The Covid Economy

[chez]

Because people probably don't analyze numbers very well. We all quote high unemployment but is it real. Why is it that every labour market study in the last 20 years have all repeatedly pointed to a growing labour shortage in Canada in all sectors and that we had better plan our immigration better because otherwise there won't be enough people working.

There may be some Uber drivers and waiters unemployed right now but is it really feasible that they suddenly all move to farm country and start working in the fields? My guess is that the farmers don't want them anyway because they already have a large well-trained workforce waiting to fly into town that they already know and trust.

Well in the Okanagan the unemployment rate has risen to 6% so there is plenty people here without jobs. These unemployed would not have to move...they are right in the heart of orchard country where foreign workers are being flown in.

As far as training goes, I'm sure locals could easily be trained in two weeks time as that is how long these foreign workers need to isolate once they enter Canada. Also the facilities that house these foreign workers have not been built for social isolation in mind and already there has been a major outbreak of the virus within one of these facilities.

I understand during normal years where unemployment is very low, yes help is required from foreign workers. I just don't feel this year is one where we should be relying on thousands of foreign works coming here with possibilities of virus spread when we have a workforce sitting at home.

[faberryman]

Climate control spending will decrease as government drops expensive support programs.  With fossil fuel energy getting even cheaper, oil's below $30, there will be less incentive to move to renewables.  Interestingly, the air and CO2 will get better because economies are contracting.  I've driven maybe 30 miles in three weeks.  Allstate Insurance is giving rebates on their car insurance because there's been so many less accidents.  It seems Covid is saving lives on the road.  Go figure.

Nonsense. Trump has talked about putting a tariff on foreign oil (the only thing he knows how to do) to keep the price artificially high to support American oil companies whose cost of production is higher than for foreign oil. The dip in oil prices arising out of the spat between Saudi Arabia and Russia won't last long. Once this coronavirus outbreak is over, people will be back to driving as much as before.

[Robert Roaldi]

Well in the Okanagan the unemployment rate has risen to 6% so there is plenty people here without jobs. These unemployed would not have to move...they are right in the heart of orchard country where foreign workers are being flown in.

As far as training goes, I'm sure locals could easily be trained in two weeks time as that is how long these foreign workers need to isolate once they enter Canada. Also the facilities that house these foreign workers have not been built for social isolation in mind and already there has been a major outbreak of the virus within one of these facilities.

I understand during normal years where unemployment is very low, yes help is required from foreign workers. I just don't feel this year is one where we should be relying on thousands of foreign works coming here with possibilities of virus spread when we have a workforce sitting at home.

I understand but how easy it is to make that decision is going to be different for different people. If you expect or at least hope that your non-essential job might be ok to return to in 3 weeks time, it's not obvious that you want to commit to some other work in the meantime. And how does that person get to farm country to apply for the job in the first place? Maybe that's locally easier to do in the Okanagan and maybe it will happen for some. It probably should. Who knows, some might discover they prefer it to their old job.

Here in Ontario, the impression I get is that the seasonal migrant farm workers have long-term arrangements with their employers, same folks flying back every year. There is housing for them on the property, they've known each other for years in some cases. It might not even be easy for the employer to change the way they operate, all of a sudden they have to start recruiting locally, interviewing, etc. I'm not saying it can't be done, just that it may not be easy to switch tactics especially at the last minute like this. Takes years to develop those processes.

[Rob C]

That's one thing I don't understand why with so many unemployed today, why do we have to rely on foreign labour? Can't we get some of those unemployed back working?

If they are all as many of our own, they lack the ethic of hard work for little reward. When unemployment pay discourages basic work...

Also, don't forget that much hard work is physically impossible for the old unemployed people to do: you'd have a hard time digging potatoes or gathering strawberries out in the fields at sixty unless you'd spent your life bending down and using those muscles. In fifties Scotland it was often students who went to the fields during holidays to make some pennies gathering such foods from the ground. Later, when students preferred other games, the work went to the traveller communities who set up camp on the farmers' fields and worked to earn their living by doing such stuff. Now, it's eastern Europeans... Without somebody being poor, those jobs just don't get done.

[LesPalenik]

Good points from both, chez on the extra non-productive 14 days of quarantine and cramped living quarters not compliant with minimal safe distance and from Robert on the need for experienced work force.

Not far from my home is the Holland Marsh agricultural area, and they are already feeling the crunch.

