Awaited Opinion

THE U.S WORKFORCE [NON-FARM PAYROLL]

noreply@blogger.com (awaited opinion) — Sun, 22 Mar 2020 17:11:00 +0000

The backbone of a country is its workforce, as an economy is mainly fueled by its productivity. Productivity gives us an indication of the growth pace of an economy, particularly its level of spending. My high school economics teacher used to say “if America catches a cold the whole world sneezes” hence this article attests to that statement by discussing non-farm payroll which is an indicator of productivity. Read More

The Paradox Nature of Trading

noreply@blogger.com (awaited opinion) — Wed, 07 Aug 2019 18:55:00 +0000

If you have ever wondered why only a few are truly successful in trading and why most of them are considered losers according to societal norms then this article is for you.

Society has taught us specific and appropriate skills that should carry us through life especially achieving success in other occupations hence the majority of society’s brightest and most accomplished people tend to fail so miserably as traders. The reason is because trading requires thinking in probabilities, which means surrendering all those skills we have acquired to achieve in every other aspect of our lives.

In financial markets, core trading in securities is not only limited to fundamental analysis and technical analysis but the most overlooked important factor is mental analysis. Read more

15 CHALLENGES Every Entrepreneur Will Face

noreply@blogger.com (awaited opinion) — Sat, 29 Jun 2019 07:53:00 +0000

Entrepreneurship Is Not For The Faint Hearted

noreply@blogger.com (awaited opinion) — Sat, 29 Jun 2019 07:38:00 +0000

With the world becoming more decentralized and big corporations either reskilling or retrenching people due to artificial intelligence technology has been incorporated into business operations. People are forced to be self-sufficient and most of them look into Small Medium and Micro Enterprises (SMME) as an option.

SMME’s have been attracting massive attention lately, especially since globally formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies...read more

We Are Governed by Emotions

noreply@blogger.com (awaited opinion) — Fri, 10 May 2019 09:30:00 +0000

Picture: Sourced from awaited opinion

Human behaviour tends to repeat itself and it is somewhat predictable. Rational behaviour states that people make decisions based on the optimal level of benefit with a maximum level of utility. Therefore when making a choice we gather all the information available and tend to think that our decision is independent of others.

Truth is we tend to take the well-being of others into account and have a tendency to favour evidence that confirms our existing biases. In this case rationality holds no ground, as intuitively we have a need to fulfill our hard-wired desire to go with the crowd.

Hence, behavioural economics is important as it helps...read more

3 Tips On Dealing With Credit

noreply@blogger.com (awaited opinion) — Fri, 12 Apr 2019 09:03:00 +0000

Let’s be honest being an adult has its own wake up calls especially when we start receiving bills. I know old people have given us advice that worked for them, however things are different now and we need different approaches.

The working-class millennials are finding themselves in more debt than ever and it’s a conversation no one wants to talk about because it’s either embarrassing or not Instagram appropriate. Trust me, going to university does not teach you how to handle money neither does employment.

Instead accomplishing all these things puts most people under pressure as suddenly, they have study loans to repay, rent, cars, clothes, cellphone contracts, Netflix subscriptions, gym membership, going out and etc. Let’s face it life is expensive and to cope with these pressures credit was introduced.

Credit is instant money that allows people the ability to buy now and pay later. Some say it is the biggest oppressor of our time and the fact that people are encouraged to get into debt for a better credit score is appalling. It is a solution for our impulsiveness and irrationality hence its prominence. However, credit is amazing when used right and for profitable reasons...Read More

Fintech Changing The Face of Banking In South Africa

noreply@blogger.com (awaited opinion) — Tue, 26 Mar 2019 12:57:00 +0000

We live in a world where people are not interested in the bank itself but the banking services. Digitalization has made it so easy for customers to just click and transact. Therefore, in a world where the market dictates the terms, banks need to position themselves in a manner that allows them to provide the ideal conditions.

According to an Accenture Strategy research, 66% of customers execute half of their banking transactions online, and 71% are open to automated support. This growing phenomenon has obligated banks to invest in enhancing their digital capabilities, as digital operational fees incur low costs or rather nonexistence costs.

Fintech is changing the face of banking, read more

Money Creation

noreply@blogger.com (awaited opinion) — Fri, 08 Mar 2019 10:23:00 +0000

Money makes the world go round! Therefore we must understand how it works, in order to attract it, keep it and make it work for us.

We are taught that the amount of money created in an economy depends on the monetary policy of the central bank. The monetary policy varies from setting the interest rate, printing notes, or even through purchasing assets or quantitative easing. Whichever way it’s created, money eventually ends up in the hands of the people through banks.

Banks are then required to hold a certain portion as reverses and they tend to loan the rest. This simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. This money then circulates in the economy and eventually lands in your hands.

The big question is how do you claim your piece of the pie and retain that money in your pocket?

The Fourth Industrial Revolution: Life made simple!

noreply@blogger.com (awaited opinion) — Mon, 11 Feb 2019 13:03:00 +0000

The first thing you do when you wake up is to check your phone, whether to switch off your alarm, look at the time or browse through social media. Our cell phones are so part of our lives and it’s hard to imagine life without them. That’s the core definition of the fourth industrial revolution, machines interacting with human beings.

The fourth industrial revolution has come to enhance the human experience. The fusion of technology has blurred the lines between physical, digital and biological spheres, which is interesting, because we are unable to tell what is real from what isn’t.

