Join the new world

AKA Why Have Employees? Part III

Holy crap we've covered some ground this week in these economics treatises. We've gone from introducing the concept of self sufficiency to exploring the vasts benefits of working as an owner. There's been a ton of meat to digest and today's article will be no different as we're going to go over the macroeconomic effects of working as owner. As this personal economic strategy makes more headway in markets there will be some repercussions.

First, however, let's cover some economic differences between the eUSA and ePH as of 6:00 Server Time for Day 1,207:


Current Monetary Market Snapshot



This is where the excitement is these days as the impact of the new Economic Module Rule limiting citizens to obtaining 10 gold from the monetary market takes effect. The immediate result was the expiration of numerous offers on the USD market as that 10 gold limit was hit. One the limit is hit the offer is removed. The net effect was to limit the flow of USD onto the market thus causing a short-term spike in the price. Many folks made a killing two days ago. I hope that you were among them. I wasn't but that's only because I'm greedy and wasn't willing to sell at such "low" exchange rates. LOL.

Current Marketplace Snapshot - High Volume Industries



The recent volatility in the monetary markets has thrown a wrench into direct market comparisons but I'm sticking with it anyway. I am stubborn like that. The USD has seen drastic inflation over the past two days since we last met but not the inflation hasn't been as severe as what has hit the PHP. As a result the PHP is currently trading for about 50% more than the USD and is affecting price comps for all heavily traded industries. Iron sucks in the ePH now because there are not enough producers as well as production being limited due to Indonesian occupation of Mindanao, a Philippine iron region.

***I will be expanding this section to cover the all food and weapon quality levels as well as to identify where citizens should be focusing their buying power in both the eUSA and ePH - things like comparing food Q levels by health/cost and renewing my "biggest bang for your buck/power for your peso" section.***

Look for this next week. Currently my data collected is too limited and irregular to do this analysis justice. I am shooting for next Friday for this addition.

Today's feature: wage trends long term and a path to personal and collective self-sufficiency. In other words, a personalized "How To" for nerds and noobs alike as well as a proposal for top-to-bottom "socialization" of the economy. Except that this time the socialists will come out on top... 🙂




I Ain't Gonna Lie - the Shitter's Getting Full



I have just one bit of advice for all of you reading this out in eRep land. If you do not currently work for yourself in at least one company you are heading for permanent poverty. If you haven't read my article from last time ("Stop Worrying and Learn to Love Owning a Business") then please do so now and spare me having to rehash too much of that because you need to understand just how working for yourself at your own companies can competitively insulate you from price deflation.

Here's why. Last time we talked about how working as owner means that you can (eventually) produce raw materials for less than 0.01 currency each. There is a relationship between the this production cost and the price of food but if you produce food from your grain production then your net cost is at most 60 health if you are level 7 or higher. The best part about this is that IF food prices fell low enough that your efficiency actually increases - meaning that your per unit cost of producing is falling.

Productivity increases in Real Life equate to real wage gains. In eRepublik the only productivity increase comes from your economic skill increasing. Hence, historically as your econ skill has gone up you've earned more in wages. Makes sense, you can produce more so you become more valuable to the owner.

This has all changed now. The highest that an owner WANTS to pay is dependent upon whatever his currently economic skill level is. I'll use myself as an example. I am currently a Guru**** or Level 13. My daily production in the Philippines is 306 grain per company and 211 health per food company (633 production points @ 6 points per Q1 food; Q1 food gives 2 health). I can produce the grain for 10 health. What is the cost of that 10 health? Follow me here, as this is the key to today's article.

The grain produced per company can make 102 health: 306 grain / 6 == 51 Q1 food; 51 Q1 food X 2 health per == 102 health. Let's take the grain needed to make just 20 health - and obviously that's 60 grain AND two work cycles (one to make the grain and the other to convert it to food). Since I can make a profit if grain were to be priced at 0.01 (proved in my last article), my cost for grain production is 60 grain X 0.01 or 0.60 at the most. If I own more grain companies and food compainies than my cost falls further because I have already covered my production costs for 10 work shifts in that 0.60 (I can produce 102 health, remember?).

