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Affordable housing is not just limited to the cost of buying a house, it is an all-encompassing feature including the costs for operations and maintenance and accessibility to social infrastructure. A large part of house affordability is related to house purchase price.
The shortage of housing in Pakistan is not a result of overpopulation, rather it is due to the massive income and wealth inequality in the country, rapid urbanisation, and massive rural to urban migration during periods of calamities like natural disasters and wars. Ninety-nine per cent of housing in Pakistan is beyond the buying power of 68 per cent of the population (IIED, 2018). When people come to cities looking for better opportunities and living conditions, it becomes increasingly difficult to provide housing to these poor people. It requires access to public and investor confidence through efficient regulatory and governance measures. An integrated and inclusive approach to housing that interlinks education, employment, health, and basic social services through collaboration among governments, civil society organisations, major interest groups, and the private sector will go a far way in making affordable housing a reality. Affordability is not only the cost of buying a home, it also needs to account for operation and maintenance costs. Accessibility of work and social infrastructure also matter. Pakistan must provide its urban population with affordable housing to mitigate the harmful effects of rapid urbanisation and reduce urban poverty.
The Iqbal Institute of Policy Studies in this article explains how to make affordable housing a reality.
What is Affordable Housing
Affordable housing is not just limited to the cost of buying a house, it is an all-encompassing feature including the costs for operations and maintenance and accessibility to social infrastructure. A large part of house affordability is related to house purchase price. House price is determined on a variety of different factors, not limited to but including, cost of land, infrastructure, building materials, labour, and profit. As a majority of the population does not have enough savings to invest large amounts of money towards building a house, the ability to finance down payments towards mortgages is also an important factor in measuring the affordability of houses. The number of available funds, existing debts, and loan amounts all add to the affordability of a house. In terms of the costs incurred to keep the house, major considerations are house occupation cost and financing of service loans. Land lease, home insurance, property tax, building maintenance costs, interest rates, loan tenure, and income and non-housing expenditure are among the major factors which affect the affordability of a house. Therefore, making housing affordable is a task that involves improvements in many sectors. There is no universal standard of affordable housing because ideas differ by region and culture. (WEF, 2019)
Measuring Affordability and Housing Deficit
Three approaches are commonly used to measure the affordability of housing. The median multiple methods consider housing as affordable if the median house price is less than three times the median annual household income. Another approach is the housing cost burden method which considers housing to be affordable if households spend 30 per cent of their income on housing. Finally, the residual income method subtracts the costs of meeting necessities from household income and uses the remaining “residual” income as the household’s capacity to spend on housing. This approach is famous in the banking sector when evaluating mortgage applications. Subsequently, housing deficits can be qualitative or quantitative. Qualitative defects stem from poor construction materials, lack of proper engineering and urban infrastructure, or building in precarious locations. Quantitative deficits result from demand for housing exceeding supply, which may be due to scarcity of land for development, growing urban populations, or the attractiveness of housing as an investment opportunity relative to other asset classes. (Yglesias, 2015)
How to Make Affordable Housing a Reality
Effective strategies are needed to address the supply and demand-side challenges of affordable housing. Governments have to define their long-term plans for increasing the supply of affordable housing by balancing their need to minimise urban sprawl with limits of building denser and taller. Political considerations that could hold back the development of new affordable housing must be addressed. Ways to improve the situation of those living in informal housing is also important along with creating a strong regulatory enabling environment for the private and non-profit sectors. Private sector players must stay updated with emerging solutions in construction techniques and materials while working alongside governments to ensure an adequate flow of skilled labour. This should be accompanied by new solutions in financing and innovative tenure models.
Affordable housing remains a challenge for major cities around the world. With growing populations, rapid urbanisation, and rural to urban migration, it is becoming increasingly difficult for governments to provide formal settlements to their populations. This not only affects the standard of living of city residents but also adds to the poverty equation by squeezing more people into squatter settlements. The affordability of housing depends on a large number of factors, but the two main areas are costs to buy the house and costs to keep the house. The purchase price, ability to finance down payments for mortgages, house occupation costs, and ability to finance service loans are additional factors that weigh in on affordable housing.
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It was heart-warming to see tens of thousands of people march in Frankfurt on Friday for FridaysForFuture, a global protest against political inaction on climate change.
There are also other ways, also, to making a difference.
How we allocate financial resources serves as an incentive for business to pursue production towards reducing greenhouse emissions.
We allocate financial capital in many ways – how we invest, the savings investment vehicles we choose, the pension schemes we contribute to or the equities we buy.
A global inflection point
For example, investing in regenerative agriculture is a great example of an impact investment. There is real and measurable impact to the environment, biodiversity and soil health. A company such as Wide Open Agriculture has a clear business plan to create a strong and sustainable business which creates employment, reduces depopulation rates in rural areas and rewards all stakeholders over time. (Full disclosure: I represent Wide Open Agriculture.)
This year – 2019 – is an inflection point in agriculture and the role it plays in climate change.
A recent World Economic Forum report notes that agriculture is a major contributor to challenges facing the environment including land degradation, aquifer depletion, nitrogen runoff and greenhouse gas emissions.
In July 2019 scientists recorded the highest concentration of atmospheric carbon dioxide in human history: 415 parts per million (ppm). This represents an increase of 135 ppm since the start of the industrial revolution – and is equal to one trillion tons – a teraton – of carbon
dioxide increase over the past 200 years.
We are destroying forests at an alarming rate – mostly for industrial style agriculture or intensive livestock grazing. They still cover about 30 percent of the world’s land area, but we have felled 46 percent of all trees since humans started cutting down forests.
About 17 percent of the Amazonian rainforest has been destroyed during the past 50 years.
Whilst industrial agriculture has been a major contributor to the problem, regenerative and sustainable agriculture offer a way to remove carbon dioxide from the atmosphere. A plant removes carbon from the air and sends it back into the soil as roots (carbon sequestration). These roots then release sugars to feed soil microbes. The microbes work their own magic to convert carbon into organic carbon matter which enriches the soil and assists further plant growth and more carbon sequestration.
Regenerative agriculture involves a set of farming practices that have at the core improved soil health, improved the eco-system and outputs of healthy, delicious food. Some of these farming practices include cover-crops, no-till farming, crop rotation, reducing chemicals and fertilisers and planned use of livestock. These practices work to drive carbon into the soil
and keep it there.
If we invest in companies that engage in regenerative agriculture, we are deploying funds toward making an “impact.” This impact investing strengthens their ability to grow, create sustainable businesses and engage in more carbon-depleting practices.
I would argue it also sends a powerful message to heavy polluters as reduced share demand tends to decrease a company’s value, which in the long run leads to investor agitation for change.
I am working with Wide Open Agriculture Limited (ASX: WOA), presenting the Australian regenerative agriculture company to impact investors, family offices and fund managers in Europe.
WOA is the world’s only publicly listed company committed to delivering not just financial returns, but also positive and measurable natural, social returns. It is backed by the large Dutch Foundation, Commonland, which holds 17 percent of the equity.
The business model is exciting for impact investors in that not only is land improved through regenerative farming, but the company also has its own food brand – Dirty Clean Food. Dirty Clean Food launched with an online distribution platform and sales are expected to reach $1 million Australian per annum just from the grass-fed regeneratively grown beef and lamb.
The company recently commenced negotiations with Asian distributors in Singapore, Hong Kong, Indonesia and China which could result in contracts that substantially lift sales revenue.
Of course there are other companies you can support directly and indirectly, so do your own research.
It is time to turn the 1980’s Wall Street mantra around from “greed is good” to “Green is good.”
About the author:
Matthew Reynolds is an accountant, management consultant and Virtual CFO living in Frankfurt.
Matthew is available to work with expat companies and businesses requiring assistance in Frankfurt or global companies seeking to expand operations to Australia.
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Rainfall deficit is defined here as the rainfall minus the reference evapotranspiration (ETo), and has been used in previous studies in Puerto Rico (e.g., Harmsen et al., 2009). The “true” rainfall deficit is dependent on the potential crop evapotranspiration, however, the reference evapotranspiration may serve as an approximation of the potential crop evapotranspiration for a typical, mature crop. If the monthly rainfall deficit is positive it means that there was more rainfall than the crop needed, if, however, the rainfall deficit is negative then the monthly rainfall was insufficient to meet the crop water requirement. The units of rainfall deficit are in millimeters.
DISCLAIMER: The information is provided “as is”. The authors and publishers of this information disclaim any loss or liability, either directly or indirectly as a consequence of applying the information provided herein, or in regard to the use and application of said information. No guarantee is given, either expressed or implied, in regard to the accuracy, or acceptability of the information.
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The system outlined in this chapter provides for finding costs under the machine or process method, and differs from the system described in the preceding chapter more particularly in the method used for the distribution of indirect or overhead charges by operating departments or manufacturing centers. It is applicable where the production order represents the customer’s order, although it may be used to advantage where the production order represents a definite production by classification of product from which customers’ orders are filled. As the conditions in every plant—even those in the same line of business—are different in some respects, the forms submitted here are only for illustrative purposes, and to suggest the general nature of the designs to be used. It will be noted that certain forms are used of exactly the same kind as in the previous system.
Purchase Requisition (Form i)
The explanation in Chapter XIV covers the salient points in connection with this form. As the present system is adapted to plants of larger size than the system described in Chapter XIV, the purchase requisition would usually be made out by the stock clerk, all material purchases going into the storeroom.
Purchase Order (Form 2)
In illustrating this design, which is the same as the purchase order of Chapter XIV, particular attention is called to the caption “Charge To,” under which the entries should indicate whether the charge is to be made against the production order or the storeroom.
Report of Material Received (Form 3)
The explanation of this form will be found in Chapter XIV.*
Accounts Payable Voucher (Form 7)
The accounts payable voucher provides for recording and analyzing the expenditures, and arranging them in such a manner as to facilitate entry on the register of accounts payable. The expenditures are classified into two main divisions:
(1) Those affecting factory records
(2) Those affecting general ledger accounts
The entries affecting factory records consist of material, labor and indirect expenses; while the general ledger entries consist of administrative expenses, selling expenses, and all charges to capital accounts, such as real estate, plant, equipment, etc.
When the accounts payable voucher calls for materials or supplies purchased, the purchase requisition, purchase order and material received sheet should be attached; and if it shows the expenditure for labor as well, the pay-roll analysis should also be attached.
Register of Accounts Payable (Form 9)
The accounts payable vouchers are entered in the register of accounts payable according to date and voucher number. In addition to showing name of creditor and amount payable, the form provides space for entering payment of the voucher and for indicating the charges to the operating and property accounts.
The entries for the accounts in the general ledger are as follows:
The total of the “Accounts Payable” column is credited to the Accounts Payable account. The totals of the “Factory,” “Selling Expenses,” “Administrative Expenses,” “Machinery and Tools,” “Real Estate and Buildings,” and “Furniture and Fixtures” columns are debited to their respective accounts. The details in the “Miscellaneous Accounts” column are posted individually to the debit of the proper accounts.
Stock Record—Raw Material (Form 10)
In this system, all raw material stock is supposed to be ordered by the stock clerk, who fills in the quantity under the proper caption at the time he makes out the purchase requisition. The information as to the quantities received and delivered is obtained from the report of material received and report of material delivered, the costing being obtained from the latter.
Production Order and Cost Sheet (Form 16)
It will be noted that in both the special order systems, the production order and cost compilation are combined. The two purposes—that is, the authorization for the manufacture of goods and the compilation of the costs—may as well be separated, and this has been done in the product systems described elsewhere.* In the present system the first copy of Form 16 is used as a production order only, while the duplicate is used as a cost sheet. The purpose of using different designs in the different systems, as already explained, is to illustrate the different methods of gathering the cost data.
If sub-production orders are issued to the various departments, it will be necessary to use the original only, not the duplicate. The use of the duplicate copy is explained in its proper order in this system.t
Material Requisition (Form 19)
The general explanation of this form is given in Chapter XIV, but where the requisition is to be used for the supplies chargeable to a machine or process, the machine or process, according to the department, should be indicated under the caption “Charged” in place of “Order Number.”
Report of Material Delivered (Form 25)
The “Report of Material Delivered” is used in this system to summarize the material requisitions according to department and order number. In case of supplies chargeable to a machine or process, the order number should be omitted, and the machine or process inserted. The costs of material delivered are entered on this form, and not on the requisition. The raw stock records are also credited from the “Report of Material Delivered.” If the material is to be used for maintenance, an entry is made on the process card record, and if for repairs and supplies, on the “Power Cost and Distribution Record.” The material cost is entered on the duplicate copy of the “Production Order and Cost Record,” according to order number.
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Let’s find out about Automatic Exchange of Information and what it means to us.
Automatic Exchange of Information agreements are made between the majority of countries. These agreements allow the exchange of information between tax authorities of different countries about financial accounts and investments to help stop tax evasion.
Financial institutions, for example, banks, building societies, insurance companies, investment companies, will provide information on non- residents with financial accounts and investments in their home country or almost anywhere else in the world and to both the tax authority of where the person is domiciled and where they are tax resident.
The tax authority will gather information on any non-resident account holder and share it with any relevant countries.
Your home country receive information from other countries about residents with financial accounts and investments overseas.
Here’s a list of the countries that are participating initially; List of Countries for CRS
Initially this only relates to accounts with a value in excess of $250,000
I will be expanding this article soon.
Full detail from the OCED here; standard-for-automatic-exchange-of-financial-information-in-tax-matters
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Log in. In classical economics, Say's law, or the law of markets, is the claim that the production of a product creates demand for another product by providing something of value which can be exchanged for that other product.So, production is the source of demand. Join now. 2. law of supply states that, all other factors held constant as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase. The value of supply is found at the intersection between quantity and price. The law of supply is a basic principle in economics that asserts that, assuming all else being constant, an increase in the price of goods will have a corresponding direct increase in the supply thereof. byronecabus00 byronecabus00 2 hours ago History Senior High School +5 pts. Start studying Economics 11-15. How does the law of supply say the factory will respond to the increase in the price of blue widgets? The law of demand states that quantity purchased varies inversely with price. 3. Join now. Ask your question. Explain the law of supply. 53). A farmer must sell a supply of one hundred apples before the end of the day or they go to waste. So this relationship shows the law of demand right over here. Now the quantity demanded goes down to 25,000. What does the third law of thermodynamics say? How does the law of supply say the factory will respond to the increase in the price of blue widgets? Primary School. 1. ... Get the Brainly App How does the law of supply say the factory will respond to the increase in the price of blue widgets? The Rule of Law - we are a nation of laws, not of men. What does the document/artifacts say about the declaration of martial law in 1972 - 5506851 1. That is the basic premise. What does the Law of Demand say? Sayâs law states that the production of goods creates its own demand. What does the law of supply state? Ask your question. Join now. This is a very popular statement, however it's not entirely true. 1. decide to hire fewer workers. remains the same. 1. Log in. Supply, or the lack of it, also dictates prices. And I'll do one more of these. Supply is the source of economic activity. Join now. Log in. The law of supply demonstrates the behaviors of producers when they: change their company's name. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Ask your question. Log in. Accor⦠So I get to $8 now. 2. B. by increasing the number of blue widgets supplied. by increasing the number of blue widgets supplied A farmer must sell a supply of one hundred apples before the end of the day or they go to waste. decreases. As the price of a good increases, the quantity a producer is able and willing to produce. d. increases. Help the community by sharing what you know. Ask your question. Why does the supply curve slope upward? Ask your question. Join now. When supply is high, demand goes down (and so does price). Scenario D, I raise another $2. How can you say that zimbawe does not have rule of law Get the answers you need, now! Answering questions also helps you learn! Normally, the law of demand does not apply on necessities of life such as food, cloth etc. Nearly all supply curves, however, share a basic similarity: They slope up from left to right and illustrate the law of supply. 1. Supply can ⦠decide to hire fewer workers. Log in. How does the law of supply say the factory will respond to the increase in the price of blue widgets? Log in. The law of supply states that as the price of a good rises, the quantity supplied of that good disappears. Join now. The first misconception I cover is the idea of "The Law Of Supply and Demand." 3. law of demand states, all other factors being constant, as the price of a good or service increases, consumer demand for ⦠When supply is low, demand is proportionally higher, and therefore so is price. The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. Each of these 'basic' to democracy, meaning that democracy can't exist without all of them. (0.5 points) The Law of Supply and Demand says that the price of a product is determined by the supply of and demand for that product. Cost of scarce supply goods increase in relation to the shortages. Kaya ngaâlaw of supply and demand iyan eh,â he said. Supply and demand analysis is an extremely powerful economic tool, however it's often misunderstood. Principles of Democracy: Rule of law, freedom of press, respect of human rights, active political processes & enlightened citizens. What do the farmers have to say? Law of Demand vs. Law of Supply . increases. Which best describes his supply of apples? A referendum allows people to change laws or propose new ones. The law of supply is âa positive or direct relationship [that] prevails between price and quantity suppliedâ (McConnell, Brue, Flynn, 2012, pp. Define the basic principles of the two most important laws in economics; the law of supply and the law of demand. How does the law of supply say the factory will respond to the increase in the price of blue widgets? Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Even the price of these goods increases, the consumer does not reduce their demand. As the price rises, say, from $1.00 per gallon to $2.20 per gallon, the quantity supplied increases from 500 gallons to 720 gallons. Kilusan ng Magbubukid ng Pilipinas considers the law as a âdeath warrantâ to the local rice industry as it would open the floodgates to foreign industries that would overpower or âwipe outâ local rice farmers. How does a referendum give people more influence in government? âIt is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value.â (J. Econ2e-Ch05_StudyGuide-1.doc - Chapter 5 Supply Section 1 Understanding Supply What Is Supply 1 What is supply(p 124 What Does the Law of Supply Say 2 Get the answers you need, ... wolfsanitha wolfsanitha A referendum allows people to vote to accept or reject a law. Introduction: An important element of classical economics is Sayâs Law of Markets, after J.B. Say, a French economist who first stated the law in a systematic form. ADVERTISEMENTS: Read this article to learn about the Sayâs Law of market in economics. In other words, the higher the price, the lower the quantity demanded. Supply ⦠The law of conservation of mass states that mass in an isolated system is neither created nor destroyed by chemical reactions or physical transformations. Conversely, as the price falls, the quantity supplied decreases. This illustrates the Law of Increasing Marginal Returns (also known as the Law of Diminishing Costs), which states that as long as all variables are kept constant, there will be an incremental increase in marginal efficiency (i.e., the extra output gained by adding one unit of input, or labor), and a decrease in marginal cost (the extra cost of producing one additional unit of product). Social sciences. See the link below for detailed explanation. Answered What does the third law of thermodynamics say? I haven't used yellow yet. How is the market supply curve derived from the supply curves of individual producers? Definition: Law of supply states that other factors remaining constant, price and quantity supplied of a good are directly related to each other.In other words, when the price paid by buyers for a good rises, then suppliers increase the supply of that good in the market. The supply curve will move upward from left to right, which expresses the law of supply: As the price of a given commodity increases, the quantity supplied increases (all else being equal). The minimum wage The law of demand is a bummer. The Brainly community is constantly buzzing with the excitement of endless collaboration, proving that learning is more fun â and more effective â when we put our heads together. * A referendum allows people to remove an official from office. What does the Law of Supply say? 1. The law of supply depicts the producerâs behavior when the price of a good rises or falls. Rather, he purchases them even the prices of these goods increase often by reducing the demand for comfortable goods. In 1803, John Baptiste Say explained his theory. Scenario E, if I raise it to $10, now the quantity demanded, let's just say, is 23,000. 1 See answer The law of supply demonstrates the behaviors of producers when they change their company's name. A bump in the minimum wage will put some low-skilled workers out of work; the real question is whether that's a ⦠- 817492 1. Example of Law of Supply: The law of supply is based on a moving quantity of materials available to meet a particular need. Description: Law of supply depicts the producer behavior at the time of changes in the prices of goods and services. Briefly stated, this law means that âsupply always creates its own demand.â In other [â¦] rinsuchanut2tu rinsuchanut2tu 13.10.2016 Science Secondary School +8 pts. Let me see, what color have I not used yet.
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Many scientist and scholars talked about the agency theory, and it is one of the most crucial theory in the economic and financial history fields. This theory was originated and created by two scholars, Stephen Ross and Barry Mitnick. Each one had a take a part of the agency theory and created.
Essays Agency is a custom essay writing service. We offer custom essays, term papers, research papers, dissertations and other types of academic writing.In this essay, I will discuss and critically analyse how the work of Giddens help us to understand the interactions between structure and agency. I will first outline and define what the terms structure and agency mean, according to both classical theorists and Anthony Giddens.Agency theory is a model that explicate why performance or judgment differ when display by member of a group. Specifically, it explains the connection between the party, called the principal that delegates work to another, called the agent.
The Social Powers theory says it is power and not the mental state of someone that leads to obedience, Milgram’s theory is incomplete. Cite this Describe and Evaluate Milgrams Agency Theory Essay APA MLA Harvard Chicago ASA IEEE AMA.
Sociological theory social action help history and politics personal statement help?? A Level History Coursework Help Examples of agency and structure? Guidance for Psychology essay ETHICAL issues methods of Pshy Investigation OCR PSYCHOLOGY A2 G543 and G544 2015.
AGENCY THEORY Case Solution. ESSAY BASED ON AGENCY THEORY. The early basic agency archetype was developed in the literature of economics during 1960s and 1970s to determine the most favorable amount of the risk-sharing among individuals.
Agency theory looks at the problems that can arise in any kind of agency relationship with principals and agents. Another example of an agency relationship is that of the relationship between.
Agency theory is a useful framework for designing governance and controls in organisations. The concept offers a solid introduction to the topic by evaluating its strengths and weaknesses and uses case study evidence to demonstrate how the theory has been applied in different industries and contexts. Measures and success factors are also provided.
Agency theory can help to explain the actions of the various interest groups in the corporate governance debate. Examination of theories behind corporate governance provides a foundation for understanding the issue in greater depth and a link between an historical perspective and its application in modern governance standards.
This example Principal-Agent Theory Essay is published for educational and informational purposes only. If you need a custom essay or research paper on this topic please use our writing services. EssayEmpire.com offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.
Agency Theory essay from our essays database at Essays Bank. Browse more than 30 other categories of academic papers.
The agency problem can be a really big issue in the finance world. Find out what an agency problem is and look at some real-world examples. Then.
Agency Theory: An Assessment and Review KATHLEEN M. EISENHARDT Stanford University Agency theory is an important, yet controversial, theory. This paper reviews agency theory, its contributions to organization theory, and the extant empirical work and develops testable propositions. The conclusions are that agency theory (a) offers unique.
Relatively, orders and rules are in our best interests for example road signs prevent accidents happening. However, obedience can lead to destructive obedience this means obeying orders which leads to the harming of other people. Milgram did many theories on obedience; one of his theories was the agency theory of obedience (1973).
The practice questions aren’t used in the real test, but they’re based on the same topics as the test. Take a practice hazard perception test. You can practice with 3 test clips for free. The.
The Criticisms on the Agency Theory: Why this theory focuses on merely two stakeholders: the managers (agents) and shareholders (principal) The agency theory, coined and popularized in the 1970s, has long been an existing concept and theory that people in the past centuries have been thinking of adopting.
Agency is often times a term used in either philosophy and sociology, however it can be used in a literature sense as well. What agency means, is essentially the freedom and capacity to live or.
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The July 2015 report by The Kaiser Family Foundation (KFF) and UNAIDS on Financing the Response to HIV in Low-and Middle-Income Countries, comes out at a critical time for the global response to the epidemic. With publication of the UNAIDS-Lancet Commission Report, the START trial results, the Vancouver Consensus, and the UNAIDS agenda to “end AIDS by 2030,” this financial report has the potential to provide a foundation for serious activism demanding increased funding where it is needed. There now exists empirical evidence that demonstrates just how much global AIDS funding exists, and how much more there needs to be. The key findings from the Kaiser-UNAIDS report neatly display financial contributions from the 14 major donor countries, and this commentary aims to interpret those findings in the context of the global AIDS epidemic.
The first and most troublesome finding from the Kaiser-UNAIDS report is that donor government disbursements only increased 1% overall from 2013 to 2014, totaling US$8.6 billion, after accounting for inflation and exchange rates. This overall increase, both bilaterally and to the Global Fund, would not have been possible without the specific contribution from the United Kingdom. UNAIDS projects that in order to end AIDS by 2030, total global contributions must be between US$22 and US$24 billion. It is extremely problematic that not only are we in need of almost three times the current disbursement amount, but that the incremental increase of 1% a year is minimal and will never allow us to reach a level that would sustain the current response to the epidemic, let alone an amount that might make possible recent promises concerning “the end of AIDS”. This finding demonstrates the immediate need for major increases in funding and serious recommitments from all donor countries.
While most government donations continue to be bilateral, it is important to note that overall contributions to the Global Fund have increased and bilateral assistance has declined. Six donors now provide the majority of their disbursements for HIV through the Global Fund, indicating that the Fund has become a major channel of international HIV support, especially for a subset of donors. Bilateral donations allow donor governments to have control over what their money is used for and where it is targeted. Since this form of financing takes control away from the countries receiving the donations (and away from the people who know their country’s epidemic best), it may be a good sign that bilateral funding is decreasing. However, when considering the six countries who provided the greatest share of their HIV financing to the Global Fund (see Figure 3 in the Kaiser-UNAIDS report), it is important to note that these countries also provided the least funding to HIV when standardized by the size of their economies (see Figure 6). While moving away from bilateral to multilateral funding may put more control in the hands of recipient countries’, an increase in funding to the Global Fund may be a result of donor governments distancing themselves from the efforts they are putting money towards. What’s more, only five of the 14 donor countries increased their donations from 2013; seven of the 14 decreased their contributions and two (including the USA) remained stagnant. Both the declines in funding and the current trends regarding financing to the Global Fund may be signs that the “AIDS fatigue” that has plagued international HIV and AIDS efforts for much of the current decade is not going away, despite optimistic slogans around “ending AIDS by 2030.”
A significant portion of the report is dedicated to “fair share” analysis. This section starts by posing a series of questions that should be considered when determining what constitutes a government’s “fair share” of international HIV assistance, as they have methodological implications. In light of these questions, three methods of assessing fair share are provided. The first two methods objectively display the highest and lowest donors in terms of funding and resources disbursed for HIV. The third method demonstrates how much a country contributes in government disbursements in relation to the size of its economy (measured per US$1 million GDP). Denmark tops this list by contributing nearly $500 per US$1 million GDP, whereas the UK and the USA spend approximately $100 and $170 less, respectively, per US$1 million GDP than Denmark does, and the other disbursement efforts decline rapidly from there. When standardizing contributions by the size of countries’ economies, it becomes apparent which countries are significantly contributing to international HIV and AIDS efforts and which countries can afford to contribute much more. Japan, for example, represents 6% of the world GDP but ranks second to last in international disbursement, and countries of a similar position are Germany, France, Italy, Canada, and Australia. When compared to Denmark, even the largest donors – the USA and the UK – can afford to contribute more based on their GDP.
Further, it is prudent to clarify that this Kaiser-UNAIDS report only reflects the trends in public contributions from these specific 14 donor countries. It does not represent a rigorous review of other nations’ donations or, more significantly, of the international donations of the private sector. Future investigation into the relationship between private and public funds would provide a more comprehensive understanding of the current financial state of HIV funding. For example, does this trend of minimal increase and flat-lining of public funding carry over into the private sector, suggesting a bleak picture for HIV funding as a whole? Or has there been an increase of private sector donations, therefore causing a loose justification for governments to decrease their individual public donations? Does the absence of these public funds create a vacuum where the private sector, with possibly more commercial or even ideological interests, could insert itself? These questions are important points of departure for future financial research and investigation.
Zooming out from the specific findings of the report, now that the HIV and AIDS advocacy community has access to these numbers and its implications, what do we do with them? What’s next? This report serves as a potential resource for activism as an empirical data set to support both claims and advocacy for more funding and from the appropriate funders, and this fact should not be undervalued. The report cannot be dismissed, because it comes at a critical moment where the HIV establishment is calling for the end of AIDS by 2030. The UNAIDS-Lancet Commission and the Vancouver Consensus both call for sweeping mobilization and renovation of international HIV responses, including a renewed commitment to human rights and confronting the structural forces that perpetuate the HIV epidemic. None of this can be achieved without sufficient and appropriate funding, and while these publications champion a laudable response that is fixated on ending the human suffering caused by AIDS, they do so without robust financial plans. The Kaiser-UNAIDS report highlights these glaring disparities between intent and practice: the gap between the goals set and acquiring the money necessary to achieve them. There is simply not enough money being invested in HIV. We require more.
If the global HIV response is unable to achieve stronger financial commitments, then cheaper, less expensive interventions must be sought. This would mean to properly address the pharmaceutical patents that prevent the increase of the number of patients on treatment, especially in the case of high-priced patented antiretrovirals (ARVs). After 20 years of both the TRIPS agreement and the availability of HAART there is a wealth of evidence showing that the increase of patients on treatment is directly related to the decrease of ARV prices.
Therefore, in this scenario, we would require more strategies to foster the availability of generic drugs, even for new generations of HIV treatments. Such efforts are important and needed, but as this report shows, impartially, at least six countries out of the 14 can simply afford to give more money given the size of their economies. Advocates and civil society groups must take advantage of this data to illustrate and reiterate this point to the top donor governments: your efforts are strong, but they are not strong enough. Now is the moment for civil society to step forward, using this report as a tool to strengthen our arguments. We now have the evidence that more funding is needed to achieve the goals that have been set for 2030. The next step is to advocate.
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Am I paying too much for electricity? Does it make sense for me to put solar panels on my roof? Consumers and businesses are asking, and OpenEI provides answers. Developed by the DOE’s National Renewable Energy Laboratory, OpenEI is where businesses and consumers alike can go to find energy information.
The free site blends elements of social media and Wiki-based technology with previously unavailable information on energy sources and prices. According to DOE, the result is a powerful, collaborative platform that will help government and industry leaders define policy options, make informed investment decisions, and create new businesses.
“Remember the end of Raiders of the Lost Ark, when the Ark was hidden away in a warehouse?” said Debbie Brodt-Giles, NREL’s supervisor of the site. “Many websites are like that — taking something with the power to transform the way we see the world and locking it away. OpenEI is about more than collecting data. We’re about sharing data in ways that transform understanding.”
Crowd-Sourcing Boosts Reliability
DOE said the site uses the power of crowd-sourcing to make energy information even more robust and more accessible. In addition, maps and other visualization tools transform raw data into displays that are easily understood.
“The more people, the more experts, we have contributing data and using the site, the better the site is going to be, the richer the experience is going to be,” Brodt-Giles said. “To have a platform to openly share information that is typically hard to access is a big plus.”
“OpenEI’s unique quality is that it is so open, collaborative, and transparent,” NREL’s Graham Hill said. “The new Utility Rate Database is a great example. We’ve taken information that is typically disparate and difficult to find and we’ve made it easy for anyone to access and understand.”
The new information allows anyone with Internet access to compare kilowatt-hour rates in dozens of cities and zero in on such variables as time-of-use rates, demand charges, and tiered rate structures.
For household consumers, that could mean getting wiser about whether to install rooftop solar panels or finding other ways to lower their energy bills. A farmer in rural Iowa can assess potential profitability of leasing land for wind power development.
Energy investors could use other tools to determine how many wind turbines could be installed on the same property. They can analyze information on rates, wind speed, sunshine (for solar), and incentives to inform their decisions. With OpenEI, said DOE, decision makers can reduce missteps and save time and money.
The new utility-rate data show average consumption rates in the cities. The data illuminate, for example, that air-conditioner-revving warm-weather cities Tucson and Atlanta consume far more energy than cooler-weather cities such as Boston, Denver, and Milwaukee.
Energy Information for All
What are site visitors creating and finding? Among other things:
• For anyone contemplating heating and cooling homes or buildings with geothermal energy, the National Oceanic and Atmospheric Administration provides research about how warm it gets as holes are drilled deeper into the earth.
• Information on how to qualify for local, state, and national incentives for renewable energy systems is accessible thanks to contributions from North Carolina State University.
• Developers can access solar radiation data to find out precisely how much sun they can expect to hit their panels in different locations around the country.
Utilities typically put their rates somewhere on the Internet, but OpenEI ensures that those rates are easily accessible and in data sets that compare costs across a range of cities.
When Energy Secretary Steven Chu announced OpenEI.org, he said, “The true potential of this tool will grow with the public’s participation — as they add new data and share their expertise — to ensure that all communities have access to the information they need to broadly deploy the clean energy resources of the future.”
For more information, visit OpenEI.org.
Publication date: 09/19/2011
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What are Altcoins?
admin,February 20, 2018
What are Altcoins?
For people who aren’t familiar with cryptocurrencies, Bitcoin would be the only currency they are familiar with. However, once you begin to get involved with cryptocurrency, you will soon realise there are actually hundreds of types of cryptocurrencies known as Altcoins. Altcoin is the combination of two words, alt is short for alternative and coin to signifies currency. In short, Altcoins are alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. Many Altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. Here are a few Altcoins you might kno, Ethereum, Ripple, Litecoin, ZCash, Dash, etc.
Up to this time, CoinMarketCap listed 1,578 Altcoins and more appear each day. Most altcoins are little more than Bitcoin clones, changing only minor characteristics such as their transaction speed, distribution method, or hashing algorithm. Most of these coins do not survive for very long. Altcoins can differ from Bitcoin in a range of ways that include:
- Some Altcoins have a different economic model or a different coin-distribution method, like the ones that were given away to all citizens of a country
- Others employ different proof-of-work mining algorithms, perhaps to resist specialized mining hardware — or maybe they don’t even rely on proof of work at all.
- Several altcoins offer a more versatile programming language to build applications on top of, while yet others offer more privacy compared to Bitcoin.
- There are also altcoins that serve very specific, non-monetary use cases, like domain name registry or data storage pointers.
One exception is Litecoin, which is one of the most successful Altcoins. In addition to using a different hashing algorithm than Bitcoin, Litecoin has a much higher number of currency units. For this reason, Litecoin has branded itself as “silver to Bitcoin’s gold.” However, there are a lot of Altcoins that don’t do much on the market. Most Altcoins offer no benefit over Bitcoin at all. Plus, they have less hash power securing them, involve fewer developers improving them, and are usually less useful due to smaller network effects. This also means that Altcoins are typically riskier than Bitcoin. Their exchange rates are often more volatile, and over the years virtually no Altcoins have maintained their value against Bitcoin. On top of that, many Altcoins can be considered outright scams, mainly created to enrich its inventors and early adopters.
Though many Bitcoin enthusiasts argue that Altcoins are completely not useful and will not succeed because they just copied Bitcoin’s infrastructure. However, Altcoins serve an important role. Decentralization is one of Bitcoin’s most prominent goals, and altcoins further decentralize the cryptocurrency community. Moreover, altcoins allow developers to experiment with unique features. While it is true that Bitcoin can copy these features if the developers or community desires, fully-functioning altcoins are much better “cryptocurrency laboratories” than Bitcoin’s testnet.
Finally, Altcoins give Bitcoin healthy competition. Altcoins give cryptocurrency users alternative options and force Bitcoin’s developers to remain active and continue innovating. If users do not feel that Bitcoin satisfies their digital desires, they can adopt an Altcoin. If enough users left Bitcoin for a particular altcoin, Bitcoin developers would have to adopt features the community desired or risk losing its place as the preeminent cryptocurrency.
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The wind power will account for the largest part of the renewable energy development in the region. China, India, Japan and Australia will together add approximately 57,400 MW of additional wind capacity during 2008-15. This represents a 47.4% increase over the total world wind power capacity in 2008. China and India are expected to be the major drivers of this growth.
Apart from wind energy, other renewable energy technologies like solar, geothermal, small hydro and biomass are also expected to increase their share in the overall renewable energy market of Asia–Pacific.
Government policy structure and promotional measures for renewables are expected to play a vital role in the renewable energy development especially with the global economic downturn and lower crude oil prices causing renewables energy projects to become uneconomical.
China uses both Renewable Portfolio Standards (RPS) and feed in tariffs to promote renewables. In India there is no national level tariff or standards but the different states in the country have RPS targets and offer fixed tariffs for renewable electricity.
Australia and Japan have a national RPS scheme and different states in these countries also offer feed in tariffs. The Australian Government’s extension of renewable energy targets from 9,500 GWh by 2010 under the old Act to 45,000 GWh by 2020, as per the new law will give a major boost to the renewable energy sector in the country.
Thailand offers additional fixed tariffs for small renewable energy projects. The country has also enacted a National RPS. The renewable energy industry in the country is still in its early development stages. However, Thailand’s renewable energy industry is expected to grow at a fast pace in future with the government laying down the Renewable Energy Development Plan 2008-22. With huge biomass resources, the government expects biomass to play a leading role in this development.
The New Zealand Government has set a set a target of 90% renewable electricity by 2025. Currently the renewables account for about 70% of the country’s total electricity generation. This implies an increase of about 20% by 2025. However, the government has still not come up with any specific policy measures to promote renewables.
Indonesia and Russia lack a major policy framework for renewable energy development
Stronger policy measures could further boost the renewable energy investments in India and Japan. Both countries have huge potential in terms of renewable energy and but lack in terms of overall renewable energy targets.
Japan has made huge technological advancements in terms of renewable energy and is one of the major players in the world renewable energy market. However non-aggressive national targets for renewable energy may hinder the development of renewables in the country. The country uses RPS as the main policy instrument to support renewables. However the targets specified under the RPS are too low. The RPS aims to establish 16.0 TWh of renewable electricity by 2014, implying that only 1.63% of the total electricity is required to be generated from renewable energy sources. The renewable energy sector in the country is strongly positioned for growth and this growth would drastically increase if the government pursues stronger and more aggressive targets.
India also offers huge potential for growth of renewable energy industry. However the country still has not enacted any national RPS targets or feed in tariffs for renewables. The RPS or feed in tariffs for renewables are offered at state level, this has restricted the renewable energy development to only some states. The implementation of a national level RPS or a feed in tariff scheme will lead to a larger scale deployment of renewables in the country.
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What is palm oil?
Palm oil is a vegetable oil with a growing share of growing worldwide demand for vegetable oil.
It is the world’s most popular vegetable oil and its most traded: 74 million tonnes were produced in 2020.
Source: Oil World 2019 annual
How is palm oil produced?
Oil palms produce fresh fruit bunches (ffb) continuously over their 25-year life. Competing vegetable oil seeds are annual crops. Palm is grown +/-5º of the equator.
Fresh fruit bunches are steamed and then squeezed to yield crude palm oil. Separately, a nut is extracted from the fruit kernel and pressed to produce palm kernel oil (PKO).
Source: Oil World 2020 annual
How are palm oil and palm kernel oil used?
Approximately half of products found in a UK supermarket contain palm oil or PKO, including shampoos, cosmetics, ice cream, biscuits, chocolate and cereals.
Is palm oil efficient?
Palm is extremely efficient in land use: tonnes of oil per hectare:
It produces 40% of the world’s vegetable oil on less than 8% of the area devoted to vegetable oil cultivation.
Oil World: 2018-19 growing season
Is palm oil bad for you?
On balance there is no evidence to support assertions that palm oil is associated with adverse nutritional outcomes in humans. Growing production of palm oil has reduced human consumption of harmful trans fats.
Can palm oil be sustainable?
Yes. The Roundtable for Sustainable Palm Oil (RSPO) has an independently-audited standard covering a wide range of social, environmental and economic criteria.
RSPO was established in 2004 with diverse membership:
- Environmental pressure groups: eg Oxfam, ZSL;
- Global bodies: eg WWF; WRI;
- Leading FMGC groups and retailers: eg Nestle; Modelez; Carrefour, Sainsbury’s; Bayer; Danone; L’Oréal;
- Banks: IFC; Rabobank; HSBC;
- Palm oil growers and traders.
8 principles tested for RSPO certification
- Commitment to transparency
- Compliance with applicable laws and regulation
- Commitment to long-term economic and financial viability
- Use of appropriate best practices by growers and millers
- Environmental responsibility and conservation of natural resources and biodiversity
- Responsible consideration of employees, individuals and communities
- Responsible development of new plantings
- Commitment to continuous improvement in key areas of activity
Is palm oil sustainable now?
Forty per cent of the world’s palm oil producers are members of the RSPO, as well as many product manufacturers, retailers, environmental and social non-governmental organisations.
RSPO oil can be bought for a premium of only US$2-25/tonne.
20% of the world’s palm oil is currently produced sustainably…
… but despite the low premium it commands, only half of this is bought.
Is it sensible to avoid or ban palm oil?
|“Oil palm is highly efficient. Simply using another type of oil might take up
more land leading to more deforestation. We may be able to protect [our forest
relatives] through simple choices, like buying products from deforestation-free
sustainable palm oil from companies that support local people using
existing plantations without cutting down more rainforest.”
Sir David Attenborough, 2019
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An Introduction to the Stock Market
Understanding the stock market is essential to making informed trading decisions. You need to know how to choose the right stocks, which requires an in-depth understanding of a company’s annual report and financial statements. Learn how to understand what stock represents in a company and how to determine the true value of any stock.
This allows you to make better investing decisions by avoiding the costly mistake of purchasing a company's stock when the market has pushed its share price too high relative to its value.
Stock Market Terms
The first step to understanding the stock market is knowing the lingo. Here are a few commonly used words and phrases:
- Earnings per Share: The total company profit divided by the number of stock shares outstanding.
- Going Public: Slang for when a company plans to have an IPO of its stock.
- IPO: Short for Initial Public Offering, when a company sells its shares of stock for the first time.
- Market Cap: Short for Market Capitalization, the amount of money you would have to pay if you bought every single share of stock in a company. To calculate market cap, multiply the number of shares by the price per share.
- Share: A share, or a single common stock, represents one unit of an investor’s ownership in a share of the profits, losses, and assets of a company. A company creates shares when it carves itself into pieces and sells them to investors in exchange for cash.
- Ticker Symbol: A short group of letters that represents a particular stock as listed on the stock market. For example, The Coca-Cola Company has a ticker symbol of KO, and Johnson & Johnson has a ticker symbol of JNJ.
- Underwriter: The financial institution or investment bank that does all of the paperwork and orchestrates a company’s IPO.
Introduction to the Stock Market
The workings of the stock market can be confusing. Some people believe investing is a form of gambling and feel that, if you invest, you will likely end up losing your money.
These fears can stem from the personal experiences of family members and friends who suffered similar fates or lived through the Great Depression. These feelings are understandable but aren't grounded in facts. Someone who believes in this line of thinking may not have an in-depth understanding of the stock market, why it exists, and how it works.
Investing by Following the Crowd
Other people believe that they should invest for the long run but don’t know where to begin. Before learning about how the stock market works, they look at investing like some sort of magic that only a few people know how to use. More often than not, they leave their financial decisions up to professionals and cannot tell you why they own a particular stock or mutual fund.
This investment style could be called blind faith, or perhaps it's limited to a sentiment such as, “This stock is going up—we should buy it." Though it may not seem so on the surface, this group is in far more danger than the first. They tend to invest by following the masses and then wonder why they only achieve mediocre, or, in some cases, devastating results.
Learning to Invest
Upon learning a few techniques, the average investor can evaluate the balance sheet of a company and, following a few relatively simple calculations, arrive at their own interpretation of the real value of a company and its stock.
This allows an investor to look at a stock and know that it is worth, for instance, $40 per share. This gives each investor the freedom to determine when the market has undervalued stocks, increasing their long-term returns substantially, or overvalued it, making it a poor investment candidate.
Why Do Companies Sell Stock?
When learning how to value a company, it helps to understand the nature of a business and the stock market. Almost every large corporation started as a small, mom-and-pop operation and, through growth, became a financial giant.
Consider Walmart, Amazon, and McDonald's. Walmart was originally a single-store business in Arkansas. Amazon.com began as an online bookseller in a garage. McDonald's was once a small restaurant that no one outside of San Bernardino, California, had ever heard of. How did these small companies grow from tiny, hometown enterprises to three of the largest businesses in the American economy? They raised capital by selling stocks.
The Need for Funding
As a company grows, it continues to face the hurdle of raising enough money to fund ongoing expansion. Owners generally have two options to overcome this: They can either borrow the money from a bank or venture capitalist or they can sell part of the business to investors and use the money to fund growth. Companies often take out a bank loan because it's typically easy to acquire and very useful, up to a point.
Banks won't always lend money to companies, and over-eager managers may try to borrow too much, which adds a lot of debt to the company balance sheet and hurts its performance metrics. Factors such as these often provoke smaller, growing businesses to issue stock. In exchange for giving up a tiny fraction of ownership control, they receive cash to expand the business.
Going public provides a company with money that doesn’t have to be paid back. It also gives the business managers and owners a new tool. Instead of paying cash for certain transactions, such as the acquisition of another company or business line, they can use their own stock.
How Is Stock Issued?
To better understand how issuing stock works, take the fictional company ABC Furniture, Inc. After getting married, a young couple decided to start a business. This allows them to work for themselves and arrange their working hours around their family. Both husband and wife have always had a strong interest in furniture, so they decide to open a store in their hometown.
After borrowing money from the bank, they name their company ABC Furniture, Inc. and go into business. During the first few years, the company makes little profit because they invest the earnings back into the store, buying additional inventory, remodeling, and expanding the building to accommodate the increasing level of merchandise.
Making the Decision to Sell Shares
Ten years later, the business has grown rapidly. The couple has managed to pay off the company’s debt and have profits of more than $500,000 per year. Convinced that ABC Furniture could do as well in several larger neighboring cities, the couple decides they want to open two new branches.
They research their options and find out that they need over $4 million to expand. Not wanting to borrow money and make debt and interest payments again, they decide to raise funds by offering equity to potential shareholders, so they sell stock in their company.
Finding an Underwriter
The company approaches an underwriter for the stock offering, such as Goldman Sachs or JP Morgan, who digs into their financial statements and determines the value of the business. As mentioned before, ABC Furniture earns $500,000 after-tax profit each year. It also has a book value of $3 million, which means the value of the land, building, inventory, and other assets, after covering the company’s debt. The underwriter researches and discovers the average furniture stock trades on the market at 20 times its company's earnings.
What does this mean? Simply stated, you would multiply the company's earnings of $500,000 by 20. In ABC’s case, this results in a market value estimation of $10 million. If you add in the company's book value, you arrive at $13 million. This means, in the underwriter’s opinion, that ABC Furniture has a total value of $13 million.
Deciding How Much of Their Business to Sell
The young couple, now in their 30s, must decide how much of the company they are willing to sell. Right now, they own 100% of the business. The more company shares they sell, the more cash they’ll raise, but they must keep in mind that by selling more, they’ll be giving up a larger part of their ownership. As the company grows, that ownership will be worth more, so a wise entrepreneur would not sell more than he or she had to.
After discussing it, the couple decides to keep 60% of the company and sell the other 40% to the public as stock. When you do the math, this means that they will keep $7.8 million worth of the business (60% of the $13 million value). Because they own a majority of the stock, greater than 50%, they will still be in control of the store.
The other 40% of the stock that they want to sell to the public has a value of $5.2 million. The underwriter finds investors who want to buy the stock and gives a check for $5.2 million to the couple.
Although they own less of the company, the owners' stake will hopefully grow faster now that they have the means to expand rapidly. Using the money from their public offering, ABC Furniture successfully opens two new stores and has $1.2 million in cash left over, since they raised $5.2 million but only used $4 million.
Using the Income to Expand and Grow
Their business performs even better in the new branches. The two new stores make around $800,000 a year in profit each, while the old store still makes the same $500,000. Between the three stores, ABC now makes an annual profit of $2.1 million.
Although they no longer have the flexibility of a small business or the freedom to simply close shop, their company is now valued at $51 million. You would reach this by multiplying their new earnings of $2.1 million per year by 20 (the average furniture stock multiple mentioned earlier) and add the company's latest book value of $9 million since each store has a book value of $3 million. The couple’s 60% stake now has a total worth of $30.6 million.
The Benefits of Selling and Owning Shares
With this example, it’s easy to see how small businesses seem to explode in value when they go public. The original owners of the company, in a sense, become wealthier overnight. Before, the amount they could take out of the business was limited to the profit that was generated. Now, the owners can sell their shares in the company at any time, raising cash quickly.
This process forms the basis of Wall Street. The stock market functions as a large auction where ownership in companies just like ABC Furniture is sold to the highest bidder each day. Because of human nature and the emotions of fear and greed, a company can sell for far more or for far less than its intrinsic value. A good investor learns to identify those companies currently selling below their true worth so that they can buy as many shares as possible.
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Australia will use “accounting rules” to tell the Paris climate summit it has met its greenhouse gas reduction targets even though its carbon pollution is increasing, an analysis has confirmed.
The environment minister, Greg Hunt, announced via the Australian newspaper last week that Australia would reveal at the UN meeting in Paris that it had already met its target to reduce emissions by 5% by 2020, compared with 2000 levels.
“The huge expectation is that it will be below zero. We’ll be able to say that we’ve already met our target,” Hunt said.
According to the latest analysis by research firm RepuTex, Australia’s actual emissions will rise 4% by 2020, compared with 2000 levels, and 6% compared with today.
But it will be able to count “carry over”, under the accounting rules governing international emissions calculations, because it “overshot” or did better than the special deal it received at the Kyoto meeting for its first climate change pledge to 2012. (Unlike most developed countries Australia was allowed to increase its emissions by 8%.)
Given the dramatic downward revisions in forecast emissions in recent years, because of lower electricity demand and the decline in heavy manufacturing, this “carry over” allows Australia to claim it has met the small decrease required by its second 2020 target, when its actual emissions are increasing.
The target of 5% by 2020 was also originally the minimum reduction agreed in a “range” of targets up to a 25% cut that both main political parties had agreed to consider, and the higher targets were to kick in when other countries made similar promises.
Despite numerous analyses concluding that the conditions have been met for Australia to adopt a tougher 2020 target, including by its own advisory body, the Climate Change Authority, the government said it will meet only the minimum 5%.
RepuTex warned that Australia’s ability to coast to its 2020 goal by using accounting rules just deferred the real reductions that would be needed to meet the next target the government has signed up for – a cut of between 26% and 28% by 2030.
It said the upsurge in coal-fired electricity generation that had occurred since the abolition of the carbon tax, along with new LNG projects and coalmines that emit greenhouse gases during the mining process, will result in Australia’s emissions rising much faster than the rate at which the government can cut them by using its emissions reduction fund to buy abatement.
RepuTex’s forecast for emissions growth of 6% over the next five years is more favourable to the government than its own official figures. The Department of Environment forecasts emissions will increase by 20% over the same period.
The prime minister, Malcolm Turnbull, who was forced to promise to keep Direct Action in order to regain the Liberal leadership, has deflected questions about the policy’s inability to meet his 2030 target on its current settings by pointing to a review the government had scheduled for 2017.