Let’s be honest, our smart devices know us better than our real best friends, they know the type of music we listen too, what advices we seek and even the people we talk too. So wouldn’t it be wonderful if we used our devices for career recommendations suited to our personalities, cities aligned to where we want to work and even connecting with the people and spaces that could elevate our careers.

Imagine a world where everyone had all the information they needed about themselves, in that way we would have the right people in the right jobs, and eventually eradicate unemployment. I know I am reaching, but the fourth industrial revolution has inspired endless opportunities.

Artificial intelligence is the creator of all these opportunities, it is the intelligence demonstrated by machines contrary to the natural human and animal intelligence. I know the thought of robots scares most people and makes them feel they will be replaced by creepy emotionless species. But the truth is; those species are already watching our every move on Facebook, instagram and even whatsapp, in fact if data is needed on human behaviour that’s the best place to begin finding it.

That’s the beauty of artificial intelligence; it has reduced the cost of prediction. That is, taking information you have to generate information you don’t have. Therefore the process of forecasting future sales, for example, can be made easier by dictating human behaviour.

To take it a step further artificial intelligence eliminates human error by automating decisions. So by giving people a few options to a question and automating their answers, it eliminates information asymmetry. This changes the theory of rational expectation as decisions are now rational.

Based on accurate information, suppliers will know what consumers seek; this will effectively heighten the customer experience as demand meets supply. Essentially artificial intelligence changes the practice and thinking of economics, in fact it inspires innovative ways of traditional systems of production, management and governance.

I know ethical concerns have risen concerning artificial intelligence, where do we draw the line and what regulations should be in place to prevent the over manipulation genetics for desirable traits. The truth is robots could never replace humans as they no general intelligence yet; they are customized for a certain purpose unlike humans. So don’t be afraid no one is going to take your job!

All we need to do is educate ourselves on how we can make artificial intelligence work for us. Find new ways of learning and new ways on conducting business. When we commit to lifetime learning and development in their area of expertise we won’t lose relevance. Ultimately we as humans are in control and need to channel this control correctly to make this world a better place.

Chasing The Purchasing Power Pace

noreply@blogger.com (awaited opinion) — Thu, 20 Sep 2018 16:55:00 +0000

Did you know that the value of your money will be worth half its value in approximately 11 years’ time? And the unfortunate thing is that you cannot do anything about it thanks to the silent “killer” causing havoc in our economies called inflation.

Inflation is a general increase in prices and fall in the purchasing value of money. Every central bank’s main purpose is to control price stability, therefore a Monetary Policy Committee is appointed, mainly consisting of six people, to decide on the repo rate using all the information available. Inflation is targeted between 3-6% in South Africa and it is been left unchanged at 6.5% for several quarters.

To determine how inflation erodes the value of money the “Rule of 72” is used to give estimation on how long will it take for your money’s purchasing power to halve.

The formula is:

Years =72 / inflation rate.

Since South Africa’s inflation rate is currently 6.5%, it will take 11 years for your money’s purchasing power to halve.

The “Rule of 72” is also used for various situations that have a growth rate. For instance, if the fixed deposit “investment” from your bank offers you 6% on your investment then it will take 12 years for your “investment” to double your money. Therefore, knowing that due to inflation the value of your money would half in 11 years’ time, would you still consider the 6% rate on the fixed deposit as a good form of investment? I don’t think so!

The Rule of 72 assists us in making financial estimates by asking ourselves important questions in terms of hedging inflation by looking for investments that outpace it.

We all want to be smart with our money by making it work for us, but what type of savings and investments would be ideal in times like these?

Personally, I’m risk loving and always seek ways of getting better returns, so I’m probably not the most qualified person to give advice (lol). However we live in fun times where cryptocurrencies and foreign exchange markets are a thing, so there is nothing stopping us millennials from learning how it works and taking advantage. Investing in stocks, bonds, property and sustainable businesses has been proven for years as being the best form of investments.

Therefore next time you are offered a fixed income policy, fixed annuities, education plan for your 5 months old child, or any form of fixed “investment”, please consider the Rule of 72 to guide your decision.

References

Bresiger.G. (2018).Combating Retirement's Silent Killer: Inflation. Investopedia

https://www.investopedia.com/articles/retirement/07/inflation-effects-retirement.asp

Hange.L. (2017). Hawks and Doves of Inflation. Awaited Opinion.

http://awaitedopinion.blogspot.com/2017/10/hawks-and-doves-of-inflation.html

(2018).The buying power of money: Why 72 is an important number in business. Way to Wealth.

http://waytowealthpro.com/blog/buying-power-money-why-72-important-number-business

(2018). How does inflation affect fixed-income investments? Investopedia.

https://www.investopedia.com/ask/answers/021615/how-does-inflation-affect-fixedincome-investments.asp

We earn less than men because of choice!

noreply@blogger.com (awaited opinion) — Tue, 12 Jun 2018 13:31:00 +0000

Growing up I have always been told that “life is a choice”, however now that I’m older life has been more of a series of never ending opportunity costs. It seems as though one could never have it all despite the efforts of trying to make the right choices.

I plan to climb the corporate ladder like most of my male colleagues, however I cannot help but think of the choices (or rather personal sacrifices) I would have to make in future for the sake of my career advancement. As I am faced with the fact that only 29% of senior positions are occupied by women.

