Loading summary
Transcript63 lines
- [00:00]
A
Foreign. Hello, and welcome to the big business and Bailouts edition of Sleep Money, your guide to the business and finance news of the week. And yep, it's been another one of those weeks and it's only been a few days since Wednesday when we last talked to you. But there's a lot to catch up on. I'm Felix Salmon of Axios. I'm here with ann Shymansky of Breakingviews. Hello. I'm here with Emily Peck of HuffPost.
- [00:37]
B
Hello.
- [00:39]
A
And we even have a special guest. We have the CEO of bcg. So many letters in there. Rich Lesser is going to talk to us because he is a management consultant who talks about big business the whole time. So we're going to ask him about what on earth big business is thinking about and going through right now. We're going to talk about the Fed and exactly what it's doing in terms of trying to get the economy moving. We're going to talk about Amazon and what they need to do to keep their workers safe, because that will be a good example for the rest of us when every other business gets up and running again. And we'll even have a Slate plus segment on Ecuador because we haven't had one of those in a while. It's a mildly gloomy show. I mean, it's a mildly gloomy time, but I think you all like it. It's all coming up on Slate Money. So, Rich. Yes. Introduce yourself and tell us what you've been up to for the past couple of weeks.
- [01:36]
C
So I'm Rich lesser. I'm the CEO of BCG, Boston Consulting Group. BCG operates in 50 countries around the world, is one of the leading management consulting firms working across all industries, public sector, huge range of topics.
- [01:50]
A
And, and the news of the week is that your clients, the big businesses in America, $454 billion of the stimulus bill is allocated basically to them. And then that's being leveraged up to something on the order of $4 trillion by the Fed. And we're going to talk a little bit about how that leverage works. But can you give us an indication of just how much money is $4 trillion and where's it going to go and what's it going to do?
- [02:21]
C
I'm actually telling you if you stack them on top of each other, how many, how far a planet it can reach?
- [02:27]
A
I mean, I did, I did a little bit of back of the envelope where I was like, if you take the median wage in America, it would $4 trillion would pay 50 million workers for like over A year and a half like it seems like an astonishing amount of money.
- [02:42]
C
So the 4 trillion. So first, my understanding, and again I don't profess in any way to be an expert on the bill, but my understanding is that money is going to help business as well as to help state and local governments. And the 4 trillion as I understand it, is that it's actually about a little over, it's over 400 billion. But because that's an equity infusion into treasury, the Fed can lend on top of this. So it's the power of being able to leverage up that equity into a higher volume of loans. And no one knows exactly how high that volume is, but the estimates we've seen as well fall into the 3 to 4 trillion dollars range. I think right now we've got a host of organizations that are facing massive costs and extraordinary losses and the risk of going out of business or being in bankruptcy. And by the way, that includes, I think state and local municipalities as well as many businesses. If you think about some of the sectors of the economy, starting with travel and tourism, but, but certainly going far beyond that. Take away all the revenue or a very high percentage of it and leave the vast majority of the costs. And even well capitalized, well run businesses don't last very long. And so the challenge is first and foremost to help people get health and to support the potentially 10 million plus unemployed that we're likely to see out of this. And second to make sure that we have an economy to return to. And frankly, the group I worry the most about are small businesses. And I'm so pleased that so much of the effort in that package was geared towards smaller businesses. No one knows now if that's enough. As I can tell you, no one can tell you, but at least a lot's geared because they're just facing massive challenge. But we need to keep big businesses going too and loans should help and hopefully they'll be able to be around once we come out the other end of this.
- [04:41]
A
So just to be like very broad rush about this, the, the general idea here, correct me if I'm wrong, is that if I'm a big business and I'm losing money right now, I'm losing money in March, I'm losing money in April, I'm losing money in May, I can just go along to my bank or this special purpose vehicle or somehow I can borrow whatever those losses are. It could be $100 million or whatever and then that will cover the losses and then I don't need to pay that I, I, I get to pay that back at a very low interest rate over many, many years. And I can afford to do that because my fundamental business is strong. And so long as there's enough liquidity of, you know, these special purpose vehicles that are set up in the, in the stimulus act of sending out these trillions of dollars, that should, basically that should be fine for big business, right? Well.
