Speaking in good morning great britainDeputy Prime Minister Dominic Raab said wage moderation is needed to avoid “a vicious cycle of inflation going up and staying up longer”.
Similarly, Bank of England Governor Andrew Bailey, who is paid £575,000 a year, has repeatedly asked workers to “think and reflect” before calling for pay rises. This is due to concerns that additional wage costs will be passed on to consumers, further increasing inflation.
But with the consumer price index hitting a 40-year high of 9.1%, this will be a bitter pill to swallow for many UK workers. When adjusted for inflation, real wages fell 3.4% in April compared to a year earlier. This represents the biggest drop in income in real terms since 2001, according to the Office for National Statistics.
Do employers have to meet wage demands?
Many employers will find themselves caught in the middle: should they listen to ministers’ warnings about the risks of spiraling inflation, or provide staff with the necessary pay rises to help them keep up with rising costs of living?
George Dibb, director of the Center for Economic Justice at the IPPR think tank, believes that looking at inflation solely in terms of wages is an oversimplification. He says that although inflation is a measure of rising prices, there are different components that currently contribute to it, from energy prices to the cost of goods to rising profits.
“I don’t think anyone is served by a debate where we pretend it’s just one factor influencing inflation,” he says. “Talking only about salaries does not help the discussion.”
While the Bank of England has expressed concern that companies could raise prices if they don’t exercise wage restraint, leading to a wage and price spiral, Dibb believes two factors show this is not a current risk. Wages are at a low point and falling at their fastest rate in more than 20 years when measured against inflation. And IPPR research found that the earnings of the largest non-financial companies were up 34% at the end of 2021 compared to pre-pandemic levels.
“When prices go up, profits go up and wages go down, that translates into a transfer of wealth away from workers and shareholders and we don’t think that’s fair,” Dibb adds. “Wage moderation may be a concern in the future, but not at the moment. The most pressing thing we need to worry about right now is the earnings squeeze.”
Many leading economists agree. Last week, 65 academics wrote a letter to Prime Minister Boris Johnson, saying cutting wages is “the exact opposite of what is needed in response to this current wave of inflation.” Instead, they suggest the government should “use every tool at its disposal to keep energy costs down, clamp down on excessive profits and unlock global supply chains.”
What happens if salary increases cannot be met?
But not all companies are seeing these record profits now. Most of those gains (90%) were concentrated in 25 companies, many of which are in the gas or commodity markets.
“For companies that are seeing higher profits, the answer is clear. They should pass those benefits on to their employees and lower their prices,” says Dibb. “For companies that are not, I understand that they are in a very difficult situation and there are no easy answers. I think the question then becomes political: how to get out of this inflationary period without seeing the economy enter a recession and these companies collapse?
Calls for pay restraint from the likes of the prime minister and the governor of the Bank of England may provide some sort of justification for employers seeking to limit wage increases. But James Willis, head of employment law at Stevensdrake Solicitors, warns: “Legitimate concerns about the looming cost-of-living crisis are likely to weigh much more heavily on the minds of many workers than the views of politicians and technocrats.”
It admits that “most employment contracts reserve broad discretion to grant any salary increase an employer deems appropriate or not to grant any salary increase.” However, the risk remains that employees who do not feel adequately compensated will seek employment elsewhere.
Adding to this challenge is the broader labor market which, due to a combination of record vacancy rates and low levels of unemployment, is extremely tight at the moment.
Steve Tonks is Senior Vice President of EMEA at WorkForce Software employee management platform. He thinks employers face a tough choice. “Either raise employee wages, when many businesses are just beginning to recover from pandemic-induced losses, or risk losing staff to higher-paying employers,” he says.
Some companies have looked for alternatives that recognize the challenge that many people now face, while being mindful of the ongoing business costs.
Following the action by Unite, the union representing Lloyds Banking Group staff, the major bank has offered 95% of its staff a one-off payment of £1,000 to help with cost of living increases.
Similarly, publisher Bloomsbury will reward staff with a 6% bonus, following record annual sales. In these cases, the advantage of offering a one-time bonus means that employers are not required to pay higher wages the following year, in case inflation or their earnings drop again.
Tonks suggests that access to earned wages, a payroll scheme that allows employees to access their pay as soon as they’ve worked hours, could be another way to alleviate current pay pressures. He adds: “Although increasingly important in the current climate, salary is not the only consideration for many employees. Considering the overall experience of employees is one way to retain staff when salary pressure is high.”