Regardless of having the equal opportunities, qualifications, jobs and salaries; a research conducted by Ipsos in 2017 found that, on average, women in South Africa earned 27% less than their male counterparts. Effectively, this means women earn in a full year what men earn in eight months due to the gender pay gap.

Gender pay gap is the average difference between the earnings for men and women who are working.

There are numerous factors that hinder the gap from reducing.

It is commonly known that occupations that are risky or need to be executed under stressful conditions result in higher remuneration than those in pleasant environments. A number of studies have shown that there are more females than males enrolled in universities, however these young women tend to choose less challenging degrees which result in lower earning careers. Women are, on average, risk aversion which tends to affect our career decisions.
They often say to get ahead in business; you need negotiation skills, competitiveness and grow meaningful networks. Status quo. discourage women in being competitive in the labour market as it is labeled as abrasive, therefore most women voluntarily avoid jobs with pay for performance stipulations. Surprisingly women are less likely to neither negotiate a salary nor ask for an increase, we in most cases accept what is offered. We also have a lot of people around us whom we hardly benefit from career wise, in essence lowering our reliance on our informal networks to seek promotions.
Despite the modern integrated gender roles, women still work shorter hours and have more workforce interruptions due to unpaid family responsibilities. It is important to know that the gender wage gap is significant for women between 20 and 35 as it a childbearing age. This might be seen as a short term setback, however raising a family consumes more working hours for women in the long run resulting in lesser pay. Choosing to have a family can oblige one to make more sacrifices about their career.

Subsequently the gender pay gap reflects people’s individual preference and their priorities.

However the “glass ceiling” effect might not be entirely based on preference, it is a rising gender pay gap as people move up the wage distribution. It reflects the barriers women face in accessing the higher ranks of the occupational ladder based on discriminatory promotion practices. Discriminatory practices such as speculations that men dislike having a female boss, women are “newcomers” therefore it takes time to move up the ranks, and women tend to take things personal.

I recently took things personally when I was made to feel very uncomfortable by a male manager; as a result I have been very withdrawn since the incident. I fear my reaction to this can be detrimental to my career advancement if I am not careful.

In conclusion we cannot choose what happens to us but we can choose how we react. We should not view the gender pay gap as a form of inequality as the word inequality does not necessarily mean its unfair, instead we should research ways on how we can enhance our career dynamics to work at our advantage. For men, business is a game and they play to win, therefore there is nothing hindering us from emulating that notion and still embracing our femininity.

References

Bac, L.(2018). Percentage of women in senior roles in South Africa creeps up. BBrief.

https://www.bbrief.co.za/2018/03/08/percentage-of-women-in-senior-roles-in-south-africa-creeps-up/

Blau, F.D. & Kahn, L.M.(2016). The Gender Wage Gap: Extent, Trends, and Explanations. IZA Discussion Papers, 9656.

http://ftp.iza.org/dp9656.pdf

Cardoso, A.R. , Guimaraes, P & Portugal, P. (2016). What drives the gender wage gap? A look at the role of firm and job-title heterogeneity. Oxford Economic Papers, 68 (2): 506–524.

http://digital.csic.es/bitstream/10261/133512/4/Cardoso-OxfEcPap-2016-v68-p506.pdf

Clifford, J (2017). The Economics of Inequality- The Gender Pay Gap- Part 1. ACDCLeadership.

https://www.youtube.com/watch?v=7fCBsugN_g0

Makou, G. (2018). Do South African women earn 27% less than men? Africa Check.

https://africacheck.org/reports/south-african-women-earn-27-less-men/

Rachelson, D. (2015). Play to win. Brandingmarketing YOU Publications:Strathavon.

There's more to a Blue Monday!

noreply@blogger.com (awaited opinion) — Mon, 26 Mar 2018 23:51:00 +0000

A week ago I arrived at work and noticed that about 10 people wore the same coloured baby blue shirt, myself included. When asked if it was planned or just a coincident, majority jokingly replied by say “it’s a Blue Monday”. In as much as I believe it was a mere coincident, I couldn’t help but wonder if there was more to this.

Alexander Kjerulf (Forbes, 2013) described a Blue Monday as a set of negative emotions that many people get at the beginning of the workweek normally due to unhappiness at work. It contains elements of depression, tiredness, hopelessness and a sense that work is unpleasant but unavoidable. Monday blues are contagious, hence their impact is understandable in a work environment where there’s physical contact, surprisingly it does not end there as financial markets are impacted too.

Financial Markets are known to be efficient, hence the efficient market hypothesis (EMH) that states that at any given time prices fully reflect all available information on a particular financial market. However there are market anomalies that contradict the EMH, such as the time series Monday effect anomaly which suggests that returns on other Mondays are less than any other day of the week.

An unsettled debate has been whether the Monday effect is driven by individual or institutional investors. Individual investors tend to have more sell orders on Mondays, whereas institutional investors tend to have fewer transactions on Mondays or if they have more or "normal" transactions then they result in large negative returns; however both types of investors are influenced by information received on Friday or over the weekend.

Clearly the Monday effect is driven by both types of investors, interesting enough the mood of investors play a significant role as most of them tend to be pessimistic on Mondays. This is called the Blue Monday Hypothesis, where investors take fewer risks on their investments. Therefore knowing certain investor behaviors is advantageous as it could be very profitable.

