Published On: Sat, Jun 20th, 2020

The Post-Plague Economy

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What a difference a day makes.  Slap a couple days into months, add a plague, and we’ll be seeing many differences in the San Miguel de Allende business climate come the Post-plague world.

I’m sure you’ve noticed by now folks moving out of retail rental spaces in centro.  They’ve been easy to spot as the folks leaving tend to take everything that isn’t nailed down, and some things that were, with them.  I’m baffled by the landlord’s thinking.  Why charge rent during a plague, unless you want to lose that tenant?  No one else is going to pay rent these days and who is say what you can charge even when things return to normal.  Isn’t it better to have a tenant that, hopefully, can pick up rent payments like they did before?

Even if you own the building your business is in, it is no cakewalk to reopen.  You have to pay brand-new taxes based on square footage.  The taxes are onerous, especially for a business on lock-down for months without any revenue.  Think of all the small, family run convenience stores that simply won’t re-open.  Not to mention the Spanish schools, gyms and hotels that have a lot of square footage to tax.

It’s a vastly different approach from the government than in the past.  Starting with former President Fox most leaders simply wanted their voters working.  If there were no jobs but you had a living room and could cut hair, the government supported your hair saloon as you were now financially supporting yourself.  The thinking has changed, as now the government would enjoy seeing only high end, international retailers lining our streets.

Also, with employees comes a host of issues.  The government is making it mandatory that employers sponsor pensions.  What poppycock!  Even teachers, with their all-powerful union normally hire on a temporary contract basis just to avoid benefits like future pensions.

So if you worked in a restaurant and are ready to retire you better hope your old boss and his or her business are alive and well so they can even pay you a pension.  Just out of curiosity I combed through my former employers from my teens through twenties, when I started my own company.  None are still up and running including household names like SearsGTE and Wang much less doling out the pensions my former managers lovingly spoke of.

Then, out of curiosity, I combed through former clients.  Many, like Canada’s largest employer, Nortel, are long gone.  Others like CiscoBayer and Glaxo still exist but not in the Research Triangle Park anymore.  I wouldn’t receive a pension from any of them any more than I would had I worked at a bar or laundry here.

There are some work-arounds.  The owner of a fast-food restaurant in centro explained how now she only hires on a contract, temporary basis.  The key there is your employees must perform easily learned, repeatable tasks to withstand the constant changes in staff.  Plus your staff knows from day one they are only there for a short while so how invested can one be in the job?

As Doris Day succinctly sang, “The future is not ours to see.” However, you don’t need a Magic Eight Ball to realize the employers (restaurants, stores, bars, etc.) that were here pre-plague won’t likely be the same ones around post, and expect a sharp increase in prices to meet new government fees and pension requirements on nearly everything you buy.

by Joseph Toone



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