Jet Airways

logic

India

Air India

India’s oldest private airline,, recently ran out of money to keep operating and shut down. This has left nearly 15,000 employees of the airline and more individuals on contract, in a lurch.It’s always sad to see so many people lose their jobs for no fault of theirs. A lot of regular travelers have been expressing their regret on their entire scenario. Some of them have even suggested that the government should step in and rescue Jet Airways given that so many jobs are on the line. Anotherthat has been offered is that if the government can keep rescuing Airwith taxpayer money, why can’t they do same with Jet Airways i.e. use taxpayer money to rescue the airline.The trouble is that two wrongs do not make a right. Just because the government keeps wasting your and mine tax money on(and many other PSUs), doesn’t mean it should start doing the same for private enterprises like Jet Airways as well.The logic of people wanting the government to rescue Jet Airways also means that when things are going well you want to reap in the benefits of the free market and capitalism, but when they are not then the government should step in and socialise the losses. Why?Also, it is but natural for regular travellers to feel for the employees of Jet Airways. As Jean Tirole writes in Economics for the Common Good: “More generally, we feel greater empathy when we identify with victims; and to do so it helps if we can recognize them. Psychologists have identified our tendency to attach more importance to people whose faces we know than to other, anonymous people.”This is basically the bias towards the identifiable victim. This also explains why many of these people who want Jet Airways to be rescued by the government, did not feel disturbed when many jobs were lost in the aftermath of demonetisation and a botched up GST. At end of a day, a job loss is a job, this way or that way. If you feel for one, you should feel for another as well.In fact, the employees of Jet Airways have also been protesting. Some of them even said they will be forced to choose the NOTA (none of the above) option during the Lok Sabha elections, which are currently on. Their reasoning was that none of the political parties care about them and hence, they will not vote for any one of them.I think there is a fundamental point they are missing here. When you work for the private sector, you run the risk of losing your job for no fault of yours. No private company ever shuts down because of its middle and lower level employees not doing their jobs properly. It basically shuts down because of the top management and the owners(s) not doing their jobs properly.Though after the company shuts down the lower and middle management employees have to face the tough times, nothing really happens to the owner or the top employees. The owner has usually made his money and the top management easily find jobs.In that sense, life is not fair, and sooner everyone working for the private sector realises this, the better it is for them. The world is a terribly unequal place. The best way to tackle this is to be financially plan for this and be ready.Many people working in the private sector tend to assume that the good times will continue forever, and they end up taking on more debt than they are in a position to repay. It makes sense to that the total EMIs being paid every month do not go beyond 40% of the take home pay, at best.Also, at any point of time, individuals need to make sure that they have three to four months of money lying around as an emergency fund, for a situation like this. Money in the bank account always helps in making good decisions in life and not desperate ones.(Vivek Kaul is the author of the Easy Money trilogy).