We’ve already started hearing it, and it’s going to get louder and louder over the summer and into the fall: We’ve got to save the economy! And that cry is going to be used to justify cuts, and austerity, and lower wages, and tax cuts for big business. All of which is going to hurt you, and is going to exasperate the cracks and problems that were revealed in our social systems through the course of this pandemic. Which is the opposite of what we want to do, because you – yes you! – you ARE the economy.
We often speak about the ECONOMY like it’s a thing, a living breathing thing that has needs and wants and must be assuaged and kept happy through the arcane tricks that only economists and bankers and big business owners – almost without exception older white males – know and can access.
The economy is not a THING that needs to be appeased. It’s not a god, it doesn’t decree anything, it doesn’t tell us what we should or should not do in order to obtain its great bounty, boons and blessings.
The economy is a word to describe the process by which we take various assets – cash, goods, raw materials, our labour – and exchange them for other assets. I have cash, I buy something – that is part of the economy. You have nimble fingers, you make something- that is part of the economy. You are not good at selling what you make, so you make an agreement with me to sell what you make in exchange for cash and perhaps other considerations – that is part of the economy. I want to start a business but I need money to get started, and you give me some and I tell you I will share my profits with you, so you become a shareholder – that is part of the economy.
You. You are the economy. The work you do, the money you spend, the money you save and invest – you are the economy. Business is not the economy. We’ve been tricked again into thinking that businesses are a THING – but it’s just a word to describe the many activities a company engages in; and a company is a collection of people. Of people like you. Because you are the economy.
When you have money in your pocket, you spend it. The ‘economy’ does better. Need proof? The last time we had a big hike to minimum wage, economists all predicted that our GDP – the measure of our economic activity – would go in the toilet, that businesses would have to lay off workers, prices would have to skyrocket, and that bad things would happen in general. The opposite happened. When the minimum wage went up in Ontario, our GDP increased, our unemployment rate decreased (meaning more people got hired to do more work) and most businesses saw an increase in sales even without price hikes. Why? Because you took the extra money you had, and you spent it. YOU are the economy. When you have money, and you spend it, you make things better.
We all know it, we all feel it. As a result of the COVID-19 global pandemic our workplaces, our stores, our local businesses, our farms and manufacturing, our meat packing plants, have all been affected. Our government has spent a lot of money, some in direct support to people, some to businesses, some in additional health care spending and other responses. We’ve heard some businesses tell us that they’ve lost an incredible amount in sales. Let us not forget, however, that grocery stores are reporting a surplus, and that Amazon and Jeff Bezos has been making money hand over fist during this time. So if there is money flowing, and money being made, there must be hope. And there is. You. You are the hope. Because you are the economy.
As we look ahead to recovery, the calls of Save the Economy! Will come louder and louder from our politicians and big business. They will demand tax cuts. They will demand austerity budgets. None of which will help the economy. Tax cuts to corporations do not translate into savings for you the consumer. It results in Jeff Bezos becoming a trillionaire while Amazon workers can’t take bathroom breaks, never mind paid sick days. YOU are the economy. If we really want to make things right, we need to ensure that workers get fair wages, higher wages, sick days and benefits. We need the government to tax corporations, and put that money into health care, infrastructure, and social supports. When you have the money in your pocket, you spend it. That is what will heal the economy.