Holiday Gifts for a Pandemic World
Little Timmy may have to settle for a jar of peanut butter under the holiday bush this year, as scarcities continue to manifest themselves at the retail level. And you might want to shop early if Lil Tim has a brand preference, since stores in parts of the country are placing limits on purchases of peanut butter, pasta, sauces and jam.
Whether or not there are better choices for future holidays gifts depends on what happens in Washington in the near future. There are budget and infrastructure bills to be considered, and Republicans have made it clear that NO is their answer for everything, including the economy.
Contemporary wisdom points to the pandemic as the cause of the many reported disruptions in supply, the reality is that something much bigger is happening.
Nearly 100 container ships are waiting to be unloaded at the ports of Los Angeles and Long Beach which handled nearly one-third of the nation’s imports last year. So many idled ships means future shipments will just have to wait.
Those future shipments will cost more. The New York Times profiled a board game entrepreneur who outsources his production to China:
Shipping a 40-foot container of games from Shanghai to the warehouse he uses in Michigan cost $6,000 to $7,000, Mr. Poses said. His next shipment, scheduled to leave China in mid-September, will cost at least $26,000. And his freight agent warned him that the price will most likely rise, to $35,000, because of rail and trucking difficulties in the United States.
Containers are piled high on the docks at many ports because there aren’t enough truck drivers to haul them away. It used to be that driving a truck was a good way to make a living.
Now it’s part of the gig economy. Wage theft --in the form of billing so-called owner operators-- for “expenses” means some drivers take home negative paychecks.
Gosh, I wonder why nobody wants those jobs anymore, even as companies are promising 30% increases in wages. (30% of zero is still zero)
If there can be one major change ascribed to the workforce by the pandemic, it’s that many workers just don’t want to work at jobs that suck any more. Pay raises are great, but child care, health services, and education opportunities are just a few of the things needed.
Once products reach distribution centers, getting them out into the marketplace is also challenging. Despite raising their base wages to $18 an hour and lots of advertising about how the jobs open doors for employees, Amazon is burning through workers too fast to be sustainable in the long run.
The just-in-time supply chains corporations have spent years honing to save money are also vulnerable. That hit Toyota hard, when one COVID-19 case in Vietnam was the straw that forced Toyota to cut its September output by 40%.
Dollar Tree Stores are looking at a 20% reduction in available inventory for the upcoming holiday season. You may be shopping for last year’s Easter Candy as stocking stuffers.
This is where we are, and even optimists don’t see many short term solutions. Companies will change the way they outsource production and fulfillment so they are no longer physically constrained by oceans.
What they can’t change will be the expectations of the countries dealt into the equation. This will be particularly interesting in Mexico which is steadily moving toward a more consumer oriented economy.
We’ve made this bed and now we have to sleep in it. As usual, those humans existing above the fray of things like paychecks and paying taxes responsible for the economic order of things will do better than the rest of us schmoos.
Everything --climate change, geopolitics, the social safety net, to name a few-- is connected. Measuring wealth growth (i.e. stock prices), disconnected from producing things (sales), with risks (losses) mitigated by various government entities has reached the point where shortages of goods are the norm.
All of this is political, to be sure. We’ll be seeing some “both sides” analysis in the months to come as Brand A economists urge tax breaks for industries argue with Brand B economists who say government intervention is needed.
The solution here is to approach Timmy’s holiday present as the result of a systemic problem. While President Biden’s Build Back Better program and House Speaker Nancy Pelosi’s reconciliation budget fall short of everything needed, that’s what is on the table right now.
Our nation is in bad shape because we’ve put off investing as a society at just about every level. Infrastructure in terms of transportation and communications can ease the sting of global shortages in the long run. A better social safety net can help in both the long and short term.
The underlying problems, caused by a generation of so-called entrepreneurs so short sided they can’t see beyond their mega-yachts will probably have to wait for somebody with Senator Elizabeth Warren’s vision for a just economy. None-the-less, staying still isn’t an option.
https://twitter.com/DanPriceSeattle/status/1440153366936444931?s=20
Should Republicans manage to smother hope once again, Timmy’s parents should get shopping pronto.
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Where the hell is my dishwasher? A personal story...
Six months ago we ordered a new dishwasher. Our old Fridgidaire, with its insulation peeking out around the edges, was wafting the wonderful aroma of burnt heating element on occasion, and was louder --way louder-- than it needed to be.
We did the research, spent some time visiting dealers, and ended up buying the kind of machine properly described as an investment more than a household appliance. The retailer was and is top shelf (having shopped there in the past); they’d take proper care on installation and haul the old machine off when the time came. We’d heard that the worst of supply chain issues were China-related, so buying a European made model seemed like a safe bet.
There was only one teensy, tiny, little problem: it was on backorder. In fact, if you shopped for appliances or many other hard goods, you’ve gotten used to hearing that word, along with “supply chain” disruptions caused by COVID. Six weeks turned into four months which has now turned into a half year.
We still don’t have the dishwasher. Ours hasn’t died yet, at least partially due to the fact that my living on a tube fed diet does not require much more than a disposable big ugly plastic syringe.
As a certified kitchen whirling dervish, I can only hope the new machine comes before I get back into cooking mode again.
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Also…
https://twitter.com/MikeLevin/status/1440425967869067264?s=20
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