- [05:44]
C
Except that those losses are real losses and those loans are real loans. And it will take probably a substantial amount of time for these industries to recover and probably some businesses within various sectors of the economy won't make it. I think we will still, just as we did in 2009, we will see that in some cases this leads to consolidation, in some cases this leads to restructuring. In some cases this leads to really healthy, vibrant businesses. As you say, it was a sharp drop, but once the drop has passed, they can re emerge strong and they can be on a path to recovery. My understanding is that a lot of this is now on the treasury to figure out the rules and that the big debate and who are the recipients and a lot of the debate that held up the legislation was the degree of transparency around the choices that are made, with a fairly high level of transparency being in the final legislation. But I don't think, I think at a high level what you described is probably the overall direction. But my understanding is there's still a ton I'll need to work through. Everybody has been running. This is legislation you would normally think would be crafted over many months or years at this volume, with this level of complexity, it's been crafted over days. We can bet they haven't had a lot of time to work through the mechanics of exactly how this is going to play out in the weeks and months ahead.
- [07:04]
D
And I guess one thing I'm kind of wondering too is, you know, even if we are able to kind of put the economy in this like medically induced coma for a period of time and then kind of wake it up again, it seems like behavior is going to change. You know, it just seems like people are not only are they probably not going to be flying as much, but they just might not be spending as much even if they have money coming in. And like, I'm just curious the effect that can have also on trying to get that economy working again.
- [07:28]
C
Right. So I think to me there are two core long term questions that while we were in the midst of a crisis of shutting places down, which by the way is still going on in parts of the country, and figuring out this Legislation have not gotten much attention, but are going to rapidly get much more attention. The first is your point, which is how will consumers and other businesses in the B2B world adjust their behaviors as this move along? And even when we're officially through it, what behaviors will we see different from we see today? How will they view vacations? How will they view discretionary purchases? How will businesses view capital investment and investing to build capacity? That's one. The more immediate question, however, is how will we sustainably flatten the curve? Because as you put it, the medically induced coma, when we are at risk of an acceleration that could kill hundreds of thousands or millions of people and completely overwhelm the health care system, you do whatever you can to try to arrest that curve and be whatever you can in our case is socially distancing. But we're probably at least a year away from a vaccine and a number of months away from any effective treatments that are proven and scaled. And in that world, the big nearer term question is how will we flatten the curve in a way that's sustainable for the economy so that we can get at least some sort of rebound, even if it isn't to the trajectory we were on back in January and February? I think that's a huge question that businesses and governments are only beginning to wrestle with.
- [09:05]
A
Certainly we saw that in Hong Kong, right, that they really did a great job of bringing the number of new cases down. But then the minute they started relaxing some of the social distancing and some of the really hardcore, you know, curve flattening attempts that they were doing, the number of cases started going straight back up again. So it's not clear, you know, I think there's a lot of, and a lot of expectation that you might see a sort of rebound in the economy in the third quarter or the fourth quarter. It's not clear how you, how you can have that rebound with also keeping the number of new cases under control.
- [09:42]
C
Exactly. And if you think about it, and Hong Kong's a great illustration, there are two kinds of problems from a health standpoint at least, that we'll need to navigate through. One is if you don't bring the virus levels all the way down to zero and you start to restart the economy where in your local environment you have small number of cases, can you put the disciplines in to keep that number low, to spot issues early with more aggressive testing, to use quarantining, to use AI and digital tracking and all the technologies that are out there but not scaled yet in the US Not Even deployed in some cases to try to keep it low and manageable even as you restart the economy at a non zero caseload. Then the second point is the one you referred to. Suppose I get it to zero and I open back up. My issue is not just my own community, it's all the influx into my community. And Hong Kong's nice because it's kind of separate from much of the rest of the world. And you know, you fly in or you come in from mainland China, which has done a good job so far of controlling more recently. But the U.S. if every community is on its own curve, you open up this city or this state, it's not just in that state, it's inputs from other parts of the country that are on different curves. And we have no history of doing what China did to really segment off Hubei province and to make that work. So you're exactly right to say that the challenges that we're going to be facing in the months ahead about restarting the economy and still keeping a sustainably flattened curve that will keep the level of infection within the capacity of the healthcare system to manage until we have a vaccine. These are huge unknown challenges where there's a ton of work that's going to be required.
- [11:26]
B
Rich, what are you telling businesses now to do to manage through this? You know, what do you tell a relatively small business that has no customers right now? What are you advising them to do? They get a big loan? Layoff workers? It seems to me that part of the reason the government's spending so much money on these companies is so that they continue to employ people. It's a lot cheaper for us to have businesses employing and paying people than it is for us to just directly pay every worker in the country. So keeping that in mind, what are you telling leaders now? What is BCG's kind of advice?
