Short Circuiting Supply Chains
The shortage of personal protection equipment (PPE) in many countries, particularly N95 respirator masks essential to safe healthcare work, is itself the result of decades of production outsourcing. Firms such as 3M, Honeywell, and Kimberley-Clark shifted production to China and other low-income countries in search of higher profits.
The Washington Post documents that “Up to 95 percent of surgical masks are made outside the continental United States, in places like China and Mexico.” As a result, one major distributer of medical equipment noted in March, “N95 Respirators’ Est. availability is April-May. Many are manufactured in China and there could be additional delays.”
Not surprisingly, former Trump adviser and alt-right commentator Steve Bannon seized this opportunity to promote his xenophobic agenda. Nevertheless, the failure of the U.S., or any country, to produce medical emergency equipment within reasonable reach so outfits like 3M can boost profits is clearly both immoral and reckless.
The impact of the virus, in turn, soon took its revenge on the very routes by which it spread, disrupting production and supply chains in complex ways. By the beginning of March, 9 percent of the world’s container fleets were idle—and this percentage has certainly increased. Chinese manufacturing output was down 22 percent in February, according to a March UNCTAD report.
The same report demonstrates that the countries or regions most economically affected by disruptions in global value chains originating in China were (in order of magnitude): the EU, US, Japan, South Korea, Vietnam, Taiwan, and Singapore—all among the most affected by the virus in the early stages. Chinese exports dropped by 17 percent in January and February. By mid-March, the Port of Los Angeles was operating at 50 percent, and Long Beach by 25-50 percent mainly to due plant closings in China according to the Financial Times.
Squeezing Essential Workers
Government responses in the US, in particular, were designed to boost the economy in the only way both neoliberal politicians and Trump Administration “experts” know: subsidizing business and reducing its costs. In addition to the well-known pro-business bias of Trump’s $2 trillion “stimulus” package, government reaction in support of capital in the US has included a command for workers to stay on the job, combined with a tsunami of deregulation for business.
The Department of Homeland Security’s (DHS) (not the CDC’s) determination of who must continue to work as “essential” labor is so sweeping as to include virtually the entire labor-powered engine of capitalist profit. Inadvertently, of course, the DHS has reminded us of just how essential the entire working class is to the functioning of society in good times or bad.
This goes as well for the highest of high-tech outfits like Amazon where, we are constantly told, robots do everything. As some Amazon workers protest and about 30 percent stay at home, the company tries to hire thousands to fill the gap. As the New York Times reports, “For all of its high-tech sophistication, Amazon’s vast e-commerce business is dependent on an army of workers operating in warehouses they now fear are contaminated with the coronavirus.”
To ease the “burden” (i.e. cost) of regulation on business further, the EPA has suspended all environmental regulation enforcement (despite the ongoing climate crisis), while the Federal Railroad Administration has issued an emergency waiver of numerous safety regulations. The NLRB has suspended all union representation elections including those done by mail.
The Federal Motor Carrier Safety Administration (FMCSA) granted “hours-of-service regulatory relief to commercial vehicle drivers transporting emergency relief….” This of course means longer hours on the road. The FMCSA’s list of items covered as “emergency” relief is very comprehensive, including raw materials, fuel, paper and plastic products as well as direct medical supplies. Truckers moving in and out of New York City, the epicenter of the virus in the US, were told to continue as usual, but to be sure to “social distance” and to wash their hands.
Despite the economic slump, which began even before the epidemic, and the fact that the first seventeen cases in the U.S. were officially counted in January, the BLS reported that as of February, non-farm payroll employment was up, and unemployment was stable. Health care, government, food services, construction, and, of course, financial services were all up, while “employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, and information, changed little over the month.” The average hours per week increased by 0.3 percent in February.
Transport Topics, the trucking managers’ journal, wrote, “As America grapples with the coronavirus and daily life is altered, the nation‘s truck drivers are among those who are risking their personal health and doing the hard work to keep products moving to stores, hospitals and elsewhere.” The American Trucking Association (ATA) reports that truck tonnage rose by 1.05 percent in January and 1.8 percent in February, meaning that, indeed, truck drivers are “risking their personal health.”
While rail freight traffic has been down for the last couple of years, the Association of American Railroads (AAR) notes that three categories of freight were up in 2020 (chemicals, food, and miscellaneous carloads) and “intermodal volumes of the railroads serving the West Coast ports that receive the bulk of imports from China appear to have plateaued over the last four weeks, indicating that we may have seen the worst of the COVID-19 impacts on the Asia trade.”
This is highly unlikely. Indeed, by March workers on the Union Pacific and Canadian Pacific freight lines had caught the virus. The US Postal service reported 111 case of COVID 19, while over 300 workers in New York City’s transit system had the virus by April. A new “gig” economy is going viral as home delivery outfits like Instacart, Amazon, and Walmart hire by the thousands and rack-up big bucks from frightened home isolators.