We talked about jobs and the economy so much last year, yet nothing (notably) happened. It wasn’t another 2008 GFC, and the scaremongering just made me trust the economists a little less, amongst other people.
I’m a big believer in the Invisible Hand. Read into that what you will. Ideally, if someone loses their job in one failing industry, then all things being equal, they should get another in a booming industry. It’s equilibrium.
One pattern is emerging, however, that will cause long-term damage – “market manifestation”. I just made that term up, but effectively, it’s where you say something so often it becomes true.
You can apply this theory to the housing market, for example. Saying there is a housing shortage and that the prices are going up encourages people to buy more urgently and pay a higher price than they might have otherwise.
Now, this might be a sweeping assumption, but Covid-19 has become our excuse for everything. Not because we are all suffering, but because we worry that we might.
Now don’t get me wrong, tourism businesses are genuinely suffering, especially those geared towards large group travel, but at some point, we need to get real about whether these businesses and industries are still viable.
I might be alone here, but raise your hand if you’ve put off hiring someone you need, because of Covid. Raise your other hand if you’ve said ‘No’ to a community organisation asking for financial support, because of Covid.
The Invisible Hand only works if there is a free market, which, in this day and age, is an impossible thought. Enter stage left: The Subsidy. Now I’m not going to scoff at the wage subsidy or other various funds; they kept us afloat during lockdown. However I am going to talk about one of the many butterfly effects of this ‘financial morphine’ we’ve had pumped into our balance sheets.
Some businesses have been unnaturally kept alive, only to die an even more painful death once the funding drip has been pulled out. I know that, in theory, we were being kept on life support long enough to pivot, but I can tell you now, so many businesses out there instead decided to wait in hope.
We at Nimons were one of them.
Wait for what, you say? Things to go back to “the way they were”!
Call me naive, but some businesses had no choice. Now those businesses are all sitting around like gannets waiting for more government support, but it’s gone.
It’s gone to those businesses that are part of the new plan. Don’t worry, I’m not sitting here in my tinfoil hat; I’m actually being more critical of those of us that expected that we’d be kept on life support indefinitely. What I do think, sitting on the deck, gazing out at hindsight, is that we should have done the humane thing in the beginning.
The issue here is, we’ve left it too late for things to naturally reach equilibrium. For those in a failing industry to join a new booming industry. So really, we do need to be maintaining the life support, but we’ve obviously run out of morphine.
So, what now?
Do we become part of the new plan? Do coach companies like ours start electrifying? Perhaps then we’d get some funding. Do we create a ‘private’ public transport system like Hong Kong? Generating our own work, so to speak. Or do we go completely left field, and convert coaches and buses into accommodation for those overwhelming the emergency housing list? Worth a thought.
A thought we postponed last year, because we were all being bailed out.
Now that we’re a year on, in our case still missing our international friends, and hanging by a thread to the domestic market, who else suffers? Sadly, it’s the community. It’s the workers who will be late to the job market. It’s the sports teams and schools who rely on our financial support. It’s the suppliers that wait patiently for our orders.
Last year, we were in no position to invest in fleet. To increase pay. To hire. To sponsor. To improve. To develop. All of the things that contribute to the community. We froze. We lost a year.
But we’re losing another year because that’s become the status quo. We keep holding out for things to bounce back, but what if they already have?
We all need to be finding a way to adjust far more quickly. We need to be more agile. Now is the time to stop waiting. Move on, in whatever way you can. But be honest. If you’re not the business you were before, write a new business plan. Find new suppliers. Stop leading people on … just break up with them.
Here’s the rub. How many businesses aren’t suffering quite as much as they claim? And how many are using the situation to get out of a lot of the things they might have previously been unable to say ‘No’ to? A pesky cold call sales pitch? A pay rise request?
That’s not fair. But it’s the butterfly effect.
I’m thinking out loud here, but if we had some kind of amnesty period – where we could restructure without worries of employment repercussions, or sell plant and equipment without tax implications – then maybe those that were struggling could lose a couple of sandbags off the side of the hot air balloon and carry on.
Then we’d know. If you’re still here, you’re still good.
But, because we were bailed out, no one knows whether the economy is tanking or booming. Whether a business is hanging on for dear life or doing quite well, thank you very much.
When the ship goes down, and you’re in the water, what do you do? Now of course everyone has a life jacket, but you don’t know when or if help will arrive. Do you find a raft? Do you start to swim? Or do you wait to be rescued?
It depends, doesn’t it? On whether you’ve been told help is on the way, or whether you can see land in the distance, or whether you know how to swim. I wonder how many community organisations (that rely on businesses like ours) would send a rescue helicopter, if they knew no one else was about to.
The problem is: we all assumed help would be on the way … and save the day.
Next time, we’ll start swimming.