So next time you consciously embrace a Blue Monday think of all the untapped profits rooming around in the financial markets streets waiting for you to cease! LOL

References

Brooks, R.M & Hongshik, K. (1997). The Individual Investor and the Weekend Effect: A Reexamination with Intraday Data. The Quarterly Review of Economics and Finance, 37(3):725-737.

https://www.sciencedirect.com/science/article/abs/pii/S106297699790020X

Pettengill, G.N. (1993). An experimental study of the “blue-monday” hypothesis. The Journal of Socio-Economics,22(3):241-547.

https://www.sciencedirect.com/science/article/abs/pii/1053535793900119

Singleton, J.C. & Wingender, J.R (2003). The Monday Effect: A Disaggregation Analysis. Quarterly Journal of Business and Economics, 42(3/4):91-111.

https://www.jstor.org/stable/23292842?seq=1#page_scan_tab_contents

Smith, J. (2013). 11 Ways to Beat the Monday Blues. Forbes.

https://www.forbes.com/sites/jacquelynsmith/2013/02/25/11-ways-to-beat-the-monday-blues/#54c7078823f5

Yilmaz, O. (2013). Between-country differences in the Monday Effect: Evidence from European Equity Markets. Tilburg University,1-29.

http://arno.uvt.nl/show.cgi?fid=126947

Love Thy Neighbour

noreply@blogger.com (awaited opinion) — Wed, 14 Feb 2018 05:28:00 +0000

Have you ever wondered what the command “Love your neighbour as you love yourself” really meant? Has it ever bothered you to know how your neighbour’s wellbeing indirectly affected you? Whether you can answer the above or not, the fact is we are all connected in one way or another.

We have been taught that the only way of taking care of people around us is to give them food, clothing, sanitary pads and all those immediate things that are not sustainable. I’d like to believe giving is more than that.

I personally believe in giving intellectually, spiritually, psychologically and even sharing ideas as it has the ability to last a lifetime

. I believe the mind is a hidden gem and if nurtured as well as cultivated properly its ability to do great things is endless. Hence giving would be more fulfilling to me if it had an economic impact.

In economics, there’s a concept called Community Economic Development (CED), where a community works with government and the private sector to build that community. In essence the “community” aspect of CED means that the community dominates the economic development process by contributing to sustained economic development as well as gaining from it. In the CED equation, the community is considered the input and output of the economic development. CED allows residents to mobilize and build assets to improve their quality of life in a sustainable way.

Brazil has a number of sustainable community banks aimed at socio-economic development. The primary objectives of these banks are to provide access to banking services to residents who unable to access them in traditional commercial banks, as well as to implement income generating projects based on the solidarity economy system. These banks are funded by public resources and well as community investment such as donations, membership fees and other commercial services. There are also local currencies which are equivalent to the real currency that are used to keep the money circulating within the community. Community Development Banks have improved poor communities by offering jobs, skills, capital for new and existing business, higher education funds and the list is endless.

The same notion could be implemented in our communities, terms of creating community banks for accessing capital to community members who wish to start sustainable businesses, or education funding for underprivileged children who wish to study in university. Most people in poor communities do not qualify for bank loans due to credit risk or high monthly repayments, therefore communities should strive to help each other in uplifting one another.

My point is as community members we need to take care of each other by finding innovative ways of uplifting our communities in a sustainable manner. For me loving my neighbour means doing good for the next person in a way that will impact that person in the future and generations to come.

References

https://en.wikipedia.org/wiki/Community_economic_development

https://en.wikipedia.org/wiki/Banco_Palmas

Hawks and Doves of Inflation

noreply@blogger.com (awaited opinion) — Fri, 13 Oct 2017 05:13:00 +0000

I was once asked in an interview to explain inflation and also state how it will affect an old woman living in the rural areas. I answered that inflation is the rise in price of goods and an old woman in the rural areas will be affected when she needs more money to buy her essentials. Technically I was correct; however, I did not get the job (lol story for another day).

In layman’s term inflation is a general increase in prices and fall in the purchasing value of money. Every central bank’s main purpose is to control price stability, therefore a Monetary Policy Committee is appointed, mainly consisting of six people, to decide on the repo rate using all the information available. Inflation is targeted between 3-6% in South Africa

Recently the South African MPC members were divided on the decision to leave the repo rate unchanged or to decrease it. This is what we call hawks and doves, where three of the members were stricter on inflation and the other members were less worried about it.

Given the current situation in South Africa where the unemployment rate is 27.7%. It is rather understandable why doves would be less concerned about inflation and rather concentrate on other things outside the monetary framework such as unemployment, since there’s a trade-off between inflation and unemployment.

However the mandate of the central bank is price stability, therefore the hawks wanting to sustain their credibility by targeting a constant price level, does make sense to leave the repo rate unchanged.

So why should you care about the MPC’s decision?

Well it takes 24 months for any repo rate decision to have an impact, therefore if you care about your future self then you would want to know if you will be able to afford certain things in 2 years time. So from today on, please pay attention the central bank’s governor “boring” speeches, because they do impact your life whether you know it or not.

Izandla Ziyagezana (Explaining the Multiplier Effect)

noreply@blogger.com (awaited opinion) — Tue, 25 Jul 2017 05:16:00 +0000

Have you ever wondered where your money comes from and where it’s going after it has left your hands? I mean knowing who had your note before you as well as knowing who will have it after you is irrelevant, however knowing the power of the circulation money is important.

