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What Role do Entrepreneurs Play in Economics

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Entrepreneurship has become a common term in the past years, which was not much known previously. Entrepreneurship is another word for a start-up or a business. Entrepreneurs typically do not start with huge capital, and only 1 – 2% of entrepreneurs emerge yearly. However, innovative and dedicated entrepreneurs play a vital role in economic growth. Let’s tell you about the role of entrepreneurs in economics.

What is Entrepreneurship?

Harvard Business School defines entrepreneurship as the “pursuit of opportunity beyond resources controlled.”

Entrepreneurs and solopreneurs are different in their organizational manner. An entrepreneur is a business leader who brings new ideas or creates a business with existing ideas. A solopreneur is a one-man army. On the contrary, an entrepreneur might not have an extensive set of managers. Yet, they have a few team members working for them.

Entrepreneurs bring more job opportunities to the masses and contribute to the overall economy of a country. Here’s how:

Job Opportunities

Entrepreneurs need people on their teams to manage business activities like production, packaging, finance, and customer care. It enables them to recruit more people and provide employment opportunities. It can help solve unemployment locally as start-ups usually take people from nearby areas.

Wealth Sharing

As entrepreneurs do not have a lot of money, they connect to investors. Investors often invest in their businesses in the form of debt or equity. Eventually, the entrepreneurs earn from the invested money and give the decided share to the investors. Wealth sharing through investments also enables entrepreneurs to pay better to their employees. It leads to wealth creation and sharing within a population to help everyone grow together. It is one of the fundamental goals of economic development.

Living Standard

Improving the standard of living is the primary goal of economic development. Entrepreneurs play a major role in the economy by elevating the living standards in a community. It is not made possible only by the addition of more job roles. Instead, the related factors impact those living and working in those areas. Many companies provide better facilities to their workers to ensure they do not get tired of the job. These facilities keep them connected to your company and drive them to do better.

Regional Development Balance

The addition of new businesses to backward and rural areas helps regional balance development by providing opportunities. When more people set up their production units in rural areas, it allows them to work to earn better. It also comes with other benefits like improved water supply, stable electricity, better roads, etc., due to the industry’s needs. Entrepreneurs support the regional public by recruiting them for their facility directly and involving them in related tasks. The government also encourages setting up businesses in less privileged areas to reduce economic disparity among different socioeconomic classes.

GDP

Adding more businesses helps boost the overall economy in one way or another. These businesses also bring foreign exchange as a result of product export. Entrepreneurs become a major part of the economy in countries with high entrepreneurship rates. Small-scale industries like cottage industries may also be categorized as entrepreneurs. You might be surprised to know that the cottage industries contribute to more than 60% of the total economy in India. The utilization of local labor and resources increases per capita income, contributing to the GDP. It is among the most critical goals of economic development in any country.

GDP

Capital Optimization

Entrepreneurs are all about money once they are stable. They want to produce a significant investment return to keep the investors engaged for a long time. It leads to capital optimization by offering high employment and a high capitalization ratio. The locals receive more money due to better jobs, and the investors get better returns.

A win-win situation for the workers, investment, and the government!

Reaching Consumer Demands

Every company works to produce many products that cater to the market demand. However, most entrepreneurs come with innovative products that add value. They take care of the consumer’s demands ensuring a steady supply.

Development of Trader

Entrepreneurs are an essential factor in promoting domestic and foreign trade. They take assistance from different financial institutions. Money in the form of trade credit, cash credit, loans, and overdrafts develops trade in the country and eventually helps improve the economy.

Reduce the Concentration of Economic Power

It is common in several countries worldwide that major businesses have economic power. However, this may face disruption when more entrepreneurs enter the stream. The addition of more entrepreneurs will help divide economic power and prevent autonomy.

Backward and Forward Linkages

Entrepreneurs do not work on traditional standards. Instead, they try to bring new technology to make more money without investing a lot. Implementing innovation and complying with the changing technology induces backward and forward linkages. They play a pivotal role in the economic development of a country.

Exports

While entrepreneurs do not export products initially, many eventually move toward them. This expansion of businesses globally contributes to the economy by adding developed foreign markets. It enables enterprises to reach bigger markets, sell a larger volume, better understand and adapt technology and leads to an inflow of currency.

