Thursday, 15 June 2017

Inflation rate reminds the middle class, we're being screwed

Every now and then, we get statistics about the inflation rate and the cost of living.  The last few years in Canada, it's been about 1.5% and before that, usually sticking around 1-2%.  Now I got a <1% raise last year, and nothing for several years prior to that.  And yet, the inflation rate continued along.

I'm pretty well educated, professional, and reasonably intelligent, much like (I'm sure) most other people out there who would be considered kind of "middle class."  And we all face the same issue, that our wages don't even keep up with inflation.  Maybe there's a good year or something, but overall, I think this is widely documented and certainly the sentiment is widespread.

But what is inflation?  Isn't that the increased price of goods over time?  And what are the inputs that go into goods?  Labour and materials (equipment, administration, yeah yeah, etc.).  But Labour is part of that.  So if the price of goods is increasing, but the cost of labour is not because people are not getting raises, then are we to believe that the cost of materials is what's accounting for this inflation?

So then we are to believe that the materials, despite all the technological advancement and automation, are costing more in production?  And some of these materials, are actually made by cheap labour in developing countries (a whole other post), getting paid on the order of no more than a couple hundred USD per month.

Domestically, how is it that it costs an average person and extra 1-2% to buy something, when I'm not getting paid more than last year.  Where's that difference going?

I think it's companies pocketing the difference, lining their pockets, at the expense of a functioning middle class to actually drive and grow the economy, all the while distracting the average person with smoke and mirrors like:
  • if you work hard, you can be rich like us company execs too; 
  • we give to charity so focus on that even though it's a pittance compared to what we're pocketing and getting in tax breaks and credits;
  • we're good corporate citizens, that's why you should buy our product even though it's totally superfluous and you would probably be just as happy if not more happy without this crap that we're selling to you and your vulnerable children
  • you're lucky to have any kind of job in this bad economy, so don't challenge us, even though our practices specifically damage that economy in the long run, and we'll keep workers on life support just long enough for us to cash out and move on to plunder another part of the world
Above, I said "companies" but what I really mean is people, rich people who disproportionately take more from society than what they give back.  Note the word "disproportionately" because some people will argue that companies provide jobs to people, which in turn provides people with money.  Yes that is important (if for no other reason that to provide people with money to buy the company's own crap, etc.), but the widening gap between rich and poor around the world clearly illustrates the disproportionate relationship at play here.

And I'm not talking about kind of rich people who work hard and exercise good entrepreneurial spirit (like small/medium business owners) or professional expertise (like doctors and lawyers, run of the mill ones trying to do good honest worthwhile work, not unrepresentative ones that give rise to talentless, reality TV, false-idol, anti-celebrities).  I mean, it's a continuum so they do play their part in perpetuating the inequally, but their culpability is somewhat mitigated for a variety of reasons.

I'm talking the ones that are so out of touch with the vast majority of people (think, the US President and his band of hooligans) that they cannot even comprehend the daily thoughts, trials, needs, or social decency of normal middle class people, even though they hold such influence over the middle class, through trickle down effects and, frustratingly, emotional manipulation and outright lying.

This is a truth that middle class people may not be aware of, or at least it's not foremost on their minds because
  • they're constantly being distracted by companies and the top 1% (or 0.1%) trying to manipulate them, or 
  • because they're busy with their normal lives doing normal, decent but vitally important work (like being police officers, firefighters, nurses, teachers, retail sales associates, restaurant servers, bank tellers, cashiers, normal stuff that actually keeps society running)
But we (middle class, which I would include well over 80% of the population, so I'm likely talking to you) must keep it in mind.  Demand for more.  If the cost of living and inflation is constantly increasing, but your pay is not, you're getting screwed, maybe not to your face, but you are.

Don't believe the distractions.  The big one is, you don't deserve to get paid more, you should be lucky to have a job at all.  The message may sound more diplomatic than that, and there are always those employers who are a rare exception to this rule, but the middle class needs more empowerment.  You do deserve more.  The threat is also an empty one, because it is self defeating.  People in power, forget that they are only there because of the middle class.

