A lot of shitty little businesses need to die now.
Minimum and award wages need to rise faster than inflation, because fuck you pay me. And interest rates should never get this low again. If businesses can’t handle that, they should close.
Australia has too many shitty little low value businesses that live at the last mile of the supply chain, buying bread and eggs from Woolies, toasting the bread and frying the eggs, adding fuck all value.
It’s easy enough to go after the fintech shell games, and the ecosystem of bullshit in which they breed, and fair enough. But today I’m talking about the cafes, gift shops, laser tag arenas, and so on that people seem to think can substitute for genuine productive economic activity (especially in the regions).
They generate tiny profits and cannot reliably pay good salaries for their employees. A huge number already depend on wage theft, off-book payments, and dubious labour practices (cutting shifts at the last minute or sending workers home halfway through on slow days) to stay afloat.
A café owner I know recently admitted that his car has been undrivable for weeks, and he’s been catching the bus to work with a plastic bag in each hand, containing kilos of bacon and whatever else. Yesterday he cancelled someone’s shift an hour before it was scheduled to start, because rain.
How is this normal?
If something is priced too low, it gets wasted. Labour is no exception.
In another town I lived in, after the fires, we saw posts in social media groups from local retirees, offering to work for free to help out local employers. Fuck the local employees, right?
As a society we have underpriced labour (especially as compared to housing) for decades and messed our whole economy up in the process.
Low labour costs mean you don’t have to innovate or invest in new labour saving devices or techniques. So the economy as a whole has gotten fat and slow and wasteful, even as people themselves have been working harder and harder.
We’ve wasted our collective labour power building shitty little businesses, instead of big efficient robust ones, nourished by the corpses of their fallen competitors.
We’ve decided, without thinking about it too hard, that we, as a society would rather have two cafes with four staff and ten tables each, than one cafe with six staff, a bigger hotplate, a newer espresso machine, and twenty tables. But the former arrangement is wasting the lives and talents of two whole people.
Over the decades leading up to the current catastrophic moment, we could have been using that wasted labour to build better infrastructure, renewable energy supply chains, for example, and now we’re paying the price, literally. Too many coffee shops, not enough electric car chargers. The former are competing with consumers for lettuce. The latter could be taking the pressure off prices at the bowser.
The other problem is low interest rates.
We can think of the private sector in general as a marine ecosystem. The banks are the sharks. The lower the interest rates, the slower the shark is swimming. The slower the shark is swimming, the slower the fish can swim without getting eaten. These slow fish have overpopulated the reef. The economy, being composed of these unfit businesses, has itself become unfit, and is immediately gasping for air when faced with challenges that a more dynamic economy could easily overcome.
We have a debt to Shiva, creator, protector, and destroyer. Our debt is the tears of those who have already failed, but whose failures have been masked by financial markets contorted in their favour.
A strategic demobilisation — in which low value businesses and jobs disappear to be replaced by higher value ones is part of what progress requires. How can it not be?
Ideally, these closures would be happening in a steady stream. But that’s impossible now because they’ve been building up, like dirty dishes, for decades. Japan probably has the most extreme version of this problem. But Australia is not far behind.
From here on out, instead of valourising all business owners, let the good ones succeed and the bad, mediocre or even just unlucky ones fail.
Yes, this will mean job losses. But we are at the point now, in history, where we have to give up on the anachronistic idea that the labour market can or should reliably provide everyone with sufficient spending power, something it has failed to do for decades, all across the developed world.
We need to take care of the people directly with public housing, healthcare, education and income support, ideally a basic income. This will also help take up the slack in terms of economy wide demand, as lending slows and businesses shut down. Free money is better than pointless work, both for the individual who receives it, and society as a whole.
Don’t reduce the competition between businesses. Make it sporting, rather than cutthroat. If your business fails, or the business you work at fails, don’t worry. We, as a society, have got your back.
Good on you for giving it a shot. Better luck next time.
