"A reason to celebrate: The lowest paid in Ontario just got a raise"

http://www.theglobeandmail.com/news/opinions/a-reason-to-celebrate-the-lowest-paid-in-ontario-just-got-a-raise/article1517697/
http://ccapvancouver.wordpress.com/2009/01/19/bc-has-the-worst-poverty-rate-in-canada-for-5th-straight-year/


Summary
As promised three years ago, the Ontario government has finally increased their province's minimum wage by seventy-five cents to $10.25 an hour.  Not only is this the first time that minimum wage surpasses ten dollars; it is also the highest amount in Canada.  Other provincial governments, such as Newfoundland and New Brunswick, will follow this practice by inflating their minimum wage to ten dollars an hour by September of next year.  Although the average wages only increased by four percent in 2009, our country's minimum wages on average have risen up by twenty percent.  However, other provincial governments have allowed their minimum wages to decline.  BC is one example.  Although BC had the national highest minimum wage of $8 in 2001, this wage has remained the same for nearly a decade and is presently the lowest in Canada.  To make matters worse, Premier Campbell has introduced a $6 training wage for new employees, which ultimately lowers the purchasing power of low-paid workers.

Connection
From an economic perspective, a company can hire more employees with a lower minimum wage. Employers doing payroll welcome lower minimum wages as they can contribute less for their employees' CPP, RPP and EI.  Unemployment rate will also decrease as there is a large demand for low wage workers.  With low wages, the cost of producing goods will be less expensive for employers, signifying that they can reap more profit for themselves.  Employers need to follow the Employment Standards Regulation, set by the BC's Ministry of Labor.  To ensure that their employees get the minimum wage of $8 an hour, employers need to have all documents that their employees have at least 500 hours of paid work experience.

Reflection
Although Vancouver is one of the cities with the highest standard of living, it is unfair that our province's minimum wage has remained the same since 2001.  Even if a single person works full-time for fifty-two weeks, earning $16 640 a year is not an acceptable 'living wage'.  It can only provide a person with enough food and some necessities.  Mortgaging a house is definitely out of the picture.  According to a blog entry in 2009 by Carnegie Community Action Project, BC has the worst poverty rate in Canada for five consecutive years.  Single parents, women, visible minorities, part-timers, immigrants and people with disabilities are usually paid the minimum wage.  Since BC is one of the provinces with the highest poverty rates and housing issues, the government can solve these problems by increasing the minimum wage.  Just by boosting the amount to $10 will make a big difference to the workers.  Low-income families can step out of the poverty-line, thus they no longer need to rely on the government for financial support.  They will have enough money to pay for food, children's tuition, rent payments, and possibly start an investment.

"Shaw to launch wireless services next year"

http://www.theglobeandmail.com/globe-investor/shaw-to-launch-wireless-services-next-year/article1528765/http://www.theglobeandmail.com/globe-investor/markets/stocks/financials/?page=balanceSheet&q=SJR.B-T&frequency=ANNUAL#financials-content

Summary 
The Calgary-based cable company, Shaw Communications Inc., has declared its plans to launch wireless services in late 2011.  In 2008, Shaw purchased a $190 million wireless spectrum from a government auction in hopes of bringing back and attracting more customers.  More than 1,055 customers switched from Shaw cable to Telus TV last year.  Although wireless services provide crucial growth for these type of industries, analyst, such as Bank of America's Glen Campbell, speculate that this might not be good news for short or long-term investors.  Since it took so long for Shaw to introduce this service to its customers, it will be marginally negative for Shaw, as compared to its competitors.  Although Shaw managed to give out dividends regularly, their stock price has not been performing well lately.  If Shaw does not carry out this plan successfully, it would result in a short-term financial pain, which puts long-term investors at risk.


Connection
This article pertains to outsiders.  Outsiders, such as Shaw's bankers, shareholders, and investors, use this to determine the profitability and liquidity of Shaw's assets.  Examining the balance sheet of Shaw, I found that its financial ratios are not as ideal as I had anticipated.  For example, let's look at its current ratio, which is calculated by taking the total current ratio divided by the total current liabilities.  In 2008, Shaw's current ratio is 0.49 (404.47/828.64) and in 2009, it is 0.55 (757.67/1,377.02).  Despite the low annual current ratio, it has increased by 6% from 2008 to 2009.  The ideal current ratio is outlined in the textbook is 2:1.  However, the actual ideal range of current ratio for Shaw is dependent on its type of industry.  Since Shaw is considered as a servicing business, its expected range is between 1.1 and 1.3.  Referring to the calculated figures above,  the company's ratio is less than satisfactory, which indicates that Shaw may have a low cash flow and may be unable to pay off its long-term debts if needed.