People and companies that are rich, they are only that way because they make money off the middle class.  Denying the middle class fair wages is like cutting a plant off at its roots.  Never let yourself forget that, because the only way to demand more for the middle class is to understand that you are actually empowered.

Big companies and the super rich use these threats, but that's all nonsense.  They are not the ones that actually employ people.  It's the small businesses that employ people.  Middle class entrepreneurs (admittedly some do better than others, so what? that's life, that's fair) are the ones that create jobs and work because they're driven.  They are not the ones that hack and slash the work force, produce a good quarterly financial report, then take off with a huge bonus regardless of the devastation left in their wake.

Google, Amazon, Walmart, Uber, these businesses generate huge revenues operating on a skeleton of a workforce by comparison.  They own all this wealth, and yet contribute little to reducing the wage gap.  And sure, they may produce some economic benefits, but all that money in the hands of the people (spent wisely to encourage innovation, cultural development, humanity) would surely generate much, much higher returns for society as a whole. Don't forget that if you are offered $1 without realizing that you were bamboozled out of $2, you might feel happy with $1 at the moment but you're not actually better off.

The power imbalance is like that of an abuser and abused.  The abused is lead to think that he is at least getting something out of the arrangement, when in fact he is getting royally screwed in actual terms, all the while being manipulated and placated into accepting his grave circumstances.

A critical point that you must also remember, is that you must help others in the middle class (which remember, I think is most people.  If you try to participate in society, even if you're poor, even if you don't have the newest smartphone, even if you work several jobs to make ends meet, you are one of us and we want you.  And if you've worked hard to run a business, make a better life for yourself and your kids, and you can employ some people and you put your kids in music classes and instill in them good values and a love for all humankind, and you might own a nice house and a nice car that is a product of your sacrifice and contribution to society, then you are also middle class and we want you too.

But we must help one another.  The influential super rich and the enormous corporate entities would pit us against one another, usually by promising that if you give up your humanity and commitment to common middle class life, you could one day be super wealthy and successful too.  This is, of course, a lie, because it implies that hard work is always directly related to wealth.  It is not.  It implies that poor people do not work hard, and that's not true.  And it implies that the richest are also the hardest working and the smartest.  Also not true.  There are always exceptions to both of these extremes, but the exceptions do not invalidate the rule.

Furthermore, contrary to what corporations and all their marketing would have you believe, more wealth, more stuff, more consumption does not equate to more fulfillment and happiness.  It's all a distraction to keep you hooked on their crap, because they already know that you are in fact the ones with the power.  I'm very pro-business, the way honest business people operate to fulfill their dreams, to create something worthwhile, to contribute to their family and communities.  I'm not a socialist or someone who thinks people should just be given handouts for nothing.  But what we have today is not pro-business, it is a perverse consumerism masquerading as opportunity for a generation that is desperate for opportunity, because they going to have to clean up a big mess like nothing the world has ever seen before.

So don't be fooled into thinking that you should forsake other middle class people.  MOST of us, even though we're not the same, are on the same team.  The people and companies that pocket the hard earned money produced by the middle class (think corporate bail outs, tax breaks for companies who close down operations and cut jobs) are the ones on the other team.  Don't fall for the distractions.

The middle class has power in numbers.  We don't always see it because of the variations in wealth among the middle class, it makes us feel like we're not actually the same.  But like I said, most of us are middle class.  I will flesh this out more in another post.  But this variation prevents us from mobilizing all together, even though we desperately need to do so.

Remember that when the price of goods goes up, but your wages do not, that difference is going somewhere.

Do you see quality of goods improving?  I don't think so, not more than what would have happened anyway as society develops.  Do you think automation, technological advancement and outsourcing is increasing the cost of production.  Not as much as we're led to believe.  It's fueled by greed.  It may not be easy but we must stop playing into it.