“We are going to review our measures in 2017 and, of course, if for whatever reason they’re not tracking in the right direction, then we can adjust them. We always have the option of buying international credits, so there are many ways we can meet those emission reduction targets,” he said this week.
But RepuTex argued that waiting a few years makes the job harder.
“While Australia will be able to increase its emissions and still meet its 2020 obligations, allowing real emissions to continue to increase over the next five years will place significant pressure on Australia’s 2030 abatement task,” RepuTex chief executive Hugh Grossman said.
“From today, Australia requires nearly 6m tonnes (Mt) of abatement to be derived from ‘new’ (not pre-existing) projects each year to meet its 2030 target. Should emissions grow over the next five years, Australia would instead require 13 Mt of new abatement projects to commence each year over 2020-2030, more than double the current rate.
“If emissions increase from today, that growth will need to be made up for later, which will place pressure on policy, and invariably industry, to find more cuts each year. It is more efficient to generate cuts from today’s levels, rather than let any gains be unwound, and then pay to start over again later. By that point the market will have less time to reduce more emissions.”
The government has indicated that a range of policies can be used to meet the 2030 target on top of the emissions reduction fund, but has not provided details.
Hunt has said, for example, that 200m tonnes of abatement will come from the “safeguards mechanism” pushing heavy industry to reduce its emissions, but the mechanism is now set at levels that do not deliver any emission reductions. Resetting the policy would turn it into a kind of emissions trading scheme, where companies trade carbon permits with one another.
Hunt has said the government will agree in Paris to regular international reviews of the adequacy of its climate change policies.
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Advertising Copywriter Business Administration Experiments Partnerships Architectures Chennai India
PVAF (present value annuity factor) using CALCULATOR by ANKIT GOYAL. Calculate Present Value Annuity Factor (PVAF). What Is the Present Value of an Annuity? The present value of an annuity is the current value of future payments from an annuity, given a. What Is the Present Value Interest Factor of an Annuity? The present value interest factor of an annuity is a factor that can be used to calculate. The present value annuity factor is used to calculate the present value of future one dollar cash flows. Application of PVAF, CVAF, PVF and CVF tables in FM) ~ Time Value of Money [ For B.
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Banks make money by charging interest for loans. In contrast to what some people may think, this is not a simple means of making money, but is rather one of the most useful ways of earning money for a bank.
Interest on loans is charged when a customer makes a deposit in a savings or checking account. Similarly, when a customer takes out new loans, he or she pays the interest on the principal. A bank can cover its operating expenses by charging an extra interest rate above that which it offers the depositor.
Customers usually only pay interest for as long as they have an account with the bank. This interest rate then becomes a charge that accumulates over time. The longer the customer remains with the bank, the higher the interest rate charged to him or her. This is a feature that many consumers want to avoid. This is especially so for the people who use their bank to keep all their financial records.
Banks are able to charge interest for loans because they need to make money from doing business. They have to pay interest and fees for providing financial services, including the provision of loans.
Banks also have to pay taxes and other fees that are required by the government. These payments are necessary for them to maintain and operate as banks.
Banks can take advantage of this extra interest rate by raising their own interest rates to compensate for the lost revenue from the interest they would be paying on customers’ accounts. If they raise interest rates, the money they receive from customers will go to covering costs.
Because they have to make up the difference between the interest that they charge for loans and the amount they would charge if they didn’t charge high interest rates, this difference in interest rates also means more profit for the banks. Since it is the banks’ goal to earn as much money as possible from as quickly as possible, they do everything possible to ensure that they are getting the maximum interest from their customers. They are willing to accept the customers’ money regardless of whether or not they are receiving any interest.
The biggest incentive to charge high interest rates on customers’ accounts is that customers usually have very little control over how the interest rates are set. This allows them to take advantage of the situation by making larger payments on their loan balances. It also enables them to increase the amount of interest that they are paying. Even if borrowers are able to make only small payments on their debts, the bank has a greater amount of money in its pocket to make even bigger profits.
The banks can also increase interest rates to offset any additional cost associated with having a loan. The additional expense may consist of paying down any existing debt that is not being covered by the loan. Banks are willing to pass these expenses along to their customers, since this is a service that they are providing.
There are several different ways that banks make money from the interest that they charge. One of the easiest ways is to raise the interest rates on existing loans. If the bank decides that they will increase the interest rates on their existing loans, they may use the additional money to purchase new credit card accounts that offer a higher interest rate than the loan they are currently offering.
They may also allow current customers to refinance their loans to pay off old ones. or even extend their credit limits to new clients, increasing the amount of money that they charge for loans to the account holder.
This type of activity increases the bank’s revenue because it allows them to make additional profits. The more money they collect, the higher they can charge for loans. And they can charge higher interest rates to more clients. As more money is collected, the banks can increase their profit margin.
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South Korea legally recognized electronic signatures in 2013. The economic and technology giant did this in a timely manner after the Digital Signature Act. However, the impetus was to boost their e-commerce and internet businesses to another tier into the process of digitalization.
E-signatures play an astounding role in the consumer market in South Korea, especially in the e-commerce sector. It is estimated that 99.2% of South Korean households have internet access through a cellular device or personal computer. In 2018, electronic commerce made up 30.8% of South Korea’s total retail industry. In the same year, it was estimated that cross border e-commerce reached $2.8 billion.
Introduction of E-signature laws
Electronic signature or e-signature in the South Korean law is defined as any electronic means that enables the identification of a person who has agreed and consented to the contents within a document. The electronic signature has similar validity and legal effects as a handwritten signature. The ultimate idea was to make the e-signature more commonplace and as easy to use as a regular signature. So systems were put in place to make it more reliable and appropriate.
However, in the modern world with mass digitalization, e-signatures are pivotal in ensuring quick workflows, security, and authenticity without repudiation. They can also be encrypted as well as used remotely which makes it more useful compared with traditional signatures. These attributes make them perfect for high-priority or time-sensitive documents.
The Digital Signature Act was established in July 1999. Back then it was confined mainly to the banking sector where it was used mainly for Internet banking verification as well as verification for transactions. These days the e-signature has advanced from the cardinal public key infrastructure to biometrics such as fingerprint scanning and facial recognition technology. Both of these technologies are readily found on South Korean smartphones made by Samsung.
There are two main governing bodies for e-signatures in South Korea. The Korea Information Security Agency or KISA has the responsibility to foster an environment that respects the legality of e-signatures. The Korea Certification Authority Central or KCAC is a part of KISA that gives certificates to intermediary certification authorities and regulates them. These intermediary certification authorities are private organizations that are regulated by these bodies.
Use and effect of E-signatures
Interestingly, e-signatures jurisdictions outside Korea usually have long mandates that specify certain technical methods and can be cumbersome to understand how the laws apply. However, the South Korean laws on e-signatures allow for flexibility when encrypted digital signatures are used in regulatory filings and in e-commerce. Increased security is also a benefit since digital signatures tend to be more protected than a simple generic electronic signature.
Since e-signatures became legal, they are used in South Korea for sales agreements, and business deals. They have also found application in the real estate market as they are used in real estate documents like lease agreements for both commercial and domestic purposes. In legal services, e-signatures are used for non-exclusive licenses of intellectual property primarily for patents and copyright.
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The Accounting Percentage Completion Method for Billing
Industries such as construction, engineering and custom manufacturing usually account for contracted jobs separately. For multi-period contracts, the percentage of completion method provides a rational way to know how much to bill a customer in each period. The method is appropriate when you can make reliable estimates of the minimum total revenue and the maximum total cost of a project. You should not use percentage completion if payment is in doubt due to financial, legal, environmental or political reasons.
Measurement of Progress
To know how much to bill, you need to measure your progress towards contract completion. The cost-to-cost method compares costs incurred to total estimated costs. You should allocate equipment costs over the life of the project. In the efforts-expended method, you compare how much of the work is complete. You might make the estimate based on labor hours or materials used. The units-of-delivery method is appropriate for contracts specifying the delivery of a set number of units to the customer. Under this measurement, you bill the contract price for the units delivered in the period and you allocate costs based on the number of units delivered.
To apply your measurement of progress, first calculate your estimate gross profit, which equals estimated revenues minus estimated costs. Multiply your estimated contract revenue by the percentage of progress and subtract the previously recognized revenue. The result is the revenue recognized for the period, which is the amount you bill the customer unless other billing arrangements take precedence. For example, you may have to subtract a holdback specified in the contract. Use the same procedure to determine how much cost to recognize for the current period.
Suppose you begin a one-year construction contract in October. Since it is a long-term contract, you must figure how much revenue to recognize and bill in this year and next. The contract value is $300,000 and you estimate costs at $250,000, giving an estimated gross profit of $50,000. On December 31, you find that you’ve spent $75,000 on the costs directly or indirectly attributable to the project. Because this represents 30 percent of your estimated costs, you recognize 30 percent of the contract price, or $90,000, as revenue and bill your customer this amount.
The percentage of completion method uses accrual accounting and thus accelerates income recognition as compared to cash accounting. In some situations, you might want to defer income and the accompanying taxes for as long as possible. You can accomplish this by using cash accounting and delaying billing. If you use accrued accounting, you can use the completed contract method and wait until the work is complete before recognizing revenue and sending out a bill.
Based in Greenville SC, Eric Bank has been writing business-related articles since 1985. He holds an M.B.A. from New York University and an M.S. in finance from DePaul University. You can see samples of his work at ericbank.com.
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Compound Interest Calculator
|Calculates Compound Interest Rate|
Compound Interest means to add the accumulate interest in the initial investment. Initial Investment is also called Principal. It simply means that the calculated interest will be the interest calculated on the previous interest. This is why the addition of interest into the basic principal amount is called compounding. It may be noted that the interest rate is dependent upon the type of loan.
This Calculator can be helpful for you because it provides you the amount of interest that can be generated on some initial investment, provided that the interest is added back to the original amount that is the principal. Following is the formula that can be used to calculate Amount of interest:A = P ( 1+ ( r/n) )nt
- P is the basic amount
- r is the annual interest rate
- n is the number of times the interest is compounded in a year
- t is the number of years
- A is the amount after time t
This Calculator is free to use. You can add this calculator to your favorites. Don’t hesitate to tell your friends about it.
Back to Calculator.
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The postponement of the Cop26 climate summit due to the Covid-19 pandemic means the United States presidential election takes on newfound significance in the international fight against climate change.
The November election comes at a critical juncture in the world’s efforts to accelerate climate action, five years on from the adoption of the Paris Agreement.
It will determine whether the United States has the potential to either be a catalytic force for that effort or a stronger spoiler going forward – even beyond President Donald Trump’s decision to withdraw from the Agreement.
The presidential primary race has already been historic even as former Vice President Joe Biden becomes the presumptive Democratic nominee.
For the first time, every major candidate published a detailed climate plan.
Polls have also consistently shown the fight against climate change is a priority for Democratic primary voters. And that climate change will likely be an important factor come November, even with the ongoing efforts to tackle another global challenge in Covid-19.
And while President Trump has expanded offshore drilling and overseas financing of fossil fuel projects in recent years, Biden has outlined an ambitious and far reaching international climate agenda that goes beyond simply returning the US to the Paris Agreement.
For example, Biden has said he would also put the economy on track to reach net zero emissions no later than 2050, implement carbon border fees or quotas on carbon-intensive goods, recommit investments through the Green Climate Fund, phase out fossil fuel subsidies globally, accelerate emissions reductions in key sectors such as aviation and shipping, and also make climate change a core national security priority.
Perhaps most significantly, most of the Democratic presidential field also spoke strongly about the need to use trade policy as a lever for climate action in a way no administration has done before.
For example, a potential Biden administration could clearly signal its intention to embed the Paris Agreement or elements of it into pending trade deals with Japan, the European Union, and the United Kingdom.
Likewise, the US’ ability to recapture a degree of cooperation with China – despite other differences with the world’s largest emitter – will be key, building on the previous joint agreements forged between Presidents Xi Jinping and Barack Obama.
This will be even more difficult given the recent trade conflict and self-inflicted turbulence in dealing with Covid-19. But identifying mutually beneficial areas for cooperation such as on climate action will be critical, as opposed to all-out economic and geopolitical confrontation.
For example, the total investment opportunity for renewable energy projects in countries that are part of China’s Belt and Road Initiative run into the hundreds of billions of dollars.
Seeking to capitalise on these opportunities, in addition to holding China accountable to higher environmental standards in these projects – as has been the focus on the campaign trail – is likely to prove an effective approach.
However, with the Cop26 talks due in Glasgow in November now delayed until 2021, there is now an even greater opportunity for a potential Biden administration to make a mark in the international fight against climate change.
In the lead-up to Cop26, every nation in the world is being asked to increase the ambition of its emissions reduction efforts through the Paris Agreement’s “ratchet mechanism” that requires countries to come back to the table every five years with stronger national targets. To date, only a handful of countries have done so – mostly small emitters.
Even in a best case scenario, it is a tall ask to make a sizeable dent on the current emissions gap from the 3.2C increase in average temperature the world is on track for by the end of the century, and the 1.5C limit the science says is required to avoid the worst impacts of climate change.
But a potential Biden administration – with its inevitable commitment to bring a more ambitious 2030 national target on behalf of the United States – has the potential to unlock similar efforts by other major emitters, including China, India, Japan, and Australia.
This is partly why it is also important a potential Biden administration does not rush to table a new 2030 national target at the same time they rejoin the Paris Agreement, but instead seeks to leverage it for maximum impact diplomatically.
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One important opportunity to do this would be through Biden’s idea to convene a world leaders’ summit on climate change early in his administration.
With a delayed Cop26, such a summit takes on profound significance in a way that is not yet fully appreciated by the international community, especially if it can set the foundation for enhanced ambition specifically from major emitters.
Ultimately, the extent that climate change is prioritised and integrated into – rather than traded off against – other pressing issues will define the true impact any new administration can make in addressing the challenge.
This will especially be the case as they grapple with the extraordinary human and economic impacts of Covid-19, and constraints from Congress and the courts.
But one thing that is already abundantly clear is that a Democratic president has the potential to be a game changer for the international fight against climate change.
Thom Woodroofe is the Senior Advisor on Multilateral Affairs to the President of the Asia Society Policy Institute and is a former climate diplomat.
Brendan Guy is the Manager of International Policy at the Natural Resources Defense Council.
They are the co-authors of an issue paper titled ‘Climate Diplomacy under a New U.S. Administration’ published by the Asia Society Policy Institute.
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The fashion industry accounts for around 5% of global CO2 emissions making it one of the most polluting industries in the world. This has been driven in large part by the rise of fast fashion. Fast fashion is an approach to the production and marketing of clothing which aims to bring cheap, trendy clothing from catwalks to high street shops at breakneck speeds. Companies like Hugo Boss, Tally Weijl, Triumph International, Nike and Adidas can turn an idea conceived in a designer’s mind to the baskets of high streets shoppers within a matter of weeks. All at such low prices as to make them irresistible.
To achieve this, fashion companies rely on economies of scale and relentless cost-cutting measures. The ultimate consequence being huge amounts of waste, pollution and horrendous working conditions for factory employees. In a previous article published on this blog we have outlined, in more detail, many of the drivers of the fashion industry’s enormously damaging environmental impact.
Some of the most reliable estimates put the fashion industry as a 1.7 trillion dollar global industry. This means that the greenhouse gas emissions, chemical dumping, soil exhaustion, water scarcity, release of microplastics and dumping of old clothes that are resulting from the activities of the fashion industry, are all occurring on truly enormous scales. All of this is driven by marketing from fast-fashion retailers and the insatiable consumer demand for cheap, fashionable clothing.
How can EKOenergy help to address some of the environmental problems in fashion? As an environmental label for energy, we seek to encourage companies to buy clean energy – and the fashion industry is a major consumer of energy. Factories producing fabrics need heat for washing, dying and drying clothes and electricity for operating machinery and lighting. Similarly, warehouses and outlet stores need energy for heating and lighting. Anywhere that energy is used, renewable energy ought to be used if the industry wants to reduce its carbon footprint.
We encourage companies to actively begin the transition to renewable energy, starting from any level of their operations. For example, retail stores on high streets can buy renewable energy very easily. This can be done today if a company wants to. Similarly, warehouses and storage depots owned by the same company are easy to transition to renewable energy, it’s just a matter of initiative.
A more ambitious goal is to introduce renewable energy throughout the length of the supply chain. As brands often buy fabrics or services from multiple different companies, cleaning the supply chain is not quite as easy as a simple executive decision. However, as 80% of the energy use in the fashion industry is consumed by the machinery in textile factories used to produce the fabric in clothes, this process is entirely necessary in the long run. We encourage companies to show ambition and make long term renewable energy commitments. Since EKOenergy operates in over 40 countries all around the world, we can help companies make this transition.
Rising trends such as the slow fashion movement provide plenty of case examples of how a sustainable fashion industry can be achieved. Companies like Kotn, Reformation and Howies are demonstrating that it is possible to produce fashionable clothing in a sustainable manner while remaining profitable. A number of sustainable fashion companies already using the EKOenergy label include Ecoalf in Spain, Carrera Jeans in Italy and Globe Hope in Finland.
Though there is no simple solution to the problems of the fashion industry, tackling energy consumption is part of the solution. If you work for a fashion brand and want to join our fashion campaign and reduce your environmental impact, get in touch with us. If you want to reduce your impact on the environment, consider buying slow fashion brands and using EKOenergy labelled electricity at your home and at your work.
Written by Cameron Boggon
Posted on 26 March 2019
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Detroit Harbor Terminals
The Detroit Harbor Terminal is a ten-story cold storage warehouse along the Detroit River in Detroit, Michigan.
On May 1, 1925, the Detroit Railway and Harbor Terminals Company issued $3.75 million in bonds for the design of a 12-acre terminal warehouse along the Detroit River in southeast Detroit. 4 Albert Kahn and his firm were hired as the lead architect. 7 Construction soon started on a ten-story, 900,000 square-foot reinforced concrete building, which was the largest warehouse on the Great Lakes when it opened on March 15, 1926. It boasted:
- Ten-million cubic feet of storage space, with 7½-million cubic feet for dry storage and 2½-million cubic feet for cold storage
- Dedicated bonded sections for goods arriving outside of the United States that needed to be stored with payment of duty deferred
- Eleven high-speed freight elevators
- Offices on the second- and third-floors, served by passenger elevators
- A 25-car railroad siding whereas all cars could be unloaded at once
- Direct connections to the Pennsylvania, Pere Marquette, and Wabash railroads
- A depth of 22-feet in the Detroit River for large Trans-Atlantic and Great Lake steamers
- A ¼-mile of dock along the river, served with gantry and stiff-legged cranes and by two railroad tracks with a 28 railroad car capacity.
The warehouse was expanded in January 1927 with 1,770-feet of railroad tracks, 280 feet of dockside space, and 450,000 square-feet of marine storage and transfer space at the cost of $300,000. 5
Prior to the opening of the St. Lawrence Seaway, each of the Great Lakes ports had their captive cargoes. 1 Detroit claimed iron ore, gravel, coal, and related commodities. Duluth had grain and iron while Toledo had coal. Traffic was only expected to grow with the opening of the Seaway. By 1958, the year before the Seaway opened, Detroit handled 87,232 tons of overseas imports and exports.
The Port of Detroit Commission, whose history dated to the establishment of the Detroit Wayne County Port District in 1933, had lobbied for the operation of the region’s ports through government support. 9 The Greater Detroit Board of Commerce opposed such efforts, stating that private enterprises, such as Detroit Harbor Terminals, could handle general cargo without adding to taxpayer burden. Wayne County voters defeated two proposals by the Port of Detroit Commission to bond finance public port developments for $9.5 million in 1957 and $7.1 million in 1958.
Detroit Harbor Terminals proposed in May 1959 to enter a 50-year lease with the Detroit Port Commission for approximately 425,000 square feet of land. 8 It would allow for a new 1,030-foot dock, sufficient for two Seaway-length vessels, a new transit shed, and a new office building 9 with acquisition costs estimated at $850,000, to be financed through 40-year revenue bonds. 8 The $4 million expansion project began on September 28 and was expected to be ready for the 1960 navigation season. 9 The updated proposal included enough dock space for five Seaway-length vessels, thanks in part to a lease agreement with the Detroit Free Press warehouse dock at McKinstry Street, giving Detroit Harbor Terminals 2,300-feet of linear water frontage.
The development announcement was also tied to a $2.5 million port development project by Todd Steel Corporation at Rivard Street and a $1.25 million dock extension project at Detroit Marine Terminals at Anspach Street. 9
By 1963, Detroit was handling 50% of all foreign cargo on the Great Lakes or 1.65 million tons by 1965. 1 Two new private terminals were soon opened and three small facilities were upgraded along or near the Detroit River, giving the region a total of 19 general cargo berths and 14 gantry cranes, more than any other Great Lakes ports combined.
Detroit Harbor Terminals boasted 2,325 feet of dock space along the Detroit River, a ten-story cold storage warehouse and other related buildings by 1974. 6 But despite the massive facility, it had become obvious that Detroit’s ports had become too inadequate to keep up with demands from the Seaway because they operated without government support, the last such instance in the nation. 1 There were discussions on creating a public port authority, a move supported by shippers and shipping agents.
Frank Scoby, the owner of Jefferson Seaways, obtained an option to acquire Detroit Harbor Terminals for $5.15 million. 1 Scoby then persuaded the Detroit Common Council to allow a non-profit corporation, Detroit Port Development Corporation (DPD), be formed to buy the terminal from him. 3 DPD ultimately was formed and bought Detroit Harbor Terminals, which was then leased back to Scoby. The purchase was financed with the sale of $9 million in revenue bonds, with the city guaranteeing that the non-profit corporation not make a profit so that the bonds could be sold on a tax-free status at a favorable interest rate to investors. The city would then be able to acquire Detroit Harbor Terminals at no cost in 1996. 1 6
In 1973, a group of 20 investors announced plans to erect a new terminal in Ecorse to serve ocean-going vessels on the Detroit River. 6 Detroit Harbor Terminals was sold to the investors on December 13, 1974, who formed Southeastern Michigan International Terminal. Detroit Harbor Terminals was planned to be part of a system whereby large container cargo ships, too large to navigate the Seaway, would have their containers unloaded in Windsor, Ontario and barged across the Detroit River to the terminal where they would be dispersed.
On September 13, 1976, the city filed suit against DPD for unpaid taxes. 3 A day later, DPD filed for Chapter 10 bankruptcy reorganization, claiming that its cash and U.S. Treasury Bills were restricted by bondholders’ claims. 3 In November 1977, Detroit Marine Terminals took over operations of the financially troubled DPD facilities. 2
The Detroit Port Authority attempted to make Detroit Marine Terminals a dock for luxury liners in June 1999 following the successful visit of the German cruise liner C. Columbus in 1998. 12 A dock, used from the early 1950s until 1992 for the Boblo Island Amusement Park ferry, was to be refurbished for the project, but the project was never completed.
Detroit Marine Terminals continued to operate the warehouse and freight operations until 2003 when it defaulted on bonds owed. 11 The terminal, which mostly handled steel imports, had seen its revenues decline after the federal government imposed higher steel tariffs a year prior.
In May 2005, the city approved an arrangement to give the Detroit Port Authority ownership of the terminal and to lease the operations to the Ambassador Port Company, a subsidiary of Manual (Matty) Moroun’s Detroit International Bridge Company, for 25 years. 11 In return, Moroun would loan the Detroit Port Authority $2.1 million to pay off bonds owed by Detroit Marine Terminals. The Ambassador Port Company could apply for three successive 25-year extensions.
The Ambassador Port Company never reopened the warehouse but continued to use the other facilities to handle approximate 60 vessels and over 300,000 tons of cargo per year. 11
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Global harvested area of crops has expanded (+8%) in the period of 2004-2011. Nevertheless, some crops such as maize, sugarcane, and oilseeds expanded area more rapidly than the average rise. Although, some economists attribute this effect to biofuel production, economy also has encouraged expansion in cropland to satisfy food demand. This paper analyzes the impact that biofuel production and economic variables has had on harvested area for corn, sugar, and oilseeds. Our results suggest that economic variables are much more important than ethanol production in explaining changes on harvested area of corn and sugarcane. For oilseed area, the significant factor was the 800 percent increase in biodiesel production, which overwhelmed other factors.
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In order to ensure the genetic diversity of fish stocks or other aquatic organisms, it may be necessary to conserve them outside their natural habitat and/or outside their normal husbandry environment. This can be done in so-called live gene banks or by means of cryopreservation. In live gene banks, breeding strains of endangered aquatic genetic resources are kept in the care of humans, e.g. to produce stocking material for resettlement projects. In cryopreservation, living cells (usually sperm) are stored in liquid nitrogen so that they can be used in the future to build up stocks of wild or farmed fish.
The AGRDEU database lists ex situ stocks of aquatic genetic resources. This section of the AGRDEU database is still under construction. Institutions that maintain ex situ aquatic genetic resources are invited to include their data in the AGRDEU database.
The on-farm inventory of aquatic genetic resources provides information on the following topics:
- General stock information on AqGR ex situ stocks
- Cryopreservation parameters of recorded ex situ populations
- Live gene bank parameters of recorded ex situ populations
- Additional information
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Organisations are now evolving in an economic and competitive environment to which they seem to have a hard time adapting to in the face of markets globalization, increased competition and diminished growth. As the equation for success is becoming more and more complex, how are they supposed to project themselves into the future?
Our capitalist model depends on sustained growth, tamed inflation and a stable financial system. Such sustained growth is only possible through productivity gains – hence the need for constant innovation.
However, the futuristic world we have been picturing for years is still very much in the making – having us wondering whether the innovation engine is broken. What are, then, the factors of growth that will push our economy ahead?
Some economists like Robert Gordon, Larry Summers, and James Galbraith argue that our society has already lived through its most amazing innovations (see Robert Gordon’s TED Talk for his demonstration). According to these theories, a form of secular stagnation only accompanied by incremental innovations is ineluctable. Effects of these innovations on the economy would be far less than those of the 19th or 20th centuries. As Robert Gordon rightly puts it, everybody would rather live without the internet than without running water. This “secular stagnation” theory is far from new and mostly derives from the fact that innovations are more and more complicated and costly to implement.
What is indeed the last innovation that truly changed our lives like the washing machine, electricity or the steam engine before it? Is the 2007 smartphone really the latest widespread innovative disruption? Have innovations only had a small added value to the economy ever since?
While we are twice as rich as we were the 1970s, nothing indicates that we live “better”.
The disappearance of growth: The result of the weakness of innovations?
An almost religious schism exists when it comes to the future of growth. On the one hand are the pessimists predicting secular stagnation; on the other hand, are those (much more numerous) asserting that we are on the edge of an unprecedented industrial revolution.
It is true that what makes today’s innovation so different from that of the past is its deflationist consequences – driving prices to the floor and sometimes reducing economic activity.
It is true that digital innovation and transformation of our organisations create destructive forces that can wipe out completely some industry sectors.
Should we conclude, then, that innovation does not have an effect on the economy anymore? Of course not. It simply shows that the way we measure our economy is wrong.
GDP, for example, merely measures economic production and is not a good indicator. It ignores, among other things, all the knowledge to which we now have free access thanks to digital media and services. HDI would appear as more appropriate in the sense that it grasps the notion of education – however narrowly understood as literacy and schooling.
These two indicators do not measure levels of intermediation, mutualisation, and sharing. They fail to measure the increase in human interactions and the wealth induced by the creation of communities. On the other hand, they do account for the fact that AirBnb is destroying jobs in the hospitality industry or that Encyclopaedia Universalis went bankrupt – without internalising that Wikipedia has allowed us to access the content of this encyclopedia freely from the comfort of our homes and on our smartphones.
We are undergoing a digital revolution – illustrated daily by the evolution of the way we behave and consume. However, this revolution is not accompanied by growth, or rather apparent productivity gains. What we are experimenting is a wave of Schumpeterian creative destruction, a deflationist innovation characteristic of the digital economy. Make no mistake, though: Innovation does exist. It is everywhere although it does not necessarily translate into a measurable increase in productivity.
As of today, the challenge faced by digital innovation is two-fold. It must bring wellbeing to the end-consumer while ensuring that this is done is a way that is both more efficient and productive in a circular, collaborative and sustainable economy.
What new model for the organisations being challenged?
In some sectors, digital innovations have lowered entry barriers, allowing new players to compete and disrupt existing markets (this is often referred to as “Uberisation”).
Within those sectors, organisations interact in disputed or highly competitive environments which often make them giants with feet of clay.
In such a context, organisations have no choice but to spread the product of their innovation as quickly and broadly as possible in order to federate a critical portion of consumers into their ecosystems. It is this community of end-users that grant organisations the sustainable dominance they are looking for.
Their challenge is therefore that of defining an economic model in which the gratuity of innovation for the consumer – allowing the federation of a community – must be balanced with the valorisation of the community itself and the profitability of high added-value niches.
Tesla Motors, recently sharing its knowledge through the release of its patents, is an interesting example of this approach. What other automotive players consider as an essential and strategic element is used by Tesla as a way to catalyse an ecosystem of stakeholders – including consumers – around it. The ultimate goal here being to promote the future creation of a more competitive electric transportation market with the ability to reach a broader set of customers – obviously hoping that Tesla will be able to dominate the high-end of such a new market.
Beyond means of production: The capacity for change as a new strategic asset
In digital, knowledge-oriented economic models, a new key criteria has appeared in the valuation of organisations. More than their fixed assets (means of production, patents…), what now determines their intrinsic value is their capacity to quickly adapt to change and to engage in innovative journeys with high added-value. This is made possible when an organisation possesses both the data it requires and the human capital that’s able to turn it into knowledge.
As a result, there is a necessity for organisations to invest in human capital (formation and/or recruitment of high-quality, atypical profiles) and to make sure that they are able to thrive in an organisational and structural framework that encourages and favours value creation.
Except for the web giants (Google, Apple, Facebook and Amazon – or “GAFA”) and a few organisations, most enterprises still have a long way to go in the transformation of their governance and management practices before they can implement such measures. However, organisations have no choice but to embrace that path if they do not want to see their competitiveness disappear ineluctably in constantly evolving industry sectors. Therein lies the dramatically high stakes of their digital transformation.
Maxime du Teil, Digital Transformation Consultant – ARSIA MONS
ARSIA MONS is a leading consulting firm based in Paris, France and specialising in the architecture and delivery of transformative IT solutions.
This article was originally published in French on the ARSIA MONS blog on 29th June 2016 – Copyright © 2016 Corix Partners for the English translation in collaboration with Vincent Viers.
The opinions expressed by guest bloggers are their views and do not necessarily reflect the opinions of Corix Partners.
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Germany is the birthplace of the Energiewende, or energy transition. Rooted in the anti-nuclear movement of the 1970s, it has evolved into a full societal shift away from fossil fuels towards renewables in an effort to avoid dangerous climate change. It is largely thanks to Germany – and more specifically its public purse – that wind and solar power are as competitive as they are today. It may, in no small way, be thanks to Germany too that renewable hydrogen follows in their footsteps in the years to come.
In an analysis of climate and energy spend in the Covid-19 recovery plans of several major European economies, however, Germany does not emerge as the greenest of the bunch. That honour goes to Spain, France and surprisingly, Poland.
Energy Monitor has analysed policies recorded by the Energy Policy Tracker, an online database maintained by environmental think tanks. According to an analysis of six different countries, Poland has so far invested the greatest share (82.3%) of post-Covid energy and climate-relevant spend in clean energy. That compares with 60.6% for Germany, about the same as France. Germany has invested the biggest absolute amount in a green recovery – €42.4bn ($50bn) – but it has also bailed out its traditional industries.
It is a “big mistake” to spend 40% of post-Covid funds on fossil energy, says Frank Steffe at Berlin-based think tank Agora Energiewende. “There should be no funding for fossil energy or fossil-based industry anymore,” he says. “The fight against the pandemic and huge programmes at the national and European level are an opportunity to put the strongly needed economic transition on the right course.”
‘Building back better’
Germany met its 2020 climate target thanks to Covid-19. In 2018, the government conceded it was widely off course to deliver a 40% emissions reduction, compared with 1990 levels. Additional policies initiated in 2014 failed to close the gap. The government blamed “surprisingly strong” economic growth and immigration. The Organisation for Economic Co-Operation and Development said the credibility of Germany’s climate policy was on the line.
Covid-19 finally helped deliver what policymakers could not: the missing 8%. Germany’s greenhouse gas emissions fell by 8.7% in 2020, bringing the total decrease to 40.8% from 1990, announced the German Environment Agency on 15 March 2021. It attributed around a third of the drop in 2020 to the coronavirus crisis.
Germany’s post-Covid €130bn economic stimulus programme is an effort to ‘build back better’. The German Association of Energy and Water Industries (BDEW), the largest energy industry association in Germany, applauds the government’s “focus” on energy and climate in the package. The measures needed for Germany to achieve future climate targets would trigger investments of €320bn in the energy sector alone, concludes an EY study commissioned by BDEW – and those investments come with 270,000 jobs. “Sustainability is not a cost factor, but an economic factor,” BDEW says.
At the heart of the stimulus – and Germany’s future climate plans – is the build-out of renewables. Germany’s most expensive green recovery measure is €11bn set aside to lower the cost of the renewables levy added to German domestic electricity bills. The levy will be capped at €0.065 per kilowatt-hour (kWh) in 2021 and €0.060/kWh in 2022, down from €0.068/kWh in 2020. The pandemic had threatened to raise it – to a record €0.088/kWh, estimated Agora Energiewende – due to the slump in electricity demand during the crisis and lower wholesale power prices because of lower natural gas prices.
One of the biggest questions facing Germany is how to finance the continued roll-out of solar and wind power without putting more pressure on households, which already pay the second-highest power prices in Europe (after Denmark). The plan in the long run is to use carbon market revenues from a national CO2 price on petrol, diesel, heating oil and gas for heating that was introduced in 2021. Germany is targeting 65% renewable power by 2030. Cheap, clean power is at the heart of the government’s plans to extend the Energiewende to transport, heating and industry through electrification and power-to-X.
Going all out for EVs
Transport has historically been the most problematic sector from an emissions point of view. The pandemic’s effects were “especially” noticeable in the transport sector, German environment minister Svenja Schulze has admitted. Most of the 11.4% (19 million tonnes of CO2) emissions reduction in transport last year came from fewer cars being driven during the first national lockdown, especially for long-distance journeys. Only 10.5% of the reduction was due to more electric vehicle (EV) registrations and biofuels. This means emissions risk rocketing up to previous levels in step with economic recovery.
Except that Germany is going all out for EVs. Germany’s stimulus package contains more than twice as much money for EVs as it does support for the traditional internal combustion engine. The significance of this, in a country where the car industry is such an integral part of the economy, is hard to overstate. German carmakers have turned to EVs first and foremost to comply with stringent new EU standards for car fleet CO2 emissions, but they also face impending phase-outs of conventional cars in key export markets (40% of exports affected) and believe the future lies in “connected” cars and autonomous driving.
Of the German carmakers, Volkswagen (VW) has made the biggest commitment to electromobility. From the ashes of ‘Dieselgate’ should rise a “climate-neutral, software-driven mobility group”, said CEO Herbert Diess at the company’s annual media conference on 16 March 2021. He talked about the “rebirth of the VW brand […] propelled by our electric push”.
The plan is to use cash flows from conventional cars to invest in EVs and software. VW does not intend to cease production of the internal combustion engine but it does want to grow EVs as a share of its total sales. By 2025, 20% of sales should be electric. This is a tall order: in 2020, VW delivered 230,000 EVs, three times more than in the previous year, but just a few per cent of its overall sales.
There should be no funding for fossil energy or fossil-based industry anymore. Frank Steffe, Agora Energiewende
VW and others will benefit from billions in Germany’s stimulus package. The government resisted calls for a buyer’s premium for all cars and instead doubled subsidies for EV buyers from €3,000 to €6,000 per vehicle. It has set aside €3.2bn for this exercise from now to 2025. This effectively makes it easier for manufacturers to comply with EU car CO2 standards, says Günter Hörmandinger, deputy executive director at Agora Verkehrwende, a sister organisation to Agora Energiewende. The goal is to have ten million EVs on German roads by 2030.
NGOs are unhappy that plug-in hybrids are also eligible for the subsidy. “The official test assumes you basically drive electric whenever you can,” explains Hörmandinger. “The reality is that people don’t. We have real-world data, which shows emissions are two to four times what is in official tests.” One possible explanation is that people opt to refuel company cars with company refuelling cards rather than home electricity.
Germany will require all petrol stations to offer EV charging points in future with €2.5bn in the recovery package to support the roll-out of charging infrastructure.
In addition to cars, buses and trucks get a €1.2bn programme to promote “alternative drivetrains”. There is also a €1bn scrappage scheme for old trucks that does not exclude new diesel engines but privileges electricity and hydrogen. Aviation and shipping get €1bn each to clean up their acts too. Germany is pioneering an e-fuel mandate for aviation that would start at 0.5% in 2026, rising to 2% in 2030.
For all the fanfare however, Germany still risks spending considerable sums on fossil fuels in the transport sector. The €1bn to clean up aviation pales in comparison to the €9bn bailout for national air carrier Lufthansa, with no notable environmental strings attached. The €1bn for shipping promotes LNG, which is cleaner than bunker fuel but still fossil. There is also €3bn set aside for innovation in the car industry and €2.5bn for local public transport. With no further details on how this money should be spent, it may prolong the life of the internal combustion engine. For many, this possibility is incompatible with Germany’s climate goals.
Alongside renewables and transport, the third and last big pillar of Germany’s green recovery spend is clean hydrogen. Germany is planning to spend more on hydrogen than any of the other six countries analysed. It has set aside €9bn, €2bn of which is for the development of production partnerships with third countries for hydrogen imports. The other €7bn is supposed to help get 5GW of domestic electrolyser capacity up and running by 2030, as set out in the country’s national hydrogen strategy adopted in June 2020.
In addition to building up supplies, the German government also envisages support for demand, such as via the e-fuel mandate for aviation and carbon contracts for difference (CCfDs) for climate-friendly steel. Such CCfDs would top up the EU carbon price to make clean steel competitive.
Unlike other countries, Germany and France are clear they want to invest their billions in green hydrogen projects, with a limited, transitional role for blue hydrogen from natural gas with carbon capture and storage.
Green hydrogen can store renewable power and ease pressure on an overcrowded grid. However, green hydrogen and e-fuels also depend on renewables. Germany’s hydrogen ambitions, which it sees as a way of extending the Energiewende into industry and long-distance transport in particular, ultimately hinge on its renewable energy build-out, at home and abroad.
It makes sense that Germany’s biggest recovery budget is reserved for the support of renewables. Whether or not the country succeeds in creating a hydrogen economy, more wind and solar are a no-regret option. The upcoming national elections will be the real test and a first chance for the public to show if it agrees with its leaders’ post-Covid recovery plans.
Energy Monitor is running a special series of analyses of post-Covid-19 climate and energy-related spend and policies, to determine whether countries really are building back better.
The data behind this series is based on Energy Monitor’s interpretation of work done by Energy Policy Tracker. This tracks public money commitments and policies that could impact a green recovery post-Covid-19. Policies are assigned on the criteria of which energy technology they benefit and whether they have environmental strings attached. While the original source had five categories, we have opted to distinguish solely between whether a measure benefits fossil fuels or clean energy (or nuclear power).
The measures are very different in nature and include countries’ Covid-19 recovery strategies, national climate policies and bailout measures for companies. We brand the whole package of measures as Covid-19-related government policy responses from an energy and climate perspective.
Our measurement of a country’s performance may not be fully complete as certain measures, such as tax incentives or new taxes, may not be included in our methodology.
The data covers the period from March 2020 to 10 February 2021.
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Managing editor Sonja van Renssen is an experienced Brussels-based journalist and conference moderator, who has written for leading energy and climate titles including S&P Global Platts and Nature Climate Change.
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I’d like parents of today to realise that talking to kids about money, debt and credit is as important as teaching them good manners. Good manners can’t be instilled overnight; neither can awareness about money and good credit habits.
Children must be eased into understanding the importance of money at a very young age as this will stand them in good stead as young adults. They should be made to realise that ‘credit’ is only a tool that empowers them with cash flow, but if used incorrectly, it can be a big stumbling block that can alter the course of their lives!
Today, I’d like to focus on credit cards and personal loans because for most people, debt seems to be a standard part of life and credit cards, though fairly passé, aren’t to be taken lightly.
The importance of educating kids about debt
I think it is super important to educate your kids about debt because if you don’t control it, it ends up controlling you. Unmanageable debt can ruin lives. It can have a huge impact on mental health, and in turn, impact the success of healthy relationships.
So, as a parent, if you can understand the basics of credit, you should lead by example and equip your kids with information many of us did not receive. If you follow and encourage healthy credit habits within the family, you will be setting your kids up for financial success.
Unmanageable debt can have severe repercussions and why we focus on credit cards
I think familiarising children with the concept of credit cards is particularly important because this is something that can easily get out of control. In my experience as a financial adviser, I’ve come across adults who have triple-figure credit card debt with no assets to show for it at all. The primary reason for this is the need for instant gratification and an increase in the number of people living beyond their means. It also has to do with the lack of understanding of what the ‘true cost’ of something is, after you factor in interest repayments.
When you’re looking at the use of credit cards among young Australians, statistics show that 36% of them have credit cards and don’t pay the balance off each month. The average amount owed is $2477!
I can certainly say that instant gratification and the need to keep up with the Joneses drives a lot of the spending in our consumer-driven society. What’s scary is that people don’t understand how it can impact their lives until they find themselves cornered by an insurmountable debt!
Young Australians love credit cards
A common example of when people take out their first credit card is probably to indulge themselves a little with a holiday once they’ve started working. For instance, a colleague of mine told me that he got his first credit card when he was around 21 and was halfway through his first year of full-time work. He decided to go on a skiing holiday to Queenstown to take a break and have fun. He knew he wouldn’t have had enough money saved up to pay for that trip before he went, as he had only been working for a few months. And that’s when he was lured by the convenience of a credit card.
This isn’t ideal, we should encourage kids to save for things, however badly they want it. When they start working, they have a steady income and they’ve got some savings in the bank, then it’s reasonable to consider getting a credit card with a limit based on the savings they have. If they have the savings, then no matter what, the balance can be repaid in full at the end of the month.
It’s important to make the full repayment
This is a very serious issue. If you get your first credit card at the age of 20 with a credit limit of around $5,000, you’re probably looking at an interest rate of 18%. Once you get that, you start making the minimum repayment which is probably 2%, and that works out to $100 a month. If you continue to make the minimum repayments then it’s going to take you about 33 years to repay the balance and in total repaying $17,181.
So effectively, you’ve turned a $5,000 holiday to a $17,181 holiday with no additional benefit. In most cases, the starting balance of $5000 is not maintained at that amount. It would be added to with more purchases or an additional card might be taken out. You fall deeper and deeper into the trap and you find that you just can’t stay on top of minimum repayments.
Credit is often easily accessible and that’s why people to fall into that trap and end up building the cycle of accessing more debt and not staying on top of the minimum repayment.
There are a number of other areas parents should be educating kids about regarding credit cards
There are a couple of other key areas for a young adult to consider before taking out a credit card. Most credit cards come with an annual fee that is applicable irrespective of whether the card is used or not. Some cards have a substantial annual fee while others have a limited fee or no annual fee. In the latter case, there may be a higher interest rate charged to balance that out.
Then there’s the ‘grace period’ factor. Most credit cards give you a certain amount of days to pay the bill before interest is charged on purchases. Some may not have any grace period, so you really need to check and make sure what the card structure is. The grace period only applies if you’re paying off your entire balance in full each month. Otherwise, each month interest is calculated immediately after the purchase, without the benefit of a grace period from another set transaction date.
Another trap that people can fall into is that of paying just the minimum, though the interest is being continually charged.
Accruing interest, how it impacts them and how to stay on top of it
Interest rates are expressed in annual terms even if the bills are generated monthly. Credit cards use different rates for purchases as opposed to cash advances. And the way cards work is you will likely pay down the lower interest rate balance first. What that means is, if you are carrying forward a balance each month, the payments you make are going to be made to the balance that has the least amount of interest.
Take a cash advance for example. Cash advance is when you use your credit card to pull money from the ATM, instead of your actual savings account. This is probably the most dangerous use of the credit card.
The bank charges you a fee for doing that and the interest rate charged will be much higher than what the purchase rate interest will be. So when you make a repayment, that repayment will go to the smaller interest balance, which is your purchase rate, rather than your cash advance rate. The only way to get on top is to make sure your balance is paid in full each month, otherwise you will continue to accrue a large interest cost on that card.
There is no grace period for a cash advance
There is no grace period for a cash advance; so the second you withdraw money, the interest starts accruing and that’s the primary danger of it.
Personal loans are popular with young people. Here are the things parents should be telling their kids.
Personal loans are issued by banks and credit union. There’s a set replacement schedule over one to five years. Interest rates are somewhat dependent on whether or not it’s a secured or an unsecured loan.
A common secured loan for a young person would be the purchase of a car. It’s a secured loan because it’s secured against the value of the car. A common unsecured loan for a young person would be for the payment of a holiday. As much as you may have that amazing experience, you don’t have an asset attached to the loan, which is where things can get a little dangerous.
So, for that reason, secured loans usually have a better interest rate than unsecured loans. And typically, personal loans would have a lower interest rate than credit cards. But there are additional fees and charges for personal loans which you do need to be aware of, and that’s where doing your research can make a big difference.
One of the other things you need to be aware of with a personal loan is that you’ve really got to stay on top of the agreed repayments. If you do fall behind on your repayments and you’re not able to make them on the agreed frequency, then it is going to impact your credit score, which later impacts your ability to access other loans.
If you’re buying your first car now and down the track, you want to apply for a home loan you don’t want to make getting your home loan difficult because you weren’t able to maintain a healthy personal loan when you were a young adult!
This is why kids need to understand the importance of maintaining a good credit score and good credit history. If they don’t handle their credit card or personal loan responsibly, they will regret it later on in life!
There are some tips parents can give children who want a credit card or a personal loan or even if they are considering giving kids a subsidiary card under their account
I think deciding in advance what the credit card will be used for and how it’s going to be repaid is of prime importance. Then, start with the smallest credit limit you can get on the card and make sure that is managed effectively. To do that, try and keep the credit limit to a figure that isn’t in excess of your savings, so it can be repaid no matter what.
Understanding the fine print and the additional fees involved with having a card or personal loans is also important. Repay the full balance on each payment cycle, to make sure interest does not accrue on the card. Avoid having multiple cards; that can also lead to a lot of issues. And examine your bills to make sure all the transactions are legitimate. Unfortunately, there are instances where you’ll have fraudulent activity. Just make sure you pick that up quickly and let your bank know if that happens.
It’s fair to say the starting point is to avoid credit cards, if at all possible, for kids particularly. If not, you should be very careful and use this opportunity to educate, create good habits and have a conversation about how it has to be used and the responsibility attached to it, before you actually do it.
If you’d like to learn more, we run regular workshops on a variety of topics. To find out the dates of these workshops, please visit our website at evalesco.com.au/workshops and join our healthy, wealthy, happy community!
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What Is Cryptocurrency? Here’s What You Ought to Know
Cryptocurrencies let you buy products and services, or trade them for profit. Here’s more about what cryptocurrency is, how to buy it and how to safeguard yourself.
Numerous or all of the products included here are from our partners who compensate us. This may influence which items we write about and where and how the item appears on a page. This does not affect our assessments. Our opinions are our own.
A cryptocurrency (or “crypto”) is a digital currency that can be used to purchase items and services, however uses an online journal with strong cryptography to secure online transactions. Much of the interest in these uncontrolled currencies is to trade for profit, with speculators sometimes driving costs skyward.
Here are seven things to ask about cryptocurrency, and what to keep an eye out for.
1. What is cryptocurrency?
Cryptocurrency is a form of payment that can be exchanged online for products and services. Numerous business have actually issued their own currencies, typically called tokens, and these can be traded specifically for the good or service that the business supplies. Consider them as you would arcade tokens or gambling establishment chips. You’ll require to exchange genuine currency for the cryptocurrency to access the excellent or service.
Cryptocurrencies work using an innovation called blockchain. Blockchain is a decentralized innovation spread across lots of computer systems that manages and tapes deals. Part of the appeal of this technology is its security.
2. How many cryptocurrencies exist? What are they worth?
More than 6,700 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a marketing research site. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total worth of all cryptocurrencies on Dec. 18, 2020, was more than $645.7 billion, according to CoinMarketCap, and the overall worth of all bitcoins, the most popular digital currency, was pegged at about $421.7 billion. (You can check the current rate to purchase Bitcoin here
3. Why are cryptocurrencies so popular?
Cryptocurrencies attract their advocates for a variety of factors. Here are some of the most popular:
Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to purchase them now, presumably before they end up being more valuable Some supporters like the fact that cryptocurrency eliminates reserve banks from handling the money supply, considering that gradually these banks tend to lower the value of money by means of inflation Other advocates like the technology behind cryptocurrencies, the blockchain, due to the fact that it’s a decentralized processing and recording system and can be more safe and secure than traditional payment systems Some speculators like cryptocurrencies because they’re going up in worth and have no interest in the currencies’ long-term approval as a method to move cash
4. Are cryptocurrencies a great financial investment?
Cryptocurrencies may increase in worth, however numerous investors see them as mere speculations, not real investments. The factor? Just like genuine currencies, cryptocurrencies create no cash flow, so for you to benefit, someone needs to pay more for the currency than you did.
That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed service, which increases its value with time by growing the success and cash flow of the operation.
For those who see cryptocurrencies such as bitcoin as the currency of the future, it must be kept in mind that a currency needs stability.” As NerdWallet writers have kept in mind, cryptocurrencies such as Bitcoin might not be that safe, and some noteworthy voices in the financial investment community have actually encouraged would-be financiers to stay away from them. Of specific note, famous investor Warren Buffett compared Bitcoin to paper checks: “It’s a really efficient way of transferring money and you can do it anonymously and all that. A check is a method of sending cash too. Are checks worth a lot of money? Even if they can transfer money?” For those who see cryptocurrencies such as Bitcoin as the currency of the future, it should be kept in mind that a currency requires stability so that merchants and consumers can identify what a fair rate is for products. Bitcoin and other cryptocurrencies have been anything however stable through much of their history. For example, while Bitcoin traded at near $20,000 in December 2017, its value then dropped to as low as about $3,200 a year later. By December 2020, it was trading at record levels once again.
This price volatility develops a problem. If bitcoins might be worth a lot more in the future, people are less most likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?
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An international business is simply a small business that works well in numerous features (such as circulation and developing plants and focuses) in lots of places worldwide. This really is considerably not the same as an dis-corporation organization, which typically has for sale things only inside of a unique dwelling nation but has less amenities to foreign countries. Providers that have worldwide corporations and desires that seek to enter new markets will probably do this using a worldwide organization. Probably the most common kinds of international organizations include things like advertising and marketing, i . t ., strength, transfer and producing.
A worldwide enterprise also is different the local or every day one particular because doing so attempts dangerous purchase. It might use a rep or agent through the household place, but does need aid from foreign traders to purchase and develop its pursuits. This may cause the objectives of an international organization far more far-achieving compared to those on the neighborhood or country’s company. Many businesses do purchase worldwide venture capital, very few really strategy investment capital firms to hunt investment capital with regard to their world wide business ventures.
One method the desired goals of world companies stand out from those of domestic kinds is simply because often aim regarding extending their share of the market in overseas marketplaces instead of purely achieving a bigger volume of individuals. This requires these people to imagine more to do with their brand name the choices it advances in other countries pc would locally, because they’re looking to pass on their current market over and above their residence country’s sides. Many of them have pretty customized nonetheless simple and easy-to-control chores. That is certainly this process to foreign buy and sell translates to that the firms engaged could be more prepared to take the concept of choosing representatives from other international locations.
Another difference between global company executives and normal managers. They might need to match the developing course of action all over distinct internet sites. Additionally, watch over Click To See More in between numerous factories. Their duties can also call for revenue control for a worldwide foundation. Conversely, elaborate supply chain activities. The international nature of a number of these duties makes them specially suited to M.R. sections, which manages sets from development and research to precise affiliate marketing. Though they may not be in charge of an essential scientific cutting-edge or new service, higher-levels managers can often come with an outsized impact on how a corporation does organization.
Since nineteen-eighties, most multinationals happen to be conducting global small business. In reality, the phrase was employed to summarize worldwide financial and financial commitment assets. B2B marketing agency , numerous multinationals to inflate their organization beyond their own personal coast by starting additional businesses in numerous nations. B2B marketing agency , also known as world-wide franchises, are occasionally operated by parents company on its own and might be fully apart from parents firm.
Most companies that aim for a universal profile elect to broaden their business enterprise by means of foreign business. They could start a factory in a country after which develop shops or distribution focuses in several nations. A successful technique frequently depends upon the country in which a corporation is established. Such as, Us suppliers that create a manufacturing facility in Okazaki, japan and then sell items there might be ready to make most of their sales in Asia and, consequently, opt to function their company there. When the international circulation locations can be obtained from these places as India and china, however, the costs of producing items you’ll encounter lower than in america or Europe, allowing for revenue to be made.
our source of world-wide business necessitates the action of everything. Specifically, globalisation has made it less difficult for items being migrated promptly and low-priced in between diverse areas. Therefore, dealers can also enjoy economic systems of level utilizing transfer and communications systems to give large shipments of manufactured goods or polished oil for the most lucrative places. Leading to several to start out outsourcing tools production or any other features.
Quite a few company administrators are consumed by the idea of doing work in another country because it offers them the ability to have a international traditions, with globalisation also emerged modifications the way providers analyzed the viability of running abroad. United foreign director states, “you study a tremendous amount about people if you are not around them. When you’re in a distinct region, you will notice issues off their view. understanding ‘ll be able to love elements from them view.” Moreover, clicking here can begin to play experiences and expertise off their countries to bring a little something to the family table that’s exceptional to their own personal.
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Using What-If Scenarios to Test ALLL Variables
What-if scenarios are a way to examine the impact of a given variable in a controlled environment. In the scope of the ALLL, institutions may be interested to see the effect of changing their lookback period, switching to a different loss methodology, or entering a new market, among other scenarios.
The use of scenario planning allows institutions to examine the end result of the calculation while accounting for the impact of different variables. This knowledge not only increases insight into the calculation but also tends to be helpful in exams, as the practice of scenario building demonstrates to examiners that you have considered multiple variables in your calculation and are aware of the impacts of each.
Related Asset - Whitepaper:
4 Advantages of ALLL Scenario Building
4 Advantages of ALLL Scenario Building - Download the PDF
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What is the cost of living in the UK with a Bad Credit score?
Below, we talk about some of the differences between having a good credit score and a bad one. As far as the financial institutes are concerned there are only 2 levels of scoring and you’ve either got it or you haven’t.
As far as borrowing money or gaining a credit line, which will allow you to pay for something with someone else’s money, you really are at the mercy of any financial institute’s rules (unless you are lucky enough to be able to borrow from a friend or family, but let’s not go into the pitfalls of that route in this article!!!!!) if they say you have to be squeaky clean to get the best rates, then that is what you have to be.
If they consider you to be a bad credit risk, it doesn’t matter if you don’t think so, they will put you in a category that will cost you a lot more when it comes to lending.
So let’s start with….. Your Credit Scoring
A credit score is one of the factors that determines the cost of living in the UK. This construct is a marking assigned to an individual based on their credit history. a person’s individual score is based on previous loans, credit cards, savings history, etc. The impact of the score will determine the cost of credit in the future, but crucially whether an individual can actually obtain credit.
Almost all banks and lending agencies in the UK look at a person’s credit score before determining whether to lend them money or not. An individual’s credit score also determines their potential credit limit, i.e., how much they can borrow based on their past record of repayments. But what happens if your credit score is too low? How would this impact your day to day life? There are a number of key aspects of life in the UK which can be impacted by a bad credit score including, but not limited to the following:
The most important thing to note is that there is no universal credit score in the UK. Major agencies such as Experian, Equifax, Noddle, etc. assign their own ratings based on their pre-determined criteria . So, a score tends to vary on a case to case basis. Nevertheless, there is a broad category which separates a “good” credit score from a “bad” one. In broad terms, a credit score of over 720 for Experian and 380 for Equifax is considered to be good.
Anyone can achieve such a score by paying their mortgages, servicing interest payments on time, and also paying bills regularly. So, it is not too hard to achieve a “good” credit rating as long as an individual keeps their debt repayments up to date.
Are you below the line?
There are many reasons why a large number of people may have a credit score which is less than 720 (Experian) or 380 (Equifax). Such a score is classified as “bad” or “poor” by banks and credit agencies in the UK . In such cases, this score can have a major impact on an individual’s life.
Firstly, having a good credit score will ensure that an individual can be eligible for 0% financing on various products such as motor vehicles. In contrast, a bad credit score will mean the individual will not be considered a good risk for these deals.
A major impact that a bad credit score has is that an individual will need to pay higher APRs on personal loans. This is because each lender carries out a full credit analysis on prospective customers based on their credit score before approving any personal loans or advances.
For example, in the UK, an average annual percentage rate (APR) for a personal loan of £2,000 and above stands at around 7% or below . The rate goes down if the loan value is higher. However, if your credit score is poor, these rates for the same amount can shoot up to 25% or even more than that.
These figures are even higher when you consider a short term or even a payday loan (however, APR figures are high on these types of loans whether you have good or bad credit for a reason, contact us if you are interested to know why?) This shows that a vast discrepancy exists in the cost of borrowing based on credit history.
Impacting day to day
In addition to restrictions on credit and high interests, a poor credit history can lead to being denied a mobile phone contract. If a credit history is not good enough and previous borrowings have not been paid off on time, applications for a new mobile phone contract can be easily rejected .
The four major factors which lead to this situation are bad credit history, missed payments, no bank account or lack of continuity. Although there are a few mobile phone agencies which offer cheaper handsets without any credit check, such cases are extremely rare.
The only option left for phones would be the use of a a pay-as-you-go SIM card which is not a preferred choice for many. Therefore, a bad credit score may lead to an individual having to rely on sharing mobile phones with others rather than having your own handset, which can be a major disruption in day to day life.
Considering buying your own home?
Furthermore, a bad credit score can also lead to a mortgage application being rejected outright. In 2014, the UK implemented the Mortgage Market Review . Buying a new property can be a very difficult task due to the changes in the law brought in by these processes.
In effect, an individual with a poor or bad credit score is I considered to be a “risky” individual, and therefore their chances of getting a mortgage application approved become much slimmer.
Further, even if someone manages to find a lender who is willing to assist them, the APR in such cases are astronomical. Buying a new property can thus become really hard with a bad credit score and ultimately alternative options for financing a home purchase need to be found.
Buying or Leasing a Car?
A bad credit score also impacts the ability to find a good financing deal in terms of buying a new car. Across the UK, the best available rates for new car financing are around 7% per annum. However, with a bad credit score, these rates could be up to about 25% per annum . This is because the individual’s credit history will be examined by the dealer as part of the contract process.
Additionally, it has been noted that in some cases, applications to buy a new car can be rejected altogether if the credit history is not favourable. This credit history is not limited to repayment of loans but may also include other aspects such as bills, credit cards, mortgages, etc. If any of these have negatively impacted a credit score, major hurdles in buying a car can be experienced.
What all this means is that a bad credit score can have a major impact on daily life in the UK. from obtaining a mobile phone contract to a property, buying anything becomes much harder and in most cases much more expensive as well. Living with a bad credit score could therefore complicate an individual’s life and hinder their ability to have a sustainable lifestyle. In other words, it is critical to keep your individual credit score under control.
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Alexandra Leonards explores the environmental technologies dominating the UK budget in 2021
More than a third of UK consumers say they’d prefer future technology to prioritise climate concerns over non-essential needs. With the government recently announcing plans for a £12 billion ‘green industrial revolution,’ the British public may be in luck.
The blueprint covers everything from clean energy, transport, nature, and technologies, with the purpose of achieving a net zero UK by 2050.
Carbon capture and storage
Carbon capture technology hit headlines last month when billionaire Tesla-owner Elon Musk promised a $100 million prize for whoever develops the “best” carbon capture innovation.
Musk reiterated his plans a few weeks ago, when he pledged to put forward what’s been described as the “largest incentive prize” in history as part of a four-year global competition to find a way of reducing carbon dioxide levels in the Earth’s atmosphere.
The UK government is also keen to develop the technology, expressing an ambition for the UK to become a “world leader” in the carbon capture arena.
In order to meet its target of removing as much as 10MT of carbon dioxide by 2030, equivalent to taking four million cars off the road, the government is investing up to £1 billion to establish Carbon Capture, Usage & Storage (CCUS) in four industrial clusters. It aims to create what it calls ‘SuperPlaces’ in the North East, the Humber, North West, Scotland and Wales.
CCUS technology captures carbon dioxide from power generation, low carbon hydrogen production, and industrial processes, and stores it deep underneath the ground where it cannot enter the atmosphere.
The government says that while this tech will be necessary on a global scale, no country is currently leading in the market. It describes the North Sea as an “unrivalled asset” for the UK, which can be used to store captured carbon underneath the seabed.
The plan is to establish CCUS across two industrial clusters by the mid-2020s, rising to four sites by 2030. The government says that as well as being the starting point of a new carbon capture industry, these UK clusters could create 50,000 new jobs in the next nine years.
The first phase of a £100 million investment in brand-new greenhouse gas removals including Direct Air Capture (DAC), which sucks CO2 directly from the air, has already been launched.
Although carbon capture is certainly a step in the right direction, it’s arguably not without its faults. Some scientists say that DAC technology can use up a significant amount of energy. Research has shown that DAC tech could potentially use around a quarter of all global energy in 2100.
The government says that it recognises the “immature nature” of CCUS in the UK and that there are inherent risks that currently “the market is unable to price, or price efficiently.” To address this, it is working to develop an appropriate risk framework to underpin the technology’s deployment in this decade.
“That is why while the business models are being developed, through the Industrial Strategy Challenge Fund (ISCF) and Industrial Decarbonisation Challenge Fund (IDCF) we are providing £130 million of funding to support projects on front end project development activities such as planning, design, and preparation for project execution,” it says.
Green aerospace tech
Last month the government announced new grants worth £84 million as part of a strategy to develop a greener aerospace market that could see zero-emissions flights launched as early as 2023.
The funding is part of the Aerospace Technology Institute (ATI) programme, which is a government and industry investment project designed to grow the UK’s position in the civil aerospace market.
The government says that the technology it is supporting could one day be used for “taxi-like” aircraft that are set to revolutionise the aviation industry, with the potential for zero-emissions air travel in the next two years.
The grants have gone to three research and development projects that focus on green technology to power zero-emissions flights, using alternative energy sources of hydrogen or electricity.
Hydrogen, which can power aircraft whilst leaving only water as a by-product, is predicted to play a central role in the decarbonisation of aviation. According to Blue Bear Systems Research, which leads one of the three projects, hydrogen fuel-cell tech has been identified by many leaders in the aerospace market as one of the “most practical” ways of quickly removing carbon emissions from aviation.
Global engineering company GKN Aerospace will receive £54 million funding in total, half of which is pledged by the government, while the other half is matched internally and by industry investors. The money will be spent on developing a liquid hydrogen propulsion system for sub-regional aircraft.
The technology will first focus on significantly improving sub-regional aircraft hydrogen powered performance, in turn enabling applications on larger aircraft and longer journeys.
It works by converting liquid hydrogen into electricity inside a fuel cell system. The electricity it produces then powers the aircraft, whilst eliminating any CO2 emissions.
“Hydrogen-powered aircraft offer a clear route to keep the world connected, with dramatically cleaner skies,” says Russ Dunn, chief technology officer, GKN Aerospace, when the project was first announced last month. “The UK is at the forefront of this technology, and the H2GEAR project is an example of industry, academia and Government collaboration at its best. Working with our partners, and made possible by Government investment, GKN Aerospace will develop and industrialise the breakthrough technology to fly aircraft with zero CO2 emissions by the mid-2020s.”
GKN Aerospace says that the first hydrogen aircraft could be introduced into the market as early as 2026.
Partner in the project Intelligent Energy will develop leading lightweight fuel cell modules for the project over the next couple of years, creating the next generation of fuel cell tech.
The company even plans to open a state-of-the-art Gigafactory in the East Midlands, which would help position the region as a centre of hydrogen fuel cell manufacturing in the UK.
ZeoAvia plans to launch a 19-seat aircraft, also powered by hydrogen-electricity. It is receiving £12.3 million government funding to help the company scale up its zero-emissions engines.
The company says that customers can expect to fly “meaningful distances” on a completely zero-emissions aircraft as early as the end of 2023.
“This project is instrumental for delivering a market-ready hydrogen powered solution for 2023 that makes passenger-ready zero carbon aviation a reality,” says Val Miftakhov, chief executive, ZeroAvia. “It once again demonstrates the ‘Jet Zero’ ambition of the UK Government to take a leading role in making flight sustainable and we are proud that they have put their faith in us again to deliver another milestone for hydrogen-electric aviation.”
Blue Bear Systems Research’s INCEPTION consortium, is receiving a £2.8 million government grant to develop a fully-electrified zero-emissions propulsion system for smaller aircraft used for travelling short distances – even within the same city.
The seven-strong consortium includes Dowty Propellers, electrified powertrain specialists Drive System Design, battery and fuel cell producer Ricardo, the University of Cambridge’s Whittle Laboratory, the University of Salford’s Acoustics Research Centre, and materials specialists M&I Materials.
As part of its green industrial revolution plans, the government has also pledged to completely end the sale of new petrol and diesel cars and vans by 2030. Although the sale of hybrid vehicles that can drive a significant distance with no carbon leaving the tailpipe will continue until 2035.
The government has said it is investing £1.3 billion to accelerate the roll out of charging infrastructure, targeting support on rapid charge points on motorways and major roads, and installing more on-street charge points near homes, with the aim of ensuring that electric vehicle charging is as easy and accessible as topping up petrol.
It has also said it will invest £20 million across trials of zero emission heavy goods vehicles, testing technologies at scale.
Earlier this month the government promised £20 million to support electric vehicle charging infrastructure and revealed that the On-Street Residential Chargepoint Scheme will continue for an additional year. The money will cover the installation of around 4,000 new charge points.
"From Cumbria to Cornwall, drivers across the country should benefit from the electric vehicle revolution we're seeing right now," says Grant Shapps, transport secretary, in a letter to local councils.
But a report by think tank Policy Exchange warns that the car charge roll-out must happen five times quicker, before the 2030 ban comes into play.
The research suggests that the UK will need 400,000 public chargers by 2030, and that installations will need to move from current levels of 7,000 a year to 35,000.
"Without a big increase in the number of charge points right across the UK, certain parts of the country risk getting left behind as 2030 approaches,” says Rod Dennis, RAC motoring group spokesperson. “Everyone remembers what happened when broadband started to be rolled out and some areas were left with poor connections.
He adds: "It would be a major policy failure if something similar happened in the next few years with communities missing out on good charging provision."
The government certainly promises an exciting year ahead for the green technology market. So it will be interesting to see how rapid and successful the development of these new technologies will be over the coming months.
What are this year’s green tech frontrunners?
Alexandra Leonards explores the environmental technologies dominating the UK budget in 2021
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You know your time is valuable, but how much is it really worth? As you fume about a delayed plane, a late doctor, a long line, is it possible to quantify—to put a concrete number on—the time being wasted? To say not just, “My time is valuable!” but “That’s $123 of my time down the drain!”
It turns out the answer is yes. And to do so you only need to use one of the most basic principles of economics: opportunity cost.
I tell my micro students everything I teach them is important, but the truth is that some things are more useful than others, and opportunity cost is near the top. (Yes, I guess I waste some of their time. Let’s not quantify that.) Here’s the idea, in business school terms: Imagine you are thinking of opening a restaurant. You expect some revenues from the restaurant (I hope!). There are also some costs: You have to buy the food, pay the waiters, rent the building. But there is another cost: You’ll have to spend all of your time at the restaurant—you can’t have another job. This means giving up some earnings—whatever your salary would be at that other job. That amount? That’s the opportunity cost. When you think about whether it’s a good idea to open that restaurant, you must consider this cost, just as you consider the cost of the food.
It’s not too hard to see how this applies in your life. How much is an hour of your time worth? It’s worth whatever wage you would get if you spent that hour working. If you work for an hourly rate, this is an easy calculation. Even if you work for a salary and a fixed number of hours, the principle is the same: It’s whatever your salary works out to per hour. (I realize that your boss probably won’t pay you more if you work more hours. But you could always get a second job, probably at the same wage rate, so don’t overanalyze it.) Same logic if you don’t work at all: If you did get a job, what would the wage be?
You may be thinking: Don’t be ridiculous, I don’t want a second job! I would much rather spend my free time relaxing, playing with my family, reading a book, exercising. No problem. The opportunity-cost equation simply tells you what the cost of your time is, not how you should spend it or how you want to spend it. If you would prefer to read a book than work another hour, that says that you value the time relaxing more than your wage rate. All this calculation gives you is a benchmark against which to consider what you are doing with your time.
OK, so this is pretty simple. Why is it useful, other than for being able to vent in very specific terms to a flight attendant? For me, the crucial application is in thinking about household chores. Specifically, whether I should do them or not. Consider grocery shopping. There are really two options: I can order online and have the groceries delivered by a company like FreshDirect or Peapod, or I can go out and spend two hours wandering the aisles at my local supermarket. There’s a delivery fee for the former, maybe a markup also. So which is the better way to shop? This opportunity-cost idea makes the decision easy: Is the fee plus markup smaller than the value of two hours of my time? If yes, delivery. If no, head to the car.
(This grocery example is actually how I learned about opportunity cost as a child. My mother, also an economist, always had the groceries delivered. As a 10-year-old I thought of going to the Stop’n’Shop as a glamorous activity and asked why we didn’t get to do this. My mother promptly explained that the other children’s parents “didn’t understand the idea of opportunity cost.” And that was the end of that.)
Once you start thinking like this, you may find you are not outsourcing enough. Should you hire a cleaning service, rather than spending three hours every other week cleaning the bathrooms yourself? Depends on the opportunity cost of your time—more or less than the hourly rate for the service? You may initially think that paying someone to clean your home is a waste of money or a luxury, but unless you make less than the rate you’d be paying (or unless you actually enjoy cleaning), if you’re not choosing to work in those hours, you shouldn’t be cleaning either. Ditto for laundry, yard work, snow shoveling, and on and on. You like opportunity-cost theory, eh?
Of course, this doesn’t mean you should outsource everything. There may be chores you enjoy. My father insists on mowing the lawn by himself with a hand mower from 1985, obviously inefficient but seemingly fun. Every few weeks my daughter and I make a trip to Whole Foods to look around, do some shopping, eat some free samples. Again, just fun. And while it may be more cost-effective for you to work late and let a baby-sitter put your kids to bed, some things are more valuable than money.
If you’re still struggling to think about whether some outsourcing is worth it, ask yourself this: Would you do this chore for someone else if they paid you the market wage for it? Would you, say, go grocery shopping for your friend if she paid you the delivery fee? If not, you probably shouldn’t be doing it for yourself either.
Opportunity cost isn’t just useful for outsourcing. Consider commuting. Many people face a choice: spend less on a house and commute farther, or spend more and commute less. How do you know how much the commuting is worth in rent or mortgage payment? It’s easy: hours of commuting time per month times your hourly wage (plus gas, train fare, etc). That’s how much extra you should be willing to pay to live in the same kind of house closer to work.
Applying opportunity-cost theory won’t always change your behavior but can simply be a useful tool to understand why things are the way they are. When I was pregnant and visiting my OB every few weeks, I waited for the doctor every single time. Sometimes for as long as an hour. I was furious. Didn’t they know my time was valuable? But consider this: Because of the way appointments like this work—because they are unpredictable in length—someone will have to wait. Either the doctor schedules long appointments and sometimes she waits for you, or she schedules short appointments and sometimes you wait for her. Doctors are very highly paid, and, therefore their opportunity cost is very high. For most of the rest of us, our opportunity cost is lower. If someone has to wait, it’s efficient for it to be the person with the lower opportunity cost. In other words, you.
The only inefficiency here is that you can’t outsource waiting for the doctor. Now there is a missing market.
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This report (4M PDF) examines how residential development adds to the costs of fighting wildfires, using Montana as a case study. Our findings document a strong correlation between the costs of fighting wildfires and the number of homes threatened and the potential for significant increases in the costs of fire protection if current development trends continue.
For example, statewide, the cost of protecting homes from wildfires has averaged $28 million annually. If development near fire-prone forests continues, costs to protect homes likely will rise to $40 million by 2025. A 1º F increase in summer temperatures would at least double home protection costs. Additional development and hotter summers combined could increase the annual cost to exceed $80 million by 2025 (see figure below).
Average Annual Cost of Protecting Homes from Wildfires in Montana
Montana’s “big sky” appeal, wealth of recreational opportunities, and growing economy have contributed to rapid population growth in the last few decades, particularly in the western portion of the state. Many of the new homes have been built in rural areas, outside existing cities and towns. Living in Montana’s forests, however, is not a risk free nor a low-cost proposition. Most years, federal, state, tribal and county governments spend millions of dollars suppressing the state’s inevitable wildfires to protect Montanan’s homes in the woods.
To better understand the current and future implications for Montana’s taxpayers, Headwaters Economics analyzed daily fire suppression costs across 18 large fires that burned in Montana during 2006 and 2007, systematically distilling out the portion of total fire suppression costs directly associated with housing — that is: the dramatically higher costs required to fight fires in the “Wildland Urban Interface.”
Montana State University collaborated in the statistical analysis, identifying the fire characteristics that were most responsible for daily firefighting costs, including the size of the fire, the nature of the terrain the fire burned through, whether roads and other infrastructure aided or complicated suppression, and the extent of housing threatened by the fire.
MSU helped determine the relative contribution of each characteristic to the total costs. Headwaters Economics then incorporated these main drivers of firefighting cost into a growth model that projects new development expected in Montana by 2025 based on the state’s recent rate of growth and pattern of development. With these tools, it was possible to understand the increases in firefighting costs that Montana will likely see unless development changes significantly from its current pattern. Key findings of our research include:
- Firefighting costs are highly correlated with the number of homes threatened by a fire.
- The pattern of development (dense vs. spread out) is an important contributing factor.
- When large forest fires burn near homes, costs related to housing usually exceed $1 million per fire.
- As few as 150 additional homes threatened by fire can result in a $13 million increase in suppression costs in a single year.
- For all agencies involved in fire suppression in Montana, the estimated annual costs related to home protection for 2006 and 2007 were approximately $55 million and $36 million, respectively.
- If current development trends continue, fires seasons similar to 2006 and 2007 could cost $15 to $23 million more by 2025, bringing total fire suppression costs associated with homes to between $51 and $79 million dollars. Adjusted for inflation, future costs could be as high as $124 million in 2025.
- A conservative estimate is that 25% of all costs of protecting homes from wildfires within Montana are paid for by the state. Therefore, Montana’s costs for home protection in 2006 and 2007 are estimated to have been $13.9 million and $9.2 million, respectively. By 2025, Montana’s future costs, adjusted for inflation, could be as high as $31 million.
Decisions about how and where to fight fires, and where homes will be built in the future will have a major effect on the state’s firefighting costs. Our research reported here was funded by the Montana State Legislature Fire Suppression Interim Committee.
For more information, see our “Wildland-Urban Interface Trends, Future and Solutions” presentation (PDF) and our “Summary: Wildfire Costs, New Development, and Rising Temperatures” research.
Already a major budgetary concern in the U.S., the cost of fighting wildfires will increase if climate change and development trends continue. Using current cost data for Montana, this study projects that the cost of protecting homes from wildfires will double to quadruple by 2025 if current trends and policies continue.
—Headwaters Economics, “Homes in Wildfire-Prone Areas: An Empirical Analysis of Wildfire Suppression Costs and Climate Change” (PDF)
Unless we address one of the root causes of the problem—home building in wildfire prone areas—the costs of fighting forest fires will continue to escalate.
—Ray Rasker, Headwaters Economics, “Now’s the Time to Tackle Forest Fire Fighting Costs” by
NewWest.Net Writers on the Range essay, 2009-04-09
Full Report: Montana Wildfire Cost Study- Technical Report (4M PDF)
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That figure will tell you the cost per 100 miles. You also can work from the total kilowatt-hours it takes to recharge the EV’s battery. If an EV requires 40 kWh to recharge a fully depleted battery, and the rate is 18 cents per kWh, that’s $7.20 for a fill-up.
Do electric cars make your electric bill go up?
The average cost of electricity in the US is 12 cents per kWh. Therefore, the average person driving the average EV 15,000 miles per year pays about $540 per year, or $45 per month, to charge it. … Electricity costs do eventually increase also, but not nearly at the pace of gasoline.
How much electricity does an electric vehicle use?
The average electric vehicle requires 30 kilowatt-hours to travel 100 miles — the same amount of electricity an average American home uses each day to run appliances, computers, lights and heating and air conditioning.
Do you really save money with electric cars?
The fuel cost savings
If you do an internet search for electric car savings, the vast majority of hits will be the savings on fuel cost. This makes sense in that you will probably pay more for the EV and expect to make it back by fuel savings. In all but a few extreme cases, fuel costs will favor EVs.
Should I charge my electric car every night?
For most of us, a few times a year. That’s when you’d want a rapid charge of under 45 minutes or so. The rest of the time, slow charging is just fine. It turns out most electric-car drivers don’t even bother to plug in every night, or necessarily to fully charge.1 мая 2019 г.
Are public charging stations free?
Public Charging Costs
Many people charge their electric car at public charging stations. They can be free, pay-as-you-go or subscription-based, with prices set by networks or property owners.
What is the disadvantages of electric cars?
According to Plugincars.com, there are a few disadvantages of owning an electric car, including: Electric cars have a shorter range than gas-powered cars. Recharging the battery takes time. They are usually more expensive than gas-powered cars.
Is charging an electric car cheaper than gas?
Most electric-car owners charge at home, and so you’ll need to know what it costs to charge there. The cost of electricity is much more stable than the cost of gasoline, but it varies tremendously in the U.S. The residential average per kilowatt-hour currently ranges from 9.3 cents in Louisiana to 28.9 cents in Hawaii.
Who pays for electric charging stations?
The Los Angeles Department of Water & Power and Southern California Edison, on the other hand, offers rebates to spur private construction of charging stations owned by others. While its ratepayers cover the costs of that program, the ultimate owners of those stations pay for installation and operation.
Is it worth buying an electric car now?
The answer is yes, in the long run, you absolutely save money. When you buy an electric car there is a high up-front cost, but your electric vehicle ends up costing less over a lifetime. … What’s more, electric cars don’t cost a lot to run, with big savings on fuel costs, servicing and car parking.
How long until an electric car pays for itself?
eight to nine years
How long do electric cars last?
However, the current prediction is that an electric car battery will last from 10 – 20 years before they need to be replaced.
Do electric cars lose charge when parked?
In short, there’s no need to worry! Electric cars can handle extended periods of inactivity very well, even better than combustion-powered engines, in fact, whose 12V batteries can lose charge, and whose fluids and radiator hoses can become damaged.
Can I plug my electric car into a regular outlet?
All mass-produced electric vehicles today include a charging unit which you are able to plug into any standard 110v outlet. This unit makes it possible to charge your EV from regular household outlets. The downside of EV charging with a 110v outlet is that it takes a while.
What is the best electric car for the money?
8 Best Electric Cars for 2020: Reviews, Photos, and More
- Mitsubishi i-MiEV.
- Mercedes-Benz B-Class.
- Ford Focus Electric.
- Mercedes-Benz B250e.
- Chevrolet Spark EV.
- BMW i3.
- Chevrolet Bolt EV.
- Nissan Leaf.
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Exemplary Goods: Exemplars as Judgment Devices
In this article the notion of exemplars is developed to study valuation processes. It argues that exemplary goods are an important ‘judgment device’ on markets of singular goods, which has so far been ignored in the literature. The article draws on Hannah Arendt’s theory of exemplars, as well as literature from the philosophy of science and psychology to construct the new concept. Exemplars are particular goods that become focal points in markets that facilitate the mutual coordination of consumers and producers. From these exemplars norms of quality emerge which are otherwise hard or impossible to explicate. These exemplars and the norms of quality which emerge from them help shape the expectations of both producers and consumers with regard to new goods that are introduced to the market. Two illustrative cases, on classic literature and hip-hop music, are presented to demonstrate the relevance of the concept.
Authors retain the copyright to their contributions. Linköping University Electronic Press publishes under Creative Commons licence CC-BY-NC, which allows users to distribute the work and to re-work it but not for any commercial purposes, without the author's permission.
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Document classification is one of the most popular applications for intelligent capture, that is, automating the identification and sorting of documents. There are a lot of processes that involve many different documents—sometimes even several hundred—that can be submitted without any organization. These include claims adjudication, loan origination and commercial logistics.
If organizations are not manually processing these documents (and most are manual), they are undoubtedly using a rules-based process that attempts to identify incoming documents based upon specific, identified attributes.
For instance, with mortgage documentation, a rules-based approach attempts to mimic a manual process, but instead of looking at the overall document including the graphical orientation, specific keywords might be used to discern between a document establishing proof of income from a document providing information on assets. Even though a person might easily distinguish between a W-2 and a bank statement, the rules-based approach relies upon the presence (or absence) of specific words or other textual data.
So rules-based automation might look for instances of “W-2” or “Total Income” for the W-2 document. It also may identify the presence of words like “account balance” along with “account number” and “statement” to establish that a document is a bank statement.
Where Traditional Classification Falls Short
As you might suspect, the power of rules-based classification is directly tied to the amount of time spent by a Subject Matter Expert (SME) reviewing available data, identifying key characteristics of each, and then encoding the rules. For some needs, where there are only a few document types, a rules-based approach might make sense because it is typically simpler to implement. In a case where there are a lot of document types, such as 30 or more and where characteristics of each might overlap, a rules-based approach will fall short.
When 50 document types or more are involved, and where there can be different versions of any particular document type, it is very probable that rules identified for one type will overlap rules for another. It really isn’t practical—mostly due to the time required, but also because of the ongoing maintenance—to analyze each type and version, to verify that there is no overlap, and then to test and tune each one.
The Power of Machine Learning
One of the strongest benefits of machine learning-based solutions, or as the industry is increasingly using, cognitive systems, is the ability to analyze a very large size of sample data to identify and record key attributes (often called “features”) of each document type that are compared against other document attributes to arrive at the most dependable set of features with which to reliably apply automation.
Machine learning systems can detect even the slightest variances that might go unnoticed by SMEs. In addition, a cognitive system can record a larger number and frequency of these key features so that it can use the most reliable inferences to produce high quality results. This ability clearly reduces the associated costs, complexity and risk associated with manual analysis and configuration of rules, including upkeep.
Cognitive classification turns potentially several hundred hours of effort into a compute-time exercise. Better, more reliable performance is achieved at a much lower level of effort. Kind of sounds like having your cake…
If you found this article interesting, you might find this eBook useful, Document Classification Techniques: A Business Primer.
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Who are bailiffs?
Wikipedia defines a bailiff as “a manager, overseer or custodian; a legal officer to whom some degree of authority or jurisdiction is given”.
A bailiff is generally known as someone who is legally empowered to collect certain debts from debtors. This may be done either by asking people to pay what they owe, or by taking and selling their properties so as to raise the money owed. Bailiffs are often called enforcement agents due to the nature of their job. While some bailiffs are a court official, some sets work for a private firm.
If you owe money, a bailiff may visit your home to see if anything you own can be sold to pay the debt. Any money raised from selling belongings is used to pay the bailiff’s fees and charges as well as the debts you owe. A Bailiff’s work begin when someone who is a creditor tried to collect his money but with no success. He doesn’t come without a warning informing the debtors the intention of the creditor to enforce the recovery of the money.
Bailiffs cannot be used for all types of debt’s recovery but for specific kinds of debts. They comprise of the followings:
- council tax and business rates
- parking penalties
- income tax, national insurance and VAT
- county court judgments (CCJs)
- high court judgments
- magistrates’ court fines and compensation orders
- child support
- Business rent.
The Powers of bailiffs
A bailiff is not an ordinary man assuming a certain position. A bailiff has authority to collect debts on behalf of a creditor and different types of bailiffs have different areas of jurisdiction. County court bailiffs, certificated bailiffs and Private Bailiffs are examples of different bailiffs and they can be used to perform in their core area.
Is a bailiff the same as a debt collector?
There are creditors that use collectors to get their money back from the debtors but they are not bailiffs. As bailiffs operate within the confine of the law, debt collectors have no such powers and they should not pretend as well. The Bailiffs and debt collectors differ with the kind of debt they are collecting and most importantly, bailiffs will surely come with an official notice. This is a great way to distinguish between bailiff and debt collectors. It should be noted at this junction that debt collectors are not bailiffs.
There are rules that a Bailiff has to follow. If these rules or any of them is broken, a complain can be made in the court and the bailiff’s action can be overturned.
Some of these rules are that the bailiff must have permission to act as such, be properly authorized to act against you and must make available for the debtor some definite information concerning the stages of the process.
Requirements to act as a bailiff
For someone to act as a bailiff a person must have certificate to act as a court bailiff which should be presented on request in the course of carrying out the duty.
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Regions, cities, and businesses operating within ten of the world’s major emitting economies could reduce global greenhouse gas emissions by 3.5-5.5 percent in 2030, compared with the emissions expected from current national policies, according to a new article in Climate Policy. The article, authored by contributors from Data-Driven EnviroLab, NewClimate Institute, PBL Netherlands Environmental Assessment Agency, CDP, and the German Development Institute, analyzes commitments to reduce greenhouse gas emissions from 79 regions, approximately 6,000 cities, and nearly 1,600 companies, operating in 10 of the world’s largest emitting economies.
These actors account for a significant share of global emissions, emitting a net 8.1 gigatonnes of carbon dioxide equivalent (GtCO2e) per year, roughly equivalent to a quarter of the ten economies’ total greenhouse gas emissions in 2016. If they successfully implement their commitments to reduce emissions, they could play a key role in helping the countries they operate in fulfill their climate action plans. In the European Union and Japan, city, region, and company commitments could enable governments to overachieve the mitigation goals put forward in their Nationally Determined Contributions (NDCs), national climate action plans outlining a country’s efforts in support of the goals of the Paris Agreement. The same holds true in India, where bottom-up efforts could enable the country to cut emissions beyond its unconditional NDC target, which outlines what the country aims to achieve independent of international funding and support. In the United States and Brazil, where the national governments have rolled back climate policies, bottom up action could help deliver some of the emissions reductions that would otherwise be lost.
These findings include some key areas of uncertainty: they assume all climate action commitments will be fully implemented, when in practice this process can face challenges, such as a lack of political will and policy support, and difficulty accessing resources and expertise. On the other hand, the study does not fully account for all of the bottom-up climate action currently underway. It focuses on a single type of pledge — commitments to reduce greenhouse gas emissions — and does not include other efforts, such as sharing knowledge or capacity building, which are also vital to reducing emissions, but more challenging to quantify. Particularly in developing and emerging countries, reporting platforms may also not capture the full scope of climate action underway. The paper not only benchmarks the current state of climate action, it also captures the development of the methodology that accounts for these efforts, and highlights ways it could be strengthened further.
The full article is available here.
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Owning forest as an entrepreneur could increase the firms’ possibility to survive in a harsh economic environment. However, the effect is only visible for men and is more vivid in rural areas.
60 000 new firms are started in Sweden each year. These new firms gives hope of rural and regional development, stronger labour market and regional economy. However, close to a third (32%) of all companies have discontinued within the first three years. A large quantity of the companies that survive, do not have enough turnover to even provide for its owner.
Forest assets give a more stabile business
One way of surviving shaky start-ups is to have forest assets. This comes from a study made within the research programme PLURAL. Non-forestry micro-firms run by forest-owners have better earnings than other firms. This implies that, for instance entrepreneurs use their forest revenues in a strategic way to maintain the firm activity. – Forest assets accesses different kinds of resources that can be used within the business, forest areas can for example be used by the tourism sector. Moreover, the forest revenues within the firm can be used as a buffer when it is economically difficult, says Katarina Haugen, one of the researchers behind the study.
Effect only visible on male owners
The firm type and the entrepreneurs age, gender and experience matter when it comes to effects of owning forest. It is particularly advantageous for private firms run by men. There is no such connection for female entrepreneurs. The researchers behind the study, Urban Lindgren and Katarina Haugen, claims the difference could stem from the difference in objective with men and women’s forest ownership. – Women and men often differ in their views of forest values and forest use. Male forest owners, for instance, tend to emphasise production, i.e. the forest economic values. This could result in them having a larger capital that in turn can be used within their firm, even firms not connected to forestry, says Katarina.
Businesses in rural areas perform better
Micro-firms with forest assets, located outside the metropolitan regions make better use of the forest and tends to perform better. – This way, forest ownership combined with entrepreneurship, could contribute to an economical development and job opportunities in for instance rural areas and less populated areas, says Katarina. It is however never harmful for a firm, regardless size or location, to own forest.
The study is based on statistical analyses of official register data with information on all micro-firms with 1-10 employees and is funded by the Swedish research council FORMAS and the PLURAL project – living and acting in several places.
Haugen, Katarina; Lindgren, Urban. (2013) On the importance of forest assets for micro-firm performance. Fennia – International Journal of Geography 191 (2), 122-142
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The gas sector differs from the electricity sector in that not every country produces or uses gas, natural or manufactured, whereas every country generates and uses electricity. The transport of natural gas requires enormous investment with pipelines covering great distances, sometimes thousands of kilometers, or conversion plants and shipping for liquified natural gas (LNG). 21.7% of gas produced in 2000 was traded internationally, a ratio which is consistent with the industries manufacturing products in the energy sector.
This report is concerned with the 73 countries which are significant producers or significant consumers of natural gas. 43 of these countries produce natural ags and 66 consume it. 7 of the producing countries are not significant consumers. The natural gas industry is relatively young compared with the other energy industries, coal, electricity, oil or manufactured gas. There are countries covered in this report which are significant producers but are only beginning to consume gas themselves. A few small consumers rely on shipped LNG requiring no high pressure transmission pipeline systems but only low pressure distribution pipes.
There is wide variation in the uses of natural gas and this has a bearing on the opening of markets. There is no point setting up a mechanism to gice free choice to domestic users in a market which hardly has any, where usage is entirely industrial or for power generation.
The liberalisation of the energy markets involves three basic processes; privatisation, unbundling and market deregulation. These may or may not all be applied in one country, depending on the model of liberalisation which is adopted. Privatisation is not the same as deregulation and either of them can be carried out independently.
An industrialised country with a mature infrastructure and strong industrial off-take has different needs from a developing country. Unlike electricity, natural gas is not necessarily available locally. With the switch from town gas, manufactured from coal and distributed locally, to natural gas piped over long distances from the wellheads, the gas industry followed a pattern more similar to the electricity sector. Large-scale transport became a very significant element of the industry. Four large companies supply nearly half the gas used in Western Europe and about half of Europe’s gas is transported through the pipelines of the leading German gas company, Ruhrgas. Liberalisation of the industry has been slower and is currently less advanced than for electricity, although comparable principles of privatisation, unbundling and market opening are being applied.
From the NRG Expert Historical Data Series
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Debit and Credit and its rules are one of the most important and basic workings of accounting. Every Accountant and bookkeeper should know about the chart of accounts, how and where they will be recorded. Classification is to enter the journal entry in proper columns, books of accounts with the proper head of chart of accounts.
Just like the rule of two plus two is equal to four of math formula, accounting itself have a rule of an equation. For balancing the accounts by classifying the nature of accounts.
Both are Latin words, In Latin Debits is Debere and Credit is Credere. After innovation and modernization of accounting, double entry bookkeeping comes into practice. They are two columns of day book, ledgers, Dr always on the left side and Cr on the right side.
Definitions: Dr that what the organization owe, which it can claim or in simple which relate to the organization.
Cr., that is entrusted by the organization or owes by others and can claim any time or at given time.
Some people said in simple words, what comes to the organization is Dr and Credit whats gone from the business entity.
Before understanding the Dr and Cr you should have knowledge of Accounting Terminologies and Chart of accounts. If you did not know about what are assets, then you will face problems whiling posting it with Dr and Cr column.
Debit and Credit Rules
- Dual Concept: Every account has a dual aspect. If something Debit then there should be something credit.
- An equal amount in Debit and Credit: Both columns should have equal Amount. If 1000$ is debited, then the amount of $ 1000 (Total) Should also be credit with an accounts.
- One or more Accounts: It’s possible that one account is debited but in credit, there is two charts of accounts.
- When assets will be increased they will be debited and if there is decreased it will be recorded in Cr side.
- All Expense will be debited when increased and credited when they decreased.
- Income will be credit when it will be decreased and debited when decreased.
- When liabilities increased they will be credited and when decreased they will be debited.
- Capital also will be credited when there is increased and Debited when there is decreased.
- Debtors or Accounts receivable will be debit when grow and credited when decreased.
You have passed correct entry or not, can be guessed from accounting equation. Dr and Cr always follow the rules of accounting equations. What is the accounting equation, it the result of accounting process.
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Since a dumping survey requires a comparison between the export price of a product and its normal value in the exporting country, the AD agreement establishes rules for calculating the export price and the normal value. He then explains how a “fair comparison” is made between the two. The government conducting an anti-dumping investigation uses this fair comparison to determine the “dumping margin.” The 1994 GATT contains a number of fundamental principles that apply to trade among WTO members, including the principle of the most favoured nation. It also requires that imported goods not be subject to internal taxes or other modifications beyond imported goods for domestic goods, and that imported goods not be treated less favourably than domestic products in other respects, as well as rules on quantitative restrictions, royalties and customs procedures related to import and assessment of duties. WTO members also approved a timetable for related tariffs. On the other hand, Article VI of the 1994 GATT expressly authorizes the establishment of a specific anti-dumping duty on imports from a given source exceeding the fixed rates, in cases where dumping harms or harms a domestic industry or significantly delays the creation of a domestic industry. The agreement on the implementation of Article VI of the 1994 GATT, commonly known as the Anti-Dumping Agreement, provides for the further development of the basic principles set out in Article VI itself, in order to regulate the investigation, fixation and application of anti-dumping duties. Article 1 of the AD Agreement establishes the fundamental principle that a member cannot impose an anti-dumping measure unless he finds, as a result of an investigation conducted pursuant to the provisions of the AD agreement, that there are dumping imports, significant harm to a domestic industry and a causal link between dumped imports and prejudice. In the particular situation of economies where the government has a total or essentially complete commercial monopoly and where all domestic prices are set by the State, the 1994 GATT and the agreement recognize that a close comparison with domestic market prices may not be appropriate. As a result, importing countries exerted considerable discretion in calculating the normal value of exported products from non-market economies. Legal definitions are more precise, but overall, the WTO agreement allows governments to combat dumping in the event of actual (substantial) harm to competing domestic industry. To do so, the government must be able to demonstrate dumping, calculate the extent of dumping (how much the export price is below the exporters` real estate prices) and demonstrate that dumping causes harm or threatens to do so.
8.1 Procedures may be suspended or suspended (19) in the absence of interim measures or anti-dumping duties if each exporter has agreed to satisfactory voluntary commitments to change its prices or stop exports to the region at dumping prices, so that the authorities are confident that the adverse effects of dumping will be eliminated.
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Interest Rates and Compounding
In most business cases, borrowing money is not necessarily a free enterprise. It costs companies money to obtain funds on credit to finance various aspects of their business. The fee that a borrower pays to a lender for use of its money is interest. The annual percentage rate (APR) makes assumptions based on simple interest, which is interest only earned on the principal investment.
Another method of accruing interest is through compounding. Compound interest is not only charged on the original investment, but also assessed on the interest charged or earned for each period. When comparing interest rates, it is best to use effective annual rates. This compares interest paid or received over a common period (1 year) and allows for possible compounding during the period (Brealey, Myers, & Marcus, 2007). The effective annual interest rate allows for figuring out what the monthly fee of borrowing money will cost a business.
The present value of money is also known as discounting. The discount rate is sometimes called the opportunity cost of money. Money can be invested to earn interest. Because money is of more value when it is cash in hand, the person holding the cash can invest the cash and in return earn interest. When payments are not received, cash flow is reduced and therefore, interest earned is reduced. The relationship between present value and time and interest rate is exponential. The greater the interest rate, the smaller the present value.
The future value of money is also known as compounding. Future value is calculated by understanding how much interest the money will earn, how long it will be earning the interest and if the money will be compounded annually or at another interval. The impact of future value on an investment most likely will be greater than the present value.
Many times firms need to decide on how to best utilize its cash on hand. Should they invest it in the stock market or purchase more equipment with the hopes that it will increase productivity and profitability? A tough decision in some cases, but businesses should determine which is the wiser choice based on their financial situation. The opportunity cost associated with these choices is whether or not the company could have earned more money by choosing to do something else with the funds. TVM help managers in figuring out which of the opportunities presented is the best option. The preferred alternative increases the companys monetary value today as opposed to a later point in time.
The Rule of 72³In finance, the rule of 72 is a method for estimating an investments doubling time or halving time. These rules apply to exponential growth and decay respectively, and are therefore used for compound interest as opposed to simple interest calculations (Wikipedia, 2008). For example, if one would like to know how long it would take to double a given amount of money at eight percent interest, divide 8 into 72 and get 9 years. When a company can quickly calculate the return on investment, they will be able to make quicker and more informed decisions in regard to the investment or budget decision.
The Time Value of Money is an important concept in financial management. Money left on its own is devalued by inflation. Investors, therefore, need to find a way to make their money grow faster than the rate of inflation. One method is through interest paying investments. Compounding interest accelerates return on investments, provided an investor can obtain a fixed rate of interest. Whichever method an investor chooses, understanding the time value of money is crucial to successful investment outcomes.
Brealey, R. A., Myers, S. C., & Marcus, A. J. , (2007). Fundamentalsof Corporate Finance. New York, NY: McGraw-Hill/Irwin.
Wikipedia, (2008). Rule of 72. Retrieved March 24, 2008, from theWikipedia Web site: http://en.wikipedia.org/wiki/Rule_
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Countries may "graduate" out of the LDC classification when indicators exceed these criteria in two consecutive triennial reviews. The first country to graduate from LDC status was Botswana in
The Rich and the Poor pp. Industrially advanced countries IACs include the U. They have developed market economies based on large stocks of capital goods, advanced technologies, and a well-educated labor force.
They have a high per capita output, as seen in Figure Developing countries DVCs are unindustrialized nations heavily committed to agriculture. They have low rates of literacy, high unemployment, rapid population growth, and their exports are largely agricultural or raw materials.
Capital equipment is scarce, production technologies are primitive, and productivity is low. Dominating this group are India, China, and the sub-Saharan African nations.
Comparisons highlight income disparities. I find this information amazing!! General Motors had sales greater than the output value of all but 22 lower-income nations of the world.
The assets of the three wealthiest people in the world exceeded the combined GDPs of the 48 poorest nations. Growth, Decline, and Income Gaps 1. The absolute income gap between rich and poor nations has been widening. Human realities are difficult. Table highlights other socioeconomic differences.
Obstacles to Economic Development pp.
Natural resources must be used more efficiently and their supplies expanded. Resource distribution is very uneven as is evidenced by the wealth of the OPEC countries. Often ownership of natural resources is an issue if they belong to corporations in industrially advanced countries.
However, weak resource bases are not necessarily impossible to overcome, as Switzerland, Israel, and Japan have shown. Human resources in DVCs have three characteristics 1. Overpopulation is the rule. An annual population growth of approximately 1.
This compares to an average 0. It means that economic growth must be very rapid to make any gain on population; DVC per capita incomes are lagging behind the IACs see Table a.
Population growth accelerates with economic growth as better living conditions extend life. Birth rates remain high as medical care and sanitation cut infant mortality. Population growth hinders development because large families create obstacles to development.
They reduce the ability of households to save, more investment is required to keep up with increases in the labor force, an overuse of agricultural land may occur, and massive urban problems are generated.
Other reasons exist in explaining why expansion hinders development. Three additional points are worth noting. The relationship between population and economic growth is not as clear as it seems. Japan and Hong Kong are densely populated, but wealthy.
Did the wealth come before or after population growth rates declined? Population growth rates for the DVCs in general have declined in recent decades. The traditional view is that reduction in population growth leads to economic development.
But the "demographic transition" theory maintains that rising incomes lead to slower population growth. Children are viewed more as economic liabilities as the wealth of a country becomes greater.
Key Question 6 4.
High unemployment and underemployment are characteristics of DVCs with rates in the vicinity of 15 to 20 percent. This may become worse as rural populations migrate to cities in the hope of finding jobs that are not there.
Underemployment occurs when workers are employed less time than desired or at jobs that do not fully utilize their skills.ECONOMICS 1 ECONOMICS OF LESS DEVELOPED COUNTRIES John Strauss Spring A Kaprielian Hall Department of Economics Phone: University of Southern California.
Least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development.
They are highly vulnerable to economic and environmental shocks and. The least developed countries (LDCs) are a group of countries that have been classified by the UN as "least developed" in terms of their low gross national income (GNI), their weak human assets and their high degree of economic vulnerability.
The problems facing less developed countries are among the greatest challenges facing the world today.
This module will focus on the diverse structures and common characteristics of less developed countries and will offer an evaluation of policies being pursued. Economic development: Economic development, the process whereby simple, low-income national economies are transformed into modern industrial economies.
Although the term is sometimes used as a synonym for economic growth, generally it is employed to describe a change in a country’s economy involving qualitative as well.
Groups List of economies Economy Code Region Income group Lending category Other Afghanistan AFG South Asia Low income IDA HIPC Albania ALB Europe & Central Asia.
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Direct benefit transfer is one of those monumental topics which have successfully incited ardent discourse in recent times. Many significant government policies have stumbled to get themselves implemented from time to time due to rampant corruption and unsolicited intervention of middlemen.
The Direct Benefit Transfer Scheme aims to transfer subsidies, welfare benefits and scholarships directly to the people through their bank accounts. The DBT is based on the ‘Fome Zero Program’ of Brazil. The DBT eliminates intermediaries in delivering services to the poor and reduces burden on the exchequer. The DBT is still evolving and has many lacunae which needs to be eliminated.
The Indian government came up with the direct benefit transfer scheme to resolve this predicament. On 1st January 2013, the government intended to bring a change in the system of transferring subsidies directly to the people through their bank accounts. This newly launched mechanism was highly expected to have reduced leakages, delays etc. On 1st June 2013, the scheme Direct Benefit Transfer for LPG (DBTL) launched formally by the Minister of Petroleum and Natural Gas in 20 AADHAAR coverage districts.
Genesis of DBT
The mechanism of DBT has its origin in Brasilia, Brazil in mid-1980. It was used in many Latin American countries as a ‘poverty reduction measure’. In Brazil, this mechanism known as ‘Fome Zero Program’ gained its utmost popularity. In this scheme, families whose income was less than a predetermined income line as per ‘the federal government’s unified social service register’, used to get money directly through their bank accounts, although Brazil launched this cash transfer in order to address some specific issues. This program, affiliated to scheme called ‘Bolsa Familia’ in 2004, paved a new way towards reducing poverty and inequality in Brazil. India also embraced this idea of direct benefit transfer program directly from Brazil.
The huge success rate of this program attracted many other countries like United States, Mexico, some other American Republic and south-east Asian nations including Latin American nations to utilize this scheme in the form of ‘Conditional Cash Transfer’(CCT).The Bolsa Familia program is deemed to be the largest and most successful CCT program. CCTs have been proven to be effective enough to shatter the vicious circle of poverty to a great extent establishing social equity and human capital enhancement. This mechanism has successfully fetched structural stability in the society. This innovative mechanism has yielded momentous success which is prominent in the statistics that the number of the beneficiaries takes a leap from 38 million in 2001 to 129 million in 2011. Besides 18 Latin America and Caribbean countries, this scheme has shown its excellence in some south-Asian countries like Bangladesh, Pakistan, Indonesia.
Benefits Of DBT
DBT aims to transfer subsidies, welfare benefits and scholarships directly to the people through their bank accounts. The direct benefit transfer has ushered in a handful of benefits. It successfully added impetus to the implementation of government schemes by preventing leakage and delays. Leakages were reduced as middlemen were eliminated, which has in turn helped the Indian economy as structural expenditure has been removed. Also, fake and duplicate beneficiaries were eliminated based on biometric identification by Aadhaar Card verification. The DBT scheme also removes delays in transferring money by allowing time-bound transfers. The recognition of actual beneficiaries and time bound transfer of benefits has brought transparency in distribution of benefits.
DBT has also contributed to the growth of economy. As the DBT scheme has opened a new way to transfer money directly to the bank accounts which is in a way is injecting liquidity to the economy leading to at least 0.5% growth in GDP. People in rural areas are also able to avail the facilities of the financial institutions with cash in their hands and have the ability to spend it according to their need.
The Jam Trinity
The JAM trinity represents JAN DHAN Yojana, AADHAAR and mobile number, plays a significant role in implementing the direct subsidy transfer to the poor- one of the biggest reforms in independent India. Previously subsidy schemes used to reach the poor of our country through various indirect ways. Those procedures were not only time consuming and complicated but also involved corruptions, extortions and intermediaries depriving the poor in availing the benefits. But the advent of JAM trinity has made the procedure much easier and fair. AADHAAR helps to sort out the disadvantaged citizens through direct biometric identification, while direct transfer of funds to the bank accounts has been availed with the help of JAN DHAN bank accounts and mobile phones. It has made it possible to yield its benefits only to the intended beneficiaries keeping aside the well-to-do families and intermediaries.
Different Types of Subsidies
When the government tends to provide an advantage to a group or an individual in the form of cash which is transferred directly to the bank accounts of the people-it is called subsidy. The prime motive of subsidy is to lessen the financial burden of the poor people and encourage them to avail every facility the government as it provides to establish a stable social and economic structure.
The government started providing subsidy for LPG, one of the most significant needs of daily life, from the year 2015. This scheme was launched with two dimensions in mind. The prime motif was to provide LPG connection to those families who belong to the below poverty line. As the financial constraints did not allow them to avail the facilities of LPG connection, the government decided to bear the expenditure to some extent by sending cash directly to the bank accounts. Another important aspect was to encourage people to surrender the subsidy as they can afford those expenses on their own. And if those surrendered subsidies are redistributed to the poor, it will help lessen the daily life constraints to some extent. This special facility was provided through the scheme Pradhan Mantri Ujjwala Yojna which was launched in 2016. This scheme was supposed to protect the health of women reducing the severe health hazards associated with unclean cooking fuels. It targeted eliminating acute respiratory ailment by indoor air pollution.
Rural India still uses kerosene as common lighting source and as cooking fuel despite its adverse effects. The government pays subsidy on kerosene which is Rs 4.39 per liter according to the latest source. But in case of kerosene, subsidy is not paid through bank accounts. Public Distribution System (PDS) is used to distribute kerosene among the beneficiaries at a subsidized rate. Moreover, through the PDS the government provides daily life household ingredients like rice, pulse, flour at subsidized prices to lessen the burden of expenditure on the poor.
The facility of subsidy is also provided in case of electricity consumption. But this advantage is not applicable in all over India. Some states and UTs like Haryana, Delhi have decided to sanction electricity consumption up to 200 units every month. Apart from electricity, the government decided to provide subsidy on fertilizer on March, 2017. The Standing Committee on Chemicals and Fertilizers chaired by MS. K. Kanimozhi intends to provide subsidy to manufacturers and importers with the objective to yield fertilizer to the farmers in affordable price.
All responsibility of implementing DBT programs was initially given to the Planning Commission that acted as the nodal point. But later, the Department of Expenditure took over all the responsibility in July 2013 and continued to function till September 2015. Then the authority of DBT and matters related to it was transferred to the Cabinet Secretariat which added more impetus to the scheme. This scheme has gradually expanded its purview of work by giving more emphasis on scholarships, women, child and labour welfare. A significant progress has been marked in recent times when seven new scholarship schemes and Mahatma Gandhi Rural Employment Guarantee Act (MGNREGA) were brought under the purview of DBT in 300 identified districts with higher AADHAAR enrollment.
Although Direct Benefit Transfer has attained enormous success still there are some existing lacunae which are required to be scrutinized properly. A person must have a bank account to avail the facility of DBT whereas many people living in rural and tribal areas are unaware of banking system. Many people are deprived of all those facilities of government schemes as illiteracy has left them vulnerable. It is obvious that having a bank account does not means that banking facilities will be availed. Another big problem is to find out deserving beneficiaries as only 3% Indians pay income tax. This extreme inclination of evading income tax deters the process of determining those citizens who actually need the government subsidy. It is also necessary to maintain a proper vigilance on how the money is spent otherwise money given by government can be used in unhealthy ways. Moreover, in rural areas men are the head of the families and is a disadvantage to women who hardly get their share of the cash. Besides, in this system of DBT all money transaction are done through micro ATMs which are not always present at the door steps of every beneficiaries who need to travel long to withdraw their money. Another vulnerability of this program is that it uses data using AADHAAR which may lead towards the violation of privacy of a citizen.
This program of DBT is an excellent initiative of government to reach out to every nook and corner of our country. It is an evolving project which presents its own concerns and prospects. It deserves a unanimous support so that it can successfully broaden its ambit more and work more purportedly to elevate the downtrodden and vulnerable section of the society which would lead towards social stability. The DBT, during the pandemic has proven itself as an efficient tool to the government to provide benefits to the people who were without any income.
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What is layoff?
Deutsche Bank Layoff 2019 A layoff is the termination of the work standing of a worked with worker. This is an action launched by the employer. The former worker may no more execute job relevant services or gather earnings. In some instances, a layoff is just a temporary suspension of work, and at various other times it is long-term. Layoffs are normally the result of financial downturns. A business might pick to lower the size of its labor force to lower costs until the situation improves. Unlike termination for misconduct, a layoff has less unfavorable consequences for the worker. The staff member stays eligible for rehire as well as frequently has favorable work experience and also recommendations that serve throughout a job search. The previous staff member might additionally be qualified for welfare, retraining, as well as various other kinds of support.
A layoff is generally thought about a splitting up from work due to a lack of work readily available. The term “layoff” is mostly a description of a kind of discontinuation in which the staff member holds no blame. A company might have reason to think or wish it will be able to remember employees back to work from a layoff (such as a dining establishment during the pandemic), and also, therefore, may call the layoff “short-lived,” although it might wind up being an irreversible scenario.
The term layoff is usually erroneously utilized when an employer ends work without purpose of rehire, which is actually a reduction active, as explained listed below.
When an Employee Is Laid Off
When an employee is laid off, it commonly has nothing to do with the worker’s personal performance. Layoffs take place when a firm goes through restructuring or downsizing or fails.
Costs of Layoffs to business
Layoffs are much more costly than lots of companies realize (Cascio & Boudreau, 2011). In tracking the efficiency of companies that downsized versus those that did not scale down, Cascio (2009) found that, “As a group, the downsizers never surpass the nondownsizers. Companies that just reduce head counts, without making other modifications, hardly ever accomplish the long-lasting success they want” (p. 1).
Straight prices of laying off extremely paid tech workers in Europe, Japan, and also the U.S., were regarding $100,000 per layoff (Cascio, 2009, p. 12).
Business lay off employees expecting that they would certainly gain the economic advantages as a result of cutting prices (of not having to pay staff member wages & advantages). However, “a lot of the awaited benefits of work scaling down do not materialize” (Cascio, 2009, p. 2).
While it’s real that, with scaling down, companies have a smaller pay-roll, Cascio contends (2009) that downsized companies might also lose organization (from a lowered salesforce), create less new items (because they are less research & growth personnel), and experienced minimized performance (when high-performing staff members leave due to lost of or reduced morale).
A layoff is the termination of the work status of a worked with employee. A layoff is typically considered a splitting up from employment due to an absence of work offered. The term “layoff” is mostly a description of a kind of discontinuation in which the worker holds no blame. A company might have reason to believe or hope it will certainly be able to remember workers back to function from a layoff (such as a restaurant during the pandemic), and, for that factor, might call the layoff “short-term,” although it may finish up being an irreversible scenario.
Layoffs are a lot more expensive than lots of companies realize (Cascio & Boudreau, 2011). Deutsche Bank Layoff 2019
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1 financial accounting and accounting standards homecare business plan learning objectives after studying this chapter, you should be able to: the homework related to intermediate accounting resume writing for dummies 2 chapter high school sample essay 16 and 17,which are essay 1 intermediate accounting 2 eps and investment! (a) identify two ratios used to measure a company’s ability to pay current liabilities. there are 16 editions of this book. chapter 1 financial accounting and how to write a research paper on a novel accounting standards ifrs questions are website that solves math word problems for you available at the end of this chapter. intermediate accounting. study. intermediate accounting ii final free practice test instructions. lee financial services pays employees monthly study flashcards on intermediate accounting ch. cram.com research paper on ocd makes it easy to get the grade you essay 1 intermediate accounting 2 want! kyle, developed in collaboration by essay 1 intermediate accounting 2 athabasca university and lyryx, is intended operation business plan for the second of two in intermediate financial accounting high school essay samples courses. entries and sat essay help essays.
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The following book is an easy read that is interesting and provide some good insights. You should read the book and write a report on it.
• Risk Takers: Uses and Abuses of Financial Derivatives (2nd Edition) by John Marthinsen Your report should be no more than 20 pages and no less than 12 pages. It should be typed, font size of 11, and one and half spaced. Top and bottom margins should be 1 inch, left margin should be 1.5 inches, and right margin should be 1 inch.
Your report should have two sections. In the first section, you should summarize each chapter (total of 8-12 pages and 70% of the grade. In the second section, you should connect the book to the topics that we discuss in the course, provide personal insights, and 4 offer your own thoughts on the material, including areas with which you particularly relate or disagree (3-4 pages and 30% of the grade). Your report should look something like this: Name: Futures Bond Section 1 A. Summary of Chapter 1: This chapter…. B. Summary of Chapter 2: This chapter … Section 2 Reflection and Connection to the Course
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A new study from UC Davis took a look at the way buying directly from farmers affects the economy in the Sacramento, California, area – which is only 4 percent of Sacramento’s total agricultural business. It’s a complicated question, but the conclusion is decisive: Buying directly from farmers has a disproportionately large impact on the local economy.
At its core, the study found that a dollar spent buying directly from a farmer has about twice the impact on the local economy as spending a dollar on food that goes through a middleman – a supermarket, for example. There are all kinds of reasons for that: Farmers who sell directly to consumers tend to buy more supplies locally, which can benefit seed and equipment sellers in the area; and they also tend to hire more local labor, which in turn benefits in the community.
There are a lot of statistics and numbers in the study, some of which are kind of theoretical and/or hard to wrap your brain around. But some are clearer. From the study:
This means, that for every $1 million of output they produce, the direct marketers are generating a total of 31.8 jobs within the Sacramento Region, while producers not engaged in direct marketing only generate 10.5 jobs.
The researchers also played around with a hypothetical: What would happen if grocery stores in the Sacramento area switched their purchasing habits a little, buying more from farmers who also sell directly to consumers and less from those who only wholesale? Grocery stores in Sacramento currently buy about $4.6 million worth of product from these direct-selling farmers; what if that was shifted to, say, $5.6 million? The study found that that kind of shift would infuse a whopping $1.3 million into the local economy and create about 22 jobs.
We didn’t really need another reason to favor direct-selling farmers, but hey, we won’t turn down a chance to help the local economy, either.
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the analysis of the reporting on sustainable development drawn up by Russian and global companies, we found one common problem is the lack of a systematic approach to prioritize on sustainable development.
Often companies are limited to only a selection of a few specific sustainable development goals. All the United Nations adopted the 17 sustainable development goals. The company chooses, for example, goal 2 (end hunger, achieve food security, improve nutrition and promote sustainable agriculture development) or goal 8 (promotion of sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all). But the company did not set themselves specific tasks to achieve the goal (and such tasks, according to the UN, in total 169) and, therefore, do not establish a measurable KPI.
As a modern technology helping to find missing people To solve important social problems joined a large company Management
in Other words, companies very formally choose the goal of sustainable development, without associating them with any specific actions and measures or indicators to measure the results of those actions. This does not prevent companies to report on the achievement of objectives. They link with these objectives, already implemented projects – instead of having to plan the specific tasks necessary to achieve the purposes of sustainable development till 2030.
previous topic: the Company switched from corporate philanthropy to sustainable development
Under the leadership of the Sustainable Development Goals of Compass (the”Guide sustainable development”), for the correct selection you need to take three steps:
to Assess how current and future activities of the company brings or separates the moment of achieving the goals of sustainable development, and to assess the entire chain of added value creation. Assessment should be carried out carefully to assess each site of the chain, the competence of the company in each area and to understand what positive effect can achieve the company around sustainable development. Companies are encouraged to identify specific areas that have the greatest negative or positive impact on the issues listed in the sustainable development. Need to pay attention to how the current and potential influence. It is best at this stage to involve the assessment of the impact of the company on the achievement of sustainable development external stakeholders (experts, NGOs, etc.).
to Determine which goals (and objectives for the selected goals) best match the scope and capabilities of the company. To evaluate the contribution of the company (economic, environmental and social) to solve a particular problem, serving to achieve the goal of sustainable development, apply the simple logical model. For example, the company chose the goal of 8 (decent work and economic growth). It first evaluates the necessary resources (money, number of volunteers needed time), and then determines the desired action (e.g. training, mentoring). It is important that the effect of these actions was measurable. Then the company decides what should be the product of the activity (e.g., numbers trained) and what results to expect, i.e. changes in people’s lives, for which the company and tries (for example, the number of people employed through training). The final step is to determine the long-term effect for society (for example, reduction of unemployment and poverty). It is important to track all these indicators in dynamics.
Select specific measurable KPIs. They can be evaluated as qualitative results (e.g., improvement of drinking water quality in a specific region on specific chemical elements) and quantitative (e.g., reduction of greenhouse gas emissions or waste in appropriate units). As a rule, the KPI contain medium and long-term indicators of progress in achieving the goal of sustainable development.
previous topic: As this year has changed to “corporate philanthropy Leaders”
Finally, companies should report on their achievements in the field of sustainable development. Usually companies use standard forms of reporting (annual or non-financial), company website and presentations at various conferences on sustainable development. Based on this information, analytical Agency form the indices and rankings in the field of sustainable development. And the more clearer the company talks about its progress in achieving the goals of sustainable development, the better it will look compared to other companies in the industry.
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Big agriculture companies like Bayer Ag, Nutrien Ltd., and Cargill Inc. are jockeying with startups to encourage crop producers to adopt climate-friendly practices and develop farming-driven carbon markets. Those efforts would let retailers, food makers and other companies offset their greenhouse gas emissions by paying farmers for their fields’ capacity to withdraw carbon dioxide from the atmosphere and trap it in the soil.
The concept envisions the Midwest’s swatches of cropland doing double duty as a vast carbon sink. Plants’ process of photosynthesis withdraws carbon dioxide from the air, combines it with water and sunlight to produce energy, and ultimately embeds carbon in dirt through roots, while releasing oxygen back into the atmosphere. Soil, if left undisturbed, can retain the converted carbon for years.
Agricultural companies, long criticized as environmental villains, say that paying farmers to maximize those natural processes can put the scale of modern farming behind a potential climate solution. Farmers, following half a decade of lean crop prices, are contemplating a possible new source of income that is less dependent on weather and agricultural commodity markets. The Environmental Protection Agency has estimated that the agriculture sector accounts for 10 percent of U.S. greenhouse gas emissions.
President-elect Joe Biden’s administration also plans to pursue the concept. Biden said in December that under his administration, the USDA will direct federal conservation payments to farmers who use their fields to capture more carbon.
There is no U.S. federal requirement for companies to offset their greenhouse gas emissions, whether by buying credits from farmers or other means. But some companies say they are voluntarily looking for ways to reduce or eliminate their carbon footprint to attract environmentally conscious consumers and investors and pursue their own corporate missions.
Iowa farmer Kelly Garrett in September planted wheat and rye not to be harvested and sold but rather to keep his soil enriched and boost the quantity of carbon dioxide his fields can pull from the atmosphere. In the spring, he will plant his typical crops into the residue.
The strategy boosts farmers’ bottom lines. Farmers that participate in the carbon credit programs so far have generally received between $7 and $40 per acre, depending on farmers’ practices. The companies say those practices can be verified through data beamed from tractors to online farm management systems, and by monitoring fields with satellites and soil tests.
“There’s a lot of money to be made here for farmers,” Garrett said, who adopted carbon-trapping practices on his farm several years ago to help enrich his soil.
In November, he was photographed standing in a corn field holding an oversized check for $75,000, proceeds from selling 5,000 carbon credits that his farm generated through a program being developed by the agricultural startups Nori LLC and Locus Agricultural Solutions.
The e-commerce platform Shopify bought the credits and used the carbon reductions generated to help offset carbon emissions from the boats, planes and trucks transporting goods sold through the platform during the Black Friday/Cyber Monday weekend.
Some agricultural companies, including Bayer and Nutrien as well as startups like Nori and Indigo Ag, aspire to be carbon middlemen, offering products and services to develop platforms where farmer-generated credits can be bought and sold.
Others, including Cargill, Corteva Inc. and Archer Daniels Midland Co. are facilitating and funding farmers’ efforts as a way to burnish the companies’ own climate commitments and those of their customers, such as grain buyers.
Source: Wall Street Journal
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Population - DNE21+
|Institution||Research Institute of Innovative Technology for the Earth (RITE), Japan, http://www.rite.or.jp/en/.|
The primary drivers of future energy demand in DNE21+ are projections of population and GDP at market exchange rate (MER). We developed two different prospects as they may more or less likely take place in the future as macroeconomic trends, considering from the past statistics. In Scenario A, slow economic growth slows down after the miraculous past growth mainly in developed countries In Scenario B, technological advances keep ongoing as in the past and per capita GDP continues to grow quite rapidly. As a reference case, we usually refer to Scenario A, but it depends on scope and purpose of analysis.
The world population scenarios were developed with reference to The UN Population Division; World Population Prospects (The 2008 Revision) which have been used worldwide. UN scenarios of the world population are developed every two years and have been revised downward for every update. Therefore, in this scenario, even after taking account of the future population increase in developing countries such as in Asia or Africa, we assume it very unlikely that the future world population will be substantially over 10 billion. Historical statistics explicitly show the trends that the fertility and population growth rates become lower with growing GDP per capita. Our population scenario is developed, assuming this trend to keep in the future, by replacing the relationship between fertility and per capita GDP by the relationship between annual change rate of population and per capita GDP. The population growth in Scenario B is assumed to be smaller than that in Scenario A, as per capita GDP is larger in Scenario B.
Figure 3 shows the world population scenarios. In Scenario A, the world population is assumed to have a medium growth rate and the UN medium variant scenario of the world population, the 2008 Revision is adopted. After growing to 9.1 billion in 2050, the world population grows steadily to 9.3 billion by the year 2100. In Scenario B, the world population is assumed to have a low growth rate. This scenario is roughly equivalent to the average of UN medium variant and low variant scenarios of the world population, the 2008 Revision. The world population grows slowly from 6.1 billion in 2000. After peaking at 8.6 billion around 2050, it declines to 7.4 billion by the year 2100.
Figure 3 Population Scenario
In terms of GDP per capita, the following distinct trends are observed historically.
- The growth rate of GDP per capita is low in the least developed countries (LDCs).
- When GDP per capita is between a few hundred dollars and a thousand dollars, the growth rate of GDP per capita tends to become high.
- For the higher GDP per capita, the growth rate tends to decrease gradually, shifting toward moderate economic growth.
- The industrial structure has three big trends; in the first period the structure centers in primary industry, in high economic growth period heavy industry develops starting from light industry, and in gradual growth period the tertiary industry starts to grow such as service and information industries.
Based on these observations, GDP (MER) per capita scenarios are developed as shown Figure 4. In Scenario A, the current developed countries slow down the GDP per capita growth until 2100 and the growth rate converges to 0.5% per year in 2100. Developing countries continue to grow steadily. The current emerging economies and least developed countries have the per capita GDP growth rates of around 1%/year and around 2%/year in 2100, respectively. The global average growth rate from 2000 to 2100 is 1.5% per year.
In Scenario B, the current developed countries continue to increase GDP per capita by 1.0%/year in 2100. Developing countries continue to grow rapidly. The current emerging economies and least developed countries grow at the rate of around 2%/year and around 3%/year even in 2100, respectively. The global average growth rate from 2000 to 2100 is 2.1% per year.
Both in Scenario A and B, economic gaps between developed and developing countries narrow steadily until 2100. Yet, the gaps in Scenario B are still bigger than in Scenario A. The GDP per capita ratio of OECD90 to Africa is 38.5 in 2000, and in 2100 6.4 in Scenario A and 6.7 in Scenario B.
Figure 4 per capita GDP Scenario
GDP scenarios are formulated by combination population scenario and per capita GDP scenario. Figure 8 shows the world GDP scenarios. The potential world GDP grows at a higher rate in Scenario B than in Scenario A. As mentioned above, GDP per capita growth at a higher rate in Scenario B makes the population smaller than the population in Scenario A, so that GDP difference between the two scenarios shrinks. The world average of GDP annual growth is assumed to be 2.0% per year in Scenario A and 2.3% per year in Scenario B from 2000 to 2100.
Figure 5 GDP (MER) Scenarios
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Kenya National Bureau of Statistics hereby releases monthly Consumer Price Indices (CPI) and rates of inflation, for November 2017. These numbers were generated by conducting a survey of retail prices for a basket of household consumption goods and services, during the second and third weeks of the month under review. The prices were obtained from selected retail outlets in 25 data collection zones spread across Nairobi and 13 other urban centers.
The CPI decreased by 0.23 per cent from 182.50 in October to 182.08 in November 2017. The overall year on year inflation stood at 4.73 per cent in November 2017.
Kenya, through the Kenya National Bureau of Statistics is joining other African nations to celebrate the African Statistics Day on 17th November 2017. This day is celebrated each year in Africa on18 November 2017, to raise public awareness of the importance of statistics in all aspects of social and economic life.
The theme of the Day this year is “Better lives with better economic statistics” and focuses on the critical role economic statistics plays in underpinning economic governance that leads to durable growth, and linking economic growth with better lives and better economic status for all citizens of Africa.
Availability and appropriate use of good economic statistics can translate into better lives for people through providing evidence as a base for policy and decision-making by the nation or by firms, households, and citizens. Statistics provide information for monitoring, evaluation, and reporting of the progress in meeting the goals and targets of the Sustainable Development Goals (SDG), as well as a basis for effective economic governance to promote the welfare of a nation.
The importance of statistics in understanding and using economic information for planning and policy design cannot be overstressed. All key macroeconomic variables (national accounts, savings and investment, employment interest rates, inflation) and microeconomic (poverty, inequality, social outcome indicators, etc.) are based on statistics. For example, national accounts that measure the overall size and strength of the economy, as well as trends in production, consumption, investment, and savings amongst other variables or indicators. Income and wealth of the economy are the bases of the well-being of the individuals and households. When the economy is strong, there will be more opportunities for jobs and employment. Increased employment will elevate more people out of poverty, and increase productivity as well.
Government provides public goods and services to citizens and intervene and influence the economy through fiscal policy. Government finance statistics show the amount and sources of government financial resources and how these resources are spent. A positive impact from public finance (revenues and spending) on the economy can return high growth in the economy, which brings in more tax revenues. Good government financial statistics help improve the transparency and good governance of the economy, and thus better the well-being of the people.
The Leading Economic Indicators highlights trends in Consumer Price Indices (CPI) and inflation, interest rates, exchange rates, international trade, agriculture, energy, manufacturing, building and construction, tourism and transport.
Consumer Price Index (CPI) decreased from 184.72 points in August 2017 to 183.66 points in September 2017. The overall rate of inflation dropped from 8.04 per cent to 7.06 per cent during
the same period. In August 2017, the Kenyan Shilling appreciated against the major trading currencies except for the Euro, South African Rand, the Euro, and the Sterling Pound.
The average yield rate for the 91-day Treasury bills, which is a benchmark for the general trend of interest rates, decreased from 8.22 per cent in July 2017 to 8.19 per cent in August 2017 while the inter-bank rate rose from 6.84 per cent in July 2017to 8.12 per cent in August 2017.
The Nairobi Securities Exchange (NSE) 20 share index decreased from 4,027 points in August 2017 to 3,751 points in September 2017, while the total number of shares traded dropped from 640 million shares to 557 million shares during the same period. The total value of NSE shares traded increased from KSh 16.0 billion in August 2017 to KSh 16.2 billion in September 2017.
Broad money supply (M3), a key indicator for monetary policy formulation, increased from KSh 2,957.94 billion in July 2017 to KSh 2,966.59 billion in August 2017. Gross Foreign Exchange Reserves expanded from KSh 1,075.90 billion in August 2017 to KSh 1,085.54 billion in September 2017. Net Foreign Exchange Reserves increased from KSh 609.02 billion in July 2017 to KSh 617.64 billion in September 2017.
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You hear about it all the time in the news—Cost of living rising! Maybe you think about it on a daily basis—Do I earn enough to cover my standard of living?
But, how often have you thought about the relationship between the cost of living and your business?
If it’s crossed your mind before, then you’ve probably also wondered about the average cost of living by state. Well, wonder no more—your cost of living by state guide has arrived.
What is cost of living?
The cost of living is the amount of money an individual needs to maintain their standard of living. Housing, food, transportation, clothing, taxes, entertainment, equipment, and education costs are just some of the basic expenses included in the cost of living.
Cost of living indexes let you compare basic expenses in different regions. There are cost of living indexes that compare cities, states, and countries.
Major cities, like New York City, have a higher cost of living than smaller cities, like Albany. To offset these higher costs (e.g., rent), wages are generally higher.
You can use cost of living information to determine how expensive it is to live and set up shop in an area.
Why the cost of living matters to your business
Cost of living matters to workers. That means it probably matters to your employees. But, why should your business be concerned about it?
Let’s name a few big reasons why the cost of living is important to your business bottom line. The cost of living affects:
- Office space expenses
- Business budgets
- Salary expectations
- Product and service prices
- Owner’s draw or salary
- Raise determinations (e.g., cost of living adjustment)
Don’t care about a locality’s cost of living? If that’s the case, you may struggle to create accurate budgets, set reasonable employee salaries, and establish a fair pricing model that customers want to buy from.
Businesses that don’t put in the time to research all possible expenses may find themselves dipping into negative cash flow territory.
Not to mention, knowing a city’s cost of living can help you decide where to start your business. Cost of labor is an important factor that goes into our best states to start a business list.
Average cost of living by state
Cost of living data can vary depending on what factors are analyzed (e.g., housing) and who conducts the study.
For our cost of living comparison by state, we used the following critical information:
- Annual mean wage for all occupations (BLS)
- Median monthly rent (GoBankingRates)
- Value of a dollar (MSN)
The mean wages represent the average wages employees working in the state earn per year. This data is from May 2020.
Median monthly rent shows the middle value of rent in the state. This data was compiled by GoBankingRates in November 2020.
The value of a dollar captures how much your dollar is worth in the state. If the value of a dollar drops below $1, then it does not go as far in that state. This data is from November 2020.
As you’re looking at the chart, keep in mind that states with a higher mean wage, higher monthly rent, and lower value of a dollar tend to have a higher cost of living.
|State||Annual Mean Wage (All Occupations)||Median Monthly Rent||Value of a Dollar|
Cost of living per state: Lowest to highest list
If you just want the scoop on which states have the lowest and highest cost of living, we’ve got you covered.
Take a look at the states ranked by cost of living from lowest (most affordable) to highest (most expensive). This data is from a resource provided by U.S. News that uses 2020 data from the Council for Community and Economic Research:
- North Carolina
- West Virginia
- South Carolina
- South Dakota
- New Mexico
- North Dakota
- New York
- New Jersey
- New Hampshire
- Rhode Island
Cost of living calculator
You might be wondering if there are any tools you can use to readily calculate the cost of living in one state versus another. And if you are wondering it, you’re in luck—there are a number of tools you can use.
Here’s a list of websites that have a cost of living calculator:
You can use cost of living calculators to see how far a dollar will go in two different cities. These calculators allow users to enter information like income, current city, and prospective city.
For example, someone who makes $50,000 per year in Cleveland, Ohio would need to make $127,570 in New York City (Manhattan), New York to keep up with the cost of living.
Keep in mind that the calculators have a limited selection of cities.
The Bureau of Labor Statistics also has a thorough consumer price index (CPI). The CPI details average prices for items such as food, shelter, transportation, and clothing.
Once you start your business, you need a reliable way to manage your accounting books. With Patriot’s accounting software, you can easily enter balances, receive and record payments, send payment reminders, and more. Start your free trial now!
This article has been updated from its original publication date of September 24, 2019.This is not intended as legal advice; for more information, please click here.
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Most students make undesirable spending choices out of idleness, oblivion, or indifference. It could help to visit https://termpapereasy.com/ site to get a bit of insight on the subject from professional paper writers. So, you can learn how to keep your expenditure under control. Below are some of the typical ways students misuse money.
- Eating Out
Fast food is, most times, overpriced. Students may find it easy to imitate some of the recipes at the convenience of your home. Eating out should be a portion of a student’s entertainment budget to prevent overspending. Making your food at home can save you almost 70% on your food budget. It is essential to plan for your meals beforehand and follow the plan strictly.
- Food Shopping
Learning efficient methods of food shopping is vital. It is possible to save a substantial amount when you are aware of what you are doing. There are a couple of tricks to buying groceries. One of them is to leverage on special offers. It would help to buy your groceries in bulk too. Also, visit shops with price match assurance to save some money. In return, this saves you money and transport as well.
- Phone Contracts
You must subscribe to phone contracts according to your use. Some students need unlimited texts for more than limitless minutes. Things can always change and so ensure you do not get stuck in a contract that does not let you move. Before committing to a phone contract, first find out what plan is flexible.
- Overspending During Nights Out
Nights out may quickly get out of hand. It may be costly and hard to regulate. For you to control your expenditure on a night out, a budget will come in handy. It is recommendable to assign 5-10% of your income after tax to entertainment. You can also reduce the number of times you go out. That way, you will find a means of reducing expenses.
- Overspending for Gadgets
Students sometimes want to be up-to-date with the latest gadgets. They are willing to pay thousands for devices. You do not have a reason to purchase a brand new machine when your current one is working. You can shop around for revamped pieces first before deciding to buy a brand new gadget in case you need to upgrade. Remodeled pieces will come with a warranty if purchased from a trusted supplier.
- Choosing a Bank
Picking the perfect bank for your needs ensures that you do not pay unnecessary levies. Number one, choose banks that have many ATMs close to your college campus and have their presence throughout the country. It reduces your need to walk far for services and also reduce your withdrawal charges. In addition to location, find banks with an efficient mobile app if you wish to use online banking frequently.
- Misusing Credit Cards
The misuse of a credit card can land you in a bad situation in the future. Before getting a credit card, ensure you choose the correct card. Take a good look at all the terms of the card, the penalties, and the initial rates. Find someone familiar with credit to take you through the process. Your credit card will help you set up your credit. Thus, you must wisely use your credit cards.
- New Textbooks
Buying new textbooks is not always necessary if you have access to used ones. The content is the same. However, second-hand books and manuals will save you some money. Students need to find stores that sell second-hand books or rent out school materials. Today it is easier to get materials online as digital copies. Some schools provide rental services to their students. It would be wise to take advantage of that and save some money. Before purchasing a new textbook, ensure you do your research and fin what options are available to you, and also compare the costs.
It is possible to save hundreds of money month after month if you make the right choices. Ensure that you dodge as many mistakes as possible. Occasionally look for places where you can restrict spending. In the end, you will find it surprising how much you can save.
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When someone is planning to buy a new printer, you know what we tell them? We tell them to not just look at the discounted prices of the printers available in the market. We tell them that there’s something even more critical when buying printers than the initial cost. We tell them to look at the printer ink yield or the toner yield of the cartridges that will be used in the printers that they’ll be buying.
The reason why printer ink yield and toner yield is important is that they define the cost per page variable pertaining to that particular printer. Costs per page add up to the operating costs of the printer. In the case of most modern printers, the operating costs are much higher than the cost of purchasing in the printer in the first place.
Cost per page can be calculated with the help of the printer ink yield which is usually provided on top of cartridges in the form of ‘x’ number of pages. However, have you ever wondered how all the toner and ink cartridge manufacturers even calculate the total printer ink yield and printer toner yield?
After all, all your printing requirements can’t be the same. Take text printing for example. Sometimes, your printed page will contain 400 words while other times it will contain 200 words. If all your prints are not same, then how do cartridge manufacturers claim that a cartridge can print ‘x’ number of pages? We’ll answer this and some more questions for you.
What Does Printer Ink Yield Or Toner Yield Mean?
Now, consider a colour cartridge whose box says that it can print 300 pages.
Sometimes, you’ll even come across cartridges that big brand companies claim will print twice the amount of pages that a normal cartridge of the same model will print.
You’ll find that different types of cartridges have different printer ink yield or toner yield.
Obviously, this is directly related to the amount of ink or toner in the cartridge. But, more importantly, these estimates are based on a standard. This standard is five percent page coverage.
What Is The Five Percent Coverage And Where Did It Come From?
Five percent page coverage means the percentage of a standard page that the ink will cover. When a cartridge’s printer ink yield or toner yield is specified to be ‘x’ number of pages, then it means that that cartridge will be able to print ‘x’ number of pages with five percent coverage.
Since every manufacturer uses the same metric of five percent page coverage when mentioning printer ink yield or toner yield, it’s quite obvious that a third party organisation established a standard for all of them to use.
This third party organisation was the International Organisation of Standardisation or ISO. ISO set this standard by devising a set of pages for figuring out the printer ink yield and toner yield for various cartridges. These documents are a part of the ISO/IEC 24712 series.
So, while we’ve explained the basics of the five percent coverage concept, we haven’t really gone into the details of how the standards have evolved over the years.
However, the changes haven’t been big either, so the evolution of these standards can be safely neglected.
The description of the five percent page coverage concept should refine how you see the printer ink yield and toner yield numbers on the cartridges you buy.
To you, these numbers should now mean that the cartridge you’re about to buy will be able to print ‘x’ number of pages in the same format as specified by the International Organisation of Standardisation.
The printer ink yield or toner yield numbers don’t define how much you’ll be able to print because sometimes your pages will require more ink than five percent and sometimes less. At the same time, the printer ink yield and toner yield estimates are useful because they allow you to compare multiple cartridges easily and quickly.
Should You Bother To Measure The Page Coverage Of Your Prints?
There’s no real point in trying to figure out the page coverage of your prints, unless you’re in the printing business. If you’re a Printing Service Provider (PSP), then it may be crucial for you to know how much page coverage your different print tasks are achieving so that you can try and find ways of reducing your costs.
In such a scenario, you may need to get a proper software program for evaluating how much page coverage your printing tasks are getting. There’re a few available in the market, but one of the more popular ones is this one here.
If you’re not a PSP and are simply curious as to how a five percent covered page looks, then we can help. Typically, a five percent covered page is half covered.
As you can see from the images we’ve provided, the fonts you choose don’t make a difference in how the page looks because all of them look to be covered about halfway through.
Does Your Choice Of Fonts Affect How Much Ink Or Toner You Use?
You can see in the images that a five percent covered page looks the same, regardless of which font is being used. However, the font you choose to print in can have a huge difference in how much ink or toner you actually end up using.
You might be thinking that the difference between multiple fonts isn’t all that much and you’re right about that. What you haven’t considered is that if you combine these differences over, say 500 pages, the difference becomes huge.
A lot of research has been done on the relationship between a font and the amount of ink or toner it uses. The font Comic Sans is considered to be one of the worst fonts that you can choose for your printing tasks.
Compared to other fonts, one of the best fonts you can choose to use to save ink and toner is Garamond. Another good font that you can choose to use is Times New Roman which is almost as good as Garamond.
We’ve done a whole assessment of which fonts is best for saving printing ink. You can check it out here.
What all this means is that when it comes to assessing printer ink yields and toner yields, quantity matters. If you don’t use your printer a lot, then printer ink yield, page coverage numbers, and your choice of fonts won’t make that much of a difference to you and your balance sheet.
However, if you’re one of those people for whom the printer is a key tool of everyday function, then you can’t really avoid paying attention to your choice of fonts, your page coverage, and especially your printer ink yield or toner yield. If you choose wisely, then you can actually end up saving huge sums of money!
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Using a strengths, weaknesses, opportunities and threats (SWOT) analysis to frame an important business decision is a long-standing recommended practice. But don’t overlook other, broader uses that could serve your company well.
A SWOT analysis starts by spotlighting internal strengths and weaknesses that affect business performance. Strengths are competitive advantages or core competencies that generate value (and revenue), such as a strong sales force or exceptional quality.
Conversely, weaknesses are factors that limit a company’s performance. These are often revealed in a comparison with competitors. Examples might include a negative brand image because of a recent controversy or an inferior reputation for customer service.
Generally, the strengths and weaknesses of a business relate directly to customers’ needs and expectations. Each identified characteristic affects cash flow — and, therefore, business success — if customers perceive it as either a strength or weakness. A characteristic doesn’t really affect the company if customers don’t care about it.
The next SWOT step is identifying opportunities and threats. Opportunities are favorable external conditions that could generate a worthwhile return if the business acts on them. Threats are external factors that could inhibit business performance.
When differentiating strengths from opportunities, or weaknesses from threats, the question is whether the issue would exist without the business. If the answer is yes, the issue is external to the company and, therefore, an opportunity or a threat. Examples include changes in demographics or government regulations.
As mentioned, business owners can use SWOT to do more than just make an important decision. Other applications include:
Valuation. A SWOT analysis is a logical way to frame a discussion of business operations in a written valuation report. The analysis can serve as a powerful appendix to the report or a courtroom exhibit, providing tangible support for seemingly ambiguous, subjective assessments regarding risk and return.
In a valuation context, strengths and opportunities generate returns, which translate into increased cash flow projections. Strengths and opportunities can lower risk via higher pricing multiples or reduced cost of capital. Threats and weaknesses have the opposite effect.
Strategic planning. Businesses can repurpose the SWOT analysis section of a valuation report to spearhead strategic planning. They can build value by identifying ways to capitalize on opportunities with strengths or brainstorming ways to convert weaknesses into strengths or threats into opportunities. You can also conduct a SWOT analysis outside of a valuation context to accomplish these objectives.
Legal defense. Should you find yourself embroiled in a legal dispute, an attorney may want to frame trial or deposition questions in terms of a SWOT analysis. Attorneys sometimes use this approach to demonstrate that an expert witness truly understands the business — or, conversely, that the opposing expert doesn’t understand the subject company.
Tried and true
A SWOT analysis remains a useful way to break down and organize the many complexities surrounding a business. At David Mills, CPA, LLC, we can help you with the tax, accounting, and financial aspects of this approach. Contact us today.
Some might say the end of one calendar year and the beginning of another is a formality. The linear nature of time doesn’t change, merely the numbers we use to mark it.
Others, however, would say that a fresh 12 months — particularly after the arduous, anxiety-inducing nature of 2020 — creates the perfect opportunity for business owners to gather their strength and push ahead with greater vigor. One way to do so is to ring in the new year with a systematic approach to renewing everyone’s focus on profitability.
Create an idea-generating system Without a system to discover ideas that originate from the day-in, day-out activities of your business, you’ll likely miss opportunities to truly maximize the bottom line. What you want to do is act in ways that inspire and allow you to gather profit-generating concepts. Then you can pick out the most actionable ones and turn them into bottom-line-boosting results. Here are some ways to create such a system:
Share responsibility for profitability with your management team. All too often, managers become trapped in their own information silos and areas of focus. Consider asking everyone in a leadership position to submit ideas for growing the bottom line.
Instruct supervisors to challenge their employees to come up with profit-building ideas. Leaving your employees out of the conversation is a mistake. Ask workers on the front lines how they think your business could make more money.
Target the proposed ideas that will most likely increase sales, cut costs or expand profit margins. As suggestions come in, use robust discussions and careful calculations to determine which ones are truly worth pursuing.
Tie each chosen idea to measurable financial goals. When you’ve picked one or more concepts to pursue in real life, identify which metrics will accurately inform you that you’re on the right track. Track these metrics regularly from start to finish.
Name those accountable for executing each idea. Every business needs its champions! Be sure each profit-building initiative has a defined leader and team members.
Follow a clear, patient and well-monitored implementation process. Ideas that ultimately do build the bottom line in a meaningful way generally take time to identify, implement and execute. Don’t look for quick-fix measures; seek out business transformations that will lead to long-term success.
A carefully constructed and strong-performing profitability idea system can not only grow the bottom line, but also upskill employees and improve morale as strategies come to fruition. Our firm can help you identify profit-building opportunities, choose the right metrics to evaluate and measure them, and track the pertinent data over time.
It’s been estimated that there are roughly 5 million family-owned businesses in the United States. Annually, these companies make substantial contributions to both employment figures and the gross domestic product. If you own a family business, one important issue to address is how to best weave together your succession plan with your estate plan.
Transferring ownership of a family business is often difficult because of the distinction between ownership and management succession. From an estate planning perspective, transferring assets to the younger generation as early as possible allows you to remove future appreciation from your estate, minimizing any estate taxes. However, you may not be ready to hand over control of your business or you may feel that your children aren’t yet ready to run the company.
There are various ways to address this quandary. You could set up a family limited partnership, transfer nonvoting stock to heirs or establish an employee stock ownership plan.
Another reason to separate ownership and management succession is to deal with family members who aren’t involved in the business. Providing such heirs with nonvoting stock or other equity interests that don’t confer control can be an effective way to share the wealth with them while allowing those who work in the business to take over management.
An additional challenge to family businesses is that older and younger generations may have conflicting financial needs. Fortunately, strategies are available to generate cash flow for the owner while minimizing the burden on the next generation.
For example, consider an installment sale. These transactions provide liquidity for the owner while improving the chances that the younger generation’s purchase can be funded by cash flows from the business. Plus, so long as the price and terms are comparable to arm’s-length transactions between unrelated parties, the sale shouldn’t trigger gift or estate taxes.
Or, you might want to create a trust. By transferring business interests to a grantor retained annuity trust (GRAT), for instance, the owner obtains a variety of gift and estate tax benefits (provided he or she survives the trust term) while enjoying a fixed income stream for a period of years. At the end of the term, the business is transferred to the owner’s children or other beneficiaries. GRATs are typically designed to be gift-tax-free.
There are other options as well, such as an installment sale to an intentionally defective grantor trust (IDGT). Essentially a properly structured IDGT allows an owner to sell the business on a tax-advantaged basis while enjoying an income stream and retaining control during the trust term. Once the installment payments are complete, the business passes to the owner’s beneficiaries free of gift taxes.
Family-owned businesses play an important role in the U.S. economy. We can help you integrate your succession plan with your estate plan to protect both the company itself and your financial legacy. For more information, contact David Mills, CPA, LLC today.
Starting a new business is an exciting venture, but with so many business structures, deciding the legal structure of your company can seem overwhelming. Will it be a sole proprietorship? A corporation? Is it an LLC?
The five most common business legal structures are:
In a sole proprietorship, the individual who owns the business is an unincorporated business by themselves.
This type of business structure is sometimes known as the sole trader, individual entrepreneurship or proprietorship. There is no legal distinction between the owner and the business entity.
According to the U.S. Small Business Administration, a sole proprietorship is “the simplest and most common structure chosen to start a business.”
A partnership is when two or more individuals join together to create a business. According to the IRS, in a partnership “each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.”
Within a partnership, there are two common types: limited partnerships (LP) and limited liability partnerships (LLP).
The U.S. Small Business Administration notes a limited partnership has one partner with unlimited liability and all others with limited liability.
In a limited partnership, the partners with limited liability tend to have limited control over the company. Profits are passed through to personal tax returns, and the general partner — the partner without limited liability — must also pay self-employment taxes.
A limited liability partnership (LLP) gives limited liability to every owner. This structure protects each partner from debts against the partnership.
When a corporation is formed, prospective shareholders exchange money, property or both, for the corporation’s capital stock.
Sometimes called a “C-corp” a corporation is a legal entity separate from its owners.
The Small Business Administration notes corporations offer “the strongest protection to its owners from personal liability” but “the cost to form a corporation is higher than other structures.”
Operating a corporation requires more extensive record-keeping and reporting.
The IRS says S Corporations “are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.”
Becoming an S Corporation requires a business to meet certain qualifications including being a domestic corporation and having no more than 100 shareholders.
Businesses must file with the IRS to earn S Corporation status.
A limited liability company, more commonly referred to as an “LLC” combines the advantages of both the corporation and partnership business structures.
An LLC can protect an individual from personal liability in most instances.
Owners of an LLC are known as “members” and the members can be individuals, corporations, other LLCs or foreign entities. Most states, including Illinois, permit “single-member” LLCs, in which there is only one owner.
The professionals at David Mills, CPA, LLC, have offices in both Morton and East Peoria. They work with business clients in the Tri-County (Peoria, Woodford and Tazewell) area as well as beyond.
When establishing a business, contact David Mills, CPA, LLC to ensure the legal entity you select best matches your professional goals.
Small businesses need budgets, but too often, they don’t have one. The staff at David Mills CPA, LLC can assist with your budgeting needs.
Creating a business budget can seem overwhelming. One survey found as many as two-thirds of all small businesses don’t have a budget.
Without a budget, though, your company’s financial health is at risk. Small businesses face challenges every day. A budget helps mitigate those difficulties.
The experts at David Mills CPA will show you how budgeting can grow your profits. Interpreting the numbers is key, but we understand making sense of those figures can feel overwhelming.
We can help you answer the critical questions:
A smartly planned budget will include flexibility to help you navigate any troubled waters your business may face.
A budget should be more than just a yearly chore. It’s a tool to help you tackle short-term obstacles while planning for the long-term future.
We will teach you the questions to ask when looking at your budget versus actual numbers. In this way, your budget becomes a valuable tool to manage cash flow and build your business.
Budgets help make your business more efficient. They can help keep your company out of debt while developing a roadmap for future growth or expansion.
Planning your business budget will make it more efficient to operate your company.
Let the staff at David Mills CPA assist you with all your business budgeting needs. Contact us today for more information.
Exciting news! David Mills CPA has officially opened our East Peoria location. We can provide your business with accounting and financial services. Our office is open Monday-Friday from 8:00 AM until 5:00 PM.
In order to best serve our customers, we offer a wide variety of services. We can assist your business with the financial aspects so you can focus on what is most important to you. A list of our services include:
Our East Peoria location is now booking appointments. For all of your financial needs, contact David Mills CPA today. We look forward to working with you and serving our customers in East Peoria.
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Commodities trading: Overview
Commodities are an important aspect of most American’s daily life. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.
For investors, commodities can be an important way to diversify their portfolio beyond traditional securities. Taken into account the prices of commodities tend to move in opposition to stocks, some investors also rely on commodities during periods of market volatility.
In the past, commodities trading required significant amounts of time, money, and expertise, and was primarily limited to professional traders. Today, there are more options for participating in the commodity markets.
In the broadest sense, the basic principles of supply and demand are what drive the commodities markets. Changes in supply impact the demand; low supply equals higher prices. So, any major disruptions in the supply of a commodity, such as a widespread health issue that impacts cattle, can lead to a spike in the generally stable and predictable demand for livestock.
Global economic development and technological advances can also impact prices. For example, the emergence of China and India as significant manufacturing players (therefore demanding a higher volume of industrial metals) has contributed to the declining availability of metals, such as steel, for the rest of the world.
Benefits of Commodities Trading with FXCore
Trade with Leverage: commodities are traded on margin, so you can choose the leverage suiting you up to a maximum of 30:1
- Competitive Spreads: we have tight spreads on our full range of commodities
- Fast Trade Execution: we provide low latency and efficient price feeds to ensure fast trade execution
- Lower Trading Cost: commodities attract a much lower cost compared to other instruments, keeping your commodity trading costs down
Tradable on Multiple Devices: using our mobile trading platforms, you can trade commodities across your favourite mobile devices
Key Drivers of Commodity Prices
Supply and Demand
The price movements depend on the supply and demand for each commodity. As the supply and demand fluctuate, the price will do the same or the opposite. Hypothetically, commodity price increases with demand. So, we can also conclude, that as demand increases for a commodity, the price will also increase. And if the demand for a certain commodity falls, the price will fall accordingly. Now, you can better understand the way it works to prepare yourself for the trading process.
