The fragile world economy, personal risk and the death of support communities
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A few decades ago I met a lot of people in England who’d never travelled outside a 50-mile radius of their small town. Today, most of them travel well beyond that. Those small towns with small, closely knit populations are disappearing. What we have instead is a worldwide network of individuals functioning locally and interacting globally.
I wrote last week about the gig economy and people reacted. One wrote: there’s a lot of work, just no jobs. Another said he’d lived without a safety net all of his career, so why shouldn’t you—and be grateful for what you have. Maybe he’s right. But to be clear, he never had kids and his partner had a high-paying steady job. Without her he might feel differently.
In most cities there’s a farmer’s market. Most of the food and baking and craft goods are made locally. But these small islands of local production float in a sea of industrially-produced goods, much of which comes from half way around the planet. At every railway crossing you can see the shipping containers moving across the country in an endless chain.
We’re all pretty happily dialled in to that. Christmas shopping—sorry, Holiday shopping—begins before Remembrance Day and runs well into mid-January. It’s an enormous consumer buffet that has long lost its significance to anyone other than kids under the age of six. And for the kids it’s just basic training in consumerism.
But we don’t want to actually see the bubble bursting. Somehow we know the bankruptcy of Sears, Zellers, The Bay, Target and Toys-R-Us has changed things while we head out on our daily shopping trips. But we try to keep those thoughts at bay. Everything is still fine. We hope.
Well, and maybe everything is still fine. But it’s worse in the States. Retail stores are closing in record numbers. Not only Sears, but Macys, JC Penney, KMart, Payless Shoes, GAP, Tevana, Michael Kors, Radio Shack, Abercrombie & Fitch, Guess, Staples and dozens more are shuttering stores—over 5,000 last year alone.
Where have all those shoppers gone? I recently read an article on the death of the open internet as we know it. The writer, André Saltz, is a blogger and computer programmer. He uses a lot of general stats and graphs to prove his point. He shows how the internet has changed over the past 5 years. Google, Facebook and Amazon now control the lion’s share of transactions. Google has consciously repositioned itself as the “artificial intelligence” company. Facebook is the “social media” company. Amazon, unsurprisingly, is the “e-commerce” company. One graph shows that over the past decade Amazon has dramatically surpassed other retailers—like Walmart, Apple, Office Depot, Dell, Netflix and Best Buy—in sales growth. Amazon sales have climbed steadily from about $7 billion annually in 2002 to over $60 billion by 2012 while other retailers flatlined. Given the meltdown of retail stores, the growth of Amazon is even more dramatic. Last year Amazon’s sales were an astonishing $136 billion, and some are forecasting sales of over $1 trillion sometime in the foreseeable future.
When the first wave of globalization hit, manufacturing jobs shifted to cheaper labour markets. That’s how all those trainloads of products get made. In the next wave white collar and IT jobs were outsourced. Now we’re seeing retail sector jobs disappear. Just like call centre workers, retail workers are becoming an endangered species. Job focus is shifting toward local service and perishable goods. Think security, policing and food service.
The end result is precarious employment. Everyone from truck drivers to academics to business consultants now live in this contract-employment world. Meanwhile, profits keep floating to the top of the economic food chain. The release of the Panama Papers and Paradise Papers show the extent of the practice of sheltering big money in offshore tax havens. It isn’t a stretch to see that the lower and middle income groups are pressured to the point of collapse. We see the symptoms in divorce rates, homelessness and substance abuse. The question becomes, how much further can this go before the whole economic system collapses? And, because there are no real local economies left, how would that affect us?
I really don’t know. But we all sense that if we lose our jobs our FB friends will comment on how bad they feel for us, and there likely won’t be anyone there to help. We’ll just be a few more sad postings on the endless newsfeed. And so it goes in the world of ones and zeros.
Additional reading:
http://clark.com/shopping-retail/major-retailers-closing-2017/
https://www.google.ca/search?q=andre+saltz&oq=andre+saltz&aqs=chrome..69i57j0l2.3551j0j7&sourceid=chrome&ie=UTF-8
A few decades ago I met a lot of people in England who’d never travelled outside a 50-mile radius of their small town. Today, most of them travel well beyond that. Those small towns with small, closely knit populations are disappearing. What we have instead is a worldwide network of individuals functioning locally and interacting globally.
