The Bank of Canada Governor set off a new round of discussions about unpaid internships. I love all the coverage, but I must say that while some of the articles sound tough they are really skirting some of the really IMPORTANT points.
1) Bank leaders like Mr. Poloz and other "Lords" of industry I am sure do not have their children working for free. They probably call up a buddy at another company and get their kids on the payroll somewhere. It may be an entry level job, but it is a paid job with a future, barring massive stupidity on the part of the young worker.
2) Why is it that the young people in earlier generations took on these same mail room type jobs and got paid? In the 50s 60s and even 70s there were jobs, and they all brought about the equivalent level of skill and knowledge, for their time, to the table as the young graduates of today. Somehow businesses valued what they brought enough to pay them, sometimes not much, but it was a paycheque and a chance to prove oneself. Now, whatever work the interns are doing in the companies has no value and the students, or graduates, the companies bring on have nothing to offer, and the companies do not see them as having any potential. If they did then they would pay them right?
I understand that it will take a couple of generations to plant the seeds that this is OK, and that a form of serfdom is a way to get ahead. But even serfs were able to use some land to feed themselves and were entitled to protection, and justice. OK, so the state has taken care of the justice part, sort of, and the protection of things like OHIP, but what about the feeding part. I guess they have to work triple hours, most for free and a bit at the food counters to keep fed.
I am not seeing any great improvement from the Middle Ages in terms of treatment by the "Lords" of industry. Wage pressures continue increase the levels of poverty for those that are working, and now we are asking parents to carry the burden so multimillion dollar corporations can increase executive compensation and dividend payments to the people who can afford to own shares. (Yes, I know many of the parents' pensions benefit, but hey may never retire if they have to keep supporting their kids.)
Is anyone else seeing a problem with this?
I understand that it is an opportunity to build a resume, or try a new field, but people used to get paid to do the same work. I guess if I were an intern I would be happy to go in and observe the work of others, and see how it all came together, but the minute I actually had to do something I think it is fair to get paid. Right?
Maybe they think of this as an apprenticeship? If so, then if we are sticking with the historical references, then there was a legal agreement that the apprentice was bound to the master and got something in return.
What it was like to be an apprentice in early New England is indicated by these words from a 1640 indenture.
"Know all men that I, Thomas Millard, with the Consent of Henry Wolcott of Windsor unto whose custody and care at whose charge I was brought over out of England into New England, doe bynd myself as an apprentise for eight yeeres to serve William Pynchon of Springfield, his heirs and assigns in all manner of lawful employmt unto the full ext of eight yeeres beginninge the 29 day of Sept 1640. And the said William doth condition to find the said Thomas meat drinke & clothing fitting such an apprentise & at the end of this tyme one new sute of apparell and forty shillings in mony: subscribed this 28 October 1640." (http://www.lni.wa.gov/TradesLicensing/Apprenticeship/About/History/)
While not always treated fairly, they were housed and clothed, I am not seeing that today, that burden is shifted to the families, who may also be struggling.
We are sort of getting the points across in the media, but the media also seems to be missing a big point. Just because those who shape society want us to believe it is OK to work for free and thus also enslave our families who then have to feed and clothe us, does not mean it is actually a right and just thing. For the leader of the Bank of Canada to say this proves that he is part of the machine of mistreatment and not looking to the companies to help grow the economy.
Saving a company a few dollars is nothing compared to the value to an economy of giving any person paid employment and having them contribute to the economic life of the whole society in a meaningful way. Do not forget the more impoverished the family they less likely they are to be able to navigate the system and crime for some, even middle class youth, may becomes a more enticing future because there is money in criminal behaviour, right big companies?
Thursday, November 6, 2014
Wednesday, September 24, 2014
Financial Update from Newsletter
Ok, as weather goes this year has been weird and I guess this week will be no different.
But meteorological weather is in no way reflecting the financial weather we are all facing.
The world's smartest (well one hopes) leaders try as they might cannot seem to wrangle 7 billion people to behave in a way that makes the economy do what they want. Strange how that happens. When I put it that way is it so surprising?
