Money moves our world. It may or may not buy us happiness, but for all other things of import in our lives it is critical. The earlier column mentioned in passing the possible impact of the pandemic on our lives, livelihood and lifestyle. We go deeper into the subject in this column. Before we proceed, the study of a similar devastating situation close to a century ago – the Great Depression – would be instructive.
The ‘Roaring Twenties’, preceding the Great Depression of 1930s in the US Capitalism, needed no apology for its flaws and excesses as stock markets climbed new peaks, growth zoomed and consumption soared. Lifestyles were marked by extravagance even among the middle classes. As the country basked in the comfort of supposed infallibility of the economy, the gathering dark clouds were ignored. Disaster struck in the October of 1929 with the great stock market crash. Companies went bankrupt overnight. People lost jobs in hordes. Unemployment touched a whopping 24 per cent. Within no time the middle class was reduced to poor. Many in the upper middle class met similar fate. The poor became poorer. Crime and suicides shot up. Some semblance of order to the utter chaos came after President Franklin Roosevelt put in place the New Deal shaped by Keynesian economics.
The Great Depression caused massive disruption in all spheres, social, personal, professional and political. The exuberance of the Roaring Twenties was replaced by the sheer practicality of survival in the early 30s. We are in a similar situation at this point. The economy had been shrinking for sometime now, but the knockout blow to it has been the pandemic. What changes can we expect to our lives in the bleak scenario? Here are a few.
BACK TO BABUGIRI
Well-paying private sector jobs were a craze among the young not long ago. With security of job and long-term life perspective firmly in the equation now, expect that to change. Jobs in the government and public sector would be back in high demand. Highly qualified people would like to settle for low-status positions. The earning might not be sumptuous but that would be an acceptable trade-off for a secure future.
END OF EMI ECONOMY?
One of the biggest game-changers in our economy has been the EMI. The generations earlier lived in certain dread of loans and eschewed consumption that could not be managed with surplus money in hand. The concept of equated monthly installments changed that. It fuelled the culture of consumerism among the aspirational class and allowed life goals to come true early. But EMIs are based on expectation of stable income over a period of time, from the perspective of both the borrower and the lender. That being in question, we may see risk-aversion on both sides. EMI economy is set to dip.
Lifestyles ride on the predictability of cash flow. They get inflated or deflated depending on the disposable money available. A car and own residential home before one hit the 40s had become the normal. Now both will be upgraded from necessity to luxury, thus part of the wishlist but not in the plan for immediate acquisition. Eating out, annual tourism with family, partying at hotels, visiting theatres and ordering that fancy mobile set have to wait. Necessities would consume most of the earning. The rest is likely to be saved for leaner days.
IT’S TOO EARLY FOR MARRIAGE
It takes no crystal ball gazing to predict shifts in the institution of marriage. Marriages will be put off till would-be spouses are convinced that there is enough to go around to plan a family. A solution to this can be double income families. Double income is a safety net in insecure times. Plans for children — few would go beyond one given the cost involved in raising more — have to wait till both spouses are well-settled in careers. Men would look for brides who are either employed or employable. An expected good result from it is parents would be forced to educate the girl child.
DIMINISHING ALLURE OF JOB SHIFTS
Better life prospects are what drive skilled professionals from native states to metro cities, from one organisation to another and from city to city. Every move involves the consideration of a better pay packet and better life for oneself and family. If this consideration is out of the frame, then it makes no logical sense to embrace the risk involved in the shift. With the balance sheet of companies bleeding, the temptation of a job in a new place would be on low-drive for many. New employer-employee equations are likely to emerge in the post-pandemic order. This is one space we need to watch out for interesting changes.