Reprinted from hartmannreport.com
It's become a virtual religion among America's CEO class: maximize efficiency no matter what it does to customers, communities, or employees - Inefficiency, it turns out, has considerable upsides
Trader Joe's VP Marketing, Tara Miller, announced on the store's Inside Trader Joe's podcast that they will not be installing self-checkout machines in their stores. Good on them.
"The bottom line here is that our people remain our most valued resource," she said. "While other retailers were cutting staff and adding things like self-checkout, curbside pickup, and outsourcing delivery options, we were hiring more crew, and we continue to do that."
In not using everything available to them to increase efficiency, Trader Joe's is very much the outlier in America. That's because -- unless regulated -- capitalism will almost always push for maximum efficiency because that's the fastest way to maximize profits.
It's become a virtual religion among America's CEO class: maximize efficiency no matter what it does to customers, communities, or employees.
The result has been an explosion of efficiency across the corporate spectrum, leading to monopoly, oligopoly, price-gouging, a crippled small-business sector, staggering profits, devastated downtowns, and even driving today's inflation.
Efficiency, taken to extremes, can be destructive to both consumers and communities.
Think about it. If there are forty different retail stores in your small town selling a whole variety of things from groceries to books to clothing to hardware, every one of them has to do their own bookkeeping, their own banking, their own inventory and store management, their own staffing and HR.
It's inefficient, but it keeps communities alive and filled with vitality.
When you buy a book from the local bookstore they deposit those funds in the local bank, which then loans them out as mortgages for local people wanting to buy a house. The bookstore uses their revenues to pay rent to a local landlord and to pay well their local employees, who then spend that money in the locally owned clothing and grocery stores. They, in turn, pay their employees who go on to patronize other stores in town.
It's a virtuous circle. Money spent in a local economy like this can take months or even years to leave the community, enriching it in multiple ways as it continues to re-circulate from business to business, hand to hand.
It's how America's small towns and communities grew so prosperous between 1900 and 1980. It's why Reagan's 1983 decision to kill off local economies and family-owned businesses in favor of giant national corporations has impoverished so much of small-town America today.
A single Walmart, for example, can consolidate all of those 40 stores' operations and HR functions under one roof. It's far more efficient, which means it can both undercut the prices of the locals and make a larger profit for the investor class.
And it will wipe out those 40 small retailers in short order, leaving your small town depending on a single major employer, a single source for everything people want and need, and killing off the entire downtown.
Worse, every night when the Walmart closes, a store manager will push a button and every penny spent at the store throughout the day will instantly transfer to corporate headquarters in Bentonville, Arkansas. No more local funds for local entrepreneurs to start small businesses or homeowners to buy homes.
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