Why is the supply chain fully elevated and how can we fix it?


This is the first part of a two-part series.

A family friend called me the other day to ask me why she felt like she was paying twice as much for groceries as last year and why she couldn’t always find some of her favorite items . I have also noticed that some local grocery chains are raising the prices, but they are also out of stock by 5-10% every week. In particular, small local stores that do not have the priority volume-based deals that the big chains operate seem to be the most affected. The grocery industry faces a confluence of factors that will impact costs and inventory rates for the foreseeable future, including the decline and turnover of workers, glaring wealth inequalities, l ‘rising raw material costs, multiple layers of supply chain dead ends, as well as fragile logistics. systems that are simply not designed to withstand these pressures. But it doesn’t have to be that way.

This week we will take a look at the most visible aspect of the supply chain crisis, which is work. But it’s not about scapegoating and demonizing workers for avoiding shitty jobs. In fact, Covid-19 has had a devastating impact on workers in the food system over the past 18 months. More than 90,000 farm and processing workers have been infected and at least 465 have died, while more than 43,300 grocery workers have fallen ill and at least 197 have died. These numbers do not take into account friends, family and community members who were also affected, especially in meat-packing towns that were Covid-19 hot spots. Many food system workers who have battled the virus still show long-term symptoms, and many who remain in the industry are bitter, fearful and disappointed with the pace and conditions of the job. Our supply chain and the food industry workforce have faced unprecedented trauma, but continue to crush it every day to feed us.

But the popular narrative of “worker shortages” misses the rapid turnover and disillusionment plaguing these industries. Nearly 650,000 traders submitted their notice in April 2021, and nearly 2 out of 5 traders are considering resigning and are considering new opportunities. This trend is similar to that of catering and hospitality, which also recorded a turnover of almost 5% on a monthly basis. Indeed, the pandemic has made a difficult job unbearable for many, in addition to safety and health concerns. Longer hours, irregular schedules, understaffed services and pay rates that barely cover the bills, not to mention the daily pressure. Traders had to be responsible for enforcing masks, social distancing, and store hygiene standards, in addition to building displays, storage shelves, calling out customers and managing retailers. deliveries – the things retailers actually do to stay in business. They had to deal with increasingly rude customers, harassment and physical assault. A few traders have even been shot dead by belligerent and armed customers. And retail workers continue to contract Covid-19 infections as mask warrants and safety precautions have been relaxed due to OSHA’s inaction.

And while many retailers have implemented signing bonuses, generous incentive programs, and higher pay rates to attract new workers, some of the largest and most popular food retailers haven’t. shared their benefits from the pandemic fairly with their existing workforce. Some have implemented restructuring and cost reduction measures despite the pandemic sales surge. And big retailers have even been able to grant shareholder dividends and share buybacks for wealthy investors and executives who have stayed away from the front lines, transferring massive amounts of wealth out of the pockets of employees and cashiers.

Yet the wealth and income gap for this diverse blue-collar workforce remains stark. Employer wage theft of workers accounts for at least $ 8 billion a year, almost half of all other property thefts combined, and is rarely prosecuted. If minimum wage rates had risen at the same rate as Wall Street bonuses since 1985, it would be worth $ 44 an hour today. If wage rates had increased at the same rate as productivity since 1968, the minimum would have to be $ 25 an hour. Another way to look at it is that a full-time worker earning the national median salary of $ 50,000 should earn almost $ 100,000 now, if our economic growth had continued to be shared over the past 45 years like it. was during the quarter century. after the Second World War. This represents $ 2.5 trillion in lost wages each year for the bottom 90% of workers, which includes the vast majority of the 1 in 7 American workers employed in the food system. That’s worth two and a half Afghan foreign policy debacles each year.

Retail workers may not always be familiar with these details, but the feeling of being hosed down is quite common and common. They push back and demand better wages in their current jobs, seek new careers and warn while living off their savings and stimulus checks. And they shun and shame businesses that still live in the pre-Covid world where it was okay to pay terribly, plan erratically and get away with it. And because the food industry has not systematically addressed such issues, even wonderful, large-scale companies are caught in the crossfire, unable to fill positions or meet customer needs, while other companies adopt. automation quickly that can make some retail jobs obsolete. .

Yet as a result of this pressure, along with widespread militant campaigns to raise the wage floor despite the federal government’s inaction, starting pay rates are gradually slowing down to the $ 15 minimum demanded for more than a decade. Nine states, led by Florida, New York and California, are on track to hit a minimum wage of $ 15, and several cities have done the same. Some industry CEOs get the message, including Wal-Mart, Costco, Starbucks

and Chipotle. Even McDonald’s

is no longer pushing against this new minimum wage, and earlier this year its CEO told investors “we’ll do just fine.” Or as Marc Perrone, the director of the UFCW, recently put it more bluntly, “People have come to the conclusion that they are worth more money, and that has helped raise the wage floor.

Retailers and other supply chain employers should focus on worker well-being and upward mobility, and should focus on better pay, just cause protections, stable hours, better working conditions. and benefits such as paid sick leave and vacations to attract retail workers. Employers should encourage greater democracy in the workplace and employee engagement, while ensuring that there is diversity and social equity in caps, option pools and bonuses. Congress should pass the PRO-Act immediately; unions have always been the strongest path to prosperity for working people.

But work is only part of the supply chain equation. Next week, we’ll take a broader look at the food prices, logistics, and operating systems that cripple our ability to withstand systemic crises, and offer some ideas on what we can do better.

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