The company’s crackdown on a worker protest in New York backfired and led to a historic labor victory.
Derrick Palmer, in pink, and Christian Smalls, right, celebrated after workers voted to unionize an Amazon warehouse in Staten Island. The two friends spearheaded the push for the union.Credit…DeSean McClinton-Holland for The New York Times
Send any friend a story
As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.
Jodi Kantor and
In the first dark days of the pandemic, as an Amazon worker named Christian Smalls planned a small, panicked walkout over safety conditions at the retailer’s only fulfillment center in New York City, the company quietly mobilized.
Amazon formed a reaction team involving 10 departments, including its Global Intelligence Program, a security group staffed by many military veterans. The company named an “incident commander” and relied on a “Protest Response Playbook” and “Labor Activity Playbook” to ward off “business disruptions,” according to newly released court documents.
In the end, there were more executives — including 11 vice presidents — who were alerted about the protest than workers who attended it. Amazon’s chief counsel, describing Mr. Smalls as “not smart, or articulate,” in an email mistakenly sent to more than 1,000 people, recommended making him “the face” of efforts to organize workers. The company fired Mr. Smalls, saying he had violated quarantine rules by attending the walkout.
In dismissing and smearing him, the company relied on the hardball tactics that had driven its dominance of the market. But on Friday, he won the first successful unionization effort at any Amazon warehouse in the United States, one of the most significant labor victories in a generation. The company’s response to his tiny initial protest may haunt it for years to come.
Mr. Smalls and his best friend from the warehouse, Derrick Palmer, had set their sights on unionizing after he was forced out. Along with a growing band of colleagues — and no affiliation with a national labor organization — the two men spent the past 11 months going up against Amazon, whose 1.1 million workers in the United States make it the country’s second-largest private employer.
At the bus stop outside the warehouse, a site on Staten Island known as JFK8, they built bonfires to warm colleagues waiting before dawn to go home. They made TikTok videos to reach workers across the city. Mr. Palmer brought homemade baked ziti to the site; others toted empanadas and West African rice dishes to appeal to immigrant workers. They set up signs saying “Free Weed and Food.”
The union spent $120,000 overall, raised through GoFundMe, according to Mr. Smalls. “We started this with nothing, with two tables, two chairs and a tent,” he recalled. Amazon spent more than $4.3 million just on anti-union consultants nationwide last year, according to federal filings.
The unionization vote reflects an era of rising worker power. In recent months, a string of Starbucks stores have voted to organize as well. But JFK8, with 8,000 workers, is one of Amazon’s signature warehouses, its most important pipeline to its most important market.
Amazon has fought unionization for years, considering it a dire threat to its business model. Its ability to speed packages to consumers is built on a vast chain of manual labor that is monitored down to the second. No one knows what will happen if the newly organized workers try to change that model or disrupt operations — or if their union is replicated among the more than 1,000 Amazon fulfillment centers and other facilities across the country.
For all their David-versus-Goliath disadvantages, the Staten Island organizers had the cultural moment on their side. They were buoyed by a tightened labor market, a reckoning over what employers owe their workers and a National Labor Relations Board emboldened under President Biden, which made a key decision in their favor. The homegrown, low-budget push by their independent Amazon Labor Union outperformed traditional labor organizers who failed at unionizing Amazon from the outside, most recently in Bessemer, Ala.
“I think it’s going to shake up the labor movement and flip the orthodoxy on its head,” said Justine Medina, a box packer and union organizer at JFK8 who had waited with an exuberant crowd in Brooklyn to hear the vote results.
The future of American unionizing efforts “can’t be about people coming in from the outside with an organizing plan that people have to follow,” said Sara Nelson, head of the flight attendants’ union, in an interview. “It has to come from within the workplace.”
Now, both the nascent JFK8 union and Amazon face pressing questions. The union, with no traditional infrastructure, experience or leadership, is likely to face a legal battle over the vote and challenging contract negotiations. The company, which did not respond to a request for comment for this article, will have to decide whether to reconsider some of its tactics and address the underlying labor dissatisfaction that handed it such a sweeping defeat.
“Amazon wanted to make me the face of the whole unionizing efforts against them,” Mr. Smalls wrote in a tweet on Friday, appearing undaunted by the task ahead. “Welp there you go!”
