Update, September 16, 2017

The digital version of my book – A Writer’s Journey Through the Bureaucratic Maze: A True Account – is now available at Apple’s iBooks, Kobo, Barnes & Noble, Inktera, Playster, Scribd, Tolino, and 24 Symbols.

Article from the ORLÉANS COMMUNITY NEWS, August 3, 2017

I am pleased to share with you all an article from the ORLÉANS COMMUNITY NEWS containing a short review of my latest book “A Writer’s Journey Through the Bureaucratic Maze: A True Account” as well as a brief reference to my debut romance fiction “Quest for Second Sex“. I sincerely thank the journalists – Brier Dodge and Nevil Hunt – for their kind words.

I may add here that both books are available in a downloadable Kindle edition – each at $2.99. The print versions are available at amazon.com at $14.95 and $21.99 respectively.

Both of my books are now available at Ottawa Public Library (OPL) and its branches.

I look forward to receiving your comments and/or reviews. Please mail these at rajchawla6@yahoo.ca.

Scanned at 04-08-2017 15-12 PM

Release of my second book – a non-fiction

I am pleased to announce the release of my second book – a non-fiction – titled A Writer’s Journey Through the Bureaucratic Maze: A True Account. Both its digital and print versions are now available at amazon.com (US$) and/or amazon.ca (C$). You can buy e-version at US$2.99/C$4.03, and print at $14.95/$20.19.


It’s a personal account of obstacles and challenges, I, as a writer, experienced during my journey lasting over four decades in the bureaucracy. During all of my professional life, I swam against the chin-high tidal waves and survived because of my inner strength. A must read tale of patience, persistence, and perseverance – the essential characteristics a writer needs to succeed.

URL for my books:



Please note that I will not be placing any new post on the site in the next 4-5 months as I am now focused on completing my next fiction entitled Minimum Payment. I will post the abstract of this fiction after completing its first draft – hopefully by the middle of October 2017. I am hoping to have it released by late December.

My non-fiction “A Writer’s Journey Through the Bureaucratic Maze: A True Account” was released in early June.

Thanks for visiting the site and your support and understanding.

Please feel free to contact me by leaving a message at the site, or by e-mailing me at rajchawla6@yahoo.ca.

Using debt wisely: a skill or a behavioral issue?

To help Canadians manage their money better, the federal government established a Task Force in June 2009, and mandated it to make recommendations to the Minister of Finance on a national strategy to improve financial literacy of Canadians. This task force released its report in December 2010 with thirty recommendations, including one to conduct periodically a national Survey of Financial Capability of Canadians. The first such survey was conducted by Statistics Canada between February and March 2009, and a short report containing these data was released in December 2010.

The Task Force’s report entitled Canadians and their money: building a brighter financial future is available at http://www.edugains.ca/resourcesFL/Background/CanadiansAndTheirMoney-2011.pdf.

Is financial literacy program of any help?
To promote financial literacy is a topical concern – especially in the current environment when most Canadians are steadily increasing their indebtedness due to stagnant incomes, changing labour market providing more precarious than well-paying jobs, creating a gulf between the earnings of those with and without the marketable skills. Then, on the demographic side, we are witnessing more family dis-solutions resulting in more women-headed single parent families, most with jobs with low-to-medium hourly wage rates in the services sector, likely vulnerable to rely on consumer credit. Yet another demographic group likely to use credit constitutes the rising number of the elderly living on fixed incomes including work-related and/or private pensions, and benefits from Canada Pension Plan, Old Age Security, and Guaranteed Income Supplement.

Besides these labour market and demographic forces pushing individuals and families to use consumer credit, low interest rates and sky-rocketing prices of homes, making buyers to take mortgages beyond their financial means, are also likely pushing current and new or potential homeowners to rely more and more on consumer credit, including charge cards, unsecured lines of credit, and other secured and unsecured loans for their day-to-day spending needs. Unfortunately, as the rising prices of homes are making home ownership beyond the reach of many, it’s creating, on the other hand, a bonanza for all those renting properties. These landlords are free to raise rents year after year, making tenants to spend more and more on rent, and use charge cards and other loans to meet their day-to-day living expenses.

