2018/10/03: sellers gain exposure to an enormous audience and higher sales. But they lose some of their ability to maintain their profit margins, putting downward pressure on wages and driving less-efficient companies out of business entirely.
In terms of the economics, which is concerned more with aggregate welfare than equity or fairness to certain individuals, that's not necessarily a bad thing. But it causes pain for those on the the losing end — especially brick-and-mortar businesses that can't compete with Amazon's fast online deliveries, hard-to-beat prices and near-infinite variety. And having created a portal through which so much commerce must flow, Amazon enriches itself by charging a toll along the way.
That's the Amazon Effect.
In a way, Amazon is doing the same thing in its search for a location for its new headquarters. It's treating prospective host cities as if they were sellers on Amazon, drawing them into a bidding war. Those cities are offering up tax breaks and subsidies, even if doing so jeopardizes their future tax revenue and drives up the price of housing for everyone else.
Amazon, and e-commerce more generally, is also disrupting the labor market. Brick and mortar retail jobs are quickly falling behind employment growth for the rest of the economy. It's not yet clear whether all the warehouse pickers and delivery drivers Amazon is hiring to support its ever growing shipping commitments will totally close that gap — especially as Amazon perfects fulfillment center robots and delivery drones in order to reduce its personnel needs in the future.
Although Amazon this week announced a new $15 minimum wage for all its employees, some research suggests that consolidating jobs under fewer large employers tends to reduce wages, not raise them.
Grocery suppliers are feeling the squeeze - big-time.
My fellow Patheos blogger Will Duquette has a great essay on his blog about the USCCB's efforts on behalf of raising the minimum wage. In A Rising Tide Lifts All Boats--Or Does It?, Will argues against using the Big Hammer to fix social problems--attempting to fix "the system" rather than helping individuals. I
In the war to win the digital consumer, Walmart is betting that an all-of-the-above strategy will win out. During a speech at AdAge Digital in New York Tuesday, Brian Monahan, vice president of marketing at Walmart.com, said that world's largest retailer remained committed to its brick-and-mortar stores and is focused on using technology to bridge the company's digital and physical assets...
A new analysis shows that the top four or fewer food companies control a substantial majority of the sales of each item, and they often offer multiple brands in each type of grocery, giving consumers the false impression they are choosing among competing products.The in-depth analysis, released by F...
Walmart now captures $1 of every $4 Americans spend on groceries. It's on track to claim one-third of food sales within five years. Here's a look at how Walmart has dramatically altered the food system -- triggering massive consolidation, driving down prices to farmers, and leaving more families struggling to afford healthy food. Read More
Yesterday's New York Times contained an enormous-three full pages-investigative report on Walmart's use of bribes to circumvent zoning restrictions in Mexico. The article pu
Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited, an examination by The New York Times found.
Walmart's explosive growth has gutted two key pillars of the American middle class: small businesses and well-paid manufacturing jobs.
Forever in blue jeans, babe? Not anymore.Photo: bburkyMy friend Tony's closet is as good a place as any to begin an investigation of Walmart's environmental impact. Tony has a pair of L
At Michelle Obama's event announcing that several retailers will open stores in "food deserts," James Gavin said he'd like to see Walmart double its U.S. store count.
A locally owned grocery in Pleasantville, Iowa. Photo: Ashton B Crew, wikimedia commonsA few weeks ago, when the Obama administration released its Food Desert Locator, many of us realized that a on
2010/10/10: this has all been well-covered for many years; this "intellectual property" madness is out of control; the big interests behind it want to criminalize everything. It's all about the protecting the business models of big businesses, and has nothing to do with protecting artists and creators. Do you really trust low-wage store clerks to act in a fair, consistent manner? Why are you not outraged at the idea of having to bring in SD cards to prove you own your own pictures, and how in God's name does that prove ownership? Anyone can copy anything to an SD card.
Local food gets the Wal-Mart treatment. One of the most important historic developments in the food economy is embodied in this statistic: in 1900, 40 percent of every dollar spent on food went to