Since commodities are usually priced in USD, as the value of the USD falls, commodities will become more expensive for traders using this currency to pay for them. Let’s say, the USD experiences a sharp rise against a basket of major currencies – commodities such as crude oil, energies, precious metals, and a variety of agricultural products will usually see a fall in price in response. However, markets do not always operate in a completely uniform manner, and further external factors should also be considered when trading.
Most commodities are susceptible to political uncertainty and political changes. Unfortunately, a majority of the world’s most commonly traded commodities are produced in unstable regions, such as the Middle East and Africa, which have recently been experiencing a number of regional crises. For example, the Middle East is the largest producer of crude oil, but the western countries impose sanctions on various countries within the Middle East, so Brent and WTI crude oil prices can become heavily influenced.
The economic prosperity of a country affects the price of a commodity, as it determines the purchasing power of a given population, with the effect becoming more obvious if the very country is a major producer or user of that commodity. Venezuela is a major producer of oil, the government has caused significant damage to the country’s oil industry through lack of investment, corruption, and cash shortages. It has crippled the economy and resulted in hyperinflation. The economic sanctions imposed on Venezuela have further constricted oil production, exports, and revenues in the currency.
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You can measure opportunity with the same yardstick that measures the risk involved. They go together. – Earl Nightingale.
PRINCE2® defines risk as an uncertain event or set of events that, should it occur, would have an effect on the achievement of objectives. So, PRINCE2® sees risk as having a positive (to take profit) and negative (option to loss) efect. Normally, positive risks are referred as opportunities and negative risks as threats.
PMBOK® has the same point of view and states that project risk management objetives are to increase the probability and impact of positive events and decrease the probability of negative events in the project.
- Business Risks: concerning those normal risk of doing business that can result in either gain or loss.
- Pure, or insurable risks: concerning those risks if they materialise can only result in loss.
- Risk event: what might happen to the benefit or detriment of the project.
- Risk probability: the likelihood of occurrence of the event.
- Amount at stake: the extent of loss or gain that could result.
Risk in the Project Lifecycle
Finally, we would like to mention this quote about dealing with uncertainty:
As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there area also unknown unknowns; the ones we don’t know we don’t know. And if one looks through te history of this country and other free countries, this is the latter category that tends to be the dificult ones. -Donald Rumsfeld (about Iraq’s weapons of mass destruction)
What is your best advice to deal with uncertainty?
Author: angelberniz (All Rights Reserved by the author).
Source: Original text (based upon first hand knowledge).
Image courtesy of jscreationzs at FreeDigitalPhotos.net.
Help us to improve it: how-to, discussion.
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Our Guide on How to Write Economics Papers is Dependable
It is arguably true that economics is one of the most popular fields of study. Economics as an academic field aims at understanding how human beings utilize resources that are scarce in satisfying their needs as well as wants. This filed is divided into two major subdivisions, that is, macroeconomics and micro economics. Macroeconomics studies how the general economy behaves whereas microeconomics studies behavior of individual firms and consumers. Are you looking for professional tutors who can guide you on how to write economics papers? If yes, then you should search no further as we can help you. Our writers are passionate about understanding how human beings use the limited resources to satisfy their seemingly unlimited wants and needs. This implies that they are always more than willing to assist you when you order for our economics paper writing help. It is worth to mention that we personalize our writing assistance to meet our clients’ specific economics writing needs. It is then needless to overemphasize the fact that we offer maximally satisfying writing assistance.
Our Tutors who offer Advice on How to Write Economics Papers can assist you on writing all types of economics Papers
Most economics and students who understand how to write economics papers would agree that there are three major types of research papers in this field. These types are namely: theoretical, empirical and a combination of theoretical and empirical research papers. To start with, a theoretical paper is written when the information or data that is needed to answer the given problem under study is impossible to obtain or unreliable. Such papers are based on reasonable assumption whereby the researcher predicts what would happen based on his/her assumptions of given actors and environment. The second type of economics research papers is empirical papers. These types of research papers are written when the information or the data that are needed to answer the given economics problem under study are available. In order to write an empirical research paper, you must collect the relevant data using various data collection instruments such as questionnaires and interview guides and then analyze it. The third type of economics research papers combines the elements of empirical and theoretical research. In most cases such papers make a prediction and then use empirical research methods to test whether that prediction is indeed correct. If you are confused about what kind of economics paper that you should be writing then you need to order for our economics paper writing help.
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In order for you to write an impressive economics paper, then you ought to follow a systematic writing process. The first step should be to identify an interesting economics problem that is researchable. You should then be sure to write each part of your paper in the order that they appear. It is however good to note that if you really know how to write an economics paper, then you should write the abstract and introduction of your paper after you are done writing the other sections. Basically, for an empirical economics paper the following sections should be included: introduction, literature review, empirical strategy, data, estimation, conclusion and a list of references. We take pleasure in letting you know that our writers have a good understanding of the all the sections that should be included in an economics paper. Moreover, they understand the writing formats that are preferred by leading learning institutions across the globe. You can therefore expect that we will always deliver you quality work at all times when you order for our economics paper writing service.
Once you order for our Advice on How to Write Economics Papers we will help you in coming up with the most suitable Model for your Paper
Perhaps one of the most challenging parts of an economics paper to write is the model. As a requirement you should endeavor to show how the various variables in your study relate to one another. This can sometimes be understood as a conceptual framework. The model can be a mathematical one or a statistical one. Those scholars who understand how to write an economics research paper would agree that this one of the most important parts of the paper as it sheds light on your research problem and further focuses your study. This section should be written as clearly as possible and you should in particular avoid jargon when writing it. Moreover you ought to let the reader know the main assumptions that your model makes. It is also good to keep it in mind that your model should be able to show your main hypothesis. Are you stuck in this section and you are wondering about where you can get assistance. If yes, then worry no more as our writers who offer economics paper writing assistance are all set to help you. Once you order for our assistance we shall help you in coming up with a clear and well thought out model for your study.
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Some of the key things that you should be sure to keep in mind when writing your economics paper include: using formal and precise language when writing, editing typos, clearing labeling and numbering figures and tables, maintaining consistency and properly citing all the sources of information used. Moreover you should be sure to accurately label all the major and minor sections of your paper. In other words, heading the various parts of your economics paper is very important. Why don’t you try our economics paper writing help today? We assure you that our services are quite affordable. Furthermore we a legit writing company and this means that you can trust us to guide you through the process of writing your economics paper.
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Despite being featured prominently in the image caption for the Royal Gazette’s “Calls for a living wage in Bermuda” article, I noted with interest that it local economist Craig Simmons doesn’t seem to actually support the concept of a “living wage”. The three options he does support are quite a bit different which makes it ironic how he is featured with the headline. Ultimately Mr. Simmon’s options help outline why a minimum or living wage can be a poor option economically while there are viable alternatives that would achieve the the same goals.
First off it is important to understand what exactly a living wage is.
A living wage is defined as the wage that can meet the basic needs to maintain a safe, decent standard of living within the community.
Certainly a noble aim. However, a “living wage” limits the scope of the goals to only providing for a decent standard of living through means of a wage which leaves anyone who is not fully employed caught short. There are also many arguments to be made about the negative economic impacts that a living wage or minimum wage can have. A living wage acts as a tax on employers of low skilled workers and would actively disincentivize low skill job creation in Bermuda’s economy. Bermuda’s economy is not like others and too many fail to realize that concepts that may work elsewhere won’t work here.
With that in mind a prudent individual should recognize that while economist Craig Simmons does seemingly support the goal of providing individuals in society with means to maintain a decent standard of living, he doesn’t suggest a minimum or living wage as a means to do it. None of the three options are wage minimums and economically that makes a huge amount of difference.
The article notes:
Turning his attention to the concept of a living wage, he said there were three options, including establishing a guaranteed income, creating a wage subsidy, or a cash transfer scheme.
Let’s cover each of these.
A cash transfer scheme is the concept of directly providing cash to eligible people. This already exists in the form of financial assistance and could be expanded. The big problem with financial assistance as it exists today is that the means testing used can discourage employment and can encourage abuse. We’ve already covered the example of people on financial assistance acting entitled to costly and unnecessary brand name medications. There are other examples such as financial assistance penalizing those with minor incomes encouraging them to stop working to get full benefits because no supplement is offered.
A wage subsidy moves a little closer to the mark. Rather than penalizing employers with a minimum the government provides assistance with wages to help raise them. It could be achieved through cash support to boost wages or through a negative income tax. A negative income tax is an extension of a progressive tax system where people earning below a threshold are paid money from the government rather than paying taxes. While this is an improvement and reduces the negative economic disincentives related to a “living wage”, it adds complexity and only assists workers.
The third option Mr. Simmons outlined is a guaranteed income. Also known as a basic income, a guaranteed income is a concept this writer first advocated 10 years ago. It is defined as a scheme in which “all citizens or residents of a country regularly receive an unconditional sum of money”. The purpose is simple, reduce bureaucracy and complexity and provide an unconditional cash stipend that can act as a rising tide to lift all levels of society. It lacks the complexity of progressive taxation schemes and reduces the burden financial assistance so only those in genuine need can achieve help. Economically this is far more fundamentally sound as it can be funded through more equitable flat taxation schemes that don’t unfairly punish employers who rely on low skill work. It puts cash in the hands of everyone, not just workers. People like the elderly, disabled, and children would all get a basic income. Entrepreneurs would be encouraged rather than punished. It would incentivize job creation by making employing people cheaper and open the door to more part time work opportunities, lowering the cost barriers for lower skilled work. Exactly the opposite of a living wage which penalizes many for the benefit of workers.
The goals behind a living wage are noble ones though economically they just aren’t feasible. Mr. Simmons’ has outlined 3 better options that are more economically feasible. A guaranteed income being the most promising of the options. It is ironic and rather sad that Mr. Simmons’ has been featured in way that makes it look like a “living wage” in its defined form would be a good option for Bermuda. It simply isn’t but that doesn’t mean there aren’t viable alternatives we should be considering.
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The European Union will put climate change at the heart of a broad new energy policy on Wednesday as it moves to boost renewable fuels, cut consumption and curb its dependence on foreign suppliers of oil and gas.
With oil imports hit by the latest energy dispute involving Russia, Brussels will lay out a vision of a common energy policy for the 27-nation bloc with proposals including scaling back the dominance of energy companies and strengthening regulators.
"The world has changed and now it's high time for Europe to have an energy policy to fight climate change, reduce the risk of our external dependency, and increase the competitiveness of the European economy," said Ferran Tarradellas Espuny, a spokesman for Energy Commissioner Andris Piebalgs.
This week's dispute between Russia and Belarus, which has hit oil exports to several EU nations, highlighted the bloc's vulnerability to foreign producers of fuel.
The fight against global warming takes top billing in the wide-ranging set of reports which will be debated by EU governments after adoption by the executive body on Wednesday.
The commissioners are expected to endorse a plan that calls on developed nations around the world to cut emissions of greenhouse gases by 30% by 2020 compared to 1990 levels.
At the same time, the Commission is set to propose the 27-nation EU set a target to cut its own emissions by 20% in that time period, with the possibility of increasing that goal if the international community agrees to a broader cut.
The EU has repeatedly said the United States - the world's biggest polluter - and other major economies will have to chip in to make the fight against climate change successful.
Environmentalists criticised the Commission for setting an internal target below the one it seeks for the world as a whole.
"We think that this is a political and scientific blunder," said Mahi Sideridou, climate policy director at Greenpeace in Brussels, on Tuesday.
The Commission's proposals set a target for the use of biofuels and a mandatory overall target for how much EU energy consumption should come from renewable sources such as wind.
Officials said the commissioners would deal with the most contentious issues on Wednesday.
The choice of language for recommending a split-up of major power companies like Germany's E.ON generation and distribution businesses was among the ideas on which consensus had not yet been reached, an official said late on Tuesday.
Given German and French opposition to the idea, the Commission is set to recommend the option of utilities handing over management of grid businesses while retaining ownership.
Brussels will also look at strengthening the role of regulators to promote the development of a well-connected internal EU market for electricity and gas.
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The financial and economic crisis shattered the Lisbon Strategy’s attempt to increase the EU’s employment rate to 70% among 15-64 year olds by 2010. The new Europe 2020 strategy envisages a 75% adult employment rate by 2020; however, this goal also seems unrealistic in light of the economic crisis which has caused the EU’s employment rate to drop significantly below 70%. A crucial question now is whether a skill upgrade of the European labour force would help to increase the employment rate, especially among youth. This Forum explores the relationship between education and employment throughout the EU.
Investing in Skills to Foster Youth Employability – What Are the Key Policy Challenges?
The global financial and economic crisis of 2008-09 hit young people around the world very hard. Youth unemployment increased significantly in most OECD countries, even in those where the increases in overall unemployment were contained; during the sluggish recovery which began in 2010, many young people have been struggling to find a job and are now at high risk of prolonged periods of joblessness and exclusion. Investing in youth to give them a fair chance in the world of work is more than ever a key policy priority in all countries.
High youth unemployment and inactivity are not new, even if they have been exacerbated by the recent crisis, and many OECD countries have devised strategies to improve the matching of the skills youth acquire at school and those needed in the labour market in order to render the school to work transition easier.1Many of them have reinforced these strategies during the crisis to address the growing concerns about the risk of the so-called “lost generation”. But have these strategies and renewed efforts been sufficient to give youth a fair chance in the world of work? The paper revisits this issue drawing from recent in-depth OECD reviews of youth employment policies.2It is organised as follows: first, the key facts on how young people have been faring in the labour market prior to and during the crisis are presented3; the subsequent section analyses the main policies to improve educational outcomes and upgrade youth skills; and the last section focuses on broader policies dealing with education, labour market and social protection.
How Are Young People Faring in Today’s Labour Market?
Youth have been disproportionally affected by job losses during the global crisis, and even over the past two years of (weak) economic recovery, access to jobs has remained difficult for many new labour market entrants. Consequently, youth unemployment has increased much more than overall unemployment in most OECD countries during the recession, and has shown no, or only limited, signs of easing in the recovery phase. Consequently, many youth are experiencing long spells of joblessness and facing a high risk of exclusion.
Youth (15/16-24) Employment Has Been Particularly Hit During the Crisis, OECD Area
1 Data by educational attainment refer to 2007 and 2009.
Source: European Union Labour Force Survey and national labour force surveys.
Job Losses Hit Youth Particularly Hard
In the two years of the Great Recession, youth employment fell by almost 8% in the OECD area (Figure 1), compared with a drop of 2% among adults. Low-skilled youth – those with less than upper secondary education – were the hardest hit (-11%), a dramatic contrast with the employment gain of 2% for tertiary graduates. The composition of youth employment also changed significantly during the crisis. While on average much of the job losses in OECD countries were concentrated among those with temporary, fixed-term contracts, among youth both permanent and temporary contracts declined sharply. Moreover, full-time employment for youth fell by 13%, while part-time employment fell by less than 3%. Overall, youth have suffered not only from their large exposure to temporary and precarious jobs that are particularly sensitive to business cycle fluctuations, but also from the operation of the last-in-first-out workforce adjustment strategy adopted by firms and their selective reduction in working time among remaining workers.
Youth Joblessness Has Increased During the Crisis
The large job losses among youth and the difficulty of many new entrants to find a job have resulted in a large increase in youth unemployment in many OECD countries. As shown in Figure 2, the youth unemployment rates for the OECD area rose on average from 13% in the third quarter of 2007 to 17.3% in the third quarter of 2011. The increase was particularly high in those countries where the Great Recession was most severe – notably, Ireland, Greece, Portugal, the Slovak Republic and Spain – while youth unemployment actually fell in Austria, Chile, Germany and Israel, four countries largely spared by the crisis. These heterogeneous performances led to a further widening of youth labour market conditions across OECD countries. In the third quarter of 2011, youth unemployment was below 10% in Austria, Japan, Germany, Korea, the Netherlands, Norway and Switzerland; it was in the range between 20% and 30% in France and Italy and reached 46% in Greece and 48% in Spain (Figure 2).
Youth Unemployment Rate Has Increased During the Crisis, OECD Countries
Note: Countries are shown in ascending order of the youth unemployment rate in 2011 Q3. Figures are seasonally adjusted. International averages refer to weighted averages. * Data refer to 2007 Q2-2011 Q2 for Iceland.
Source: OECD calculations based on Eurostat, Short-Term Indicators and various national sources.
Inactivity Is a Bigger Problem Among Out-of-School Youth than Unemployment
The unemployment rate represents a good, albeit incomplete, measure of the difficulties faced by young people in the labour market. An important and growing number of youth who have exited the education system are not (or no longer) looking for work and thus are not included in the official unemployment statistics. An indicator that captures both exclusion from employment, but also from the labour market and education system altogether, is the share of youth neither in employment nor in education and training – the so-called “NEET rate”. In the first quarter of 2011, this group accounted for 12.3% of all youth aged 15/16-24 in the OECD countries, up from 10.7% in the first quarter of 2008 (Figure 3).4 22 million young people were jobless in the first quarter of 2011, 14 million of whom were inactive and not studying, almost double the level of those who were unemployed (8 million).
While some may have chosen to withdraw from the labour market and stay on in education because of the depressed labour market, for many young people inactivity is the result of discouragement and marginalisation, which tend to reflect the accumulation of multiple disadvantages, such as the lack of qualifications, health issues, poverty and other forms of social exclusion. Available evidence from longitudinal individual data for the United States and European countries also suggests that the NEET status can be very persistent for some young people, leading to a vicious circle whereby inactivity feeds into discouragement and that, in turn, to a further detachment from the labour market.5
Youth Joblessness Indicators During the Crisis, OECD Area
1 As a percentage of the youth population (persons aged 15/16-24). 2 As a percentage of the youth labour force (persons aged 15/16-24).
Source: National labour force surveys.
OECD governments are increasingly concerned by the steep rise in youth unemployment and risk of exclusion from the labour market. A number of them have recently adopted comprehensive programmes to help all disadvantaged youth.6 As an example, with the number of NEETs exceeding 1 million, the UK government in late 2011 put forward a new policy strategy including additional support through more apprenticeships for young people and through a new Youth Contract. The new programme will in particular help the most disengaged 16 and 17-year olds by assisting them to return to education, to acquire an apprenticeship or to obtain a job with training. In the Netherlands, the Investment in the Young Act introduced in October 2009 requires local authorities to offer a work/learning position to all young persons on benefits, i.e. support and assistance in returning to the education system or in finding work or possibly an apprenticeship. If a young person refuses the offer of support, then he/she loses the entitlement to benefits. Likewise, in France an emergency strategy was launched in the midst of the crisis to facilitate the school-to-work transition by promoting apprenticeship and combined work and training opportunities, fostering the transformation of internships into permanent employment contracts and providing additional training and employment opportunities for youth far removed from the labour market.
Job Quality Is an Issue for Many Young Workers
Beyond the standard divide between employment and unemployment, what matters for youth is access to productive and rewarding jobs that offer them good career prospects. This is an area where further progress is needed in many OECD countries, even in those that have managed to contain the increase in youth unemployment during the crisis.
Many youth jobs are temporary. The incidence of temporary employment among young workers aged 15/16-24 was 38% in 2010 on average in the OECD area, an increase of almost seven percentage points since 2000.7 The incidence of temporary contracts differs a lot across countries. At least half of all young workers have a temporary contract in Slovenia, Poland, Spain, Sweden, Portugal, France, Germany and Switzerland.8
The observed increase in the incidence of temporary jobs should not necessarily be regarded as negative in terms of the career prospects of those youth holding these jobs. For many youth, temporary contracts are more often a stepping stone to a permanent contract than a dead end.9 Among the nine European countries where data are available (United Kingdom, Ireland, Belgium, Luxembourg, France, Greece, Finland, Italy and Spain), the probability of youth getting a permanent job one year after working at a temporary job is higher than after being unemployed.10 This probability, however, is much higher for youth with tertiary education than for those with lower levels of education. Moreover, a high incidence of temporary employment is a key factor to explain the concentration of job losses among youth during the recent crisis. The first response of many firms facing a collapse in demand during the Great Recession was indeed to terminate their temporary contracts or not renew them upon expiration. The extraordinarily high youth unemployment in Spain (48% in the third quarter of 2011) is associated not only with the depth and length of the economic crisis but also with the fact that more than 60% of youth were on temporary contracts before the crisis and many of these jobs were destroyed during the crisis.
But the quality of jobs for youth goes beyond the issue of contract duration and the prospect of renewal/conversion; it also includes hours worked and remuneration. The case of the Netherlands, a country able to maintain a relatively low youth unemployment rate during the crisis, is a good example in this respect. Salverda11, for example, suggests that the much-praised fact that many Dutch youth combine education with work experience often hides the fact that many of them are working in tiny low-paid jobs for very few hours per week. He suggests that if the focus was instead on the full-time youth employment rate, the Dutch economy would differ little from a number of other European countries; full-time youth employment declined sharply in the Netherlands as in these other countries during the crisis.
Improving Educational Outcomes and Upgrading Youth Skills for Better Labour Market Outcomes
Tackling youth unemployment and under-employment or inactivity no doubt requires a comprehensive policy strategy that removes the different barriers in order to achieve productive and rewarding jobs. In this context, education and training policies play a key role in equipping youth with appropriate skills in a rapidly evolving labour market and thereby facilitating the transition from school to work. Success in converting skills into productive jobs largely depends on developing a better understanding of whether the right mix of skills is being taught and learned in equitable and efficient ways, whether economies and labour markets are able to fully utilise their skill potential and whether governments can build strong governance arrangements and effective coalitions with their social partners to find sustainable approaches to who should pay for what, when and where.
Education Matters for Better Labour Market Outcomes for Young People
It is recognised that higher educational attainment improves the labour market prospects of young people and that a corollary of low educational attainment is marginalisation through unemployment/inactivity. Indeed, on average in the OECD area in 2009, low-skilled youth, who did not complete upper-secondary schooling, have an unemployment rate 1.8 times that of tertiary graduates (Figure 4). The risk is at least three times as high in seven OECD countries (Estonia, Finland, Norway, Switzerland, Sweden, the Czech Republic and the United States).
There are, however, six OECD countries (Chile, Greece, Italy, Mexico, Portugal and Turkey) where tertiary graduates have a higher risk of unemployment than low-skilled youth. In some of these countries, namely Chile, Mexico and Turkey, the higher incidence of open unemployment among skilled youth is related to the fact that they are the ones who can afford to search for a formal-sector job, while many unskilled youth are often employed in the informal sector where low-paid and precarious job opportunities abound. More generally, however, many skilled youth – upper-secondary or tertiary graduates – leave the education system unprepared for the labour market. This can result in high youth unemployment rates but also in large shares of youth working in fields unrelated to what they have studied. The latter is a major source of over-qualification, i.e. work in jobs that require lower qualifications than those they possess.12
Low-Skilled Youth (15/16-24) Face a Much Higher Unemployment Risk than High-Skilled Youth, 20091
Note: “Low-skilled” refers to lower than upper secondary education and “high-skilled” to tertiary education. For Japan, “low-skilled” refers to less than upper secondary education as well as upper secondary education. 1 2008 for Belgium.
Source: European Union Labour Force Survey and national labour force surveys.
Educational Policy Responses Need to Be Diversified
Major progress has been made in promoting universal access to primary and often lower-secondary education, but many young people still do not have access to, or drop out from, education before achieving an upper secondary qualification, which is considered a milestone for a smooth transition to work, participation in lifelong learning and career progression. Different policy actions are required in this context.
First, it is important to keep in mind that expansions of early childhood education, to cover either more children of a given age or younger children, are found to yield benefits at school entry, in adolescence and in adulthood.13 Generally, these gains are largest for those who are disadvantaged (e.g. those who come from low-income or immigrant households), especially if the investments are sustained through compulsory schooling.
Second, in OECD countries where enrolment in education through lower secondary education (i.e. up to age 15 or 16) is almost universal, the focus has been on improving retention in upper secondary education, in some cases by raising the age of compulsory participation in learning. Provided that it is accompanied by measures to diversify educational choices, in particular through apprenticeship and a focus on the acquisition of a recognised qualification that is valued by employers rather than simply spending more time in a classroom, measures to encourage longer stay at school have proven effective in ensuring youth leave education with a minimum skill level. Extending the schooling period could be achieved in different ways. Some countries have raised the school-leaving age. This is the case, for example, in the Netherlands, where since 2007 a law has required 18-year-olds who have not acquired a two-year diploma from the second cycle of secondary vocational education to follow a work-study programme. In England also, the Education and Skills Bill requires a flexible participation in education and training for young people until they are aged 18 or until an upper secondary qualification is obtained, whichever is earlier. In 2006, the province of Ontario in Canada raised the age of compulsory learning from 16 to 18 and provided a range of positive incentives to stay on in schooling and to achieve a qualification in its Student Success Strategy.
Finally, policies to raise educational attainment are directed at those groups of young people among whom rates of school completion are currently low — people living in disadvantaged and remote areas and those from particular contexts, such as immigration or ethnic backgrounds. For youth who have disengaged from academic education, dual schooling systems, combining class-based learning with work-based apprenticeships, have received significant attention. This is partly because of the good performance in terms of low youth unemployment in countries with a long tradition of apprenticeship systems – notably Austria, Denmark, Germany and Switzerland. In particular in Germany, roughly two-thirds of people under the age of 22 choose to enter apprenticeships where, along with related technical instruction at a vocational school, they learn on-the-job the skills required for a given occupation. For Zimmerman14, apprenticeships instil employable skills as well as provide a transition to a young person’s first job. A number of OECD countries have introduced specific measures to support apprentices in the context of the recent economic crisis.15
Developing Labour Market Skills in a Broader Strategy
Measures to improve the labour market skills of youth should be seen as part of a broader strategy to promote cost-effective skill development policies and measures which foster deeper investments in human capital and a strengthening of the links between learning and the skills requirements of the labour market.
High-quality career guidance can help youth make better informed decisions about their future skills but requires early action in lower secondary education, highly qualified guidance personnel and timely and high-quality data on local labour market needs and employment prospects by occupation. Unfortunately, most existing career guidance programmes suffer from severe under-funding, are provided by teachers who lack familiarity with workplace requirements, and cannot rely on accurate labour market and skill statistics and projections by region and occupation.
A number of policy initiatives have also been directed to develop “soft” skills such as literacy and competencies to improve the ability of young people to navigate the changing world of work successfully. They are important to young people’s resilience and focus on emotional and social dimensions as well as problem-solving abilities and creativity. In Australia, the need for such skills is recognised via the National Foundation Skills Strategy for Adults, the federal budget and some state policies, and through the work of universities, vocational education and training (VET) providers and not-for-profit organisations.16
Finally, the combination of work and study would also help youth acquire some of the skills required in the labour market before they leave the education system. To encourage the acquisition of work experience, internships have expanded recently in a number of countries. But according to a survey by the European Youth Forum17, the quality of internships is not often secured. Another concern is that internships are mainly available to those with access to external financial resources, in particular from their families. This means that families and young people already on the margins of society will lose out, and as a result, the gap between privileged and non-privileged students and labour market entrants could widen. Some guidelines have started to emerge to prevent abuses and ensure that internships are true learning experiences for students rather than a cheap form of labour for employers. Several countries have introduced a number of requirements. France in particular requests that internship agreements can only be entered into with students, i.e. an agreement is required between the education establishment and the employer, and interns are paid a moderate wage, at least when the internship lasts beyond a certain length.18
Well-Designed and Closely Co-ordinated Policies Dealing with Education, Labour Market and Social Protection Are Necessary
While leaving education with the skills required by employers and needed for lifelong-learning is important to facilitate the transition to work, labour market policies and institutions can play a major role in helping youth to get off to a good start.19
In particular labour market policies such as unemployment benefits and active labour market programmes can assist the job search by providing adequate income support combined with effective employment services. In recent years, access to safety nets in OECD economies has been made increasingly conditional on an active job search following the “mutual obligations” principle, whereby income support for the unemployed is combined with strict job search requirements and compulsory participation in effective re-employment programmes under the threat of moderate benefit sanctions in the event of non-compliance. Job search assistance programmes are often the best way to help youth who are assessed as job-ready. Training programmes work best when they are carefully tailored to local or national labour market needs.20 Because action is needed on multiple fronts, several OECD countries are strengthening the support they provide to unemployed and disconnected youth by setting up comprehensive programmes that include classroom instruction, on-the-job training and adult mentoring. Finally, to be successful, hiring subsidies need to be targeted at the most disadvantaged – e.g. low-skilled youth – and at employers who are expanding their workforce.
At the same time, while labour market institutional settings can play an important role in preventing the exploitation of youth in low-paid, precarious jobs, an appropriate balance must be found to ensure these institutions support rather than hinder the creation of productive jobs for youth21, and social dialogue can facilitate striking the appropriate balance.22
One challenge is that of reducing the cost of employing low-skilled youth. Almost half of the OECD countries with a statutory minimum wage (ten out of 21) have an age-related sub-minimum wage to facilitate the access of low-skilled youth to employment. Others have significantly reduced the social security contributions paid by employers for low-paid workers. Another option would be to promote apprenticeship contracts for low-skilled youth, where the apprenticeship wage is lower than the minimum wage because it implies a training commitment on the part of the employer. Another challenge is how to promote a smooth transition for youth from entry jobs to more stable and productive ones. In those countries with large differences in the stringency of regulations for temporary (or other atypical job) contracts as compared with permanent ones, many youth tend to be trapped into precarious jobs that do not offer clear career prospects for a long period. While reducing the differences in the provisions associated with different types of contracts would have positive effects for many low-skilled workers and those with intermittent employment spells, youth are likely to be among the main beneficiaries. There should be a rebalancing of employment protection so as to promote a process whereby youth (as well as other workers with limited work experience) can gradually move from entry jobs into jobs that offer good career prospects.
There is no doubt that fostering youth employability requires a comprehensive and forward-looking skill strategy; this is more urgent today as the global economic crisis has hit youth hard and many of them are still facing significant barriers to employment. But it has also become clear that efforts to achieve a better match between the skills youth acquire at school and those needed in the labour market may not per se be sufficient to improve labour market prospects for all youth. These efforts must be complemented by economic and social policies to promote the stronger and sustainable growth of quality jobs. In the still hesitant economic recovery from the Great Recession and despite the often severe constraints on public finances, it is important to support robust training efforts in growth strategies while providing better support and access to employment services and social protection to disadvantaged youth.
With use of statistical assistance from Thomas Manfredi and Sébastien Martin in preparing the paper is gratefully acknowledged. The authors are also grateful to John Martin for his useful comments. The opinions expressed in the article are those of the authors and do not engage the OECD or its member countries.
- 1 OECD: Employment Outlook, OECD Publishing, Paris 2011.
- 2 This paper draws heavily from a paper focussed on the risk of a jobless generation in the crisis (S. Scarpetta, A. Sonnet, T. Manfredi: Rising youth unemployment during the crisis: how to prevent negative long-term consequences on a generation?, OECD Social, Employment and Migration Working Paper No. 106, 2010) and the OECD: Off to a Good Start? Jobs for Youth, OECD Publishing, Paris 2010, which summarised the key lessons from 16 country reviews of the school-to-work transition carried out by the OECD Secretariat over the period 2006-2010.
- 3 The term “youth” refers specifically to the 15/16-24 age group, except when otherwise specified. For Iceland, Spain, Sweden, the United Kingdom and the United States, “youth” refers to the 16-24 age group and to 15-24 for all other countries.
- 4 Figure 3 shows another useful indicator: the unemployment to population ratio, which also compares the number of young unemployed to the entire population of that age group. By contrast, the youth unemployment rate only concerns the proportion of young unemployed in the youth labour force, i.e. those who have already left the school system and are active in the labour market.
- 5 G. Quintini, T. Manfredi: Going Separate Ways? School-to-Work Transitions in the United States and Europe, OECD Social, Employment and Migration Working Papers No. 90, 2009.
- 6 OECD: Off to a Good Start?..., op. cit.
- 7 OECD: Off to a Good Start?..., op. cit.
- 8 In Germany and Switzerland, temporary contracts are mainly apprenticeship contracts.
- 9 See B. Cockx, M. Picchio: Are Short-Lived Jobs Stepping Stones to Long-Lasting Jobs?, IZA Discussion Papers No. 4007, Institute for the Study of Labor (IZA), 2009, who find that short-lived jobs (lasting less than one quarter and involuntarily ending in unemployment) tend to be stepping stones to long-lasting jobs (lasting more than one year) in Belgium for long-term unemployed school-leavers.
- 10 See Figure 5.8 in OECD: Off to a Good Start?..., op. cit. based on 2005-06 data from the European Survey on Income and Living Conditions (EU-SILC).
- 11 W. Salverda: The Netherlands: Is the impact of the financial crisis on inequalities different from in the past?, in: D. Vaughan-Whitehead (ed.): Work Inequalities in the Crisis: Evidence from Europe, ILO, 2011.
- 12 For more details, see OECD: Employment Outlook, OECD Publishing, Paris 2011.
- 13 C. Ruhm, J. Waldfogel: Long-Term Effects of Early Childhood Care and Education, IZA Discussion Paper No. 6149, Bonn 2011.
- 14 K.F. Zimmermann: Job Strategies for the Young, IZA Compact, October 2011.
- 15 See OECD: Off to a Good Start?, op. cit., for a review.
- 16 L. Robinson, M. Long, S. Lamb: How Young People are Faring, Centre for Research on Education Systems, University of Melbourne, 2011.
- 17 European Youth Forum: Interns revealed, Brussels 2011.
- 18 OECD: Jobs for Youth: France, OECD Publishing, Paris 2009.
- 19 See OECD: Off to a Good Start?, op. cit. for a more in-depth analysis of the cost-effective measures to tackle the large rise in youth joblessness.
- 20 See e.g. J.P. Martin, D. Grubb: What Works and for Whom? A Review of OECD Countries’ Experience with Active Labour Market Policies, in: Swedish Economic Policy Review, Vol. 8, No. 2, 2001.
- 21 J.P. Martin, S. Scarpetta: Setting It Right: Employment Protection, Labour Reallocation and Productivity, De Economist, November 2011.
- 22 According to European Industrial Relations Observatory – EIRO: Helping young workers during the crisis: contributions by social partners and public authorities, Dublin 2011, both trade unions and employers’ organisations recognise the particular difficulties facing young workers; they also mostly agree on some policy measures, such as developing apprenticeships and reforming education systems.
Young Workers’ Employability and Higher Education in Europe in the Aftermath of the Financial Crisis: An Initial Assessment
The Europe 2020 Strategy, designed by the European Commission, considers the use of graduate employment data as key in designing, delivering and evaluating higher education courses. The need for rapid reaction and adaptation to the challenges taking place in Europe since 2008 makes such information as important as ever. The present study makes an initial assessment of the impact of the economic crisis on graduates’ employability. Using a large sample from young workers in Europe, this paper estimates unemployment rates by level of education and field of study and compares their level before and after the crisis across countries. Differences in gender are also considered.
Young people (defined as those below 35) face more difficulties than older workers in securing stable and well-paid employment. Temporariness, spells in unemployment and generally poor working conditions are commonly encountered in the early stages of a professional career. Furthermore, work opportunities for young people in Europe have been badly hit by the economic and financial crisis of 2008-09. In most EU countries unemployment levels among young workers are not only significantly higher than those for other age groups, but they have also risen at a faster pace. Furthermore, higher education, which has traditionally been seen as a safety net against unemployment and adverse employment conditions, can no longer be seen as such, mainly due to the dramatic increase in the supply of graduates over the last few decades.
Variation in the types of higher education, as expressed by the different fields of study, affects graduates’ employment conditions to a certain extent.1 In general, strong divergences exist among graduates from different disciplines. Those which relate to the changing patterns of demand – such as computing, engineering, education and health and welfare – enjoy the best employment prospects. On the other hand, the prospects are relatively poor for graduates from disciplines with lower levels of labour market application, such as humanities and the arts. Moreover, some subjects – such as education, engineering, health and welfare, and services and tourism – are more effective at avoiding short-term unemployment spells. Others, instead, are particularly effective at preventing long-term unemployment. Such disciplines include sciences, biology and environment, computer use and health and welfare.
Nevertheless, no studies have so far investigated how different levels of education and various fields of study have been affected by the recent economic crisis. In order to assess this, this article examines the unemployment rates associated with different educational levels and fields of study for young people (under 35) in the EU15 before (2007) and immediately after (2009) the economic crisis. This preliminary investigation can aid our understanding of the vulnerability of higher education and certain fields of graduate study to downturns in the economic cycle.
Higher Education and the Labour Market
It can be inferred from economic theory that an inverse relationship between education and unemployment exists in most developed countries. The fact that individuals with higher levels of education experience lower levels of unemployment has been well established. This has led to the general notion that as one’s level of education increases, the probability of unemployment decreases. However, even though additional education is generally related to better performance in the labour market, there are cases where the increase in supply has outpaced demand. In such cases the labour market situation for graduates has been affected negatively.
During the last few decades, higher education systems across Europe have undergone a process of rapid and sharp transformation. Access to higher education has increased significantly, expanding the supply of graduates and producing an unprecedented number of high-skilled workers. As a result, the intense level of competition among graduates has exerted downward pressures on labour market returns. Arguably, employers have changed their expectations of graduates, and academic degrees are now regarded as a “pre-requisite” rather than as a positive signal of upgraded skills and capabilities. In many instances, graduates are recruited in occupations, such as administrative or technical jobs, that traditionally did not require higher education skills. Such phenomena are leading to over-education as well as other problems for graduates, such as job insecurity, contractual precariousness and low wages. The key point of the above is that we may no longer be able to take low rates of unemployment for graduates for granted.
However, employment perspectives for graduates are far from being homogeneous across countries and fields of study. Strong country differences exist for various aspects of the transition to employment, such as the timing, method and length of the job search. These differences result in diverse outcomes in terms of unemployment, job stability, working time and job satisfaction. Regarding country variation, graduates in Mediterranean countries (i.e. Spain, Italy, Portugal and Greece) seem to be more vulnerable in their labour markets than graduates in the remaining European countries (i.e. Continental, Nordic and Anglo-Saxon countries).
The European higher education sphere has traditionally been rather nationally focused, with distinctive institutional and operational differences. This heterogeneity can, to a certain extent, explain differences in the employment prospects of graduates. Also significant is the variation of employment prospects across different fields of study. In particular, there is a rising mismatch between the demand for and the supply of some specific types of degrees, which creates various imbalances in the graduate labour market in Europe.
The need for comparative analysis across Europe is as important as ever. The Bologna work programme 2007-20092 acknowledges the issue of country and subject heterogeneity and considers graduates’ employability to be a high priority. The European Commission’s 2020 Strategy puts forth the higher education modernisation agenda and focuses on enhancing mobility across member states.3 Thus, knowledge of the transitions to the labour market by graduates of different disciplines across countries can provide useful guidance.
Education and Unemployment: Drawing the Picture of Europe
Data and Sample
This article makes use of micro-data from the yearly European Labour Force Survey (EU-LFS) in order to examine the labour market situation of graduates of different fields across the EU15. The LFS is a household sample survey that is designed to obtain labour market information about individuals. It is conducted on a quarterly basis in all EU member states. The sample of the survey varies across countries. To capture how graduates’ employability has been affected by the recent economic crisis, data for the year before the crisis (2007) and immediately following the crisis (2009) were chosen. Thus, we estimate unemployment rates broken down by level of education and higher education discipline across EU15 member states for the two years in question; we also break down the results by gender.
Such an investigation had been hindered up until now by the absence of common definitions of levels and types of higher education. In the EU-LFS, the definitions of levels of education and academic fields are harmonised, based on UNESCO’s (2006) International Standard Classification of Education (ISCED). The ISCED was first designed by UNESCO in the early 1970s to serve as an “instrument suitable for assembling, compiling and presenting statistics of education both within individual countries and internationally.”4 This classification has been adopted by the EU-LFS, building a harmonised database of educational levels and academic fields. The harmonisation of educational levels and types of education largely overcomes the comparability problem that has limited most studies.
The highest level of education obtained by the individual is captured using the EU-LFS classification of low (ISCED1 and ISCED2), medium (ISCED3 and ISCED4) and high (ISCED5 and ISCED6) levels of education.5 The high education category includes all tertiary education (e.g. undergraduate, post-graduate, PhD degree). Regarding the field of study, the EU-LFS distinguishes 11 different subject groups. These are: 1) Education Science; 2) Humanities and Arts; 3) Foreign Languages; 4) Social Sciences, Business and Law; 5) Physics, Chemistry and Biology; 6) Mathematics and Statistics; 7) Computer Science; 8) Engineering; 9) Agriculture and Veterinary; 10) Health and Welfare; and 11) Services and Tourism.
EU15 Unemployment Rates for Young Individuals (16-35)
|Education level||Before (2007)||After (2009)||% Change|
Source: Compiled by the authors based on the EU-LFS.
Education Level and Gender
Using the sample described above, we analyse young people’s employability in Europe before (2007) and just after (2009) the economic crisis, with particular interest in differences across education levels and fields. Table 1 shows unemployment rates by education level and gender for the aggregate EU15 level.
The unemployment rates shown in Table 1 clearly suggest that the 2008 economic crisis severely affected the employment perspectives of all young individuals regardless of their education level. Nevertheless, unemployment rose more dramatically for low- and medium-educated individuals than for highly educated ones. This has widened the “employability gap” between graduates and non-graduates. For instance, while unemployment in 2007 was 7.1% for the highly educated and 15.4% for the low educated, these levels rose to 8.7% and 21% respectively in 2009. Furthermore, while the unemployment rate for graduates rose 22.7% in two years, the rate for medium- and low-educated individuals escalated 39.7% and 26.6% respectively.
On the one hand, this suggests that graduates were the least affected by the economic crisis in terms of unemployment. On the other hand, however, this may indicate that some jobs traditionally performed by the medium educated, such as administrative or technical jobs, may have been taken by graduates. These lower-skilled jobs could act as a substitute for the more expensive contracts traditionally offered to graduates, which in turn negatively affects the employment situation of medium- and low-educated workers. Consequently, if highly educated workers are now involved in low-skilled activities, the problem of over-education may have intensified. Further research in this direction is urgently needed in order to adequately address the demand for workers and skills.
Table 1 also shows that the economic crisis has not equally affected male and female individuals. As expected, unemployment increased for both males and females, but the impact was greater for men. Accordingly, the gender unemployment difference has narrowed, at least in terms of avoiding unemployment. Gender differences have been particularly reduced for the high and medium education segments, where unemployment rates in 2009 were practically equal for males and females. This trend may be explained by the strong employment losses suffered in some typically masculine fields, such as construction or industrial manufacturing, particularly in the early stages of the crisis. Moreover, the increase in flexible labour market patterns during the crisis may have favoured female employment, reducing the deterioration of their employment situation. On the other hand, one cannot rule out the possibility that females may have chosen to exit the labour market and focus more on family commitments.
Education Level and Country
Table 2 depicts the very heterogeneous picture of unemployment across European countries. In general, the risk of unemployment grew significantly between 2007 and 2009 in all countries. However, the worsening of labour market conditions for graduates is not equal in all countries. Interestingly, the estimated rates show that the crisis hit strongly in countries where unemployment was relatively low. In the UK, Denmark and Ireland, technically full employment for graduates was reached in 2008, but in 2009 unemployment rates rose to 5.26% in the United Kingdom (from 2.78% in 2007), to 7.13% in Denmark (from 4.66% in 2007) and to 9.23% in Ireland (from 3.03% in 2007). Graduates in these countries, especially in the UK and Ireland, may have been particularly affected by the first wave of the 2008 crisis as many investment banking and financial intermediation companies suffered big job losses.
Less surprisingly, unemployment rates also soared in countries where unemployment has traditionally been higher. Mediterranean countries, such as Greece, Italy, and in particular Spain, suffered strong increases in unemployment rates at all levels. In these countries, the increase in unemployment was more intense among those with medium and low levels of education, whose unemployment rates reached very worrying levels. Despite the loss of jobs in the graduate labour markets of these countries, the higher education segment performed better than the medium and low education segments.
Unemployment Rates by Country and Education Level
|High education||Medium education||Low education|
Source: Compiled by the authors based on the EU-LFS.
The impact of the crisis on unemployment in the rest of the European countries was not that strong. In Germany, for example, employment perspectives for the low and medium educated improved, while the perspectives for the highly educated remained practically unaltered. This does not come as a surprise, as Germany has been only marginally affected by the economic crisis compared to other countries. The case in Luxembourg has been more or less similar. In countries such as France, Sweden, Belgium and Austria, unemployment rates lessened quite moderately. However, in all of these countries, the impact of the crisis was stronger on the medium and low education segments than it was for the EU as a whole.
In general, the economic crisis widened the gap in the European labour market. In particular, the already high levels of unemployment in 2007 were followed by further increases in 2009. Regarding higher education, the value of being a graduate clearly varies from one country to the next. Using corner cases such as Portugal or Italy as examples, unemployment among graduates is practically as high as it is for medium and low educated individuals. High education therefore is not very effective in providing protection against unemployment in these countries. On the other hand, in countries such as Sweden, the UK, Germany or France, the unemployment rate of the low educated is up to six times (i.e. in Sweden) higher than for the highly educated. A quick glance at any index on the quality of universities and higher education makes visible the relationship between the value of degrees and their positive effect against unemployment.
Table 3 shows the distribution of graduates across academic fields alongside unemployment rates for each category. The EU-LFS classification of academic fields includes three large categories such as Social Sciences, Business and Law (36.2%), Engineering (11.3%) and Health and Welfare (11.3%) that account for the majority of all graduates. This is an important shortcoming to the analysis, as a great deal of variation within these broad categories is uncontrolled. For example, within the largest category (Social Sciences, Business and Law), the employment perspectives of Law graduates, whose labour market is usually tightly regulated, and Business graduates, whose employment is more flexible, could differ significantly.
The distribution of graduates across academic fields in Europe remained quite stable between 2007 and 2009. In general, there is a moderate rise in the number of graduates in all academic fields in our sample. This growth is not equal for all fields, and accordingly the weights of some fields increase at the expense of the decrease of some others. In particular, the share of the largest academic field, Social Siences, Business and Law, increased by 2.3 percentage points, absorbing chiefly graduates from Humanities and Arts as well as from Education Science, whose shares shrank by 1.3 and 0.6 percentage points respectively. The shares of the remaining academic fields, including the more technically specific ones (i.e. Engineering or Health and Welfare), remained stable.
Labour Market Participation and Unemployment Rate by Academic Field
|Number of young active graduates in the sample||Unemployment rate|
|Academic field||Before (2007)||After
|Before (2007)||After (2009)|
|Education Science||900 [7.38%]||1,053 [6.70%]||9.82%||9.64%|
|Humanities & Arts||1,410 [11.5%]||1,613 [10.2%]||15.1%||14.5%|
|Foreign Languages||450 [3.69%]||494 [3.15%]||10.0%||11.1%|
|Social Sciences, Business & Law||4,141 [33.9%]||5,699 [36.2%]||10.5%||10.7%|
Chemistry & Biology
||978 [8.02%]||1,188 [7.56%]||14.3%||7.23%|
|Mathematics & Statistics||187 [1.53%]||209 [1.33%]||7.04%||7.87%|
|Computer Sciences||432 [3.54%]||526 [3.35%]||7.93%||11.0%|
|Engineering||1,475 [12.1%]||1,931 [12.2%]||11.1%||12.4%|
|Agriculture & Veterinary||178 [1.46%]||237 [1.51%]||11.1%||9.90%|
|Health & Welfare||1,364 [11.1%]||1,776 [11.3%]||4.12%||5.80%|
|Services & Tourism||317 [2.60%]||466 [2.97%]||10.1%||15.4%|
|General Programs||40 [0.33%]||78 [0.50%]||13.0%||14.6%|
Note: The column percentages do not add up to 100% since the category “other” is not included in the table.
Source: Compiled by the authors based on the EU-LFS.
As expected, unemployment rates vary greatly across academic fields, although a common trend is that rates are higher in 2009 than in 2007. The lowest rate in 2007 was for Health and Welfare (4.12%), and the highest was for Humanities and Arts (15.1%). However, no clear relationship exists between the level of unemployment in 2007 and the supply of graduates in 2009. For example, the high unemployment rates in Social Sciences, Business and Law (10.5%), Agriculture and Veterinary (11.1%) and Services and Tourism (10.1%) were followed by increases in the shares of such graduates in 2009. The lack of a strong relationship between high unemployment and the supply of graduates suggests that graduates’ decisions regarding their academic field do not perfectly anticipate their future labour market perspectives, particularly when economic conditions change so rapidly. This may create some labour market frictions, causing unemployment to grow more considerably in some fields than in others. The experience in the Service and Tourism field illustrates this: in 2007, unemployment among graduates of this academic field was 10.1%, but despite being one of the fields with the highest levels of unemployment, the share of graduates actually increased in 2009. As a result, the unemployment rate for this field soared to 15.4% in 2009.
The change in unemployment rates between the two years is in accordance with other evidence on the impact of the 2008 crisis. According to the European Commission6, in the early years of the crisis the most affected sectors were finance and banking alongside some industries based on private consumption. Our figures show that the greatest increases in unemployment were concentrated in Computer Sciences (3.7%), a field strongly associated with financial intermediation, and Services and Tourism (5.3%), which is linked to private consumption. Conversely, fields associated with public employment, such as Education Sciences or Humanities and Arts, experienced marginal increases in unemployment. However, this situation may have changed in the ensuing years, as public expenditure cuts have strongly affected employment in these sectors.
Discussion and Policy Implications
The Europe 2020 strategy states that higher education plays “a crucial role in individual and societal advancement and in providing the highly skilled human capital and the articulate citizens that Europe needs to create jobs, economic growth and prosperity.”7 Some very optimistic perspectives for higher education employment are made in that report, as it is predicted that by 2020, 35% of all jobs in the EU will require high-level qualifications. According to this forecast, the European labour market will be soon transformed into a highly skilled, highly competitive source of human capital. However, such an optimistic perspective is in conflict with the growing concern regarding the increased unemployment figures among European graduates.
In this uncertain situation, the analysis we present in this contribution shows that labour market conditions have worsened for the highly educated. Nevertheless, such deterioration has been stronger for the low- and medium-educated young workers, which serves to suggest that graduates were the least affected by the current economic crisis. However, the preliminary evidence presented in this contribution suggests that the long-lasting skills mismatch problem that has affected European economies due to the expansion of higher education has actually intensified. In particular, the destruction of some highly qualified jobs, such as in the Computer Science area, may have led graduates towards less qualified jobs, pushing medium- and low-qualified workers to unemployment.