When the Canadian government halted all non-essential air travel, it raised red flags for the agricultural sector, which relies on guest farm workers from countries like Mexico and Jamaica for a successful growing season. Jody Mott, Executive Director of the Holland Marsh Growers Association, was among the interested parties bringing those concerns to the attention of the federal government – and who, on March 20, received “good news.”

In the wake of representations from a wide range of economic interests, the Ministry of Immigration, Refugees and Citizenship has now announced exemptions to the travel ban for foreign nationals who have already committed to working, studying or making Canada their home. That means that the travel of agricultural guest workers will be deemed “essential,” and will be permitted despite COVID-19 concerns. Mott has received calls from local residents, volunteering to assist the farmers as needed. It means that farmers can now bring in those “essential, experience agricultural workers” as the first step, “then we’ll be looking for other people to work along side of them.”

“Every farm in the area has very different aspects,” and different needs for workers, Hambly said. Gwillimdale usually brings in its first group of guest workers in January, to assist at the packing plant; a second in April, to get the land ready for cultivation and seeding; and then additional agricultural workers to maintain and harvest the crops.

https://www.bradfordtoday.ca/local-news/federal-government-announces-travel-ban-exemptions-for-needed-farm-workers-2187844

[chez]

Here's an article from the Vancouver Sun regarding foreign workers and the Covid outbreak at one facility...with more to come.

"Cohen said workers often don’t have access to adequate bathrooms. They sleep in one of three or four bunk beds crammed into a bedroom that doesn’t allow for two metres of physical distancing."

“They’re almost always overcrowded and there’s a lack of inspections at the best of times,” Cohen said. “I’ve interviewed hundreds of workers and one of the consistent requests that workers make to us is that housing be inspected by surprise inspection, and at this point that doesn’t happen.”

https://vancouversun.com/news/local-news/covid-19-kelowna-nursery-outbreak-likely-wont-be-last-for-migrant-workers-advocates-warn/

[John Camp]

There was an interesting letter to the editor in the weekend Wall Street Journal about "creative destruction," which is what happens during recessions in which efficient business operations survive, and the inefficient die. This supposedly makes even more room for the efficient operations, which then thrive. But this time, the letter-writer said (he's an economist) we're simply getting destruction. Both efficient and inefficient operations are closed by government order, unrelated to the quality of the operation.

I hadn't thought about that, but in thinking about it, the point is clear. It doesn't make any difference how efficient or well-loved your restaurant is, if it's ordered closed, it's closed, and you could go broke. The same with other retail-oriented businesses which depend on actual bodies coming through your store. Further, it seems to me the if the economy is partially re-opened, we're still going to have a problem if the virus is out there floating around. As a 76-year-old, I'll be reluctant to go to any restaurant until I'm immune, either through recovery from an infection, or a vaccine. Even quality operations would have trouble staying open if only half the customers show up. Heck, a lot of them would have trouble staying open if their traffic dropped only ten percent.

This oncoming recession could be a bad one. Not only do people have less money to spend, they might not even go out to spend it if they have it, because of the bug. We desperately need a treatment or a vaccine, and for more reasons than simple survival.

[LesPalenik]

It doesn't make any difference how efficient or well-loved your restaurant is, if it's ordered closed, it's closed, and you could go broke. The same with other retail-oriented businesses which depend on actual bodies coming through your store. Further, it seems to me the if the economy is partially re-opened, we're still going to have a problem if the virus is out there floating around. As a 76-year-old, I'll be reluctant to go to any restaurant until I'm immune, either through recovery from an infection, or a vaccine. Even quality operations would have trouble staying open if only half the customers show up. Heck, a lot of them would have trouble staying open if their traffic dropped only ten percent.

Add to it factors such as that there were too many restaurants to start with, they are really not that essential for most people, many restaurants were operating even before with a very small margin, some older restaurant owners will use this situation to retire for good, and many employees will be reluctant to return to their old jobs.
Poor prognosis for restaurants and other businesses in the service industry.

[Robert Roaldi]

Good points from both, chez on the extra non-productive 14 days of quarantine and cramped living quarters not compliant with minimal safe distance and from Robert on the need for experienced work force.

Not far from my home is the Holland Marsh agricultural area, and they are already feeling the crunch.

https://www.bradfordtoday.ca/local-news/federal-government-announces-travel-ban-exemptions-for-needed-farm-workers-2187844

Off-topic re the Holland Marsh. I used to live in North York. My most vivid memory of the Holland Marsh is from a September evening southbound on the 400, returning home from volunteering as a marshal at an automobile rally near North Bay, when suddenly the car filled up with the sweet smell of onion. Just so sudden and unexpected. That's a neat area, never did any photography there.