Overall Development

Entrepreneurs do not only provide jobs to a specific number of people. Setting up a manufacturing plant may lead to the need for more units and more people to operate new machinery gradually. It will also open doors for training centers in the area to promote skills. More people will learn and adapt those skills to improve their standard of living. This leads to overall development in that region besides your business goal.

The Bottom Line

Entrepreneurs play a major role in the economy of a country. They provide better job opportunities and improve living standards by increasing per capita income. They also contribute to regional development balance by setting up their units in less-privileged and rural areas. It contributes to backward and forward linkages significantly. Entrepreneurs also boost foreign trade through export to facilitate the inflow of foreign cash.

Characteristics of a Perfectly Competitive Market

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A perfectly competitive market is beneficial to the buyers as it reduces monopoly in the business. The consumers are well-informed about the price of the goods. This discourages high prices and offers equal opportunity to all. The market share does not influence the prices in a perfectly competitive market. While it is attractive, this model is theoretical. Let’s tell you the definition and characteristics of a perfectly competitive market.

What is a Perfectly Competitive Market

A perfectly competitive market refers to a theoretical market structure where both sellers and buyers are price-takers. It means that the producer or the consumer does not affect the market price of goods. The prices are independent of their decisions, eliminating monopoly. All firms in such a setting are price takers and sell identical products. However, the perfect competition model is theoretical, and all markets are imperfect.

Characteristics of a Perfectly Competitive Market

Large Market

The perfect competition market has a large number of producers and consumers. The producers make sure to maintain a steady supply of goods in the market. The products are quite similar to each other in features and pricing. It makes it difficult for the buyers to differentiate between the quality of different products. As the quality of the product is same, no seller proposes exaggerated prices.

Same Products

The products in a perfectly competitive market are the same in features and selling points. They are indistinguishable from the average consumers. The customers can easily switch to other sellers due to negligible differences in the quality. One such example is buying a regular commodity, such as buying bread from a market where everyone sells bread.

Complete Information

The consumers of a perfect competition market have all the information about a business. They are aware of the prices in the market, the quality of the product, and its weak points. This kind of information is also known as “perfect information.” It enables them to move to another producer that offers the same product in a better way. Complete information is not much possible in imperfect markets.

checking information in documents

Cheap Transport

A perfectly competitive market does not spend a lot on transporting the goods to minimize the price. Cheap transport enables the producers and retailers to provide products to the buyers at the decided price without fluctuation.

Standardized Product Prices

All the products in a perfectly competitive market are standardized. They are equivalent with the same properties process. Standardizing the products ensures that the price of the service or goods stays the same. It allows the consumers to buy products at a fixed price to avoid monopoly in the business.

Equal Market Share

Different competitors in a business cannot compete on the price. They have a similar market share. You cannot reduce prices to attract more customers or increase prices to make more profits. When a business increases or decreases the price to benefit itself, it encourages others in the craft to do the same. It disturbs the perfectly competitive dynamics. Thus, a perfectly competitive market does not have varying shares.

No Entry or Exit Barriers

In a perfectly competitive market, firms can enter and exit the market without any restrictions. Common restrictions in an imperfect market include start-up costs, government regulations, and patent issues. These barriers are negligible in a perfectly competitive market.

Does a Perfectly Competitive Market Exist

The Perfectly Competitive Market theory does not exist in real life as all producers cannot have the same product. It is used as a standard to understand how competitive the market is. The agricultural and dairy setups somehow come around the idea of a perfectly competitive market. People usually produce similar products making it similar to a perfectly competitive market.

The Bottom Line

A perfectly competitive market is a theoretical concept that acts as a benchmark for competition in the market. Perfect competition has a large market with people selling the same products at the same price. The producers and consumers in such a setup are both price-takers. It eliminates monopoly from the system. Unlike improper competitive markets, they also do not have any entry and exit barriers. Yet, competitive markets are ideal and ideal situations do not typically exist.

Best Ways to Minimize Your Monthly Auto Expenses

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It’s no secret that automobile ownership may be costly. Between the monthly car payment, insurance, gas, and maintenance expenses, it’s easy to see how your budget can spiral out of control.

However, there are ways to minimize your monthly auto expenses and keep them within your budget. This blog post will help put some light on some practical ways to do just that!

Carpool To Save Gas Bill

One way to reduce your auto expenses is to carpool with friends or family members. When you carpool, you can split the cost of gas, which can save you a significant amount of money each month.