Our analysis also shows that unemployment rates are not homogenously distributed across European countries. In order to reduce the strong geographical disparities, European nations have created the European Higher Education Area. This effort at integration aims to reinforce mobility and cooperation and, consequently, help in reducing unemployment in countries such as Spain, Portugal and Greece. Indeed, recent figures provided by the Spanish Department of Labour indicate that the number of graduates leaving the country to find a job doubled in 2011. The case is similar in Greece and Italy. However, this potentially beneficial mobility has a clear drawback that has been pointed out by the European Commission. In particular, there is a risk of a massive exodus of high-skilled workers from countries where unemployment is high to countries where jobs are available. This ongoing migration trend serves as a “brain drain” on countries where investment in R&D is low, concentrating the highly skilled and talented in the more developed countries of Europe. If this migratory trend grows, it may harm the economic growth of countries losing graduates, increasing disparities among European countries.
In this sense, it is very important to note that the convergence of higher education systems is not only intended to make the European labour market more flexible and mobile. It is also aimed at improving the quality and reliability of some higher education systems that are failing to provide the necessary employability to their graduates. For instance, this could be done by improving university networks aiming to provide joint courses. Another example is the Erasmus Mundi initiative led by the European Commission, which has strongly contributed to the sharing and transferring of knowledge and resources across the European higher education systems by moving more than 1.5 million students and academics in the last decade. Through initiatives of this type, the European area may benefit from an overall improvement in educational quality and increased harmonisation.
Our analysis also shows that males have been more affected by the crisis than female graduates. The Higher Education Policy Institute (HEPI) also observed a more rapid increase in unemployment among male graduates; however, according to their report, males still appear to be working in better quality jobs, as measured by salary and other metrics.8 This evidence suggests that male graduates may be more vulnerable to economic downturns, as female graduates are more used to accepting poorer employment conditions and it may therefore be easier for them to adapt to new (worsened) labour market conditions.
The distribution of unemployment rates by academic field clearly shows that the supply of graduates does not adjust perfectly to the labour market’s needs and changes. First of all, differences in unemployment rates between various fields are as large as 10%. Second, the number of graduates in some fields that have been particularly troubled by unemployment continues to grow (e.g. Social Sciences, Business and Law or Services and Tourism), while enrolment in fields where unemployment is lower (Health and Welfare, Mathematics and Statistics or Physics, Chemistry and Biology) still remains at low levels. To enhance flexibility and labour market mobility across fields, higher education institutions could encourage new transversal and multidisciplinary programs. In this line, the European Commission recommends member states to “encourage a greater variety of study modes (e.g. part-time, distance and modular learning, continuing education for adult returners and others already in the labour market)”.9
In order to provide solutions to the issues discussed above, the European Commission has developed a strategy advocating the following policies.10 The first policy is to promote a diversity of higher education institutions in order to attract a broader cross-section of society into higher education. In particular, higher education institutions should be able to provide assistance to disadvantaged and vulnerable groups, such as young unemployed workers. The second policy aims to strengthen quality through mobility and cross-border co-operation. This may be achieved by eliminating unnecessary administrative barriers, ensuring the efficient recognition of credits gained abroad and facilitating the issuing of Schengen visas to students and researchers undertaking short stays. The third policy aims to link higher education and research with business for excellence and regional development. In particular, the strategy proposes stimulating entrepreneurial, creative and innovative skills and encouraging cooperation with business and administration.
This contribution is a very initial assessment of the impact of the current financial and employment crisis in Europe. The positive message that one may take from our analysis is that graduates seem to be the least affected by the economic crisis in comparison with individuals with lower levels of education, thus reinforcing education’s status as a “safety net” against adverse economic phenomena. However, the evolution of the crisis, from its beginnings as a financial crisis in 2008 to the sovereign debt crisis of 2011, is yielding many different consequences that are impossible to predict. Public employment, for example, has been significantly reduced during the last two years. As a result, graduates from some academic fields which were practically unaffected in 2009, such as Education Science or Health and Welfare, may suffer the impact of the crisis in a delayed manner. There are new and challenging avenues for research that should be able to assess new problems and provide new solutions.
- 1 See I. Núñez, I. Livanos: Higher Education and Unemployment in Europe: an Analysis of Academic Subjects and National Effects, in: Higher Education, Vol. 59, No. 4, 2010, pp. 475-487.
- 2 See Bologna Work Programme 2007-2009, Bologna Follow up Group, Lisbon 2007.
- 3 See Europe 2020: A strategy for smart, sustainable and inclusive growth, European Commission, Brussels 2010.
- 4 UNESCO: International Standard Classification of Education, Paris, July 1975, p. 1.
- 5 For a full description of the LFS data see: European Commission : Labour Force Survey: Anonymised Datasets, Eurostat, Social Statistics and Information Society, 2006.
- 6 See European Commission: Supporting growth and jobs-an agenda for modernisation of Europe’s higher education system, European Commission, SEC 2011, 1063 final, Brussels, Belgium 2011.
- 7 European Commission, op. cit., p. 2.
- 8 J. Thompson, B. Bekhradnia: Male and female participation and progression in Higher Education: further analysis, Higher Education Policy Institute Report, 2010.
- 9 European Commission, op. cit., p. 6.
- 10 European Commission, op. cit.
Does Education Reduce Unemployment? New Evidence on the Impact of Education on Unemployment and Re-employment
The labour markets in the USA, Canada and many European countries have been characterised by dramatic structural changes in recent decades, partly due to technological change, globalisation and the shifting economic environment. In addition to these ongoing sources of adjustment, high unemployment and weak economic activity remain in many countries as they slowly recover from the “Great Recession” of 2008-09. In this environment, workers’ adaptability to changing circumstances has become increasingly important for both individuals’ labour market success and the efficiency of the overall labour market. Whether displaced or unemployed workers are able to adjust efficiently to adverse employment shocks is critical to not only their own welfare but also to the maintenance of healthy communities and the efficient allocation of labour resources.
Motivated by the issue of whether additional education improves the ability of the labour force to adjust to economic shocks, we have been conducting research on the impact of formal education on transitions between labour force states, especially the transition from unemployment to employment. This article synthesises our recent findings on the causal effects of education on unemployment incidence, job search intensity and re-employment success based on data from the USA and Canada.1 We find that education at both the secondary and post-secondary levels increases the probability of re-employment among the unemployed. The magnitude of this effect is substantial. Further, our research suggests that education increases job search intensity, which may help illuminate a mechanism through which education influences the probability of re-employment. Finally, we find some evidence of a causal linkage between education and unemployment incidence (the probability of job loss). Additional education at the post-secondary level reduces the likelihood of becoming unemployed, although the size of this effect is relatively modest. However, education at the secondary school level does not appear to influence the likelihood of becoming unemployed.
Previous research has shown that education has a substantial impact on labour market outcomes such as earnings and employment as well as non-market outcomes such as health, longevity, civic participation and criminal activity.2 The purpose of our research is to investigate the causal effects of education on individuals’ adaptability to employment shocks. The view that education enhances adaptability has a long history. Early contributors to human capital theory regarded formal schooling (and work experience) as mechanisms that would enhance individuals’ ability to make efficient decisions in the face of changing circumstances. Schultz surveys this literature – much of it based on studies of the agricultural sector – and concludes that additional education and experience lead to more efficient decision making by consumers, households and workers, and in particular to more rapid adjustment to changes in economic opportunities.3
Causality versus Correlation
Several previous studies have found that educational attainment is negatively correlated with the incidence of unemployment and positively correlated with re-employment rates among unemployed job seekers. The correlations between education and unemployment outcomes found in previous studies, however, do not necessarily represent true causal effects of education.
In particular, the positive associations between education and job search intensity or re-employment success could arise because of unobserved factors that are correlated with both variables. For example, those with more innate ability may acquire more education and thus may more readily adapt to changing circumstances. Similarly, individuals from advantaged backgrounds are likely to acquire more schooling and to enjoy better employment opportunities from well-connected social networks. Therefore, positive correlations between education and job search intensity or the probability of re-employment based on simple multivariate regression methods such as ordinary least squares (OLS) may overestimate the effects of education and fail to reveal the true causal link between education and labour market outcomes.
To address these statistical and econometric challenges, we employ an instrumental variables (IV) strategy to identify the causal relationships between education and unemployment, job search and re-employment outcomes. In this context, an instrumental variable refers to a variable that exerts an influence on educational attainment but is not correlated with unobserved factors such as innate ability that may result in a spurious correlation between education and unemployment. Specifically, we make use of historical changes in compulsory schooling laws and child labour laws as well as conscription risk in the Vietnam War period to create the instruments for schooling in analyses based on US data, and we make use of compulsory schooling laws to create the instruments for schooling in analyses based on Canadian data.
Because of the importance of the IV methodology to our results, we provide a brief intuitive explanation of this statistical approach. Compulsory schooling laws regulate school attendance requirements such as the maximum age of school entry and the minimum school leaving age. Child labour laws similarly regulate the work activity of children, especially those of young ages. In Canada these laws vary by province and in the USA by state. They have also evolved substantially over time in both countries. Much previous research has demonstrated that changes in these laws over time within provinces and states, as well as differences in these laws across provinces and states, have led to changes in educational attainment. Of course, these laws do not influence schooling decisions of all students. For example, the minimum school leaving age does not influence the educational attainment of those who would remain in school beyond the school leaving age in the absence of such laws, such as those who would finish secondary school and those who would attend post-secondary educational institutions. However, among those who would leave school at, for example, 14 years of age in the absence of such laws, a minimum school leaving age of 15 results in these individuals receiving at least an additional year of education beyond what they would otherwise have obtained. The key assumption of the IV methodology is that this additional education brought about by changes in compulsory schooling laws is independent of unobserved factors such as innate ability or motivation that might be correlated with both education and unemployment outcomes later in life. The other important point to note is that changes in compulsory schooling laws will primarily influence education decisions at the secondary schooling level.
In our research with US data we also use conscription risk during the Vietman War era as an instrumental variable for education. Throughout most of the Vietnam War, males could enrol in college to obtain deferments that delayed their eligibility for conscription (the “draft”) into the Armed Services. Card and Lemieux find evidence that conscription risk varied significantly across birth year cohorts, due to differences in military manpower requirements and cohort size.4 By comparing college attainment of males with that of females from the same cohort, they find that draft avoidance behaviour led to significant increases in both college attendance and college graduation for Vietnam generation males. We use a measure of conscription risk calculated as the average number of inductions over the years a cohort was aged 19 to 22 divided by cohort size. Similar to the case of compulsory schooling laws, males in a cohort with high conscription risk were induced to obtain more college education than they would have chosen to obtain in the absence of the Vietnam War draft.
According to the range of schooling years affected by the instruments, the IV estimates based on compulsory schooling laws and/or child labour laws yield insights into the impact of high school education on labour market outcomes such as unemployment. IV estimates based on conscription risk in the Vietnam War period, on the other hand, illustrate the causal effects of college (post-secondary) education on the outcomes.
Measuring adjustment to employment shocks requires longitudinal data. For example, to study re-employment outcomes among the unemployed we need to be able to observe individuals who are unemployed in some initial period and may be employed or unemployed in some later period. For both Canada and the USA we use two data sources that have a quasi-longitudinal structure. The first is the monthly labour force survey, called the Current Population Survey (CPS) in the USA and the Labour Force Survey (LFS) in Canada. Both surveys have the feature that respondents remain in the survey for several periods so they can be followed through time. For example, the CPS keeps an individual in the sample for four consecutive months, out of the sample for eight months, then in again for another four months before she leaves the sample permanently. Thus the same individual can be observed in the CPS 12 months later. Our measure of adjustment in this case is the probability of re-employment conditional on being unemployed one year earlier. The Canadian LFS keeps an individual in the sample for six consecutive months. Our measure of adjustment in this case is the probability of re-employment in month six conditional on being unemployed in month one.
In order to take advantage of its large sample size, we also use census data from both countries. The US and Canadian censuses provide information about each respondent’s current labour market status as of the reference week (usually in June of the census year), as well as information about labour market activities in the previous calendar year. In particular, they provide information on the number of weeks spent unemployed and the number of weeks spent working in the last calendar year for each respondent. Based on the census data, we measure adaptability to employment shocks as the probability of being re-employed at the time of the survey conditional on being unemployed in the previous year.
Education and Re-employment Success
As a major adverse employment shock, unemployment is a costly and damaging event for many people. How efficiently unemployed workers can adapt to the changing environment directly determines re-employment success. We measure an individual’s adaptability as the probability of obtaining re-employment conditional on previously being unemployed. Using the empirical strategy described above for estimating causal impacts, we find that education at both the secondary and post-secondary levels promotes re-employment success for unemployed workers.
Regression-Adjusted Probability of Re-employment Conditional on Being Unemployed One Year Earlier by Years of Schooling
Note: Regression-adjusted probability of re-employment is obtained by controlling for survey year, survey month, state of residence, age, gender, race, marital status and metropolitan status. The graph displays the coefficient estimates on the complete set of schooling dummies. The intercept applies to the base category – white males surveyed in January 1980 and 1981 who were 35 to 44 years of age, had eight years of schooling or less, were married and lived in a non-metropolitan area in California.
Number of observations: 83,898.
To provide some insight into the magnitudes involved, Figures 5 and 6 show the nature of the relationship between education and re-employment success among the unemployed using US CPS data (Figure 5) and US census data (Figure 6). These figures are based on a multivariate regression that controls for other influences on re-employment success such as state of residence, age, gender, race, marital status and so on. The figures thus plot the correlation between the probability of re-employment and educational attainment (measured by years of completed schooling) when other influences such as gender, age and race are held constant. In both figures there is a strong positive correlation between re-employment success and years of schooling. According to CPS data the probability of re-employment rises from about 0.52 with 9 years of education to about 0.70 with 18 years of schooling, with most of this increase occurring between 11 and 16 years of education. According to census data, the re-employment probability increases from about 0.45 at 9 years to 0.70 at 20 years, with most of the increase being observed in the interval between 11 to 18 years of schooling. There are also particularly large increases in the re-employment probability at 12 and 16 years of schooling, which correspond to completion of high school and college for most individuals.
Regression-Adjusted Probability of Full-time Re-employment Conditional on Being Unemployed for more than Eight Weeks in the Previous Year by Years of Schooling
Note: Regression-adjusted probability of full-time re-employment is obtained by controlling for state of birth, state of residence, gender, race and cohort of birth. The graph displays the coefficient estimates on the complete set of schooling dummies. The intercept applies to the base category – white males who were born in California between 1936 and 1945, had eight years of schooling or less and lived in California.
Number of observations: 307,171.
The pattern with Canadian data is similar. Figure 7 shows the re-employment probability based on census data, which provides information on years of completed schooling. Figure 8 plots the re-employment probability based on LFS data, which provides information by level of educational attainment.
Based on CPS data in the USA, simple multivariate OLS regression estimates suggest that graduating from high school is associated with a 12 percentage point increase in the probability of re-employment on the survey date given being unemployed one year before. An additional year of schooling is associated with a 2 percentage point increase in this probability. These estimates are similar to what one would calculate by a quick inspection of Figure 5. We also find that whites, males, married people and individuals living in large metropolitan areas enjoy an advantage over others in locating a new job. Keep in mind that, as discussed previously, these estimates do not necessarily represent the causal impacts of changes in education.
Regression-Adjusted Probability of Re-employment Conditional on Being Unemployed in the Previous Year by Years of Schooling
Note: Regression-adjusted probabilities of re-employment are obtained by controlling for survey year, province/territory, major city (Toronto, Montreal, Vancouver, or other major city), age, gender, marital status, family size and language. This graph displays the coefficient estimates on the complete set of schooling dummies. The intercept applies to the base category – males surveyed in 1981 who were 35 to 39 years of age, had eight years of schooling or less, were married, lived in a major city other than Toronto, Montreal, or Vancouver, lived in Ontario, only spoke English at the time of the survey and had mean family size.
Number of observations: 458,641.
Source: Canadian census (1981-2001).
Regression-Adjusted Probability of Re-employment in Month Six Conditional on Being Unemployed in the First Month by Educational Attainment
Note: Regression-adjusted probabilities of re-employment are obtained by controlling for survey year, survey month, province of residence, age, gender, marital status, family size and duration of unemployment. This graph displays the coefficient estimates on the complete set of educational attainment dummies. The intercept applies to the base category – married males surveyed in January 1976 who were 35 to 39 years of age, had eight years of schooling or less, lived in Ontario at the time of the survey, had mean family size and mean duration of unemployment.
Number of observations: 249,330.
Source: Labour Force Survey (1976-1996).
Our estimates of the causal impacts based on the same data are considerably larger in size.5 For example, IV estimates with compulsory schooling laws as instruments indicate that graduating from high school increases the probability of re-employment by 44 percentage points and that an additional year of schooling increases the re-employment rate by over 5 percentage points. Both of these effects are statistically significant and economically large relative to the average re-employment rate of 0.53.
A potentially important issue in examining factors that influence re-employment outcomes is that the sample consists only of the unemployed, which may result in sample selection bias. Education may affect the chances of becoming unemployed and hence the characteristics of individuals in the sample. For example, more educated workers may be more likely to voluntarily leave their jobs and may also transition more quickly to a new job. We therefore exclude from the sample those who entered unemployment by quitting their previous job. Based on this restricted sample, the estimated impact of high school completion on re-employment success declines a small amount according to both the OLS and IV estimates. A small decline is also evident in the impact of education as measured by years of schooling. Overall, however, the estimated impacts of education on re-employment remain large and statistically significant. We further exclude from the sample new entrants and re-entrants, thus focusing the estimation exclusively on job losers. The results are similar to those for the full sample, although the estimates are less precise due to the smaller sample size.
In summary, our IV estimates based on CPS data indicate that additional schooling at the secondary school level does exert a significant positive influence on the re-employment outcomes of the unemployed. The magnitudes of the estimated impacts are large and do not appear to be affected by sample selection.
As a robustness check, we use an alternative data source, the 1980 census in the USA, to investigate the impact of education on re-employment success. The sample size of the census is several times larger than that of the CPS and thus may yield more precise estimates. In addition, because the census was collected at the beginning of our CPS sample period, it is likely that a larger proportion of the census respondents were influenced by compulsory schooling laws, which were more binding early in the 20th century.
The OLS estimates based on the 1980 US census indicate that graduating from high school is associated with an 11 percentage point increase in the probability of full-time re-employment conditional on being unemployed for more than eight weeks in the previous year, while an additional year of schooling tends to increase this re-employment rate by more than 2 percentage points. These OLS estimates are similar in magnitude to those obtained with CPS data. We also find that whites, males and young people enjoy an advantage in locating a new job after being unemployed.
IV estimates based on the census data using compulsory schooling laws and child labour laws as instruments are all statistically significant. These estimates indicate that graduating from high school increases the probability of re-employment by over 20 percentage points, and an additional year of schooling increases the probability of re-employment by 3 to 4 percentage points. Relative to the mean re-employment rate of 0.45, these estimated impacts represent increases of 40-50% and 5-10% respectively.
With 1980 census data, we are able to use an alternative instrument for schooling, conscription risk in the Vietnam War period, which mainly affects post-secondary education. Specifically, we focus on three measures of educational attainment: college attendance (completing 13 to 15 years of schooling), college graduation (completing 16 or more years of schooling) and years of schooling. All three IV estimates are economically large and statistically significant. The IV estimates indicate that graduating from college leads to a 42 percentage point increase in the probability of full-time re-employment conditional on being unemployed in the previous year, while college attendance increases this re-employment rate by 28 percentage points. An additional year of schooling raises the probability of re-employment by 6 to 7 percentage points.
In similar analyses based on Canadian data, including LFS and census data, our IV estimates of the impact of education on re-employment are similar in magnitude to those found with US data. For example, based on the LFS sample excluding job leavers, high school completion raises the probability of re-employment within the next five months by about 15 percentage points, and each year of additional schooling increases this probability by 1.5 percentage points. These results suggest that the positive impact of education on re-employment holds in different labour markets.
Education and Job Search
Job search intensity is not only a good indicator of individuals’ adaptability to employment shocks, but it also is a potential mechanism through which education may increase the probability of re-employment following unemployment. A number of studies on re-employment demonstrate the crucial role of job search behaviour for re-employment.6
Regression-Adjusted Job Search Intensity by Educational Attainment
Note: Regression-adjusted job search intensity is obtained by controlling for survey year, survey month, province of residence, age, gender and marital status. This graph displays the coefficient estimates on the complete set of educational attainment dummies. The intercept applies to the base category – males surveyed in January 1976 who were 35 to 39 years of age, had eight years of schooling or less, were married and lived in Ontario at the time of the survey.
Number of observations: 451,120.
Source: Labour Force Survey (1976-1996).
Our analyses of the impact of education on job search intensity rely on the Canadian LFS (1976-1996). We measure search intensity by the number of active job search methods used in a month conditional on being unemployed in that month. The OLS estimates of the effects of high school graduation and years of schooling on job search intensity indicate that there is a statistically significant partial correlation between education and search intensity. Figure 9 plots this relationship, controlling for other influences on search intensity. Graduating from high school is associated with an increase in the number of active job search methods used in a month by 0.12. An additional year of schooling is associated with an increase in the number of search methods used by 0.02. We also find that people younger than 45, males and unmarried people tend to search more intensively than do other unemployed searchers.
To estimate the causal impact of education on job search, we use changes in compulsory schooling laws in Canada to instrument for schooling. The estimated causal impact of high school graduation on search intensity is 0.17 (about 40% higher than its OLS counterpart), while the IV coefficient for years of schooling is 0.02, about the same as the OLS counterpart. We conclude that educational attainment, whether measured by graduating from high school or years of schooling, exerts a causal impact on job search intensity.
Education and Unemployment Incidence
The impact of schooling on the incidence of unemployment (the likelihood of becoming or being unemployed) is of interest in its own right. It also provides information on the potential selection bias in analysing re-employment success among unemployed workers. We thus apply our IV strategy to estimating the effect of schooling on transitions into unemployment from employment and out of the labour force.
The OLS estimates based on the US Current Population Survey suggest a weak negative relationship between education and the likelihood of job loss, which is defined as the probability of being unemployed on the survey date conditional on being employed one year earlier. However, the IV estimates based on compulsory schooling laws and child labour laws – both those for high school completion and years of schooling – are positive in sign and are not statistically different from zero. We conclude that there is no evidence that formal schooling reduces the probability of job loss, even though simple inspection of the data indicates that education and the probability of job loss are (weakly) negatively correlated. Results for transitions into unemployment from non-participation are similar.7
Similar results are also obtained in our analyses based on US census data with compulsory schooling laws and child labour laws as instruments and analyses based on the Canadian Labour Force Survey with compulsory schooling laws as the instrument. All these results based on IV estimation suggest that additional formal education at the secondary school level does not influence the incidence of unemployment.
In addition to the impact of secondary education, we analyse the impact of post-secondary education on the incidence of unemployment based on the US 1980 census with conscription risk in the Vietnam War period as the instrument. In this analysis, job loss is defined as the likelihood of being unemployed on the census survey date conditional on being employed throughout the previous year. These IV estimates indicate that education does have an impact on transitions into unemployment. Specifically, both college attendance and college graduation reduce the probability of job loss by 11 percentage points, and an additional year of schooling reduces the probability of job loss by 2 percentage points.
To our knowledge, our research is the first to provide evidence on the causal link between education and transitions between employment and unemployment. Our research also contributes to the growing literature on the private and social benefits of education. Further, our findings bear several implications for public policy. First, they provide empirical evidence that supports education as an effective means to enhance adaptability, a valuable characteristic in a changing labour market. Second, to the extent that education may reduce unemployment incidence, increase job search intensity and improve re-employment outcomes among the unemployed, the private and social benefits of education may be understated by standard outcome measures (e.g. earnings). Third, our research lends support to the case for education as a “preventative” alternative to government-sponsored adjustment assistance policies, which are often based on a “repair shop” model that deals with problems ex post. As is believed to be the case with health care, preventative strategies may be more efficient than “repair shop” strategies in addressing labour market challenges.
It is also important to note that our analyses based on US and Canadian data yield very similar results on the impact of education on unemployment incidence and re-employment success. This suggests that our findings tend to hold across different labour markets. It would be informative to investigate in future research the extent to which our findings also hold in labour markets beyond North America.
The authors thank the Canadian Labour Market and Skills Research Network (CLSRN) and the Social Science and Humanities Research Council for financial support.
- 1 This article is based on W.C. Riddell, X. Song: The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from the U.S. Labour Market, in: Labour Economics, Vol. 18, No. 4, August 2011, pp. 453-463; and on W.C. Riddell, X. Song: Education, Job Search and Re-employment Outcomes among the Unemployed, IZA DP No. 6134, November 2011.
- 2 See P. Oreopoulos, K. Salvanes: Priceless: The Nonpecuniary Benefits of Schooling, in: Journal of Economic Perspectives , Vol. 25, No. 1, Winter 2011, pp. 159-184 for a recent survey of this literature.
- 3 T. Schultz: The Value of the Ability to Deal with Disequilibria, in: Journal of Economic Literature, Vol. 13, No. 3, 1975, pp. 827-846.
- 4 D. Card, T. Lemieux: Going to College to Avoid the Draft: The Unintended Legacy of the Vietnam War, in: American Economic Review, Vol. 91, No. 2, May 2001, pp. 97-102.
- 5 See our papers for a discussion of differences between OLS and IV estimates.
- 6 See, for example H.J. Holzer: Search Method Used by Unemployed Youth, in: Journal of Labor Economics, Vol. 6, No. 1, 1988, pp. 1-20.
- 7 In this case neither the OLS nor IV estimates of the impact of education are statistically significant.
The Evolving Supply and Demand of Skills in the Labour Market
This paper analyses labour demand and supply with respect to skills and tasks. The literature on this topic is abundant, especially in light of education expansion and the impact of technology on labour demand. The goal of this work is not to add evidence to the causes and effects of labour demand and supply but rather to sketch the broader picture of their equilibrium and then to try to anticipate what type of skills mismatch EU countries will encounter during the next decade. The paper begins with separate considerations of labour demand and supply with respect to qualification, outlining the main trends and their causes. This is followed by an analysis of their equilibrium and a matrix which can be used to understand the potential types of mismatches. Finally, conclusions and avenues for future research are drawn.
The key to understanding changes in labour demand is job polarisation. In 2003, Autor, Levy and Murnane1 initiated a new stream in the labour economics literature when they noticed that labour demand in the USA was polarised with respect to wages, meaning that it grew stronger for both low-paid and high-paid jobs while shrinking in the middle. According to the authors, the job polarisation phenomenon helps to explain the rapid increase in income inequality experienced in the USA starting at the end of the 1970s. While it is difficult to determine whether this is a new phenomenon, as appropriate wage data rarely go back beyond the 1990s, the authors’ approach is quite innovative.
The literature on labour demand tends to consider two types of skills, low and high. Adding a third category, medium-skilled jobs, allows us to draw a more complex picture. These three categories are used to group the nine basic categories of occupations listed in the International Standard Classification of Occupations (ISCO).2 The first three mainly include high-profile jobs: managers, professionals, technicians. The last one, elementary occupations, includes such jobs as cleaners; labourers in construction, manufacturing and transport; and food preparation assistants. Between these are five categories of middle-skilled jobs such as plant and machine operators, electrical and electronic trades workers and craft and related trades workers.
Job Polarisation in EU27, 2000-2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
Figure 10 shows changes in employment in the EU27 between 2000 and 2010 for each qualification group. What we would normally expect is that demand for workers rises as the skill content of these occupations increases in a linear fashion. The picture is instead U-shaped, as predicted by job polarisation, and it is the result of an approximately 20% increase in the demand for low-skilled and high-profile occupations between 2000 and 2010 and a 4.5% decrease in the demand for middle-skilled occupations.
Is this phenomenon widespread in European countries? To answer this question we need a numerical definition of job polarisation. We can affirm that polarisation occurs if demand for both high-profile and low-skilled jobs is higher than the demand for middle-skilled ones.
According to this definition, polarisation occurred in 17 out of 27 EU countries.3 In Sweden for example, demand for both high-skilled and low-skilled occupations increased by more than 20%, while the demand for medium-skilled occupations declined by 2%, as shown in Figure 11. In the remaining ten countries, employment in high-skilled occupations still increased substantially, but low-profile employment increased less (or decreased more) than middle-skilled employment, thus indicating a linear trend. Figure 11 demonstrates this using Belgium as an example, where demand for high-skilled occupations has been buoyant, but where both middle- and low-skilled jobs were not in high demand over the previous decade.
Changes in Labour Demand: Sweden and Belgium, 2000-2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
What is the factor that explains the different shapes of the changes in labour demand? One aspect is surely technology: two main theories exist to explain the relationship between labour demand and innovation: skill-biased technological change (SBTC) and task-biased technological change (TBTC).
The basic idea behind the SBTC theory is that technology is biased in favour of skilled workers and against the less-skilled ones, as it complements the former and substitutes the latter. In other words, technological progress tends to increase the demand for skilled labour and decrease the demand for less-skilled tasks. The main empirical work in this field has been carried out by Goldin and Katz4, who explain that younger and more educated individuals will grasp new technologies more quickly and therefore will be in high demand. But what makes the change skill-biased is also the type of technology. The relationship between the relative employment of the highly skilled, on the one hand, and measures of technology, like computer investments and use, R&D expenditure and capital intensity, on the other, is clearly positive. This is due to the fact that this technology is complementary to human input, in particular in the first phase of the production process when raw capital has to be created, installed and maintained. This model seems better-suited to the Belgian-type curve.
At the beginning of the new millennium, an alternative hypothesis to SBTC emerged to explain the trend towards polarisation: task-biased technological change. Autor, Levy and Murnane5 changed the focus and shifted attention from skills to tasks. They distinguish three types: routine tasks, non-routine manual tasks and non-routine intellectual ones. Technology has its strongest impact on the routine tasks, because it is easier to create machines that substitute for people in repetitive types of work. Interestingly enough, these are not considered “bad jobs”, as they normally occupy the middle ranks of wage distributions.6 The upper category, intellectual tasks, is still affected but, as also theorised by SBTC, in a complementary sense: very sophisticated software can help architects produce fancy plans but cannot replace their creativity and experience. The middle category, manual tasks, is less affected by technology because these tasks require limited skills that are not replaceable by machines for the reason that they are not repetitive. The theory is also called the “routinisation hypothesis” because the overall impact of technology consists in squeezing the middle category and expanding the remaining two. This second model constitutes a potential explanation for the type of changes in labour demand seen in Sweden.
Another stream of the literature attributes changes in demand to globalisation, or more specifically, to offshoring and the offshorability of jobs. Blinder7 argues that the migration of jobs from the USA and from rich countries in general towards poorer ones is likely to become a phenomenon comparable to the industrial revolution. All in all, based on his 2004 analysis of 817 occupations, Blinder finds that between 22% and 29% of all the jobs in the US workforce are potentially offshorable.
In the same tone but with a different perspective, Autor, Dorn and Hanson8 estimate the impact of rising Chinese import competition between 1990 and 2007, starting from two observations: (i) the share of total US spending on Chinese goods rose from 0.6% in 1991 to 4.6% in 2007, and (ii) there was an increase in transfer payments through a series of federal and state programmes, especially disability, retirement and in-kind medical benefits. They find that “increased exposure to low-income country imports is associated with rising unemployment, decreased labour-force participation, and increased use of disability and other transfer benefits” in exposed local labour markets.9 They also find that the decline in employment and wages is not limited to the manufacturing sector and therefore leads to an overall decrease in the average earnings of households. Numerical estimates are rarer for European countries due to data problems, but empirical results for the UK show that international outsourcing has increased the demand for skilled labour.10 As far as the service sector is concerned, offshoring is still at a relatively low level compared to manufacturing offshoring11, but it is growing much faster. Amiti and Wei12 and Hijzen et al.13 do not find any strong negative effects on employment and argue that services offshoring makes employment in offshoring firms grow faster than otherwise.
Ultimately the two theories do not really compete with one another: routine jobs, for example, could be replaced by technology, by cheaper labour in developing countries or by a mix of the two. Firpo, Fortin and Lemieux14 argue in fact that technological change15 played a central role in the 1980s and 1990s, while offshorability became an important factor beginning in the 1990s.
The evolution of labour supply with respect to skills has followed a clear path: since the post-war period, all countries have undertaken a substantial expansion of education. The trend is the result of two phenomena: the ageing of populations (with older and less educated generations being phased out of the labour market) and changing patterns of qualification acquisition.16 Nowadays in most (if not all) EU countries, the universalisation of secondary education is a consolidated achievement, and the attention of policymakers has shifted to tertiary education. Expanding higher education is also a core objective at the European level: the EU2020 strategy, for instance, recommends that at least 40% of 30-34 year-olds complete tertiary education. Therefore educational expansion is certainly not a new phenomenon: skills upgrades characterised all advanced economies in the 20th century. However, what may be new in the 21st century is the universalisation of higher education. According to Trow, there are three levels of tertiary education participation: elite if it is reserved to only a few, mass when more than 15% of the relevant population participates and universal when participation rises above 50%.17 With respect to this categorisation, it is worth noting that during the decade 2000-2010 all EU countries surpassed the 15% target, thus achieving mass higher education, and one country, Ireland, is approaching the universalisation level.
In general it can be observed that the growth in the economically active population’s educational level followed, as expected, a linear trend over the last decade. This is the product of a decrease in the number of people who have only primary education, a moderate increase or stabilisation in the group that has secondary education and a substantial growth in the number of university graduates. EU27 aggregate figures constitute a textbook example (Figure 12). The number of people among the economically active population with only primary education declined by 15% in the period 2000-2010, the number of those that completed high school increased by 13% and the number of tertiary education graduates increased by 30%.
Skills Upgrade in EU27, 2000-2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
A reference definition is necessary to compare country performances. For this purpose, we define educational expansion as that process which entails an increase in the supply of workers with tertiary education that is bigger than the increase in the supply of workers with secondary education, which is itself bigger than the increase in those with primary education. In these terms, educational expansion occurs in all EU27 countries with only two exceptions: Denmark and Lithuania. In the former there was a substantial increase in workers with only primary education (18.4%), which is possibly due to immigration. In Lithuania, there was an unusual 19.6% decrease in the number of workers with tertiary education, which could be explained by emigration in this case.
Demand and Supply
We now examine the match between the demand and supply of education with respect to skills and occupations over the period 2000-2010 based on a combination of the figures introduced above. The research question that drives this section is the following: given the trends outlined above, what is the equilibrium between the supply and demand of skills, and how homogenous is it across countries?
As a starting point, Figure 13 displays the combination of the EU27 evolution of demand and supply in a bubble chart. The position of each bubble represents the growth rate over the decade. Each bubble’s size corresponds to the share of that group in the population (total employment or economically active population) in 2010.
Demand and Supply of Work with Respect to Skills/Tasks in the EU27, 2000-2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
The share of middle-skilled occupations in total employment is 50.4%, and the share of the labour supply with a secondary degree is 48.2%. However, these trends are moving in opposite directions: the latter has grown by 13.2% while the former has declined by 4.5%. The share of low-skilled workers is small (22.2%) and rapidly decreasing (-15.2%), most probably due to a phasing out of the older and less educated generation from the labour force. The percentage of low-skilled occupations increased by 18.4%, resulting in a 9.8% share of these types of jobs in the economy. A third of the total labour force is highly educated, and the size of this group grew by 44.9% over the period 2000-2010. Meanwhile, demand for these workers grew more modestly (23%) but still accounted for 39.8% of total employment.
All in all, the static picture is good: there are precisely as many medium-skilled jobs as there are medium-skilled workers. There is still room for further educational expansion at the tertiary level, and the phasing out of older, low-educated workers along with the increase in the number of low-skilled occupations approaches equilibrium. However, a good current match could lead to a future mismatch, given that the trend towards an upskilling of the population is likely to continue into the future and that the shape of labour demand is difficult to predict. For this reason, CEDEFOP projections prove very helpful. Figure 14 replicates Figure 13 with data for the decade 2010-2020.18 The forecast reveals that the current dynamic is likely to improve the match between demand and supply during the course of the current decade.
Demand and Supply of Work with Respect to Skills/Tasks in the EU27, 2010-2020
Source: Own elaboration of CEDEFOP forecasts.
However, as is often the case with comparative analysis, divergences across EU countries are strong, both in terms of levels and changes. In Figure 15 four countries are compared: two with a current good match, Estonia and Hungary, and two with a serious mismatch, Portugal and Spain.
In Estonia and Hungary, for instance, the share of workers that have completed high school has already outpaced the demand for medium qualification jobs. In Spain there is a perfect equilibrium between the supply and demand of highly qualified profiles but a strong mismatch at the remaining two skill levels. Portugal is an interesting case because on the one hand a large share of the population still holds only primary education, and on the other the demand for medium- and high-qualified jobs grew spectacularly. This indicates that the process of educational expansion in Portugal is far from complete.
Demand and Supply of Work with Respect to Skills/Tasks in Four Countries, 2000-2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
As we have shown, there is a trend towards polarisation on the labour demand side with respect to occupations in most European countries, whereas on the supply side, the trend is towards a linear upskilling of the population. Depending on the speed of these changes and on the skill content of current demand and supply, there is a risk that in some countries a skill mismatch problem will arise. More specifically, there is a risk of vertical mismatch, meaning that there is no correspondence between the formal qualification demanded by a certain job and the qualification of the worker. Medical professions provide a good example: it is legally forbidden to practice as a doctor without the relevant university degree. The vertical mismatch can be of two types: overqualification or unfilled demand. The first occurs when a certain worker has a higher level of education than required by his/her job. The second occurs when a job vacancy remains unfilled because potential candidates do not fit the requirement of the job.
To understand what type of mismatch countries may incur in the next decade, the following framework is used and summarised in Table 4. Each country is classified first according to its current situation, which can be either a state of equilibrium across the three categories or one of tension, meaning that there is no correspondence between one (or more) of the categories (vertical axis of Table 4). The horizontal dimension of the table is meant to provide an insight into the future level of correspondence, which depends on the current equilibrium and the speed of convergence or divergence. Assuming that the drivers that characterised the period 2000-2010 will continue to shape demand and supply in the current decade, five categories are hypothesised for the future match based on the literature previously examined: shortage of low-skilled workers, excess supply of low-skilled workers, overqualification of middle-skilled workers, overqualification of high-skilled workers and equilibrium across the three qualifications.
Dynamic and Static by Country
|Shortage of low-skilled||Low-skilled unemployment||Middle-skilled “displacement”||Overqualification of high-skilled||Equilibrium|
|Equilibrium||PL||DE, ET, LV, LT, HU, AT, SI, SK, UK||BG, IE||EU27, BE, FI, RO, SE, FR|
|Tension||EL, IT, PT, MT, DK||CY||CZ, NL, LUX|
Source: Own elaboration.
Among countries starting from a position of equilibrium, two possible future outcomes dominate: either equilibrium or “displacement” of the middle-skilled workers. The latter outcome is the result of two opposite trends: a further expansion of the middle-skilled labour supply, already abundant in these countries, and the shrinking of middle-skilled occupations. This group of country is relatively homogeneous: we find it in the Baltic countries, the UK, Austria, Germany and central European countries whose economic structures are linked to Germany. As the likelihood of finding an appropriate job diminishes, what will be the fate reserved for those who complete high school in these countries? Unless new technology is introduced to shape the production mode, two possibilities emerge: they must either compete with the low-skilled for less qualified jobs or acquire new skills to compete for the high-profile ones.
A current equilibrium can also generate two further types of mismatches: a shortage of low-skilled workers and the overqualification of high-skilled ones. The first problem may be cause for concern in Poland, where a polarisation of demand occurred, creating new elementary occupations while the percentage of people with only primary education dropped by half to 7.4% during the 2000-2010 period. The second risk concerns Bulgaria and Ireland, where demand for and supply of high-skilled workers is in perfect balance but supply is growing much more quickly. The case is similar for Cyprus, even though it started from a more unbalanced situation at the medium-skilled level in the 2010-2020 period.
Among countries with a mismatched starting situation, with the exception of the Czech Republic, Luxembourg and the Netherlands, which are moving towards equilibrium, one outcome prevails: low-skilled unemployment. This risk is shared by Greece, Italy, Malta, Portugal and Denmark, where the number of low-skilled workers in the economically active population is so high that even an increase in demand for them in the countries where job polarisation occurs (Greece, Italy and Malta) cannot compensate for the size of the group.
Enough Graduate Jobs for Graduate Workers?
One of the research questions that inspired this work is whether there will be enough graduate jobs for the increasing number of tertiary graduates. This question is at the heart of the literature on over-education, an issue that has received enormous attention from academics. It is difficult to give a clear and exhaustive answer, as the literature itself does not reach a unanimous conclusion.19 However, three facts have to be taken into account.
First of all, there is no relationship between an expansion of the high-skilled workforce and its employment rate. There is no evidence that the employment rate of the highly skilled is lower in the countries in which the high-skilled workforce rapidly expanded in the last decade. Yet the opposite is not true either – as shown by the nearly flat line in Figure 16 (the slight inclination is too small to be considered indicative).
Relationship Between the Expansion of Tertiary Education and the Employment Rate of High-Skilled Workers
Note: The expansion represents the change from 2000 to 2010. The employment rate is for the year 2010.
Source: Own elaboration of Eurostat – Labour Force Survey data.
The second fact concerns the homogeneity of the graduate group. If the labour market does absorb the increasing high-skilled supply at least in terms of average employment rates, it is likely that the variance within the high-skilled group diverges. Research shows that as more people obtain a degree, the value of the degree varies either based on the prestige of the university or on the subject of studies. Sloane and O’Leary20 argue that in the UK “there are still sizeable returns to be attained from undertaking a degree. However, focusing just on the returns to a degree relative to those without degrees can be misleading, since there are substantial differences in the return to different types of degree. Further, the types of degree offering the highest returns are different for men and for women.”21 According to their study, taking Arts as the comparator as this is the subject with the lowest returns, the subjects with the highest returns for men are Maths and Computing, Medicine, Engineering and Technology, and Business and Financial Studies. For women the highest returns are found for Medicine, Education and Architecture. For both men and women the second- and third-lowest rankings (above Arts) are filled by Social Sciences and Languages.22 Similarly, Reimer, Nolke and Kucel23 analyse how field of study affects unemployment and occupational status for university-educated graduates in 22 European countries. They discover that relative differences among fields increase with educational expansion at the university level. More specifically, they find that in most countries university graduates with a humanities degree have higher risks of unemployment, whereas unemployment rates tend to be relatively low for graduates from the health/welfare field. Their main explanation for this phenomenon is that “educational expansion is associated with a decline in mean ability in less academically challenging fields like the humanities or social sciences. (...) Due to self-selection and institutional sorting, additional lower ability students will increasingly end up in less academically challenging fields like the humanities and social sciences. This in turn lowers the signal value of the respective degrees on the labour market, which is observed as lower occupational status and higher unemployment risk.”24
The third element, pointed out by Elias and Purcell25, is that what we today consider to be a graduate job cannot be seen as a frozen and immutable category. In order to better describe the heterogeneity of high-skilled occupations, Elias and Purcell develop a new classification for graduate employment and distinguish between four possible categories: traditional graduate occupations (doctors, lawyers), modern graduate occupations, where an undergraduate title became necessary in the 1960s (IT, primary school teachers, journalists), new graduate occupations, where graduates with degrees have increasingly been recruited (welfare officers, sales managers) and niche graduate occupations, where most workers do not have a degree but specialists are emerging (leisure, sport, hotel managers).
All in all, policymakers do not (yet) need to worry about the destiny of future university graduates. Although the return from various majors turns out to be differentiated, data indicate that high-skilled workers do usually find jobs and, according to forecasts, demand for them will continue to grow strongly. CEDEFOP26 estimates that, when considering supply developments in the demand projections, the overall number of jobs employing highly qualified people is projected to rise by almost 16 million between 2010 and 2020.
Shrinking Middle- and Low-Skilled Jobs
What perhaps needs more attention is the remaining part of the skills spectrum. As indicated earlier, demand for workers in elementary occupations27 increased in 17 out of 27 European countries between 2000 and 2010. There are two reasons for this rise. On the one hand, in many cases, these low-skilled jobs cannot be automatised or outsourced because they require physical presence and human interaction, e.g. truck drivers and cleaning staff. On the other hand, low-skilled jobs owe their new success to a combination of societal factors such as population ageing and the higher participation rates of women in the labour market, factors which increase the need for personal services. Autor and Dorn28 document an increasing trend in the working hours in “service occupations”29 in the USA. For this group, the share of labour hours grew by 35% between 1980 and 2005, even though jobs in this category require among the lowest levels of education and are among the lowest paid.
What ultimately needs to be studied more closely is therefore the middle category.30 Regardless of whether one prefers to attribute changes in labour demand to polarisation or skill-biased technological change, it is incontestable truth that the demand for middle-skilled occupations showed negative growth in most countries and did not surpass 5% growth anywhere. At the same time, the supply of workers with an equivalent diploma increased as a product of educational expansion. Figure 17 shows that in 2010 the share of middle-skilled workers already outpaced the share of middle-skilled jobs in countries like Slovakia, the Czech Republic, Austria and Germany.
Share of Middle-Skilled Workers/Jobs, 2010
Source: Own elaboration of Eurostat – Labour Force Survey data.
The threat of the hollowing out of the middle class has been captured by other studies, even though their starting point is an analysis of wage data. For instance, a study by Grabka and Frick31 calculates that between 2000 and 2006 the middle class32 in Germany shrank from 62% to 54% of the population. The authors attribute the squeeze in part to the Hartz welfare market reform and in part to the changing structure of employment. Similarly, a report by The Economic Council of the Labour Movement shows that 31.5% of the Danish population belonged to the middle class in 2002. Seven years later that share had dropped to 28.6%.33
How can job polarisation combined with an educational upgrade of the population be turned into an opportunity? According to Brynjolfsson and McAfee34, the solution is organisational innovation: “co-inventing new organisational structures, processes, and business models that leverage ever-advancing technology and human skills. Joseph Schumpeter, the economist, described this as a process of ‘creative destruction’ and gave entrepreneurs the central role in the development and propagation of the necessary innovations”35. In suggesting this, they quote a few examples of companies like Apple, Google, Facebook, Amazon and Ebay that created added value and jobs with brand new “product categories, ecosystems, and even industries”36.
Many researchers have speculated on the challenges imposed upon the labour market by educational expansion and technological change. The objective of this paper has been to sketch the potential consequences of a certain evolution of labour demand and supply with respect to qualifications. In doing this, it is necessary to remember that there is no single European labour market: the skill composition of labour supply and demand as well as their changes are highly differentiated cross-country, leading to all sorts of equilibria.
In summary, it can be said that the educational expansion of the European economically active population will not stop in the next decade; it is still prominent on policy agendas and its benefits outpace its cost, especially if one takes a broader view and considers aspects like the cultural, societal and political benefits of a better educated population. What is more difficult to predict is labour demand. Theories and forecasts suggest that high profile jobs will continue to be requested by companies. So will elementary occupations that can be neither offshored nor replaced by technology because they require interaction and physical presence. Nonetheless, this will not be enough in countries like Greece, Spain, Italy, Malta and Denmark to compensate for the still relatively high number of low-skilled workers in the economically active population.
Another clear trend of the last decade is the shrinking of the central category where middle-skilled jobs are concentrated. Current dynamics imply that unless new technology is introduced in the organisation of work, this category risks losing the most from the future potential equilibrium, especially in Germany, Austria, Hungary, Slovakia, Slovenia, the UK and the Baltic states. More research is needed to understand whether the middle category will compete for lower- or higher-skilled jobs and what the consequences of the new equilibrium will be. It can be anticipated that income inequality may increase as an effect of job polarisation, a phenomenon that has already been documented in the UK and the USA. But the consequences of the shrinking middle fall in the broader domain of social sciences and therefore must also be analysed through the lens of sociology and political science. A second aspect of further reflexion has to do with anachronism: changes in demand in this paper are analysed on the basis of ISCO 1988.37 As pointed out by Elias and Purcell38, the definition of a graduate job is not frozen in time: what we consider a graduate job today, such as a journalist, did not require tertiary education twenty years ago. The same applies to non-graduate jobs: with the help of technology, some former graduate jobs have been de-skilled (accounting for example), and the quality of other low-skilled jobs has been increased. This is fundamental to achieving a match between future labour demand and supply.
The author would like to acknowledge the support of the FP7 Social Science and Humanities project NEUJOBS for work which underpinned this paper. However, the views in the paper are entirely those of the author.
- 1 D. Autor, F. Levy, R.J. Murnane: The skill content of recent technological change: An empirical exploration, in: Quarterly Journal of Economics, Vol. 118, No. 4, 2003, pp. 1279-1333.
- 2 ISCO88 is used in this analysis. The tenth category, Armed Forces, is not counted.
- 3 BG, DE, EL, ES, FR, IT, CY, HU, MT, NL, AT, PL, RO, SL, FI, SE, UK.
- 4 C. Goldin, L.F. Katz: The Race between Education and Technology, 2008, Harvard University Press, pp. 89-128.
- 5 D. Autor, F. Levy, R.J. Murnane, op. cit.
- 6 M. Goos, A. Manning: Lousy and Lovely Jobs: The Rising Polarisation of Work in Britain, in: The Review of Economics and Statistics, Vol. 89, No. 1, February 2007, pp. 118-133.
- 7 A.S. Blinder: How Many U.S. Jobs Might Be Offshorable?, CEPS Working Paper No. 142, Princeton University March 2007.
- 8 D. Autor, D. Dorn, G. Hanson: The China syndrome: local labour market effects of import competition in the United States, MIT Working Paper, August 2011, p. 4.
- 9 Ibid.
- 10 A. Hijzen, H. Görg, R.C. Hine: International outsourcing and the skill structure of labour demand in the United Kingdom, in: Economic Journal, Vol. 115, 2005, pp. 860-878.
- 11 M. Amiti, S.J. Wei: Fear of service outsourcing: Is it justified?, in: Economic Policy, Vol. 20, No. 42, 2005, pp. 308-347.
- 12 Ibid.
- 13 A. Hijzen et al., op. cit.
- 14 S. Firpo, N.M. Fortin, T. Lemieux: Occupational Tasks and Changes in the Wage Structure, IZA Discussion Papers No. 5542, 2011, Institute for the Study of Labor (IZA).
- 15 Together with deunionisation, in the sense of the decreasing participation of workers in trade union organisations.
- 16 CEDEFOP: Supply and Demand in Europe – Medium Term Forecast up to 2020, Luxembourg: Publications Office of the European Union, 2010.
- 17 M. Trow: Problems in the Transition from Elite to Mass Higher Education, Carnegie Commission on Higher Education, Berkeley 1973.
- 18 With one difference: Fig. 13 only considers the economically active population aged 25-64, while CEDEFOP projections instead consider the population aged 15+. This entails marginal adjustments in the absolute values but leaves the proportions unchanged.
