Friday, November 27, 2009

Amazon’s supply chain

The task of shipping millions of parcels each day is no small feat. Amazon.com has the unique distinctions of shipping millions of parcels during the Christmas shopping season.  In UK, the peak was observed at 1.4 million shipments on December 08. The Financial Times carries the details:

At its peak last year, Amazon’s UK operations dispatched 1m items on one day. Orders peaked at 1.4m items on Monday, December 8. Amazon expects another “cyber Monday” peak this December.

Wednesday, November 25, 2009

Immigrants in Canada earn less than locals

The Globe and Mail recently highlighted a study by Statistics Canada that shows that recent  immigrants earned less than equally qualified locals doing the same job. However, the study indicated that those immigrants who have spent over 10 years in Canada have been able to narrow the earnings gap. The detailed study could be downloaded by clicking HERE.

I have leafed through the study and discovered that the difference in wage is not corrected for other mitigating factors. The differences have not been tested statistically and the wage differences are not determined in a regression-type model. This is a serious limitation of the study because it does not allow us the ceteris paribus inferences.

For instance, the study has found a $2.30 difference in the hourly wage between immigrants and non-immigrants.  However, if one were to control for factors other than education, which are instrumental in determining a person's wage, i.e.  personal drive, communication abilities, familiarity with the industry and working culture, productivity, would one have observed the same wage difference as observed in tabulations reported in the study?

Irrespective of the abovementioned caveats, the study tabulates wage differences and offers interesting comparisons, and is of great value for a debate on this critical issue.

Statistics Canada reported the following:

Wage-related indicators

In 2008, the average hourly wage of a Canadian-born employee in the core working-age group of 25 to 54 was $23.72, compared with $21.44 for an immigrant worker, a difference of $2.28 an hour. A gap existed regardless of when the immigrants landed. However, it was widest, at $5.04, for immigrants who had landed within the previous five years.

The gap in wages between immigrant workers and their Canadian-born counterparts was particularly wide among those with university degrees. Immigrants aged 25 to 54 with a university degree earned $25.31 an hour on average in 2008, about $5 an hour less than their Canadian-born counterparts.

In terms of wage distribution, the proportion of immigrants earning less than $10 an hour in 2008 was 1.8 times higher than for Canadian-born workers. At the other end of the spectrum, a lower share of immigrants earned $35 or more an hour than the Canadian born.

Union coverage among immigrant employees aged 25 to 54 in 2008 was lower than the Canadian born regardless of period of landing. The share of Canadian-born employees with union coverage was nearly 1.5 times higher than for immigrants as a whole, and 1.3 times higher than for immigrants who had been in Canada for over 10 years.

Over-qualification for the job

In 2008, 42% of immigrant workers aged 25 to 54 had a higher level of education for their job than what was normally required, while 28% of Canadian-born workers were similarly over-qualified. Regardless of period of landing, immigrants had higher shares of over-qualification.

More than 1.1 million workers aged 25 to 54 who had a university degree were working in occupations whose normal requirements were at most a college education or apprenticeship. The share of immigrants with degrees who were over-qualified was 1.5 times higher than their Canadian-born counterparts.

Over-qualification was particularly prevalent among university-educated immigrants who landed within five years before the survey. Two-thirds worked in occupations that usually required at most a college education or apprenticeship.

Modest sales recorded in September 09

Retail sales in Canada totalled $34.9 billion in September ’09. This amounted to a 1% increase over August 09. The retail sales, excluding the automobile sector, rose by 1.1%, which is the largest gain recorded since January 09.

However, when compared with September 08, retail sales declined by 3.3%.  The automotive sector declined by 11% followed by furniture and home furnishings at -7.9% and clothing/accessories stores at –4.7%. Food and beverage stores reported an increase of 3.6% in September 09 against September 08. Pharmacy and personal care stores registered a 5.9% increase in sales for the same time period.

The recent retail sales suggest that Canadians have continued spending on essentials and staples, but have tightened their purse strings on discretionary spending. Thus, pharmacies and grocers are doing well, and furniture stores are struggling in Canada.

Source: Statistics Canada.c091123a[1]

Tuesday, November 24, 2009

US home prices slowing their ascent

The US home prices have slowed down the increase in home prices observed from June to August 2009 when the home prices appreciated by 1% each month. The increase in home prices was much modest at 0.3% in September 2009. Compare to the peak observed in May 2006, the US home prices in September 2009 were still 9.6% lower than the 2006 record highs.

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Source: http://www.haver.com/index.htm

Recession hardly makes a dent in transport energy consumption

The recession in 2008, it appears, has hardly made a dent in the nation’s transport energy consumption. While Canada suffered hundreds of thousands of job losses in 2008, the decline in transport energy consumption was merely 3.5%.

At 31% of the final energy demand, the transport sector is the largest user of energy in Canada. Comparatively, the energy use by the industrial sector, second largest user in Canada, fell  by 5.9%.  This presents an interesting comparison: the decline in the industrial sector energy consumption was almost twice that of the reduction in the transport energy consumption.

Overall energy consumption in Canada in 2008 (7,793 petajoules)  declined by 2.1% when compared with 2007 (7,958 petajoules). “One petajoule equals roughly the amount of energy required to operate the MontrĂ©al subway system for one year” Statistics Canada.

On a positive environmental note, energy generated using fossil fuels (natural gas, refined petroleum products and coal) declined by 3.6%.

Other salient comparisons include:

“Crude oil production decreases

Canadian companies produced 159 million cubic metres of crude oil in 2008, down 1.2% over 2007. (A cubic metre contains 1 000 litres).

Alberta's oil sands accounted for 70% of total crude oil production in 2008, up from 43% in 2007 and well above the 28% in 2000. The oil sands produced 192 000 cubic metres of oil a day in 2008.