- [12:02]
C
So a couple things. The first is, I mean, if you just backtrack and we're talking about backtracking like a month or maybe in some parts of the world, two months, not 10 months. The first steps were about reacting to the situation in terms of near term, first and foremost protecting workers and customers, and second, protecting core of the business model. And that was the initial focus and there was huge focus on people and near term actions to protect supply chains and other things. Now, I think for many companies it's somewhere between survival and, you know, just getting along. For some industries, it's literally just about how to survive, which has both an element of how to restructure the P and L as fast as possible at a time when revenues have dropped by huge double digit percentages and what to do in terms of expenses and how to do it in a way that recognizes there's a real chance of a rebound. So it's not just it is in society's interest to keep those workers employed, it is also in businesses interest to keep the last. You've trained a workforce, you've got a high performing business, a shock has happened. The last thing you want to do is break the bond of trust you have with your employees and to potentially lose employees that are critical. So it's hard on both a societal dimension and a business dimension. And the balance sheet challenges partly, hopefully addressed through this legislation and legislation in other parts of the world will help to allow these companies to maintain a viable balance sheet to be able to get through this. The third element is the rebound element. And I would say there are a number of businesses, but only in the last week or two, it's going so fast that are starting to turn their attention to what will I do to be able to come out of the strong. Actually if you look at China, that's a better example because they're like six weeks, eight weeks ahead of us. You know, leading companies started saying what do I need to do in terms of how I engage with my customers, more online behavior, how do I need to change my product and service offerings, how do I think about distribution models and other things. And actually a number of them have been quite forward thinking to retool their models to be able not just to navigate the crisis period, but to be able to come out strong. In all honesty, I would say most businesses here are only at the early stages of that. We've been in shutdown mode in most parts of the country, not in restart mode. But I think over the next couple months, if I think what our clients are talking about now, that's the big thing. And then if you take the public sector part of our equation, because we do a lot of public sector work too, the two big topics have been how do we just navigate the healthcare system crisis we're facing, Whether it's with PPE ventilators, you know, navigating, you know, how to keep people safe and how do we start the journey to think about what it will take to restart, which, you know, the president talks about, you know, very short period of time. I think most other leaders feel like that's very aggressive, very, very aggressive. But, but whether it's that week or some number of weeks later, at some point, you know, Governments are going to be faced all around the country with not just when and where do I restart, but how do I restart in a safe way for my community.
- [15:15]
A
Rich, thank you. This has been super informative. Thanks for coming on Slate Money. And as a New Yorker, I just want to say, like, anything you can do for New York State and getting the government to take some of that 4 trillion and move it to Andrew Cuomo, we would appreciate that.
- [15:31]
C
Well, I'm a New Yorker too, and I think about it every day and I think we really all feel for, I mean, and unfortunately, New York is where it's hitting now, but if you look at some of the other parts of the country, they may be 10 days behind new York. But I think it's hard to look without feeling tremendous concern at the challenges facing. I think we all have responsibility from our own business vantage point to do whatever we can to support these communities, whether it's helping them get supplies or helping them navigate through. We each have different capabilities to bring, but it's on all of us to get through this crisis together. So thank you. It's a pleasure to be with you.
- [16:09]
B
Thank you.
- [16:10]
A
Thank you very much. So, Anna, Rich was talking a bit about this. I want to delve into it a little bit more because we got a couple of requests over Twitter, which is basically, how does this whole Fed thing work? We have $2 trillion of stimulus bill and then $4 trillion of Fed money, where basically, and this is, this is the magic of loans is that because loans need to be paid back, you can leverage and multiply, and The treasury puts $400 billion into this sort of bucket, and then the Fed tops up the bucket with another three and a half trillion dollars of money that it just invents from nowhere. And then all of that money goes out in the form of loans to, to businesses who then pay it back, and then the Fed doesn't lose any money. And it's all kind of weirdly magical. And this is how capitalism works, right? This is fractional reserve banking at its best.