Then there are individuals, mostly with low education, unskilled, and holding short-term or temporary jobs, who in turn, can’t secure credit cards and/or loans issued by banks and/or other financial institutions. They have either been denied access to credit cards because of their low incomes, or have exhausted their permissible spending limits on their existing cards. A good number of these individuals turn to private lenders like Payday Loans, Money Marts, or Cash-on-the spot, and become their prey for life. Such lenders or money sharks thrive on such poorly educated needy low earners who are prepared to meet their daily needs with funds borrowed at exorbitant rates. My heart goes to such people. For them, paying one loan with another becomes a part of their life.

Even though the Canadian federal government in cooperation with several provincial governments have been introducing some measures to protect such borrowers paying sky-rocketing interest rates, the measures in place are largely focused on controlling interest rates, but not the borrowers’ behaviour, or options to use funds from other sources. Since Canada respects an individual’s freedom, values, and right to choose his/her lifestyle, an individual is free to borrow money from any source he/she so chooses.

Individuals and families living with no or little cash flow are presumably living in financially straitened circumstances. Granted, some may have voluntarily abused credit by spending frivolously on acquiring luxury goods, misused student loans, taking expensive holidays, maintaining a lifestyle they could hardly afford, stretched themselves beyond their means, but the majority use credit to meet their current essential and nonessential expenses. The question I ask here is if any financial literacy program can help such users of credit, instruct them to manage their money better, save more for the rainy day, or for children’s post-secondary education, and above all, save for personal retirement.

In my view, no financial literacy program is going to help such individuals if their day-to-day living is at stake and they simply need immediate access to cash – even if it means going deeper into indebtedness. For such individuals, the survival is at issue. For them, offering them any course guiding them to handle money properly is like a drop of water on an oily surface. The mere lecture about managing money is not going to help meet their financial needs, or their day-to-day challenges of survival.

On the other hand, the well-educated, holding skilled jobs with good wages and salaries wouldn’t really require such literacy program – partly because most of these have likely picked up some financial knowledge while pursuing higher education. They may not all be professional wizards, financial or money smarts, but such people can at least consider the pros and cons about choosing a lender, or comprehend the kind of loan agreement they are signing. According to the 2009 Survey of Financial Capability of Canadians, highly educated, high income, and financially knowledgeable individuals had much higher rate and amount of indebtedness than their low educated, low income, and not so financially literate, counterparts.

These better educated individuals, using credit wisely or unwisely, get credit at prevailing market interest rate, with scheduled payment plan from regular sources like banks, or other financial institutions. Their less educated, low income counterparts, on the other hand, would be more prone to turning to private lenders like Payday Loans, and Money Marts. The latter are likely to have either no clue about the aftermath of what they are doing by borrowing money from such lenders, or their need is so strong that they give a damn to what happens to them the next day, next week, next month. What they want is immediate access to cash money even if it leads them to a deep and suffocating hole.

Theoretically speaking, the financial literacy program should be good for low-to-mid income people who can’t handle or manage their money better. This program will indeed teach them a variety of skills to manage their money. However, what they really need first is a stable and a right frame of mind to concentrate on the learning process. And this they would have it only when they have good enough access to cash to meet their needs.

Once they have enough money, then only they can be taught some budgeting techniques, ways to save, ways to control spending, ways to use debt wisely, etc. In addition to helping Canadians to improve their financial capability, both the federal and provincial governments should introduce measures aimed at moderating the demand for credit – like moderating the rising prices of homes, volatility in both the real estate and financial markets, and consumers’ habits of spending borrowed money. For example, if we can bring down the purchase price of a home, we can also bring down the amount of mortgage debt required and its associated monthly payment – all resulting in a more cash, or lesser use of credit, for an owner. The sad part is that no government would like to introduce such measures controlling credit as all of these, in one form or another, essentially help the growth of the nation’s economy. And, who wants to stop that?

Empirical evidence that the financial literacy program is not working

Since 2009, the year the program was introduced by the federal government, Canadians overall owe more today than they did eight years ago. For instance, for each dollar of disposable income they made, they owed $1.67 in 2016 compared with $1.55 in 2009. Between these years, the overall household debt has risen from $1.4 trillion to $2.0 trillion – an increase of $600 billion. And, 80% of this increase is attributed to the increase in residential mortgages, and the other 20% to consumer debt. The rate of growth of total debt (42.8%) has outpaced the rate of growth in personal disposable income (32.3%). Put simply, Canadians are spending money they haven’t yet earned. It’s long-term effects are not good either for the economy, or for the future generation.

