We have much to be grateful for. Truly.
Tomorrow marks the start of the holiday shopping season. Small businesses look forward to these final weeks of the year. It is their bread and butter.
Despite inflation and high interest rates, the economic news has — for now — been better.
According to the Public Assets Institute, in the second year of the pandemic, from March 2021 to March 2022, Vermont’s private employers added or restored more jobs than they had in decades. PAI reports payroll jobs at existing businesses increased by more than 22,000, and new businesses created almost 10,000 more, for a total of 32,204.
To be sure, some businesses closed, and others laid off workers during the same period; lost jobs totaled nearly 21,000. But that still left Vermont with a net gain of 11,244 private sector jobs, which was the best March-to-March growth since 1994, during President Bill Clinton’s first term,” the think tank noted in its most recent blog.
“Despite the recent gains, however, Vermont’s private sector has about 12,000 fewer payroll jobs than before COVID-19 struck. It was a good run, given the pandemic. The number of Vermonters employed increased for 20 straight months. In October, however, the number declined by almost 600 people — to 328,690 from 329,284 the previous month. Vermont has seen longer streaks of employment growth —more than 70 months in the 1980s — but the pace has been erratic for the last decade or so,” PAI noted.
Those statistics may feel as dry as an overcooked turkey, but they are important to know. Vermont is positioned better than other states for hard times ahead.
And not to be a sharp object that punctures the big balloon at the Macy’s Thanksgiving Day Parade … but those hard times could come as soon as next week.
If the two largest rail unions in the nation can’t come to an agreement, American consumers and nearly every industry will be affected. Freight trains could halt as soon as Dec. 5. That’s the day a rail strike could begin.
According to published reports, it wouldn’t take long for the effects of a rail strike to trickle through the economy. Many businesses only have a few days’ worth of raw materials and space for finished goods. Makers of food, fuel, cars and chemicals would all feel the squeeze, as would their customers.
That’s not to mention the commuters who would be left stranded because many passenger railroads use tracks owned by the freight railroads.
According to The Associated Press, the stakes are so high for the economy that Congress is expected to intervene and impose contract terms on railroad workers. The last time U.S. railroads went on strike was in 1992. That strike lasted two days before Congress intervened. An extended rail shutdown has not happened for a century, partly because a law passed in 1926 that governs rail negotiations made it much harder for workers to strike.
December could prove disastrous for the U.S. economy if a middle ground cannot be found.
Railroads haul about 40% of the nation’s freight each year. The railroads estimated that a rail strike would cost the economy $2 billion a day in a report issued earlier this fall. Another recent report put together by a chemical industry trade group projected that if a strike drags on for a month some 700,000 jobs would be lost as manufacturers who rely on railroads shut down, prices of nearly everything would increase even more and the economy could be thrust into a recession, according to the AP. And although some businesses would try to shift shipments over to trucks, there aren’t nearly enough of them available. The Association of American Railroads trade group estimated that 467,000 additional trucks a day would be needed to handle everything railroads deliver.
Here are some other considerations:
About 30% of all packaged food in the U.S. is moved by rail, he said. That percentage is much higher for denser, heavier items like cans of soup. Some products, like cereal, cooking oils and beer, have entire operations built around rail deliveries of raw ingredients like grain, barley and peanuts, along with shipments of finished products.
Jess Dankert, the vice president for supply chain at the Retail Industry Leaders Association, told the AP that retailers’ inventory is largely in place for the holidays. But the industry is developing contingency plans. Retailers are concerned about online orders. Shippers like FedEx and UPS use rail cars that hold roughly 2,000 packages in each car.
And, as we noted, roughly half of all commuter rail systems rely at least in part on tracks that are owned by freight railroads, and nearly all of Amtrak’s long-distance trains run over the freight network.
All of these delays will come with a price. And those losses are not going to get eaten by businesses. They are passed on.
So, this holiday, give thanks for what you have. Count those blessings. Because December could be another story.