[LesPalenik]

Off-topic re the Holland Marsh. I used to live in North York. My most vivid memory of the Holland Marsh is from a September evening southbound on the 400, returning home from volunteering as a marshal at an automobile rally near North Bay, when suddenly the car filled up with the sweet smell of onion. Just so sudden and unexpected. That's a neat area, never did any photography there.

They still grow large crops of strong smelling onions and carrots there. But also other vegetables on smaller lots.

[Robert Roaldi]

They still grow large crops of strong smelling onions and carrots there. But also other vegetables on smaller lots.

Is that apple store still there on hwy 9, the place that claimed to sell over 20 varieties (or something like that, too long ago now to remember exactly)?

[chez]

Here in the Okanagan many of the traditional fruit orchards are being converted over to vineyards to feed the growing wine industry. More money in wine than fruit.

[Robert Roaldi]

Here in the Okanagan many of the traditional fruit orchards are being converted over to vineyards to feed the growing wine industry. More money in wine than fruit.

Hardier grape varieties and warmer temperatures means that even Ottawa has two local vineyards now, just south-east of Orleans. There are others near VanKleek and South Mountain. They are all less than 10 years old, I believe. Prince Edward County, south of Belleville, is close to being just one big vineyard. We did a driving vacation a few years ago along the north shore of Lake Erie from Windsor to Niagara and that area is dotted with vineyards along the way, long before you get to Niagara. Niagara used to be a huge fruit growing area, I wonder if that has changed.

Even the townships south of Montreal have a dozen or more wine makers now. There may be other wine-growing regions in Québec, I don't know. Wine, wine everywhere you go.

I maintain that there are more micro-breweries in Ontario than there are beer drinkers. We have (had?) a few restaurants in east Ottawa that only served artisanal beer, they don't carry large brewery brands. And the newest thing (to me) are that several small volume distillers are showing up in small towns in eastern Ontario.

[LesPalenik]

Is that apple store still there on hwy 9, the place that claimed to sell over 20 varieties (or something like that, too long ago now to remember exactly)?

Yes, there are several stores there. The one on Highway 9, west from 400 is still there, I usually buy there plant seedlings in May.
The other big store is on the east side of 400, first exit north of Highway 9 (shown in the attached picture).

[Robert Roaldi]

Yes, there are several stores there. The one on Highway 9, west from 400 is still there, I usually buy there plant seedlings in May.
The other big store is on the east side of 400, first exit north of Highway 9 (shown in the attached picture).

Thanks very much.

[James Clark]

There was an interesting letter to the editor in the weekend Wall Street Journal about "creative destruction," which is what happens during recessions in which efficient business operations survive, and the inefficient die. This supposedly makes even more room for the efficient operations, which then thrive. But this time, the letter-writer said (he's an economist) we're simply getting destruction. Both efficient and inefficient operations are closed by government order, unrelated to the quality of the operation.

I hadn't thought about that, but in thinking about it, the point is clear. It doesn't make any difference how efficient or well-loved your restaurant is, if it's ordered closed, it's closed, and you could go broke. The same with other retail-oriented businesses which depend on actual bodies coming through your store. Further, it seems to me the if the economy is partially re-opened, we're still going to have a problem if the virus is out there floating around. As a 76-year-old, I'll be reluctant to go to any restaurant until I'm immune, either through recovery from an infection, or a vaccine. Even quality operations would have trouble staying open if only half the customers show up. Heck, a lot of them would have trouble staying open if their traffic dropped only ten percent.

This oncoming recession could be a bad one. Not only do people have less money to spend, they might not even go out to spend it if they have it, because of the bug. We desperately need a treatment or a vaccine, and for more reasons than simple survival.

Not just restaurant and retail.  Both my wife and I own rather successful businesses that support, develop, or create large scale event and conference content.  Our field is literally, just gone.  It'll come back, and we're positioned better than most to push through, but there's no amount of better or more efficient work that we could have done to mitigate this.

<shameless local business plug>Also, take the risk and go to Geronimo. That has to survive so I can get back there later this year.  </shameless plug>

[Alan Klein]

That's one thing I don't understand why with so many unemployed today, why do we have to rely on foreign labour? Can't we get some of those unemployed back working?

The corporations would have to pay a little extra to use out-of-work Canadians.  So your PM is trying to save the corporations money by getting foreigners their work permits.

