As you may be aware of, Stephen Poloz recently made some remarks regarding Canada’s current high youth unemployment rate; it is roughly double Canada’s current total unemployment rate of 6.5%. Making statements such as “young people should work for free“, Poloz caused an uproar, with many people showing their discontent regarding his take on the situation. Personally, I do see some worth in what he was saying; I think people should have to put in some effort to find a job that suits them, and gaining any experience will help speed the whole process up.

However, working for free with no guarantee of later reimbursement or paying contracts does not sit well with me. I see issues both on a personal level and in the big picture. I have many expenses to pay for and am not fully reliant on the Bank of My Parents, therefore I would sooner work in a field completely unrelated to what I want to do and pay my expenses, rather than work in my desired field for free. Also, encouraging the youth to work for free would also encourage businesses to simply not pay young people, potentially making the unemployment issue worse. This concern is outlined as well in the CBC Business News article:

Stephen Poloz, unintended champion of jobless youth

Ultimately, I would have to say I disagree with Poloz. Under most circumstances, I don’t see much benefit coming from youth commonly taking unpaid jobs. It’s just not practical for most students, with high tuition prices and other expenses. Please respond or comment your opinion!

Entrepreneurship is undoubtedly the most high risk realm of business. The amount of dedication and time entrepreneurs put into business ideas is often far more than any employee. They often stake their entire worth on ideas, making the risks even higher. Despite all the effort, so many start-ups end up failing.

Entrepreneurship interests me, and my mom happens to be a successful entrepreneur herself. As such, I have done some reading into strategies entrepreneurs can implement to avoid failure. I came across Martin Zwilling’s blog titled: Ten Ways Entrepreneurs Fail Their Way To The Top.

Many of his points I agree with, and from watching my mom start her own business could support with real life examples. Tips such as “Never rely on a verbal agreement in business” and “Never count on someone who offers to work for free” are extremely legitimate. However, Martin’s number one point was “Don’t spend money you don’t have in the bank”. This was the only tip I questioned. I just don’t see this as possible for almost any start-up situation. First-time entrepreneurs almost never have the required funds to get their business off the ground. I personally think that it is a far better idea to leverage money; using loans and credit is usually the only way business owner’s are able to make any progress. As the old saying goes, ‘It takes money to make money’, and if entrepreneurs always made sure they were in the green, I guarantee there would be a lot less progress. Sure it adds risk, but ultimately that is the name of the game in the industry.

Please feel free to comment or respond, offering your view on this point.

This article on Canada’s wireless providers grabbed my attention. Addressing a combination of topics that have been covered both in my Comm 101 class and my Econ 101 class, I thought it would be a good article to blog on. Both the issue of oligopoly and high barriers to entry associated with the wireless industry are mentioned, with the main focus of the article on how the big three firms (Bell, Telus, and Rogers) don’t use cost as a Point of Difference. Instead of cost leadership these companies, especially Telus, focus on customer experience. This is somewhat unfortunate for consumers because due to the high barriers to entry in the wireless provision industry, mainly the lack of infrastructure and towers, smaller providers have a very hard time matching this quality of experience. As a result, most consumers pay very high phone bills, and don’t have an alternative.

This photo shows just how dominant the big three are; over 80% of the market is controlled by 3 companies.

http://upload.wikimedia.org/wikipedia/commons/thumb/c/c1/CWTA_2011_Q3.svg/360px-CWTA_2011_Q3.svg.png

This dominance, combined with the fact that almost all cell towers are owned by Telus or Rogers allows the big three to ignore cost leadership as a potential defining POD. They can basically charge whatever price they want. Personally, I think phone bills are far too high; I would immediately switch to a provider such as WIND if they had the same coverage and customer experience as the bigger firms.  I know the government has already become involved in an effort to reduce the oligopolistic nature of the industry, but I still think there is a large amount of room for improvement.

This topic has been on my mind since class 15, when in section 107 had an extensive discussion regarding CSR and business ethics. Many examples were discussed, such as the factory collapse in Bangladesh, mentioned in Jordan Andrew’s Business Ethics post. Although I didn’t get a chance to get a comment in, I really wanted to express my opinion regarding where blame should be placed in incidents such as this. People tend to immediately jump to the conclusion that the firm is solely responsible. Although I don’t think they are blameless, I think solely blaming the firm responsible is often wrong. As Jordan mentions in his post, a large amount of pressure is placed on the firms to meet demand, causing managers and owners to make decisions that are potentially harmful.

Also, a point that Paul brought up really resonated with me. His example regarding workers who normally worked for a factory with less than ideal working conditions that turned to prostitution when they were released from working at the factory got me thinking about issues surrounding varying standards in different parts of the world. In Canada, if a factory made employees work in unsafe conditions it would obviously be morally wrong. However, in a developing country where a firm is taking people who normally have to resort to illegal activities to make a living and giving them a secure job, with potentially dangerous working conditions, the risks are actually far less for people in the latter situation. Although the firm would be committing a moral wrong-doing if it were located in a country such as the USA, in places such as Bangladesh the firm may actually be providing a positive alternative to worse situations.

I do acknowledge the fact that forcing workers to work in unsafe is conditions is wrong, and in an ideal world should be non-existent. However, as long as there is no blatant disregard for human life, I think there are special circumstances that make less than ideal working conditions an understandable evil…

To summarize, this issue is far broader than what meets the eye. Blame for incidents such as the Bangladesh Factory Collapse should not fall solely on the firm in most situations; the problem is a result of many more diverse factors.

As more and more North American Oil is sourced from domestic fracking operations, the price of crude oil has been plummeting. According to Shawn McCarthy in the Globe and Mail article:

Oil sinks on Saudi Arabia’s intention to cut prices

crude oil prices have hit lows not seen since 2010. As North American companies such as Suncor Energy Inc. increase the supply of oil, the prices naturally drop due to the law of supply. However, prices are also falling drastically due to existing foreign firms( Oil companies based in countries like Iraq and Saudi Arabia) lowering prices, adopting a cost leadership strategy. Their oil is cheaper to produce and also takes advantage of cheaper shipping costs. In an effort to drive out competition, they are lowering prices to levels that North American companies simply cant match, due to fracking being more expensive and shipping costs generally being a lot higher. As we discussed way back in class 7, this Cost Leadership strategy effectively allows foreign oil companies to occupy a distinct rung on the oil industry ladder, despite there being a large number of competing firms.