Foreign Perspectives

Archive for the ‘Finance’ Category

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.

When the welfare state was set up in Britain back in the 1940s, it had the laudable aim of supporting those in time of need and the expectation that those in need would want to get out of a dependence on benefits as soon as they could.

The effect of that was that, over time, the amount paid out to people on benefits gradually increased. Initially the level of benefit was set very much at the subsistance level but the amounts involved have increased over the years with the aim being to have the payments at slightly less than the average wage. However, simultaneously with those increases has come a restructuring of the benefit system ostensibly to target those most in need and that’s where the problems are becoming apparent.

For example, take a typical family of two adults and two children which is what the original welfare state calculations would have been based on. Should the man become unemployed (another welfare state assumption was that the man was the wage earner) then they would be entitled to payments of approximately £60 for the adults and £55 each for the children (including the child benefit). That’s a total of  £170/week, £740/month or £9000 per year. Since the benefits are tax-free, that’s the equivalent to a salary of around £14,000. Not great, though there would be additional help in the form of housing benefit, free school meals and a few other things.

However, let’s take an example of two adults plus ten children. Too many children? Well, no, because families of that size are increasingly common in some areas for reasons which will become apparent shortly. Each child adds £55/week so the totals now come to £600/week, £2600/month or £32000 per year. Bearing in mind that the benefits are tax-free this equates to a salary of around £50,000 and, of course, there’s the housing benefit, free school meals, etc. Even though I’m quite highly qualified, I would find it difficult to get that level of salary.

Now, I accept that people with large families don’t necessarily have them to pick up massive benefit payments but even if they don’t, surely there should be some kind of limit in terms of a maximum benefit payment regardless of other circumstances? If not, it would appear that the best plan would be to pop out kids on a regular basis: it can’t be right that the benefit system seems to be actively encouraging that.

Most people don’t consider it a big deal if their house (ie buildings) and home (ie content) insurance isn’t with the same company. After all, why not just go for the cheapest in both categories?

That sounds fine and it may well save you some money but the problem with the UK home insurance market is that insurance companies that do content insurance have a list of stuff that counts as being “content” and a different list of stuff that counts as being “buildings”. Unfortunately, these lists aren’t completely identical between the various companies so you can find some things listed as “content” by one company that will appear on the “buildings” list of another company. That discrepancy is why it’s essential to keep both policies with the same company.

Most of the time it won’t matter. After all, clearly the bricks are part of the building and clearly the furniture is part of the content. What about something like an outdoor BBQ that incorporated a seat made from bricks? It might seem a somewhat contrived example but there are lots of similar grey areas that insurance companies create through these different lists.

Don’t forget too that if, even if you’re lucky enough to have any problem that arises completely covered by two different companies, that means that you’re looking at two separate insurance excess payments which these days can mean anything up to £1000 or so.

We’re all used to the price of computers and electronic items generally dropping in price over the years but it happens to some surprising items outside that arena too.

One major example I spotted lately was the Encyclopedia Britannica. Way back in 1981 that cost £600 for the full set yet now you can pick up the 2007 equivalent for £450. Granted, that’s on an offer at the moment but even without that offer it’s still only £745 (although, oddly, the 2010 edition is only £712!). That gets you a LOT of books: the 32000 pages spread over 32 volumes add up to over four feet of shelf space and weigh in at over 60 kilos.

Yeah, I know, people tend to look towards DVD or online versions of these things these days and, yes, I know that the paper one will date a whole lot but I still quite like having the books sitting there to leaf through. Besides, in reality, knowledge doesn’t really date that quickly. Sure, the likes of the Haiti disaster won’t be in even the 2010 edition but then it’s not so much the immediate information that you want in an encyclopedia but the more historic stuff and that doesn’t change terribly quickly.

Now, if only I could find a corner in the house to fit them in…