[LesPalenik]

There is a new app that shows how long you might wait at grocery stores. Based on the location of the device, it will show various waiting times at the supermarkets, pharmacies and clinics with colour coded points on the map

A map that shows how long you might wait at Toronto grocery stores near you is here to hopefully rescue all of us from hour-plus waits in socially distanced lines.
We now have an open source cookbook, so why not an open source wait time map? The map was created by a web dev who's actually based in Florence through GitHub.
"This project aims to avoid the gatherings of people in various supermarkets and pharmacies during the COVID-19 pandemic," reads the project's GitHub page. "Based on the geolocation of the device, it will show various points of interest such as supermarkets, pharmacies, clinics, bars etc., with an estimate waiting time."
Colour coded points on the map indicate wait times from five minutes (green) up to over an hour (bright red).

https://www.blogto.com/eat_drink/2020/04/map-wait-times-grocery-stores-toronto/

[Alan Klein]

I don't want to make a big thing out of this, especially because there have been many cases where union actions were beyond the pale, and I'm thinking primarily about ties to organized crime.

But I have a problem with blaming high union wages for everything. How come greed is good, but suddenly bad when an hourly worker wants more? In the approximately 30 years it took for General Motors to go from No. 1 to oblivion, the bonus-receiving management continued to build cars that no one wanted. But when the end came, the business press blamed the high cost of union pension and health benefits. I never heard one voice suggest that the bonuses paid to the management over that time should be paid back though. Funny, isn't it?

So when things go well, people take the credit and pay themselves well, when things go bad, it's someone else's fault? I don't think so. At every step of the way, that management agreed to all those union demands.

Then Honda and Toyota moved into North America, hired those same people, paid as well as they earned before, and everyone did quite well, not because there were no unions but because people wanted to buy those cars.

Every time a union gets a wage demand that people don't like, just remember that a management team agreed to it. Somehow this gets forgotten for some reason.

I am certain that you can find many egregious examples of union greed. And every time you come up with one, I'm going to point to the 2008 bank bailout. And the handouts to Bombardier. And subsidies to other industries in bad times, as if they weren't supposed to be making their own disaster plans. I'm sorry but blaming the unions is an order of magnitude too facile.

You seem to have forgotten but I haven't.  It was Obama who authorized and the US taxpayer in the 2008 recession who bailed out the auto workers union pension fund at GM and Chrysler (but not Ford) to the tune of billions of dollars.  It was broke. That was President Obama's payback to the union for their support in the election.  So please don't cry for the unions and make it seem like they were some innocent bystanders.  To argue management agreed to pensions is a two way street.  After all, the union signed also.  So both sides are responsible.  Yet, the American taxpayer would up paying for their mistakes.  Why? 

[Alan Klein]

There was an interesting letter to the editor in the weekend Wall Street Journal about "creative destruction," which is what happens during recessions in which efficient business operations survive, and the inefficient die. This supposedly makes even more room for the efficient operations, which then thrive. But this time, the letter-writer said (he's an economist) we're simply getting destruction. Both efficient and inefficient operations are closed by government order, unrelated to the quality of the operation.

I hadn't thought about that, but in thinking about it, the point is clear. It doesn't make any difference how efficient or well-loved your restaurant is, if it's ordered closed, it's closed, and you could go broke. The same with other retail-oriented businesses which depend on actual bodies coming through your store. Further, it seems to me the if the economy is partially re-opened, we're still going to have a problem if the virus is out there floating around. As a 76-year-old, I'll be reluctant to go to any restaurant until I'm immune, either through recovery from an infection, or a vaccine. Even quality operations would have trouble staying open if only half the customers show up. Heck, a lot of them would have trouble staying open if their traffic dropped only ten percent.

This oncoming recession could be a bad one. Not only do people have less money to spend, they might not even go out to spend it if they have it, because of the bug. We desperately need a treatment or a vaccine, and for more reasons than simple survival.

John That's what I've been posting.  Finally glad someone else see what I see. 

I read two weeks ago that fully 1/3 of restaurants or 6000, will not re-open in Michigan, I think the state was.  Meanwhile, in the US, the government is going to give money to small businesses to keep workers working.  For what reason?  No one is going to their store.  If they are, they they don;t need the money.  They'll only put the loan that doesn;t have to be repaid into the business owner's pocket making him richer at taxpayer expense.  Stupid.

So there is no creative destruction.  It's government picking winners and losers.  Workers will be paid to stay away from work or work for losing firms instead of being hired by more successful businesses where they can be more productive.  As usual, the government is just making the situation worse.  Everytime the government tries to help, everything they touch, they screw things up worse.  We never learn.