Tag Archives: economy

Price hikes

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Everywhere I turn I’m surprised by the price of things. Groceries, restaurants, parking, shoes, alcohol, no matter what I’m looking to buy, prices seem significantly higher than just a couple years ago. It’s not subtle, it’s very noticeable.

I wonder if the percentage of people living below the poverty line has increased? How are lower-middle class families doing? How many houses have been sold due to interest rates being too high? How many people are commuting from farther away from work than they hoped because rentals in cities are too high?

How are people making minimum wage making ends meet? How many kids in their 20’s and even 30’s are living at home with their parents? How many are renting with no hope of coming up with a deposit to buy a house?

Prices don’t seem to go down either, even when the economy and interest rates lower, prices stay hiked up… they don’t increase as fast, but they also don’t lower. New lows are set and we are forced to settle with the new hikes as the new normal.

It doesn’t seem sustainable.

Empty Malls

We went to the mall nearest to my parent’s house and I was shocked to see about 60% of the stores closed. The grocery store and drug store were busy, but while my mom waited for a prescription I went looking for a coffee, and the rest of the mall was almost empty. The closest I got to finding coffee was a Subway and Booster Juice, both with no customers in the stores. Both had shuttered, empty sores next to them.

The strip mall and small malls that we’ve known for decades are dead. There won’t be a revival. Amazon, eBay, Etsy, and other online shopping sites are in direct competition with these malls and unless someone is pulled to these malls by the need for groceries or a prescription, none of the other few remaining stores will get a visit.

That said, all malls won’t die just the stand-alone ones. The newest form of densification in cities is to build a mall or commercial level shopping below high rises… stack the customers on top of the shopping spaces and make the mall convenient to visit. You don’t even need to put on a coat to visit the mall, it’s just a trip down the elevator, or a walk through an underground parking lot.

Goodbye strip mall. They will all be torn down and revived only when a few hundred condos are built above the mall space. You want customers in your mall? Make the mall an extension of their living space. Until that happens, you’ll see more and more empty, shut down, and abandoned stores… Malls that are mere shells of what they used to be.

Price hikes and profits

I saw an article recently that said inflation has dropped to 4.2%, the lowest since August 2021. Yet our grocery bills are up 9.7%. What’s disturbing about this is that many grocery stores (or their parent companies) are reporting record profits. So are oil and gas companies while I’m paying $1.93 per litre of gas.

Some people can no longer afford their mortgage, others are being priced out of the market due to increases in mortgage rates, and yet companies are giving their shareholders huge returns. These price hikes we are seeing at this time are proof that the capitalist market ruled by profits is broken.

Shareholder good exceeds public good. Profits, not people matter. And those who can afford to be shareholders grow richer and richer while those who can’t afford the extra cash to invest suffer as their dollar is worth less and less… whether it’s mortgages or the price of eggs, what a dollar used to get you doesn’t go as far today as it did last year.

Got a 5% raise? That sounds great except food will still cost you more to buy than you had to pay last year, before your raise. In other words, your income is not growing as fast as your living expenses. And unless you are a shareholder getting great returns, that won’t change any time soon.

I don’t know how this changes? I just see a larger and larger gap between the haves and the have-nots, and the gap is widening. Is this sustainable? No. But what’s the solution?

Food and fuel insecurity

Since the pandemic started we’ve seen shortages in both consumable items and merchandise, which we haven’t seen before in my lifetime. I recently paid over $2.40 per litre of gas, and can remember being upset at having to pay over $2 not that long ago. Early in the pandemic it was toilet paper that was scarce to find, but that was driven by fear of shortages. More recently I’ve seen the back of empty shelves where I have not seen them before, ranging from items in the butcher section, to baking items, to well known products that usually seem to have an endless supply.

And I think things will get worse before they get better.

Parts of Europe are being deforested by concerned citizens collecting firewood, by people uncertain if they will be able to afford heating fuel in the coming winter. Food banks are reporting record number of people needing their service. And certain items including basic food items will be both in short supply and more expensive than ever before.

This is not fear mongering, and it’s also not all doom and gloom, end-of-the-world-as-we-know-it, but life in general is going to get more expensive with less purchasing power and choice for a while.

How will this pan out over the next few years? It’s hard to guess because the issues of inflation, money devaluation, questions of war, and a shaky stock market are far beyond my understanding. What I suspect is that this global economic downturn is not something we will just have to deal with this winter, but something that we will deal with through all of 2023 and beyond.

We can live without our favourite brand of cereal in our grocery stores. We can wait longer than we hoped for an appliance or a new car to arrive after ordering it. What we can’t do is sustain gas and food prices that make it impossible for lower-middle class and poorer families to sustain themselves on their inflation-diminishing salaries for an extended period of time… while grocery stores and oil companies generate record quarters of profits. At what point do large corporations recognize that their record profits will fall when a significant part of the population has no buying power?

