Howdy, y’all!
Well, it’s been a tough week on my end of things. Some of you will remember that a couple weeks back I wrote about my uncle with COVID. Unfortunately, he passed away late last week. We were unable to travel to Ohio for his funeral (he died in Kentucky and they transported him back to Ohio, where his children still live), but we did watch it on Facebook. It was incredibly hard on my poor grandmother and her one surviving brother, so please keep them in your thoughts and prayers. Rest in Peace, Uncle Paul. Please, get vaccinated if you haven’t. The life you save may be your own.
I did a bit of reporting for the first piece. I don’t often do reported pieces (for a number of reasons), but something my friend Michelle – who owns a coffeeshop in North Carolina – said to another reporter struck a chord with me. So, I sat down to talk with her about the problems she has as a small business owner in this pandemic. We all know that there are issues with our supply chains – we see the empty shelves at the grocery store – but what we don’t know is how small businesses are being screwed because of it. I hope my conversation with Michelle shines some light on that.
The second piece is about the opposite end of the pandemic economy. Amazon is raking in billions in profit as more and more people shop online. However, this is not necessarily good for its employees or the towns fighting to attract Amazon warehouses. I talk briefly about the history of company towns in Appalachia and why Amazon company towns look to be no better than their 19th century antecedents.
Finally, I start a new job next week, which I discuss a little more below. It’s an exciting opportunity, but I still remain committed to producing this newsletter every Saturday. As always, it is and will always remain free. However, if you want to help me make a living, you can become a Patron for as little as $3 a month, make a one-time donation using PayPal, or buy me a book to help with my research. All contributions are greatly appreciated, no matter how big or how small.
Now, let’s talk business!
On small businesses and supply chain shortages…
It is no secret that this pandemic has been incredibly hard on America’s small businesses. Last month, NPR’s Marketplace reported on how small businesses are struggling with their supply chains due to a rash of pandemic-related shortages. According to the US Census Bureau, more than half of America’s accommodation and food service small businesses – that is, hotels and restaurants – have recently experienced supply-chain disruptions due to the pandemic.
There are a host of reasons for this, including a lack of labor to make and move the products as well as the difficulty in obtaining raw materials. But one reason that struck me – and that is underreported – is that small businesses are being given the shaft by their suppliers.
“We were told by one of the largest distributors in the United States that as of three weeks ago they were no longer able to support us small businesses,” my friend Michelle Smith told WCTI-TV last month. Michelle owns Brewed Downtown, a fantastic coffeehouse and café in Jacksonville, North Carolina. I got to know her and her husband/business partner Eric when I lived in Jacksonville, so I called her to discuss how small businesses are being given the shaft by suppliers.
“Their priority right now is to service the larger chains, the nationwide chains, because they are buying in bulk,” Michelle said of her suppliers. Suppliers are having a hard time obtaining the things, like cups and other paper products. Because these items are in such high demand but short supply, distributors are prioritizing big business which buys more of these items. The effect is that small businesses such as Brewed Downtown are being left without the essentials they require to run their businesses and remain open. “I had been on backorder because they had been prioritizing these bigger companies,” Michelle told me.
Before the pandemic, Michelle had to order 15 “pieces” in each order – which was fine given the size of her business. However, as the pandemic has gone on, the cost of even doing business has gone up for her. First, her supplier added a $15 delivery fee “which wasn’t a problem,” she tells me. “Then it moved up to 20 pieces and they called it a service fee. Then it moved up to 50 pieces,” she says, which she must pay for when it is delivered. In turn, this means “we have to have at least $1000 a day in sales in order to resupply,” which is not always possible for a coffeeshop the size of Brewed Downtown.
Michelle has tried to find creative solutions to this problem. She tried sending in her order early, “hoping to be ‘first come first serve,’” she says. Instead, she was told “they take the big dollar customers and reserve what they want for them. If there’s anything left over, we the little guy get it.” After that, she tried pooling orders with other local businesses, but this is not a sustainable solution – especially given how many local businesses are national chains with corporate structures and procedures, meaning they do not have the freedom and flexibility to collaborate in such a way.
