director of the Institute for Global Food Security at Queen’s University, Belfast, said the complex supply chain was vulnerable to fraud since the contents of meat shipments were not routinely verified.

“There are multiple contracts in these supply chains, and the contracts are very tight,” he said. “But there are absolutely no checks. It is really done on trust that the piece of paper that says that you have five tons of beef is beef. There is no verification of the audit trail.”

Spanghero said earlier that it will sue its Romanian suppliers, though French authorities say those suppliers acted in good faith and properly labeled their shipment as horse meat.

“We have respected all of the labeling laws,” Iulian Cazacut, the director of the meatpacking plant, Doly-Com, in Romania’s impoverished northeast, said in an interview. “I am not responsible for the mistakes of others.”

Mr. Cazacut said the company, which processed 427 tons of horse last year, bought horses, no longer fit for work, from local farmers for around 60 cents a pound, far less than the approximately $2.50 a pound fetched by beef.

Dan Bilefsky reported from Paris, and Stephen Castle from London. Reporting was contributed by George Calin from Bucharest, Romania; Andrew Higgins from Brussels; Douglas Dalby from Dublin; and Melissa Eddy from Berlin.

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Service Cuts May Arise With Merger of Airlines

Donna McWilliam/Getty Images

Thomas W. Horton, chief of American Airlines, left, with Doug Parker, chief executive of US Airways, at a news conference.

And then there were three.

The airline industry took a decisive step toward greater concentration on Thursday with the announcement that American Airlines and US Airways had agreed to merge, forming the nation’s biggest airline. The merged airline, to be called American, leaves just three major carriers — Delta Air Lines and United Airlines too — able to offer extensive domestic and international service, a sharp contraction over the last decade.

But while airline executives argue that mergers are good for passengers because they bring more service to more destinations, some economists and consumer advocates warn that all this consolidation comes at a price for travelers.

With fewer carriers, passengers have fewer options; fares and fees are now more likely to go up, particularly for flights between midsize cities. And more cities, especially smaller ones, can expect to see further reductions in service.

“It’s much easier to have tacit collusion with just three airlines,” said George Hoffer, a transportation economist at the University of Richmond. “It’s not illegal. But it’s like having a few big people in a small boat. Anyone’s decisions tie you all together.”

That helps explain why fees had become so uniform within the industry in recent years, he said, and why all airlines now charge extra fees beyond ticket prices for things like checking bags, rebooking reservations or even picking seats or boarding early.

Those extra fees now account for a growing share of airline revenue and are a big reason behind the industry’s renewed profitability.

Fares, too, have risen in recent years, according to the latest government statistics. Some of that increase, analysts said, reflects rising oil prices. And while airfares on average are still lower than they were in 1995, once adjusted for inflation, they have been steadily rising since 2008.

But some airports, where the number of carriers has fallen, have had steep increases in fares. Ticket prices between Delta’s hub in Atlanta and Detroit, for instance, rose more than 20 percent from 2007 to 2011, while the number of carriers serving that route fell to two from four, according to a study released last year.

Still, most analysts expect the merger to be cleared by federal antitrust authorities, who have approved seven major mergers in the last decade.

The last time the Justice Department challenged a merger was the proposed combination of United Airlines and US Airways in 2001. That merger was rejected on the ground it would reduce choice and possibly lead to higher fares.

Since then, regulators have taken a different view of airline mergers. Instead of looking at any carrier’s overall market share, antitrust authorities now examine whether a merger would decrease competition on specific routes.

The department raised no objections to the merger of Delta and Northwest in 2008. It required United to sell only a handful of takeoff rights at Newark Liberty Airport before allowing its merger with Continental in 2010. And when Southwest bought AirTran, federal regulators found in 2011 that “the merged firm will be able to offer new service routes that neither serves today.”

A decade ago, the Justice Department “would not have stomached mergers the size of Delta-Northwest, United-Continental, or American-US Airways,” said Paul Stephen Dempsey, a professor of global governance in air and space law at McGill University. “Now, having approved the gargantuan Delta and United acquisitions, it cannot equitably deny American the same.”

