Whole Foods tops Portugal
You don’t need to probe too deep to confirm how out of whack the global economy is.
Take stock market valuations.
With national economies in Europe tanking faster than you can say “Bailout!,” some countries’ equity markets are cratering.
That provides an opportunity to play the country/company comparison game – demonstrating how Company X’s market capitalization is now bigger than the entire GDP or equity market valuation of Country Y.
Take Portugal: Bank of America Merrill Lynch recently published a chart showing that Whole Foods Market, the Texas-based retailer of natural foods, has reached a market cap in the $16-billion (U.S.) range, the same as the market cap of all of Portugal’s listed equities.
Some more fun facts: The market cap of Italy’s financial sector is now the same as that of Colgate-Palmolive (around $47-billion); the total market cap of euro zone financials – about $360-billion – is less than that of Canadian financials ($377-billion); Spain and Italy’s combined equities market cap barely noses out Taiwan’s ($368-billion).
Finally: Greece’s equities valuation of about $5.8-billion is roughly equal to that of TripAdvisor.
The rise and fall of labour’s empire
Low- and medium-skilled labour jobs were once the key engines of economic growth in advanced economies.
Not any more. In recent times, capital goods and knowledge have taken on a much more significant role, according to a recent report by the McKinsey Global Institute.
Labour’s share of income – measured as the share of national income that goes to wages and compensation – has been in long decline across advanced economies, says the study.
“Labor’s share of income had risen steadily through the 1950s and 1960s and peaked in 1975; since then labor’s share of income in advanced economies has fallen below the 1950 level, declining seven points from its peak of 65 per cent in 1975,” it says.
As companies shifted to automation and new technologies, productivity became to depend more on capital and labour’s share of income fell.
Growing reliance on knowledge and capital to drive economic growth resulted in a loss of power and income for low-skill labour, the authors write.
Low-skill workers have suffered stagnating wages, job losses and prolonged periods of unemployment, even as more educated citizens have enjoyed rising incomes.
Aboriginal people are taking their rightful place in Canada’s national economy.
By 2016, the aboriginal market should reach the $32-billion mark, higher than the nominal GDP of two Atlantic provinces combined, says a recent report by Toronto-Dominion Bank deputy chief economist Derek Burleton.
Yet many misconceptions about the aboriginal population persist – for example, the myth that aboriginal businesses are simply riding the coattails of resource sector growth.
In fact, only about 13 per cent of aboriginal-owned small- and medium-sized businesses in 2010 were directly linked to the primary sector – namely agriculture, forestry, mining and oil and gas extraction – says the study, based on research from the Canadian Council for Aboriginal Business.
Aboriginal entrepreneurs are running successful business across all sectors, writes Mr. Burleton.
“In fact, the majority of aboriginal-owned establishments are linked to service-producing sectors like construction and business services.”
Access to credit has been boosted by the creation of aboriginal financial institutions (AFI) across the country, he says.
“The National Aboriginal Capital Corporations Association estimates that since the late 1980s, AFIs have provided over $1.3-billion in financing and 30,000 loans to Aboriginal small businesses.”