Switching to another distributor is not the easy solution it seems. “Other suppliers have piece count too,” Michelle explains, “so even switching to a new company might not be good.” This also does nothing to fix the root of the problem, which is the lack of supply in general. “Ham’s been an issue,” she tells me, saying she has been waiting four weeks for an order. Because she is not doing “800 pounds of ham a week,” she says, her distributors have refused to supply her. The list of products goes on and on and on. “Sausage, bacon, pastrami, roast beef… they’ve all jumped up in price.”
In response to this, Michelle has been told to alter her menu and adjust accordingly. But as she explains, that is not as easy as it sounds. “I can’t just go to Walmart and get flatbread,” she points out. “I have to go to somebody. It’s not manufactured here.” Furthermore, her customers come in expecting to see certain things on the menu. If they come in only to be routinely disappointed by the lack of their favorite items, Michelle could lose business.
There is an added unfairness in expecting small business owners like Michelle to simply go to the local store and buy their supplies, too. “The only place I’m tax exempt is at Sam’s Club,” she tells us. At all other grocery stores, she is paying sales tax just like you or I would, only to then have to charge the customer sales tax on the same item – something she does not have to do when buying from a distributor. In this way, the tax is being paid twice to the detriment of the business owner.
As a socialist – and I should stress that Michelle is not – you might think that the plight of a business owner is an odd thing for me to concern myself with. But the inherent injustice here is infuriating. If Michelle were a Starbucks instead of a local mom-and-pop coffeehouse, she would not be having these problems. That is patently unfair and puts small business at a steep disadvantage. It means that on the other end of this pandemic, there is a very real possibility that in many towns throughout America all that will be left is big box retailers and generic chain restaurants.
Small businesses are the backbone of the American economy. According to the Small Business Administration, small businesses make up nearly half of private sector employment in the United States. They also represent 64% of net new private sector jobs and 46% of private sector output. Our country would literally be poorer without them.
Michelle says that her distributor required their employees to be vaccinated, yet half of the workforce still came down with COVID and had to be out of work. In August, United Natural Foods Inc’s distribution center in Centralia, Washington was closed due to a COVID outbreak, leading to shortages across the nation, showing just how precarious this situation remains. A 2020 report from McKinsey & Company noted that it may take the US food service industry as long as four years to recover from the pandemic.
Small businesses like Brewed Downtown may not be able to survive that long, especially if distributors continue to prioritize large national chains. I do not believe there is a singular solution to the supply chain problems we are experiencing. Some of them are inevitable. But we can do a few things to help keep the American economy moving, I think:
To begin with, get vaccinated if you are not already. Vaccination will help slow the spread of this pandemic and bring us closer to herd immunity. This in turn means fewer people calling out sick with COVID or having to isolate and quarantine, meaning increased productivity in every sector of the economy.
Next, companies need to respond to the material conditions of the workforce. If they are having trouble recruiting drivers, it is not because people are too lazy or that government handouts and relief checks have been too generous. While there will invariably be some people who do believe that quitting their job and living off their COVID relief is a smart idea – Michelle told me one of her employees did just that – the vast majority of Americans want to work and will indeed need to work.
However, a shortage of labor and an increased demand for it will invariably lead to higher wages. This is not some socialist scheme, it’s basic capitalist supply and demand. Companies – including food distributors – are going to have to respond to these market conditions. In short, they’ll have to pay people more.
From a public policy perspective, we need to do more to encourage and promote small businesses as well as support them in times like these. If you’re going to give tax breaks to capital, give it to businesses like Brewed Downtown instead of businesses like Starbucks. If you’re going to subsidize the economy, subsidize local businesses. While none of this will solve the supply chain problem – I’m not sure given the current construction of the global economy whether any single government policy can do that – it will help foster a culture where small business and local entrepreneurship is encouraged over monopolies, conglomerates, and mega-corporations.
You may not agree with me on all of these points. Michelle doesn’t. That is fine. I’m not even convinced doing all of those things would solve this problem. It will likely take more.