“Apparently, Washington believes that this is the optimum path to industry health, and that  concentration and collusion is preferable to regulated competition,” he said.

Airline executives say mergers are necessary to reduce financial volatility and restore a measure of stability to a business that lost about $60 billion in the last decade. Instead of stifling competition, the argument goes, bigger airlines with bigger networks provide passengers with more travel options, more destinations and, theoretically, better service.

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Phys Ed: Getting the Right Dose of Exercise

Phys Ed

Gretchen Reynolds on the science of fitness.

Fitness Tracker

Marathon, half-marathon, 10k and 5K training plans to get you race ready.

A common concern about exercise is that if you don’t do it almost every day, you won’t achieve much health benefit. But a commendable new study suggests otherwise, showing that a fairly leisurely approach to scheduling workouts may actually be more beneficial than working out almost daily.

For the new study, published this month in Exercise & Science in Sports & Medicine, researchers at the University of Alabama at Birmingham gathered 72 older, sedentary women and randomly assigned them to one of three exercise groups.

One group began lifting weights once a week and performing an endurance-style workout, like jogging or bike riding, on another day.

Another group lifted weights twice a week and jogged or rode an exercise bike twice a week.

The final group, as you may have guessed, completed three weight-lifting and three endurance sessions, or six weekly workouts.

The exercise, which was supervised by researchers, was easy at first and meant to elicit changes in both muscles and endurance. Over the course of four months, the intensity and duration gradually increased, until the women were jogging moderately for 40 minutes and lifting weights for about the same amount of time.

The researchers were hoping to find out which number of weekly workouts would be, Goldilocks-like, just right for increasing the women’s fitness and overall weekly energy expenditure.

Some previous studies had suggested that working out only once or twice a week produced few gains in fitness, while exercising vigorously almost every day sometimes led people to become less physically active, over all, than those formally exercising less. Researchers theorized that the more grueling workout schedule caused the central nervous system to respond as if people were overdoing things, sending out physiological signals that, in an unconscious internal reaction, prompted them to feel tired or lethargic and stop moving so much.

To determine if either of these possibilities held true among their volunteers, the researchers in the current study tracked the women’s blood levels of cytokines, a substance related to stress that is thought to be one of the signals the nervous system uses to determine if someone is overdoing things physically. They also measured the women’s changing aerobic capacities, muscle strength, body fat, moods and, using sophisticated calorimetry techniques, energy expenditure over the course of each week.

By the end of the four-month experiment, all of the women had gained endurance and strength and shed body fat, although weight loss was not the point of the study. The scientists had not asked the women to change their eating habits.

There were, remarkably, almost no differences in fitness gains among the groups. The women working out twice a week had become as powerful and aerobically fit as those who had worked out six times a week. There were no discernible differences in cytokine levels among the groups, either.

However, the women exercising four times per week were now expending far more energy, over all, than the women in either of the other two groups. They were burning about 225 additional calories each day, beyond what they expended while exercising, compared to their calorie burning at the start of the experiment.

The twice-a-week exercisers also were using more energy each day than they had been at first, burning almost 100 calories more daily, in addition to the calories used during workouts.

But the women who had been assigned to exercise six times per week were now expending considerably less daily energy than they had been at the experiment’s start, the equivalent of almost 200 fewer calories each day, even though they were exercising so assiduously.

“We think that the women in the twice-a-week and four-times-a-week groups felt more energized and physically capable” after several months of training than they had at the start of the study, says Gary Hunter, a U.A.B. professor who led the experiment. Based on conversations with the women, he says he thinks they began opting for stairs over escalators and walking for pleasure.

The women working out six times a week, though, reacted very differently. “They complained to us that working out six times a week took too much time,” Dr. Hunter says. They did not report feeling fatigued or physically droopy. Their bodies were not producing excessive levels of cytokines, sending invisible messages to the body to slow down.

