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    Published on: November 15, 2021

    KC went to a local mall that opened about two years ago, and that he was utterly convinced would've been turned into an Amazon distribution center by now.  He was wrong about that … but he does have some observations about a building that seems utterly rooted in late 20th century retailing.

    Published on: November 15, 2021

    Fox News reports that "a group of Inc. workers in New York City's Staten Island has withdrawn a petition to hold a union election, a spokeswoman for the U.S. National Labor Relations Board confirmed on Friday.

    "The group, known as the Amazon Labor Union, filed its petition last month, joining an escalating push by unions to organize Amazon's vast network of warehouse workers."

    National Public Radio reports that "union organizers had said in late October that it delivered more than 2,000 signed union-support cards to the NLRB's Brooklyn office after launching the effort in April. That's a major step in authorizing a vote that could set up the first union at the nation's largest online retailer.

    "As part of its petition to hold a vote, organizers must submit signatures from at least 30% of the roughly 5,500 employees who the union says work at four adjoining Amazon facilities that it seeks to represent under collective bargaining."

    KC's View:

    People may not be commenting on why they withdrew the petition, but it seems pretty obvious from here - they didn't have the votes.

    Doesn't mean that the petition can't be refiled.  It can be.  But the organizers are going to need to have their act together, and know, as best they can, that their numbers are going to add up.  Because Amazon has had some luck beating back these unionization efforts.

    Published on: November 15, 2021

    The US Department of Labor said on Friday that 4.4 million workers quit their jobs during September, up from 4.3 million people who quit in August and the highest resignation rate during the 20 years that the government has been tracking these numbers.

    If just the two months of resignations were added up, they still wouldn't fill all the available jobs that existed at the end of September - 10.4 million.

    The New York Times offers some context:

    "Economists cite a number of reasons for the slow return. The pandemic is still disrupting child care, making it hard for some parents to work; other workers are worried about contracting the virus or spreading it to high-risk family members. Many Americans have also built up their savings during the pandemic, allowing them to be choosier about jobs.

    "Those factors are likely to ease as the pandemic ebbs and savings dwindle. But other shifts could prove more lasting. In a research note published Friday, economists at Goldman Sachs observed that roughly two-thirds of the people who had left the labor force during the pandemic were over 55; many of them have retired and are unlikely to go back to work.

    "The labor crunch is giving workers the upper hand in negotiations. Wages have risen sharply in recent months, particularly in service jobs, although in other industries pay is lagging behind the pace of inflation.

    "The recent rise in the number of workers quitting suggests that many are taking advantage of their leverage to accept better-paying jobs, or to look for them. At the same time, understaffing in many businesses may be putting stress on remaining workers, leading even more people to leave their jobs. Industries that require most employees to work in person, such as manufacturing, retail and health care — as well as leisure and hospitality — report the biggest increases in the rate of workers leaving their jobs."

    The Washington Post weighs in:

    "The South, the West and Midwest have the highest numbers of workers quitting their jobs, at 3.3, 3.1 and 3.0 percent, respectively, while only 2.2 percent of workers in the Northeast are quitting jobs. This is consistent with trends seen in August, which showed that workers in more rural areas quit at a higher rate in part because they had more leverage to demand better pay.

    "The country has regained the vast majority of jobs lost in the earliest months of the pandemic, but still has over 4 million fewer jobs than in February 2020.

    "Economists have been looking to the return to full employment as an important milestone, but labor shortages, continued coronavirus cases, and supply-chain issues have emerged to complicate that recovery. The high level of turnover among employees is adding to the mismatch, as lower-wage jobs are increasingly hard to fill because workers in those professions are finding alternatives."

    And from the Wall Street Journal:

    "The nation’s high turnover trend has maintained momentum over the past several months as factors like plentiful job openings, a continuing child-care crisis and increased household savings have made job-hopping—or simply quitting—more attractive to some workers.

    "In a labor market where job openings outnumber applicants, companies have been brainstorming how to get more candidates in the door. The hiring overhaul signals a potentially broad rethink of job qualifications. The change could help millions of people get jobs previously out of reach, according to economists and workforce experts.

    "U.S. workers left 20 million jobs between May and September this year, according to the latest federal data, a number more than 50% higher than the resignations handed in during the same period last year. That figure was also 15% above the level from spring and summer 2019, when the job market was the hottest it had been in almost 50 years."

