OPINION
IS THIS YOUR FIRST RECESSION?
Words: Ray Heron
L
et me prefix this by saying, i’m no economist,
and my Delorean is broken, so I can’t see the
future. If you’re my age (mid 30s) then you
lived through the GFC, but it probably didn’t
effect you all that much. I know that I was still
young, and living pay cheque to pay cheque,
more than likely spending any income I did have
on alcohol or gadgets.
The silver lining of being this age, is that you can
walk around asking people if this is their first
recession. It’s a power move of sorts.
Back in 2005, when the world was heading into
the GFC (Global Financial Crisis), I was in tertiary
education, finishing off a diploma in radio
broadcasting. And being the youngest in my class,
and not really caring about the state of world
financial affairs, I was spending every cent I
earned. Daily from the tutors and older students,
I would get “What? Is this your first recession?”
Now, all you Boomers out there, hold that
thought while I school the younger readers...
If you’re younger than me, this might in fact be
your first recession. So what exactly does it mean?
If you completed 5th form economics, you’ll
know a recessions is a business cycle contraction
when there is a general decline in economic
activity. Recessions generally occur when there is
a widespread drop in spending and generally last
for at least six months. Whereas a depression is a
more severe decline that lasts for several years.
There have been 33 recessions since 1854, but
only one depressions since then, which was the
great depression of 1929.
Ok Boomers, you can join back in now. It’s no
secret that Covid-19 has screwed us over, and the
Level 4 lockdown restrictions have been severe.
Businesses being closed for that long, and cash
flow drying up is going to mean some businesses
simply don’t re-open their doors. Regardless of
your political views or opinions, 19 deaths (at the
time of writing) due to Covid-19 is very low
compared to the rest of the world. But things are
not going to be the same as they were before
lockdown. And we are going into a recession. So
what can we do about it? It’s simple really... two
words... Buy Local.
When you save yourself $20 by buying that
motorcycle part online from an overseas outlet,
you send the full cost of that item to another
country’s economy. Just like that it’s gone... and
Trev, or Barry, or Steve, who owns your local bike
shop is one day closer to making the hardest call
of all, to make his staff redundant. His staff, could
be your mates’ parents... heck, his staff, may well
be your mates...
When you buy that item locally, sure it may cost
you slightly more, but you inject cash into that
local bike shop and, in turn, our own NZ economy.
When you spend with your local bike shop, they
can then afford to employ locally.
You’re also supporting the NZ based distributor,
who had to fork out the cash to get the stock
from wherever in the world it had to come from.
It likely came in through sea freight, so the dock
workers have made an income. The truckies drove
it from the port, to the warehouse. The distributor
unpacked it, Marketed it, boxed it up and
couriered it to your local bike shop, and the guys
put it on display for you to buy.
All those people are kept in work, by you
purchasing that item locally. All those people can
afford to buy a beer, or put their kids through
school right here in NZ, because you bought that
item from a local supplier.
This is the only way the local bike shops are going
to survive the next 12 months. You know, the local
bike shops who you have asked for donations, or
to help with fundraisers. The guys who support
our community by organising trail rides and
charity events. The local bike shops who have their
name on NZBSK bikes and kids’ 85cc MX bikes.
Your local bike shop needs you now, they have
supported you for years, now you need to support
them. Keep your mates in jobs, and buy local. This
is the only way the NZ economy will survive.
What? Is this your first recession...?
20 KIWI RIDER