The companies are taking more control, giving less back, increasing income inequality.  We all suffer from it.  The inflation rate is a constant reminder that we're getting screwed.  We must band together and stop it.  Here's just a few ways to do that:
  • stop buying crap you don't need.  It's hard, because billions of dollars in advertising money is trying to get you do it.  Now that doesn't mean stop buying stuff you actually need, or might even want just because you want it.  You deserve to get what you want.  Advertisement has its purpose, and its even helpful at times, just don't let it consume you, especially if you really can't afford it.
  • think critically about the motivations of companies (which really includes the super rich, if you think about it).  also, to be fair, there are some super rich people/companies that are trying to contribute positively to society, but again the exceptions do not invalidate the rule here.  Most companies are just trying to get your money, they don't care about you, no matter what their marketing tells you.  I particularly loathe some some jewellery retailers that put up ads making you feel like you're changing the world, when really they're just selling you their crappy wares.
  • contribute to your community.  I have a particular preference for food banks, but that's for personal reasons that I'll discuss in another post.  But contribute, however small.  And don't be turned off by cash donations that help with "administration."  Administration in a charity is very important, just do your research, make sure the charity is legitimate and not totally wasteful with its resources.  But charities have expenses and challenges just like businesses.  What good is all that food or clothing going to do, if it can't get managed and distributed properly to the needy?  And I prefer cash donations because the charities can leverage economies of scale better than you can as an individual.
  • vote.  Vote as much as possible.  Vote with your dollars, in the decisions you make, in the organizations you support.  Some people may not be in a position to choose, if you're really that close to the line.  But most people can afford to pay a little more than the lowest price, if you really think about it.  Vote with your dollars, and support good, upstanding fellow middle class people trying to run their businesses.  It is better for the community in the long run, and it pays dividends.  Large corporate entities don't care about you, it's all a cost/benefit algorithm.  You deserve better.
  • vote.  This time for your public representatives.  It's not always easy to look beyond yourself, but vote for what's best for the whole region, city, town, country, whatever.  No one will blame you if you just can't, but at least try.  Look out for the poor, the marginalized, even if you're not among them, because they are out there, and in fact, if they prosper, you will too.  It may seem counter intuitive, but it will happen.  Help others, even with your votes.
Anyway, that's it for now.  More next time.

Sunday, 1 May 2016

Free educational apps for kids, paid for by your kid’s future

I went on a long haul trip to Asia a few months ago.  I don’t like having my 2-year old on a tablet, but I figured I needed some kind of backup plan for when she melts down 12 hours into the 15 hour flight.  So I looked on review sites, looked through the Google Play store, and tried find something acceptable.

I kind of saw this problem coming last year when I realized public schools in my area were buying iPads for “educational” purposes and loading them up with “free” apps.  The rationale was that it was cost effective because you had to buy the iPad, but then you got access to lots of apps that could teach lots of different subjects like math, science, art, whatever, and the apps didn’t cost anything up front.

(Almost) Nothing's free.  I cringe whenever someone tells me you can get free apps, especially when this is told to a parent or educator or a child/young person.  Someone's paying for it, which means someone is willing to front the money for you to not pay for it.

Do a search in Google Play for "educations games" and there's a huge list of "free apps."  But as soon as you open up the details, what do you see?  "Ad-supported family app."  or "In-app purchases."

This is old news, but in Europe, Google was compelled to remove the word "free" from apps that contained in-app purchases.  The lobbyists in North America must be too powerful for us to get the same kind of consumer protection here.

I actually think that ad-supported apps that are named "free" are worse.  Kids are already constantly bombarded with advertising that creates unnecessary desires, which don't provide any real personal fulfillment even when these false desires are met.  Then the kid grows up feeling "empty" because they thought that buying whatever it was that was advertised to them would actually make them happy.  It won't, not for real anyway.

It's so insidious that companies first deceive the parents, by passing often useless apps off as "educational" and "free" apps.  Then, the advertising makes little consumerist drones out of the kids.