When Amazon opened the sprawling JFK8 site in 2018, the company was both drawn to and wary of New York, America’s most important consumer market. The established Retail, Wholesale and Department Store Union announced a bold goal: to turn JFK8 into the first organized Amazon warehouse in the country.
Soon Amazon withdrew from its highly touted plan to open a second headquarters in the city, as a backlash grew over public subsidies it would receive and its history of opposing unions. But the talk of organizing JFK8 went nowhere. In labor circles, many believed that Amazon’s turnover was too high, and its tactics too combative, for a union to succeed.
When the first coronavirus cases were confirmed at JFK8 in March 2020, Mr. Palmer and Mr. Smalls confronted managers with safety concerns. Employees were increasingly worried about rising infection rates and felt that Amazon was not notifying them about cases in a timely manner, managers documented in newly released court records.
But Amazon refused to pause operations, saying it had taken “extreme measures” to keep workers safe. The pandemic had turned JFK8 into a lifeline for the city, where 24/7 shifts and a fleet of trucks delivered supplies as it went into lockdown.
As Amazon moved to fire Mr. Smalls that March, two human resource employees at JFK8 doubted the wisdom of his dismissal. “Come on,” one messaged. Mr. Smalls was outside, peaceful and social-distancing, she wrote. His firing, she predicted, would be “perceived as retaliation.” But the termination proceeded.
After the firing, the chief counsel’s smear against Mr. Smalls — a full apology came only later — and the dismissal of another protester, the two friends resolved to take action. Mr. Smalls was outspoken, Mr. Palmer deliberate. They were both Black men from New Jersey and the same age (31 then, 33 now). Both had dropped out of community college, prided themselves on high scores on Amazon’s performance metrics and once hoped to rise within the company.
Now they made new plans. Mr. Palmer would keep working at JFK8, the better to change it from inside.
In early 2021, they took a road trip to another Amazon warehouse. When workers held a union drive in Bessemer, Ala., Mr. Palmer and Mr. Smalls wanted to witness it. But they found organizers from the retail union — the one that had previously declared an interest in JFK8 — less than welcoming to them and thought the professionals seemed like outsiders who had descended on the community.
By April, workers in Bessemer had rejected the union by more than a 2-to-1 margin. Mr. Palmer and Mr. Smalls declared their intention to organize JFK8, but few took them seriously. Why should they win when better-funded, more experienced operatives had been beaten?
As they set about their first task — gathering thousands of worker signatures to trigger a unionization vote — cracks in Amazon’s employment model were evident.
JFK8 had offered jobs to workers laid off by other industries during the pandemic. But a New York Times investigation last June revealed that the warehouse was burning through employees, firing others because of communication and technology errors and mistakenly depriving workers of benefits.
Black associates at JFK8 were almost 50 percent more likely to be fired than their white peers, according to an internal document. Even before the pandemic upended work, Amazon warehouses had an astonishing annual turnover rate of 150 percent.
As Mr. Palmer and Mr. Smalls approached workers at the bus stop, Amazon’s tone toward its employees kept shifting. Jeff Bezos, the company’s founder, was handing over the role of chief executive to Andy Jassy, and the company raised wages and added the goal of being “Earth’s best employer” to its guiding principles. It pledged to listen to complaints and improve working conditions.
At other times, it was contentious. In a widely publicized Twitter exchange about the Bessemer organizing, Amazon sounded so dismissive about workers who could not take bathroom breaks and had to urinate in bottles that it had to apologize.
In May at JFK8, an anti-union consultant called the mostly Black labor organizers “thugs,” according to a complaint filed against Amazon by the N.L.R.B. The retailer denied the episode.
And in November, the labor agency said Amazon had showed “flagrant disregard” for the law and threw out the results of the Bessemer warehouse vote, ordering another.
That fall, after months of gathering support, the New York union organizers delivered more than 2,000 signatures to the labor board, but they were rejected for not meeting the minimum required to hold an election. Mr. Smalls said Amazon had submitted payroll data to the board indicating that the company believed half the people who had signed cards no longer worked at the warehouse.
“After all those months of hard work, it seemed like the momentum was gone,” Mr. Palmer recalled in an interview. Between working his shifts and organizing at JFK8 on his time off, he had spent barely a day away from the warehouse for months. Some of the employees he approached were skeptical of unions or dues, or just grateful for Amazon’s health care and pay, which starts above $18 an hour at JFK8. Others seemed too exhausted and wary to even engage.