I refuse to pay someone my level more than 0.60 for what I can produce myself.

Obviously This is Simplistic - And Here's Why

This basic analysis doesn't account for economies of scale from producing massive amounts of material, the current price of product produced, etc. In other words right now you can eke out profit margins on employees in the traditional manner. But as more an more product is produced via work as owner there you are only ensuring that those company owners that do not hire employees can make the highest profit margin. (Profit MARGIN, not total profits.)

I've had several people suggest to me that they're not about to leave money on the table. That's fine and it's your prerogative. My advice to everyone is to stop paying employees and just work for yourself after reaching self-sufficiency. Sell your surplus. It's the lazy man's way to make money, yes, but in the long term the incentive remains for everyone to produce in this fashion and let some other sucker attempt to maintain their profit margin in competitive markets. Already in the eUSA we've seen times where Q1 weapons prices have fallen below the cost of manufacturing (raw materials + manufacturing wages). This is the inevitable trend and I'm here to warn all of you.




Conclusion: Why Pay Wages? Why Have Employees?

My Croatian friend BeDva said it best: "cuz u r a masochist or an incurable humanist." Wiser words were never spoken, eRep readers, and it would behoove you to admit right now into which class you're committing yourself. Either you like the pain and suffering of minimal profit for maximum overhead by having employees or you feel a greater need to give players jobs.

Stop it. Just... stop. I have a multi-tiered plan to get the most efficiency out of our economy here in the ePH. I wish we could try something like the in a large economy like the eUSA but unfortunately there are too many citizens there that do not involve themselves in anything but two-clicking.

Traditionally we have used income taxation (mostly) to fund buying items for the military off the markets. Now we're faced with a dilemma, however, in that we cannot tax enough to supply all military members with 30 food fights (aka 300 health). 30 food fights should be the minimum target for any military members as it maximizes damage for the lowest cost. Adding weapons can be done but I'm not going to discuss this right now - that's yet another article.

Here's what I'm proposing for the ePhilippines: a multifaceted approach that melds the economic and military sides of the game and provides a development and integration path for new players.

1. The ePhilippine government shifts taxation to import taxes and VAT. The amount of VAT will need to be adjusted.

2. The ePhilippine government authorizes certain citizens to run "jobs hubs" in which employment is offered at minimum wage for all skill levels.

3. As new citizens join and work at a jobs hub the owner contacts them and educates them about purchasing a grain company to work in for themselves. Since gold bonuses for ranking up and strength gains happen frequently this should be attainable.

4. The goal for this program will be to get every ePH citizen four grain companies and two food companies by econ skill level 10.

5. All ePhilippine citizens should be mobilized into the military from the start. IF ePH citizens join the military I will personally pledge the following:

- I will match 1 to 1 any gold used to purchase/build a company.
- I will match 1 PHP for every 5 PHP used to purchase land.

6. ePhilippine citizens taking part in this program should really pledge to remain here for the foreseeable future. That's as far as I'll go with that but suffice to say if you're seeking help from me you'd better not violate my eRep Rules #1 and #2 (go read my profile if you're not familiar).

Why Would I Do This?

This is the quickest path to increasing aggregate ePH damage. I would like to get every citizen the ability to fight at least 30 times in every battle for the lowest cost possible. This is the lowest cost.

This is also a solid plan for mobilizing and integrating new players. Citizen retention is always an issue in eRep and for every country.

This also provides an incentive for foreigners to emigrate to the ePH. Getting our population numbers up and getting more activity in our population will make us much more powerful in the eWorld militarily, economically and politically.

Stay dirty, piglets.




Small But Mighty

The goal for the ePhilippines can never match the total damage of a large country like the eUSA but rather to exceed her in per capita damage. It's like being Manny Pacquiao to the eUSA's Muhammad Ali. Both kick ass. And Manny Pacquiao is a BAMF (as well as a Filipino) indee😛