Using debt wisely – a skill or a behavioural issue?
Of the two debt components – residential mortgage and consumer debt – the indebtedness in respect to the former is by choice, and it’s considered as a good choice as long as it is made keeping viable affordability in mind, whereas that in respect to consumer debt is largely behavioural (with the exception of those with no savings or any cash flow, and who simply breathe on borrowed money).

Mortgage debt is considered as a good debt as it’s taken to purchase a home – one’s key asset over a lifetime – that also appreciates over time. As one pays off the mortgage debt over time, one builds equity in addition to the appreciation in the value of home due to the changes in the local and national real estate markets. This rising equity in home provides the owner some sense of future financial security. Any undertaking of mortgage debt requires some set of skills right from the choice of a lender to the negotiations about the amount sought, its amortization, interest rate, frequency of payments, lump sum payment without a penalty, etc. For example, an average person may opt for a monthly payment schedule whereas a more skilled may opt for a weekly payment, saving oneself thousands of dollars of interest by repaying borrowed money over a relatively shorter period.

Consumer debt, on the other hand, is largely considered as a bad debt as individuals use it for varying reasons – ranging from grocery shopping to taking holidays, paying off monthly bills, on-line shopping, taking cash advances – you name it. Since consumer credit is “cash available 24/7”, one uses it for day-to-day shopping of both essentials and non-essentials to satisfy one’s current needs or consumption, or maintain one’s lifestyle. The use of this credit also reflects one’s spending habits, or behaviour as a “sensible or conservative spender”, or a “compulsive or frivolous spender”.

Spending is a ‘behaviour’, and not a ‘skill’ to be learnt from any financial literacy program. For example, does one need any skill to order a product or book a vacation package on-line and pay by credit card? No. One wants something on the spot, orders it right away (impulsively or non-impulsively), and pays by readily available credit card, line of credit, or any other form of revolving credit. No second thought on the purchase, or any analytic aftermath.

The only way to control spending behaviour and its related borrowing is to learn to exercise some degree of self-control or budgetary restraints – which only a person him/herself can devise and implement. No classroom program is going to enforce it. How to exercise such restraints is a completely different topic, and beyond the scope of this short post.

Because of the prolific use of credit cards and easy access to lines of credit coupled with low interest rates, Canadians have increased their consumer debt load by 26% (or $118 billion) between 2009 and 2016. This translates to $46 million a day over seven years. That’s a hefty dose of daily consumer indebtedness that may even be hurting a particular segment of Canadians.

Financial literacy, indebtedness, mortgage debt, amortization, equity in home, consumer debt, spending behaviour, conservative spender, frivolous spender, low-income, precarious job.

Are you doing better even if you have been with the same employer for a decade or more?

Probably not, if you have been with the same employer for a long time – 10, 15, 20 years or more – and have not gotten any promotion, or monetary reward, or bonus for your work performance, productivity, or contribution. The only increase in your salary is the union-negotiated, or employer granted periodic increases. Such increases usually fail to keep up with the rising rate of inflation.

Among employees belonging to a union, those in the public sector generally fare much better than their counterparts in the private sector. It’s well documented that a much higher proportion of public sector employees is unionized.

This question if one is better off while working too long with the same employer seeped into my mind while I was writing my second book entitled “A Writer’s Journey Through the Bureaucratic Maze: A True Account (to be out by late May or early June this year). There, in Appendix II, I used the actual salary amounts and number of years spent without any promotion, or rewards, and found out that I, in fact, was losing each year the purchasing power of the salary at hand. In this post, I want to share that example with you, along with some of its implications.

Illustrative example (based on factual data):

I started working at one of the Canadian federal departments in 1970. My starting salary was close to $11,000. By 1978, the salary moved to $32,000. And by the time I retired in March 2012, I was making close to $93,000. The corresponding ‘all items’ Consumer Price Index (CPI) with (2002=100) for 1970, 1978, and 2012 are 20.3, 36.6, and 121.7 respectively.

Let us now look at the components of change in salary between 1970 and 1978 and between 1978 and 2012 – the change due to rising inflation only, and the real change due to promotion/advancement.

The difference in 1978 and 1970 salary: $32,000 – $11,000 = $21,000
Increase in 1978 salary due to the change in CPIs (or inflation alone) = $11,000 x (36.6/20.3) = $19,833
Now the difference of $21,000 can be re-expressed in terms of two components: $21,000 = ($32,000 – $19,833) + ($19,833 – $11,000)
= $12,167 (real change due to promotions) + $8,833 (change due to inflation)
100% = 58% + 42%

So between 1970 and 1978, 58% of the change in my salary was due to promotions and the other 42% to strictly inflation.