To press onward, the union leaders posted the TikTok videos, made outdoor s’mores and sang along to hip-hop and Marvin Gaye. When workers faced family crises, the budding union prayed. One fired employee became homeless, and the group set up a fund-raising campaign.
Their near-constant presence at the warehouse helped. “The more comfortable they get with us, that’s when they start opening up to us,” Mr. Palmer said of other workers.
Some union sympathizers took jobs at JFK8 specifically to help the organizing effort, according to Ms. Medina, who was among them.
Amazon countered with the full force of its anti-union apparatus. It monitored organizers’ social media, court filings show, pelted workers with text messages and blanketed the warehouse with signs saying “Vote NO” or claiming the union leaders were outsiders. The company often held more than 20 mandatory meetings with workers a day, The Times reported last month, in which managers and consultants cast doubt on the effort.
“The Amazon Labor Union has never negotiated a contract,” one presentation said. Dues would be expensive, it continued, and the union “has no experience managing this massive amount of money.”
Andro Perez, 35, works at a smaller Amazon warehouse near JFK8, where another union vote is scheduled this month. He’s leaning toward voting yes, he said, because Amazon’s mandatory meetings mostly criticized unions. He would rather his employer address the question: “What could you do better?”
The organizers at JFK8 fought back, filing dozens of complaints with the N.L.R.B. claiming that Amazon violated workers’ rights to organize. Amazon has denied their allegations, but the labor board found many to be credible and pursued them in administrative court.
By Christmas, the organizers scored a major legal win. Amazon agreed to a nationwide settlement, among the largest in the agency’s history, that said workers could stay in the buildings to organize when they were off the clock.
With that, the organizers moved their potlucks indoors, giving them more access and legitimacy. Mr. Smalls’s aunt provided home-cooked soul food: macaroni and cheese, candied yams, collard greens and baked chicken.
“What you do is you create a community that Amazon never really had for workers,” said Seth Goldstein, a lawyer who represented the organizers free of charge.
One day this February, Mr. Smalls was bringing lunch to the break room when Amazon called the police, saying he had trespassed. He and two current employees were arrested. The response may have backfired: The union’s videos of the episode on TikTok have been viewed hundreds of thousands of times.
Kathleen Lejuez, 41, employed by Amazon for nine years, said she was not a “union fan” but voted for the organizing effort to send a message to a company that she felt had lost its connection to workers. “The humanity at Amazon is gone,” she said in an interview.
In the weeks before the count, Amazon, which has consistently said its workers are best served by a direct relationship with the company, laid the groundwork for potential challenges to the election — arguing in legal filings that the labor board had abandoned “the neutrality of their office” in favor of the union.
On Friday morning inside the agency’s offices in Brooklyn, Mr. Smalls, in siren-red streetwear, sat next to Amazon’s lawyer to review each ballot. His knee jittered as each vote was presented.
The votes were tallied — 2,654 for the union, 2,131 against. With a comfortable margin secured, Mr. Palmer, Mr. Smalls and other representatives emerged into the spring light, screamed with joy and clasped one another in a tight circle.
A few miles away, at JFK8, workers were stealthily monitoring the results in between packing and stowing boxes. There was no formal announcement. Instead, a shout rose up from somewhere on the floor: “We did it! We won!”
Immigration Politics Roils Pandemic Response
A man stands at the wall that divides Mexico from the United States at Tijuana Beach.
For a brief moment last week, it looked as if Congress might actually fulfill, in part, the basic responsibility of keeping Americans safe in an emergency. A $10 billion deal was reached to restock supplies of COVID vaccines, therapeutics, and tests, using revenue from canceling previously issued relief funds. It’s ridiculous that the government needs to “pay for” lifesaving items, and worse, funding for global vaccines was left on the cutting-room floor, taking the “pan” out of pandemic and ensuring fertile breeding grounds for more mutations that will eventually come ashore.
But just when we were celebrating with the tiniest of flags Congress’s ability at least to minimally function, even that ground to a halt.
The pandemic funding vote, which the Senate attempted to squeeze in before confirming Justice Ketanji Brown Jackson, was abandoned, because Republicans sought an amendment to extend the Title 42 policy at the U.S.-Mexico border. Title 42 allows the Centers for Disease Control and Prevention (CDC) to expel migrants and asylum seekers through the Public Health Service Act of 1944, a measure initially intended to prevent tuberculosis outbreaks. It has been in effect to stop the spread of COVID-19 for two years, but the administration has announced it would end on May 23.