Reduce Your Insurance Costs

Another way to reduce your auto expenses is to shop for the best car insurance rates. Several websites allow you to compare rates from different insurers. You can also get discounts on your car insurance by taking defensive driving courses or installing safety devices in your vehicle.

Refinance Your Loan

In case you are still making payments on your car loan, you may be able to lower your monthly payments by refinancing your loan. Several websites allow you to compare rates from different lenders. You may also consider trading in your car for a newer model with a lower interest rate.

Benefits of Refinancing Your Car Loan

Maintenance Tips

You can save money on your auto expenses by taking good care of your car. Make sure to get regular oil changes and tune-ups. You should also keep your tires properly inflated and aligned. These simple maintenance tasks will help prolong the life of your car and prevent costly repairs down the road.

Cover-More Ground in Single Trip

If you have to make multiple trips in a day, try to combine them into one trip. This will save you time and money on gas. You can also run errands during off-peak hours when there is less traffic. This can help you avoid getting stuck in traffic jams, waste gas, and add to your stress level.

Learn To Do Simple Maintenance

You can save enough money on car repairs by learning to do simple maintenance tasks yourself. For example, you can change your oil or rotate your tires. You can also wash and wax your car to keep it looking its best. These simple tasks will help keep your vehicle in good condition and prevent expensive repairs down the road.

Cash In Extended Warranty

If your car has a warranty, you may be able to get free or discounted repairs. You may purchase an affordable extended auto warranty for your vehicle. This will protect you from paying for expensive repairs down the road.

Downsize Your Car

If you are looking to save money on your monthly auto expenses, you may want to consider downsizing your car. A smaller car will generally cost less to operate and maintain. You may also consider selling your car and using the money to purchase a more fuel-efficient vehicle.

Drive Slow To Avoid Damaging the Car

Last but not least, you can save money on your monthly expenses by driving slowly and carefully. This will help to avoid accidents and costly repairs. It is also important to obey the speed limit and drive defensively.

By following these simple tips, you can minimize your monthly expenses and keep your budget under control.

5 Common Types of Investments and How To Get Started

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In a world where finances are our top priority, it’s important that everyone becomes aware of the many ways in which we can generate money from the money we already have. Making our money work for us can be one of the smartest things we can do, and one of the ways in which we can do this is by investing our money in the economy.

There are many people who don’t know all the options we have to make investments, in fact, there is still a large proportion of the population that remains aware of such options. This can be due to the inability of individuals to research this information, the lack of motivation to learn about the economy and finances, or the little free time many might have due to working multiple jobs at once. For those of you who need a bit more guidance on investments to improve your finances and live a better life, continue reading for the five most common types of investments and how you can get started on each of them.

1. Stock Investments

Stocks are one of the most common investment options out there. If you’ve read a little bit of news recently or have spoken to others about the economy, chances are you’ve heard about stocks. Stocks are shares or portions of a company that you can invest in. Companies like Apple, Tesla, and Amazon all have stocks in which you put your money for growth. Once you invest in these companies, you become a shareholder and automatically generate profits depending on the success of the company.

Another variant of a stock is called a penny stock. A penny stock works just like a normal stock, the only difference is that each share costs less than a dollar. Some of the best penny stocks to buy now in Canada include 5NPlus (VNP), American Lithium Corp (LI), CloudMD Software & Services (DOC), and Drone Delivery Canada (FLT). You can start investing in penny stocks through applications like Wealthsimple and QuestTrade.

2. Real Estate Properties

Another popular type of investment involves real estate properties. Real estate is one of the most convenient ways to make money. You can invest in real estate by purchasing a house or an apartment and renting it for more than it’s worth so it can pay itself off without needing any more investments on your part.

3. Exchange-Traded Funds (ETFs)

ETFs have gained popularity in recent years due to the development of cyber technology which allows us to trade digital art in the same way we trade goods in real life. ETFs are a type of collection of investments that have a fluctuating value depending on the market. This type of investment is usually recommended for new investors due to its diversity. If interested, you can start investing in ETFs right within the stock market by using your choice of Robo-Advisor.

4. Cryptocurrency

Another popular investment option is cryptocurrency. If you’ve heard of Bitcoin, Litecoin, or Kraken, then you already know about cryptocurrency. Cryptocurrency is nothing else than a digital currency that can be used to purchase goods and services. Instead of using the US dollar, you can use crypto to purchase almost anything in the market. You can invest in cryptocurrency with an app like Coinbase.