My fear is that it has to get a lot worse before significant system change will happen. In the mean time, prepare to watch your purchasing power fall over the next year and beyond.

Nationalism vs Globalism

I remember reading The World is Flat back in 2006 and thinking about how our world had changed.

I hired a patent lawyer in India shortly after that and paid less than 10% of what I would have paid in Canada (a story for another time). I recognized the value of outsourcing, and seeing the entire globe as a single supply chain. It was a time of breaking down walls and getting access to whatever you needed, wherever you needed it, faster and cheaper. We have benefited greatly from this as consumers of products, many of which are made of component parts that are manufactured in different countries around the world, then delivered to our local stores, or dropped off at our doorstep.

But the tides are changing and we could very well see a move away from the globalization we’ve been benefiting from. Shortages and supply chain issues have been issues across the globe. War, fuel costs, inflation (or stagflation), compounded with severe weather systems affecting crops, have all led to things we haven’t seen in decades: Jumps in prices, delays in delivery, and shortages in products leaving some shelves bare in our grocery store.

This is all leading to a shift from globalism to nationalism. Why would a country export a product desperately needed in their own country? Why rely on a component part being made slightly cheaper in another country when shipping and supply are causing delays in production of the final product? What is a country to do when neighbouring countries don’t trade enough food, because they are focussing on feeding themselves? And the food that is coming in is very expensive due to increased transportation costs.

All these changes lead to a more nationalistic approach. An approach counter to the globalization that brought us such prosperity, with an endless supply of cheap food and goods. Is this the end of globalization? Probably not, but it could be the start of a rebalancing where countries get more nationalistic, and things get tougher for a while.

High prices, shortages of products, and a focus on countries protecting themselves from dependencies on other countries…dependencies that we relied on to create a global economy that brought us better, and more affordable products faster than ever before. Things really might get worse before they get better. And while I believe that there will be a return to globalization, I’m not convinced it will happen any time soon.

Mind the gap

Is it just me that sees headlines like this and just shake my head?

Air Canada gives execs $10M in bonuses

The article states, “Air Canada granted its executives and managers $10 million in “COVID-19 Pandemic Mitigation Bonuses” and other special stock awards to compensate them for last year’s salary cuts, per its annual note to shareholders. The extra compensation came while the airline was negotiating a $5.9-billion rescue plan with the federal government… Air Canada explained the bonuses, pointing to its “management’s exceptional performance” during the pandemic.”

All this after laying off half of its workforce.

Wow.

I have a friend who thinks Jeff Bazos deserves every penny for getting Amazon where it is. Meanwhile, I think he could personally pay every employee that makes less than 100,000 a year a $10 per hour raise and still be one of the richest men in the world a couple decades from now.

I’m sure Amazon executives earn their fat bonuses too.

These inequalities are getting worse, and our governments subsidizes these big companies, and gives them tax breaks, so that they can provide jobs.

This isn’t sustainable. It’s not just about executive bonuses, it’s about gross inequity. The gap is widening.

Digital currency

In five to ten years a crisp, mint condition 50 or 100 dollar bill from the ‘late 1900’s’ will be a collector’s item. No one will be paying for anything with paper bills or coins. No one. It’s not just that we will be using credit cards and bank cards instead of cash, there won’t be any form of money that won’t be digital.

The Canadian and American dollar, and currencies from all over the world, will be digital cryptocurrencies. They won’t be like Bitcoin where every account address is public. When you pay, no one will be able to look into your account, but the money will be verified as real at the point of transaction. You will be able to instantly change currencies from one country’s currency to another, without a bank. You will also be able switch to another cryptocurrency or Visa, or MasterCard, or some form of smart contract IOU, that is staked against something you own (at a pre-determined interest rate).

Paper money will be nothing more than collectables like Magic the Gathering or Pokémon cards that are no longer printed.

It might seem crazy to think this will happen as soon as 5 years from now, but North America won’t be first. There are countries with incredible inflation that need to print larger and larger bills, making smaller bills useless. In countries like this, the cost of printing the money is hardly worth the effort. Imagine having to carry around seven to ten $50,000 bills to buy a loaf of bread! These economies will move to digital first.

But then the transition will grow exponentially. Within 10 years every nation will have a digital currency and paper money will be a thing of the past. Have any mint condition bills and coins? Keep them, they will be worth a lot more than face value for your grandchildren.

Ordering online is too easy

Sometimes it is just too easy to order things online. The draw to impulse buy something is strong. The incentive to buy in bulk, or more items than you need is exaggerated by a pricing scheme that invites buying excess. I needed golf tees to use to put my paper archery targets onto my target block. 25 tees would last a long time, 50 would last well over 2 years, but I got 75 because it was a great deal. It didn’t cost much more to get the extra 25 tees… but that little bit more was still money that I didn’t need to spend.