An amendment extending Title 42 would likely pass, as a handful of Senate Democrats also oppose lifting the order, in a rebuke to the administration. Five Democrats and six Republicans have signed on to one bill that would block the expiration without a detailed plan from the Department of Homeland Security. A separate bill from ten Senate Republicans would simply extend Title 42 until February 2025.
This is clearly an election-year proxy fight about immigration and border security. But when you break it down, it’s an astounding fight for Republicans to wage. For well over a year, Republicans have been resisting pandemic restrictions with a unified voice, from mask and vaccine mandates to school closures. They have called these safety measures an impingement on American freedom, and lauded no-restriction zones in states like Florida as a refuge from tyranny. On March 3, all 48 Senate Republicans in attendance voted for a resolution to end the federal COVID state of emergency that has been in effect since March 2020.
Yet this one pandemic restriction, this order to safeguard Americans from COVID, must stay in place, Republicans insist. Only noncitizens traveling into the U.S. at a land or coastal port of entry without proper travel documents are impacted. Though someone entering the U.S. on a travel visa could just as easily have COVID, though a U.S. citizen could also enter the country from abroad while infected, only noncitizens are singled out. Once in the country, no person should experience any infringement on their life due to the virus, Republicans maintain. But while entering the country, this one subset of travelers should be forcibly removed, for the stated purpose of maintaining public health.
“The biggest lie in Washington today is that Title 42 is a public-health issue,” said Frank Sharry, founder and executive director of the immigration advocacy group America’s Voice. “It’s a pandemic restriction for Black and brown people. This is a backdoor attempt by Republicans to end asylum as we know it.”
THE PROSPECT SENT QUESTIONS to all 15 Senate Republicans who are co-sponsors of the two bills (one, Sen. Thom Tillis of North Carolina, is a co-sponsor of both), asking them what other pandemic restrictions they support, given their explicit concern over the spread of the virus at the border. These questions were also sent to Senate Minority Leader Mitch McConnell (R-KY), and all five Senate Democrats—Sens. Kyrsten Sinema (D-AZ), Mark Kelly (D-AZ), Maggie Hassan (D-NH), Joe Manchin (D-WV), and Jon Tester (D-MT)—who joined Republicans on one of the two Title 42 bills.
Of those 21 queries, only two Senate offices responded. Ansley Bradwell, a spokesperson for Sen. Marco Rubio (R-FL), who introduced the bill that would extend Title 42 to 2025, simply sent a link to a story from Breitbart, ominously warning of the “biggest migration crisis in U.S. history” if Title 42 expires. When the Prospect explained that Title 42 is a public-health restriction designed to prevent pandemic spread, and reiterated the question of what other pandemic restrictions Sen. Rubio supported, Bradwell did not respond.
Title 42 was rather obviously imposed by the Trump administration and its ringleader on immigration policy, Stephen Miller, to essentially bar immigration at the border.
The other response came from the office of Sen. James Lankford (R-OK), co-author of the bipartisan Title 42 bill. Lankford does not support any pandemic restrictions; he has said that if the administration wants to lift Title 42, “then it must be safe enough to lift the COVID-19 state of emergency on the whole country.” But Lankford has also said that his vote last month to end the national emergency doesn’t change the need for Title 42; he wants a plan from the Department of Homeland Security (DHS) to secure the border first.
It is here where Lankford, some Democrats, and even immigration advocates are in a strange form of agreement. In different ways, they’ve all criticized the brief summary DHS has provided on how to deal with an influx of migrants after Title 42 ends as insufficient, both as policy and as politics. Advocates are disappointed in the administration’s relative silence on immigration over the past several months. “They don’t want to talk about it because it brings mainstream media coverage of the right-wing narrative,” said Sharry.
The muddle has left progressive Democrats angry and moderate Democrats exposed, and rebellious against the White House’s lifting of the provision. For their part, conservative state attorneys general are likely to bring Title 42 to a Trump-friendly judge in a bid to get it extended. A similar tactic and a court order led the Biden administration to reimpose the “Remain in Mexico” policy, which forces asylum seekers to stay outside the country in hazardous conditions while their claim is reviewed. The not-so-conspiratorial take expressed by some advocates is that the administration wouldn’t mind having to do the same for Title 42.
