Minimum wages + ObamaCare + Unemployment = ???

This is the awful monster that you get when you put minimum wages (aka maximum wages), Obama's Affordable Care Act (aka national insurance plan for everyone that no one wants to pay for) and Unemployment Insurance (aka insurance against trying to find work).

For the majority of you who don't read US news, this is basically a combination of three "well intended" populist vote buying laws that had morphed into a horrible monster that forced employers to...

1. Pay the minimum wage since there is no incentive to pay more.
2. Convert as many permanent staff to temporary staff as possible to kill entitlements such as bonuses and benefits.
3. Restrict working hours to 29.5 hours per week as you must pay for the ObamaCare if you go over 30 hours or risk a hefty fine.

And the net result is let's say you are working in New York, you get $214 per week (29.5 x $7.25) flipping burgers, assuming you can land yourself a job in the first place.

And so how does the employee responds? Simply reduce productivity since there is no prospect whatsoever for conversion to a permanent position, pay raise or bonuses.

Oh why even bother to try to work when you can collect your unemployment benefits at 60% of you last average weekly wage which is $128.40 doing nothing at all for 99 weeks?

Source : http://www.zerohedge.com/news/2013-08-19/obamacare-strikes-forever-21-which-forcibly-demotes-some-workers-295-hours-week

Reading tea leaves

Have you notice that DBS has been changing the denominations and minimum withdrawal accounts at their ATMs?

First, ATMs with a minimum withdrawal of $200 appeared. For the folks trying to withdraw the bare minimum amount of $20 for whatever reasons (don't lie, it is because they are broke and/or didn't have financial discipline), not because of the fear of loss), sorry, you are out of luck.

Then with time, even more ATMs dispensing only $50 appeared. And lately, they started to dispense $100 notes as well.

How I interpret the bank's actions is that these are the bank's reaction to inflation. When inflation is creeping upwards, customer draws cash in ever larger amounts and therefore forced the bank to refill the ATMs at a higher frequency.

Moreover, it makes little sense to spend more to employ more Certis Cisco guards for more ATMs refilling runs.

What I am expecting is that inflation will be rearing its ugly head again and MAS is likely to strengthen the Singapore dollar to rein it in.

And so our overseas holidays will likely to become even cheaper in the future.