My nephew Bill, whose business supplies restaurants, says that 25 to 35% of the restaurants that have shut down will not reopen after the COVID-19 crisis. Many other small businesses will go under, or already have.
Beyond the current crisis, technology continues to reduce the number of people needed to produce goods and services. As an example of how this works:
— In 1850, a farmer with a horse-drawn plow could feed four people.
— In 1910, with a steam tractor he could feed seven people.
— In 1986, with a combine he could feed 77 people.
— In 2006, with GPS he can feed 144 people.
Beyond this, many companies are using the crisis as a opportunity to discover how technology can replace more of their workers permanently. (Many workers, on the other hand, are asking: “How can I replace my company permanently?” as well!)
Some of us are trapped into thinking we should use past solutions to solve current problems. For example, “ Buy only U.S. made,” or “bring jobs back to the U.S.”
Get serious! My same nephew said to me 15 years ago, when he ran another business: “Let’s see. I can get my supplies from China, or I can get them from the U.S. and go out of business. Which do I choose?”
Those jobs will never come back. Big companies exist for one primary purpose – to make money. So do little ones. The goods and services they provide are secondary to profit. They have gone to other countries because it is more profitable. To “bring them back” would require huge permanent subsidies from state and federal governments. Guess who would ultimately fund those subsidies.
So, on the surface, it seems ludicrous to think that there can be an abundance of jobs after the crisis. However, to actually create an abundance of jobs requires us to think outside the box. We need to create a new order rather than wallow in the past order.
Here are two scenarios:
1. The old/present order: You have an idea. You get money. You start a business. You hire people. You sell to people who need (or simply want) your product or service.
In this scenario, jobs are created by an entrepreneurial idea and money to carry it through. The fallacy behind this scenario is that there are not enough ideas and not enough money to create the jobs we need.
2. The new order: Start with the need! The source of every job is a human need. From this point of view, plenty of jobs are begging to be created!
Take a look at what needs exist and aren’t being satisfied around the world or in our own neighborhood. Can you see any unfulfilled needs in society? Look around and draw up your own list of what needs are not being fulfilled right now.
Do we have affordable housing so that people who work in Santa Barbara don’t have to commute to Oxnard or Lompoc? Do we have a need to respond to homeless people in a way that serves them and our community?
COVID-19 is triggering a society that can collectively decide: What are our needs as a city, county, state, nation and world, and what are we willing to act on, to work on, to fulfill those needs?
Instead of saying, “we have to create jobs,” start by asking “what are our unfulfilled needs?”
The question that comes to mind is: How do we finance answering to all our societal needs?
For those of you who follow my writing, I will forgo giving the one answer that I frequently write about – public banking! Not that this is not one of the excellent first steps! But to help rethink money itself, I leave you with a quote from a Canadian economist, John Hotson, whom I knew many years ago:
“Our current financial system diverts us from our real problems to asking, ‘Where is the money going to come from?’ This should be the least of our worries.
“As long as we have vast unmet human needs and idle human and nonhuman resources, . . . finance should never be allowed to stand in the way of doing what must be done. Could anything be more insane than for the human race to die out because we ‘couldn’t afford’ to save ourselves?”
– From How Banks Create Money; Why We Can Never Get Out of Debt – Selections by Peter Myers – http://www.mailstar.net/money.html.
Frank Sanitate is a writer and frequent contributor to The NewsPress who lives in Santa Barbara.