    KC's View:

    I have to admit that I have trouble wrapping my head around this.

    A bit of personal truth here - I've been laid off from five different jobs in my life.   Four of the five times, the company was going out of business or shifting to a contractor-only business model because of lousy management.  (I'm apparently not a good luck charm.)  And even when I got laid off from jobs I didn't really like, or companies that I didn't really like, or by employers that I didn't really like, I was bereft when I didn't have a job.  Which actually is why, the last time it happened, I said screw it (using a different verb), and started MNB.

    So I have problems grasping the great resignation.

    That doesn't make me right, though.  It just means I have to work harder to understand the motivations behind people who leave their jobs without solid prospects.  As, I think, we all do.

    People want to feel greater investment in their careers, no matter where those careers happen to be on the food chain.  I happen to believe that money is important, but so are other things - not least the desire to feel like one is contributing, having a sense of common cause.

    I do worry, however, about what happens when the current pendulum swings the other way … how will management react to greater leverage, and what will labor to in response?

    Maybe a time for common cause?  What are the odds it happens?

    Published on: November 15, 2021

    From the Wall Street Journal this morning:

    "Companies are paying higher wages, spending more for materials and absorbing record freight costs, pushing up economic inflation gauges. They are also reporting some of their best profitability in years.

    "Executives are seizing a once in a generation opportunity to raise prices to match and in some cases outpace their own higher expenses, after decades of grinding down costs and prices."

    Not everybody, of course:  Some industries, "largely those still climbing out of pandemic lockdowns, such as travel, or those too weighted with inflationary costs, have raised prices but not experienced a profit boost."

    But, the Journal writes, "Nearly two out of three of the biggest U.S. publicly traded companies have reported fatter profit margins so far this year than they did over the same stretch of 2019, before the Covid-19 outbreak, data from FactSet show. Nearly 100 of these giants have booked 2021 profit margins - the share of each dollar of sales a company can pocket - that are at least 50% above 2019 levels."

    The story goes on:

    "Profit margins often rise with inflation. The risk to companies is that they overreach, raising prices faster than their competitors, or farther than customers will tolerate, losing sales and market share that may take years to recover.

    "The risk to the economy is that price hikes not only stick, but convince customers more increases are inevitable, spurring inflationary demand and sparking a vicious cycle. How long inflation is likely to last is a central concern for economists and politicians.

    "Inflation hit a 31-year-high last month. Americans are paying more for an array of products and services, including necessities: food, gas, rent and furniture. The consumer-price index, a key economic indicator, increased in October by 6.2% from a year ago. That was the fastest 12-month pace since 1990 and the fifth straight month of inflation above 5%."

    KC's View:

    Last Friday, I linked to a piece in The Guardian by Robert Reich, the former US Secretary of Labor and current professor of public policy at the University of California at Berkeley, about his prescription for dealing with inflation.

    I did this because an MNB reader sent me the piece…just minutes after another reader emailed me asking if I'd seen anything interesting about inflation that I planned to share with the MNB community."

    I got a lot of pushback about the link, largely because Reich took aim at corporate giants.  Which is fine.  I knew it would be provocative, which is why I ran it.

    To be clear, I am not smart enough to know whether Reich's diagnosis has any merit.  I know very little about economics, but I try to keep an open mind as I read different opinions about what to do now.

    All I know (I think) is that the problems seem very complicated, in some ways systemic and related to the unusual circumstances of the past couple of years, and require nuanced, definitive and quick - but not knee-jerk - reactions.

    Published on: November 15, 2021

    From the Seattle Times this weekend:

    "As antitrust scrutiny of Amazon mounts, the retail behemoth has been pressuring some of its top sellers to drop prices to ensure shoppers cannot find a lower price anywhere else — online or in a brick-and-mortar store.

    "Since early this year, Amazon has been telling some of the largest third-party sellers on its Marketplace platform they can’t list new products until they match prices offered by Amazon’s retail competitors, like Walmart, Target and Costco, according to copies of emails between seven sellers and Amazon seen by the Seattle Times.

    "Amazon’s threats may add fuel to arguments that the company’s control over its Marketplace platform violates federal antitrust laws. The tactic could also raise prices for consumers, according to interviews with employees and executives of some of the largest sellers on Amazon’s platform.