- [17:06]
D
Yeah, very similar. I mean, like, when we think of how a lot of money is created just normally in the US system, I mean, you have the Federal Reserve that creates like the monetary base, and then of course, they set rules for banks in terms of how much money is created. But, you know, if you're a bank, you're, if you're, if someone comes in and you give them a loan, you are essentially creating money, you know, and this is very similar to what we're seeing happen now. That the Fed has this amount of money that the treasury has given it. And it's not as though it can only lend out that amount of money. It can basically keep lending out that same amount of money over and over again. And so it's into, it's creating all of these loans, so it's creating all of this additional money in the system. Now eventually when that money is paid back, in theory, then that would come out of the system.
- [17:53]
A
But the, but the payback period is going to be what, 20 years or something. Enormous.
- [17:58]
D
Exactly.
- [17:58]
A
And the Fed doesn't care because like the Fed, I mean it is actually a very profitable institution, but it's not, the purpose of the Fed is not to make money. And so the Fed is like, yeah, we'll have that money out there in the form of loans and if there are any actual losses on the loans, then the treasury will eat those losses. The Fed doesn't eat those losses. The Fed is doing risk free lending of trillions and trillions of dollars into the economy, which seems amazing. And it kind of makes me think, why doesn't it do that like all the time, just normally?
- [18:27]
D
Because that would, that would not be good, I think, because, you know, if you're thinking about it right now, you know, the Fed is essentially going to be lending money to, you know, many investment grade companies and also potentially even small businesses here. But if you think about it, so like if a lot of money is going to the people at the top and some of the best companies at the top, then that means the amount of money that a private investor would get to lend to them is going to be less because the risk is now going to be less because you have the Fed in the market. So not only is the risk on that bigger company going to be less, but the risk on all of the companies that are kind of down the line, the smaller, riskier companies, you're also going to get less money for lending to them.
- [19:12]
A
And so this is something brilliant. Like everyone gets to borrow for cheap.
- [19:15]
D
No, no, it's not, because for a number of reasons. One, it's an like, it's fine right now. I am not criticizing what the Fed is doing right now. This is a crisis. But long term you want the market to allocate capital to the businesses that can survive. You don't just want this kind of flow of money coming in. So then you're not pricing risk, which means investors are going to take whole horrible risks. You're not getting money to the place where it can be used the most Effectively. And also, I mean, we have the ability to do this right now because the United States is in a very unique position. But if all of a sudden we started functioning very, very differently in terms of how our central bank worked, we would not be in that position anymore. We would be a very different type of economy. And that is not how our economy works normally.
- [20:00]
A
Right. And we are not going to talk about the platinum trillion dollar coins.
- [20:05]
D
Good God. We are not.
- [20:08]
A
But we, I think we, we. I would like to just ask you one more question about the finances of big business and bailouts and stuff. There was a article in the Washington Post which we all put in the show notes basically saying there's absolutely no point in bailing out the airlines because airlines go bust the whole time. Airlines. If you look at the history of airlines, this is all they do is they go bust. And I can't remember who said that if you want to make a million dollars, just start with a billion dollars and start an airline. And what happens when airlines go bust is they consolidate, they go through bankruptcy. But ultimately, as far as the routes being flied and the pilots and the employees all seem to just continue with the same brands and they keep on getting their paychecks and the passengers keep on flying from A to B and, you know, a bunch of shareholders become bondholders and a bunch of bondholders become shareholders and there's financial engineering and there's debt and there's equity. But is there any particular reason why having the airlines go through, you know, that 15th bankruptcy bout of airline bankruptcies would be a bad thing right now?
- [21:25]
D
Yeah, I mean, I would probably argue that airlines are a really, really significant part of the economy because not just because they're getting people, although that is still significant in terms of moving people, but they're also moving goods. It is just. Now, you're not wrong that you could of course continue to operate while going through bankruptcy, but that's, that's not seamless. And to me, although isn't that basically.
- [21:49]
A
What we did with the auto industry in the financial crisis, that it continued to operate while going through bankruptcy and seemed to work quite well?
- [21:56]
D
It did. Although I would again though argue that it was definitely not seamless. And it would also mean that the airlines would have to make some very difficult choices. And I'm not saying that they perhaps shouldn't have to make some of those difficult choices. I just don't know if they should be doing those in a crisis. I think what probably makes the most sense is to get the airline industry through this, but to then afterwards say, okay, in the same way that the financial crisis taught us that the banks are too big to fail, we cannot allow them to kind of go under. So that means there have to be more regulations around them. I think that this is the same with the airlines. I'm not saying we have to go back to like way back in the day with how we regulated airlines, but I do think that right now it is reasonable if we understand that every time there is a crisis, the airlines are probably going to need help, that then it's also possible that when this particular industry, the government could have a little bit more say in what they do. And, you know, I don't always say that, but in this instance, I will.
