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Archive for the 'business' Category

Australia Needs an Honest Conversation about Unemployment & the Economy

Wednesday, August 7th, 2019

Every so often I want to pull out my eyeballs and throw them at the media. No, at society. At a society that demonises unemployment as a personal failure, but at the same time does not understand the structural integrity of the economy being underpinned by a need for job scarcity. Australia demands about 5 per cent of our labour market must be unemployed in any given week at a participation rate currently around 66 per cent. And government will take measures to ensure that happens. But nobody is having that conversation outside economics. Certainly not in politics.

The Scarcity of Labour and Inflation

Enter the economic concepts of the Full Employment Rate of Unemployment and the non-accelerating inflation rate of unemployment. In short, employment and inflation are linked. And inflation is controlled using the scarcity of labour (aka jobs). In that relationship we choose a full employment rate of unemployment to be around 5 per cent; this calculates to approximately 700,000 job seeking Australians that we would rather, as an economy, weren’t able to get a job in the given fortnight.

Here’s the idea in a nutshell. If too many people get work then the scarcity of labour falls to a point that recruiters would need to offer higher wages to attract employees. The market power would be in the hands of the workers. This means the companies would have to charge more for their products and services to cover those higher wages. In turn, the rising cost of products and services to those workers increases and they would demand higher wages as their standard of living declined. Again, this leads to a spiral of price rises and resulting wage rises. Spiraling inflation.

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The Importance of Live Strategic Documentation

Thursday, June 20th, 2019

There is a benefit from making a Business Plan that is greatly diminished if you are just jumping through a hoop and that plan is thrown into a drawer that you’ll never open again. The same goes for a Strategic Marketing Plan, an Electronic Marketing Plan and your Financial Budget, if they get pushed into that same drawer. What most small businesses fail to consider is the competitive advantage of keeping these as a live strategic business tool.

Strategic Documents are about Planning not to Fail

I know it’s tedious to create strategic documents – Business Plan, Strategic Marketing Plan, Electronic Marketing Plan and a Financial Budget. And there isn’t a small business owner who does not cringe at the idea these might need to be opened and and rewritten. I get that; they are tedious and painful to make in the first place. If they’re made at all – only 3-5 per cent of small businesses even make a business plan. Especially if they’re made honestly and critically. An awful lot of business owners just make rubbish up and call that a plan and that’s self-serving assurance that the task was completed.

The question to ask yourself is why do we make these documents in the first place? The answer is because they are about scoping out the business environment that you want to operate in and understanding as much about your competitors, your operations and the customers as possible. While, of course, understanding that you can’t control most of these things. Understanding, as well, that the more you know about the environment enables you to effectively compete and sustain your success.

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The Gamber’s Fallacy & The Hot Hand Fallacy

Tuesday, June 13th, 2017

The Gambler’s Fallacy and the Hot Hand Fallacy are two poles of the same flawed paradigm. They are reverse images of the tendency for our brain to believe in a storied, or patterned, outcome. As opposed to the probabilistic reality that individual events may have zero bearing on the preceding or following events. They are human biases.

The Gambler’s Fallacy

The Gambler’s Fallacy says that the longer you sit at a slot machine or roll a dice, events with entirely unrelated outcomes, the chances of winning increase. In the classic description of the Gambler’s Fallacy the player believes that if a coin has flipped three heads, the chances are increased that on the next go it is inclined to flip a tail. It’s the idea that averages even out the odds. But, unfortunately for the gambler, each toss of a coin is entirely independent of probabilistic outcome and there is just as much a reason to expect a head or a tail at 50/50 odds after 10,000 coin flips of heads.

The number of preceding outcomes has no relationship to the next. Read the rest of this entry »

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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