What I am sure of, though, is that we must do something to help small businesses like Brewed Downtown remain open through this pandemic and the resulting turbulent economy. We need to at least begin discussing ways to support small business owners, to help them, and to make sure that when we finally come out on the other side of this we are not left with nothing but fast food restaurants and a Starbucks on every corner. That is not a world I want to live in.
On Amazon’s company towns…
Dust off your top hats and petticoats. Amazon is taking us back to the 19th century.
While many small businesses have struggled to remain open during the pandemic, the online retailer has turned record profits as demand for online shopping and home delivery skyrocketed. Much like a modern-day Wells Fargo wagon, Amazon delivery trucks have brought goods to millions of isolated Americans across the country.
This is the upside, and it should not be discounted. The truth is, without Amazon my life would have been much less pleasant during this pandemic. Rural Americans, especially, have become dependent on online shopping to obtain goods that our urban counterparts often take for granted. There is one bookstore in my county, and it sells nothing but Christian books. Options for clothes include Wal-Mart and a thrift store. So, you know, Amazon has really helped.
Amazon knows this, too. They currently have, in practical terms, a monopoly on general online shopping. If you want something specific – say, a pair of Sperry Topsiders – you might go directly to the brand website. Or, if you want a discount, you may browse Overstock.com. For general orders, though, chances are you head straight to Amazon.
This increase in demand, accelerated but by no means dependent on the pandemic, has led the company to expand. This includes the recent opening of a fulfillment center in Fargo, with plans for future warehouses in Michigan and Rhode Island also announced this month.
Amazon touts is fulfillment centers as boons for local economies desperate for jobs. However, the company is simply following in the footsteps of its robber baron ancestors, creating “company towns” which ostensibly uplift the working class but in practice continue the exploitation and oppression of some of America’s most vulnerable workers and communities.
Coming from Appalachia, I know how unjust factory towns can be. Last month, I had the good fortune of wandering into the Coal Creek Miners Museum in Rocky Top, Tennessee where a man called Boomer was giving an interview/lecture on the Coal Creek War of 1891-1892. Rocky Top – which was previously known as Lake City, and before that Coal Creek – is only about a 20-minute drive from my house, and the Coal Creek War was something I knew a bit about. Still, I sat riveted as Boomer told the tale.
The Coal Creek War was an armed standoff between miners and the state of Tennessee, who sent in the militia to quell a strike over the coal company’s use of convict labor. The state would lease prisoners to the coal companies, saving them money by using what was basically slave labor instead of paying miners to mine the coal.
Many of these convicts, it should come as no surprise, were Black folks from outside East Tennessee. Throughout the South, states used Jim Crow laws to arrest Black folks (especially Black men) for what were previously minor infractions, send them to prison, and then lease them to private companies for pennies on the dollar what they would pay free laborers. In doing so, capital was able to both save on labor expenses and avoid any trouble from organized labor (or so the capitalists thought) while the state was able to continue controlling and exploiting the labor of Black folks after emancipation.
Now the good people of Coal Creek, especially those whose livelihoods depended on the mines, were none too thrilled with this development. Some of their fury was no doubt born of racism, but much more of it was a response to the material needs of their community. The mines were the major source of employment in Anderson County. Beyond that, though, the coal companies also controlled most aspects of a miner’s life. They paid their miners in “company scrip,” which could only be used in the company store, where miners would buy groceries and household items they would take back to their company-owned homes. In this way, the coal companies tightly controlled life in Coal Creek.
With convict labor imported from elsewhere in Tennessee, though, the coal companies needed fewer local miners and could pay those they did need a lower wage. This pissed off the good people of Coal Creek, who recognized an injustice was being perpetrated against them. So, the workers went on strike. The coal company, none too pleased with this, tried evicting these miners from their home. Thus, a conflict ensued in which 27 miners were killed and dozens of Tennessee National Guardsmen and allies of the coal company were wounded or killed.
The Coal Creek War was just the first of the many struggles between organized labor and the coal companies here in Appalachia. The West Virginia Coal Wars saw striking miners fight for the end of the practice which forced them to shop in company owned stores. In Kentucky, the 1932 Harlan County War again saw miners – striking because of a massive wage cut during the Great Depression – evicted from their company-owned homes as they fought for their rights to fair wages and freedom from corporate tyranny.
