By M.D. Kittle
MADISON — It’s beginning to look a lot like an empty-shelf Christmas, and liberal lockdown policies by governors like Tony Evers are a big reason why.
America’s supply-chain crisis is impacting everything from chicken tenders to chassis. And now Omicron — the COVID variant du jour — could exacerbate the product shortages and bottlenecks in the global distribution system, economic experts say.
It wasn’t just the pandemic that put producers and consumers in this predicament. The stringent policies that foolishly shut down economies at the outset of the COVID-19 outbreak stalled the dynamic supply chain, says Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce.
“The supply chain disruption is primarily a product of the COVID-19 shutdowns, which starved factories of orders, led to reduced or idled production that couldn’t be restarted with the flick of a switch as COVID’s impact waned,” Bauer said.
As the first cases of COVID-19 were being reported in Wisconsin, Gov. Tony Evers hit the “off” switch on Wisconsin’s economy. The governor issued a health emergency and locked down travel and business in the state. Employers and workers deemed “non-essential” were ordered to shut down and shelter at home. Evers’ health tzar extended the lockdown — illegally — after governor’s original order expired after 60 days.
The same kinds of lockdowns were going on, mostly in liberal-led states, throughout the country. Stringent shutdowns in Europe and Asia had already started weeks before. A Voices of America headline on Feb. 6, 2020 said it all and pointed to the problems ahead: “China Coronavirus Lockdown Crippling Global Supply Chain.”
“With more than 50 million people on lockdown, economists warn China’s efforts to contain the coronavirus outbreak are reverberating through the global economy,” VOA reported in the early stages of a deadly virus that originated in world’s largest exporter of goods.
A severe worker shortage has created huge problems for manufacturers and other employers trying to meet the needs of the consumer. Unprecedented amounts of government aid has only exacerbated the situation.
Millions of workers lost their jobs when the pandemic hit and the lockdowns went into effect. While a majority of those employees have returned to the workforce, a significant number opted to stay on the sidelines thanks to generous long-term unemployment benefits and government stimulus checks.
In August, a record 4.3 million Americans quit their jobs, the most since the U.S. Department of Labor started tracking the stat more than 20 years ago.
WMC’s Bauer said the American Rescue Plan Act disincentivized work with a $300 weekly bonus unemployment payment. Evers refused to end the subsidy even as struggling employers across the state begged him to do so.
“President Biden made it worse on the consumer demand side by injecting too much unnecessary stimulus into the economy.That includes the $1.9 trillion American Rescue Plan Act (ARPA), which was enacted last spring when it was clear the economy was on the mend and businesses were hiring,” Bauer said. “ARPA helped fuel demand for good and products, but there was not enough global capacity to produce or transport it. That, in turn, has caused inflation.”
Inflation not seen in decades. And the soaring prices are anything but “transitory,” as Biden has suggested. It’s hitting American households hard.
A new Gallup poll finds nearly half of U.S. households (45 percent) are experiencing financial hardship because of inflation. Ten percent of those respondents say they’re dealing with “severe hardship,” that inflation is “affecting their standard of living.”
Higher prices are hitting employers, too.
A National Federation of Independent Business survey of its members shows supply-chain disruptions are impacting a majority of small business owners (82%) with 48 percent reporting “a significant impact on their businesses.” A majority of owners (62 percent) say the disruptions are worse now than they were three months ago.
“Going into the busy holiday season, nearly half of small business owners who rely on holiday sales as a significant part of yearly revenue report that both the supply chain disruptions and the staffing shortage will impact their holiday sales,” said Holly Wade, executive director of NFIB’s Research Center. “Small employers continue to adjust their business operations and hiring practice to compensate for these issues, including for many dramatic price increases.”
In the face of mounting evidence of empty store shelves and soaring prices, Biden this week shrugged off the supply-chain crisis and consumer worries this holiday shopping season.
“Now, I can’t promise that every person will get every gift they want on time — only Santa Claus can keep that promise,” President Biden “But there are items every year that sell out, that are hard to find.”