So what is new on the home front?
Well first off the 20 somethings of today are continuing the trend of earning less than the generation before, and the gap is widening. The worst part is that older workers doing the same job, even accounting for experience, are getting paid WAY more than the younger workers. The reason is simple it is corporations and governments gradually pushing down wage expectations so that when older workers, who knew a better life when workers were scarcer and they could make a living wage, will not kick up a fuss and rock the boat (they still have more democratic power), but the younger workers will not know any better and overall wage costs will decline increasing profitability. It is a good business strategy and quite long term thinking for a change, I am just not entirely sure what the final social ramifications will be, but I am sure it will not be good.
So, now younger workers cannot buy new homes, what will that do to prices over time? Older people may not get the money out of their homes that they had hoped, unless they sell to overseas parties hiding money in Canada, so maybe their retirement is not as easy. The other thing I think the western world is waiting for is to see what the generational shift in wealth will do to pull them out of the hole they are digging. I think that will depend on how selfless parents are in terms of spending their hard earned money vs. sacrificing again to leave something to their children, the "ME" generation giving up things...? Still a tough call.
So the government has tightened mortgage rules, debt with solid underpinnings (relatively) instead of credit cards etc. But OOPS we forget TD, and other banks now have all your assets underwriting any debts you have, (read your fine print) so if you get into trouble with an "unsecured" line of credit or credit card, they might dip into your savings accounts to clean up your mess, it might not have been your plan, but it is theirs. I generally suggest keeping debt at one financial institution and assets at another to keep those two worlds from colliding, and maybe undermining your self management. Your call though. I keep reminding people banks are only your friends when they can make money from you, so be careful how you handle that relationship. There is a reason they give you a better rate when you give them more business. FINE PRINT.
The Bank of Canada held its overnight rate for a long time now, with no signs of change for some time. This is great news for variable rate holders. They are predicting rate increases, but no timelines yet. But the increases they are anticipating are not earth shattering, though it may shock young people who have only been borrowing since 2008.
Bond rates are going up so lenders are on the cusp of raising rates again. Not much, and they may come down again, but generally there are optimistic noises coming form economists which is not good news for borrowing rates.
The deals I post today may not hold tomorrow but more often than not I can get you something better than most people can find on their own.
All the best.
But meteorological weather is in no way reflecting the financial weather we are all facing.
The world's smartest (well one hopes) leaders try as they might cannot seem to wrangle 7 billion people to behave in a way that makes the economy do what they want. Strange how that happens. When I put it that way is it so surprising?
So what is new on the home front?
Well first off the 20 somethings of today are continuing the trend of earning less than the generation before, and the gap is widening. The worst part is that older workers doing the same job, even accounting for experience, are getting paid WAY more than the younger workers. The reason is simple it is corporations and governments gradually pushing down wage expectations so that when older workers, who knew a better life when workers were scarcer and they could make a living wage, will not kick up a fuss and rock the boat (they still have more democratic power), but the younger workers will not know any better and overall wage costs will decline increasing profitability. It is a good business strategy and quite long term thinking for a change, I am just not entirely sure what the final social ramifications will be, but I am sure it will not be good.
So, now younger workers cannot buy new homes, what will that do to prices over time? Older people may not get the money out of their homes that they had hoped, unless they sell to overseas parties hiding money in Canada, so maybe their retirement is not as easy. The other thing I think the western world is waiting for is to see what the generational shift in wealth will do to pull them out of the hole they are digging. I think that will depend on how selfless parents are in terms of spending their hard earned money vs. sacrificing again to leave something to their children, the "ME" generation giving up things...? Still a tough call.
So the government has tightened mortgage rules, debt with solid underpinnings (relatively) instead of credit cards etc. But OOPS we forget TD, and other banks now have all your assets underwriting any debts you have, (read your fine print) so if you get into trouble with an "unsecured" line of credit or credit card, they might dip into your savings accounts to clean up your mess, it might not have been your plan, but it is theirs. I generally suggest keeping debt at one financial institution and assets at another to keep those two worlds from colliding, and maybe undermining your self management. Your call though. I keep reminding people banks are only your friends when they can make money from you, so be careful how you handle that relationship. There is a reason they give you a better rate when you give them more business. FINE PRINT.
The Bank of Canada held its overnight rate for a long time now, with no signs of change for some time. This is great news for variable rate holders. They are predicting rate increases, but no timelines yet. But the increases they are anticipating are not earth shattering, though it may shock young people who have only been borrowing since 2008.
Bond rates are going up so lenders are on the cusp of raising rates again. Not much, and they may come down again, but generally there are optimistic noises coming form economists which is not good news for borrowing rates.
The deals I post today may not hold tomorrow but more often than not I can get you something better than most people can find on their own.
All the best.
Thursday, September 4, 2014
Bank of Canada and rates hold steady
Greetings ALL
It is a new school year but the world has not yet decided that it is ready to do great things again. I cannot help but think that the West's reluctance to go to war again, while not a bad choice, because most wars don't solve problems, it does mean continued uncertainty on how to stop a massive ego on one front and "medieval mayhem" on the other. (Modern politics is far from simple.) Harper's reluctance to spend his vote getting pot of money supporting Canada's allies with increased military spending is either a good idea, or a bad one, depending on how big a view you take of all the events going on. As with anything big, history and the victors will decide the true value of these choices.
In the meantime, on the homefront it is still good news for borrowers. With a chance to get 2.79% 5 year fixed mortgage, the BoC announcement is reaffirming for home buyers. They have time.
Things are going as the Bank of Canada expected, economically speaking, which is why the target for the overnight rate is still sitting at 1%.
The Bank announced on Wednesday that, with the global economy performing largely as expected and Canadian inflation settling down again, there doesn't seem to be a need to increase interest rates-for now.
Stronger growth in the second quarter-due largely to surging exports-has brought the GDP almost exactly to the point the Bank projected in July. The housing market continues to perform stronger than expected, but so far it hasn't impacted inflation enough to warrant higher interest rates.
For now, risks contributing to the increase of inflation seem to be balanced, which is why the Bank ultimately decided to stand pat. But it's not making any promises going forward, however, as it says only time will tell what the global and Canadian economies will look like heading into the October 22 announcement.
If you're wondering how this announcement affects your specific situation-or if you have questions about variable mortgages, locking in or anything else mortgage-related—feel free to drop me a line. I'd love to chat! 416.486.1113
It is a new school year but the world has not yet decided that it is ready to do great things again. I cannot help but think that the West's reluctance to go to war again, while not a bad choice, because most wars don't solve problems, it does mean continued uncertainty on how to stop a massive ego on one front and "medieval mayhem" on the other. (Modern politics is far from simple.) Harper's reluctance to spend his vote getting pot of money supporting Canada's allies with increased military spending is either a good idea, or a bad one, depending on how big a view you take of all the events going on. As with anything big, history and the victors will decide the true value of these choices.
In the meantime, on the homefront it is still good news for borrowers. With a chance to get 2.79% 5 year fixed mortgage, the BoC announcement is reaffirming for home buyers. They have time.
Things are going as the Bank of Canada expected, economically speaking, which is why the target for the overnight rate is still sitting at 1%.
The Bank announced on Wednesday that, with the global economy performing largely as expected and Canadian inflation settling down again, there doesn't seem to be a need to increase interest rates-for now.
Stronger growth in the second quarter-due largely to surging exports-has brought the GDP almost exactly to the point the Bank projected in July. The housing market continues to perform stronger than expected, but so far it hasn't impacted inflation enough to warrant higher interest rates.
For now, risks contributing to the increase of inflation seem to be balanced, which is why the Bank ultimately decided to stand pat. But it's not making any promises going forward, however, as it says only time will tell what the global and Canadian economies will look like heading into the October 22 announcement.
If you're wondering how this announcement affects your specific situation-or if you have questions about variable mortgages, locking in or anything else mortgage-related—feel free to drop me a line. I'd love to chat! 416.486.1113
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