In response to questions from the Prospect, a White House official stressed that they introduced an immigration bill in January that addressed border security, and that the CDC is responsible for determining the status of Title 42. “DHS has been very transparent about the planning it’s doing to anticipate what the border/processing could look like” after Title 42 expires, the official added.
TITLE 42 WAS RATHER OBVIOUSLY imposed by the Trump administration and its ringleader on immigration policy, Stephen Miller, to essentially bar immigration at the border. Over 1.7 million migrants have thus been denied entry without a hearing. The subsequent declining immigration rates since the pandemic have contributed to labor shortages in key industries and harmed Americans who rely on those services.
Some of that 1.7 million is based on double-counting migrants who attempt to cross multiple times. That context is left out of the caterwauling from the right about an uptick at the border. Similarly, claims that migrant crossings are responsible for a surge into the country of the deadly drug fentanyl omits the inconvenient fact that almost all of the drugs come in through passenger vehicles and trucks.
The public-health case for Title 42 is similarly wrongheaded; leading epidemiologists cannot confirm whether it prevents COVID spread in any way. Other experts have noted that in expelling asylum seekers, border officials place them in close contact for several days, which could increase infections.
Advocates initially praised Biden for overturning several Trump policies at the border after his election, though not for keeping Title 42. The issue proved contentious and led to infighting among White House policymakers. Most of the aides who were key links to advocacy groups have left the administration in frustration.
Crossings rose after a court decided that unaccompanied minors were not subject to the Title 42 order. The administration tried to manage this, until the spectacle of thousands of Haitians in Del Rio, Texas, being brutally beaten by Border Patrol agents created a media firestorm. In response, the White House “reverted to the typical playbook,” Sharry said, by cracking down on border entries, even from countries like Haiti, whose immigrants have Temporary Protected Status. (Many Haitians are now attempting entry through the Florida Keys.)
The current perceived double standard at the border, where Ukrainian immigrants are allowed in but asylum seekers from other countries are not, has added to dissatisfaction. Cuban refugees, who are arriving at the Mexican border in large numbers, also typically are not expelled under Title 42.
Meanwhile, the conservative noise machine has seized upon statements from federal officials that as many as 18,000 migrants will cross the border per day once Title 42 ends. Lankford upped the numbers, claiming that one million migrants will reach the border in six weeks.
This has put vulnerable Democrats seeking re-election in November, who mostly want the bad headlines in their states to stop, in a tough spot. Even Democrats not on the main bill to prohibit the termination of Title 42, like Sens. Mark Warner (D-VA), Raphael Warnock (D-GA), and Catherine Cortez Masto (D-NV), have spoken out against it.
The Lankford-Sinema bill prohibits the termination of Title 42 without “a plan to address any possible influx of entries.” The nature of that plan is vague; a Lankford spokesperson would only say that the government would have to secure the border and follow the law. Such parameters mean different things to different members of Congress; the White House could satisfy Democrats on this front and still face a roadblock from Republicans, whose votes would ultimately be needed to pass pandemic funding legislation in the Senate.
So far, Republicans have only demanded an amendment addressing Title 42; if that amendment is brought up for a vote and it loses, it’s not clear whether Republicans will take down a funding deal they negotiated. Democrats will try again in the Senate after a two-week Easter recess. As pandemic funding is vital for preparedness in the event of another variant, the health of millions potentially hangs in the balance of a perennial fight about immigration. The White House official insisted that the need for funding was “urgent” and already truncated by Congress. “If we do not have treatments, vaccines, or tests,” the official said, “Americans will die from COVID whether they support or oppose the administration on immigration.”
David Dayen is the Prospect’s executive editor. His work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, the Los Angeles Times, and more. His most recent book is ‘Monopolized: Life in the Age of Corporate Power.’
Fortify your mind! Join the Prospect today
Support The American Prospect‘s independent, nonprofit journalism by becoming a member today. You will stay engaged with the best and brightest political and public policy reporting and analyses, and help keep this website free from paywalls and open for all to read. Our membership levels offer a range of perks including an opt-in to receive the print magazine by mail.
New York Times wants its reporters to spend less time on Twitter – New York Post
Thanks for contacting us. We’ve received your submission.