Some of these apps are actually ridiculous too.  Instead of charging a tablet, downloading a "free" app, exposing a kid to even more advertising just to...for instance, practice writing the alphabet using your finger on an artificial about a paper and pencil?  Yeah, there might not be any special animations, sound effects, or background music, but so what?  Are those critical to learning the alphabet?

The app exists to make money for the developers and the advertisers.  Providing education is often secondary, like the two pieces of broccoli they give you at a steakhouse so that you feel slightly less guilty that you just consumed 3 days worth of fat and cholesterol in one meal.

If you actually find an app that suits your purposes, and you have to test it out first, look for a way to buy it outright.  This tends to make the developer less money, because they want to keep advertising to you or they want you to keep paying a subscription (like an in-app purchase).  But if you find one that lets you remove the ads (at least), then that'll help keep some of that filth away from your kid's impressionable young mind.

I won't buy any app that doesn't let me eliminate the ads.  If it's actually a worthwhile app, it's worth buying. The developers deserve to get paid for their work.  But I'm not giving them and their advertisers direct and ongoing access to brainwash my kid.

Licensed apps are the worst!  Apps that are supposed to be "free" and "educational" as taught by your kid's favourite animated character.  All that character is trying to do is to sell you and your kid a doll or a game or some other overpriced knickknack made by underpaid workers toiling away in a developing country.  You will pay for this app in the way of future merchandise that is branded by that licensed character, that you or your kid will buy because advertising works.

I bought 3 apps for my kid to play with during my trip to Asia, and I tried a bunch of others that I deleted immediately.  I wish I had never even installed those ones that didn't make the cut because now I feel like my tablet is somehow tainted.  Anyway, all three apps allowed you to pay to eliminate the ads.

One app was a huge collection of some 400 puzzles.  This won't work for everyone, but my daughter likes to focus and work on things like puzzles.  Another app was a set of alphabet flashcards with a picture and word on the same screen (important), no fancy animations or sound effects.  This was a few dollars, but had no ads.  This was primarily a space saver, because I could have brought physical flash cards.  The last app had some shapes and patterns and helped my kid practice her vocabulary.

Some apps have a purpose.  Some apps can work for your kid, and maybe for a specific purpose (i.e. at the end of a long flight).  

I'm not saying all apps are evil.  But "free educational" apps may not be educational and they are definitely not free.  Someone is going to pay, whether it's you now, you later, or your kids much later.  Buy it, if it's worth it, and get rid of those ads.  Don't let developers and advertisers get rich off of enslaving your kid to their (probably) useless merchandise.

Saturday, 30 April 2016

Why should you read this blog?

Why should you read this blog?

As I get older, as I’ve become a father, I’ve thought more about what’s really important in life.  I want to share what I’ve learned because about one subject in particular because I think it’s very misunderstood for a lot of people from all different background situations.

I come from a well-educated immigrant family.  I’m very different from my parents, culturally, and they taught me a lot about life and being a decent person, but they taught me almost nothing about money – neither the mechanics nor the philosophy of it.  

And even though they made some pretty decent money in their prime earning years, and everyone saw the outward-facing success, that’s all it was: outward-facing success.  They had no financial foundation, and now that they are older, they aren’t enjoying anywhere near the life and freedom that they could have had if they knew more about money.  

My parents’ lack of financial wisdom has caused incredible strain between us, not because I expected any money from them, but because everyone cares about their loved ones and it’s painful to see my parents fall far short of their potential.  The biggest pill to swallow was when they lost the house.

This blog isn’t about how to set up a savings account.  There are plenty of great guides out there for that purpose.  This blog is about the principle and philosophy of money in our day-to-day activities, the out-of-control consumerism that makes me worry for the future, and where I've tried to evade the perils of financial illiteracy that get in the way of a full and happy life.

Money is a touchy subject.  Everyone has deep beliefs about it.  You may not agree with everything I write, but that’s fine.  I think a lot of you will share my thoughts, concerns, beliefs, and general situation.  And if there’s something interesting or useful you can take away from my writing that helps you or someone you love, then I will be deeply humbled and hopeful.

Thanks for reading.