Dire straits for business /employment

Support for business means support for employment. The provincial and federal governments are offering that, given the extraordinary circumstances brought about by the COVID-19 virus.

The numbers of layoffs being talked about are shocking. Even unprecedented, which is a word we don’t use lightly.

People need to stay home; there’s no question about that, if we’re to bring this outbreak under control. But people staying home means some businesses can’t operate. It also means lots of people aren’t buying things – goods or services – they normally would be. So whole industries are experiencing a drastic drop in sales. Airlines are a good example, laying off thousands.

The state of oil industry is another story. It’s a classic double-whammy there, with the price of oil making any kind of investment unappetizing.

All of this together could add up to an unemployment rate bigger than during the Great Depression at its peak.

What’s different this time? A much more robust system of social supports for unemployed people. Governments will go deeply into debt. The fiscal pain might last for years.

Here’s another prediction: whatever supports government offers for people suddenly out of work, it won’t be enough. People are going to have to adjust expectations and make do with less. At least for a while.

It might be a really good year to plant a bigger garden….

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