Melissa Harris-Perry: Welcome to a brand new week on The Takeaway. I'm Melissa Harris-Perry, and thank you for joining us. Hey, we've got some very good news about the show to share with you, but you have to wait until the end. Trust me, it's worth the anticipation. First, let's get to the conversations.
We begin today with some questions. Is your favorite toothpaste still available at your local drug store? Have you been able to replace your kids' worn school shoes? Are you still stocking up on paper towels? In short, how's the supply chain treating you?
Don: Hi, this is Don McGreevy from Columbia, South Carolina. I've had a problem with shoes. I always had problems getting shoes wide enough to accommodate my feet and the orthotics I need. I recently went in search physically by phone and online and finally found what I hope will be a good fit because I was told that every turn that there were supply chain issues with shoes.
Kelly: This is Kelly from Oviedo, Florida. I have pet ducks and I've been surprised that dried meal worms have not been available due to the supply chain problem. Also, my dog uses ear drops on a daily basis to avoid infections due to allergies. The ear drops are unavailable currently with no end in sight.
Kevin: I went to IKEA to get chairs for my new apartment and when we got to the stock area, the entire aisle was empty. It almost felt like a ghost story. Oh, my name is Kevin and I'm from New York city.
Melissa Harris-Perry: It's pretty clear that many of you already know this, but just in case you haven't personally encountered it yet, the global supply chain is a bit of a mess. The challenges this mess is causing has transformed local reporters into macroeconomics 101 professors on the evening news. Check out this helpful mini-lecture from ABC affiliate WFAA in Texas.
Speaker 5: Goods are made overseas, then loaded into shipping containers and put into cargo ships. Ships arrive at a port to dock. Workers and crews unload the huge containers of goods and prep them for transport via truck or train. The containers arrive at distribution centers for major retailers and shippers like Walmart and UPS. Then, the goods get sent to their final destinations, like retail stores, where you the consumer can buy them.
Melissa Harris-Perry: These days, the reality of our supply chain is not nearly this clear-cut.
Derek Thompson: Name apart, and it is at least partly broken.
Melissa Harris-Perry: This is Derek Thompson, staff writer for The Atlantic. He joined The Takeaway to help us understand the complex issues causing shortages on store shelves and slowdowns in services.
Derek Thompson: We can start with the container ships that we know are bobbing off the coast of Los Angeles and Long Beach in California. We have had many shots and photographs of those container ships that have created a traffic jam. That traffic jam is creating further traffic jams in the American interior because of the container ships, essentially, that can't be unloaded, you have trains that are backed up. Because the trains being backed up, you also have truckers that can't fulfill their duties.
You have a 60,000 person truckers shortage in the United States. This is a long ongoing shortage that has slammed up against the reality of the pandemic. Then, finally, you have an overall labor shortage in the US for a variety of reasons. Just about everywhere you look in the supply chain, from the international containerships, to the domestic rail, to the American truckers, to the people who put the stuff on the shelves in the CVS and Walgreens, you've got a shortage of just about everything.
Melissa Harris-Perry: A shortage of just about everything. I just got comfortable with in-person grocery shopping less than six months ago. Fully vaccinated and always masked, I've really enjoyed selecting my own produce again, but I am not ready to go back to the madness of American panic shopping we experienced in the spring of 2020.
Speaker 7: Well, just a crazy scene at a grocery store where toilet paper has been in high demand.
Speaker 8: Surveillance video shows a stampede of customers clearing the shelves.
Speaker 7: Fights over toilet paper breaking out in grocery stores and shelves run empty.
Derek Thompson: That, as I understand it, was a totally different situation. Maybe I should state the thesis, a statement right here. There is not one supply chain crisis. There are many supply chain crises that, for the purpose of headline writing, we just call a supply chain crisis. For toilet paper, that was an entirely different situation. For toilet paper, as I understand it, the problem was that toilet paper manufacturers and distributors were used to distributing both to residences and to corporations.
When the corporate demand for toilet paper dried up because no one was going to offices, then that toilet paper supply was not efficiently redirected toward households by sending all of it to the CVSs and Walgreens of the world. A totally different situation explained the toilet paper crisis, which is distinct from the used car crisis, which is distinct from the semiconductor crisis. There's a bunch of different stuff that's going on. I do not in any way blame casual listeners, or even frankly sometimes experts, for not understanding exactly every single part of this incredibly complex chain.
Melissa Harris-Perry: There is more than one supply chain and more than one supply chain crisis. Got it. Feeling frustrated and confused about all of this is pretty reasonable given the complexity of the issue and the number of different sectors it's affecting. In fact, the complexity can lead us to wonder if these shortages are real or just a convenient excuse for poor service and high prices. It's a concern expressed by Erin, a listener who called us from Northern California.
Erin: I'm a restaurant owner. At first, it was PPP supplies. Then, it was paper products. Now I'm having major issues with certain products like chicken, fish, and especially appetizers from distributors selling pre-made frozen items. Super frustrating. Should be noted that I want to, but I'm having a hard time trusting the suppliers. I feel like I'm over a barrel and they can raise prices and tell me that that is because of supply chain issues.
Melissa Harris-Perry: Erin, I totally understand your skepticism. I've been wondering the exact same thing about the substantial increase in the price of used cars. My family's in the market for a reliable but low-cost pre-owned vehicle, but the sticker prices-- Now, according to consumer reports, the increase in used car prices is not a case of price gouging local dealers. The most recent consumer price index report shows used car prices are up almost a full third over the same time last year. I asked The Atlantic's Derek Thompson why the price of used cars has jumped so notably. After all, used cars are not sitting in the shipping containers bobbing in the harbor.
Derek Thompson: The supply chain crisis is not just one thing. It's not like a traffic jam that's been created because there's one accident. It's like a traffic jam where you can see cars being backed up along the highway for 17 miles and you have no idea what exactly is causing it because there might be so many different things that are causing it. For used cars, let's just take that one very specifically. The issue with used cars, in many cases, is that during the pandemic you had a lot of rental car companies sell off their cars because no one was buying rental cars.
It created, when the economy opened up, a road jam as everyone was trying to buy back used cars, including the Hertzs and Nationals of the world that you're now competing with. You can't find a used car that previously wouldn't have all this competition from the Hertzs and Nationals trying to stock up on all the cars that they sold off when no one was traveling. That explains the used car situation. There's a bunch of totally random, extremely specific supply chain crises all over the place that essentially exacerbate what from the media sometimes looks like merely a container problem.
Melissa Harris-Perry: Buying a used car has gotten more expensive because of one part of the broken supply chain. As Rob, who called us from New Jersey, has recently learned, another part of the supply chain crisis is making it much slower to repair a car.
Rob: It took two weeks for my mechanic to get a door switch that he thought would take two days. He told us that he was told that there were only three available in the country.
Melissa Harris-Perry: These shortages are annoying, but are they truly a crisis? In other countries, even those with high GDPs, supermarket shelves aren't stocked and stacked in the way that they are in the US. The notion of how much should be available for purchase, it's just really very different in other places. There is no nation in the world except the US where storage shelves grown under the weight of so many products in so many varieties.
High-income Americans may be used to choosing any pair of sneaker and any color combination we prefer, clicking "add to cart" and finding a Zappos box on our front porch within 48 hours. We don't just want breakfast cereal, we want to make a choice between 14 different kinds of cereal. Even as we're defining multiple supply chain crises, I have to wonder if it's even a crisis at all. Especially since all of this abundance contributes to plenty of waste, which was the story of the 2017 documentary, Wasted! The Story Of Food Waste.
Speaker 11: In the United States, 40% of the food we produce is going to waste.
Speaker 12: Food production is the single biggest cause of deforestation, water extraction, biodiversity loss.
Speaker 11: More and more people are concerned about climate change. One of the biggest contributors to greenhouse gases is the food that they're throwing away.
Speaker 12: We are literally taking food out of the mouths of the hungry and sending food waste in a landfill. That is crazy.
Speaker 13: We don't need to produce more. We need to act different.
Melissa Harris-Perry: Despite the dramatic documentary music and convincing statistics of impending global doom, Derek Thompson offered a more sober response to my consumption angst.
Derek Thompson: I have a lot of friends that I would consider of my politics relatively liberal, who do feel like a lesson of this pandemic is that we should consume less. I'm sympathetic to that argument. At the same time, what strikes me is that it'd be much better if we could find efficient and non-climate destroying ways of making enough. I would love us to pursue and think very seriously about an abundance agenda, not a paucity agenda. To find ways to make enough of everything that people need, rather than force people to only consume or ask that people only consume just as much as they can get by consuming.