The New York Times wants to shield its journalists from online harassment by encouraging them to minimize their time on Twitter, according to a newly circulated memo.
Dean Baquet, the executive editor of the Gray Lady, told his employees that maintaining a Twitter account is “purely optional” after newsroom staffers reportedly raised concerns over being targeted by internet trolls.
Baquet told staffers that the Twitter policy “reset” was “absolutely not a ban,” according to Insider, which obtained a copy of the memo.
“If you do choose to stay on, we encourage you to meaningfully reduce how much time you’re spending on the platform, tweeting or scrolling, in relation to other parts of your job,” Baquet wrote in the memo.
Baquet pledged that the newspaper would bolster support for its journalists who are subjected to the “industry-wide scourge” of harassment on social media.
But the top editor added that reporters’ tweets would be monitored by their bosses.
“Tweets or subtweets that attack, criticize or undermine the work of your colleagues are not allowed,” Baquet wrote in the memo.
The new policy was panned by former Times staffer Taylor Lorenz, the social media beat reporter who moved on to the Washington Post after a high-profile departure from the Gray Lady.
Lorenz, who told MSNBC she contemplated suicide after being harassed and bullied on social media, said Times editors “consistently buy into bad faith attacks online and punish their journalists when they’re subject to … smear campaigns.”
She tweeted on Thursday that the new Times policy was “disappointing and contradictory to see.”
“This is not how a newsroom should approach the internet or social media,” she wrote.
Lorenz accused Times editors of being “more obsessed” with Twitter than “the majority of the newsroom” and that they have been “stalking down employees every reply.”
“Saying they’re going to police that even *more* is counterproductive, damaging to journalists, especially those who need to use the internet for reporting,” Lorenz tweeted.
A Times spokesperson told Insider: “What Dean is calling for is a reset in our newsroom’s approach to Twitter and other social media platforms. He’s telling our journalists that there’s no expectation that they individually need to be on social media.”
The masthead editors are more obsessed w/ twitter than the majority of the newsroom, stalking down employees every reply. Saying they’re going to police that even *more* is counterproductive, damaging to journalists, especially those who need to use the internet for reporting
The spokesperson added: “He’s responding in part to the concerns of numerous colleagues in our newsroom who told us that change was needed. But this is absolutely not a ban.”
“The New York Times is committed to promoting our best-in-class journalism wherever our audience is, including on Twitter and other platforms.”
Twitter announced earlier this week that Elon Musk, the world’s richest man, would be joining its board of directors after the Tesla boss bought a 9% stake in the company.
Musk vowed to make “significant improvements” to Twitter, which has been accused by critics — including Musk himself — of stifling free speech.
Supply Chain Hurdles Will Outlast Covid Pandemic, White House Says – The New York Times
The coronavirus pandemic and its ripple effects have snarled supply chains around the world, contributing to shipping backlogs, product shortages and the fastest inflation in decades.
But in a report released Thursday, White House economists argue that while the pandemic exposed vulnerabilities in the supply chain, it didn’t create them — and they warned that the problems won’t go away when the pandemic ends.
“Though modern supply chains have driven down consumer prices for many goods, they can also easily break,” the Council of Economic Advisers wrote. Climate change, and the increasing frequency of natural disasters that comes with it, will make future disruptions inevitable, the group said.
White House economists analyzed the supply chain as part of the Economic Report of the President. The annual document, which this year runs more than 400 pages, typically offers few new policy proposals, but outlines the administration’s thinking on key economic issues facing the country, and on how the president hopes to address them.
This year’s report focuses on the role of government in the economy, and calls for the government to do more to combat slowing productivity growth, declining labor force participation, rising inequality and other trends that long predated the pandemic.
“The U.S. is among and remains one of the strongest economies in the world, but if we look at trends over the last several decades, some of those trends threaten to undermine that standing,” Cecilia Rouse, chair of the Council of Economic Advisers, said in an interview. The problem is in part that “the public sector has retreated from its role.”
The report dedicates one of its seven chapters to supply chains, noting that the once-esoteric subject “entered dinner-table conversations” in 2021. In recent decades, Ms. Rouse and the report’s other authors write, U.S. manufacturers have increasingly relied on parts produced in low-cost countries, especially China, a practice known as offshoring. At the same time, companies have adopted just-in-time production strategies that minimize the parts and materials they keep in inventory, in an attempt to maximize returns to shareholders.
