Which Sectors Will Collapse First?

Understanding Primary-Secondary-Tertiary Economics

You won’t have likely heard of the Primary-Secondary-Tertiary (PST) Economics model. That is because many years ago I invented the term to explain which economic sections often receive the cutbacks in spending from the public first, which form the basis of determining which sectors will encounter job losses first.

The terms are fluid and don’t refer to any specific industries, but rather the industries importance to the functioning of the rest of society. It also shows you where true power lies in any society.

Economics are divided up into Primary, Secondary and Tertiary economic sectors. These are not strong boundaries, and some business models may stradle the line, and might be a dual-model (Primary-Secondary) or just very weakly typed (for example, heat is only a Primary economy during, say, winter).

Primary Economics

Primary economics is any system which if people go without, they will basically die. So a really good example is a farmer that sells food staples. People cannot boycott the goods or “not pay” as it otherwise means starvation and death.

Utilities that provide water, heat or cooling would also be another good example, although it depends on how critical they are for survival. If people all had survival water filters and their own supply line, then a water provider wouldn’t be a ‘primary’ provider, but have a ‘secondary’ importance.

Secondary Economics

Secondary economics are the systems that are ‘really nice to have’ and vastly improve the quality of life.

They’re almost essential, but in absolute desperation you could do without them. For example, healthcare treatment for any non-life threatening injuries. You’d like your broken arm to be properly treated, but if it cost a million to fix then you can probably forego the service entirely.

A lot of Primary-seeming economics stradle this line, with healthcare being a key example. Vital, life-saving treatments are primary economics, where as non-life threatening are secondary. Public transport would be another Secondary economy, as would things like Internet access.

Cutbacks on Secondary economic services is usually when people start to recognise there is a problem with the economy or the way a country works. Not being able to afford to drive or get healthcare is rightly alarming. A functional (in the minimal sense of the word) nation has both Primary and Secondary economics as a minimum.

Tertiary Economics

Contains everything luxury goods, these are the things people won’t mind going without when finances start to bite. Computer games, online digital entertainment, diamonds, caviar, expensive watches are all great example of tertiary economics.

Often these drive high economic prices as they’re primarily driven by excess capital expenditure (read: people have more money than common sense and are happy to part with large wads of cash).

Good Tertiary economics shows a country has excess capital to spend, and is a good sign of health. The loss of Tertiary economic services is only a yellow flag and not concerning, as the desireability of products can ebb with the flows of people’s subjective views and as currency values dip.

That said, having a job in a Tertiary economy, although higher paying, comes with the risk of lower financial stability, as Tertiary economics are the first to get cut during an economic collapse.

What Primary-Secondary-Tertiary Economics Tells Us

We can use this to model consumer spending (read: how you’d likely spend your money) by dividing a particular service sector into a particular category. The PTS economics tells us what consumers will likely prioritise their spending on.

There may be outliers, as humans are not always entirely rational, but it plots a generalised trend of which jobs will go first. In your case, this is good news because you can determine the likelihood of how secure your own job is as the economic insanity starts to bite. It also allows you to determine which job you should switch to in order to be in a more secure financial footing.

Of course, PTS only models consumer spending habits, and has no impact or determination on outside variables, like major disasters, supply shortages, utilities running out of fuel supplies, companies making unfathomly stupid decisions and more.

PTS is a good way to determine your current financial security with your own job.

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