5. Retirement Plans

Lastly, you can take control of your future and invest in your retirement plan. Your retirement plan will sustain you when you can no longer work during your senior years. You can invest in your retirement through your employer’s 401(k) plan or other options like a Roth IRA, a CD, and even the stock market.

Try any of these options to dive into the investment world today.

5 Tips For Managing Post-COVID Financial Stress

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Personal finance causes many individuals to undergo stress, affecting their mental, physical, and emotional well-being. This happens because many people often struggle with managing their finances. Following the Coronavirus (COVID-19) pandemic, anxiety among the low- and middle-income people have only heightened. Moreover, many have been left unemployed and depend on their savings. 

Luckily, all hope is not lost if you’re also undergoing financial stress due to a money shortage. Thanks to specific tips that can help you better manage your money, thus, effectively dealing with your financial stress. Below are five tips on best handling post-COVID money-related stress and getting your life back on track.

Stress women working on laptop

Create A Budget

For many individuals, financial stress is usually brought about due to a disconnect in the amount of money they earn and how much they spend. Knowing this, a financial literacy skill you need to learn to avoid such a mistake and worsen your money-related stress is creating a budget. Using this tool, you’ll save yourself financial stress by always being on top of how you spend every penny you earn. In the long run, doing this will help you improve your finances to help you achieve your future goals.

To create a budget, you should first identify your net income. After this, take note of all your monthly expenses, such as rent or utility bills. Moreover, you can use a money management app or spending tracker to help you out. Tracking your expenses will help you pinpoint areas where you can cut down.

During the first couple of months, sticking to the set budget will undoubtedly be challenging. However, you’ll slowly get the hang of this recent spending and have a much easier time in the future. As a result, you’ll find yourself less stressed about your financial situation.

Build An Emergency Fund

Building an emergency fund can sound like a far-fetched idea if you’re making barely enough money to get by. But with such a fund, you’ll be able to cope better with financial stress and anxiety, which can give you peace of mind. When building an emergency fund, you should first aim to set aside at least USD$1,000. And after settling all your debts, increase your savings and target setting aside at least three to six months of your monthly expenses.

Because building an emergency fund is often quite challenging, you should start small. This means you can start by saving USD$10 to USD$100, and over time you’ll grow your savings in your emergency fund. With enough money saved, you’ll enjoy greater peace of mind even during times of financial stress knowing that you can comfortably cater to any unforeseen emergencies.

Look After Your Health

When going through financial stress, it’s easy to overlook the need to maintain your overall health. As a result, you find yourself resorting to unhealthy habits such as lack of physical exercise, poor sleeping habits, or an unhealthy diet. Doing this adds tremendous stress to you by affecting your emotional, physical, and emotional well-being, which worsens your financial health in the long run. 

With this in mind, it’s best to put steps to ease your body, mind, and soul into a relaxed state to help you achieve more excellent financial health. The different ways you can do this include:

  • Eat a healthy diet to supply your body with nutrients to help your brain better cope with financial anxiety and be less sluggish.
  • Get adequate sleep, ideally at least seven hours of rest.
  • Exercise regularly to promote the production of endorphins to boost your overall mood and, thus, help you better deal with financial stress.
  • Consult your doctor right away if your financial stress affects your physical well-being. If you suffer from an underlying health condition, this is crucial to help your doctor treat the symptoms before they worsen. 
  • Get emotional support from a family member, friend, or therapist to share the financial stress you’re going through. This action helps you better cope with your anxiety and ensures you don’t make decisions that further worsen your financial predicament.

Doing any of these activities will ease your mind from financial stress by helping you disconnect from your stressors.

Stress men and women with help card

Settle Your Debts

Whereas your focus needs to be on saving and investing to achieve financial freedom, this shouldn’t be at the expense of clearing all your outstanding debts. This is because debt can quickly become a significant burden and cause you great financial stress if left unchecked. With this in mind, it’s essential always to prioritize debt repayment to do away with any financial stress that you might be experiencing.

You can employ different debt repayment methods, such as the snowball method, whereby you start by paying your smaller debts and later go to the bigger ones. In contrast, you can also begin by clearing the debts with higher interest rates, known as the high-rate method. While repaying your debts, it’s recommended that you don’t take any new obligations.

