As the economy continues to falter, the name of the game is product scarcity. Supply chain disruptions have left grocery store shelves bare, forced gamers to suffer console and headset shortages, and led to microchip shortages in the electronics industry. The rise in prices of consumer goods is partly the result of these shortages. Now that Republicans are drawing attention to a baby food shortage, the question seems to have been politicized: Should supply chain issues be blamed on the party in power?
The answer is that our supply chain issues are global in scope – and in more ways than one. Product shortages are caused by the fact that most of our goods are transported long distances to be used for manufacturing, sold or otherwise used. Imagine a giant spider’s web that spans the entire planet. Like a baseball smashing every strand, unexpected problems can destroy key routes that keep our supply chains running.
RELATED: Thanks to Climate Change, Supply Chain Disruptions Are About to Become the New Normal
This is why climate change in particular is expected to lead to many more product shortages. Dr. Thomas Goldsby, professor of supply chain management at the University of Tennessee – Haslam College of Business in Knoxville, told Salon that volatile and unpredictable weather will fundamentally alter our economy.
“The frequency and severity of these unpredictable weather patterns are changing consumer buying behaviors as well as the arrangements businesses are making to deal with them,” Goldsby explained. “Companies need to build more redundancy into their production and distribution networks to compensate for this volatility – and all of this comes at higher costs.”
In addition to changing consumer behavior, scientists agree that climate change will alter the physical landscape in profound and transformative ways. On the one hand, sea levels are expected to rise; even if this happens, heat waves will cause widespread droughts. Both of these things will affect the economy.
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“Take the alarming levels of Lake Mead which provides vital water to parts of Nevada, Arizona and California,” Goldsby pointed out. “Water supplies are cut and farms lack essential hydration to make them viable. The quality of life for non-farmers is also affected. I hear the term ‘climate refugees’ with more frequency.”
“Essentially, starting in the 1970s and 1980s, there was a dramatic acceleration of something that had been going on for a long time – the jobs movement.”
As is often the case with climate change, marginalized communities stand to suffer a disproportionate blow. As Shahram Azhar, an assistant professor of economics at Bucknell University, wrote in Salon last year that “climate change is having a demonstrably negative effect on the planet’s natural ecosystem (pests, coral bleaching, etc. ) which is essential for agrarian production. For working-class people, this basically means more food insecurity, malnutrition and poverty due to rising food prices on the one hand and the instability of jobs and incomes on the other hand.
It is tragically no surprise that climate change is hitting marginalized groups the hardest when it begins to shut down supply chains. These expansive supply chains exist largely because wealthy interest groups wanted to exploit cheap labor, says Richard Wolff, economist emeritus at the University of Massachusetts Amherst. This is why supply chain disruption can be described as a “global” problem in more ways than one. Not only is it heavily impacted by global events like climate change, but supply chain disruptions exist due to globalization.
“Basically, from the 1970s and 1980s there was a dramatic acceleration of something that had been happening for a long time – the movement of jobs, initially in manufacturing, although it also spread to services” , Wolff told Salon. “And the impetus was profit, as always. Profit is the bottom line. Profit is the goal of business because that’s what capitalism does. And thanks in part to the technology of the internet and the technology of air travel, which had become normalized in those years, it was now possible to take advantage of, and there were also political conditions of much cheaper labor elsewhere in the world. “
“Capitalists are always stimulated, when wages rise, to find a workaround, a way to avoid paying them,” Wolff explained.
As wages in western democracies like the United States rose, companies realized they could increase their profit margins by manufacturing different products in different places around the globe. With transport and communication costs falling, this would prove to be cheaper than using domestic labour. Once the inevitable long supply chains were created, companies could then claim that this was an inevitable consequence of the economy, as opposed to the accumulation of deliberate choices that probably would not have been made if our global economic system was not profit driven. .
“Capitalists are always stimulated, when wages rise, to find a workaround, a way to avoid paying them,” Wolff explained, noting that it ranges from automation to outsourcing jobs. In the process, they leave consumers vulnerable to disruption from environmental issues – even before the era of climate change.
“When we created dust bowls in various areas in the 1920s and 1930s, it permanently changed the landscape of this country in terms of where people live and work and so on,” Wolff explained, referring to a series of dust storms that swept through the American Midwest due to poor farming practices. “Once you’ve made it global by moving overseas, you obviously become vulnerable to droughts and floods and everything that’s happening now, not just in the continental United States, but globally. You either have to take action to avoid climate change, or you spend money to accommodate the adjustment process that’s involved.”
Wolff added, “The problem with capitalism is that these issues take time and money, and they don’t want to do either.”
For more articles from the Show on supply chain issues: