Aegle Limited

Everywhere you look companies, Government initiatives and goods are now known purely by their acronym. Long established brands are revamped as trendy acronyms, titles are seemingly put together just so the acronym looks good and product features consist of a great list of acronyms (just consider a car).

Has this gone too far? It is a bit like management speak, all right for those in the know but utterly unfathomable to anyone else. I wonder how much confusion is caused by misinterpreted instructions using textspeak and acronyms?

The trend is taking its toll on the younger generations, one has to despair at their spelling and general standard of literacy which is quite honestly appalling.

Maybe we should start a campaign to encourage people to avoid acronyms. I wonder what we should call it? Suggestions!

As unemployment reaches record highs in this country the Daily Mail reveals that vacancies in the UK are being openly advertised in Romania. Many are for qualified nurses, engineers and hotel staff but nearly 25% relate to unskilled roles such as labourers and taxi drivers.

It seems that employers have concluded that many of the British workforce are unemployable, either ill-educated, unreliable or so comfortable on benefits that they have unrealistic salary expectations.

It is a scandal that home grown people are being denied the opportunity of employment in favour of foreign workers whatever the reason. Or is it that employers are exploiting cheap labour to boost profits?

The Office for National Statistics today revealed that economic growth in the UK was -0.2% in the last quarter of 2011 indicating that we may be heading back into recession – the dreaded double dip everyone had hoped we could avoid.

It is not surprising that hard pressed individuals have reined in their spending in the face of inflation, wage freezes, redundancies and so much uncertainty. At the same time public spending is also being reduced so in many ways it is more surprising that the figure is only 0.2%.

Mervyn King admits that as the economy rebalances “the path of recovery is likely to be arduous, long and uneven”. Debt still remains too high, both public and private.

But he struck an optimistic note “there is no reason to despair” things are moving in the right direction although he seemed to indicate rather slower than would be ideal.

The problems in the Eurozone are still creating significant obstacles to recovery. Greek default appears to be becoming ever more likely and little is being done to resolve the problems of other Euro members. The sooner something is agreed and implemented the quicker will be the recovery purely as a result of increased certainty and optimism.

Ultimately the best way to stimulate an economy is through cuts in taxation, putting more money in peoples pockets, but that will have to be saved for a future date as to do so now would only inflate the national debt still further.

Announced in the last two days are 5,000 new jobs at Asda and 2,500 jobs at McDonalds to a great fanfare.

Don’t get me wrong it is good that companies see fit to expand but can these really be called jobs? I imagine that many will be part-time on menial wages because they need to have a flexible workforce in order to meet variations in demand.

They are also service industry jobs reliant upon the rest of the population having sufficient income to spend, what we really need are industries which create wealth which can filter down through the economy.

Reports that nearly a quarter of small businessmen are contemplating giving up because of markets conditions and/or red tape hardly indicates much optimism. Increases in business rates due in April are seen as the tipping point by many.

Once upon a time there was a job for life – provided you kept your nose clean career opportunity would happen and you could expect to progress your career with the same company as you gained further skills and experience.

Then companies sought brighter talent through graduate recruitment reducing potential opportunity for mere earthlings. Often these graduates were promoted through the company quickly without really understanding the business and soon reached powerful management positions.

Those same graduates preferred to employ other graduates and further reduced the opportunity for progression.

Those graduates sought out cost savings, perhaps outsourcing jobs abroad or mechanising processes making operational staff redundant. Pensions and perks have been significantly reduced effectively reducing earnings.

At the same time Government has increased taxation through higher National Insurance and reduced personal allowances making it more expensive to employ staff. Business leaders are forced to make further cost reductions.

So now permanent employment is becoming a rarity, the majority of jobs created in the last year have been self-employed, many of those part-time, so what is going on?

Firstly many people are picking up whatever bits of work are available just to make ends meet. In some cases this is second jobs.

Perhaps the most obvious change though is that employers are now advertising for self-employed staff to avoid the employment costs. This saves them National Insurance, pension, sickness and holiday pay plus potential costs such as maternity leave and redundancy. In some instances they may be saving almost 50% in costs. The “employee” is the one that is the loser having no pension provision, sick pay or holiday pay AND being paid poorly for his efforts.

