Open up or not to open up the economy amid COVID-19 in Canada
Posted on 09-05-2020
There are two main forces at play in the COVID-19 pandemic regarding the economy. On the one side, many people are withdrawing from the work force due to the illness. So, there is a blow to the production of goods and services country wide, worldwide. On the other side, businesses cannot function without workforce. Tools, equipment and raw materials do not produce profits by themselves. Labour does. No labour, no profits. Businesses are eager to produce profits, so they push for hiring the workforce. There lies the conflict. Are we on the side of self-isolating people or on the side of businesses? There are stark differences between Canada’s and US’s approaches. We see in the US that for Trump, profits trump everything, even the wellbeing of citizens. He wants to reopen the economy, make everything work as it was before. The people will suffer the consequences.
Canada has a different approach. Canada helps to a degree the people who lost their job due to COVID-19 with the CERB, EI and other instruments to get thru the period of self-isolation and being out of work. However, it still has big shortcomings. For example, we are giving people money and let them sit idle. Economically this is not too rational. Instead we could hire for a little bit more money those who are idle and, say, let them test for COVID-19 the population, do contact tracking, help refitting workplaces to be safe to return to work, maintaining the necessary social distancing, etc. Creating value is always a better alternative than sitting idle. 3 million people in Canada lost their jobs. Put them to work. The cost of their employment is much less than the cost we pay by not doing it. The social cost we pay otherwise of being unemployed is not quantized by today’s economists.
Canada’s top medical officials would like the population to isolate the longest possible to flatten the curve of infections. At the same time, there is the pressure from businesses to reopen and start producing profits. Who wins? Probably the businesses, although this process is claimed to be gradual.
In the 30’s Great Depression to which we compare this crisis of capitalism, Franklin Delano Roosevelt hired 15 million jobless people in the US, among other things. We could do the same here and now. There are so many socially necessary things to do. From the proper care of our elderly, children and the disabled, to give potable tap water to all Canadians, clean up the environment, build nuclear power plants, etc. I will not continue.