According to an article at Axios, Donald Trump is “obsessed” with Amazon, and for a very clear reason.
Behind the president’s thinking: Trump’s wealthy friends tell him Amazon is destroying their businesses. His real estate buddies tell him — and he agrees — that Amazon is killing shopping malls and brick-and-mortar retailers.
Trump’s wealthy friends are right. Amazon is putting their shopping centers and big chains out of business. That change is generating a high cost in terms of employees cut by failing retail firms. The technological and structural advances for online retailers like Amazon give them an advantage on both price and convenience.
Which was exactly what Donald Trump’s friends’ national chains and shopping malls did when they used their structural advantages to destroy small local retailers and decimate traditional downtown shopping areas. That earlier change didn’t just close stores: it closed hotels, restaurants, and all the other bits of infrastructure that depended on the workers, salespeople, and delivery companies for income.
The people now complaining to Trump aren’t the people who owned mom-and-pop businesses. They’re the people who put those businesses out of business. Watching Amazon eat their lunch in some ways feels satisfying. Donald Trump is absolutely wrong about factors involved in this transition. His wealthy friends and their massive real estate gambles don’t deserve saving. And Amazon is absolutely not a drain on the Post Office, as Trump ludicrously believes.
But Amazon and other online retailers do represent an existential threat for American workers, a threat that goes way beyond the tens of thousands who are directly losing their jobs.
The recent closure of all Toys ‘R Us stores and the mad scramble to win a new Amazon site are absolutely connected issues. In 2017, Amazon sold more toys than all 737 Toys ‘R Us stores put together—in fact, it sold more than twice as much. Today’s 30-somethings may have fond memories of that catchy jingle and the sign of Geoffrey the Giraffe when they were kids. But that nostalgia hasn’t been enough to drag them out of their homes to take their own kids to peruse physical shelves.
For the wealthy executives and real estate speculators, America’s increasingly empty retail space represents a wealth crisis. Not only are fewer and fewer of their assets generating revenue, but it’s harder and harder to justify charging remaining retailers traditional rates for space when there is empty square footage on every corner.
But for America’s workers, this is just another transition in a series that have had the same result each time: Fewer jobs, lower pay, decreased benefits, and higher pressure to perform. While 33,000 people may be losing their jobs as a result of Toys ‘R Us closing, those jobs are a fraction of those who lost their positions when Toys ‘R Us and other chains shuttered local stores and toy departments at local retailers. Consolidated purchasing and distribution allowed such chains to undercut local retails, not least of all because they simply paid out less money to fewer workers.
The movement from local retailers, to national chains, to big box stores, to online has taken away jobs and opportunities at every level. And it’s not just a matter of the direct effect on workers, or the secondary effect on those who were connected to the company commercially. The concentration of wealth at each level of this transition has created a huge effect on communities.
Far more than closing coal mines or a decline in manufacturing, the concentration of wealth resulting from retail transitions has shifted funds to fewer and fewer locations. That change affects both infrastructure and culture—after all, few companies put their names on stadiums that are not in their headquarters’ town, and CEOs rarely join the board of arts councils outside the city where they live.
It’s extremely unlikely that the shifts in retail are done. There will be even more of a push for efficiency, streamlined processes, and increased productivity—meaning fewer people. It’s one of the biggest reasons that the United States should be seriously studying universal basic income, free college education, and universal health care. Those ideas may seem in some sense anti-capitalist, but with the forces of the market pushing us closer and closer to a wealth singularity, they’re the only steps that can save capitalism.
Unfortunately, the remedies now being perused by Trump and his friends are just as likely to be effective in reversing these trends as they have been at “digging coal.”
Trump tells people Amazon has gotten a free ride from taxpayers and cushy treatment from the U.S. Postal Service.
Actually, the Post Office has been a huge beneficiary of Amazon and other online retailers. It’s generating record levels of revenue, adding jobs, and even adding additional delivery days. But that’s unlikely to stop Trump from finding some way to punish Jeff Bezos for having more money than Trump.