    "The CEO of one seller whose ability to create new listings was suspended earlier this year said he believes Amazon’s pricing policy is anticompetitive, but, fearing retaliation, has not communicated those concerns to Amazon."  The story goes on to say that "sellers, antitrust attorneys and Amazon’s hometown congresswoman say the policy demonstrates how Amazon is increasingly exerting control over the activities of the businesses on its Marketplace."

    KC's View:

    Interesting, because on the one hand, if retailer A goes to a brand and says that it wants the same low prices as retailer B, and has the market power to make that stick, then most consumers would say that it's a good thing.

    It becomes problematic, I guess, in part because Amazon is forcing low prices but then taking a larger cut of the sale, which makes the brands less profitable.

    It is going to be interesting if, in the long run, Amazon faces greater regulation that results in its prices going up.  Which seems to be the potential eventuality that the Seattle Times is highlighting.

    Published on: November 15, 2021

    CNBC has a story about how some brands, especially those that have built direct-to-consumer businesses over the past few years, are re-evaluating their holiday advertising plans.

    The reason:  social media platforms have become tainted by recent publicity about their data practices, which is leading some brands to reconsider those connections.  And, some policy changes, especially by one company, are making it harder to go direct to consumers.

    From the CNBC story:

    "Last year — and especially over the holiday season — social media platforms like Facebook were highly effective in reaching consumers stuck at home, aimlessly scrolling on their smartphones. But this year, between Apple’s privacy changes and the ongoing controversy over Facebook’s practices, more and more consumers are steering clear of Facebook’s apps, which include Instagram and WhatsApp. Or they’re turning to new ones, like TikTok.

    "The shift has brands worried that an online marketing blitz won’t reach the right customers. Some even fret that they could alienate consumers by being on certain social media sites … An analysis by the market research company eMarketer found that users in the U.S. are expected to spend less time scrolling through Facebook this year and in the coming years. Time spent on the platform for adults over the age of 18 is expected to be down 3.3% in 2021 compared with 2020 levels, eMarketer said. It forecasts it will drop another 1.8% from 2021 to 2022, and fall another 0.7% in 2023."

    The Apple changes are cited as being particularly concerning:  "Apple in April made privacy changes impacting how apps can track users. Many consumers have since opted out of tracking by popular apps, which means businesses are gathering less information on users’ daily habits and interests. As a result, it becomes much more difficult for advertisers to target people on the internet effectively."

    Published on: November 15, 2021

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  Here are the US Covid-19 coronavirus numbers:  47,916,190 total cases, resulting in 783,565 deaths, and 37,918,301 reported recoveries.

    The global numbers:  254,168,146 total cases, with 5,1187,220 resultant fatalities and 229,827520 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 79.4 percent of the US population age 12 and older, and 68.3 percent of the total US population, has receive3d at least one dose of vaccine, while 68.8 percent of the 12-and-older population and 58.8 percent of the total population is fully vaccinated.

    The CDC also says that 35.5 percent of the US population age 65 and older, and 15 percent of the total US population, has received a vaccine booster shot.

    •  The Wall Street Journal this morning reports that "Covid-19 cases are climbing in places like the upper Midwest, Southwest and parts of the Northeast, hindering the nation’s progress in ending a surge triggered by the highly contagious Delta variant of the coronavirus.

    "Nationally, the seven-day average of new cases appears to be edging back up after hovering just above 70,000 for several weeks, according to data from Johns Hopkins University, halting what had been a decline from the Delta-fueled peak that began in September. While the Southeast cools off from its summer surge, other regions are under pressure, including places where colder weather has brought people back indoors where the virus can more easily spread.

    "The stalled progress is an unwelcome turn as the Thanksgiving holiday nears, which will mean more people traveling and congregating indoors, as families gather to celebrate."

    •  Bloomberg has a fascinating story:

    "Over dense forests and cocoa farms, a fleet of drones hummed en route to Ghana’s central Bosomtwe District. Upon reaching their destination Sunday, the red-and-white aircraft parachuted thermal packages containing cargo that’s long been awaited by the local Kokodei community: vials of Pfizer’s COVID-19 vaccine.

