Friday, March 19, 2021

"Can Amazon Be Stopped?"

 From Washington Monthly, April/May/June 2021 issue:

The story of the e-commerce giant is the story of America’s economic unraveling.

About two and a half years ago, as media speculation about where Amazon would locate its second headquarters reached a fever pitch, The Onion, a satirical website, decided to make its own projection. “‘You Are All Inside Amazon’s Second Headquarters,’ Jeff Bezos Announces to Horrified Americans as Massive Dome Envelops Nation,” the site declared. The story described a world in which Amazon divided the United States into segments of its supply chain. “The entire state of Texas will be replaced with a 269,000-square-mile facility used exclusively to house cardboard boxes, tape, and inflatable packaging materials,” the authors wrote. “A large swath of the Midwest will soon be razed to make way for a single enormous Amazon Fulfillment Center.”

It was, of course, a joke. But based on reporting from the veteran ProPublica journalist Alec MacGillis, it’s a joke with more than just a ring of truth. In Fulfillment: Winning and Losing in OneClick America, MacGillis argues that Amazon’s dramatic expansion is Exhibit A for America’s economic unraveling. Armed with stark statistics and moving anecdotes, MacGillis illustrates how the retail giant pushes regional stores out of business. He shows how the company extracts tax incentives from desperate local governments in exchange for poor-paying warehouse jobs. Amazon has “segmented the country into different sorts of places, each with their assigned rank, income, and purpose,” he writes. It has altered “the landscape of opportunity in America—the options that lay before people, what they could aspire to do with their lives.” 

It is a damning and powerful assessment. But Amazon isn’t MacGillis’s only, or even most fundamental, subject. Instead, he treats the company as both a cause and a symptom of a bigger problem: skyrocketing regional inequality in the United States. 

Over the past 40 years, certain parts of America—mostly along the coasts—have become far more prosperous than others. This trend has not received as much attention as rising income disparities, but its political consequences have been similarly grave. Regional inequality has fueled authoritarian nationalism in the U.S. It has concentrated well-educated liberals in economically vibrant, overwhelmingly Democratic states. It has left white working-class voters elsewhere embittered and detached from mainstream politics. After decades of job losses and wage stagnation, it’s not surprising that some people in struggling counties embraced a candidate who promised to restore a halcyon era (“Make America great again”) and blamed their challenges on groups many were already prejudiced against (minorities). Donald Trump’s path to the presidency was paved in part by declining economic opportunity in the Midwest.

MacGillis provides readers with a useful primer on how this happened. Beginning in the late 1970s, politicians gradually stopped enforcing fair competition policies: the many laws designed to create an even economic playing field for different businesses and different parts of the country. Regulators started neglecting antitrust statutes, allowing a few companies in each sector to expand rapidly by purchasing or crushing their competitors. They loosened restrictions that had prevented chain stores, like CVS and Walmart, from dramatically underselling smaller rivals. And they eliminated regulations that made it equally easy to transport goods to and from all parts of America. “Profits and growth opportunities once spread across the country,” MacGillis writes. Now, they cluster in places where the dominant companies are based.

These trends are all bigger than any one business. But it’s easy to see why MacGillis chose to focus on Amazon specifically. The company owns a third of the country’s data storage market. It controls somewhere between roughly 40 and 50 percent of America’s e-commerce market, more than five times the share of its nearest rival. That makes Amazon both singularly powerful among U.S. businesses and representative of winner-takes-all corporate America at large. Together, Facebook and Google control more than 50 percent of the online advertising market. Like Amazon and its neighboring company Microsoft, they are headquartered only a few towns apart. Comcast and Charter, both located along the Acela corridor, collectively own a majority of the U.S. cable market.

These companies haven’t just survived the current recession. They’ve thrived. While the employment rate has gone down since COVID-19 arrived in America, the S&P 500 has gone up by more than 15 percent. All but one of the five richest companies have seen their value grow, including Amazon. Indeed, Amazon’s stock has increased by an astonishing 80 percent over the past 12 months. MacGillis writes that the company is reporting record profits.

The distribution of Amazon’s newfound wealth, however, has been deeply uneven. The company is hiring warehouse workers across America, but these low-paying jobs require famously long shifts, involve strenuous and monotonous work, and offer little autonomy. Meanwhile, Amazon is also expanding its Seattle and Washington, D.C., offices—adding well-paid, white-collar jobs in elaborately sculpted buildings with rooftop dog parks, onsite botanical gardens, and discounted child care.

Geographically, the United States was once an equitable place. Between the 1930s and the late 1970s, per capita earnings in almost every part of the country gradually converged. In 1933, the average income in the southwestern United States was roughly 60 percent of the national average. By 1979, it was approximately the same. During the same period, New England fell from being 1.4 times richer than the rest of the country to just above average. In 1978, the average income in the Detroit metro area was on par with that of New York City and its suburbs. Drawing on findings from this magazine, MacGillis notes that the 25 richest metropolitan areas in 1980 included Milwaukee, Des Moines, and Cleveland.....


Possibly related:   

"Amazon Is Pure Madness: It's Going to Destroy Almost Every Industry Alive and It Must Be Stopped", Bezos Denies Being Satan's Minion

"I ain't nobody's bi...minion" a remarkably buff Bezos was overheard saying.

See also:
Competitive Hormone Supplementation Is Shaping America’s Future Business Titans