Exports of crude oil, primarily to the United States, increased 1.6% from 2007. According to the United States Energy Information Administration, Canada remained the leading export country to the United States, ahead of both Mexico and Saudi Arabia.

Canadian crude oil now represents 20% of total US demand for imported crude oil. These exports account for more than 65% of all Canadian production. The US Midwest is the most significant market for Western Canadian crude oil.

“Modest decrease in natural gas production

Natural gas production fell 4.9% in 2008. At the same time, natural gas drilling declined by 16%.

Natural gas exports to the United States fell to 3 941 petajoules in 2008, down 4.0% from 4 106 petajoules in 2007. This decrease reflected increases in natural gas production in the United States.”

(Statistics Canada)

UI recipients rise in September

[Data and maps in this blog are obtained from Statistics Canada]

While those employed in the financial industry are coming up with the spending plans for the bonuses heading their way in December, it appears that not all in Canada share they good fortune. The latest figures for the unemployment insurance suggest that the number of UI recipients suddenly rose by 54,300 (7.1%) in September 2009 after falling for two months preceding September.

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The total number of UI recipients in September 2009 reached 818,000, which is 64% higher than the one observed in October 2008. The largest increase in UI recipients was observed in the three largest English speaking provinces namely, Ontario, British Columbia, and Alberta.

The number of beneficiaries increased in Ontario by 9% in September 09. The unemployment losses in Ontario are driven by the losses in the manufacturing sector. The increase in Alberta was even more drastic at 25%. It appears that Alberta’s petro economy has run out of steam.

I am wondering how this increase in UI recipients reconciles with the  increase in housing prices and volume of trades in the resale housing market in Canada. Where are the funds and confidence coming from if the job market remains volatile.

The spatial distribution of change in UI recipients for urban Ontario and Quebec is presented below where the colour coded map presents the percentage change in number of people receiving Employment Insurance regular benefits, September 2008 to September 2009, by Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs).

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Rest of Canada presents the following outlook.

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Sunday, November 22, 2009

Mattel unveils a veiled Barbie! Whatever it takes to make a sale

Finally, Barbie adorns a burka. The iconic doll that has sold millions over the years, has embraced hijab and burka. From headscarf to an all engulfing burka, the doll is at last Sharia-compliant!

Is it a marketing ploy to attract the middle class in Muslim countries or is it that the age has finally caught up with Barbie, who has turned 50 this year. One can't tell if the burka in the photograph below is covering a pigment-corrected Barbie or her long-time boy friend Ken.

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Photograph by Daily Mail

The makers of Barbie, Mattel, is supporting the new Burka Barbie, which is a creation of an Italian designer Eliana Lorena, and was unveiled in Florence, Italy, as part of a charity auction organized by Sotheby’s.

Sotheby’s has promoted the new Barbie as wearing a “traditional Islamic dress.” This amounts to generalization of the highest order. I can see Tarek Fatah (ban the burka campaign) spinning in his chair!

There is no such thing as a traditional Islamic dress for the 500-million plus Muslim women. The Muslim cultures support diversity in languages, cuisines, customs, and yes dresses. One does not see branding of the traditional Islamic food or the traditional Islamic language. Why should then be there such a thing as the traditional Islamic dress. There is certainly no similar artificial construct that applies to men’s clothing.

The notion of a traditional Islamic dress is indeed a false one. Languages, cuisines, and clothes are influenced largely by culture and to an extent by religion. While Islam may dictate what meet is kosher or Halal, it certainly does not mention what spices to use and how long to cook. Similarly Islam suggests modesty in clothing, but does not dictate concealing one’s face.

Hiding behind the notion of a “traditional Islamic dress” is a not so covert attempt by the Arabs to export their cultural norms to non-Arab Muslims. Iranians try to do the same with Shiite Muslims. The bundling of culture and religion is almost akin to two for the price of one: one embraces Islam and gets the Arab culture for free.

The South Asian Muslims living in India, Pakistan, and Bangladesh account for 50% of all Muslims. Add to this large number the Indonesians and Malaysians, and we have 75% of the billion-plus Muslims who are culturally non Arab when it comes to language, food, and dress, among others. The non-Arab Muslims have been practicing their Islamic faith and celebrating their non-Arab cultures for centuries. Their dresses, foods, and languages are part of the global cultural heritage. Why should one deny this diversity by throwing a cloak over it?

The burka has served as an instrument to oppress women in many societies, many of those are Muslim. The burka hides the individual’s identity. We don’t recognize other humans by their silhouette, smell or voice. Our faces are indeed our primary ID. We even communicate without words using our eyes, eyebrows, and wrinkles on our forehead. A burka even denies one the right to communicate with a smile.

It is sad to see that the West continues to practice doublespeak: banning burkas in France and showcasing burka-clad Barbie in Italy. One should not let short-term profiteering dictate one’s decisions that may have a long-term adverse impact. The Burka Barbie may register some additional sales in the Muslim countries. However, it will be at a cost of legitimizing women’s exploitation in many societies. This is too big a cost for short-term profits.

I am certainly not advocating a ban on burkas. This amounts to a dictatorship and exploitation of a different kind. I am advocating the need to educate young Muslim men and women about their rights and responsibilities. How can the young Muslim women, which are part of the demographic dividend in the Muslim world where younger cohorts constitute the majority of the population, be enfranchised politically, socially, and economically is a challenge that the Muslims have to embrace now than later.

Also, the decision to wear a burka or otherwise should also be a woman’s decision alone. President Sarkozy of France, Tarek Fatah of ban the burka fame in Canada, and I should not be the dictators.

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Photography by Dawn.com