When it comes to something like American cereal, yes, there are a lot of different kinds of American cereal, that's true, but I'm not sure that that's a moral crisis. I think it's wonderful that there's so many different kinds of cereal that people can choose from. It's not entirely clear to me that the abundance of American cereal is creating, is directly and uniquely responsible for any particular environmental crisis. I would love us to look at this supply chain prices. Rather than think, oh, maybe we should all live a more sustainable Hasidic, homespun lifestyle that reduces our dependency on goods that activate a global supply chain, sure, you can ask for that, but it's never going to happen.
American culture is not going to change in a dime. It would be better if our response to the everything shortage that we're experiencing is to have a policy that makes more of everything that we need. For example, it seems very clear to me that we need more containers, which carry more than 90% of the world's traded goods. Let's make more containers, if that's the crisis. We probably need more semiconductors for cars. You seem to be dealing very specifically with the used car situation, which would be ameliorated by the manufacturing of more cars, not only for people in America but around the world.
Let's think of ways to build more semiconductors that everyone who wants to drive can drive a hopefully efficient car that doesn't emit a lot of gas, and hopefully it's either a hybrid or electric vehicle. I started ranting a little bit in response to this question. It's something that I've thought about a lot. Rather than seek a shortage policy, I want us to seek an abundance policy and do so in a responsible way.
Melissa Harris-Perry: Derek's indication, open abundance policy, despite our current experiences of shortage, is provocative and maybe a bit counterintuitive. I wondered if there's any historic precedent for the supply chain issues we're facing. Perhaps if we faced this trouble before, our history might also give us a roadmap for getting out. Derek does not see clear mirrors in a prior era.
Derek Thompson: There's lots of ways in which a variety of economic indicators that we're seeing today are mildly reminiscence of the 1970s. I don't want to draw this analogy too tightly because the 1970s will conjure images of stagflation and gas lines. We don't have stagnation, the economy is growing, and we don't have gas lines. That said, we have a couple other things.
We have a shortage. The oil crisis was, in many ways, a natural resource shortage. We have a little bit of inflation. We'll see how much that inflation sticks around. We have more business dynamism. We have more people starting companies and they have in any decade since the 1970s, 1960s. We also have wages rising for low-income Americans at a very rare case for the 21st century. Wages are rising for low-income Americans in a way that actually looks much more like the middle/end of the 20th century. I would say that in a variety of ways, both good and bad, we are seeing little tendrils of the 1970s economy perking up in 2021.
Melissa Harris-Perry: All right. How about the question on everyone's mind, heading into the holidays? Will there be toys on the shelves in December?
Derek Thompson: There will be toys in the shelves in December. They just might not be the toy that you want or your child wants. My advice to parents, I know, I'm sorry to say something so terrifying and so Halloween-ish. Speaking of Christmas in October, for years, we've complained about Christmas creep. The idea that Christmas decorations enter stores in late November, early November, late October. This year, I think we should practice Christmas creep as a shopping strategy.
We should think very, very early about what our kids and loved ones want and try very hard to buy it for them as soon as possible, because I absolutely do believe that while the supply chain prices for variety of reasons is not going to necessarily last for another six months, another nine months, it's definitely going to last another two months. For that reason, I think that we should be very diligent about making those Christmas lists a little bit earlier this year.
Melissa Harris-Perry: Even as Derek counseled Y shoppers to begin purchasing holiday gifts as soon as possible, many of you call to tell us that you're avoiding supply chain issues by reducing or forgoing gifts altogether.
Rebecca: Hi, this is Rebecca from Fife, Washington. Between the supply chain issues and how our overconsumption is affecting climate change, my family has been discussing doing activities or maybe a trip as gifts this year instead of buying more stuff. For example, doing a glassblowing class or going for a snowboarding trip, instead of more things.
Lisa: I've been thinking a lot about our shopping during this upcoming holiday season and have decided to double down on our family focus on meaningful gift giving. Purchasing from locally owned businesses, from artists and crafters on Etsy, getting more experiences and things, and just buying less. We hope the supply chain problems will be a non-issue for us, while at the same time still creating some holiday magic. This is Lisa from San Jose, California.