Talk To A Professional 

Money matters can be overwhelming to handle all by yourself. For this reason, it’s best to get help from a financial advisor. With their skills and experience, these professionals can teach you how best to deal with your financial challenges. They do this by teaching you how to save money, reduce your debt, and set attainable goals, which is beneficial during these post-COVID times.

Other challenges that a financial advisor can help you deal with include student loans, medical debt, credit card loans, mortgages, and tax debt. They also can enlighten you about government programs that are in place that are aimed at persons that suffered a devastating blow due to the coronavirus pandemic. With their help and guidance, you’ll, over time, get back on your feet and free yourself from financial stress.

Takeaway

The COVID-19 pandemic has disrupted millions of lives across the globe, resulting in such persons undergoing money-related stresses. If you find yourself in such a position, learning how to manage financial stress is essential for your peace of mind. This guide has elaborated all you need to know on how to go about dealing with post-COVID financial stress and achieve a positive outlook on life. 

The value of the pound in December – How does this compare to January?

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The foreign exchange (forex) market is one of the most actively traded and highly liquid markets. There are many factors which can affect the value of a currency, such as political events, the state of the country’s economy, the recent COVID-19 pandemic, and Brexit, for example.

When looking to become a successful forex trader, you must do some extensive research of the market, as well as the possible factors that could influence it.

So, let us take a look at exactly what is forex trading and how it works, before delving into the how the pound Sterling (GBP) has recently performed in the forex market.

What is forex trading?

Forex trading is simply the conversion of one currency into another. Companies, banks and investors carry out around $6.6 trillion worth of forex transactions every day. Many foreign exchanges are done for practical purposes such as travel, but forex trades tend to take a place on the financial market, in an attempt to earn a profit, as the value of currencies rise and fall.

Currencies are always traded in pairs. The base currency is always equal to one, while the quote currency is equal to the current quote price of the pair. This shows how many of the quote currency it’ll cost to buy one of the base currencies. For example, at the time of writing, the value of the pound is equal to 1.19 Euros (EUR).

There are several currency pairs to choose from – often categorised as major, minor or exotic. All major currency pairs include the US Dollar (USD).

December 2021

With a further understanding of forex trading, let’s look at the value of the GBP over time. In December 2021, the value of the pound was equal to 1.18 EUR. Since the Brexit vote in 2016, the value of the pound against other leading currencies, such as the Euro, has fallen significantly.

This was not helped by the uncertainty of the COVID-19 pandemic, which followed shortly in March 2020. After almost two years of lockdowns, and living in a state of worry about the health of the UK economy, it’s no wonder that the value of the pound has suffered.

On top of this, we have seen rising inflation rates, with an increase of 5.4% in the UK in December 2021 from 5.1% in November — above market forecasts of 5.2%. This is the highest it has been since March 1992, and means that the value of the pound will be affected, as less goods and services can be bought with the same amount of money.  

What’s more, the Consumer Prices Index (CPI) increased by 0.5% in December 2021, compared with a rise of 0.3% in December of the previous year.

January 2022

As previously mentioned, at the time of writing, the value of the pound is equivalent to 1.19 Euros, however did rise to 1.20 EUR earlier in the month. The rise of the value of the pound is partially down to the upcoming easing of COVID-19 restrictions, marking what seems to be the end of the pandemic, and allowing a chance for the country’s economy to recover.

In December, there was concern of another lockdown due to the fast spread of the new Omicron variant, however the Government have stated that as of the 27th January 2022, you will no longer be required to wear a face covering, or have to show your NHS COVID Pass at venues and events by law. This will be followed by the return to office work and a reduced isolation period, causing people to return to local shops and cafes, and in effect, boost the economy.

The UK’s current inflation rate remains at 5.4% (the same as that in December) and the future of the health of the UK’s economy, as well as the value of the pound, looks to be promising — despite the price of electric, and the cost of living, both expected to increase.

According to Trading Economics Global Macro Models and analysis expectations, the GBP is expected to rise in comparison to other currencies, but could face even more uncertainty in the coming weeks, as UK Prime Minister Boris Johnson faces many discussions about his leadership.

Role of the Financial Institutions and Financial Markets in Economy

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We have always read that financial stability helps in positive economic growth. The importance of this statement can never be justified. There is absolutely no way for the economy to grow and benefit the country if the financial sector doesn’t support it. 