Which brings us back to Amazon. While it is true that the billion-dollar retailer isn’t formally controlling the housing of its workers nor paying them in “scrip,” its 21st century spin on a laissez-faire favorite is no less exploitative. Rather than being a means of empowering the working-class, Amazon is following the same sinister playbook authored by the robber barons of the 19th century.
Amazon’s greed is well documented. In Ohio, more than one in ten Amazon employees are on food stamps. Even after raising its minimum wage to $15 an hour, Amazon is still among the top 25 employers nationwide with workers dependent upon SNAP. Indeed, workers earn 10% less in areas dominated by Amazon.
This is despite the company raking in record profits – last year was its most profitable year ever, and the company looks set to do even better this year. It made $8.11 billion in the first quarter of 2021 alone. When considering this, $15 an hour is chump change, especially given that most Amazon employees do not last more than a few months on the job; Amazon’s turnover rate for hourly employees is 150%, with many workers hired on as seasonal or temporary employees.
Clearly, this is not stable or long-term work, which is what a community needs in order to have any sort of economic security. This precarity is unsurprising given the sheer brutality of life in an Amazon warehouse. Many workers burn out given the company’s Dickensian policies. The hellish conditions of Amazon warehouses have been well documented, with reports of workers having to urinate in bottles, working long and physically arduous shifts with few breaks, and being forced to meet ridiculous and frankly impossible quotas.
Even if you can meet the ludicrous expectations corporate imposes upon its workers, there is no guarantee that Amazon will become a career rather than just another job. In fact, the odds of that happening are very small. Those who do manage to make it past a few months in the crucible of warehouse life are often fired before their two-year anniversary, when their stock options would kick in. This is no coincidence. Amazon does not want to have to live up to its economic promises to workers who last that long, and it certainly does not want to give workers stock, lest they use their stock options as leverage.
And then, of course, there is the very real possibility that automation could replace these jobs in the coming years. We have seen this time and again in retail. Think of how few cashiers you see at a big box store anymore compared to how many self-checkout lanes are open. The profit motive demands the elimination of wage-earning workers in favor of automation, making dependence on Amazon a horrible long-term solution to a community’s economic needs.
Even in the short-term, Amazon’s influence and impact on the towns it comes into is often detrimental to the local community. Municipalities compete to win Amazon warehouses and headquarters with tax breaks and incentives which cost the local coffers millions in revenue. Once there, Amazon uses its wealth to exert influence on local politicians, as it did in Seattle where in 2019 it contributed a record $1 million to a pro-business PAC. This is to the detriment of local citizens, including employees, who depend on local government to protect their rights and wages.
It is also to the detriment of a city’s resources; Amazon trucks destroy roads and create traffic and logistical problems that did not exist before. The sheer size of its warehouses mean police, ambulatory, and other public services spend an inordinate amount of time responding to calls from Amazon employees and managers, tying up these resources for the rest of the community.
Rather than being a means of upward mobility for the working class, Amazon’s new factory towns are yet another way its exploits employees and destroys local communities. Local governments need to understand the cost of doing business with Amazon. Employees need to be clear-eyed about the reality of working for this company.
For its part, Amazon needs to do more to invest in the communities it enters, including hiring workers long-term, paying a living wage, increasing benefits, and paying its fair share in taxes while decreasing its impact on local resources. Until that happens, Amazon towns will continue to be no better than a modern spin on a Gilded Age nightmare.
What I’ve been up to…
I wrote about J.D. Vance, his sneering condescension, homophobia, misogyny, and classism for The Independent. This is a piece I have been wanting to write for a long time, and I am grateful to my editor Holly Baxter for allowing me to do so. J.D. has made himself a fortune by speaking for a people who never asked him to speak for us and who, frankly, he is out of step with in so many ways. I’m glad he is doing terribly in the Ohio primary polling, though Josh Mandel is arguably worse.