The result, the authors argue, are supply chains that are efficient but brittle — vulnerable to breaking down in the face of a pandemic, a war or a natural disaster.
“Because of outsourcing, offshoring and insufficient investment in resilience, many supply chains have become complex and fragile,” they write, adding: “This evolution has also been driven by shortsighted assumptions about cost reduction that have ignored important costs that are hard to turn into financial measures, or that spilled over to affect others.”
In the report, the administration cited its efforts to identify weaknesses in supply chains for key products like semiconductors, electric-vehicle batteries, certain minerals and pharmaceutical products, and to bolster American manufacturing through expanded federal purchasing and other investment.
“The public sector can be a partner of the private sector, rather than a rival,” the report said.
And in a blog post Thursday, Sarah Bianchi, the deputy U.S. trade representative, said that trade negotiators had been working with officials in Canada, Mexico, the European Union, South Korea, Japan, Britain and elsewhere to identify and address bottlenecks in supply chains.
But some economists have noted that making supply chains more resilient could carry its own costs, making products more expensive when inflation is already a major concern.
Adam S. Posen, the president of the Peterson Institute for International Economics in Washington, said the pandemic and Russia’s invasion of Ukraine might lead companies to locate at least some of their supply chains in places that were more politically stable and less strategically vulnerable. But pushing companies to duplicate production could waste taxpayer dollars and introduce inefficiencies, raising prices for consumers and lowering growth.
“At best you’re paying an insurance premium,” he said. “At worst you’re doing something for completely political reasons that’s very economically inefficient.”
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Where is inflation headed? Officials say they do not yet see evidence that rapid inflation is turning into a permanent feature of the economic landscape, even as prices rise very quickly. There are plenty of reasons to believe that the inflationary burst will fade, but some concerning signs suggest it may last.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
How does inflation affect the poor? Inflation can be especially hard to shoulder for poor households because they spend a bigger chunk of their budgets on necessities like food, housing and gas.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Other economists have emphasized that global supply chains are not always a source of fragility — sometimes they can be a source of resilience, too.
Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said in an interview that the world had been seeing a trend toward the decentralization of manufacturing and production, in which supply chains were moving out of China into Vietnam, Laos, Cambodia, Bangladesh, Ethiopia and other countries. That is an opportunity to diversify supply chains and bring poorer countries into the global trading system, allowing them to reap the benefits of globalization, too, she said.
Rather than reeling in supply chains to concentrate them in developed countries, she said, businesses are doing more “nearshoring” — shifting to low-cost but less distant countries — as well as pursuing risk-mitigation strategies like building up inventory.
Ms. Rouse, the White House economic adviser, said that while it could make sense to promote increased domestic production of some critical components such as computer chips, the Biden administration was not pushing to reverse offshoring entirely.
“We don’t need to make everything here,” she said. “We understand that would be excessively costly and unnecessary.”
But despite their emphasis on the public sector’s role in the economy, the White House economists recommended only modest steps that the federal government could take to strengthen supply chains. They suggested that the government help aggregate and disseminate data that could make it easier for companies to understand their supply chains and identify weaknesses. And they said the government could encourage domestic production of products that were vital for national security or other core interests. Independent experts said those steps could be useful, but were unlikely to solve the problems outlined in the report.
“The short answer is there’s no easy answers,” said Chad P. Bown, a trade economist and senior fellow at the Peterson Institute.
INTERNATIONAL2 months ago
Latvia, Estonia leave China-backed East Europe forum – wrde.com
POLITICS6 months ago
New York Times wants its reporters to spend less time on Twitter – New York Post
U.S.5 months ago
A Proclamation on Law Day, USA, 2022 – The White House
MIAMI5 months ago
Pop singer Van Hechter and super producer Villagomez team up to create a brand new summer anthem ”Love In Miami”!
ESPAÑOL6 months ago
Conoce a Rueda Empire, el exitoso productor Musical
BUSINESS5 months ago
Camara de Comercio Empresarial launches its first NFT-PUG BUSINESS collection
ESPAÑOL4 months ago
Jay-S estrena “Bailar en la Playa”, su nuevo tema promocional
ESPAÑOL5 months ago
La Beba Sajori y su nuevo material discográfico