If the financial sectors constantly promote or encourage the commercial activities of a country, only then the economy of the said country will progress effectively. Financial institutions and financial markets play a vital role in the progress of a nation and act as a critical driving force for economic lift. 

We have already established the fact that financial institutes and financial markets play a role in the economy, but how do they work? Let’s dive deep into what roles they play and how they affect the economy.

What are Financial Institutions? 

All the institutions that specialize in performing financial transactions such as deposits, loans, investments, insurance, etc., are known as financial institutions. There are mainly five types of financial institutions regulated by the central government. 

  1. Commercial Banks
  2. Investment Companies
  3. Brokerage Firms 
  4. Investment Banks 
  5. Insurance Companies 

These institutions ensure that people make the right use of interest rates and make profits that benefit them and the whole economy.

business ideas

Role of Financial Institutions in Economy

  • Financial institutions have significant importance in maintaining economic stability and controlling inflation. They regulate the money supply for a country’s economy. When the central bank modifies reserve requirements by lowering them, banks can more excessively loan out money. This increase the money supply in the economy. 
  • Another role played by financial institutions is capital formation. Anything from land to machinery is considered capital, and financial institutions make sure to increase the capital stock. This is done when the unused money from individuals is invested in different businesses. This is mainly conducted through savings accounts in banks and investment opportunities provided by investment firms. 
  • Financial institutions help in the growth of the business sector. Financial institutions assist small, new on the market and medium-sized businesses in their early stages of operation. They supply these businesses with both long-term and short-term funding. The long-term investment assists companies in capital development, while the short-term funding programs help the companies meet their requirements for everyday capital.
  • Financial institutions are constantly under government regulation, and it is a country-wide phenomenon. They work according to the government standards and help the economy in its growth. The best way to describe it is to notice how banks come out with loans at lower interest rates for a particular sector. Governments issue guidelines for the banks to lower the interest rates for the industry facing developmental issues. This helps the businesses of the said sector to get the money required to initiate the growth. When the business sector grows, the economy also uplifts itself. 

Financial institutions are the foundation of a country’s economy. If all these institutions collapse, the economy will collapse with them and will be unable to recover. 

What are Financial Markets? 

Financial markets offer a channel for the acquisition and selling of stocks and bonds for potential profits. People invest their money or savings in the form of equities to gain more financial profit in the future. 

Financial markets contribute to the uninterrupted delivery of savings and productive investment in a country’s economy, facilitating economic growth, capital formation, and the development of products and services. 

Following are the types of financial markets existing in today’s economic world: 

  1. Capital Markets 
  2. Foreign-Exchange Markets (Forex) 
  3. Stock Market 
  4. Money Market
  5. Commodities Market
  6. Bond Market
  7. Derivatives Market 

The confluence of financial markets and institutions of a country, and a diversified range of financial assets and mechanisms, meets the demands of borrowers and investors and hence benefits the economy as a whole.

Role of Financial Markets in Economy

  • Members of the financial markets get indications from the cost of borrowing and the rate of return on their investment. These signals assist in directing finances to individuals, corporations, government organizations, and investors who want to get money by linking them with interested lending institutions or lenders.
  • Different securities such as bonds or public and private shares are sold in the capital market to generate financing for multiple enterprises and government institutions in short to long-term ranges.
  • The foreign exchange market ensures efficient transactions and smooth transitions of currencies. Without the foreign exchange market, the trading and monetary transactions would not be possible, thus resulting in an economic collapse. 
  • Financial markets generate liquidity, helping firms to expand and businessmen to fund their enterprises.
  • Capital markets help to stabilize economies by instilling investor interest and confidence. More investments in the business sector contribute to the development and growth of economies.

You may have noticed that the countries with poor economies often have minimum to no growth in their financial markets. Their economies are not developing because their financial markets are not working smoothly. 

It is evident that the economy won’t be able to stand on its feet without the smooth and uninterrupted functioning of financial markets and financial institutions. There are many factors that contribute to stable economic growth, and financial markets and institutions are one of them. 

To have a developing economy and a better country’s financial stability, each factor has to play its part. If any of the elements are not working efficiently, the economy will face a downfall.

