Foreign Perspectives

Archive for the ‘Economy’ Category

This recession is turning into a much longer and deeper one than anyone expected which is becoming more visible to a wider range of people as time goes on.

Individual house sales are a fairly rare event for most people so we’re still seeing people putting houses on the market at prices based on a purchase price from a few years ago which, in many cases, was a higher price than the current market will support. That houses won’t sell at these prices is obvious but in many cases the owners simply can’t afford to sell them at the current prices so they add to the collection of “for sale” signs which in turn make things seem a little bit worse as their numbers build. As an example of how far away from the current prices these can be take the example of a house a few hundred yards from me which was bought at the peak of the market at around £300,000 whereas identical houses are now selling (slowly) for around £170,000. Had those people bought on an 80% mortgage they’d need house prices to rise another 40% from their current level just to cover the mortgage.

However, even when houses are priced at an appropriate level that still doesn’t mean that they’ll sell quickly as once a buyer is found and the house is taken off the market it’s quite likely to get the “for sale” sign back as buyers frequently can’t get mortgages: in one local case it took three buyers before reaching one who could get a mortgage.

Sadly all this means that people will be stuck in their houses potentially for decades if they can’t simply write off what could be a substantial loss.

Whilst we all think that we’d like to live in interesting times, of course such times are interesting because they are filled with the unexpected which is usually a sign of trouble.

Thus over the last couple of years we’ve had by far the most interesting time in global economics for many decades. That interest came in the form of banks and economies around the world collapsing and with the corresponding knock-on effect on the real world in terms of jobs lost, businesses closing, houses being repossessed and taxes rising. And it’s not over yet.

Throughout all that global bad news there have been untold numbers of individuals receiving their own bad news ranging from job losses through to families finding themselves out on the street due to reasons outside their control.

I’m sure that many people would prefer to opt for living in really boring times these days.

Prosperity for all is the aim but it’s going to be a long time before we get to that point as this budget is all about repairing the foundations of the economy that were so badly damaged by the previous Labour administration.

There’s a sensible capping of benefits almost across the board with probably the largest headlines to come from the cap on housing benefit. One suspects that the largest headlines to come will be from some of those in the million pound housing benefit mansions.

What it also cut was a whole raft of seemingly minor benefits which were introduced piecemeal over the course of the previous Labour administration. What all those different benefits largely did was to create a whole bureaucracy to administer them with little benefit for those who probably needed them most who never even knew they existed.

Increasing VAT to 20% after next Christmas is the single measure that paid for much of the changes. Notably this is a simple measure rather than the complex mix of additional tarifs that some recommended in terms of eliminating exemptions to childrens’ clothing or books.

With the announced substantial cuts in government spending there’s going to be something of a forced move from the public to the private sector for many. That’s going to need equally substantial retraining in many instances.

What this is intended to do overall is to get rid of what has become a crippling level of public debt in a remarkably short period of time. That rapid reduction meant a fairly harsh budget but one that should get us back on an even keel within the forseeable future.

It’s been a very long time since we had the opportunity to view how the use of a wide range of products changes when the price of them goes down.

Sure, we’ve been used to that happening on all kinds of electrical and electronic items with computers almost dropping to the fashion item price range (hence the arrival of colour choice recently of course). However, who’d have thought of that very same thing happening to something like eyeglasses?

That’s a product that’s historically been seen as involving highly trained opticians, expensive offices and skilled technicians which overall seemed very much like a recipe for high prices as far as you could see. Except that online retailers like ZunniOptical are changing all that with prices at the bottom end of the range (which don’t look like el cheapo glasses by any means) coming in for pretty much loose change.

Clearly when a product drops into that “loose change” price range from previously having sat well in the “fairly serious money” price range then there’s going to be big changes in how it’s perceived and used. For one thing, the concept of having a single pair of glasses purely because it wouldn’t be worthwhile to have more than one pair doesn’t hold any more. Thus, even at the lowest price there is heaps of choice and the opportunity to match your glasses to your outfit in a way that wouldn’t have been viable before.

I wonder what’ll be the next product that this will happen to?

I’m rather uneasy about the job offer that I quite unexpectedly received earlier in the week for a whole host of reasons.

The job description requires experience in four software products of which I’ve limited experience in only one of them. Moreover, it requires one to work 60 to 80 hours per week when I’m aiming for 30 to 37. I made all that very clear at the job interview so I was quite amazed to put it mildly when I received a phone call to say that they’d offered me the job.

The call was from someone in personnel who had spoken to someone two levels up from the people that I’d spoken to. They obviously couldn’t be expected to know anything about the software product requirements but the call was to clear up the number of hours to be worked. Somehow the people they spoke to understood that 30 to 37 hours was enough to do the work along with 1 weekend in 3 oncall. Yet, the job specification was very clear that oncall (ie being available on the phone and to come in) was required 365 days a year with regular weekend work. In fact, at the interview I clarified that this was the case and in fact the “regular weekend work” actually meant every weekend and that the weekly hours weren’t the 60 or so that I’d estimated but more like 80.

Last time I heard of such a discrepancy was when a colleague went for a job some years ago. The people several levels up assured him that it was basically a fantastic job that he’d love. In reality, when he took it on that basis it turned out that it was the worst job he’d ever had and in fact the one that I’d told him it would be. That discrepancy is just as extreme for this job offer as it was for him.

So I have an offer for a job which I know I can’t do without a fairly substantial chunk of prior training and one which almost certainly requires substantially more than the legal maximum of 48 hours a week. Actually, even the personnel people would be requiring me to sign away my right not to work more than 48 hours a week and that’s something I also made very clear at the outset that I wouldn’t do.

Why the offer at all though? Well, I suspect that the management who made the offer have made some commitment to their own management that they’d get more people into the branch pronto and will basically take anyone they can get, regardless of fit.