- 19 There are two main reasons to explain the inconsistency of the results: one is the lack of appropriate data (F. Green, Y. Zhu: Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education, in: Oxford Economic Papers, Vol. 62, No. 4, pp. 740-763). The other is the existence of different methodologies, none of which are more convincing that the others (D. Verhaest, R. van der Velden: Cross-country differences in graduate overeducation and its persistence, Research Memoranda 007, ROA, Research Centre for Education and the Labour Market, Maastricht 2010).
- 20 P.J. Sloane, N.C. O’Leary: The Return to a University Education in Great Britain, IZA Discussion Papers No. 1199, 2004, Institute for the Study of Labor (IZA).
- 21 Ibid., p. 19.
- 22 This is consistent with another study by M. Bratti, R. Naylor, J. Smith: Different returns to different degrees? Evidence from the British Cohort Study 1970, The Warwick Economics Research Paper Series (TWERPS) No. 783, 2007, University of Warwick, Department of Economics, that finds Arts and Social Sciences at the bottom of the ranking.
- 23 D. Reimer, C. Noelke, A. Kucel: Labor Market Effects of Field of Study in Comparative Perspective, in: International Journal of Comparative Sociology, Vol. 49, No. 4-5, 2008, pp. 233-256.
- 24 Ibid., pp. 250-251.
- 25 P. Elias, K.Purcell: Seven Years On: Graduate Careers in a Changing Labour Market, Manchester 2004.
- 26 CEDEFOP, op. cit.
- 27 Defined by ISCO as “simple and routine tasks which mainly require the use of hand-held tools and often some physical effort”, see http://www.ilo.org/public/english/bureau/stat/isco/.
- 28 D. Autor, D. Dorn: Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States, MIT Working Paper, June 2011, http://econ-www.mit.edu/files/1474.
- 29 According to the US Census classification, service occupations are jobs that involve assisting or caring for others, including: food service workers; security guards; janitors and gardeners, cleaners; home health aides; child care workers; hairdressers and beauticians; and recreation occupations.
- 30 Average employment rates in the EU are 53.8% for the low-skilled, 73.1% for the middle-skilled and 83.9% for the high-skilled.
- 31 M.M. Grabka, J.R. Frick: The Shrinking German Middle Class –Signs of Long-Term Polarization in Disposable Income? DIW weekly report No. 4/2008, Berlin.
- 32 Middle class is defined as those whose income falls between 70 and 150 per cent of the median.
- 33 J.J. Schytz: Middelklassen bliver mindre, Arbejderbevægelsens Erhvervsråd 2011. Information reported in English by Frederik Jansson on the Social Europe Journal Blog (http://www.social-europe.eu/2011/08/the-danish-middle-class-is-shrinking/). The middle class is defined as those with an income equivalent to 85-115 per cent of median income.
- 34 E. Brynjolfsson, A. McAfee: Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, 2011, Digital Frontier Press, Kindle Edition.
- 35 E. Brynjolfsso et al., op. cit.
- 36 Ibid.
- 37 A new version of ISCO was elaborated in 2008. However, the use of the new data is currently limited.
- 38 P. Elias, K. Purcell, op. cit.
Contributors to this Forum
Stefano Scarpetta, OECD’s Directorate for Employment, Labour and Social Affairs, Paris, France.
Anne Sonnet, OECD’s Directorate for Employment, Labour and Social Affairs, Paris, France.
Ilias Livanos, Institute for Employment Research, University of Warwick, UK.
Imanol Núñez, Universidad Pública de Navarra, Pamplona, Spain.
W. Craig Riddell, University of British Columbia, Vancouver, Canada.
Xueda Song, York University, Toronto, Canada.
Ilaria Maselli, Centre for European Policy Studies, Brussels, Belgium.
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Energy storage technologies are considered the key elements for a sustainable future in energy supply through distributed generation. As the population continuously grows, so will the demand for cheap energy and an economy reliant on fossil fuels is generating drastic changes to our climate. Power is the main contributor to climate change; it produces around 60 percent of greenhouse gases. As the electricity grid pursues modernizing, distributed energy resources such as home batteries and other cutting-edge kinds of technologies can help facilitate the transition to a better network. Consumers are at the center of it, with the ability to literally and figuratively take power into their own hands and homes. We know that solar home batteries can’t solve all problems when it comes to extreme weather, but it’s undoubtedly the key to more resilient, affordable energy using solar and home storage batteries.
The amount of solar energy obtained by Earth in a year exceeds the power that has been garnered from oil, natural gas, coal, and nuclear sources in the history of humankind. The number received by the planet in an hour is higher than the entirety of the world’s yearly energy consumption.
Identify Resilience Solutions
Through this, you will identify the potential solutions to enhance power sector resilience based on your knowledge of the threats, vulnerabilities, and risks development. Resilience solutions frequently include some combination of resource and technology diversity, redundancy, decentralization, transparency, collaboration, flexibility, and foresight considerations. Additionally, every power system is unique, and solutions must be tailored to specific circumstances.
Planning will develop a country-specific plan to assess power system vulnerabilities and generate a resilience strategy. It will provide a framework for the resilience planning process in your country. In the planning process, it can modify and be customized to suit the needs of a specific country. It will also evaluate the practical solutions to address vulnerabilities and incorporate guidance into existing power sector plans. There is a need to make smarter, targeted incentives to improve the economics of solar-storage systems in states that now lack the incentives and market structures to support distributed energy storage in low-income communities properly. In such environments, it can be to develop resilient power projects for affordable housing economically. Properly structured new incentives to help create broader resilient power markets and protect vulnerable populations through improved resiliency and utility bill savings. This report outlines recommendations for how incentive programs could be structured to support a robust and resilient distributed solar-storage market for affordable housing and community facilities.
Reliability and Affordability
A range of cost-effective opportunities exists to place solar-storage in affordable housing throughout the country, particularly in places where utility demand charges are high and to where electricity markets are structured to produce revenue for grid services from battery storage systems. Battery storage can provide energy efficiency and stand-alone solar measures to reduce facility costs further. Energy and community developer experts should explore solar-storage; it can be a complementary approach to reducing electricity bills for housing developers.
Of course, it’s all about areas. The property structure and home’s location, local weather patterns, and availability of our solar resource are how often and how powerful the sun shines can significantly affect the cost-effectiveness of your installed solar system. Home Storage deployment requires confirming the power demand of the site and the solar and battery potential. The key to more resilient, affordable energy, which is solar and home storage batteries, is varied on developing a conceptual framework for assessing energy resilience, exploring possibilities, and identifying the criteria relevant to mitigation and adaptation to climate change.
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The international response to the growing crisis of water scarcity has been to dedicate one of the seventeen Sustainable Development Goals (SDGs) to water. Approved by global leaders at a UN summit in 2015, Goal 6 aims to “ensure availability and sustainable management of water and sanitation for all (by 2030).”
The SDG6 target most relevant to water scarcity aims to “substantially reduce the number of people suffering from water scarcity.” Although the UN’s 2017 SDGs report reminds us that “more than 2 billion people globally are affected by water stress”, there is no SDG indicator monitoring progress of this statistic, which dates from 2012.
Instead, the relevant indicator will monitor “freshwater withdrawal as a proportion of available freshwater resources,” an established measure of water stress (25%) and scarcity (60%) at country, region and global levels. Northern Africa, as well as Western, Central and Southern Asia, already exceed the 60% threshold.
At national level, the task of reconciling the demands of competing users of water to achieve SDG principles of equity and sustainability is often undermined, particularly when responsibilities are fragmented between government departments. A further SDG target addresses this challenge in its call to “implement integrated water resources management at all levels.”
Governments are accordingly encouraged to develop national plans which integrate their policies on poverty reduction, food security, energy security and climate adaptation so that actions necessary for water security are coherent.
Poor water governance standards in many developing countries can nevertheless enable powerful interests to gain disproportionate access to scarce water resources. Lack of enforceable regulation in India lies at the heart of the country’s groundwater crisis.
Another example is the phenomenon known as “land-grabbing”. The acquisition of agricultural land in developing countries is pursued by foreign investors and by wealthy governments seeking to overcome their own food and water insecurity. Displacement of the poor from land on which they have enjoyed customary use too often equates with the loss of water rights.
At international level, water governance has been weak. UN Water is not an implementing agency – its role is to strengthen coordination and coherence among other UN entities dealing with freshwater. There is no UN Convention to tackle water scarcity in parallel with those for climate change, biodiversity and desertification. A 2011 meeting of the InterAction Council, the group of former world leaders, deplored that “international water leadership is virtually non-existent.”
In 2016 the UN announced the formation of The High Level Panel on Water, to be represented by 11 world leaders. However, the Panel’s mandate expired in March 2018 with its Open Letter appealing for a “new agenda for water action.”
more Water Scarcity briefings (updated April 2018)
Water Energy Food Nexus
Causes of Water Scarcity
Climate Change and Water Scarcity
Solutions to Water Scarcity
Access to Safe Water
Source material and useful links
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In rural Uttar Pradesh, India, CBM Australia runs a community project to improve the economic situation of people with disability. The project — Parivartan — ensures that people with disability have access to assistive devices, rehabilitation support, health care and education. It also supports participants to develop small businesses.
One of the biggest achievements of the project is supporting people with disability to access government benefits. Often illiterate, people with disability in Uttar Pradesh do not know how to fill out forms, submit applications and navigate the complex systems to access government pensions and entitlements.
The total amount of funds that the project team has helped people with disability access from the government is AU$700,000 — this includes pensions, goods, loans and infrastructure support.
Much of this government funding to people with disability will continue, even when the project is finished. Around 900 people with disability, who would have otherwise missed out on receiving the disability pension, now are signed up to receive it.
Not only are people receiving benefits, but the 93 community groups established by the project are now accessing small loans from the bank, which they are using to build their own businesses.
“Over the last 3 years we have seen a big increase in the numbers of people with disability who now have savings. And we also see that people with disability are accessing bank loans — this is a remarkable indicator of how much this project has caused positive change,” said Prof Abhishek Thakur of the Delhi School of Social Work, who led a study looking at the economic impact of the project.
Living in Uttar Pradesh, Maya is a single mother of four children and the family’s breadwinner. A poliomyelitis infection at the age of five resulted in neuromuscular paralysis. Through the project, Maya accessed a customised wheelchair. She now manages a small farm, where she grows vegetables and earns enough to support her family.
CBM Australia is supported through the Australian NGO Cooperation Program (ANCP).
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ROBOTS will make more jobs than they take in the UK, according to a new report.
The combination of artificial intelligence and robotics will displace up to 7 million jobs between 2017 and 2037. However, this will lead to a reduction in costs and increases in spending, which in turn could generate 7.2 million jobs – a net gain of 200,000 jobs, according to accountancy firm PwC.
Jobs in health, scientific and technical services, and hospitality are predicted to increase, while those in manufacturing, transport and storage, and public administration will decrease.
Automation seems to be less disruptive than we had feared. In 2013, a study from the University of Oxford suggested that around half of jobs in the US and a third in the UK were at “high risk” of automation in the proceeding years. But this has since been revised. In April, economic organisation the OECD said the figures are more likely to be 10 per cent in the US and 12 per cent in the UK.
This article appeared in print under the headline “Robots won’t be taking your job”
More on these topics:
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Bookkeeping is one of the most popular and profitable work-from-home small businesses.
It boasts a combination of low overhead requirements and a high hourly rate, making it very popular among those who would like a simple way to start working from home.
Specialties, such as bookkeeping with Quickbooks, are accessible to those with no previous experience.
If you’re looking for a new career online, then being a virtual bookkeeper may be the best choice for you. The good news is that you don’t even need experience to begin.
You can start with nothing more than existing skills and a deep desire to learn.
You will develop most of the relevant abilities on the job. This article will give you detailed and actionable advice on how to become a WFM bookkeeper with no experience.
What Does A Bookkeeper Do?
Bookkeeping, as the name suggests, involves maintaining the financial records of a business.
A bookkeeper oversees a company’s financial data by keeping accurate data for accounts receivable and payable, daily ledger entries, payroll information, and regular reconciliations.
Bookkeepers can also alert management if they notice trends or issues in financial information.
The primary responsibilities of a bookkeeper include the following:
- Paying bills
- Sending invoices and collecting payments
- Updating financial records
- Checking records for accuracy
- Creating financial reports
- Posting credits and debits to the right accounts
- Inputting financial data into accounting software
A bookkeeper’s general job is to monitor the financial data for the company. The duties can vary depending on the needs of the client or employer.
They can take on many different responsibilities, including paying employees, ensuring payment of invoices, and creating reports for management.
The Differences Between Bookkeepers and Accountants
Quite often, bookkeeping is confused for accounting. However, the two are not quite the same.
This difference is essential because accountants typically need extensive education and certification, but bookkeepers do not.
Accountants work on specialized tasks, such as preparing tax documents, reconciling budgets, or auditing finances.
Accountants also carry out other duties, including the ones below:
- They organize your financial records
- They help your business to comply with both state and federal laws
- They audit your company’s financial records
- They can act as consultants to your businesses, evaluating your financial records and advising on ways to save money.
Accountants are heavy lifters. They audit your company’s financial statements and ensure that your company complies with different laws and regulations.
They do not handle the day to day details of a business’s finances.
They don’t deal with accounts receivable or payable or pay wages and bills. All of these are the bookkeeper’s duties.
Due to their work’s specialized and legal nature, accountants have strict licensing requirements, and they need to have years of education.
Since bookkeepers do not need certification or licensing, it is easier to become a bookkeeper with no experience than to start an accounting career.
What Skills Does A Bookkeeper Need?
A bookkeeper needs to have a wide range of skills to excel at the job. They include, but are not limited to, the ones below:
- A bookkeeper should have basic computer literacy and operate various accounting-related software, such as Quickbooks, FreshBooks, or Microsoft Excel. Most WFM bookkeeping jobs involve the use of programs like Quickbooks.
- A bookkeeper should also have a solid foundation in math. Since they will be dealing with numbers daily, they should be able to perform basic arithmetic.
- A bookkeeper should be able to pay attention to detail. Their job heavily depends on their ability to keep comprehensive and accurate records. Therefore, they should pay attention to detail to avoid making errors and recognize the mistakes made by others.
- A bookkeeper should have good communication skills. Depending on their work scope, they will regularly communicate with colleagues, clients, superiors, and vendors. They will also periodically prepare financial reports. They should have the ability to communicate numerical data in a simple format.
- A bookkeeper should be a person of high integrity. Bookkeeping involves maintaining, analyzing, and reporting on confidential financial information. It also involves access to a company’s finances. A bookkeeper should have the integrity to keep confidential information confidential, as well as to be transparent about records and guard against the misuse of organizational funds.
How To Get Started Without Experience
While you can become a virtual bookkeeper without experience, it is advantageous to get some education in relevant courses.
There are still employers out there that require bookkeepers to have some postsecondary education with coursework in accounting.
That said, you can still get hired with nothing more than a high school diploma. According to the US Bureau of Labor Statistics, entry-level bookkeepers do not have postsecondary degrees.
You can get certified in accounting software such as Quickbooks if you do not have a math or accounting-related degree.
It is easy to know how to become a WFM bookkeeper with no experience. As mentioned earlier, much of your work will be to maintain financial records, not advise a company on them.
As a result, you will likely have most of the skills required for an entry-level job, such as basic arithmetic, attention to detail, and communication skills.
You will gain most of the more technical skills and experience while on the job or by learning a program such as Quickbooks on your own.
Where To Find Remote Bookkeeping Jobs
As a bookkeeper working from home, you will work remotely for the most part. Any company stands to gain a lot from the services of a virtual bookkeeper.
That said, there aren’t any specific companies out there that routinely hire bookkeepers.
Instead, you will have to hunt for a job on various remote hiring sites. As long as a company is remote-friendly, it should be possible to get a job as a bookkeeper.
There are many sites where you can look for work-from-home jobs as a bookkeeper. One example is Indeed, where you will find that the page on remote bookkeeping job opportunities is updated daily.
Another is FlexJobs. FlexJobs protects practitioners from scammers by auditing each listing to make sure it is entirely legitimate. It will cost you a monthly fee as a job seeker, but it will also give you peace of mind.
There are many other job boards you can check on the internet, as well as forums where people discuss job opportunities. You can also reach out to hiring managers on social media sites such as LinkedIn.
This gives you the opportunity to pitch your services directly to the person making the hiring decisions and make a personal impression.
Become A Freelance Bookkeeper Today
You can also easily freelance as a virtual bookkeeper by signing up for freelance marketplaces, such as Fiverr and Freelancer, which allow you to keep tabs on the freelancing bookkeeping opportunities posted there.
These can range from short-term gigs lasting a couple of weeks or months to long-term projects that can transition into full-time work.
To succeed as a freelancer, you will have to be more deliberate about the niche you want to specialize in.
For example, some bookkeepers only work with medical companies, while others are very good at bookkeeping for tech professionals.
Whichever niche you pick, focus on providing value, especially for the first few clients, since they will be more likely to refer you to others that way.
With the right approach, you can quickly learn the skills needed to become a bookkeeper with no experience.
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When tourists travel from one country to another, they have to change money into the currency of the country they are visiting. So, when UK tourists visit France or Spain they have to buy euros. Likewise, when tourists from the USA visit the UK, they have to buy British pounds.
Also, when tourists use credit cards while they are abroad on holiday, what they spend when they are on holiday is converted back into British pounds when they receive their bill.
An example is shown below. The credit card was used to buy a number of goods and services in France in Euros. These amounts were then converted into British pounds by the credit card company.
You will see that over the period in which the card was used the exchange rate between Euros and British pounds changed. For example, on August 28th, the rate was 1.0791 Euros and on August 31st the rate was 1.0845.
The rates of exchange between different currencies are continually changing, depending on economic and political conditions. These changes affect tourists and tourism organisations.
Exchange rates between different currencies can change a lot over a period of time, such as two or three years and these changes can have a big impact. Sometimes, the terms ‘strong pound’ and ‘weak pound’ are used.
A ‘strong pound’ means that tourists can buy a lot of foreign currency when they go abroad, making their holiday cheaper. A ‘weak pound’ means that less currency can be bought, making things more expensive for UK tourists abroad.
Explain how changing currency exchange rates might have an impact on the following businesses:
- A small hotel in a UK seaside resort.
- A UK based tour operator taking small groups of tourists to Europe.
- A large attraction. Writing frame
When buying foreign money to spend abroad, tourists need to have some idea of what they are spending and how much things are costing. So, calculating how much a foreign currency is worth is important.
Let’s assume that at a moment in time £1 has an exchange rate of $1.35 and 1.12 Euros.
To change British money into foreign money the following formula is used:
Foreign currency = British currency x Exchange rate
So, given the exchange rates above:
For £100 a tourist would receive
$135 (£100 x 1.35) and 112 Euros (£100 x 1.12)
Let’s say that a year beforehand the exchange rates had been $1.47 and 1.29 Euros. If this were the case, the UK tourist would be worse off changing money than they had been a year ago and items bought when abroad would be more expensive.
Research currency converter websites to see what today’s exchange rates are compared to the ones given above.
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As the Obama Administration’s Climate Action Plan works to reduce emissions across the United States, Germany provides a helpful case study in the benefits of clean energy: reduced pollution, increased energy independence and technical expertise in managing a reliable renewable power grid.
Germany’s ambitious energy transition, or Energiewende, initiated major changes in its domestic energy production and helped fuel the recent global energy transformation. With a dual focus on renewable energy and energy efficiency, Germany is currently on track to meet its goal of a 40% emissions reduction from 1990 levels by 2020 and 80-95% by 2050, despite its shift away from nuclear power and increase in coal use.
Renewables already produce a quarter of Germany’s electricity needs and provide employment for over 1.5 million people. The commercial viability of clean technologies like photovoltaic cells has fostered investment in domestic low-carbon energy sources. According to the Minister of the Environment “the boom in environmental technologies is one of the reasons Germany made it through the economic crisis relatively unscathed.” These successes offer important, positive lessons for the United States–and the world–ahead of the Paris climate talks in December.
- Around 25% of Germany’s electricity already comes from renewables.
- Carbon dioxide emissions have fallen to their second lowest level since the 1990s, even as GDP has grown.
- Energy efficiency measures have decoupled economic growth and power consumption, as the demand for electricity has decreased while economic growth continues.
- Renewables have driven down wholesale electricity prices by 32% since 2010, and retail prices are expected to begin falling as subsidies are reduced.
- Renewables make up a greater share of Germany’s electicity mix than hard coal (18%), about as much as lignite coal (25%), and as much as nuclear (15%) and gas (10%) combined.
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Most people are surprised to hear it, but flooding is the most dollar-costly natural hazard that affects Australia. It doesn’t kill as many people as heatwaves and bush fires do, but the damage it does to property, infrastructure and production is greater than that wrought by bush fires, severe storms, tropical cyclones, landslides or earthquakes.
That’s the bad news. The good news is that flooding is the most easily mitigated of the natural hazards we face. We know, by and large, where it will happen, we usually get advance notice and there is much we can do to contain the damage that it brings. One of the questions that arises from the floods that have assailed eastern Australia virtually constantly since September is why we have done so little and suffered so much.
The answer is twofold. Part of it is that not all the damage can be prevented: it is hard to see how the loss of crops and coal production could have been avoided in this month’s Queensland floods. Another part of it is that public and political will to act has been lacking. A recent illustration of this was the reaction to the offer in 2006 by the Mayor of Brisbane, Campbell Newman, to buy back hundreds of severely flood prone properties in that city at market value. More than four years on, very few property owners have taken up his suggestion.
Only one Australian state - NSW - has ever put a major effort into flood mitigation. There, the equivalent of well over a billion dollars in today’s terms has been spent on it since the early 1960s. That sum amounts to an average investment of more than $20 million per year. The effort has dropped off lately, but for more than 40 years NSW led the nation in investing in creating flood-resilient communities.
Queensland’s government refused to support Newman’s voluntary buy-back initiative. That is consistent with Queensland’s approach to flood mitigation over the long term: relatively little has been done. One result is that very few towns in Queensland have levee protection. Dozens in NSW have it, and NSW has done many other things to mitigate the costs wrought by floods as well. The two states each account for about 40% of the nation’s average annual flood damage, but their responses to dealing with the losses have been radically different.
So what can be done to mitigate the costs of flooding? First, it has to be recognised that the best flood mitigation - or to give it its modern, more inclusive name, floodplain management - almost always consists of a mixture of strategies. Some of these may involve engineering solutions like levees (to keep floodwaters out of certain areas), flood bypasses (which "train" water to travel past rather than through towns), flood mitigation dams (which pond floodwaters and release them slowly after downstream river levels have fallen) and flood retention basins (which also hold floodwater temporarily).
But these "structural" measures can only do part of the job. Levees can almost never be built to keep out the very worst floods. Sooner or later they are overtopped with great damage and loss resulting in the "protected" areas. This is not to decry them. At Grafton, in the northern rivers of NSW, the levees built in the early 1970s have kept out six floods which would have entered residential and/or commercial areas; in the 130 years of Grafton’s existence before 1970 some 18 separate floods did damage in the town. The comparison of the periods before and after the levees were built is a strong testament to their worth.
But none of the floods which Grafton has experienced has been anything like as big as nature could produce there. One day, a flood will overwhelm the levees and flood the town. The benefit will have lain in damage avoided in the many floods that were kept at bay, and the occasional big one which is not excluded will not deny that benefit. It will simply prove that levees cannot solve the whole problem or make Grafton flood-free.
Or take mitigation dams. They can lower the downstream peak levels, but they can only fully pond relatively small floods. Genuinely big ones cannot be totally controlled unless there are many more dams than we now have and, of course, provided that the heavy rainfall does not fall downstream of them. To fully mitigate big floods at, say, Rockhampton, all the tributaries of the Fitzroy River would have to be dammed as well as the main stem of the river upstream of the city - with huge losses of agriculturally productive land, the abandonment of many farms and several towns and an enormous cost in construction. It would be totally unfeasible, economically and environmentally.
Engineering structures have limits, and their place is easily overstated. We need to recognise that all floods cannot be made benign. Genuinely big ones will inevitably overwhelm the structural measures we institute or will outstrip their mitigative capacities. Put simply, big floods contain far too much water to hold or direct.
Structures alone can never do the whole job, and floodplain management must therefore be about more than "controlling" floodwaters. We must recognise that we need to adapt to flooding and learn to live with it rather than trying to overpower it.
Fortunately there are many ways we can adapt to flooding. Houses can be raised, dwellings and commercial premises can be removed from the most frequently and dangerously inundated parts of floodplains, and planning regimes can be instituted that prevent rebuilding in such areas or the expansion of urban areas onto land that is certain to be inundated. All of these things have been done in Australia, especially in NSW, since the great floods in that state during the mid-1950s.
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What is Gross Income?
REtipster does not provide tax, investment, or financial advice. Always seek the help of a licensed financial professional before taking action.
Gross Income Explained
For individuals, gross income is the total of one’s wages, dividends, interest, alimony, rental income, and any other sources of income before any expenses are deducted. It is reported on their tax return before certain deductions and exemptions to determine adjusted gross income.
For businesses, gross income is synonymous with gross profit. Business gross income is defined as gross revenue minus the cost of goods sold (COGS) and is reported on the tax return and the income statement.
Why is Gross Income Important?
Individual gross income is a baseline metric for lenders and others, such as landlords, who need to assess creditworthiness and the borrower’s ability to repay their loan.
It’s also the starting point for individual tax filings. Deductions such as retirement plan and HSA contributions are subtracted from individual gross income in above-the-line calculations to arrive at adjusted gross income or AGI. Standard or itemized deductions are then subtracted from the adjusted gross income to arrive at taxable income.
In a business setting, gross income is basically a metric of profitability. Remember, a business’ gross income reflects its gross revenue minus cost of goods sold; other expenses such as taxes and administrative costs are subtracted from gross income to arrive at net profit.
How is Gross Income Calculated?
For individuals, gross income is calculated by simply adding all sources of income before subtracting any expenses such as taxes, insurance, and retirement contributions.
The formula for calculating business gross income is:
Gross revenue – Cost of goods sold (COGS) = Business Gross Income
Gross Income vs. Effective Gross Income
Effective gross income (EGI) is a factor commonly used in determining the value and potential cash flow of a rental property.
The calculation for effective gross income is:
Gross Potential Rent + Other Income – Vacancy Costs – Credit Loss = Effective Gross Income
Gross Potential Rent (GPR) is the amount of rental income a property would generate if all units were rented. For example, a fourplex in which each unit rented for $1,500 a month would have a GPR of $48,000.
Other Income includes items such as parking and storage rental, laundry machines, and late fees.
Vacancy Costs are typically calculated as a percentage; and it represents the percentage of time a rental property or rental unit sits empty. Vacancy rates vary by location and market.
Credit Losses occur when a tenant doesn’t pay full rent on time and it also includes the costs to evict a tenant.
Other factors can affect effective gross income. For example, downtime, when units are vacant because the property is being renovated or rehabbed, would depress the effective gross income. Similarly, turnover costs in commercial property are sometimes deducted from effective gross income, although some accountants include them as operating expenses in the general ledger.
Examples of Gross Income
The following examples help explain gross income in individual and business situations as well as effective gross income in a real estate setting:
Individual Gross Income: Vincent earns $88,000 per year in salary. He generates $22,000 of income from his rental property and $2,500 of interest income per year. His gross income is $112,500. ($88,000 + $22,000 + $2,500 = $112,500)
Business Gross Income: Midwestern Widgets generated $20 million in gross revenue. The company’s cost of goods sold was $7.5 million. Midwest Widgets has a business gross income or gross profit of $12.5 million. ($20 million – $7.5 million = $12.5 million)
Effective Gross Income: Susan’s duplex has gross potential rent of $60,000 per year and $1,000 per year in parking permits. Her vacancy and credit loss costs are $5,000 per year. The duplex has an effective gross income of $56,000. ($60,000 + $1,000 – $5,000 = $56,000)
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How many times a month do you think about saving? Are you one of those who have proactively chosen an optimal savings mechanism (e.g., a retirement or index fund) or are you like the majority of us who don’t save nearly enough and think of regular savings as a goal for the distant future? The psychology that influences your own behavior — a discipline called behavioral economics, which draws insights from psychology and economics — may not be very different from one that influences a low-income individual living in the urban center of Dar-es-Salaam or in rural parts of Tanzania.
Tanzania is unique in many ways. Although mobile money got a later start in Tanzania than it did in neighboring Kenya, today more than 50 percent of the country's adult population is registered for formal digital financial services, mostly mobile money. As mentioned in our earlier post, Tanzania is also the first country in Sub-Saharan Africa to allow mobile money providers to earn interest on their escrow accounts, with Tigo-Pesa being the first to offer its subscribers interest payouts of 7 to 9 percent per annum (better than a one-year term deposit). Despite these incentives, however, average mobile savings balances remain low, especially among low-income users.
This raises some important questions: Are behavioral economics at play here? Are behavioral inertia or biases guiding people’s decisions? And if so, can solutions derived from behavioral economics move them beyond these biases, resulting in greater use of digital financial services? To help answer these questions, CGAP partnered with the World Bank’s Mind, Behavior, and Development Unit (eMBeD), Financial Sector Deepening Tanzania (FSDT), Busara Center for Behavioral Economics and Airtel Money Tanzania on a savings study. First, using behavioral economics, we set out to understand what influenced the saving habits of low-income Tanzanians. Then we conducted experiments to see what impact targeted messaging interventions could have on those behaviors.
Through our initial research we found four dominant behavioral themes that influenced which savings mechanisms people used:
- Mental accounting. Tanzanians, like most people, use mental shortcuts to build associations between their preferred savings mechanism and their reason for saving. Often, this means putting savings into different places or accounts based on criteria like the source or purpose of the money (e.g., saving money for business expenses in a small jar while saving for school fees in a community box at the local savings and credit cooperative).
- Agency. Agency refers to whether people feel like a product gives them control over some aspect of their lives. The Tanzanians we spoke with wanted products that gave them control over their financial lives.
- Trust and risk. Interestingly, there was no savings medium that respondents considered to be universally “most trustworthy.” Some considered banks trustworthy, while others trusted mobile money or their local savings group lock-boxes. People expressed trust in whichever savings mechanism they used most actively.
- Social influences. Social norms, networks and trends also influence Tanzanians’ savings behavior and the channels they use to save.
Of the two primary experiments we conducted, the first was a messaging experiment, where participants interacted with an SMS system for 14 days. Participants with similar profiles were divided into five groups. A control group received no messages from the platform, while the other four groups experienced an SMS treatment grounded in the behavioral themes identified above. The first group received generic messages that reminded them to save. The second group received messages tailored around the psychology of agency and control. The third group's messages were tailored around mental accounting, while the fourth group received messages that inform them of how much super-savers in the group had already saved.
One of the approaches was clearly the most effective. The group that received SMS messages about the savings balances of other savers saved at a higher rate than the control group. Interestingly, the group that received messages about agency saved even less than the control group did, implying that the wrong message can be worse than no message at all. In any case, the implications of the social influence treatment are striking: a message that compares savings to that of slightly better savers can increase saving by up to 11 percent (for details, see this slide deck).
Our second experiment dug deeper into the behavioral theme of trust and risk. Respondents trusted whichever savings medium they used most actively. This suggests that their choice of savings product might not always reflect their true preferences but rather the product information that was most readily available to them. This experiment aimed to answer two questions: Which common features of savings products do customers value most? And if asked to select from an array of products with different features, will customers choose products that have the features they say are important to them (i.e., optimal products)?
First, participants were presented with a list of eight savings features — security, privacy, convenience, accessibility, fees, interest, check balance and language — and were asked to rank the attractiveness of these features. The rankings were used to create three pairs of savings products (a total of six products) for each participant. Each pair included one optimal choice, based on the participant’s rankings, and one suboptimal choice. Participants were shown each pair of products and asked to choose one product per pair that they would like to use. We found that although having more choices at their fingertips engaged the participants, it often resulted in cognitive overload and suboptimal product choices.
Interestingly, one attribute — privacy — emerged as a clear winner in these experiments; security was the least preferred attribute. This suggests that although digital products are typically marketed as secure, security might not be the attribute that appeals to the greatest number of people. It also means that customers’ choice of savings vehicle, and their trust, may depend on their perception of how risky that vehicle is in terms of confidentiality.
As these results suggest, financial services providers who are looking to encourage savings among low-income customers should take a closer look at socially influenced messaging. Such messages have strong potential to positively impact savings behavior. Additionally, since people tend to make suboptimal choices when presented with too many features, providers should make information on confidentiality simple and clear so that customers can easily choose the most private savings vehicles.
More generally, providers that are looking to build a strong customer base with healthy financial behaviors should apply the principles of behavioral economics.
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A breakthrough in storage technology?
A research centre and a start-up may solve the biggest problem facing the energy transition.
Germany. Renewable energies are setting new records: in 2017, 36.1 percent of electricity in Germany was produced by wind, solar, biomass and hydroelectric power plants. That is 3.8 percent more than in 2016 – and a bigger increase than ever before. The energy transition could advance even more quickly if the development of new storage technologies could keep pace with the production of renewable energies. To this end, the Fraunhofer-Gesellschaft and TU Braunschweig’s Battery LabFactory Braunschweig (BLB) are now setting up a joint energy storage research platform in Braunschweig. The researchers there plan to further develop mobile and fixed storage technologies.
Turning electric cars into flexible energy storage units
Meanwhile, a start-up from the small town of Wildpoldsried in southern Germany is creating quite a stir. Using a charging box, the company Sonnen is interconnecting electric cars to create one large virtual storage unit. Users of the “Sonnen-Charger” system form an energy-sharing community that jointly uses the solar power generated by its individual members with their photovoltaic units. What is innovative about the approach is that the charging box also links electric cars to the electricity grid and intelligently controls the charging process.
If the vehicle does not have enough of its own solar power to charge it, surplus electricity from other members of the community is used. As such, all the vehicles become part of a large virtual battery. They help absorb excess electricity derived from renewables, keep the power grid stable and save money: members of the energy-sharing community benefit from a flat rate and receive up to 8,000 kilowatt hours (kWh) of electricity free each year.
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THE notion that money can't buy happiness is popular, especially among Europeans who believe that growth-oriented free-market economies have got it wrong. They drew comfort from the work of Richard Easterlin, professor of economics at the University of Southern California, who trawled through the data in the 1970s and observed only a loose correlation between money and happiness. Although income and well-being were closely correlated within countries, there seemed to be little relationship between the two when measured over time or between countries. This became known as the “Easterlin paradox”. Mr Easterlin suggested that well-being depended not on absolute, but on relative, income: people feel miserable not because they are poor, but because they are at the bottom of the particular pile in which they find themselves.
But more recent work—especially by Betsey Stevenson and Justin Wolfers of the University of Pennsylvania—suggests that while the evidence for a correlation between income and happiness over time remains weak, that for a correlation between countries is strong. According to Mr Wolfers, the correlation was unclear in the past because of a paucity of data. There is, he says, “a tendency to confuse absence of evidence for a proposition as evidence of its absence”.
There are now data on the effect of income on well-being almost everywhere in the world. In some countries (South Africa and Russia, for instance) the correlation is closer than in others (like Britain and Japan) but it is visible everywhere.
The variation in life satisfaction between countries is huge (see chart). Countries at the top of the league (all of them developed) score up to eight out of ten; countries at the bottom (mostly African, but with Haiti and Iraq putting in a sad, but not surprising, appearance) score as low as three.
Although richer countries are clearly happier, the correlation is not perfect, which suggests that other, presumably cultural, factors are at work. Western Europeans and North Americans bunch pretty closely together, though there are some anomalies, such as the surprisingly gloomy Portuguese. Asians tend to be somewhat less happy than their income would suggest, and Scandinavians a little more so. Hong Kong and Denmark, for instance, have similar income per person, at purchasing-power parity; but Hong Kong's average life satisfaction is 5.5 on a 10-point scale, and Denmark's is 8. Latin Americans are cheerful, the ex-Soviet Union spectacularly miserable, and the saddest place in the world, relative to its income per person, is Bulgaria.
This article appeared in the Christmas Specials section of the print edition under the headline "The rich, the poor and Bulgaria"
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In the 1970s the prices of most things Americans buy more than doubled. Such a general increase in prices is called inflation. Prices of selected goods may increase for reasons unrelated to inflation: the price of fresh lettuce may rise because unseasonably heavy rainfall in California has ruined the lettuce crop, or the price of gasoline may rise if the oil-producing countries set a higher price for oil. During inflation, however, all prices tend to rise. Over the last 400 years there have been many periods of inflation. In the 16th century, when the Spaniards began bringing back gold and silver from the New World, prices in Western Europe moved upward as the supply of money increased. During the 19th century prices tended to go downward as food and raw materials became cheaper. After major wars such as the Napoleonic Wars and World Wars I and II, prices again moved upward. In the 1950s and '60s a so-called creeping inflation occurred, when the general price level in the United States and Western Europe rose by an average of 1 to 5 percent each year. In the 1970s inflation increased until it reached as much as 13 percent a year in the United States. Many countries have suffered from inflation more than has the United States. Israel had inflation of more than 100 percent a year in the early 1980s, meaning that the cost of living more than doubled every year. In Argentina inflation was greater than 400 percent in 1975 and averaged more than 100 percent each year from 1976 to 1982. The most remarkable inflation in modern times was the German hyperinflation of 1923, when people went to the store with wheelbarrows full of money to buy a few groceries. A similar hyperinflation occurred in Hungary after World War II. Inflation has been defined as "too much money chasing too few goods." As prices rise, wages and salaries also have a tendency to rise. More money in people's pockets causes prices to rise still higher so that consumers never quite...
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Category: Harvard Business School
Related Reading: A complex network of intersecting financial, legal, political, and cultural factors all contributed to the development of the South Sea Bubble, the eventual collapse of the South Sea Company in 1720, and the financial ruin left in its wake. The years leading up to the South Sea Bubble were a time of financial promise and enthusiasm for Britain. Following the War of Spanish Succession (1701-1714), there was the increased potential of foreign trade and the turn toward a more global marketplace. Wealth and luxury were no longer reserved to the aristocracy. Consumerism was on the rise, and class and gender boundaries were increasingly blurred when it came to investing in the stock market.
The Human Factor Introduction In the 1930s Harvard Business School colleagues Donald Davenport and Frank Ayres contacted leading businesses and requested photographs for classroom instruction—images Davenport hoped would “reveal the courage, industry and intelligence required of the American working man.” They amassed more than 2,100 photographs, from strangely beautiful views of men operating Midvale Steel’s 9,000-ton hydraulic press to women assembling tiny, delicate parts of Philco radios. Now students, and America’s aspiring corporate managers, had visual data to study “the human factor,” the interaction of worker and machine. But the pictures were more than documentary records.
Introduction Online Exhibition In 1986, Baker Library issued an exhibition catalog titled Coin and Conscience: Popular Views of Money, Credit and Speculation: Sixteenth through Nineteenth Centuries. Catalog of an Exhibition of Prints from the Arnold and S. Bleichroeder Collection, Kress Library of Business and Economics, written by Ruth Rogers, then curator of the Kress Library at Baker Library. The images selected by Ms. Rogers for inclusion in the catalog represent the major thematic divisions of the Bleichroeder Collection , while also displaying its geographic and stylistic diversity. The publication provides introductory text, detailed descriptive information about seventy prints from the collection, an artist index, and a bibliography for further study.
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Alternative Dispute Resolution or ADR, or Amicable Dispute Resolution is the process of settling disputes without the interference of the court. It is a private way of solving disputes and is used a lot in today’s time. ADR is one of the best methods for getting quick and economic dispute resolution. It consists of procedures such as Negotiation, Arbitration, Mediation and Conciliation. The procedure of ADR is private and confidential and the parties can choose their own arbitrator for solving the dispute through mutual consent. ADR is a voluntary process unlike litigation.
Processes under ADR
ADR was recognised and in operation in India since 1940. Arbitration in ADR is mandatory if there is a clause of arbitration in the contract between two parties. It is a flexible and confidential process of adjudication. The process is rapid, more efficient and less expensive. Arbitration covers enormous fields such as Commercial transactions both domestic and international issues, environmental issues, consumer disputes, labour disputes, disputes related to Intellectual Property Rights (IPR) etc. Conciliation is a less formal form of arbitration, and it does not require a prior clause of arbitration or conciliation in the agreement made by the parties. The person solving the dispute is known as a Conciliator.
Any party can appoint a Conciliator by the mutual consent of the other party. Negotiation is a bilateral or multilateral process in which the parties who differ over a particular issue attempt to reach agreement or compromise over that issue through communication. Mediation is an extension of the negotiation process. It is a process when parties cannot settle their disputes through negotiation and go to an impartial third party to assist them in reaching a resolution. It is a “facilitated negotiation.” The third party is called as a Mediator who may be a lawyer and is neutral to both the parties.
Apart from the four processes of ADR, disputes are solved by Lok Adalats as well. The Lok Adalats or People’s Court are mentioned in the National Legal Service Authority Act, 1987. These courts are presided by a retired judge or a social activist or a person having legal background. Some pending cases of the regular courts are sent to Lok Adalats for dispute resolution. There is no fee for Lok Adalats and are deemed as Civil Courts.
Legal provisions in India regarding ADR
Section 89 of the Civil Procedure Code, 1908 (CPC) provides the opportunity to people for settlement outside the court in the form of arbitration, mediation, conciliation and negotiation. The Arbitration and Conciliation Act, 1996 and the Legal Services Authority Act, 1987 also deals with the legal provisions of ADR.
ADR is used internationally in different countries and multinational companies. It is supported by the United Nations to prevent conflict, have peaceful settlement of disputes, preserving friendly relationships among international institutions.
The concept of ADR has been used in earlier times as well in villages and towns by simple communication and listening. By ADR, the parties can choose their own tribunal for dispute resolution and is helpful in technical matters when a person with appropriate degree can help the parties. It is less expensive, time saving and a confidential process. In the times of pandemic, ADR is best suited instead of going to the courts.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.
If you would also like to contribute to my website, then do share your articles or poems at [email protected]
We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.
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Ill-equipped to deal with a crisis
#GS3 #PandemicCrisis #Science
COVID-19 has laid bare science policy deficits
- In the U.S., despite egregious failures and missteps, science and informatics have been able to guide COVID-19 policy to some degree.
- It is time to think about the underpowered investments in science in India and about the stark social inequities that COVID-19 will lay bare, shorn of the protections afforded by science and data-driven policies, and effective decentralised governance.
Investments in science
- India has invested very little in the type of science that is needed to meet contemporary environmental challenges.
- COVID-19 may be its most severe environmental challenge so far, but India faces devastating challenges such as assaults on biodiversity, floods and unmitigated pollution every year. Every disaster underlines national vulnerabilities, accentuated by inadequate science and research infrastructures.
- Amidst the worst pandemic of modern times, India’s medical research institutions and epidemiologists have a prominent role to play.
- India is a global superpower in information technology, yet it has few scientists or institutes systematically deploying ‘big data’ and informatics to understand large-scale environmental challenges, including infectious diseases.
- India is a hotspot for emerging diseases — but to respond adequately, it urgently needs an expanded group of world-class specialists in this area.
- The successful mitigation of COVID-19 in India will require rigorous testing, monitoring, and modelling to inform policy and action.
- In a country where access to data is limited, we will need good data on demographic changes, on how disasters push people into poverty, and the local interventions that pull people out of poverty and build resilience to these cyclic events.
Building for the future
- The Principal Scientific Adviser to the Government of India, one of India’s most accomplished scientists, is playing a critical role in policy responses.
- Directed by the Principal Scientific Adviser’s Office, and with the Prime Minister’s support, there are nine large national science missions in various stages of implementation. These include a mission in quantum computing and another in biodiversity and human well-being, with an important component on emergent infectious diseases.
- India needs substantial investments in a science directed towards the well-being of all social sectors; a science for realising the UN SDGs; a science to build resilience against environmental disasters; and a science for healing humanity’s relationship with Nature to ward off biodiversity loss and mitigate climate change — the “epidemic” that has been around us for some time.
- There are reports about policy decisions to kill nature — for instance, the Karnataka government’s decision to continue with the proposal for the Hubballi-Ankola railway line through the last remaining forests of the Western Ghats.
- India aspires to be a $5 trillion economy. Such aspirations must envision a society that cherishes science and knowledge, enshrines equity, justice and decentralised governance, and respects our natural heritage. We must ensure healthcare as an individual basic right — and Earth-care as a collective right.
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One of the areas where management has the most control, and therefore a key consideration of managerial accounting, is a company’s selling and administrative expenses. Selling, General & Administrative Expense (SG&A) is an income statement item that includes all selling-related costs and expenses of managing a company. Because administrative expenses may be eliminated without direct impact on the product being sold or produced, they are typically the first expenses identified for budget cuts. There is strong motivation from management to maintain low administrative expenses relative to other expenses as an organization may utilize leverage more effectively with lower administrative costs. An entity may utilize the sales-to-administrative ratio to gauge the portion of sales revenue attributable to covering administrative costs.
General & Administrative (G&A) Expense
A company’s master budget profit and loss statement include these expenses along with sales revenue, cost of goods sold, and other expenses, such as interest and depreciation. The selling and administrative expense budget makes up part of a company’s pro forma, or budgeted, profit and loss statement. This portion of the budget includes the planned operating expenses for the business, excluding its directcosts of manufacturing. The company’s manufacturing costs get classified as “Cost of Goods Sold” and have their own category on the budgeted profit and loss statement. Selling and administrative expenses are typically a huge line item on a company’s income statement.
As a result, general and administrative expenses do not fall under cost of goods sold and are not inventory. General and administrative expenses are also typically fixed costs in nature, as they would stay the same regardless of the level of sales that occur.
An efficiently run company maximizes production and sales output in relation to operating expenses, both of which include the sales and administrative costs. When output exceeds what the sales team is selling, either production needs to be slowed or changes must be made to generate more sales and reduce overhead until the company finds an operating balance point. Selling expenses, often called cost of goods sold, refer to costs and purchases needed to create products or deliver services for which consumers pay your small business money. The difference between sales revenue and sales expenses determine gross profit, from which overhead is deducted to calculate net profit.
selling expenses definition
These costs may be fixed or variable; for example, sales commissions are a variable selling expense dependent on the level of sales the sales staff achieves. Selling and administrative expenses are both part of the selling, general and administrative (SG&A) expenses a company uses to operate. Even though they are part of the same income statement category, breaking these subcategories down gives business leaders insight for cost control measures. Companies look at the selling expenses in comparison to other administrative expenses to determine if the company is properly utilizing resources for staff and marketing.
What are examples of selling expenses?
Selling expenses include sales commissions, advertising, promotional materials distributed, rent of the sales showroom, rent of the sales offices, salaries and fringe benefits of sales personnel, utilities and telephone usage in the sales department, etc.
Salaries of senior executives and costs associated with general services such as accounting and information technology (IT) are examples of administrative expenses. The allowance method is an accounting technique that enables companies to take anticipated losses into consideration in itsfinancial statementsto limit overstatement of potential income. To avoid an account overstatement, a company will estimate how much of its receivables from current period sales that it expects will be delinquent. That said, don’t underestimate the significance of these managerial decisions on how the company drives investor returns. How management decides to group and analyze its expenses implicitly defines how they view and understand the company.
Selling and administrative expenses even include non-cash expenses such as depreciation and amortization. The company knows, from the previous history, that its variable S&A expenses average out to $0.10 per unit sold. The company estimates advertising costs for quarters 1 through 4 as $100, $200, $800, and $500, respectively, based on the previous year’s spending.
What are examples of selling and administrative expenses?
Selling, General & Administrative (SG&A) Expense. SG&A includes all non-production expenses incurred by a company in any given period. This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more.
- Selling and administrative expensesappear on a company’s income statement, right under the cost of goods sold.
- These costs may be fixed or variable; for example, sales commissions are a variable selling expense dependent on the level of sales the sales staff achieves.
- Typical company expenses from accounting, legal, sales, marketing, facilities, and other corporate activities fall into this category.
Management makes decisions based on the data they have available, and these managerial accounting decisions gives context to the data. A poorly structured selling and administrative expense budget can affect not just tactics but also strategy. Managerial accounting is much more customizable than financial accounting, and therefore it can provide many more practical tools for managers. This includes personnel expenses and also everyday operating expenses such as insurance, supplies, travel and entertainment, rent, and payroll taxes.
General and administrative expenses appear in the income statement immediately below the cost of goods sold. They may be integrated with selling expenses (in which case the cluster of expenses is known as selling, general and administrative expenses), or they may be stated separately.
If the rented space was used to manufacture goods, the rent would be part of the cost of the products produced. A budget calculated on a monthly basis usually has a good level of detail factored into it, while some companies prefer a higher-level quarterly-basis budget. Since some of the company’s expenses vary with sales, the projected number of units to be sold becomes the budget’s starting point. Analysts gather information to estimate the approximate variable costs per unit sold and use this to drive the monthly expense calculations for the variable cost budget.
On the income statement, administrative expenses are listed below cost of goods sold and may be shown as an aggregate with other expenses such as general or selling expenses. These expenses are vital to a company’s success as they are incurred to increase efficiency or comply with laws and regulations.
They include highly variable expenses such as marketing as well as mostly fixed expenses such as rent. Because of this dynamic, a manager analyzing these numbers should make sure to distinguish between the company’s baseline fixed costs and the incremental variable costs that rise and fall over time. The variable expenses could be correlated to sales, to head count, or even to capital spending. A proper analysis must dive into this level of granularity to fully understand how the company’s strategy and tactics will influence its expenses.
If the total net sales for the period is $100,000, the company establishes an allowance for doubtful accounts for $3,000 while simultaneously reporting $3,000 in bad debt expense. If the following accounting period results in net sales of $80,000, an additional $2,400 is reported in the allowance for doubtful accounts, and $2,400 is recorded in the second period in bad debt expense. The aggregate balance in the allowance for doubtful accounts after these two periods is $5,400.
Selling and administrative expensesappear on a company’s income statement, right under the cost of goods sold. Typical company expenses from accounting, legal, sales, marketing, facilities, and other corporate activities fall into this category.
Information on this type of expense is especially useful when calculating a company’s fixed costs. General and administrative expenses are all the expenses not associated with selling and not associated with making the product. These expenses include the overhead to run the main office, marketing, executive and support staff, and any distribution costs. General and administrative expenses typically refer to expenses that are still incurred by a company, regardless of whether the company produces or sells anything. This type of expense is shown on the income statement, typically belowcost of goods sold (COGS) and lumped with selling expenses, forming a selling, general and administrative expense line item.
Simply put, selling and administrative expenses are all the expenses not directly related to the production of a product. That includes the budgets of all non-manufacturing departments such as marketing, accounting, sales, engineering, and so on. Because administrative expenses do not directly contribute to sales or production, there is a strong incentive for management to lower a company’s general and administrative expenses. However, since these costs are typically fixed, there is a limited ability to reduce them. Typically, any cost that does not link to the production or the selling process and is not part of research and development is classified as a general and administrative expense.