While some employers may be aware that they are adding to current inflationary pressures, many economists believe that wage restraint is not the right course of action today. Similarly, unless some form of employee support is offered, the consequences of losing staff to better-paid competitors can end up being more challenging.
Objective Recently announced the launch of a new wallet to support value interaction in Metaverse. Objective Paymenta new Facebook branding Paymentwill continue to perform these same functions in the past. However, it will expand as a universal way to pay for goods and services in Metaverse.
Objective Payment will replace Facebook Pay.
The company announced the launch of a new digital wallet that supports the utility economy in the next iteration of metaverse of Objective. The wallet, nicknamed Objective Paymentit will be an evolution of Facebook Pay. He Still support the range of payments it currently handles. However, a new focus on digital identity and land forecasting will be added.
According to the CEO of ObjectiveMark Zuckerberg Objective Payment it will be a solution to two problems of the metaverse Nope Accessibility with digital assets and property protection.
I declared: ” A the future, there will be all a lot of digital items you might create or buy – digital apparel, art, videos, music, experiences, virtual events, etc. Proof of ownership will be important, especially if you want to take some of these items with you to different departments. »
To discover: eBay announces the acquisition of the NFT marketplace KnownOrigin.
Objective Payment to aim for standardization in the metaverse
Ideally, anything purchased in part of Metaverse Should be available on another platform with the same functions and features, Zuckerberg said. This is one of the goals that Objective try to achieve with Objective Pay. It is aboutan identity Web3 that binds the purchase of digital goods to a single digital identity.
Zuckerberg added: ” THIS type of interoperability will provide much better experiences for users and greater opportunities for creators. That is, the more easily you can use your digital assets, the more you will value them, which is the most important market for creators. »
Learn more: Matrixport offers new institutional security services for NFT through Cactus Custody.
Additionally, Zuckerberg believed that a common global payment method would provide many opportunities for content creators. Indeed, the benefit of consumers could buy their content. However, this can only be achieved with a certain degree of standardization.
pay the reminder, Facebook changed its brand image to Objective in October to capture the progress of the company’s main ambition, which is to build the metaverse. After then, Objective I started renewing these products to match the company’s new brand image. For example, Oculus quest is now Objective quest and Facebook Portal is now Objective Gate. It is logical that Objective also change its payment experience, especially since it get ready for the metaverse.
Google faces a legal problem in Mexico: it will pay 5,000 million pesos for moral damages – Marketing 4 Ecommerce
The internet giant faces a new legal problem, now in Mexico: Google must pay 5,000 million pesos for moral damages to Ulrich Richter Moralesa Mexican lawyer who sued the internet giant for authorizing the creation and dissemination of the blog “Ulrich Richter Richter and his chingaderas a la Patria”, where It is linked to crimes such as drug trafficking, money laundering and document forgery..
On June 13, the Eighth Civil Chamber of Mexico City ruled that Google is responsible for creating and distributing the blog, which is hosted on Bloggerplatform of Google Inc, and which is always available on the Internet.
The background to the legal problem Google is facing in Mexico
According to the Mexican justice, Google violated the rights to personality and honor of the lawyer, who in 2015 sued the American companyits subsidiary in Mexico and the author of the blog.
Ulrich Richter Morales has denounced Google for distributing the blog, where he is accused of serious crimes and of teaching his partner to falsify documents. Photos of Richter and his family were released in the publication.
The attorney is working on a court case for the recreational use of marijuana in the country and has extensive legal experience, He has represented companies such as TV Azteca, Revista Proceso and Mexican politicians. like the former governor of Coahuila, Humberto Moreira Valdez.
The tech giant failed to appeal the conviction
In 2021, when Judge Judith Cova Castillo sentenced Google to pay 2 billion pesos for “tolerating and authorizing illicit advertising and unwarranted dissemination of illicit blog content worldwide”, the tech giant appealed the decision.
The call hurt Google since the resolution is a new court sentence where he is forced to pay 5,000 million pesos to the lawyer.
Mexican justice condemns Google Inc
With votes in favor of magistrates Manlio Castillo Colmenares and Álvaro Augusto Pérez Juárez, the Eighth Civil Chamber resolved the lawsuit in favor of Ulrich Richter Morales, named Alejandro Gutiérrez Torres as the author of the text and indicated that Google Inc, an American company, is responsible for spreading the accusations against the lawyer Mexican.