Following the same steps, the change in salary between 1978 and 2012 was: ($93,000 – $32,000) = ($93,000 – $106,403) + ($106,403 – $32,000)
where $106,403 is simply the increase in 1978 salary due to inflation (= $32,000 x (121.7/36.6)).

This shows that by the time I retired in 2012, I was making even lesser than the inflation-adjusted 1978 salary – never mind making any real gain due to any promotion (which I didn’t get).

So between 1978 and March 2012 (399 months), I was short of $13,403 in order to simply keep up with the inflation.

Put it another way, I lost about $34 (=$13,403/399) a month, or $408 ($34 x 12) a year in the purchasing power of salary at hand. In the eyes of the world, I was working full-year full-time, but with each passing day/year, I was losing the purchasing power of money. Isn’t it ironic?

That’s why I mentioned at the outset that working too long with the same employer isn’t economically healthy for workers with stagnant, or periodic union-negotiated increases in salary.

Post’s message:
Employees working with the same employer over a long period, with no promotion or advancement, but simply periodic union-negotiated increases in wages and salaries are likely to be losers as they would be losing the purchasing power of their salary at hand. One can say one is fully employed and getting a salary, when in fact, the rising inflation over time would steadily keep chipping away one’s purchasing power. Employees have to make up this loss by looking at other sources of income including moonlighting, use of personal savings, and/or debt.

For paid workers, the only way they can beat the inflationary changes and protect their purchasing power is to keep on making career advances and make real gains in wages and salary. But there eventually comes a point when such workers either come to the end of their road as they lack any further opportunity, skills, connections, personal marketability, etc. From that point on, they are on the way to lose the purchasing power of their salary at hand.

Business people and those self-employed on own account, on the other hand, can always beat inflation by steadily rising prices of goods and services they sell. This group would lose its purchasing power only when their business isn’t doing well, or they have slowed down on account of their poor health, or other volatility in the market. Other than that, self-employed persons pave their own paths to prosperity. They are not limited like their paid counterparts – always vulnerable to the personal biases and whims of their employers.

What does the future hold?
First, on the rising rate of inflation.

In Canada, the rate of inflation (measured in terms of the change in ‘all items’, or’core items’ (as used by the Bank of Canada) CPI was rampant in the seventies and eighties. For example, all of the goods and services that cost me $1.00 in 1970 were costing me $2.17 in 1980, $3.86 in 1990, $4.70 in 2000, $5.74 in 2010, $6.00 in 2012, and $6.33 in 2016. So during my work life (1970 – 2012), I witnessed the cost of living move up six times, and 6.33 times by 2016. The percentage decomposition of the change in ‘all items’ CPIs showed that 42% of the total change occurred in the 1970-80 decade, followed by 31% in the 1980-90, 11% each in the next two decades (see charts).

Post_CPI_Chart 1

The Canadian rate of inflation has been hovering around 2% a year since 1992 (with the exception of the year 2002-03 with a rate of 2.8%, and 2010-11 with the highest rate of 2.9%). With the rate of inflation low and stabilized, employees with long job tenure and stagnant wages and salaries would be losing their purchasing power steadily, but at a much slower pace.

Second, on the rising number of employees with long tenure.

It’s well-known that Canada’s population is aging, living longer, and among those working, a good proportion is opting to work longer. Since the job or occupational mobility decreases with age, it’s likely that those working longer would be extending their employment with the same employer. According to Statistics Canada, 23.8% of all 9.7 million employees in 1976 had worked for the same employer for more than ten years; four decades later, in 2016, their proportion had risen to 31.4% of the total of 18.1 million. The proportion of those working more than twenty years with the same employer had risen from 10.2% to 12.6% (see chart).


Of the additional 8.3 million employees between 1976 and 2016, 40.3% were working for ten years or more for the same employer. Evidently, more and more employees are staying put either because of the rapidly changing economy, technology squeezing some old and traditional jobs out and opening, in turn, some new and challenging ones, widening the gulf between those with and without proper marketable skills.

All these changes are likely creating, in turn, a phobia among employees to change employers. They must be living with the premise that a job at hand is better with the current employer than running a risk of losing it with a new employer. For them, the grass on the other side of the fence may not be all that greener after all.

Your suggestions/comments on this or any existing post are always welcome.

Employee, job tenure, CPI, rate of inflation, income, salary, wages, savings, debt, purchasing power, decomposition of change.