Relationship Between Gold and the U.S. Dollar: An Overview

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In addition to its important role as a commodity, gold is certainly one of the oldest tradings means that the human race knows. As a matter of fact, gold has a double purpose; it can serve as a commodity as well as a currency. As a commodity, gold has amazing properties; it is dense, soft, lustrous, malleable, brilliant, and ductile. As a currency, gold is all-pervasive around the world. On that premise, the following article presents an overview of the history of gold and takes a deep dive into its relationship with the U.S. dollar.

The history of gold and its symbolism

First discovered in river bottoms in its natural state between 5,000 and 3,000 BCE, gold has been coveted by civilizations throughout history. Even in this day and age, gold still remains a proxy of prosperity and wealth and the ultimate symbol of human achievement. In the course of history, gold, which is a rare metal, was used by a substantial number of governments as a safe-haven asset to back their currencies in case things go awry on the economic front. In fact, while a lot of governments still maintain a lot of gold, none of them uses it in order to back their money in this day and age. That being said, the U.S. dollar is considered to be the standard for pricing this rare yellow metal. For that reason, there is a unique relationship between the currency value of the United States and the price of gold. 

The U.S. Dollar vs Gold

As gold is considered to be an asset, it has an inherent value. This value, however, can fluctuate over the course of time and, in some cases, in a volatile way. For the most part, when the U.S. dollar value increases in comparison to other currencies, the price of the yellow metal tends to decrease in terms of the U.S. dollar. The reason behind this being that the price of gold becomes higher in other countries, which means there will be fewer buyers, which means less demand. On the other hand, as the U.S. dollar value decreases, there will be more demand for gold so it appreciates. That said, the U.S. dollar value is not the sole facet that affects the value of gold; interest rates also affect it. If the U.S. central bank increases interest rates, interest rates across the economy will increase. This will attract more capital and investors from all over the world to invest in the U.S. and, consequently, buy the U.S. dollar. 

Gold trading

In addition to being one of the world’s most precious metals that has an imperative role in the economy and that appreciates ahead of its industrial usage, gold is one of the most widely traded metal commodities. In fact, there are several reasons to engage in gold trading. As gold preserves its purchasing power and performs great at the expense of other assets, it can serve as a hedge against inflation and turbulent times in the world’s economy. Gold trading can also be popular among investors who want to diversify their portfolios. 

A durable, consistent, divisible and valuable currency, gold still remains one of the world’s most storied currencies that serves as a barometer with regard to the safety and security of governments and their economy. 

Minimum Wages in Illinois

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All employers are asked to pay their staff a minimum wage. It is defined as the least rate of working per hour by the employees. If somehow, a worker isn’t able to earn up to the minimum pay, he/she should clear the due amount to the respective entity. Different regions have locked state, local, or federal rules for the minimum wages, including Illinois. The fundamental cause behind fixing this lowest amount is such that a company/office can pay the right amount to its employees on time.

Let’s read the article below to know more about Illinois and its minimum set wages for employees.

Figure Out Illinois’s Minimum Wage in 2020

The general minimum wage rate for the federal department in Illinois was set to be 7.25 dollars per hour. Keeping this in mind, non-tipped workers above 18 years are getting a handsome wage rate of 10 dollars per hour by 1st July 2020. However, students and teenagers working to earn for themselves earn the least rate of 8 dollars/hour. According to a law in Illinois, if these under-eighteens serve their employers for almost 650 hours a year, they should be granted the same salary rate as workers above eighteen are getting. It was quite an impartial decision made by the respective government.

A Little History About Increasing the Minimum Wage Rate in Illinois

The House and Senate of Illinois passed a law in 2019, stating an increase in the wage rate to $15/hour by 2025. Later on, the government outlawed this statement after thoroughly evaluating workers and their performances in past years. It was not a good experience as the workers used to serve fewer hours and earn more up to $13/hour in 2016. Thus, the decision was reconsidered, and the minimum wage in Illinois now stands at the rate of $11 per hour.

Illinois Lawful Protection for Tipped Workers

An employee should clearly understand the rules and regulations behind getting tips on providing services. What should be the tipped amount paid by the employer? Should you contribute to handling the compensation or due payments of your working place? All these general questions are answered according to the laws of your respective state. Similar is the case with Illinois! The government has fixed some rules of paying the tipped amount to the employees working in Illinois. They are generally paid almost sixty percent of the actual minimum wage per hour. Let’s discuss in detail the key tips and legal protection provided by the Illinois government and federal state to the tipped workers.

