The Bubble Will Burst!!!!
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by Petz
Over the past week, wages in eCanada have skyrocketed to levels where owners are obviously taking losses of several CAD for many workers for each day of work. The fact that wages for skill 0, 1 and 2 workers are at levels greater than what skill 3, 4 and 5 workers were making a few weeks back show that these wages are both ridiculous and paving the way for a major meltdown of the ecanadian economy. New players who have no understanding of the game mechanics are taking jobs at q3, q4 and q5 companies for the higher wages without realizing what they must do to maintain their wellness. This is causing players to drop in wellness and get fired. We are creating a workforce of low wellness workers and causing inflation that is growing daily.
Owners have abandoned offering realistic wages calculated on productivity and are simply offering wages to beat out other companies. The simple concept that revenue must be greater than the cost of wages and materials has been forgotten in eCanada.
Can we blame the workers....NO. They are simply profiting from the ignorance of so many poor business minds. The reality is the our economic bubble is getting bigger and bigger each day. As we prepare to enter a war against eFrance, our economy should be sound and secure so that we are able to meet the demands we require to support the war but really we are playing a dangerous game where the economic bubble could burst at any moment. When it finally blows, we will see massive company closures and dramatic wage cuts. Players will become frustrated and eCanada will be left with a population of low wellness players and disinterested citizens that quit the game. For those that do not believe this can or will happen, I have already seen this situation happen twice in my eLife.
Those players and companies will significant gold reserves will survive as always but many will fail to survive because they choose not to learn or educate themselves in how to operate a company properly. Our government needs to become more proactive in the education process of new workers and new business owners. Owners should take the time to learn to use erepublik tools to calculate profit margins and proper wage structures. They need to explain to workers how wages should be calculated based on wellness, skill and cost structure.
The time has come for owners to start operating in a manner that will benefit their workers, their companies and the entire eCanadian economy. It's time to learn from out past experience in eHistory and even from the economic meltdown of the world's economy in real life.....Don't let the bubble get too big because when it bursts.....the mess it leaves behind isn't easy to clean up.
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So you want the workers to all get collective pay-cuts? How do you propose to implement that?
NO saya that is not what I am saying. What I am saying is that owners need to start being realistic.
4.50 for skill 1 and 7.7 for skill 2 is not a healthy situation for the economy. I am simply trying to bring to attention the major problem that is happening in our country. Last month the government was worried about dropping prices on products and what we have seen is nothing but massive inflation. Import taxes were targeted when what was really needed was education for new players and owners. We have congress members posting all kinds of stats about taxes but maybe they should show owners with numbers just how much money they are losing by overpaying workers especially those with low wellness and low skill.
I am a bit skeptical of that. A businessman would simply shutter off his company if he couldn't make a profit, and it's pretty easy to do that in erep. If everyone was losing money, wouldn't they all shut down their companies? A good competitive market mostly moves towards equilibrium.
The whole point of doing a business is to make money - I am pretty sure a good number of the GMs here know and embrace that.
The fact is that there is a surplus of companies on the market for sale and a high number of companies that do not make a profit and only survive for a few months. People complain about corporations with alot of companies but they exist because they are the minority that operate properly and prosper. We see alot of companies starting up trying to capitalize on high product prices but they are unaware of the costs involved
Additionally, consider this, why are the admins requiring new companies in V2 to have not only the 20 gold start up but also 20 gold for initial wages...it is because too many people start up companies without having the necessary capital to operate, lose money and then have to shut down and sell off their companies. If everyone was making money, the companies for sale would be fully operational and be selling at massive profits rather than less than 20 gold. Instead they are empty and at discounts. That is evidence enough. yes owners shutter off but often it is after they have lost tonnes.
It is because of the protectionist economy we have.
There has long been the belief that every Canadian should have a company without the forethought of where all the workers are going to come from.
Well congratulations - this is the result.
You guys have been so hell bent against opening up the markets to REAL competition yet cry about the consequences of your protectionism...and we just declared war to boot!
If this wasn't so sad it would be funny.
Yes Tyler it is sad, the import tax changes have done absolutely nothing. The propaganda about titanium caused land job wages to spike for no real reason. Protecting properly run companies is not the problem, supporting ignorant owners is.
The import tax changes did nothing because the entire world declared war on each other. Protectionists were crying in the streets as tho they stood to lose their first born...thinking that every company in the world was clamoring to get into the CAD market - and were your fears realized?
No, they were not.
The wages shot up everywhere, not just in Canada and was attributed to the hospital rule change - not titanium. Properly run companies should survive with competition, improper ones shouldn't.
That is what the economy is - the law of the jungle transplanted into civilized society. The best able to adapt survive - those unable do not.
Agreed Tyler, the strong will survive, however the amount of gold wasted in unprofitable companies would be better served in other aspects including the war effort. Yes wages went up in other countries but so far not to the levels seen here plus eCanada already had higher wages than many other countries so the effect is greatly amplified here
It'll never happen.
We're gonna get wiped because 96% of this country are rl romanticists or at the very least ignore game mechanics.
It's so frustrating...
Its because of supply and demand. Canadian products are selling, causing new Canadian companies to enter the markets. This in itself is a good thing. The Canadian economy is very strong. The demand for workers is great and salaries are reflecting that. The labor market will correct itself, and there is no need for any kind of action to do so.
What the Canadian Government can to, is to promote our great economy and well-paying jobs to the rest of eR. There are regions around the world that are severely depressed. Its time to alert those workers to the benefits of the great Canadian economy, and bring them here. This will increase the Canadian economic output, add population and military strength, and reverse the unsustainable direction of wages.
Citizen B
HaHa
I was waiting for the Citizen B comment...
Aarggghh - We have the highest standard of living, Aarggghh, supply and demand, Aarggghhh, Canadian economy strong, Aarggghh!