For Newsweek, I wrote about the war over masks in Tennessee schools. It’s been an eventful week here in the Volunteer State. Knox County Schools were closed on Monday following a ruling by a federal judge that not requiring masks violated the Americans with Disabilities Act. This resulted in a series of protests by parents throughout the week, culminating with a report in The Tennessean – our newspaper of record – that per CDC data our state has had the most COVID-related school closings in the nation. Frankly, I don’t understand what there is left to argue about. Sure, masks suck, but they’re a necessity right now. Do your bit and put one on your kid before you send them off to school. And for the love of God, get vaccinated if you can.
In case you missed the announcement on social media, I have been hired as the Contributing Editor for Social Engagement at 100 Days in Appalachia, a nonprofit collaborative news site run by and for Appalachians. I’m very excited to begin working with this amazing team. I’ll be running their newsletter products, so please do sign up for that. (Don’t worry, I’ll still be freelancing elsewhere and writing this newsletter, too!)
Today, I’ll be travelling to Cumberland Mountain State Park for the annual SOCM meeting. SOCM is an organization I am new to, having become interested in their work after meeting their director at the Coal Creek Miners’ Museum. You can read more about SOCM and the incredible work they’ve done in communities across Tennessee here. I’m sure I’ll have more to say about this next week.
What I’ve been reading…
Andrew Neil gave an interview about his departure from GB News to the Daily Mail. It’s basically him playing the world’s smallest violin. I genuinely do not understand how he failed to see the writing on the wall when it was so obvious to the rest of us. GB News was always going to be the Fox News of the UK. Anyone who saw who they were hiring and knew who was behind it – Angelos Frangopoulos has a NewsCorp pedigree – could see it clear as day. Neil’s hubris blinded him, plain and simple.
This NPR story on a Danish artist who took $84,000 from a museum and in return sent them two blank canvasses in a piece he calls “Take the Money and Run” has had me laughing for days. I’m not sure I approve of scamming a museum like this, but I also love the statement the artist makes about money, art, and taste. I for one do not pretend to have a sophisticated palate when it comes to visual art, and usually modern art in general bores me and stunts like this annoy me. But… I kind of love this, haha.
Adam Serwer wrote this fantastic piece on the Supreme Court for The Atlantic. The tl;dr is the Supreme Court is hyperpartisan whether the justices want to admit it or not, and that we – the public – are under no obligation to believe them when they gaslight us that they are not partisan hacks. They are. Therefore, it is perfectly acceptable for us to treat the Court as what it is – a partisan political branch the same as the other two. The reason conservative justices are so adamant we do not treat the Court like that is because if progressives start to do what conservatives have done for 50 years, we might start to roll back some of the power they’ve consolidated for themselves on the bench.
A Communist at Large released part four in his China series. This blog makes the case that China is already an economic superpower and that it controls the world’s capital, even if the West has yet to realize this. I think his analysis is largely true – American capital is almost wholly commercial capital, which does not generate new wealth but rather moves existing wealth around. It is Asia which is generating new wealth. What that means for the 21st century is fairly obvious: this is going to be an era dominated by the Chinese – economically if nothing else.
Charita Hudson Moyers was a friend of mine. I didn’t know her well, but I met her when I was in college at WKU. She worked at Grill Works, one of the little food stations in the Garrett Conference Center. I didn’t eat there a lot, but whenever I did she was a ray of sunshine. Miss Charita, as I knew her, always had a smile on her face and did her best to cheer me up when I was down. She passed away from cancer this past week, and the entire Hilltopper community is in mourning for this beloved member of our family. The College Heights Herald, the WKU student paper, had a lovely article about the impact she had on decades’ worth of students’ lives.
What I’ve been listening to…
I’ve been listening to Alan Jackson’s gospel album a lot this week. Given the news that he is suffering from a degenerative nerve disease which is affecting his ability to perform, it is fitting that I share a video of a live performance of his. He truly is one of the greats, and I wish him well. What an artist.
Obsession of the week…
After reading about the Melungeon’s last week, I’ve gone down a bit of a rabbit hole reading about Melungeon history and watching videos on YouTube about them. I’m actually shocked at how little is out there. Here’s a presentation I watched on YouTube:
A picture of the puppy…