I don’t golf, and never visit golfing stores, so I don’t know how much I saved, buying from Amazon rather than from a place that has to pay high fees for retail space? I don’t think about the fact that a store like that is good to have in the community, and worth supporting. I also like the idea of not going to a store that I don’t need to right now. Not walking by people in isles, people who seem less interested in social distancing than they do in getting to the items that they are shopping for.

The appeal to just online shop rather than going to retail stores is strong. When the pandemic ends, I suspect online ordering habits won’t. I wonder what this will do to our local economies? If we will end up with less choices, and more ‘big box’ stores that have the draw of meeting many needs, because niche needs are easier to get online? I wonder if there will be a pricing reset for retail space?

I also wonder how much extra junk we are all buying, because more is better, and bulk items are cheaper? We live in a consumer product driven world and online shopping is an easy way to accumulate a lot of stuff we really don’t need.

A reset is coming

I’m not a futurist. But I see the writing on the wall:

  • Bernie Sanders and Andrew Yang put the idea of a Universal Basic Income (UBI) out in a way that has made it a serious consideration.
  • Bitcoin has gone past 50k and Tesla is leading the way in using Bitcoin the same way investors hold gold.
  • It’s clear that taxes are broken and corporations and billionaires are not taxed fairly, but there are too many loopholes to fix this any time soon.

In a short period of time we aren’t going to look at money the same way. We won’t look at the work week the same way. I don’t know what this will look like, but it will be very different… and this will happen sooner than you think.

The Great Reset or the Great Rethink?

I can’t believe how often good ideas get buried into conspiracy theories. See this article in the Nee York Times:

The baseless ‘Great Reset’ conspiracy theory rises again

A baseless conspiracy theory about the coronavirus has found new life as cases surge once again.

On Monday morning, the phrase “The Great Reset” trended with nearly 80,000 tweets, with most of the posts coming from familiar far-right internet personalities. The conspiracy alleges that a cabal of elites has long planned for the pandemic so that they could use it to impose their global economic control on the masses…

The article then shared this tweet:


Now, moving away from crackpots that spread the idea of some ruling cabal planning to use the pandemic to bring in a socialist and controlling government to strip you of rights and freedoms… there are actually some very smart people looking for the opportunity in this crisis.

These wise thinkers and leaders are trying to rethink some of the idiocy of our pre-covid world, and take this opportunity to do a reset of some sort. That’s not a conspiracy, that’s leadership.

Check out this World Economic Forum happening now: weforum.org.

What’s on the agenda?

Sustainable production: Almost 50% of the world’s energy consumption and 20% of greenhouse gas emissions are attributed to the manufacturing sector. How can we accelerate sustainable production and make it a competitive advantage? 

New digital business models: While much of the physical world came to a standstill during the global pandemic, digital connectivity soared. How can new digital business models help companies provide value and build resilience? 

Urban infrastructure and services: Many cities face serious obstacles to providing basic services, and COVID-19 has made it even more difficult. How can urban innovations help cities improve quality of life, resilience and sustainability?

Keeping populations healthy: The pandemic has revealed the need to strengthen health systems and ensure that populations have better information and control over their health. How can technologies help to improve and maintain healthier lives? 

Financial innovation: New financial technologies are shaping how services are provided around the world. How can we ensure that they are accessible and deliver greater value and efficiency to all parts of society?

Frontier technologies: Fourth Industrial Revolution technologies, such as artificial intelligence, blockchain and synthetic biology, are heralding a global transformation. How can we create, scale-up and govern these technologies so they “do no harm” while delivering the value we need? 

New work models: New work models are essential to address the challenges created by a transforming labour market, new skillset requirements and globally connected technology-driven industries. How can we ensure that employees are able to keep up with the evolving demand for skills and have the opportunity to contribute purposefully to the workplace of the future?

Imagine that: smart people getting together to ask meaningful questions about how our world could be a better place! Of course some of the solutions will be ‘out there’, big audacious (and to some, scary) ideas. But I want to live in a world where people challenge themselves to rethink what’s not working and use times like this to reset how we do things. The fact that some people are afraid of change shouldn’t generate fear-mongering and stop us from making thoughtful progress during challenging times.

For example, as an educator I’ve seen remote learning catapult the use of technology in classrooms and many great educators are rethinking the way they interact with students, and the way they get students to interact with each other. If the pandemic ends and we just go back to the way things were before, we are missing out on using some valuable lessons learned. And, if we go forward haphazardly from here without educational leaders trying to parse what we keep and don’t keep, then we are leaving innovation to chance.

Within every crisis there is an opportunity, and now is the time to rethink and to reset the post-pandemic world we will live in.