Rather, they felt pressed for time and reacted, it seems, by making choices like driving instead of walking and impatiently avoiding the stairs.

Despite the cautionary note, those who insist on working out six times per week need not feel discouraged. As long as you consciously monitor your activity level, the findings suggest, you won’t necessarily and unconsciously wind up moving less over all.

But the more fundamental finding of this study, Dr. Hunter says, is that “less may be more,” a message that most likely resonates with far more of us. The women exercising four times a week “had the greatest overall increase in energy expenditure,” he says. But those working out only twice a week “weren’t far behind.”

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Phys Ed: Getting the Right Dose of Exercise

Phys Ed

Gretchen Reynolds on the science of fitness.

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Marathon, half-marathon, 10k and 5K training plans to get you race ready.

A common concern about exercise is that if you don’t do it almost every day, you won’t achieve much health benefit. But a commendable new study suggests otherwise, showing that a fairly leisurely approach to scheduling workouts may actually be more beneficial than working out almost daily.

For the new study, published this month in Exercise & Science in Sports & Medicine, researchers at the University of Alabama at Birmingham gathered 72 older, sedentary women and randomly assigned them to one of three exercise groups.

One group began lifting weights once a week and performing an endurance-style workout, like jogging or bike riding, on another day.

Another group lifted weights twice a week and jogged or rode an exercise bike twice a week.

The final group, as you may have guessed, completed three weight-lifting and three endurance sessions, or six weekly workouts.

The exercise, which was supervised by researchers, was easy at first and meant to elicit changes in both muscles and endurance. Over the course of four months, the intensity and duration gradually increased, until the women were jogging moderately for 40 minutes and lifting weights for about the same amount of time.

The researchers were hoping to find out which number of weekly workouts would be, Goldilocks-like, just right for increasing the women’s fitness and overall weekly energy expenditure.

Some previous studies had suggested that working out only once or twice a week produced few gains in fitness, while exercising vigorously almost every day sometimes led people to become less physically active, over all, than those formally exercising less. Researchers theorized that the more grueling workout schedule caused the central nervous system to respond as if people were overdoing things, sending out physiological signals that, in an unconscious internal reaction, prompted them to feel tired or lethargic and stop moving so much.

To determine if either of these possibilities held true among their volunteers, the researchers in the current study tracked the women’s blood levels of cytokines, a substance related to stress that is thought to be one of the signals the nervous system uses to determine if someone is overdoing things physically. They also measured the women’s changing aerobic capacities, muscle strength, body fat, moods and, using sophisticated calorimetry techniques, energy expenditure over the course of each week.

By the end of the four-month experiment, all of the women had gained endurance and strength and shed body fat, although weight loss was not the point of the study. The scientists had not asked the women to change their eating habits.

There were, remarkably, almost no differences in fitness gains among the groups. The women working out twice a week had become as powerful and aerobically fit as those who had worked out six times a week. There were no discernible differences in cytokine levels among the groups, either.

However, the women exercising four times per week were now expending far more energy, over all, than the women in either of the other two groups. They were burning about 225 additional calories each day, beyond what they expended while exercising, compared to their calorie burning at the start of the experiment.

The twice-a-week exercisers also were using more energy each day than they had been at first, burning almost 100 calories more daily, in addition to the calories used during workouts.

But the women who had been assigned to exercise six times per week were now expending considerably less daily energy than they had been at the experiment’s start, the equivalent of almost 200 fewer calories each day, even though they were exercising so assiduously.

“We think that the women in the twice-a-week and four-times-a-week groups felt more energized and physically capable” after several months of training than they had at the start of the study, says Gary Hunter, a U.A.B. professor who led the experiment. Based on conversations with the women, he says he thinks they began opting for stairs over escalators and walking for pleasure.

The women working out six times a week, though, reacted very differently. “They complained to us that working out six times a week took too much time,” Dr. Hunter says. They did not report feeling fatigued or physically droopy. Their bodies were not producing excessive levels of cytokines, sending invisible messages to the body to slow down.

