I spent the better part of yesterday afternoon flying a kite…
“It’s a breeze,” I told my daughter, my dad jokes reaching ever new lows during the quarantine. “As soon as the wind picks up, you start running towards it.”
After I handed her the kite, I stepped back to watch with fatherly pride. What a wonderfully honest and pure way to escape the mounting dread of life during coronavirus. Fresh air, a cool breeze and some old fashioned family fun should be a perfect antidote to this pestilence, right?
Wrong…
The wind abruptly stopped and the kite slammed into the ground.
“Don’t worry,” I told her. “Half the fun of flying a kite is trying to keep it in the air!”
We got the kite back up in upon the next gust and were feeling pretty confident this time. My daughter gave the kite some more slack and it was flying pretty high. But, lo and behold, as soon as it starting reaching new heights the wind abruptly changed directions and crashed the kite again.
“You just have to run the other way when the wind changes. It’s easy,” I lied.
We went through this routine for about half an hour before she finally realized that flying kites on a unpredictably windy day wasn’t worth the trouble and heartache.
The entire experience mirrored what life – and the stock market – has been like this year.
So far this year, we’ve seen the biggest back and forth gusts in market history. A 30% drop was soon followed by a 20% recovery. Rinse and repeat. It’s been exhausting and difficult to navigate.
The winds have been blowing the market in every direction…
The government has spent trillions of dollars to try and stabilize it. Oil went negative for the first time in history. Entire industries have been put at the brink of extinction.
Oh, and 26 million people have lost their jobs.
Those jobs are not just going to come right back and it is spreading fear and uncertainly, which are the two biggest issues facing investors. It’s especially scary for small businesses which, despite billions of dollars in government aid, are facing total collapse.
That’s why I spent the last week speaking with local business owners in my community to see how they were faring.
I started with our local restaurant.
While masked, gloved, and waiting for a carryout order for some crabcakes, I spoke with the owner about how he was fairing during this crisis. He delivered his answer with a nervous chuckle.
“Not well.”
While it has been next to impossible to stay above water on curbside carryout and delivery orders, he seemed just as concerned about what will happen after the country reopens. For one, his restaurant will have to cut the amount of tables in half due to the need for distancing.
Two, he was very concerned about the ability to hire his lower wage workers once they are able to reopen. While waiters and bartenders will happily return to work for tips, dishwashers, line cooks, food runners and hostesses aren’t quite so lucky.
Considering that the government rescue effort averages around $976 a week for those out of work, it just doesn’t make sense for these low paid workers to even come back. Why would you slave over a hot griddle for hours a day when you can make almost twice as much money staying home?
The end result will be that restaurants have to pay more money for less employees, serving half as many customers. And the customers that do show up? They’ll probably be paying twice as much money for their meal to compensate.
With millions of people out of work, the restaurateur fears that many diners will choose to save their money instead of treating themselves to what now constitutes a “luxury purchase”.
This is a nightmare for an industry that already runs on thin margins. Restaurants lost $30 billion last month. They expect to lose another $50 billion in April and $240 billion by the end of the year.
Almost 14 million people work in restaurants in the U.S. You can’t have a honest recovery of any kind with that number of people out of work.
The news was just as dire same when I checked in with another prominent local business…
While the Lorax spoke for the trees, nobody seems to be speaking for the flowers. Except for my trusted local florist Chris, that is.
I ran into him at the grocery store the other day. He was buying up the best remaining flowers they had in order to fill the few orders he did have. I took a glance in his cart and couldn’t believe what I saw: flaccid petunias, hideously colored roses and tulips that would classify as one-lips.
To say I was shocked would be an understatement. I’m a regular customer of his (husbands take note, buy your wife flowers often) and his arrangements are unbelievably gorgeous. No disrespect to the grocery store florists, but he’s in an entirely different league.
I asked him why in the world he was buying third-rate flowers when he had the best I’d ever seen.
“The flower market has completely shut down. I can’t get anything. This is the best I can do,” Chris sadly admitted, almost on the verge of tears.
It’s true: the $8.5 billion cut flower industry is totally collapsing.
Spring is a massive time for flowers with Easter, Mother’s Day and weddings all happening. But Easter was effectively shut down. We don’t even get to see our mothers. And weddings aren’t happening…
Another grim reminder: funerals aren’t happening either. Virtual funerals don’t require the thousands of flowers that accompany a typical one. Complaining about flowers while people die alone sounds cruel, but livelihoods depend on it.
The entire global supply chain has fallen off a cliff. Roses dropped to 8 cents a stem last month. At the world’s biggest flower auction house in the Netherlands, instead of paying employees to sell flowers to the international market, companies were paying them to have them destroyed.
It took a week and a half just to shred all the unsold flowers.
These types of collapse are happening in all sorts of industries we’ve taken for granted. While we can keep throwing government money at them, the pain will be felt for years to come. A small business recovery does not appear anywhere on the horizon.
We all have a long, windy journey ahead of us.
It is the perfect opportunity to properly learn how to fly a kite.