After participating in a 15km walk for a good course, I decide to go unwind and get myself an ice cold virgin strawberry daiquiri at one of the restaurants in Johannesburg. I used a portion of my income to pay the restaurant; which would form part of income to the restaurant owner, who will use it to pay the waiter serving me. The waiter will use his salary to pay for his rent to his landlord, who will use it to repay his home loan to bank.

In this case, the money has return to the bank and all of us (the restaurant owner, the waiter, the landlord and I) have benefited from me swiping my bank card to pay for a drink. As much as we do not have that money anymore, every one of us did what they wanted to do with the money, leaving us feeling very optimistic about the future because we were slightly well-off than we were and we know this cycle will occur again.

In economics this is called the multiplier effect, where an increase in spending produces an increase in national income and consumption greater than the initial amount spent. Meaning your decision to spend will result in income for another person, and so on. In this instance spending is good as it impacts on other people’s well-being and grows the economy.

Therefore next time you make the decision to spend, think of what a nice contribution you’ll be making to society and the state of your economy. (LOL) I know it sounds like I’m encouraging spending whereas financial advisers will tell you to tighten your belt, however how, on what and when you spend your money is a different topic and it’s definitely none of my business.

All I’m trying to say is “izandla ziyagezana”, which is a Zulu proverb that means we need each other. Therefore an increase in spending is needed to increase income, thus this ripple effect of money circulation is how money is created.

References

Multiplier effect. Dictionary.com

http://www.dictionary.com/browse/multiplier-effect

Thanks to Sagoema Maredi for inspiring the topic

Self-Sabotage

noreply@blogger.com (awaited opinion) — Mon, 17 Jul 2017 05:25:00 +0000

They say the brain is designed to protect us. Have you ever thought of doing something and ten minutes later you thought otherwise? That is because you only have a 5 seconds window period to get up and do that task, however if you haven’t done it after the 5 seconds then your brain will convince you that it’s not worth it therefore do not take action.

Of-course I am neither a psychiatrist nor a psychologist, but from the books I’ve been reading and the motivational videos that I’ve been watching- I have come to a conclusion that we are our own worst enemy. We tend to come up with excuses on why things are not working out or many reasons why we are not focusing on our dreams anymore. The sad thing is that we blame the world and never ourselves, I guess it’s easy to point fingers because it makes us feel good about ourselves.

I’ve had my fair share of self-sabotage in the past 3 months. I have strangely convinced myself that I cannot blog anymore as I have a new job and I am trying to get a hang of my new role. It would’ve been understandable in the first month, but time has lapsed its already three months later and I am still holding on to that excuse (LOL). The truth is whenever I think of a topic, I procrastinate over researching and writing it to a point that I become uninterested then move over to other things. Procrastination is my biggest problem in life!

Like most human beings, I tend to postpone tasks for the future instead of doing them immediately. In economics this is called ‘time-inconsistent preferences’, where humans value their time now than later when determining the cost and benefits of completing a task.

Despite having all the information from past experiences regarding postponing tasks, procrastination is recurrent as humans tend to be short-sighted in the current moment. As much as humans are self-interested and optimistic about their future-selves, our weakness of immediate satisfaction persists hence we hardly learn from the past.

At times the future seems far-fetched but that should not derail us from fulfilling our long-term goals. We should always picture the sense of relief, happiness, and satisfaction that will ultimately come from completing a task. In addition we should increase the speed in which we do things so that we do not leave room to overthink completing the task at hand. Hence I have decided to be more forward-looking and adopt habits that will eventually lead me to attaining my goals, like waking up earlier for instance (LOL).

“You are binded by a contract”

noreply@blogger.com (awaited opinion) — Tue, 21 Mar 2017 12:05:00 +0000

You know the excitement of finishing a degree as well as finally feeling ready and willing to be an adult? Well in most cases you think finding a job will solve all your problems! You then send your CV almost everywhere and wait patiently to get a call from a potential employer. So you pray, fast and do almost everything you believe in to hopefully attract the right job your way. Eventually the stars align and you receive that call you’ve been waiting a while for.

As nerve wrecking and exciting as it is, getting a job for the first time comes with a lot of adulting and in most cases we can never say we are ready for this new endeavour. We get caught up on the actual job, the salary and job title that we hardly ask the most important questions nor read in detail all the documents we are given by the Human Resource department. This is understandable because the situation is fairly new, besides we are impulsive beings especially in our early 20s.

If you are like me and recently signed your first contract, welcome to adulthood! I remember being asked in an interview if I have ever made a big mistake and how did I overcome it, well not knowing that signing an employment contract could be my biggest mistake LOL. In fact, lately hearing the word contract makes me cringe because I still cannot believe how unfair the world can be.

In case you do not know, a contract is a legal agreement between parties to fulfill an obligation. It is a legal document that people sign to protect them in case the other party does not meet their end of the deal. It is supposed to be voluntary, fair and binding! However is a contract really voluntary and fair, because at times it seems like an instruction especially in a David a Goliath type of situating.

Employment contracts are a perfect example of a David and Goliath type of situation, because in most cases employees feel obligated to just sign out of desperation. By signing that contract means you adhere to your employer’s instructions, therefore signing off your powers and in most cases your future will be dictated by someone else.