The branch of Google in Mexico was exempt from liabilitybecause you have no control over the Blogger platform.
According to a Google spokesperson, the phrase is “arbitrary, excessive and without any basis”, assured that the company will defend itself until the last resort. “Decision infringes freedom of expression and other fundamental principles and we hope that the federal courts will act in strict accordance with the law“, said.
As, Richter Morales celebrated the sentence and says that the sanctions are taken according to the income of the offender.
“Punitive damages are based on the offender’s financial capacity and must be exemplaryTherefore, any amount fixed in the case of Google according to the parameters indicated by the doctrine and the Supreme Court of Justice of the Nation is important, since we are in the presence of one of the five richest companies in the world.“, said.
Finally, Richter Morales concluded: “This must have been taken into account by the tech giant when asked to take down the blog, which they ignored and now there are the legal consequences. at the end of the road the Supreme Court will rule in due time and definitively on the amount of the sanction”.
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When Klarna launched its Buy Now Pay Later (BNPL) service in the UK in 2016, interest-free credit at the point of sale seemed like a sideshow. But with the payment method attracting growing interest from consumers and retailers, established banks like NatWest are now entering the field.
It’s still early days for BNPL, which continues to be overshadowed by the credit card market. There are currently 35 million active credit cards in the UK, according to UK Finance, with £16.2 billion spent in January 2022 alone. BNPL, on the other hand, was used at least once by around 15 million people, or around 28% of the adult population in October 2021, according to Equifax, and the average user paid £125.32. That suggests BNPL’s overall loans are about a tenth that of credit cards.
However, banks are willing to take advantage of the new market. NatWest looks poised to be the first incumbent bank to enter the BNPL arena, launching a new product this summer. It promises to bring one of the main advantages of a credit card to BNPL: “consumer protection on all purchases”. BNPL will also be part of the NatWest mobile app, with the aim of offering an “effortless” customer experience.
The bank strikes back
NatWest has not provided details of what it might charge retailers. However, its size may help it undercut fintech providers BNPL. It can also have another advantage: the incumbents know how to comply with the regulation.
NatWest will not be alone. Monzo was the first UK bank to enter BNPL with ‘Monzo Flex’ late last year. It offers interest-free payments in three installments, although it has an interest rate of 19% APR when the client chooses six or 12 installments. From the consumer’s point of view, this is similar to a credit card.
BNPL could eat up a much larger established business, so why are the banks interested?
It all comes down to consumer expectations, increased choice, and why BNPL took off in the first place.
BNPL appeals to consumers in part because it’s accessible to people who can’t get a credit card or don’t want a hard credit check. In the UK, you’re still subject to rules that allow informal credit, for example setting up a relationship with a newsstand at the end of the week, though those arrangements will change shortly. Mainly, though, it’s because it’s cheaper and less complicated.
It is particularly important that BNPL costs less than a credit card or an overdraft, according to a survey conducted by Bain. Some BNPL providers, such as Klarna, do not charge interest or late fees on smaller sums. Klarna has a regulated credit offer for larger amounts that does charge interest, but there is a fixed total cost and no revolving credit.
In contrast, the average cost of credit card loans was 18.28% in January 2022, while the effective interest rate on overdrafts was 20.83%, according to the Bank of England.
Klarna has described credit card markets as “rigged” against both merchants and consumers and only working in favor of banks that charge excessive fees. It is not the only fintech that sees a business opportunity in the margins of established players and better customer service.
“Buy now, pay later can absolutely displace credit cards in the UK,” says Shachar Bialick, founder and chief executive of Curve, which aggregates multiple cards in one card and app and also offers BNPL.
The BNPL benefit
BNPL offers a range of other advantages. Card providers like Visa, which have large economies of scale, charge retailers less than 2% for credit service. BNPL can demand more than double.
At first glance, that seems potentially off-putting to retailers, who have long complained about overcharges on cards. However, the magic sauce of BNPL is that it increases sales compared to other payment options. That matters in an online world where the competition is just a click away. Bain says that about 57% of merchants see an increase in “basket conversion” and about 46% saw an increase in order value.
