Severe Unemployment after the SHTF

I think many preppers do not realize how any major SHTF scenario will affect employment. Any event that disrupts society or the economy can cause unemployment to spike. Any event that disrupts a fundamental building block of society, such as agriculture, transportation, communication, money, housing, power, etc., is likely to cause the loss of many jobs.

And when many people suddenly lose their jobs, they spend less money on, well, everything. So every business is affected adversely, since there are suddenly fewer customers. This leads to an after-shock of more layoffs and cutbacks on hours for a second wave of job loss.

Then you know what happens next. It’s a vicious cycle. Each job loss wave harms the economy further, leading to more layoffs and eventually business failures. And any business that wants to survive has to cut expenses, cut back on employee hours, employ as few persons as possible, and raise prices.

Now you might think that the government could intervene, to stop this process, by giving people money: unemployment, social security, food stamps (SNAP), etc. But those social safety nets only work to a limited extent. Give away too much money, and money becomes less valuable, prices rise sharply and inflation become uncontrollable. Then, eventually, the social safety net system or the monetary system collapses.

What most people don’t understand about money is that it is only a token representing the good and services produced by work. You can’t solve the problem of poverty or unemployment with money, not really. You can only solve economic problems with work, which is what gives money value. If a society reaches a point where so few persons work that there is not enough good and services to run that society, it collapses.

There is no easy solution here. The economy is more complex, and the U.S. economy is more closely interwoven with the world economy than ever before. An economic catastrophe overseas could set in motion an economic downturn or collapse here. Ultimately, though, work is the foundation of any economy. You can’t just give everyone enough money to live on, a so-called unconditional or universal basic income. If everyone is given an income without working, there will not be enough work to produce enough goods and services for everyone. Work is the only solution to economic problems. That, and a good measure of self-sufficiency.

– Thoreau

3 Responses to Severe Unemployment after the SHTF

  1. This is why everyone should have enough cash to pay for all your expenses for eight months, at a minimum.

  2. I definitely agree that self-sufficiency is the best way to combat a lagging economy. By working on skills that let you do more for yourself, you’ll be in a better situation financially no matter the current conditions. It’s hard to do that when you live in the city, though. What do you think some good skills someone living in an urban area can do to become economically independent when they can’t grow their own food?

  3. Great post. Like you said not many people consider this aspect of a disaster. Katrina made some places of business totally unusable for better than a year. I am guessing that many went out of business.

    To me the best practice is to grow your own. A raised bed garden, a nursery, and some chickens are a great way to start. Add some rabbits for variety and you have the majority of your needs met.

    Acquiring carpentry, electrician, plumbing, and medical skills will also help pay the bills for heating, rent, gasoline, and such during a disaster. Security credentials could also be a great benefit if there is a high demand in your area before and after the event.