I actually agree with you Petz, the numbers don't work for companies, but good luck in your endeavor to educate all canadians and business owners
Could someone PM Tim Young and tell him this is why all eCanadians can't be business owners.....
See, this is how you make money in erepublik
I own a Q1 weapon company
When wages were low the cost of iron was low as well
I bought up a tonne of it and put my company into full production. I produced weapons, but I did not sell them as there was no profit at the time (cost to produce $2.30, market price was $2.10-$2.20)
Well my 1000 weapons I produced over a month ago cost me a total of about $2300 CAD or 70 gold
Want to know what I just sold my inventory for?
about $5000 CAD or 154 Gold
not bad for an initial investment of 85 Gold (including the cost of the company, which had stock and raw when I bought it)
and now the business is shuttered for the time being, because the numbers don't add up
How many times are you going to rant about the exact same thing, here is my same response as last time.....pay the price or get left behind
lol jake, I can afford to pay when I have to others can't. again if you can't understand why 3 CAD for a skill 0 person who makes 0.5 of a q1 product on day 1 is too much, it shows that you are both a poor business mind and obviously not to good at simple math.
The wages are sustainable in relation to the current prices for Q3+ exporters, and Citizen B makes excellent points. The high wages are drawing in immigrants and our population is up by almost 5% just the past week.
When the demand for labour is this high and all the Q3+ companies are fighting to ramp up supply the lower quality companies are just not going to be competitive. There are some Q4 companies out there hiring these low skilled workers simply because they need the 10 body production bonus.
Until the demand cools off and prices stabilize Q1 and Q2 companies will find themselves unable to compete in the Canadian labour market. There is nothing the govt can or should do in response to this.
While the gold wasted in these unprofitable companies could be put to much better use, i'm glad everyone has the freedom to choose what to do with their own hard earned gold. The +20g startup cost is a good barrier to entry which should force newcomers to the game to do more homework before starting up a new company.
the influx of workers are not and will not be canadians...they are simply taking the gold and investing it into their own country's economy and running away. As i stated this is contributing to the bubble....when it bursts they will leave and we will be left with an economy in pieces and a low wellness workforce.
Even if they only purchase a Q1 food per day to stay alive, they are still contributing their labour to Canadian companies. We then export their goods back to their original countries and take their gold from them there.
Don't forget its their income that's taxed, and not their consumption. I have to assume that's the reason our government has a low VAT consumption tax and a relatively higher income tax.
Petz is concerned with his own pockets nothing more nothing less. He keeps putting out these media articles singing the blues or predicting doom and gloom regarding high wages.
Most things regarding the markets self correct with time whether it be prices, wages or an over abundance of companies.
Once things normalize I look forward to your future articles that will of course take up the plight of under paid workers.
But for now wages are artificially high and you can shutter any of your ecanadian companies, pay the going rate of pay to workers or do with out workers end of story.
Jake your comments show your ignorance...do you actually think I am not making a profit... high wages, low wages, economic boom or recession...my companies make profits because i know what I am doing. eCanada has never had under paid workers...even before this last wage jump, ecanada has always had higher wages than most other countries. My pockets will continue to get filled long after all these overpaying fools are out of business.
And you continue to show your biased opinions and need for greed, if you are doing so well why do you continue to complain? I do not for one minute believe that you are concerned about any other business failing only the fact that your pockets are not filling as quickly as you would like.
You fool no one but yourself with these self serving media articles.
there is a difference between what you deem to be complaining and what is in reality realistic evaluation of wages...you even stated the last time that as a worker you wanted to cash in on the unrealistic wages...so who is greedy...all signs point to you.
At no point have I seen you serve the eCanadian government....maybe run for office once and put in some time and effort for the nation for once. Maybe then someone would believe anything you say
Have I touched a nerve by chance.
In your article you state in your doom and gloom
"we will see massive company closures and dramatic wage cuts."
Yet in your comments you say
"eCanada has never had under paid workers...even before this last wage jump, ecanada has always had higher wages than most other countries."
So when your finished speaking out of both sides of your mouth let me know.
yeah jake...take a look at all the companies that are up for sale....we overpay our workers compared to almost all of the countries in this game. dramatic wages cuts are coming....it is not a question of if...but when
There is a shortage of workers and we can not sustain the number of companies that are out there, no question. But its the nature of things, there will always be some that start a business with out doing their home work first or with out enough capital to maintain the business during any downward flux.
You sir are only concerned with your bottom line, if wages fall you put more cash in your pocket. That is not a sin but call it what it is.
Jake you continue to try to personally attack the fact that I run successful companies, rather than attack my successful model, you would think that more people should try to listen to reason. Like I said, no matter what, I will make a profit and survive. I offer statements on the economy which are true and reasonable but you prefer to attack me personally. People need to start communicating with those that are successful...maybe then we wouldn't have so many companies go broke
The reason for wage increase is because the CAD has fallen.
It is now at 0.031 now.
Everything is priced in gold.
If Addy gets his finger out and actually able to keep the currency stable then our wages might not go up and down all the time.
"but you prefer to attack me personally."
That"s the pot calling the kettle
"it shows that you are both a poor business mind and obviously not to good at simple math."
"Jake your comments show your ignorance.."
"maybe run for office once and put in some time and effort for the nation for once. Maybe then someone would believe anything you say"
My problem is not what you say but the reasons for your position, you are a business person, your issues are with your bottom line not mine or any one elses. I see it very clearly and I call em as I see em.
What is wrong with a temporary blip that results in high wages, for a period, workers will benefit then the cycle will reverse itself and wages will self correct as they can not be maintained at that level for ever. It is not the end of the world just a period of less profit for the business person and that is not all bad as it weeds out some competition for workers.