Melissa Harris-Perry: I so appreciate everybody who called with these terrific suggestions. While options like planning early or reducing consumption are good ways for individuals and households to avoid some of the worst problems of the supply chain, the possibility of a lean Christmas has meaningful consequences for the economy. Of course, ruining Christmas is never good politics. Republican lawmakers and conservative columnists want to hear from top officials in the Biden administration. They've increased calls to compel congressional testimony from Gina Raimondo, the secretary of commerce, and Pete Buttigieg, secretary of transportation.
In a particularly scathing piece for The Hill, columnist Joe Concha argues that media has spilled more ink about Buttigieg's newborn twins than about his responsibilities as secretary of transportation to address the shipping container crisis. The trembling politics of a Christmas time supply chain crisis undoubtedly prompted President Biden to address the nation late last week. The president focused on a series of public-private partnerships that will ramp up national freight services to a 24-hour operation.
President Biden: With the holidays coming up, you might be wondering if gifts you plan to buy will arrive on time. Today we have some good news. We're going to help speed up the delivery of goods all across America. The Port of Los Angeles announced today that it's going to begin operating 24 hours a day, seven days a week. This follows the Port of Long Beach's commitment to 24/7 that it announced just weeks ago. This is the first key step toward moving our entire freight transportation and logistical supply chain nationwide to a 24/7 system.
Melissa Harris-Perry: Executing this 24-hour strategy may prove challenging given the unprecedented labor market, something that Derek Thompson addressed in our conversation.
Derek Thompson: You see not only more Americans quitting than anytime on record, 3% of Americans quit last month, 7% of restaurant and hotel workers quit just last month. That's one out of 14 people working in a hotel, restaurant or bar. You definitely are seeing an enormous amount of churn in the labor market. Churn tends to be really good for wage growth. If you are in a labor market where everyone is terrified of quitting their job because they have no idea if they can find work outside of wherever they have to be employed, well, then your boss doesn't need to give you a raise. Does he, or does she?
He or she can I just say, "You're going to stick around. I'm not going to give you a raise ever because you're basically stuck here." Well, people are definitely not stuck anywhere. They can quit and find job openings in many different sectors of the economy. That's why I think you particularly see labor churn in places like restaurants and hotels. If you're working for a small restaurant in North Carolina that's paying you, I don't know, $11 an hour, I don't happen to know what the minimum wage is North Carolina, but if they're paying you $11 an hour, you walk down the street, you see that McDonald's is going to pay you $15 or $20 an hour, why wouldn't you quit?
You'd be crazy not to quit. Of course, you should quit and get that job that's going to pay you 30% more or 40% more. This is what's happening. Of course, it is good for workers overall. It is difficult for bosses and employers. I'm not one of these people who has absolutely no sympathy for bosses and employers. Running companies is a really important part of keeping the American economy going. They are suddenly having to deal with all sorts of changes of worker expectations in this new normal. Raising wages is a good thing for just about everyone.
Melissa Harris-Perry: Thank you so much for joining us, not only to understand some of these core aspects of what's happening in this moment, but to think some big thoughts about our economy. Derek Thompson, staff writer at The Atlantic.
Derek Thompson: My pleasure. Thank you.
Jody: This is Jody Pinion from Charleston, South Carolina. I have definitely started my holiday shopping already. I do most of my shopping online. I'm very concerned about getting everything I want for my family on time. I'm even worried that some of the items won't be available at all.
Jamie: This is Jamie calling from Vashon Island, Washington. Our family chose to stop doing Christmas many years ago. Our two sons jested that we no longer be part of the consumer realm and that we begin to create our own celebrations, and so we have. Now we gather to celebrate the changing of the seasons, the coming of light, and to share our gratitude for one another.
Keith: Hi, my name is Keith. I'm calling from San Francisco, California. I buy presents all year long for people. When I see something that I think they'll like, I get it and I set it aside, and sometimes I forget, so some people get off the present. I have a reputation to maintain as a good present-giver and the best gay uncle, guncle that they have.
Elizabeth: Hi, this is Elizabeth Pavlica from Minneapolis, Minnesota. I'm the worst holiday shopper and always wait for the last minute. This year, I'm not taking any chances with empty shelves and supply chain issues. My holiday shopping is almost done.
Lisa: I've been thinking a lot about our shopping during this upcoming holiday season and have decided to double down on our family's focus on meaningful gift giving. Purchasing from locally owned businesses, from artists and crafters on Etsy, getting more experiences and things, and just buying less. We hope the supply chain problems will be a non-issue for us, while at the same time still creating some holiday magic. This is Lisa from San Jose, California.
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