It’s not how far you fall, but how high you bounce that counts.Zig Ziglar
threatened promised a few weeks ago, over the next few posts I’m going to float some ideas intended to make the New Normal we’re groping for a better place for all of us to live. Each of the things I’m going to propose are going to make at least some of you uncomfortable (Some of the concepts will make all of us uncomfortable!). But these uncomfortable times demand that each of us break out of our bubbles if we’re going to “Build Back Better.”
My focus throughout all of these essays on COVID-19 recovery is on something called “Main Street.” I trust Wall Street will take care of itself, but our Main Streets are going to need help to recover. I use the phrase “Main Street” to evoke a sense of community; a belief in neighbors helping neighbors; a trust in our inherent ability to synthesize a New – and better – Normal from our differing perspectives. And while that may seem overly idealistic, I believe that this is a time for radical pragmatism: real solutions to our real problems that we can all fight for. In this post, I’m going to focus on building a better economy for our communities.
As I’ve pointed out in previous posts, small businesses – the mainstay of our Main Streets – are the ones who have been hardest hit by the pandemic. Last Friday, John Mauldin wrote about an 80% economy in our future – with the lost 20% primarily small businesses. More importantly, the most economically fragile are the ones most likely to lose their jobs and, sadly, the ones least likely to be able catch on somewhere else due to location, education and lack of marketable skills. Many of their jobs – especially in retail and restaurants – are unlikely to come back soon. For decades our “service economy” was lauded; but I do not believe that it can lead us back to something better in its former shape.
There are going to be new job opportunities for those who can stretch to meet them – our entrepreneurs. In the service sector people will be needed to deploy and service the new tools that entrepreneurs are developing for telework and teleschool. Workers will be needed to meet health care needs with new high-tech and low-tech solutions. For example, I foresee a major role for thermal imaging at entrances of any building open to the public – preventing those with fevers from exposing others (and, ideally, at border and customers and immigration checkpoints as well). Initially this will be crudely done by hand-held instruments, requiring workers to “point and shoot” the devices. Workers are being added to support warehousing and delivery of our essentials (and not so essentials) as well.
But I see a greater opportunity for new businesses and jobs in manufacturing. Major companies are already taking a much closer look at their supply chains. Part of our recovery plan should include policies to encourage shortening our supply chains whenever possible, and encouraging our manufacturers to buy American first. But not just shorten but fundamentally change the way we think about our supply chains. For too long, our manufacturers have aimed to make their supply chains as efficient as possible – going for the cheapest source with “Just in Time” delivery. But now we’re seeing “Just-in-time” turning into “Almost never” (e.g., China preventing American factories in China from shipping medical supplies back to the US). The pandemic should teach us that resilience is not the same as efficiency; redundancy (e.g., multiple suppliers) must be built in to avoid loss and for quick recovery (or as we physical scientists say – “Entropy rules!”).
An important part of this rethinking of our supply chains is reducing our dependence on a single source: China, Inc. Our pharmaceutical industry is dependent on Chinese sources of raw materials for about four-fifths of our medicines. China is a primary source of cheap finished medical supplies (e.g., surgical masks). What hasn’t been mentioned enough is that with their Belt and Road initiative, our electronics industry has also become critically dependent on Chinese-controlled sources of precious and rare earth metals. We need to address this in our national recovery strategy – looking at the economics of recovery of critical metals from electronic and other wastes would be an intriguing place to start.
But while entrepreneurial efforts will undoubtedly create new jobs, it is also likely that they won’t be nearly enough for all of the workers displaced by the pandemic. Upgrading our nation’s infrastructure has to play a prime role in putting people back to work. We need to make existing public spaces as pandemic proof as possible. Governor Cuomo’s vision for a New York City that is both more livable and more socially distance-able is a good example. But there are a host of other actions that should be taken to ensure that our infrastructure not only meets present needs but is ready to support our New Normal. For example, rapidly building out and extending the G5 internet throughout the country, especially to rural areas. Hardening existing infrastructure while reimagining how infrastructure can support – perhaps even guide – safer and better living patterns in the future; solving the conundrum of affordable housing; recognizing the value offered by our suburbs in this time of the pandemic. Upgrading our infrastructure will be a tremendous undertaking, with the potential to put all of America back to work. Undoubtedly it will be expensive, costing trillions of dollars, but the return on that investment can be a lasting monument to our resilience.
But just giving people jobs and an income is not enough – the enduring problem that the pandemic has pointed out is that so many of us do not have any savings to tide us over in emergencies, i.e., it’s not so much lack of income, but lack of wealth. We need to find a way to help even the least skilled begin to build a grubstake for emergencies, and to seize opportunities to have a better life. I would suggest that if – as we are being told – we’re in a war, that we harken back to one of the best ideas of the World Wars – bonds, call them Rebuilding America Bonds. If we have to go into debt to repair our economy and reinvigorate our infrastructure, then let’s owe that debt to ourselves, and have that debt aimed at helping the least of us. Give us our income tax refunds in Rebuilding America Bonds. Nudge employers to include Rebuilding America Bonds as part of their pension portfolios. Encourage parents, grandparents, extended family and friends to give Rebuilding America Bonds for birthdays and holidays. Encourage states and communities to float their own version of these bonds to pay for their own infrastructure refurbishment programs, and backstop those programs at the federal level.
For not only our physical infrastructure needs repair; while we say we’re all in this together the words and actions of some are evidence that their “all” is not everyone. We also need to rebuild our trust in each other and our recognition of our common humanity.
Finally, we must – MUST – begin to seriously address the impacts of the pandemic on those just entering or just about to enter the workforce. During the Great Depression, FDR used the WPA and the CCC (enough initialisms there to satisfy even the fussiest of bureaucrats!) as a way to give meaningful work to the jobless. The Civilian Conservation Corps, in particular, gave jobs to about 300,000 youths at a time. Even before the pandemic, about 13% of those 16-25 years of age weren’t in school and didn’t have jobs. Let’s craft programs similar to those implemented 80+ years ago for today’s young people. Have them work at the community level to do needed jobs which will also help them become more employable.
Similarly, we need to think seriously about the minimum wage. While it is kind to consider raising it, it is not wise – here, wisdom is kindness through a telescopic lens, looking at the future impacts of an action. One of those impacts is that raising the minimum wage effectively lowers the boom on young people trying to get the skills necessary for employment. Whatever we decide as a nation to do about the minimum wage, we need to maintain a lower “youth minimum wage” so that there are entry points for even unskilled young people into the workforce. They need to learn the discipline of working at a job; even as they gain the experience and the satisfaction of doing the things to make their jobs a success.
We need to break out of the cocoon of fear fostered by the media – too often minor league politicians-without-portfolios playing “Gotcha Games.” We need to Go Big in our thinking and in our recovery: unleashing our entrepreneurs, rebuilding our infrastructure so that it is both more robust and better sited – and suited – to a changing world; providing our kids with the tools they’re going to need to live – and thrive – in this changing world; supporting the least among us so that they can survive – and lift themselves up – in the world as it changes. This is a different message too often unheard – borne of optimism in our ability to shape a better future for ourselves and our communities.