It is evident that the world we live in is individualistic in nature as no one really cares about you. I harshly realised this recently when I was told I cannot terminate a contract by resigning as it is not stated in my contract. This left me feeling captured, frustrated, constrained and what hurt me the most was that I always thought a contract was there to protect me; not knowing that it was the other way around.

Don’t get me wrong, contracts do protect employees especially in times of uncertainties where the economy is very volatile. For instance the New Keynesian Economics (NKE) school of thought recognises a range of real world imperfections (Snowdow, 2005:365). Therefore this school suggests that wages are rigid due to contracts being negotiated on a long term basis. This means in whichever phase or direction the economy is, employees’ salaries will never change because they signed a contract that protects them from uncertainties.

I guess a contract is a good thing after all; it just depends on which side of the contract are you on. Therefore in future always sign a contract that is advantageous for you. You can never be apologetic for putting yourself first, because at the end of the day no one cares about you but yourself. I guess self-interest is the main reason contracts even exist after all!

Reference

Snowdon, B. & Vane,H.J. (2005). Modern Macroeconomics-Its Origins, Development and Current State. Edward Elgar Publishing Limited: Massachusetts.

Apparently I am voluntarily unemployed!

noreply@blogger.com (awaited opinion) — Tue, 10 Jan 2017 19:48:00 +0000

I’ve just completed my Bcom Honours Degree in Economics and like most graduates I am job hunting. The question that I am always asked lately is why I’m not employed yet and why wasn’t I applying for any graduate programmes last year. Well the thing is, I was applying to so many graduate programmes and even got called for interviews; however I am still waiting for responses.

I understand that the job market in South Africa is kinder rigid as there are a lot of graduates (like me) who are looking for employment, hence the job market cannot swallow all of us. With an unemployment rate of 26.6% I am not surprised why I am still at home applying for jobs and hoping to get responses.

I never thought I’d be frustrated about living in a third world country (because you cannot miss what you don’t know). However the thought of knowing that in some first world countries such as America, where their unemployment rate is 4.9% which is so close to full employment, I could be employed by now as almost everyone who is looking for employment is working.

This reminds me of a conversation I was having with a few friends of mine. My friend made a claim that “the classical school is misleading us, how could we live in a world that has full employment, and does this mean just because we are unemployed graduate then we are voluntarily unemployed!” So many of my friends agreed with him and they all said in a country like ours it was impossible to have full employment.

This is true! The classical school speaks about a market that is self-correcting, which has a natural state of full employment and no government intervention. This is not the case for us in South Africa as we relay so much on the government for jobs as well as assisting the economy.

However my take on this is that we are voluntarily unemployed because we are not looking at other alternatives of earning a living. I mean if we did not all look at being formally employed but focused on other things such as starting businesses or freelancing or even trading, then the unemployment rate wouldn’t be so high.

Personally I would love to start my own thing and stand on my own; however my fear of failure is kind of holding me back. I do have capital to start and even an idea of the type of business I would like to start. However a part of me feels like I need some type of work experience before I could stand on my own so that I learn tried and tested methods of running a business. So maybe I am voluntarily unemployed because I chose fear to detect my current state.

Let’s blame Individualism

noreply@blogger.com (awaited opinion) — Thu, 15 Dec 2016 16:13:00 +0000

“The world is what it is today because of individualism” these were the wise words of my macroeconomics lecturer Prof Chetty. Before presenting the lecture of the evening, my lecturer normally gave a talk on a topic that was not related to our syllabus, I was so intrigued when he spoke about individualism. He made an astonishing claim about how the root of all things, be it wars, unemployment, poverty and etc., were merely cause by individualist behaviours of people. He then went on and said economics teaches us individualism, meaning economics teaches us that people behave in an individualist manner.

For example firms in all industries are basically in business to maximise their “individual” profits and minimise their costs, an entrepreneur may start a business to eventually accumulate “individual” wealth, a parent may send their child to the best schools to hopefully rip the reward in future, and a politician may campaign for people’s vote to eventually end up with a relatively better job and have state privileges. In essence we are all doing things that will benefit us in the end and everyone wants to be better than the next.

The concept of individualism was brought to light in the 18^th century by Adam Smith, who claimed that in a competitive economy, an individual acting on his or her self-interest will promote public interest (Nafziger, 2006:124). This means self-interest has an invisible hand that unintentional impact on the welfare of society. I agree with Smith that individualistic behaviours tend to benefit the public, in a sense that it encourages innovation, entrepreneurship, accumulation of skills and to some extend good governance. However Smith and other economists from the classical school suggest that the economy is self-fixing therefore there is no room for government intervention, which is not the case in the real world, because the government plays a pivotal role in all economies.

On the flip side most social problems are rooted by individualism. Self-interest makes people think they are superior than others, it can fuel greed and drive people into becoming less reliant of each other. Hence we live in a world filled with wars, hate and injustice- every religious group thinks it is better than the next, every race thinks highly of themselves, this individualistic thinking even spills over to gender and age groups. Basically individualism makes people less tolerant of each other, which tarnishes world peace. As Mother Teresa said, if we have no peace, it is because we have forgotten that we belong to each other (Brainy quotes, 2001).

To be honest I love the fact that we live in a world where there’s room for independent thinkers. We cannot always conform to the norm nor constantly look up to “influencers”. Therefore let’s be encouraged to be innovative, entrepreneurs and accumulate skills, so that we can hopefully have a positive impact on society. However let’s always be reminded that we need each other and never allow the spirit of Ubuntu (humanity) to die. After all Smith argued that people are self-interested but naturally like to help others.