- [22:49]
A
Say that I do think that we are seeing a very interesting lesson right now in terms of how governments really do learn from previous crises. And what we're seeing in Korea and Hong Kong and Singapore and places like that is they're reacting incredibly swiftly and effectively to Covid, precisely because they went through SARS, they went through the, you know, H1N1 and MERS, and they know the playbook and it's. And they can just basically click their fingers and make it happen, and they are equipped to deal with this kind of crisis. And I think that one of the little silver linings that we're seeing in this crisis is there is no banking crisis. We went through the financial crisis in 2008, 2009. We were like, the banks are way too levered. We need to do something about that. We need to make sure they're much more better capitalized. And we did, and they are better capitalized. And now we don't need to worry about the banks. It's the one part of the economy we don't need to worry about. Like, it worked.
- [23:50]
D
No.
- [23:50]
A
And in fact, they have so much capital that, like, we're like, hey, it's an emergency. Go out and lend the capital grant.
- [23:56]
D
No, I think you're right. I mean, and granted, I think if this went on forever without any federal aid, the banks could be in trouble at some point. But you're totally right. I mean, clearly what we did worked. And I feel like that's important to say over and over again because once this is all over, I give it a year or two, the banks are going to be complaining that they have to hold so much capital. So, I mean, I do feel like you can say, wait a second, remember two years ago? So I think that. I'm not saying there's anything good about this Obviously, there's nothing good about what's going on, but I'm. But you are correct. This definitely did teach us that lesson.
- [24:29]
B
I feel like that's the one bright spot, is the banks are okay and that Jerome Powell seems to be willing to do whatever he needs to do to keep capital flowing. And it was reassuring to see him on the Today show. I don't know if everyone watched. It was like, the first time the Fed chair has been on the Today show. I think Savannah Guthrie said, in, like, 40 years or something. And he. He did a good job talking like a normal person to. In the human language. Like, for example, he said very simply, like, the Fed can lend out $10 if it just has a dollar of backstop at Treasury. Which for me was like a light bulb moment. I was like, oh, I get it. This is how they do the. They make 400 billion into whatever trillion dollars. 10 to 1. Okay, fine. Got it. Thanks, Jerome. And he was very smart and reassuring. And the contrast to what's been going on this past week or so with getting this third stimulus package passed was pretty striking, because even though I think it's like a $2 trillion bill and it'll provide all this money for loans to big and small businesses and has this beefed up unemployment insurance and has payments going out to a lot of families, households, it's still not enough. It's still not that good. And there was still all this ridiculous squabbling over it. Like, at some point the bill was held up because a few conservative senators were worried the unemployment benefits would incentivize people not to, which is kind of literally what we're doing right now. We're telling people not to work, and actually they. They need to be incentivized not to work. It's been really striking to me just how well the Fed works and how well all of that is kind of figured out and solving this crisis while at the same time, there is this building crisis for everyone else. Like, the jobs numbers this week were terrifying. You all obviously saw the chart of unemployment. Unemployment. I wish initial, initial claims with the vertical line just shooting up, like, infinitely into the sky. Because it was 3.3 million claims. I mean, I put a call out on Twitter, like, have you been laid off? And I've never gotten such a big response because the sample is so big. There are so many people now without jobs. And I feel like while you, you know, Powell's doing everything he can, like, he can't help all those people without jobs. And he even said on the Today show, you know, like, I'm doing all I can, but we really need Congress to kind of like kick it into gear. And I still feel like the problem in the US Isn't just that we haven't experienced a pandemic. It's just that, like, none of our government, just the foundations and values that these people hold do not jibe with what needs to be done. And what needs to be done is pretty simple. You stop the economy, you give everyone money and you contain the virus. Like, it's actually pretty simple. Like just give everyone the money and that's it.
- [27:35]
A
That's the thing which I was most gratified about, if that's the right word in terms of the Powell interview, was that he was absolutely unambiguous that the thing that you need to do to get the economy moving again and to help the economy is stop the virus.
- [27:55]
B
Yeah, that's it.