I wrote last week about the gig economy and people reacted. One wrote: there’s a lot of work, just no jobs. Another said he’d lived without a safety net all of his career, so why shouldn’t you—and be grateful for what you have. Maybe he’s right. But to be clear, he never had kids and his partner had a high-paying steady job. Without her he might feel differently.
In most cities there’s a farmer’s market. Most of the food and baking and craft goods are made locally. But these small islands of local production float in a sea of industrially-produced goods, much of which comes from half way around the planet. At every railway crossing you can see the shipping containers moving across the country in an endless chain.
We’re all pretty happily dialled in to that. Christmas shopping—sorry, Holiday shopping—begins before Remembrance Day and runs well into mid-January. It’s an enormous consumer buffet that has long lost its significance to anyone other than kids under the age of six. And for the kids it’s just basic training in consumerism.
But we don’t want to actually see the bubble bursting. Somehow we know the bankruptcy of Sears, Zellers, The Bay, Target and Toys-R-Us has changed things while we head out on our daily shopping trips. But we try to keep those thoughts at bay. Everything is still fine. We hope.
Well, and maybe everything is still fine. But it’s worse in the States. Retail stores are closing in record numbers. Not only Sears, but Macys, JC Penney, KMart, Payless Shoes, GAP, Tevana, Michael Kors, Radio Shack, Abercrombie & Fitch, Guess, Staples and dozens more are shuttering stores—over 5,000 last year alone.
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| Security has never been tighter as customers disappear |
Where have all those shoppers gone? I recently read an article on the death of the open internet as we know it. The writer, André Saltz, is a blogger and computer programmer. He uses a lot of general stats and graphs to prove his point. He shows how the internet has changed over the past 5 years. Google, Facebook and Amazon now control the lion’s share of transactions. Google has consciously repositioned itself as the “artificial intelligence” company. Facebook is the “social media” company. Amazon, unsurprisingly, is the “e-commerce” company. One graph shows that over the past decade Amazon has dramatically surpassed other retailers—like Walmart, Apple, Office Depot, Dell, Netflix and Best Buy—in sales growth. Amazon sales have climbed steadily from about $7 billion annually in 2002 to over $60 billion by 2012 while other retailers flatlined. Given the meltdown of retail stores, the growth of Amazon is even more dramatic. Last year Amazon’s sales were an astonishing $136 billion, and some are forecasting sales of over $1 trillion sometime in the foreseeable future.
When the first wave of globalization hit, manufacturing jobs shifted to cheaper labour markets. That’s how all those trainloads of products get made. In the next wave white collar and IT jobs were outsourced. Now we’re seeing retail sector jobs disappear. Just like call centre workers, retail workers are becoming an endangered species. Job focus is shifting toward local service and perishable goods. Think security, policing and food service.
The end result is precarious employment. Everyone from truck drivers to academics to business consultants now live in this contract-employment world. Meanwhile, profits keep floating to the top of the economic food chain. The release of the Panama Papers and Paradise Papers show the extent of the practice of sheltering big money in offshore tax havens. It isn’t a stretch to see that the lower and middle income groups are pressured to the point of collapse. We see the symptoms in divorce rates, homelessness and substance abuse. The question becomes, how much further can this go before the whole economic system collapses? And, because there are no real local economies left, how would that affect us?
I really don’t know. But we all sense that if we lose our jobs our FB friends will comment on how bad they feel for us, and there likely won’t be anyone there to help. We’ll just be a few more sad postings on the endless newsfeed. And so it goes in the world of ones and zeros.
Additional reading:
http://clark.com/shopping-retail/major-retailers-closing-2017/
https://www.google.ca/search?q=andre+saltz&oq=andre+saltz&aqs=chrome..69i57j0l2.3551j0j7&sourceid=chrome&ie=UTF-8
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