References

Mother Teresa (2001). Mother Teresa Quotes. Brainyquote.

Available from: https://www.brainyquote.com/quotes/quotes/m/mothertere107032.html

Nafziger,W.E. (2006). Economic Development. Cambridge University Press: New York.

A special thanks to Prof S. Chetty for inspiring this topic.

Online shopping causes "Vampire Economics"

noreply@blogger.com (awaited opinion) — Tue, 08 Nov 2016 21:26:00 +0000

I first heard of this term on radio during the UK report on a morning show. Unfortunately I was unable to find the podcast of this topic, because I would have loved to link it to this post. Basically the reporter was talking about how online advertising companies are studying consumer traits and their online behaviours therefore targeting them according to their weaknesses. For example they would look at a specific consumer who suffers from insomnia and is often browsing through online stores in the early hours of the morning; in this case an advertising company would put as many adverts during that time in the hopes of luring that consumer to make a purchase. Another example would be advertising companies targeting shopaholics, alcoholics or even people suffering from mental illnesses, during their vulnerable state to ensure they purchase something online.

This type of conduct by advertising companies is called vampire economics, because they are desperately trying to “suck some life” out of consumers to get as much as they can of what’s left for themselves (The Standard, 2009). Consumers are being savaged by “parasite” advertising techniques and the sad reality is that it is a growing pheromone worldwide.

The vampire economics concept should not be confused to the vampire effect in advertising. The vampire effect in advertising is using devices to grab “suck” consumer’s attention away from the main message of the advert (Kuvita & Karlíček, 2014). These devises are normally unrelated to the product, for example celebrity endorsements are to some extent an example of the vampire effect in advertising. In my opinion this advertising concept is not that big in South Africa as yet, because consumers are not easily swayed in their purchases due to the fact that consumption is mostly based on preference and not necessarily on celebrity influence.

As much as South Africa is considered a 3^rd world country, there is a vast growth in terms of online shopping (well not as fast as the UK or any other 1^st world country). Hence I am worried about “vampire economics” affecting South Africans in the near future, because I have personally noticed that whenever I am surfing the net, I always come across adverts that are in a way targeted to me. However I hardly buy things online so I cannot advocate for “vampire economics” in South Africa. Another thing is that online shopping is not that big amongst the middle and lower class so we hardly hear reports of consumer’s vulnerability being used against them. But it does not mean it is not happening just because it is hardly reported, hence we should not relax and think we are not affected by such business practice as technology changes every day and one can never be certain.

I wish I had concrete advice to give to online consumers to protect them from “blood sucking” advertising tactics. All I can say for now is that consumers must be more vigilant and not give in to temptations of purchasing all the time. The Consumer Protection Act is very adamant in enforcing the Right to Equality in the Consumer Market and Protection against Discriminatory Marketing Practices (Wronski, 2012). Therefore South African consumers are strongly protected by the law; the challenge is proving that consumers are subject to “vampire economics”.

On the contrary, a part of me understands why businesses would conform to this type of advertising as they are driven by maximising profit. But does it really have to be at the expense of their customers? I wonder what happened to conducting business in an ethical manner, because it seems like minimising costs and maximising profit forcing vendors to lose their integrity.

References

Kuvita,T. & Karlíček,M. (2014). The Risk of Vampire Effect in Advertisements Using Celebrity Endorsement. Central European Business Review, 3(3):16-22.

Available from: http://cebr.vse.cz/cebr/article/viewFile/139/100

Mathemagican 2009. Vampire Economics. The Standard.

Available from: https://thestandard.org.nz/vampire-economics/

Wronski, M. 2012. Consumer Protection Act: Your Ultimate Free Guide. Mike Wronski.

Available from: http://www.mikewronski.co.za/2012/01/09/consumer-protection-act-ultimate-guide/

Indlela ibuzwa kwabaphambili (an African twist to the new growth theory)

noreply@blogger.com (awaited opinion) — Fri, 21 Oct 2016 11:24:00 +0000

“An investment of human capital is the main aspect of the new “endogenous” growth theory by Romer (1986), Lucas (1988) and others. This theory states that the economic impacts of population ageing depend, not only on changes in the labour force and savings, but also on changes in investment on human capital and research and development (Fougère & Mérette, 1999: 4). This highlights the importance of the human capital stock accumulated by living generations being transmitted to future generations, as a way of ensuring a balanced growth path that will benefit the future generation. Therefore the returns from investing in education now will result in a higher stream of net revenue from future labour supply (Fougère & Mérette, 1999: 9-10). This aspect will therefore attract investment as it suggests a skilled labour market currently and in future.”

The above paragraph is taken from my research project which was on “The impact of an aging population on investment in South Africa”. While working on this research project a thought crossed my mind, my understanding of the new growth theory led me to a Zulu proverb “indlela ibuzwa kwabaphambili”. This Zulu proverb means that the road is asked from those who came before us. It basically states that the young generation should seek advice from the old generation, as well as the older generation should give advice to the younger generation. The older generation should pass on their knowledge to the younger generation so that they are better informed, which will help them to make better decisions in future.

Therefore both the new growth theory and this Zulu proverb, speak about equipping the younger generation with knowledge so that they can be better in future. In essence this also means investing in human capital (through education) to secure a brighter future.