Rather, they felt pressed for time and reacted, it seems, by making choices like driving instead of walking and impatiently avoiding the stairs.

Despite the cautionary note, those who insist on working out six times per week need not feel discouraged. As long as you consciously monitor your activity level, the findings suggest, you won’t necessarily and unconsciously wind up moving less over all.

But the more fundamental finding of this study, Dr. Hunter says, is that “less may be more,” a message that most likely resonates with far more of us. The women exercising four times a week “had the greatest overall increase in energy expenditure,” he says. But those working out only twice a week “weren’t far behind.”

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In Japan, the Fax Machine Is Anything but a Relic

Kosuke Okahara for The New York Times

Yuichiro Sugahara, whose company delivers bento lunchboxes, mostly through fax orders.

TOKYO — Japan is renowned for its robots and bullet trains, and has some of the world’s fastest broadband networks. But it also remains firmly wedded to a pre-Internet technology — the fax machine — that in most other developed nations has joined answering machines, eight-tracks and cassette tapes in the dustbin of outmoded technologies.

Last year alone, Japanese households bought 1.7 million of the old-style fax machines, which print documents on slick, glossy paper spooled in the back. In the United States, the device has become such an artifact that the Smithsonian is adding two machines to its collection, technology historians said.

“The fax was such a success here that it has proven hard to replace,” said Kenichi Shibata, a manager at NTT Communications, which led development of the technology in the 1970s. “It has grown unusually deep roots into Japanese society.”

The Japanese government’s Cabinet Office says that almost 100 percent of business offices and 45 percent of private homes had a fax machine as of 2011.

Yuichiro Sugahara learned the hard way about his country’s deep attachment to the fax machine, which the nation popularized in the 1980s. A decade ago, he tried to modernize his family-run company, which delivers traditional bento lunchboxes, by taking orders online. Sales quickly plummeted.

Today, his company, Tamagoya, is thriving with the hiss and beep of thousands of orders pouring in every morning, most by fax, many with minutely detailed handwritten requests like “go light on the batter in the fried chicken” or “add an extra hard-boiled egg.”

“There is still something in Japanese culture that demands the warm, personal feelings that you get with a handwritten fax,” said Mr. Sugahara, 43.

Japan’s reluctance to give up its fax machines offers a revealing glimpse into an aging nation that can often seem quietly determined to stick to its tried-and-true ways, even if the rest of the world seems to be passing it rapidly by. The fax addiction helps explain why Japan, which once revolutionized consumer electronics with its hand-held calculators, Walkmans and, yes, fax machines, has become a latecomer in the digital age, and has allowed itself to fall behind nimbler competitors like South Korea and China.

“Japan has this Galápagos effect of holding on to some things they’re comfortable with,” said Jonathan Coopersmith, a technology historian who is writing a book on the machine’s rise and fall. “Elsewhere, the fax has gone the way of the dodo.”

In Japan, with the exception of the savviest Internet start-ups or internationally minded manufacturers, the fax remains an essential tool for doing business. Experts say government offices prefer faxes because they generate paperwork onto which bureaucrats can affix their stamps of approval, called hanko. Many companies say they still rely on faxes to create a paper trail of orders and shipments not left by ephemeral e-mail. Banks rely on faxes because, they say, customers are worried about the safety of their personal information on the Internet.

Even Japan’s largest yakuza crime syndicate, the Kobe-based Yamaguchi-gumi, has used faxes to send notifications of expulsion to members, the police say.

After the deadly earthquake and tsunami in northeastern Japan in 2011, there was a small boom in fax sales to replace machines that had been washed away. One of the hottest sellers is a model that is powered by batteries so it will keep working during power failures caused by natural disasters.