- [27:56]
A
And he was like, our timetable is going to be set by the virus. And when the virus, when new infections go down to zero or near zero, then we can start talking about restarting the economy. But we need to wait and do that first. It's so great to hear that in plain language from someone like him. When you're hearing something very different from Donald Trump. And I keep on seeing all of these people doing opinion polls saying what's more important, saving lives or restarting the economy? It's the same thing. The way you restart the economy is by saving lives.
- [28:26]
B
I feel embarrassed for our country for having that debate at all, even a little bit. It's like Trump is actually his own. He is a one man virus that's infected the public discourse and is like keeping us from solving the actual crisis of the real virus.
- [28:42]
D
One last, like, lesson this has taught us as well maybe to move forward is that one part of modern monetary theory is that they say that basically it shouldn't be. You shouldn't use monetary policy to control prices. You should use Congress because it's so simple to get Congress to just raise taxes or lower taxes. And I think this has also taught us that that would be an absolutely horrible idea.
- [29:00]
B
Yeah.
- [29:02]
A
Okay, Emily, you had a big story this week about Amazon. And one of the things that has fascinated me about the way that this crisis has played out is the 74 page documents that you get from the state of California and the state of New York and stuff like that, talking about all of the things that are essential and all of the services that turn out to be essential, even under a lockdown and, you know, people going to work to make the chips that go into the radios that the EMTs use to communicate with each other. Like, there's absolutely enormous parts of the economy which fall under essential services. And supply chains are clearly part of that. And Amazon is like the biggest and most visible incarnation of, like, modern supply chains. And so everyone at Houston is basically working full out, right?
- [29:58]
B
Yes, everyone at Amazon is working full out. The company announced it's going to hire 100,000 more people. Everyone's ordering Amazon right now, and they're definitely an essential business and service. What I wrote about is, given all that, the company should be doing everything in its power to keep its workers as safe from this virus as they can. And from my conversations with warehouse workers and drivers and advocates, they're not. And I think that big businesses so far through this crisis have really shown how. I mean, in my opinion, they cannot be trusted to keep Americans safe and protected. So, like, for example, with Amazon, they're not in all cases telling workers when someone in the warehouse has tested positive for COVID 19, they don't have the protective equipment right now that everyone needs to stay safe when they're working altogether. And that's mostly because there's a shortage countrywide over that. But even given that they're not social distancing necessarily in all the facilities and workers are really scared. And the way they've set up their leave policy is kind of this distorted thing where They've raised pay $2 an hour for workers at least through April. Right. To really incentivize people to work and come to work. And they're. I think they're even giving bonuses as well. And then on the flip side, their COVID 19 sick leave policy is that you can take unlimited sick leave but not get paid. So it's like, thanks. So the choice is, you know, protect your health and go bankrupt or risk your finances or go into work and risk your health. And there's no guarantee when you go in and risk your health that they're really doing as much as they need to do to keep you safe. Amazon, of course, says it is, we should say, and Jeff Bezos wrote a.
- [31:57]
A
Letter, blah, blah, blah. And like, I feel like this is a little bit a precursor to what we were talking about with Rich Lesser, which is like this conversation that you're having about Amazon right now and how much can you do and how much should you do and what kind of measures can reasonably be taken is the exact conversation that pretty much every reopening business is going to be having in the next few months and people want to go back to work, but also people don't want to go back to work because the minute you go back to work, you open yourself up to a greater number of potential infections. And it does seem, I think you're absolutely right, that Amazon is in the perfect position to try and work out what best practices are in this kind of thing, because everyone is going to have to go through this pretty soon.
- [32:48]
D
I think that's right. I mean, I think that obviously no company, at least, especially in the United States, has ever had to deal with anything quite like this and really is pretty much making everything up on the fly. But for those companies like Amazon, that a is an enormous company and baby, which we're now very much seeing, is also a vital part of our economy in many ways, is going to have to figure out how to make this work, not only for this crisis, but I just can't imagine that once this is over, every single company is going to have to show how in the next crisis they will be able to keep their workers safe.
- [33:22]
B
Right? And I mean these companies, I did a similar story about Walmart workers also who are going through a lot of the same things with the just as bad of a paid sick leave policy. These companies should, should have been doing better on this all along. Like you speak to these Walmart, Walmart has publicized we give sick leave. But when you speak to the workers, they're like, oh yeah, I earned eight hours of sick leave. Like it's, it's meaningless stuff. And it's not like we have a massive public health crisis all the time to deal with in this country. But like, there have been studies after studies that show, like, places that have paid sick leave have lower rates of flu. Like these companies have never done enough to keep their workers safe. And now this is coming home to roost. And policymakers still aren't like, getting it either. And it's just like this rolling crisis of irresponsibility as I see it.