So much excitement ignited within me after making this “discovery” LOL. It is so amazing to note that such a proverb has existed for centuries and never have I thought I would one day link it to economics. This goes to show that a part of what I am learning at university has existed in the African community for a long time; it’s just that I understood it differently. In this case I feel like universities are teaching us what we have already learned from home; however we are hardly aware of that because we have never taken the time to relate Western and African education for ourselves. Maybe it's because we believe that western education is better since we pay for it and it also seems far-fetched from our daily lives hence we don’t relate to some concepts. Besides the world would understand me better if I spoke about the new growth theory than a Zulu proverb that only makes sense to me and my fellow black South Africans.

What I am trying to say is that, it would’ve been so easy to use this proverb to explain the new growth theory to me, I am pretty sure I would have understood it the first time I heard about it. Maybe this is what decolonised education is all about, that is teaching an African child in a way that better relates to her. However the problem is who will teach us in this manner, for example, an economics professor might not know African proverbs or customs to be able to fuse them within the university curriculums. My solution is that we young elite Africans must take it upon ourselves to learn as much as we can from our elders at home and lecturers in university, so that we can be able to fuse the two and teach the next generation, therefore securing a better and brighter future.

Self-service should not be feared (response to an article)

noreply@blogger.com (awaited opinion) — Sun, 25 Sep 2016 21:16:00 +0000

As a Sunday tradition my dad would buy Sunday newspapers and we would all read them and then discuss what intrigued us most, this weekend was no different! What got my attention was the “Self-service raises job-loss fears” article written by Steve Kretzman on the City Press newspaper.

The article states that Pick n Pay has introduced self-service checkout counters at the Observatory branch in Cape Town, which has erected fears of kiosks and cashiers possibly becoming “redundant” in future. A representative from the union said that this mechanism threatened workers and is not assisting in a “collapsing” economy. On the contrary a Pick n Pay executive member said self-service cashiers have not impacted on employment, in fact staff is essential for monitoring them. (Kretzman, 2016:3).

In case you do not know, self-service cashiers are machines that enable customers to pay for what they have purchased at a store. I am for self-service cashier! I think they are resourceful as they will make shopping more convenient by cutting queues and avoiding customer service complains. In addition the company using them will in a way have a competitive edge and would cut labour costs.

However I do not agree with staff just being needed to monitor them. I think Pick n Pay could create jobs in other areas of the business that could advance these workers skills. For instance, these workers can be trained to venture into other parts of the business and this can be seen as a promotion of some sort. In fact my dad was telling me that companies should give workers 40 hours of training a year, therefore this could be like a skills development programme which will in essence better the workers standard of living. I mean these self-service cashiers will have to be monitored, fixed, serviced and possibly manufactured, so who better to do it than them! Yes this will take time but if they want to secure jobs in future as well as have a modern way of doing business then they could consider my suggestion. This reminds me of the microwave story that my lecturer Mr Frederich Kirsten once told us, he said a certain country imported a microwave from America and disbanded it then assembled it from scratch. This obviously took time but to date that country is one of the leading manufacturers of microwaves in the world, because they imported a product, saw how it was manufactured and then produced it at a lower cost.

Well maybe I am being too optimistic about this and not really looking at it in real terms. There are disadvantages to everything; in this case, customers may have difficulties in using them at first, possible theft by customers mispricing items and high installation costs. But I believe where there’s a will there’s a way! I mean, back in the days my granny and her peers used to receive their salaries in an envelope, that progressed to an introduction of a banking system, which progressed to the use of ATMs and now internet banking. Come to think of it, I wonder where the people who used to count and seal the envelopes went to or the ones who used to control bank queues. My point is every opportunity closed is an opportunity opened.

In conclusion, let’s not fear change but adapt to the ever changing times. Let’s be a progressive nation to attract investment and eventually grow our economy. But then again they say you can’t miss what you do not know!

Reference

Kretzman, S. (2016, September 25). Self-service raises job-loss fears. City Press: 3.

Available from: http://www.fin24.com/Companies/Retail/self-service-raises-job-loss-fears-20160925-2

Why I started a blog!

noreply@blogger.com (awaited opinion) — Tue, 20 Sep 2016 16:25:00 +0000

“Doing your honours is making sense of what you did not understand in your undergrad” that’s what my research lecturer said to us in the beginning of the year. To be honest, she was indeed spot on, because it has only been nine months and I am already able to make sense of it all and I have also gained inerasable knowledge.

In the most part I have gained so much confidence and now have “swag of a college kid” lol. It's amazing how it took me 9 years to get this feeling (not that I am old), it’s just that I knew I wanted to be an economist at the age of 14 (well that’s the age I learnt of the term), however I have loved the finance sector way before then.

I make reference of the “swag of a college kid”, because for some reason we all exude so much confidence when we feel as if we know something very well. I am talking about that “I got this” feeling, that makes you walk differently, talk differently and even think differently from the layman. However it’s what you do with that knowledge that distinct you from the rest, which is why I started a blog!

I wanted to voice my “confident” opinion in a dynamic manner. I wanted a space for me to write something without adhering to specific jargon or writing techniques, where my perspective of things can be understood by the layman as well as an intellectual. This does seem like a tough position to put myself in; however I like challenges since they give you an opportunity to learn, so bring it on!