At Tamagoya, Mr. Sugahara has turned his company’s reliance on the fax and standard telephones into an art form. Every morning, orders for about 62,000 lunches pour in, about half by fax. Most of those lunches are cooked and put onto trucks even before the last order is taken. A small army of 100 fax and telephone operators carefully coordinate deliveries, and fewer than 60 lunches — or 0.1 percent — are wasted.

Hisako Ueno contributed reporting.

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DealBook: In First Disclosure, Getco Reports Years of Sagging Profit

One of the most powerful firms in the secretive high-speed trading industry reported on Wednesday that its profit and revenue had been declining steadily since the financial crisis.

Getco, a privately held company, released its financial results for the first time as part of its impending purchase of Knight Capital Group, the trading firm that suffered a debilitating software malfunction last August. Getco, which was founded in Chicago in 1999, won a bidding war for Knight in December, offering a combination of cash and shares that valued Knight at around $1.4 billion.

It was no surprise to analysts that Getco had struggled in the last few years because of withering trading activity in many financial markets, but the magnitude of the decline was striking. The company’s profit in the first nine months of last year was $25 million, down 82 percent from a year earlier, and its trading revenue fell 43 percent, to $414 million, in the same period. That was a much sharper drop than the decline in trading volume on the markets where Getco makes most of its money.

The disclosure did not appear to weigh on the prospects for the Knight deal. Getco said the decline in profit was in large part because of its investment in new business lines, which it projects will begin to pay off this year. Richard Repetto, an analyst at Sandler O’Neill, said that the drop in profit and revenue was sharper than expected, but that “the math on the deal is still pretty safe.”

Knight’s stock, which rose after the deal was announced in December, gained 2 cents, or 0.5 percent, to $3.72 on Wednesday.

Beyond the deal, Getco’s struggles illustrate the larger challenges facing computerized trading companies. While these high-speed firms have come to dominate the trading world, accounting for more than half of all stock trading, they have encountered sliding trading volumes and less extreme short-term swings in the prices of financial assets.

Getco’s overall expenses have fallen in recent years, but the costs of keeping computers close to the big exchanges and maintaining high-speed data streams were more than three times as high in the first nine months of last year as they were in all of 2008. Trading revenue in the first nine months of 2012 was barely a third of what it was in all of 2008.

Getco said in its filing that many competitors were “making decisions about their long-term ability to compete across asset classes and product types,” leading some of them to close or scale back. Knight announced recently that its profit in the fourth quarter of 2012 was $6.5 million, down 84 percent from a year earlier, in part because of costs related to its Aug. 1 programming problem that flooded the market with errant trades, leading to losses of $458 million. Its fourth-quarter revenue fell 16 percent, to $288 million.

Through the merger with Knight, Getco will become a publicly traded company. Together, the firms will become one of the largest players in the trading of American stocks, though they did not discuss their market share in Wednesday’s filing.

A majority of Getco’s revenue comes from trading American stocks, using sophisticated computer algorithms to dart in and out of trading positions and take advantage of small moves in stock prices and the rebates offered by exchanges. The company has been expanding in other markets around the world, but trading volume has declined in many of those markets as well.

Getco is also pushing to expand its business trading on behalf of clients. But it still made 94 percent of its revenue last year from trading with its own money.

The filing was made on Wednesday as part of the process of winning shareholder support for the merger. The deal is subject to the approval of shareholders and regulators, but the companies expect to close it in the second quarter of this year.

Knight was attractive to Getco in part because it has a reliable business buying and selling the shares of small retail investors, who are generally easier to make money trading against than large institutional investors.

The companies’ best hope for future growth appears to be in the changes that financial reform legislation is making to markets in the United States and Europe. Wednesday’s filing said these changes were likely to push more trading of bonds and derivatives onto electronic platforms where Knight and Getco can participate.

In the filing, Getco also said that it was positioned to take advantage of the broader challenges facing the high-speed trading industry and predicted that its earnings would rise sharply this year.

“Getco believes that it stands to benefit from this period of rationalization and consolidation,” the filing said, “as it is positioned to potentially capture a greater share of activity if and when market volumes and volatilities increase.”

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