    "In the days ahead, these drones will shuttle tens of thousands of the shots developed by Pfizer and its partner BioNTech to some of Ghana’s most rugged, remote countryside as part of an effort to provide more equitable access to doses. Every four minutes, from dawn until dusk, drones operated by Zipline will depart from its distribution centers bearing the immunizations. The company has been tasked with bringing doses to 40% of Ghana’s population.

    "This isn’t Zipline’s first time working with COVID vaccines and supplies, but highly effective messenger RNA shots have a strict requirement for storage at ultra-cold temperatures. Until ready for use, the Pfizer doses must be stored as cold as minus-130 degrees Fahrenheit — colder than the lowest readings ever recorded on Earth’s surface. Ghana is among the many low- and middle-income countries lacking the equipment and infrastructure to store and deliver these shots."

    Published on: November 15, 2021

    •  Bloomberg reports that Amazon is being sued by drivers who charge that the "algorithms, apps and devices the company uses to manage its sprawling logistics operation" are putting them at risk.

    According to the story, "Amazon closely tracks delivery drivers’ every move … including 'backup monitoring, speed, braking, acceleration, cornering, seatbelt usage, phone calls, texting, in-van cameras that use artificial intelligence to detect for yawning, and more.'  If drivers fall behind schedule, Amazon employees send text messages 'complaining that a certain driver is ‘behind the rabbit’ and needs to be ‘rescued’ to ensure that all the packages on Amazon’s route are delivered in compliance with Amazon’s unrealistic and dangerous speed expectations."

    Because many drivers often work for third-party delivery companies, Amazon says it cannot be held responsible for accidents.  The lawsuits, however, maintain that Amazon's hands-on approach means that it actually is managing those companies from afar.  

    Which is where it gets tricky - because the plaintiffs want access to Amazon's algorithms to make their case, and Amazon is resisting making them public because, it says, it will reveal proprietary "trade secrets."

    Published on: November 15, 2021

    Got the following email from an MNB reader about alternative methods (drones?) for delivering prescription drugs, especially now that corner drugstores are closing all over the country:

    I recently attended the annual “Open Enrollment” session for my company – a few things stood out to me as it relates to this story:

    “mail order” is clearly the preferred way to go when it comes to many prescription drugs, thus eliminating or at the very least significantly reducing the need to the visit to the corner pharmacy

    “Telemedicine”  is here for real and leaped miles ahead with the pandemic… in many cases it’s now or going to be in the near future the first stop for primary  care for many people – Primary Care Doctors Offices to follow the corner Drugstore?

    The corner pharmacy is no longer a corner pharmacy…  it’s now a “Health Hub” that just happens to have a pharmacy in it.  Something that a traditional rural corner drugstore just can’t compete with. Many may not even have the needed types of health care professionals in their towns to staff such a hub.  This also has implications for the CPG industry as when our local pharmacy (CVS) became such a “Health Hub” recently, they significantly cut back on the amount of retail selling space to make room for the new added health care services.

    Regarding former Starbucks CEO Howard Schultz's efforts to intercede in Buffalo, where the company is facing unionization efforts, MNB reader Kenny Fried wrote:

    Having seen Howard up close with Starbucks employees  for more than 15 years, I can tell you I have never witnessed any other corporate leader connect and care more about his employees than he did.  Not having him around as the public face of Starbucks makes a huge difference.

    Responding to last week's FaceTime piece about the increasing reliance on self-checkout, MNB reader Michael Seelig wrote:

    I completely agree with your assessment of the “new” front end at grocery. I would like to add one more observation, maybe, just maybe, the retailers are being realistic as to how often they use all of the cashier supported checkout stands. It’s been years since I have been in any store, other than Costco, where they use much more than 50% of the checkout locations. Maybe, they are owning up to all that dead space and providing other options.

    I mentioned in my commentary about the inflation story above that I got a lot of pushback on the piece I referenced last week by former US Labor Secretary Robert Reich on the subject.  Here are some of those comments…

    From one MNB reader:

    As an executive in the C-store business, the main driver behind inflation and rising prices for our industry and our company in particular is the rising wages. It is not as Robert Reich preaches largely because of a lack of competition or supply bottle necks.

    New York State continues to raise the minimum wage in addition to fewer workers vying for all of the openings has forced us to offer a higher wage for entry level positions. I have no qualms about paying people more, but as a company that continues to invest in services for customers and the physical plants we have very little choice. No doubt we are also seeing increases from our suppliers which we have to pass along to the customers.

