The New Normal Divide
The New Normal Divide
By Gary Silverman, CFP®
As we discussed last week, parts of our population cannot get back to normal any time soon. Today, I’m talking about the ramifications of this scenario. The point is not to produce gloom, but rather to illustrate a likely reality (In other words, an educated guess about the future). We can plan for this new normal…both the good and the bad of it.
For many of our businesses, there will be fewer in-person customers. Nobody thinks travel will get back to anything approaching normal this year. Conference planners tell me that they know attendance will be down, and so will revenues. But at least now, some of the unknowns are becoming known. Of course, what we now know might not be good. Nevertheless, knowing means businesses and people can plan.
Now, not everyone is planning the same thing…or even complimentary things. Mini wars are popping up. Some folks say that nobody (not you, the public, the government, or the business) can tell them to wear masks. Others say that those who choose to go bare-faced are not welcomed in their places of business or in their circle of friends. This isn’t helping the road to normal, new or old.
These tensions will show up, if they haven’t already, between employers, employees, and state governments. The governments are paying unemployment now, but won’t want to if employees can start reemploying their workforce. But just because a business is ready to employ doesn’t mean that the workforce will feel safe. And no doubt some workers won’t feel safe for another year, if then.
I’m even seeing this in my chosen recreation: running. The rules of recent group runs stated that participants would be social distancing or wearing face masks when distancing was not possible. Yet in Facebook posts, I see my running buddies hugging or sitting side-by-side enjoying a post-run hydration. They have the right to do that. I have the right not to join them.
Now apply that to movie theaters, salons, restaurants, gyms, etc. Whichever group they cater to they will alienate the other. Group running is a social activity. If part of that group begins despising the other, it would be sad. Businesses, on the other hand, are trying to make money. If a large block of their clients despises them, it can be catastrophic to their bottom lines.
Thing is, all of this is interconnected. If I get fed up with not being able to go on social runs, I might stop that activity. That means less money spent on shoes and other running accessories which hurts those people who own or work at the athletic stores I frequent. (Note: this is totally hypothetical; I’m too much of a running nut to give it up until my doctor tells me I’ll die next time I lace up my shoes.)
Multiply this across the rest of the economy and you see we are not getting “back to normal” any time soon. I don’t think we will ever return to the old normal—and predictions of the new normal are premature. But while premature, it doesn’t mean you should shut your mind to what you’ll need to do to survive the future. We’ll look at that next week.
Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.