The primary rule for getting tips is that it all belongs to the particular worker and not to the employer. Still, there are some exceptions found where a worker can share his tipped amount with other parties, such as:

Rules for Tip Credit: A few states give their employers a right to count their staff tips as wage pledges. It does not mean the employer is getting a portion of his employee’s tips, but he’s instantly paying that percentage to the respective person. It is called tip credit, and Illinois usually follows this step under basic tips rules.

Rules Regarding Tip Pool: According to a law in some states of Illinois, workers getting tipped should share a portion of that amount with other staff in the tip pool. This way, all employees can enjoy a part of the extra salary.

Illinois Dealing with Overtime Minimum Wage

An employee’s overtime salary considers being 1.5 percent of its actual minimum earning per hour. Hence, as per the current wage rate in Illinois, the overtime amount turns out to be 16.5 dollars/hour. Now, who is eligible to get this overtime amount? All those workers who spent their forty hours a week on work are authorized to receive this 1.5 times extra amount.

Exemptions of Employees to Get Overtime Wage Salary

As everyone struggles to earn more and more, the government of Illinois specified some workers who can acquire this facility. At the same time, they also exempted a few who are ineligible for this overtime minimum wage. A necessary list of these exceptions include:

  • Some technical workers, such as engineers, software professionals, etc., get almost 27.63 dollars/hour.
  • Some administrative by Fair Labor Standards Act
  • Workers who serve in television or radio in an area with less than 100,000 people
  • All the workers of state agencies or municipalities
  • A few agricultural employees
  • Employees who are commissioned by the Fair Labor Standards Act
  • The staff of a few educational institutes who are facilitated by their own unit

Should Illinois Work on Increasing the Current Minimum Wage Rate?

The state should respect increasing its hourly rate with time, bearing in mind its current minimum wage rate. Almost 13 states offer a minimum salary of 10 dollars per hour or maybe higher than this. It counts to be approximately equal to Illinois’s minimum wage rate. If this region plans to raise its hourly income for its employees, it can significantly influence the overall economy, lessen the income’s injustice, and create tax returns.

3 Customer Service Essentials in the post-pandemic Economy

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Thousands of articles have already been written about the way the pandemic has changed the behavior and expectations of customers. Over the past year, many consumers have been forced to change their habits, use different suppliers and switch to new channels.  As a result of this varied exposure, they’ve more than likely had the opportunity to compare your business with others they’re in contact with.

What does this mean, for example, for a small retailer? First, it means they’re no longer comparing your service with that of your competitor down the street. They could be comparing your service delivery to that of Amazon or any other huge company with vast resources at their disposal that has impressed them over the past year.

So how can you compete and retain your customer base? How can you ensure that you compare favorably to the big online players or the best in your niche?

Here are 3 Key Strategies

Your brand promise

Create a brand promise that’s not about you, it’s about what you promise to do for your customer.  So it’s not: ‘We promise to be transparent’, it’s ‘We promise that you’ll know exactly the progress of your order at all times’. Your customers will understand how well you measure up to this in reality.

Get your delivery process right

Isolated at home, customers who order online have come to expect their purchases to appear on their doorstep almost instantly. Again, while the big players have led the way, smaller businesses are increasingly finding ways to compete. With the increase in online purchasing, many businesses have found themselves, almost by accident, with a far more geographically diverse customer base.

Whether you fulfill your orders in-house or outsource, choosing a reliable courier service is essential. As a senior manager at Texas Couriers explained “Each package we deliver to customers in our area is an opportunity to build our reputation locally. That’s why we commit to delivering in hours, rather than days.” Partnering with a local service ensures you both have a stake in outstanding service delivery and exceeding customer expectations.

Give your brand a human face

Whether your team encounters customers face-to-face, or electronically, choosing the right people to represent your brand and solve problems is an essential aspect of your service delivery.  

For example, there are two trends in online support. Large organizations are using AI tools to deal with customer enquiries and provide support. However, how often have you been wowed by a robotic response? More likely you’ve been left frustrated and angry. That’s why many smaller companies can grab a competitive advantage by taking the opposite route. Pop-ups on your website promising that customers can talk to a ‘real person’ offer a human element that no bot can replicate.

Make sure you have the right people in all “customer contact “ roles- they should be empathetic problem-solvers.  Move the ones who aren’t focused on engaging with customers and to other jobs, and reward your customer service superstars appropriately – they remain  the key to your company’s continued growth success.