The Income Statement is one of a company’s core financial statements that shows their profit and loss over a period of time. Bad debt expenses are generally classified as a sales and general administrative expense and are found on the income statement. Recognizing bad debts leads to an offsetting reduction to accounts receivable on the balance sheet—though businesses retain the right to collect funds should the circumstances change. Part of this process is subdividing the broad “selling and administrative” expenses into smaller, more useful subgroups.
It includes most every expense the company incurs not directly related to the production of its products. Whether a company wants to grow, cut costs, or simply maintain what it’s doing, managers must pay close attention to this figure and all its component parts. Managing this section of the income statement is a crucial component to running a successful business. As you can probably tell already, selling and administrative expenses are a bit of a mixed bag.
Administrative expenses are the expenses an organization incurs not directly tied to a specific function such as manufacturing, production, or sales. These expenses are related to the organization as a whole as opposed to an individual department or business unit.
Operating income is an accounting figure that measures the amount of profit realized from a business’s operations, after deducting operating expenses such as wages, depreciation, and cost of goods sold (COGS). Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis. The total operating cost for a company includes the cost of goods sold, operating expenses as well as overhead expenses. To view the full costs associated with running certain business units, a company may allocate its administrative expenses out to each business unit based on a percentage of revenue, expense, square footage, or other measure.
For example, a company’s marketing budget will certainly be reviewed independently of its engineering expenses. However, it could be useful to review marketing and sales expenses together as one group relative to sales or sales growth. These choices are at management’s discretion based on the company’s business model and objectives.
Most businesses figure out selling expenses monthly, but it can also be done weekly or quarterly. EBIT stands for Earnings Before Interest and Taxes and is one of the last subtotals in the income statement before net income. EBIT is also sometimes referred to as operating income and is called this because it’s found by deducting all operating expenses (production and non-production costs) from sales revenue. The sales method applies a flat percentage to the total dollar amount of sales for the period. For example, based on previous experience, a company may expect that 3% of net sales are not collectible.
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9 October 2020
Contributed by Allen & Gledhill Partner Vignesh Vaerhn and Associate David Lim, Agricultural Law in Singapore: Overview provides an overview of agricultural law, including subsidies, environmental issues, agricultural companies and co-operatives, land ownership and usage rights, water controls, tax and financing, crop seed business, plant variety right protection, GM crops, animal welfare, livestock gene patentability, food standards and product liability.
This article is part of the Practical Law Agricultural Law Global Guide.
Reproduced from Practical Law with the permission of the publishers. For further information, visit www.practicallaw.com.
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When you buy a car, the retail price of the car is at least a few hundred dollars short of what you pay. When you buy a house, fees and other logistical costs drive the price up. You end up with most of the burden of these transactional costs. However, sellers also feel this burden with closing and intermediary costs taking up a large chunk of the seller’s profit. So where does this money go? The money is made by realtors and real estate agents who draw up paperwork and make sure everything goes according to plan. Since there is a lot of money at stake, there needs to be some trust and understanding between the two parties. Smart contracts do exactly this, without the need for an intermediary.
"Blockchain technologies could reduce banks' infrastructural costs by $15-20bn a year by 2022”.
Another industry that stands to benefit from the implementation of smart contracts is the insurance sector. Insurance companies spend millions of dollars processing claims and while just smart contracts won’t create a viable system that cuts costs, minimizing and streamlining the entire process can allow smart contracts to prevail and succeed. Determining car insurance rates and processing claims are very reliant on factors such as the number of accidents, age of driver, etc. With multiple smart contacts for each policyholder, there could be a system that sees an accident automatically enforce a higher rate as well as a shift in your policy.
In summary, smart contracts are a great technology that can benefit both consumers and producers, but are still too young to be implemented on a large scale. The blockchain technology behind each smart contract makes it a secure and trustworthy contract, free of legal jargon and manpower that costs all parties involved. While many use cases show the bright future of smart contracts, there are still many hurdles that need to be jumped before we can see smart contracts around the world, in every aspect of our lives.
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While many people have their stalwart piece of plastic in their wallet, it might surprise you that across the country, when paying bills most people (89%) prefer to have the payment come from funds they already have in their bank account, and 79% of that 89% prefer to use their debit card instead of doing a direct bank transfer. After debit cards, people prefer to make direct payments from their bank account (19%) followed by a credit card (11%). This is according to newly released data from doxoINSIGHTS, our collection of analytics reports, and is based on more than three million users paying over 50,000 billers across the United States.
To our surprise, we also found that some regions of the U.S. show a preference when paying from their bank:
- Dedicated to Debit: Southern states like Georgia, North Carolina, South Carolina, and Texas show the highest percentages of those who pay bills via debit card.
- Bound by the Bank: Some of the “I” states have it. Bill payers in Iowa and Illinois are much more likely to pay directly from their bank account than to use a debit card.
Paying bills directly from your bank account has its obvious benefits: it ensures your purchases, withdrawals, and bill payments are deducted directly from your checking or savings account. This can be accomplished by either connecting bill payments directly to your bank account, or indirectly through your debit card. Either option allows you the freedom and control of managing money you know is in the bank.
Committed to Credit: What was even more interesting from the data was the substantial regional differences in the use of credit to pay bills. Residents of far-flung states like Alaska and Hawaii are much more likely to pay bills with their credit card vs through their bank. Almost ¼ of all bills paid in Alaska are with credit.
As for why consumers prefer to use one method over the other, it really comes down to personal preference. The tendency to rely on credit cards to pay bills, however, can typically be attributed to three main reasons:
- Credit Convenience: Some people carry their favorite piece of plastic and use it for all purchases and bills – from gas to groceries, health insurance to home bills. As long as they pay it off every month, this practice is fine.
- Points Junkies: Some people like to “play the game” when it comes to credit card points and reap the benefits! Between air miles, hotel points, and cash back features, they can really add up.
- Cash Flow: Some people use credit card payments as a means to an end to avoid late fees on a bill, and then pay off the credit card balance once payday rolls around.
The main point we takeaway from this data is: people like options! With doxo, users have complete control over how they pay their bills with any payment instrument (credit, debit card, or bank account). Other payment systems like bank bill pay are more limited in their offerings, and some billers only offer one or two payment methods. doxo offers the most robust payment options and flexibility over how people pay their bills.
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What is C Corp vs S Corp?
Potential or existing business owners often face the choice of setting up either as a C Corp vs S Corp when starting a new business or changing their business structure. For everyone’s guidance, business goals primarily determine whether to incorporate as a C Corp vs S Corp.
Both corporation formats are governed by similar provisions regarding ownership and capital generation. They are separate legal entities that provide limited liability to owners. The major decisions are overseen by a board of directors, who represent the interest of shareholders, while the day-to-day operations are headed by an executive. The distinguishing features between C Corp vs S Corp are related to taxation and flexibility of ownership.
- A C Corporation is the default designation provided to a freshly incorporated company.
- A corporation may choose to convert into an S Corporation at any point in time, given that it receives the consent of all its shareholders to file for S status.
- Both formats are governed by similar provisions regarding ownership and capital generation. The distinguishing features between the two formats are related to taxation and flexibility of ownership.
What are Corporations?
A business can be set up in multiple forms, such as a Limited Liability Partnership (LLP), Corporation, or Limited Liability Company (LLC). A corporation, by definition, is a type of business structure formed by filing a document called “Articles of Incorporation” with the state. Once set up under state law, a corporation becomes a separate legal entity, and its owners have limited liability for corporate debts.
Corporates must comply with a multitude of procedural rules such as paying annual fees, filing annual returns, issuing stock, holding general and shareholder meetings annually, and keeping minutes of said meetings. Non-compliance with the rules relating to the functioning of a corporation under U.S. corporate law may lead to the dissolution of the company or personal unlimited liability for its owners.
A C Corporation is the default designation provided to a freshly incorporated company. Any corporation may choose to convert into an S Corporation at any point in time, given that it receives the consent of all its shareholders to file for S status. The provisions allotting S status to companies are enumerated in Subchapter S of Chapter 1 of the Internal Revenue Code, which is where the term S Corporation comes from.
C Corp vs S Corp – Taxation
A traditional C Corporation is treated as a separate legal entity by the U.S. Internal Revenue Services (IRS). The business is charged corporate income tax for profits earned. The shareholders are liable to pay personal income tax on income earned from the company, i.e. profits earned in the form of dividends. This practice is often termed as “double taxation.” Certain fringe benefits provided for employee welfare such as healthcare and life insurance are deductible from corporate profits, which helps reduce the corporation’s tax burden.
Conversely, an S corporation does not get charged at the corporate level. All gains accrued by the business are attributed to the owners, who are then charged personal income tax. It resembles the model of a sole proprietorship or a partnership. An S corporation is not permitted to deduct the cost of fringe benefits offered, which means that they add to the taxable income of all shareholders holding more than 2% of stock.
C Corp vs S Corp – Flexibility of Ownership
An S corporation must not consist of more than 100 shareholders. To be eligible for ownership, one must be a natural individual holding a U.S. passport or be an American resident. This means that artificial entities such as trusts and other corporations are not entitled to ownership of stock in such a company. Each shareholder holds equal voting rights, as only one class of stock is permitted for distribution.
Certain types of business entities, such as banks and insurance companies, are not permitted to hold S status. C corporations, on the other hand, are permitted to list an unlimited number of shareholders. The shareholders’ voting rights may be divided to enable the implementation of various profit-sharing structures. Such a model is well suited for companies aiming to raise capital through complex vehicles such as initial public offerings (IPOs).
C Corp vs S Corp – Scale of Operations
The S designation is more suited to smaller or new firms that want to escape the double taxation effect employed by the C Corp structure. Most new firms expect to operate on losses for their initial years. The S structure is specifically advantageous as it allows owners to offset their income from other sources using the aforementioned losses, thereby reducing their overall tax liability.
Some states do not recognize S status, and converted companies, although recognized under federal law, may still be taxed under the C status structure. Thorough research about regional legislation must be conducted before alternating between business structures.
CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following CFI resources will be helpful:
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mixed economy(redirected from Mixed economies)
Also found in: Dictionary, Thesaurus, Encyclopedia.
mixed economysee ECONOMY.
mixed economya method of organizing the economy to produce goods and services. Under this ECONOMIC SYSTEM, some goods and services are supplied by private enterprise and others, typically basic INFRASTRUCTURE goods and services such as electricity, postal services and water supply are provided by the state.
The mixed economy is a characteristic feature of most present-day developed and developing countries, ‘pure’ or totally PRIVATE ENTERPRISE ECONOMIES and CENTRALLY PLANNED ECONOMIES being rarely encountered. The precise ‘mix’ of private enterprise and state activities to be found in particular countries, however, does vary substantially between these two extremes and is very much influenced by the political philosophies of the country concerned. See NATIONALIZATION, PRIVATIZATION.
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- What are the 4 elements of a risk assessment?
- What is a risk assessment checklist?
- What are the 5 main areas covered on risk assessment?
- What is the purpose of a risk assessment?
- How is a risk assessment done?
- When should you do a risk assessment?
- What are the 5 steps of a risk assessment?
- What is risk assessment in health and safety?
- What are the 3 types of risk?
- What are the 2 types of risk assessment?
- What are the main features of a risk assessment?
- How is a risk calculated?
- What are the different types of risk assessment?
- What are the 10 principles of risk management?
- How do you write a risk assessment plan?
What are the 4 elements of a risk assessment?
There are four parts to any good risk assessment and they are Asset identification, Risk Analysis, Risk likelihood & impact, and Cost of Solutions..
What is a risk assessment checklist?
The risk assessment checklist should only include the items you can reasonably know. Fortunately, you’re not expected to anticipate risks that are unreasonable. With risk evaluation, you must examine what you’re doing as well as the risk control measures you have in place.
What are the 5 main areas covered on risk assessment?
These steps should be adhered to when creating a risk assessment.Step 1: identify the hazards. … Step 2: decide who may be harmed and how. … Step 3: evaluate the risks and decide on control measures. … Step 4: record your findings. … Step 5: review the risk assessment.
What is the purpose of a risk assessment?
The aim of the risk assessment process is to evaluate hazards, then remove that hazard or minimize the level of its risk by adding control measures, as necessary. By doing so, you have created a safer and healthier workplace.
How is a risk assessment done?
Five steps to risk assessment can be followed to ensure that your risk assessment is carried out correctly, these five steps are: … Evaluate the risks and decide on control measures. Record your findings and implement them. Review your assessment and update if necessary.
When should you do a risk assessment?
The Health and Safety Executive (HSE) says risk should be assessed “every time there are new machines, substances and procedures, which could lead to new hazards.” An employer should carry out a risk assessment: whenever a new job brings in significant new hazards.
What are the 5 steps of a risk assessment?
The Health and Safety Executive’s Five steps to risk assessment.Step 1: Identify the hazards.Step 2: Decide who might be harmed and how.Step 3: Evaluate the risks and decide on precautions.Step 4: Record your findings and implement them.Step 5: Review your risk assessment and update if. necessary.
What is risk assessment in health and safety?
Risk assessments are part of the risk management process and are included in the Management of Health and Safety at Work Regulations. … A risk assessment defines which workplace hazards are likely to cause harm to employees and visitors.
What are the 3 types of risk?
Risk and Types of Risks: There are different types of risks that a firm might face and needs to overcome. Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.
What are the 2 types of risk assessment?
The two types of risk assessment (qualitative and quantitative) are not mutually exclusive. Qualitative assessments are easier to make and are the ones required for legal purposes.
What are the main features of a risk assessment?
1. Overviewidentify what could cause injury or illness in your business (hazards)decide how likely it is that someone could be harmed and how seriously (the risk)take action to eliminate the hazard, or if this isn’t possible, control the risk.
How is a risk calculated?
Many authors refer to risk as the probability of loss multiplied by the amount of loss (in monetary terms). …
What are the different types of risk assessment?
They should also be competent in the risk assessment process, to be able to identify high risks and what action might be needed to reduce risk.Qualitative Risk Assessment. … Quantitative Risk Assessment. … Generic Risk Assessment. … Site-Specific Risk Assessment. … Dynamic Risk Assessment.
What are the 10 principles of risk management?
These risks include health; safety; fire; environmental; financial; technological; investment and expansion. The 10 P’s approach considers the positives and negatives of each situation, assessing both the short and the long term risk.
How do you write a risk assessment plan?
Prepare a risk management planIdentify risks. What are your risks and how likely are they to occur? … Minimise or eliminate risks. … Identify who has to do what should a disaster occur. … Determine and plan your recovery contingencies. … Communicate the plan to all the people it refers to. … Prepare a risk management plan.
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Being self-employed and running a business of your own is not an easy task. Usually, finance is a major problem. According to popular research and entrepreneur statistics, more than 50% of businesses that failed did so because they lacked funds. Successful entrepreneurs have told stories as regards the challenges they have gone through while building a business of their own. Many of these stories have helped others, especially people who are just starting their entrepreneurial careers. But it is important to get a clear understanding of what it truly entails.
This article provides a good number of fascinating statistics to help you gain special insights into what goes on in the world of entrepreneurs. But first, we will need to take a brief look at some of the most vital stats that everyone should know.
Vital Statistics about Entrepreneurship
- 19.6% of self-employed professionals work in the construction/trades field.
- Owners of small startups report that managing their business is four times more stressful than raising children.
- The average number of businesses started by an entrepreneur is two.
- 73% of small startup owners are men.
- 22.5% of small businesses fail within their first year.
- 27 million working-age Americans are starting or running a new business.
- 67% of small business owners use personal funds to handle financial problems.
- 60% of people who start small businesses are in the age range of 40 – 60 according to stats on small businesses.
- 82% of business failures are due to poor cash management.
- Less than 1% of entrepreneurs came from an extremely rich or poor background.
Entrepreneur Statistics for 2019
1. A third of small businesses get started with less than $5,000.
Unlike large scale businesses, small businesses obviously do not start big. According to a study made in 2019, it is estimated that small startups are launched with less than $5000.
2. 60% of people who start small businesses are in the age range of 40 – 60.
Many say “age is just a number.” This means most activities and actions are not affected by it. The same thing goes with entrepreneurship, as according to the latest entrepreneurship stats by Guidant Financial, about 60% of people who start small businesses are in the age range of 40 – 60.
3. 67% of small business owners use personal funds to handle financial problems.
(Federal Reserve Banks)
Obtaining funds for the running of a business can be very challenging, and small businesses are particularly vulnerable to this kind of problem. From top entrepreneur statistics in 2019, 67% of small business owners are usually left with the option of using personal funds to handle financial problems.
Entrepreneurship US Statistics
How many entrepreneurs in the US in 2018?
4. 27 million working-age Americans are starting or running a new business.
The United States is known to have a good number of entrepreneurs who handle one or more businesses across the nation. Entrepreneurship statistics have estimated that there are up to 27 million working-age Americans who are either starting or currently running a new business.
5. About half a million startups are launched each year in the United States.
Startups are launched every year in the US. An amazing fact about the number of these startups is that they are up to half a million. However, Entrepreneurship US facts show that out of this huge number, a large percentage still shuts down.
6. The average founder salary is estimated to be less than $50,000 per year.
Of course, there are lots of monetary gains to be had from a successful business. The salaries of most entrepreneurs have been studied, and according to Entrepreneur, the average founder salary is estimated to be less than $50,000 per year.
Entrepreneurship Statistics Worldwide
7. 82% of business failures are due to poor cash management.
Business failures have become rampant in the world. This is usually due to the poor management of finance. According to popular entrepreneur statistics, about 82% of business failures are due to poor cash management.
8. There over 582 million entrepreneurs in the world.
There are entrepreneurs all across the world. Each country of the world has its own set of entrepreneurs, albeit some more than others. An expert study determined that there are over 582 million entrepreneurs globally. This fact is supported by entrepreneur statistics for 2017.
9. 3% of entrepreneurs started their business due to a life-changing event.
A good number of people across the world have experienced life-changing events like divorce or the death of a loved one. Entrepreneurs undoubtedly experience this, too. And according to research, about 3% of today’s entrepreneurs ventured into being one after they had experienced such significant events.
10. More than 20% of small businesses fail within the first year of their conception.
Keeping up with the many challenges of running a business can be very tough. According to small business statistics, over 20% of small businesses fail to continue beyond their first year.
11. 63% of adults believe entrepreneurship is a good career.
Many adults understand the ins and outs of business management and know what offers good pay. Research based on entrepreneur statistics for 2017 was carried out by various bodies, and this study proved that about 62% of adults believe entrepreneurship is a good career choice.
12. Less than 1% of entrepreneurs came from an extremely rich or poor background.
It is usually a topic of debate whether or not most successful entrepreneurs come from very rich families. This makes it easy for them to deal with financial challenges and gain better opportunities at building their business. However, research has proven that less than 1% of entrepreneurs came from an extremely rich or poor background. Hence, most entrepreneurs lie within the middle class range.
How many new businesses started in 2017?
13. About 627,000 businesses were launched in 2017.
A huge number of businesses are launched every year across the world. Popular research made by top organizations reveals that about 627,000 businesses were launched in 2017.
14. 73% of small startups’ owners are men.
Male entrepreneurs are known to outnumber female entrepreneurs significantly. There are many facts about this, all of which show men as the leading number. Men account for 73% of small business owners, while women make up 27%.
15. Entrepreneurial statics reveal 44% of entrepreneurs have a college degree.
Slightly less than half of entrepreneurs had a degree before venturing into running a business of their own. In fact, about 44% of them had gone for a college degree. Many have also gone for a more advanced degree, such as a master’s or a doctorate.
16. 30% of small businesses continually lose money.
Making profits is the main purpose of any kind of business. So, business owners are prone to devise several means of improving their financial income and gaining more funds when starting their business. But in some cases, things do not work out as planned. A recent study shows only 40% of small businesses are profitable, and about 30% continually lose money.
17. 80% of small businesses that started in 2014 made it to the second year.
According to entrepreneur statistics for 2014, 80% of small businesses that launched in 2014 made it through to the second year. And by 2018, only 56% remained.
Entrepreneurship Fun Facts
18. Fewer than 25% of entrepreneurs indicated that the desire to make money is a major motivation.
A lot of people say money is one of the best forms of motivation for a human being. It may come as a surprise that only about a quarter of entrepreneurs share that opinion. As our top fun fact about entrepreneurs indicates, 25% of them claim that the desire to make money is a major incentive.
19. A business having two founders has increased odds of making more money.
Most popular and successful businesses today were founded by two people. Having two founders is one of the many reasons for their success. According to top reports concerning entrepreneur statistics, businesses having two founders have increased odds of making more money.
20. 46% of businesses had only one founder.
Indeed, running a business without experience in many areas of the profession will most likely not end well. For this reason, most people work with partners who are highly experienced in entrepreneurship. According to statistics, up to 46% of business owners do not do this.
21. 72% of small business owners say that they don’t check their mobile device while eating with others.
As an entrepreneur, dealing with distraction from work can be a bit difficult. A research project reported that 72% of small business owners don’t check their mobile device while eating with others. This approach helps them maintain a healthy work-life balance.
22. According to new business statistics, men are more likely to receive financing to start a business than women.
Although many people picture men as being workaholics, these entrepreneur statistics indicate that women are actually more likely to start a business on their own. However, a study led by the SBA has shown that male entrepreneurs were slightly more likely to receive financing, as 34% of them acquired loans in the past year, compared to 31% of females.
23. The average number of businesses started by an entrepreneur is two.
Aside from making more money, entrepreneurs are looking for various means of investing their skills, funds, and resources. Because of this, a good number of entrepreneurs decide to start another business after becoming successful with one. And from top facts, the average number of businesses they start is two.
24. Owners of small startups report that managing their business is four times more stressful than raising children
Many adults who have kids admit to the fact that raising them takes dedication and commitment. However, startup statistics show many of these adults who are small startup owners also claim that running their business is a lot more stressful than raising kids.
25. 44% of entrepreneurs had two or more children.
Many entrepreneurs have a family. According Natalie Sisson’s “The Suitcase Entrepreneurs” online post, entrepreneurship statistics show that about 44% of entrepreneurs had two or more children.
26. 19.6% of self-employed professionals work in the construction/trades field.
Being an entrepreneur does not necessarily involve a person working in the same business as others. With a huge number of industries out there, you are more likely to find entrepreneurs that specialize in running different business types. The construction/trades field has a large percentage of entrepreneurs running businesses. According to top statistics, 19.6% of self-employed professionals work in the construction/trades field.
Entrepreneurship is common everywhere in the world. Surprisingly, many of the most entrepreneurial countries, like Brazil, are still developing. According to entrepreneurship statistics, this is due to the higher number of opportunities to start a venture. Hence, these countries have more entrepreneurs than most other nations.
These top facts and figures that will help you understand how people view entrepreneurship. If you intend to become one yourself, these same entrepreneur stats are sure to give you better insight on what to expect. Being an entrepreneur is a tough job, but anyone can be successful at it if they truly understand the process.
What percent of entrepreneurs are successful?
When it comes to running a business, about 80% make it through their first year. This percentage tends to gradually reduce as the years go by. Only 70% survive their second year, and by the tenth year, only about 30% remain in business.
What is the failure rate of all entrepreneurs?
According to the SBA, 30% of new businesses fail during the first two years of their conception, 50% during the first five years, and 66% during the first ten years.
What percent of entrepreneurs went to college?
According to Cnbc, 44% of entrepreneurs earned a college degree. A good number of entrepreneurs who have no degree are from developing countries. This accounts for the fact that the most entrepreneurial countries are the developing ones, as entrepreneur statistics make abundantly clear.
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India and its stand on the Solar Energy
India is one of the largest contributors to the carbon emission after China and USA. Though steps have been taken to reduce the emission and policies have been implemented, but are they enough?
Let’s find out what challenge we need to overcome and what India’s stand on the Solar Energy is:
- India’s Solar Power Potential: As per the Ministry of the New and Renewable
Energy (MNRE), the country’s total solar potential is 750 GW.
- As of 2018, India’s Solar Grid has reached a capacity of 26 GW in comparison with 3 GW in 2014.
Current Challenges for India:
- India’s Capacity Utilization Factor (CUF) of solar photovoltaic is between 11%-30% which is less. CUF is the energy generated as a percentage of installed capacity.
- It’s not cost effective because of its low efficiency of panels and high costs of battery.
- Solar Rooftop System has a high cost of initial installation.
- Competition from Coal Power Generation Plants emerged as cheaper with lesser emissions and higher efficiency.
Lack of Indigenous Manufacturing Capacity for Solar panels:
- India imports over 90% of its solar panels.
- China is flooding India with its solar panel exports which further endanger the growth of Indian Companies.
- Availability of Land: 250 acres of land for every 40-60 MW generated.
- Minimal Research& Development done on Solar Technology in India.
Steps Taken To Overcome These Challenges:
- India’s Solar Energy targets: 100 GW solar power installed capacity by the end of 2123022.Ministry of New and Renewable Energy (MNRE) has proposed to achieve it through 60 GW of large and medium scale solar projects, and 40 GW through rooftop solar projects.
- The Ministry of New and Renewable Energy (MNRE) under its scheme has proposed Development of Solar cities.
- Over 34 solar parks in 21 states with an aggregate capacity of 20,000 MW have been approved.
- Scheme for farmers for installation of solar pumps and grid connected solar power plants.
- Sristi Scheme: It is sustainable rooftop implementation for a solar transfiguration of India under which Indian Government subsidizes rooftop solar plant installation.
- International Solar Alliance: Led by India and France that will focus on promoting and developing solar energy and solar products in remote areas. The International Solar Alliance is an alliance of over 122 countries started by India, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
So, we can say India is moving the right direction towards using the solar potential and the future looks bright.
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Make Togolese agriculture competitive and attractive? And especially how to encourage banks and financial institutions to invest in this sector? It is to answer these problems that the government has launched the MIFA, Mechanism Incentive for Agricultural Financing.
The report is clear: the agricultural sector accounts for 40% of Togolese GDP. It’s almost half. Yet agriculture is only funded at 0.3%.
Why ? Because the sector is considered “risky”, especially because of climate threats that can damage or even destroy crops.
MIFA then acts as a guarantee fund. The guarantor is the state itself. As the risks are shared, financial institutions are less afraid to finance cooperatives or small farmers. Because this is the challenge, allowing “small farmers” to have access to credit to develop and become more competitive.
The establishment of this funding mechanism is based on an effective program in Nigeria since 2013, the NIRSAL (Nigeria Incentive-Based Risk Sharing System for Agricultural Leading).
MIFA is financially supported by the International Fund for Agricultural Development (IFAD) and the African Development Bank (AfDB).
The program is in its pilot phase. It is expected to reach 5,000 farmers in the first phase and eventually reach almost 1 million producers in the value chains. For this first phase, the focus will be on cassava, maize and rice. rice. These channels should benefit from better access to loans, as well as a significant decrease in interest rates on loans from 15% to 7.5%.
Remember that Togo has 7 million inhabitants, 75 per cent of whom are under 25, 75 per cent live in rural areas, in a country where agriculture provides 60 per cent of the labor force.
Kapital Afrik intends to deliver strategic financial information to executives and managers, through a daily newsletter and a website that covers all African finance.
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Have you ever considered establishing a trust to protect and transfer your assets ?
What is a trust?
A trust is a fiduciary arrangement through which a person (the settlor) transfers the legal title of his/her assets to another person or company (the trustee) who/which holds the assets on behalf of the beneficiary/beneficiaries. The legal title of the assets is vested in a trustee while the beneficial ownership is being vested in the beneficiary/beneficiaries. The trustee is responsible for managing and administering those assets in the best interests of the beneficiary/beneficiaries.
Main benefits of a trust
If the settler gets into financial difficulties, e.g. bankruptcy, divorce, etc., the assets placed in a trust are protected.
Well structured and administered trust can benefit substantial savings in income tax, capital gains tax, estate duty and inheritance tax.
The details of assets placed under a trust are confidential and can not be disclosed to the public.
Trust can provide a flexible way to make arrangement for the distribution of the settlor’s assets.
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Coins have a face value and must be issued with government backing. More often than not, coins are circular pieces struck from precious metals like silver or gold. However, coins do not always have to be round, and some mints strike fascinating “shaped coins” such as this Shark-Shaped coin from the Solomon Islands and this Darth Vader Helmet shaped mask from Niue. For some of the unique shapes that coins can be issued in, check out this Info-Vault article about our top 9 odd-shaped coins. The key definition of a coin is that is legal tender with a face value and was issued by a sovereign mint either as a piece of circulating coinage or as a collectible coin. It should be noted that face value does not equal the value of the coin itself, but rather what it would be worth in a financial transaction. For example a Silver Eagle may have a face value of $1, however due to the spot price of silver at the time among other factors, the coin will be worth more than just its face value.
Coins issued by sovereign mints are often more restricted and conservative in terms of designs as they are determined by a committee or legislation.
Rounds are very similar to coins in that they are round pieces struck from precious metals, and even feature impressive designs sometimes. The primary difference between coins and rounds is that coins have a face value and rounds do not. Rounds are issued by private mints who do not have the authority to authorize legal tender and therefore do not have a face value. This means that the value of rounds is based on the precious metal content and its value at a given time.
As their designs do not have to be formally approved by a legislative body, rounds can be struck with a wide variety of designs ranging from political interests to religious themes to movie characters and beyond.
Some rounds are replicas of famous coin designs such as this Morgan round from the Highland Mint that is closely based off of the famous Morgan Silver Dollar issued by the United States Mint, but lacks a few key details such as a face value and a U.S Mint mark (a HM is used instead). Rounds are also often less cost prohibitive than buying coins issued from sovereign Mints which makes them ideal for bullion stackers.
Bars are generally issued by private mints although some sovereign mints, such as the Royal Canadian Mint, do issue them as well. Bars are generally issued for those looking to buy precious metals like silver and gold in bulk and do not have a face value even when issued by sovereign mints. Common silver bar weights include 1 oz., 5 oz., 10 oz., 1 kilogram, and 100 ounces. Bars cannot be used in financial transactions are instead traded based upon their silver content and purity based off the spot price at the time.
For further reading on the differences between coins, bars, and rounds, check out this other informative Info-Vault article.
ModernCoinMart® is a retail distributor of coin and currency issues and is not affiliated with the U.S. government. The collectible coin market is unregulated, highly speculative and involves risk. ModernCoinMart reserves the right to decline to consummate any sale, within its discretion, including due to pricing errors. Prices, facts, figures and populations deemed accurate as of the date of publication but may change significantly over time. All purchases are expressly conditioned upon your acceptance of ModernCoinMart’s Terms and Conditions (www.moderncoinmart.com/terms-conditions.html or call 1-800-362-9004); to decline, return your purchase pursuant to ModernCoinMart’s Return Policy. © 2019 ModernCoinMart. All rights reserved
||ModernCoinMart (MCM) sets the standards for online sales of bullion, US coins and world coins with free shipping, competitive pricing, a large selection and customer service that will amaze you. Confidence. Trust. Reliability. That's the MCM way.|
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Coastal Capital: Economic Valuation of Coral Reefs in Tobago and St. Luciaby , , and -
The economic benefits derived from coral reefs are vital to the economies of small island states in the Caribbean. Economic valuation of these benefits helps to guide the wise, sustainable use of these resources.
Coral reefs provide many benefits, sometimes called ecosystem goods and services, which are of high value and critical importance to local and national economies in the Caribbean.
These values are frequently overlooked or underappreciated in coastal investment, development and policy decisions, resulting in short-sighted decisions that do not maximize the long-term economic potential of coastal areas.
This project focuses on development of a valuation methodology that will be broadly applicable in countries across the Caribbean, supporting wise, long-term coastal policy and management.
This report provides a comprehensive summary of the valuation methodology as well as valuation results from implementation in two pilot sites in the Eastern Caribbean (St. Lucia and Tobago). Shorter, island-specific summaries of results, along with an Excel-based Valuation Tool for implementing the methodology are available from www.wri.org/project/valuation-caribbean-reefs.
Estimating the economic benefits of coral reefs to local economies is neither easy nor straightforward, due to the range of approaches available and frequent limitations of underlying data. Many valuation methods exist, and results are rarely comparable.
A priority for this project has been the development of a simple, broadly applicable methodology to value coral reef goods and services, based predominantly on commonly available data. Use of a consistent approach should lead to more comparable estimates of value for different places and time periods. An easily replicable methodology can also be applied while varying key assumptions in order to assess the impacts of different development and management options.
This methodology does not assess Total Economic Value (TEV), but rather focuses on three key goods and services: coral reef-associated tourism, fisheries, and shoreline protection services. These goods and services were chosen because of their importance to local economies and because data are available to support estimation of these values.
The method was developed based on literature review, feedback from local partners and examination of coral reef use and data availability in two pilot locations (St. Lucia and Tobago).
The results from the economic valuation of coral reefs in St. Lucia and Tobago—sites with very different coastal management and data richness situations—are presented in this paper. Even assessing only a subset of goods and services demonstrates that the benefits provided by coral reefs are economically significant, particularly with respect to island GDP. These estimates should be viewed as lower bound (partial) estimates of the economic contribution of coral reefs to the economy of these two islands.
The economic impact of coral reef-associated tourism and recreation and fisheries is evaluated using a financial analysis method—tracking the financial flows generated by these two industries, and their wider impact on the economy. Shoreline protection services are evaluated using a modified avoided damages approach, where the value of a reduction in wave-induced erosion and property damage due to coral reefs is estimated.
The methodology, as well as the Valuation Tool, uses a tiered approach, allowing results to be calculated at different levels of detail depending upon the data available.
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Engaging in strategic financial planning can assist you to achieve personal wealth. Whether you wish to build a retirement nest egg, purchase a vacation home, buy your child’s college education or purchase investment property, financial planning is best way to reach your goals.
In today’s economy financial planning never been more important. Unfortunately, many people falsely believe they do not possess enough money glacierpartnerscorp.com to save lots of for the future. The truth of the matter is a lot of people can put aside at the very least five dollars a week. It’s merely a matter of reviewing finances and making minor budget cuts.
Individuals who are living paycheck to paycheck might want to consider obtaining credit counseling. Although most credit counselors charge a fee, there are numerous non-profit agencies that start using a sliding scale to modify fees for those who have low incomes. Based on income levels, some people can obtain credit counseling at no cost.
Many choices are available to greatly help people commence with financial planning. The Internet provides a success of educational resources to greatly help consumers regain control of personal finances. Local libraries offer numerous money management books, along side home study investment courses.
The first step of financial planning requires thorough review of income and expenses. Most consumers do have more money than they realize, but often waste it buying unnecessary items. An easy way to ascertain if you are wasting money would be to track every expense for one month. Take note of every penny spent, than review to ascertain where expenses can be trimmed.
If you learn you are spending $100 each month on coffee drinks, junk food lunches, yard sale items and online purchases, consider eliminating those expenses and placing that profit a top interest savings account. Within the course of 10 years, this bit could develop into $12,000 plus interest.
Financial expert, Suze Orman, suggests setting aside a minimum of 10-percent of earned income prior to paying living expenses. Lots of people feel guilty about paying their self first, but if you wish to get ahead in life you must learn how to include savings in your household budget.
One credible source for learning how financial planning will help you feel debt-free is Dave Ramsey. Ramsey is known for his no-nonsense way of debt management. His website is filled with debt reduction tools and advice that may help anyone achieve financial freedom regardless of these income.
Ramsey’s website offers his no-cost Gazelle Budget Lite online budgeting software to greatly help consumers create a zero-budget financial plan. Visitors can peruse financial planning articles, download household budgeting forms, purchase personal finance, money management and investing books, attend financial classes or obtain personal coaching from Ramsey’s Financial Peace University.
Another great source for studying various financial strategies is through certified financial planners. These professionals will help consumers achieve short- and long-term investment goals. They’re trained to greatly help individuals be familiar with negative spending habits and learn how to implement get free from debt strategies.
The best place to locate certified planners is through the Financial Planning Association website at FPAforFinancialPlanning.org. Visitors can locate information about retirement planning, estate planning, saving for college and purchasing a home.
There’s never been a much better time to start financial planning. The sooner you begin, the easier it’s to build wealth. Before you dive in, take time to conduct research to ascertain which kind of planning is best suited for your needs. Then, create a savings plan and create a commitment to stick to it!
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Principle of diversification(redirected from Diversification Principal)
Principle of diversification
That portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk. In other words, unsystematic risks disappear in diversified portfolios, and only systematic risks persist, those related to particular assets.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Principle of Diversification
A principle of investing stating that a portfolio containing many different assets and kinds of assets carries lower risk than a portfolio with only a few. The principle of diversification states that unsystemic risk may be alleviated through diversification, but systemic risk is more difficult to reduce. That is, the risk associated with a single investment or type of investment may be offset by the risk of another investment or type of investment. See also: Diversification.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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What is a Fixed Income Investment?
Introduction to Investment Planning – Part 2.1
Bonds are fixed income investments
“Stocks and bonds”: These are the basic building blocks of an investment portfolio. I will write about stocks in an upcoming post, but after my discussion of cash or cash-like assets (e.g., savings accounts) in my previous article, I thought it best to take the next rung upward on the risk ladder.
When you lend money to a friend, it is usually a small amount for a short term. An example might be when you go out to a restaurant together with several of your friends. A friend sitting beside you suddenly leans over to you and asks, “Can you pay for my meal? I forgot my wallet and my phone. I’ll e-transfer you the money tomorrow.” As your friend is not in the habit of asking for this sort of thing, you trust him and cover his part of the meal, which comes to $40. It’s not a lot of money and it’s only for one night. You will be content with getting your money back.
What would your response be if your friend asked to borrow $40,000 from you as seed money for a new business venture of his and said he would pay it back in four years? That is not a small amount of money. Furthermore, you could be using that money for some other purpose during those four years so not having it at your disposal is a kind of hardship. You would probably ask for more than $40,000 in return.
You and your friend agree on a rate of 4% interest per year over the four years and that he is to pay you the interest semi-annually (every six months). That works out to $800 for each interest payment. After you’ve lent your money to your friend, these are the payments you expect in return.
|Year 1 Payment 1||Year 1 Payment 2||Year 2 Payment 3||Year 2 Payment 4||Year 3 Payment 5||Year 3 Payment 6||Year 4 Payment 7||Year 4 Payment 8 + Return of Principal|
This is essentially a description of a bond. You have bought a bond from your friend. In return you get eight semi-annual payments of $800 (a fixed income) for the life of the bond and when the bond matures, you get your principal back.
Bonds are issued by a variety of entities. Governments are among the biggest such borrowers of money. They are also the most secure, so you are likely going to get a lower interest rate from a government bond than you will from a corporate bond. Government of Canada bonds are the most secure and are consequently given a AAA rating.
Provincial bonds will have a lower credit rating but are still considered investment grade. For example, the Province of British Columbia has a AAh (h = high) rating on its bonds, while the province of Newfoundland and Labrador has an Al (l = low) rating. Consequently, in order to attract buyers to its bonds, the lower-rated issuer must offer a higher yield.
There are other government sources of bonds, such as from cities (municipal bonds) or government agencies (agency bonds).
Corporate bonds, as the name suggests, are issued by corporations. Rather than issue stock, that is, equity or a share of ownership in the company, management chooses to raise money by borrowing it in the form of issuing bonds. Since companies are not governments, they do not have the ability to raise funds through the power of taxation. Therefore, they are not as credit worthy as government entities and will most likely have to offer higher interest rates to attract investors to their bonds.
Why invest in Bonds?
Beyond collecting the interest that is due to bondholders, bonds provide at least two benefits that make them a good partner for investments in stocks. The first thing they provide is stability. Stock markets can move up or down dramatically in a single day. Individual stock prices can move even more. Bonds tend to be much less volatile. If you own a 50/50 portfolio of stocks and bonds, and the stocks you invest in drop an average of 5 percent, while the bond portion of your portfolio barely moves, you have only had a decrease in value of 2.5 percent. That stability can be very reassuring.
The second thing bonds provide is a counterweight to equities. When stock markets drop, people tend to seek safety, and since bonds are perceived as safer than stocks, people buy bonds. When bonds are in demand, bond prices go up. In the scenario above, where your stock investments decline by 5 percent, your bond investments might go up by 2 percent. The net loss of your overall portfolio might then be no more than 1.5 percent.
A third benefit is the interest received from bonds. These days, with interest rates so low, that does not seem like much of a benefit, but added onto the potential for growth in value if interest rates drop, even low interest rates should not be ignored.
In sum, bonds are a good diversifier that often make sense when paired with riskier, more volatile equity investments.
More to come on fixed income investing in the next post.
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Disclaimer: This blog post is intended for general information and discussion purposes only. It should not be relied upon for investment, insurance, accounting or legal decisions.
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The new order would be a huge boost for electric vehicles, and vehicles using alternative fuels like hydrogen, and could boost a sector that’s already surging in California.
As an announcement from the California governor’s office indicates, the transportation sector is responsible for more than half of all of California’s carbon pollution, 80% of smog-forming pollution and 95% of toxic diesel emissions.
“This is the most impactful step our state can take to fight climate change,” said Governor Newsom, in a statement. “For too many decades, we have allowed cars to pollute the air that our children and families breathe. Californians shouldn’t have to worry if our cars are giving our kids asthma. Our cars shouldn’t make wildfires worse – and create more days filled with smoky air. Cars shouldn’t melt glaciers or raise sea levels threatening our cherished beaches and coastlines.”
After the order, the California Air Resource Board will develop regulations that will mandate 100% of sales of passenger cars and trucks are zero-emission by 2035.
Setting the 2035 target would achieve reductions in greenhouse gases above 35% and an 80% improvement in oxides of nitrogen emissions from cars.
The board will also develop regulations that require operations of medium and heavy-duty vehicles to be fully zero-emission by 2045, where feasible.
Under the order, state agencies in partnership with the private sector will be required to accelerate deployment of affordable fueling and charging options. The order also requires broad accessibility to zero-emission vehicles, according to a statement.
What it won’t require is for Californians who own gasoline-powered cars to give them up or deny car owners the ability to sell their gas-powered cars in the used car market.
With the initiative, California is joining 15 countries that have already committed to phasing out gas-powered cars, according to a statement.
Built into the order is an assumption that zero-emission vehicles will be cheaper and better than fossil fuel-powered cars, but there are significant hurdles — and opportunities before the market gets there.
There’s going to need to be a massive buildout of charging stations and fueling stations for electric and hydrogen powered vehicles. New charging technologies will need to be put in place to enable faster charging, and new financing models will need to be put in place to ensure the kind of accessibility the California government is requiring.
All of these opportunities should have startups champing at the bit, and several companies, like the new electric vehicle manufacturers launching to compete with Tesla, the new charging technology developers and others, will have Newsom to thank for the sudden boost in their valuations.
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- How do you calculate direct labor cost?
- What is the formula for calculating labor cost?
- Is Rent a direct expense?
- Are direct materials a fixed cost?
- What type of cost is direct labor?
- What are the 4 types of cost?
- What are examples of fixed costs?
- How do you calculate cost per hour?
- Is labor a fixed cost?
- What are direct fixed costs?
- Is rent a fixed or variable cost?
- What are the 3 types of cost?
- What is direct material cost example?
- What is total labor cost?
- What are examples of direct labor?
How do you calculate direct labor cost?
Once you have the total cost, the direct labor rate is calculated by dividing that dollar amount by the total hours of labor calculated earlier.
The result is the direct labor cost per hour for the production of that product or the delivery of that service..
What is the formula for calculating labor cost?
Calculate an employee’s labor cost per hour by adding their gross wages to the total cost of related expenses (including annual payroll taxes and annual overhead), then dividing by the number of hours the employee works each year. This will help determine how much an employee costs their employer per hour.
Is Rent a direct expense?
Understanding Direct Costs Although direct costs are typically variable costs, they can also include fixed costs. Rent for a factory, for example, could be tied directly to the production facility. Typically, rent would be considered overhead.
Are direct materials a fixed cost?
Key Takeaways. Direct costs are expenses that can be directly tied to the production of a product and can include direct labor and direct material costs. Direct costs can be fixed costs such as the rent for a production plant.
What type of cost is direct labor?
The Differences Between Direct and Indirect Costs of Labor The direct labor costs are those expenses that can be directly traced to production. XYZ, for example, pays workers to run machinery that cuts wood into specific pieces for chair assembly, and those expenses are direct costs.
What are the 4 types of cost?
Following this summary of the different types of costs are some examples of how costs are used in different business applications.Fixed and Variable Costs.Direct and Indirect Costs. … Product and Period Costs. … Other Types of Costs. … Controllable and Uncontrollable Costs— … Out-of-pocket and Sunk Costs—More items…•
What are examples of fixed costs?
Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.
How do you calculate cost per hour?
Calculate Your Hourly Rate Business schools teach a standard formula for determining an hourly rate: Add up your labor and overhead costs, add the profit you want to earn, then divide the total by your hours worked. This is the minimum you must charge to pay your expenses, pay yourself a salary, and earn a profit.
Is labor a fixed cost?
Labor is a semi-variable cost. … Fixed costs remain the same, whether production increases or decreases. Wages paid to workers for their regular hours are a fixed cost. Any extra time they spend on the job is a variable cost.
What are direct fixed costs?
Costs that are incurred by and solely for a particular product or segment but which do not vary with an activity level.
Is rent a fixed or variable cost?
Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.
What are the 3 types of cost?
Types of costsFixed costs. Fixed costs are costs that do not vary with the level of output in the short term.Variable costs. A variable cost varies in direct proportion with the level of output. … Semi-variable costs. … Total costs. … Direct costs. … Indirect costs.
What is direct material cost example?
Direct materials cost the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing. The manufacture of products or goods required material as the prime element.
What is total labor cost?
A business’ total labor cost is the amount of money it pays to all of its direct labor employees over a specific period.
What are examples of direct labor?
Direct labor includes all employees responsible for producing a company’s products or services. Some examples of direct labor include quality control engineers, assembly line workers, production managers and delivery truck drivers.
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Costs, Volumes and Profits
The difference between business revenue and costs of operation make up business profits. Sales volumes and the cost of products or services can impact the potential of a business to generate profits. This relationship is explained through cost-volume-profit analysis.
The difference between sales and variable costs or the cost of goods and/or services sold makes up profits. After deducting fixed costs from the gross profit, you are left with income or the net profit. Fixed costs range from rent and interest to insurance and labour costs. They are indirectly related to production of goods and services.
Higher costs lead to lower profits and vice versa. Increasing revenue or lowering costs can increase profits. Improving the efficiency of business operations, reducing the cost of material and cutting on labour can reduce costs. The cuts on costs should not cause a drop in business revenue to increase profits.
If the sales volumes are higher than variable costs, more profits can be generated. Constant sales volume and revenue with reduced costs can increase profits. This course explains the relationship between costs, volumes and profits through cost-volume-profit analysis.
We show how changes in prices, margins and unit volumes of products or services can affect a company’s ability to generate profits. Cost-volume-profit or CVP analysis is a critical tool for financial analysis that helps businesses determine their ability to become profitable.
You Will Learn:
- The definition of the terms: costs, volumes and profits
- The relationship between costs, volumes and profits
- How to calculate cost-volume-profit or CVP analysis
- The assumptions made during CVP analysis
- How to calculate contribution margin and contribution margin ratio
- Pound and unit break-even points
- How to create a contribution margin income statement
- The benefits of CVP analysis
Benefits of the Course:
Taking this course will help you:
- Know the relationship between cost, volume and profits
- Know how to calculate CVP analysis
- Know how to use analysis results to increase business profits
- Know the importance of the relationship of cost, volume and profits in business operations
- Know the various benefits of CVP analysis in business
- Learn how to increase profits in your current or future business
Who can take the Costs, Volumes and Profits Certification course?There are no entry requirements to take the course.
What is the structure of the course?The course is broken down into 1 individual modules. Each module takes between 20 and 90 minutes on average to study. Although students are free to spend as much or as little time as they feel necessary on each module.
Where / when can the course be studied?The course can be studied study at any time and from any internet connected device
Is there a test at the end of the course?Once you have completed all 1 modules there is a multiple choice test. The questions will be on a range of topics found within the 1 modules. The test, like the course, is online and can be taken a time and location of your choosing.
What is the pass mark for the final test?The pass mark for the test is 70%.
What happens if a user fails the test?If the user doesn’t pass the test first time they will get further opportunities to take the test again after extra study. There are no limits to the number of times a test can be taken.
How long does it take to complete the Costs, Volumes and Profits Certification course?We estimate that the course will take about 0.75 hours to complete in total, plus an additional 30 minutes for the end of course test.
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Canada On Track to Hit Paris Target 200 Years Late as NEB Endorses Carbon Tax
Carbon taxes are an efficient way to reduce energy use and related carbon pollution in homes and businesses, fostering greater innovation and adoption of clean energy technologies, Canada’s non-partisan National Energy Board (NEB) concludes in a report issued last week.
“Pricing carbon and adopting complementary climate actions will encourage businesses and households to improve efficiencies and reduce emissions while helping to build a more resilient economy,” the report stated. “Carbon taxes often require little additional bureaucracy and can be incorporated within an existing tax system,” it added, and they’re “transparent and predictable.”
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That analysis represents a shift from the Board’s past uncertainty about the federal government’s ability to enforce carbon pricing across Canada, National Observer reports. But the report “finds that while Canada is diversifying and adopting cleaner energy sources, it remains one of the most emission-intensive countries in the world. It identifies the pace by which Canada will be able to transition to a low-carbon economy as a significant area of uncertainty.”
“The drive to reduce [greenhouse gas] emissions is a global focus, and Canada’s energy transition to a lowercarbon economy faces a variety of challenges and uncertainties,” NEB Chief Economist Denis Charlebois said in a release. “Our report provides an overview for Canadians on how the pace of change in energy markets, policy, and technology may impact Canada’s energy transition.”
The report indicates that “Canada’s energy sources are becoming more diverse, and energy use and economic growth are decoupling,” Observer states. “The regulator notes Canada’s energy demand is already slowing, and energy sources are becoming less carbon-intensive. In a scenario in which Canada adopts more clean energy technologies, Canadians will use 15% less total energy and 30% fewer fossil fuels by 2040.”
At that rate, analyst and self-described “chart geek” Barry Saxifrage writes in a separate post for Observer, Canada is on track to meet its 2030 climate targets—200 years late—and to hit its 2050 goals by the year 2961. (As Saxifrage suggests, let’s all mark our calendars, shall we?)
“One thousand years might sound shocking but, actually, I’ve been low-balling the problem. If you look more closely at the emissions data, we would never reach Canada’s climate targets,” he writes.
That’s because the Canadian fossil industry “has its own ‘overall trend’ when it comes to emitting climate pollution. And its emissions trend has been rapidly and relentlessly upwards for as long as Canada has been keeping records,” at a rate of 2% per year (a doubling every 35 years) since 2005.
Already, he says, Canada’s oil and gas industry “pollutes 50 million tonnes more than the entire country’s 2050 climate target.”
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