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Bailouts are about more than saving companies. According to Airlines For America the airline industry drives $1.7T in economic activity while contributing to more than 10 million jobs. And let’s not forget about the cruise industry. According to Forbes the cruise industry contributes $53B in economic activity and employs 421,000 jobs.
Both of these industries have a whole host of other contributions that they make to the economy. Statista reports that in 2018 the revenue generated by sales of suitcases, briefcases, handbags, wallets, bags, and containers was more than $38B USD. Skift reports that in 2018, Uber generated 15 percent of its ridesharing gross bookings from trips that drivers either started or completed at an airport.
PRNewsWire reports that the cosmetic and toiletry container market to have a worth of $38.1B USD by 2025. To put that into context if you have flown lately you know that any items like toothpaste, lotion, baby oil, cologne, or hair products have to be in a certain sized container. People spend billions of dollars on the containers that they buy to transport these items. That’s on top of the money that they spend on the items themselves. You can go to Market Watch and purchase the report to see those specific numbers.
If you travel internationally there’s the revenue generated by cell phone providers for providing coverage. I remember my daughter went on a trip to Spain for eight days and I paid ten dollars per day for her to have coverage during her trip so she didn’t have to worry about purchasing a SIM card. The SIM card would’ve been less expensive, but there’s still a cost either way.
When we hear about bailing out an industry, we generally have a feeling that these businesses need to take care of themselves. Why do taxpayers need to give their hard earned money to prop up private industry? We already buy their products and services. Then they are going to take our tax money too?
For a moment I’d like to present the alternative argument. Let’s think about the 10.4 million people who work in the airline and cruise industries. Each one of those individuals pay a mortgage or for rent. They have a car payment. They buy food and gas. They pay all of the bills that the rest of us pay.
Now let’s imagine that the current economic uncertainty disrupts those industries or worse yet eliminates them. Imagine that the airline industry disappeared along with the cruise industry. No one flies. Airports close. All the stores and the restaurants close. All of the people who fuel the planes, the janitors, pilots, stewards and stewardesses, car rentals bus drivers, parking attendants, ticket attendants, TSA, the people who push elderly and sick people in wheelchairs, skycaps, security, even the construction workers employed by airport expansion are all unemployed over night.
They can’t pay their bills. They all apply for unemployment. The economy is rocked overnight as we try to both absorb all of these newly unemployed Americans while adjusting an entire sector of the transportation industry is eliminated. This would be horrific. I haven’t even tried to list the additional unemployed people displaced if the cruise industry is impacted.
Bottom line is that we are all connected whether we like it or not. I hate bailouts just like the next person. However, sometimes you have two choices. One bad and one worse. Let’s agree that a bailout in this situation is bad. Choosing not to bailout these industries is much worse.