BNPL also appeals to a broader range of consumers, including the less well-off. In general, retailers find that BNPL pays for itself, even if it comes with a higher percentage fee than a card payment. The bottom line is that consumers are flocking to such solutions, which means that both retailers and banks will have to provide access more and more.
“The fintech sector grew out of the demand for more diverse financial products that work for both consumers and providers.” says Claudio Alvarez, a partner at GP Bullhound, a technology investment and advisory firm. “Klarna and others have revolutionized the consumer lending space. It was only a matter of time before incumbents caught on and started adapting their product offerings to keep up with the new emerging fintech.”
A sea change in retail financing
Although retailers are willing to offer BNPL, it is not lucrative for financial providers, at least not yet. Klarna, the largest BNPL player in the UK, had global revenues of around $1.6bn and net losses of around $758m in 2021 as it expanded. It now serves 45 countries. For comparison, Visa’s net income in 2021 was $12.3 billion.
But Klarna, like many tech companies, wants to reshape its entire market for the long term, not make money now. Its goal is to be a major aggregator that only takes the smallest margins by removing what it sees as unnecessary financial taxes on the economy. If it is successful, some banks will need new business models.
There are also regulatory issues to consider. UK regulators began taking a hard look at BNPL with the Woolard Review in February 2021. It concluded that “as a matter of urgency, the FCA [Financial Conduct Authority] must work with the Treasury to ensure that the necessary amendments to the legislation are made to bring BNPL products into the realm of regulation.” That is expected this year.
Established payment companies, including banks, already comply with long lists of often onerous regulations globally. This underpins its scope and scale. Some challenger banks, on the other hand, have struggled to keep up with the essentials of domestic market compliance, as the Prudential Regulation Authority recently noted.
Banks’ deep compliance skills could be a distinct advantage in regulated BNPL. No one has suggested that companies like Klarna are not doing their business well, and Klarna itself welcomes the regulation.
However, while some fintech challengers are being punched in the knuckles for poor back-end processes, incumbents are built to respond to regulation. With BNPL regulated, you now have the opportunity to enter a growing, out-of-the-box market that is tailored to your particular skillset.
He didn’t test me. Pay impulses I say. In the end you can’t help it if you’re looking to grow faster. You need financing as leverage in your business. There is no other.
Everyone has to pay taxes. The stupidest thing you can do is try to defraud the state to save yourself miles or even millions of money. Your freedom is priceless. Going to jail for money is not worth it. In addition, we do not want to live in a society where breaking the rules of coexistence is something normal and well seen.
Then there is the part of having a strategy when it comes to paying taxes. If you try the theme there are options to pay more or less in a 100% legal way. There are even more options if you operate between several countries, as is the case with me. One thing is essential for this. You have to know more than your tax advisor. Yes, he heard me correctly. A media consultant listens to the “normal things” to call it something. You have to put your batteries to check taxes and structures that allow you to save legally. It’s what I always do. I call up advisers and tell them “I have an idea…”. Then you are an advisor who tells you where the risks are and if your plan can work or not.
Last year things have been going well financially. The downside of all is that this entails a significant payment of taxes. 2 or 3 years ago I always wanted to minimize this part. Now I allow accumulating a minimum amount of benefits that entail a relevant tax payment. Why? For a very simple reason: to demonstrate solvency to the bank.
Banks are an essential instrument to continue investing and use your existing capital as leverage. Right now I am closing a financing in Germany of 305k for the purchase of a local. It is not yet 100% confirmed, but it looks good, although you can close the purchase without having to put a single euro on the table. They even lend me 7k to do a little reform.
When they do the studies they always look at your income from last year. A person who does not pay taxes consequently has no income (or very little). Many entrepreneurs act in this way to maximize the cash flow available to invest. I always tell my advisor that my goal is to maximize cash flow. I don’t need to have the money on a personal level. As long as I have it in the company, I can use it to grow assets.
What little has been taken into account in the past is the impact of paying taxes. Let’s say we pay 30k taxes. This amount can serve as leverage to get 300k financing. That is why it makes no sense to minimize the part of paying taxes. You have to find a good balance. The issue of accumulating debt is a dangerous game. You have to know very well what you are doing because things can go wrong. When I get into debt, I take into account different scenarios and I do so if I really think that a possible catastrophe of any kind is not going to ruin me. You will never be able to anticipate everything that can happen but you have to at least give it some thought.
So things have changed. I like paying taxes, if it opens doors for me with banks.