Do not be fooled by Government statistics the increasing numbers of self-employed are probably not the next entrepreneurs but hard pressed desperate people trying to earn a crust.

The Government has always stated that a degree offers individuals more opportunity in the workplace, resulting in better and well paid jobs. The argument is that the cost of the education is more than repaid over a working lifetime through graduates being better paid than their lesser educated counterparts.

Perhaps this is true when individuals possess a degree relevant to the job they are doing but it is arguable that those with “lesser” degrees such as media studies are not seen in the same light by employers. In fact research indicates that graduates hold unreasonable expectations of their self-worth and are, as a consequence, less employable than a school leaver who might be less well educated but is willing and prepared to learn.

Almost all employers are critical of an education system which fails to prepare young people for the world of work. Common complaints are a lack of literacy and numeracy, computer and interpersonal skills but the overriding issue is a lack of commitment and reliability. Too many fail on attitude, personality and a lack of loyalty.

So is a university education worth the cost? The answer must be it that it depends upon whether the degree has any relevance to the subsequent vocation and if so will that job pay sufficient to recoup the costs of education over a reasonable timescale?

Figures for December show that demand for both permanent and temporary staff fell as employers remain cautious about the state of the economy.

The Eurozone crisis is weighing heavy bringing much uncertainty and stifling confidence whilst in the UK the changes in the way that temporary workers are handled has added to the costs and flexibility employers value most.

It is emphasised that the current market is not as bad as that in 2009 but clearly business confidence is in dire need of a boost. Some certainty would offer businesses the chance to properly plan strategy and investment.

As proof that people will go too where the jobs are the British Antarctic Survey are expecting 3000 applications for 36 vacancies to provide essential maintenance and catering facilities during the six month Antarctic winter night. Candidates will be effectively marooned as no supply vessels or aircraft can reach them until October. Gives a whole new meaning to getting away from it all!

The powers that be have done a very good job in persuading the public that banks are evil and to blame for all the financial woes but ultimately the blame must lie with the politicians themselves.

They are the ones who abandoned the Bretton Woods agreement, introduced a soft touch regulatory regime and deregulated currency markets leading to financial globalisation. The growth this produced meant that banks grew exponentially and were constantly seeking new investment opportunities. Financial instruments became more and more complex resulting in complicated derivative structures and unmeasurable risks.

Governments were keen to encourage this expansion as readily available money allowed them to borrow more, running up trade deficits far in excess of what might be considered reasonable and also putting money into the pockets of business and individual alike which contributed to economic growth albeit with an ever increasing trade deficit.

The real mistake was to allow Lehmans to go, this immediately crystallised losses for an enormous number of financial organisations and meant that all others were wary of lending to them for fear that they might not get their money back.

Governments had to bail out banks and in the case of Ireland be bailed out themselves. Southern European countries who had benefited from the Euro had been encouraged to borrow at historic low rates and had of course over indulged also needed bail outs and now we have moved to a sovereign debt crisis where yesterday saw investors effectively paying Germany to borrow their money.

The ongoing uncertainty means that banks continue to distrust each other preferring to lodge money with central banks than risk it for extra gain or borrow under unlimited arrangements designed to ensure ongoing liquidity. Almost all countries are implementing austerity drives impacting upon individuals spending power and stifling demand. Is it any wonder that the Christmas updates from retail stores are so dismal?

Banks are being told to increase their liquidity ratios and reserves at a time when they are experiencing rising bad debts and write offs. Many need to seek further capital but as we saw with Unicredito last week investors are very wary or unwilling to contribute.

The only solution is to bring lending back in line with capability to repay, that applies to companies, individuals and Governments but this cannot be done quickly or easily, it will take many years of concerted effort.

The banks do have money available to lend thanks to central bank initiatives but are likely (and sensibly) to apply much more rigorous criteria before agreeing. It is no different with sovereign debt, weaker countries pay more than stronger ones – simple risk reward!

So if you want to blame anyone politicians have a lot to answer for.