Reflection
I agree that Shaw's announcement may not turn out to be as favorable as Mr. Shaw claimed.  There are already a lot of companies who have matured cell phone plans for their customers, such as Telus, Rogers, and Bell.  Shaw has taken too long to introduce this service, which explains why its customers has switched to companies, like Telus, that offer 'bundled' plans. 'Bundled' plans generate more profit for the company and customers are not as likely to switch to another company. With Shaw offering wireless services in the 'quad-plan' (cellphone, home phone, cable and internet) next year, competition between the companies will become more fierce.  Although this may not sound appealing to investors, a wireless phone service is good news, especially for Shaw's customers. Consumers will have more selections of companies to choose from, resulting in competitively low prices.

"Money thief lands jail term"

http://www.leaderpost.com/health/Money+thief+lands+jail+term/2332627/story.html

Summary
A 59-year-old Saskatoon man, Darcy J. Hemsworth, was convicted of pocketing over $40,000 from video lottery ticket machines.  As a night auditor for the Senator Hotel, he committed thefts on many occasions over a year's time and had not returned any of the stolen money.  His defense lawyer, John Hardy, argued for a conditional sentence on house arrest, due to his client's health problems and offer to find employment to pay off his restitution.  In a pre-sentence earlier, Hemsworth claimed that he won $1,000 daily by gambling a few months prior to his conviction.  Ultimately, the judge ruled for 1-year jail sentence and ordered Hemsworth to repay the loss to the hotel in addition to two insurance companies, due to his lack of remorse and abuse of his employer's trust.  The judge also stated that Hemsworth was not a gambling addict and did not suffer from any depression.

Connections
The article provides an example for Chapter 14's cash short or over.  Cash short is defined as the actual amount of cash not equaling the amount written in the company's books.  A business owner will demand their clerks to pay the difference out of their own pockets, particularly when it involves significant amounts of money.  Senator Hotel utilized legal measures to ensure that Hemsworth paid off the amount he had stolen and received the punishment for his crimes.  Until Hemsworth is released from prison, the debit amount of over $40,000 will remain in the cash short or over account in the books of Senator Hotel.

Reflection
Since Hemsworth was an auditor, I believe he deserves a longer jail sentence for his unethical behavior.  The Senator Hotel trusted him to sort through their money matters.  Instead, he took advantage of his position and stole from the hotel.  There are people in the world, like Hemsworth, who are stealing from their companies.  Companies should set up a better system, where there are at least two auditors to check the book's figures.  With two people checking, it will be more difficult for one person to steal from the company, since people can report on each other. Lastly, the government should enforce harsher laws to reduce the number of similar cases.

"Year-end Clearout on Now at Northland Volkswagen"

http://www.calgaryherald.com/cars/Year+clearout+Northland+Volkswagen/2391244/story.html

Summary
With the holiday discounts stacking up, Northland Volkswagen is not far behind in launching some outrageous savings for the New Years.  The dealership is now offering cash discounts on remaining 2009 and selected 2010 models.  This includes $5,000 off cash purchase or no interest financing for a maximum of 3 years on a 2009 Jetta TDI Sedan.  Furthermore, customers can enjoy $8,000 deduction for cash payments on 2009 Routon, resulting in the total cost of only $34,999. Other promotions for this vehicle include special packages with no down payment and monthly installments as low as $497.  Consumers can also consider Volkswagen's trade-in and rebate programs on new and pre-owned top quality cars.

Connections
In order to reduce the inventory for 2009 vehicles, Volkswagen's year-end clearout sale is a very appealing deal for both the company and car buyers.  Relating to the terms of sales and cash discounts as discussed in Chapter 12, customers must abide by the terms of paying in cash in order to benefit from the discount.  In truth, customers are only getting a 7% discount from the dealership, due to the 12% sales tax.  For Volkswagen, the advantage from this deal is that they can instantly cash in the vehicle, which increases their cash flow and their earnings before the fiscal year ends.  Although the company's profit has been reduce due to cash discounts, the amount is less than paying the costly handling fee of credit card purchases.  Looking in the books of Volkswagen, a cilent's purchase involves a transaction of debiting the Discounts Allowed and Bank accounts, while the Sales Tax Payable and Sales Account are credited.

Reflection
Discounts off cash purchases are definitely an effective way to boost up the company's sales.  Over the Christmas holidays, almost every store offered a discount.  I recall getting a 12% discount from a clothing store manager who offered me tax exemption of my merchandise if I paid in cash.  However, some cilents cannot take advantage of the savings due to not having generated sufficient cash, particularly when it is a vehicle.  Even though there are huge savings at a dealership, the soaring price of fuel may even cost more than the vehicle overtime.  It is like purchasing a proficient, yet inexpensive printer.  Companies, such as hp, do not make revenue from the sale of printers, but from the more profitable ink cartridges and toners.  Thus, customers have to differentiate whether the retailer's discounts are actually worthwhile.  I am not implying that discounted merchandises are not good, but as consumers, we need to look and plan ahead.  Otherwise, our inventory of discounted goods may end up being stored in the basement or sold at a yard sale.