    There are really only 3 ways to make up the increase in costs: 1)Raise retails, 2) Negotiate lower cost of goods, or 3) Become more efficient (which means fewer employees).

    That is reality and KC may not agree, but join us in how things really work.

    From another MNB reader:

    How long is the big bad corporation rhetoric going to continue?  The same government that is pointing the finger at Big Corp is the same one that has allowed them to be.  If anyone thinks that the corporations are just raising prices for fun has rocks in their heads.  Yes the bottlenecks are adding to inflation, but that is not the sole reason.  It is raw materials, ingredient costs, packaging costs, transportation costs.  When you just look at one piece, the cost of containers.  That expense has quadrupled since the pandemic.  Let alone the holding costs.  Who pays for that?  The companies do.  So that cost is passed on either through higher prices or efficiencies in the plants.  By efficiencies I mean less labor and more automation.

    So Robert, stop deflecting blame to Big Corp and start pointing it to Big Gov as the issue here.  Oh, you're from California.  Should have seen that first and then I would understand.

    My problem with this email is that I'm not sure that "big government" is entirely responsible for all the increased costs that you list.

    From another reader:

    There is only so much money to spend before you are not making a profit or losing money. When the cost of shipping the item has increased five-fold and the cost of all of the ingredients/components have increased significantly the money has to come from somewhere. In some cases, it now costs more to ship items than it did to make them. As we have seen, price increases help but in no way make up for the incremental expense. It may not be about reducing advertising because the items are not easy to find, it’s so manufactures can continue to support their employees and answer to shareholders.

    And from MNB reader Steve Anvik:

    Robert Reich has been ranting from the liberal viewpoint, as long as conservatives have been from theirs.  Reality is that both sides take money / sell influence - and thus the mergers and monopolies he often rails against, continue.  What to do in this “apparent” political impasse, when both sides rightfully find fault in each other? 

    Go back to the Luddite philosophy? Or ride a financially conservative robust U.S. economy (which benefits nearly everyone) to drive wealth that “trickles down” to create jobs, increase prosperity overall?  Are there poor? As a relational % Yes.  I’ve noticed though every person in the U.S. has a new Apple or Android, cars outnumber citizens, etc. 

    We’re not perfect, but raising the lowest tiers of society takes money (both free market, and tax revenues) - so bashing business is popular, but misplaced.  Throttling the economy down, as imho is happening today - will turn inflation into stagnation, or a tipping point of debt.  Robert Reich should retire, and give us all a break.  

    I think that it is fair to say that everybody rants, regardless of their political perspective.  But rather than discount one side or the other, I'd prefer to think that there may be good ideas on all sides that, if you could figure out ways to negotiate, compromise and find common philosophical ground, we might be able to make actual progress in addressing real issues.

    Responding to last week's piece about my Skip Barber experience, one MNB reader wrote:

    Clearly you didn’t trust the safety measures put into the car and the track. The race school didn’t want you to get hurt either. Just saying…

    I trusted the school.  It was me that I didn't trust.  I was out of my comfort zone.  Which was sort of the reason I took the classed wrote the column.

    And from another reader:

    I can so relate to the experience … 25 years ago with two kids in elementary school I did the Skip Barber racing school.

    Got real aggressive at one point and did a major spin out lucky I did not seriously hurt myself or others 

    Spent not few hours constantly repeating “you have two kids, you have two kids"…

    Published on: November 15, 2021

    In Week Ten of National Football League play…

    Kansas City Chiefs 41, Las Vegas Raiders 14

    Atlanta Falcons 3, Dallas Cowboys 43

    New Orleans Saints 21, Tennessee Titans 23

    Jacksonville Jaguars 17, Indianapolis Colts 23

    Cleveland Browns 7, New England Patriots 45

    Buffalo Bills 45, New York Jets 17

    Detroit Lions 16, Pittsburgh Steelers 16

    Tampa Bay Buccaneers 19, Washington 29

    Carolina Panthers 34, Arizona Cardinals 10

    Minnesota Vikings 27, Los Angeles Chargers 20

    Philadelphia Eagles 30, Denver Broncos 13

    Seattle Seahawks 0, Green Bay Packers 17