- [34:16]
A
Let's have a numbers round. Emily, what's your number?
- [34:21]
B
$5. My number is $5. That is what Instacart workers want per order for hazard pay. Now, we talked about Amazon workers, but Instacart workers are also the true heroes of the COVID 19 economy, bringing groceries to all of us people holed up in our houses. So on Friday, some Instacart workers threatened to basically go on strike starting Monday if they don't have their demands met by the company. And their demands are $5 per order hazard pay and 10%. Like to have the minimum tip set at 10% instead of whatever it is now, 5%. And then some other protections while they are our nation's heroes delivering our milk and eggs to our doorsteps. And I really need my Instacart to keep flowing here, up, up in Westchester. So this is my plea to Instacart to just meet the demands of these people and just keep it going. Like, they're making a lot of money right now. They're one of the few companies making tons of money. Right. Instacart has never had business like this before. I would never have used Instacart before. Maybe I would use it again. But please, like, just give the workers what they want. Instacart, please. We need our milk and eggs here in Westchester.
- [35:42]
A
My number is 24, which is the number of D days that elapsed between March 3rd and March 27th. You see, that's how sophisticated I am. Mathematics. March 27th is the day that Boris Johnson announced that he had tested positive for coronavirus. March 3rd is the day that Boris Johnson came out on a press conference and said, quote, I can tell you that I am shaking hands. And I was at the hospital the other night where I think there were actually a few CORONA patients, and I shook hands with everybody. So 24 days to go from shaking hands with coronavirus patients to I can't believe I've tested positive.
- [36:27]
B
I was hoping you would bring that up.
- [36:28]
D
At some point, all of the world leaders are going to have the coronavirus.
- [36:31]
A
But, I mean, it's kind of impressive that Britain has, like, it's managed to infect the actual head of state as well as the technical headers. You know, like, it's got Prince Charles and Boris Johnson. Both have Covid.
- [36:41]
B
Now you want to wish Boris Johnson good health. I'm not wishing him poor health or anything, but, like, sometimes karma is a beautiful thing. Can I say that? Is that okay? It's true.
- [36:52]
A
I can see a little image of Harvey Weinstein going through your head right now.
- [36:56]
B
I mean, not Harvey Weinstein, but anyone who is out there telling an entire population that it's totally fine to shake hands with people with coronavirus. Like, life comes at you fast.
- [37:08]
A
Yeah.
- [37:09]
D
So my number. My number is 1.3 billion people. So that's the biggest shutdown that we have in the world right now, which is in India. And, yeah, I mean, I feel like we think it's rough here, but, like, you know, if you're thinking about a country like India where you have lots of parts of the country where you have people living very, very close quarters, you have a lot of migrant workers, so you're telling everyone to go home and kind of close themselves off, which is essentially almost impossible for a lot of people. You also have such a large, informal part of the economy that isn't going to be really having any way to access, you know, basic necessities. Now, I will say the Indian government is giving money and they're giving food. So I don't want to say that they're not. But, like, we think things are bad here, and I'm not trying to downplay how bad things are here, but they're worse than a lot of other places.
- [38:07]
A
Yeah. I mean, India, I mean, not to put too fine a point on it, it doesn't have everyone doing, like, zoom calls and getting instacart.
- [38:13]
D
Yeah. Like, I mean, and the fear is that they're gonna have a harder time stopping it. I mean, the. Sorry, I've been reading a book on the Spanish flu, but the span and the Spanish flu, it was something like almost 20 million people in India were killed. I mean, it was an enormous number that. I mean, the estimates are kind of all over the place, but still, you know, and the fear is that it's going to be very hard to contain it if it starts to spread.
- [38:35]
A
I mean, it's true. Like, India is probably the most terrifying country. I mean, presumably what goes for India also goes for Pakistan and Bangladesh, and Pakistan already has it, the subcontinent. But if it starts tearing through India, there's very little India can do beyond what it's doing or already trying to lock down the entire country. And if that doesn't work, I have no idea what else they could do. It's absolutely terrifying. I think that's it for us this week. Thanks to Rich Lesser as well as to Anna Shymansky and Jessamine, Molly and Emily Peck and all of you guys for listening. Do keep the emails coming slatemoneylate.com and we will talk to you you next week on Sleep Money.