Salem Political Snark

List of Salem businesses that got PPP loans is mildly interesting

The title of this blog post won't go down in the annals of provocative headline writing, for sure. But it's accurate. I toyed with other titles, like "If you're too wired to sleep, read this" or "Here's something more interesting that watching paint dry... barely."

Still, I hate to let a good PDF file go to waste, so here's a list someone sent me of the businesses in Salem that got PPP (Paycheck Protection Program) money from the federal government. The highlighted names of businesses in the list are ones that this person felt deserved attention.

Download PPP Loans in Salem

One thing that struck me was how many businesses got PPP money. This is good, by and large, though there is reason to believe that much of the $517 billion handed out by the PPP program wasn't wisely spent. Here's how a recent Slate story, "The Paycheck Protection Program was a flop," starts out.

Since this spring, the federal government has handed out $517 billion through the Paycheck Protection Program, the main lifeline that Congress threw to small and midsize businesses to help them survive the coronavirus crisis. It’s a weighty amount of money, almost two-thirds of what Washington spent on the entire stimulus package it passed in 2009 to combat the Great Recession.

Unfortunately, it doesn’t seem to have bought us very much.

Hastily crafted as the economy began to collapse earlier this year, PPP was designed to keep businesses alive and Americans attached to their jobs while the country shut down to try and squelch the pandemic. It offers employers with 500 or fewer workers low-interest loans to cover their operating expenses, which the government will forgive if they avoid layoffs. (Somewhat larger companies can qualify if they are in the hospitality industry or meet the government’s previously established small-business size standards.) For most borrowers, it’s essentially free money that they can use to pay their bills and their staff.

This week, a team of economists led by the Massachusetts Institute of Technology’s David Autor released the most detailed evaluation yet of the program’s results—and their conclusions were not flattering. The researchers found that PPP only boosted overall employment among eligible businesses by between 2 to 4.5 percent and likely saved about 2.31 million jobs, at the cost of $224,000 each.

To put those numbers in perspective, consider that there were 31.8 million Americans on the unemployment rolls at the start of this month, and that 2.4 million people filed for benefits last week alone. The country appears to have spent a half-trillion dollars and put just a small dent in joblessness. What’s more, we only paid for a temporary fix. PPP only provided loans equal to about 10 weeks of payroll expenses; now that the money is running out, some businesses appear ready to start laying off workers again.

Another thing that caught my eye was that getting free money, basically, is popular across the entire ideological spectrum. Salem businesses run by conservatives got lots of PPP money. So did businesses run by progressives. Many churches got PPP money. So did many health care providers.

It's difficult to determine which businesses were most deserving of getting the PPP money without knowing their unique circumstances.

For example, D&O Garbage got money. They do a fine job picking up our trash and recycling, but I wonder how much the pandemic affected their business. Maybe some out-of-work people decided they'd take their trash to the dump themselves. Hard to tell. And I'm sure the Illahe Hills Country Club suffered during stay-at-home orders. However, seeing them on the list was a bit of a surprise.

When it comes to the number of jobs reportedly retained via a PPP grant, the Galt Foundation led with 500 jobs. Their focus is on creating employment opportunities for people with disabilities, so it's hard to quibble with them getting PPP money. Likewise for Garten Services, which claimed 335 jobs retained.

Capitol Racquet Sports, a.k.a. Courthouse Athletic Clubs, said 368 jobs were retained. Since athletic clubs have been hard hit by the pandemic, this seems believable.

The Seaman Restaurant Corporation claimed 364 jobs were retained. It's unclear what restaurants they operate in the Salem area. A Dun & Bradstreet corporate profile says "Seaman Restaurant Corporation has 250 total employees across all of its locations." Hmmmm. The claim of 364 jobs retained would deserve a closer look if anyone was looking into this, but almost certainly nobody will.

Here's another excerpt from the Slate story.

Unless you happen to be a deficit fanatic, there are much worse tragedies than the government frittering away a bit of cash in an attempt to shore up an economy in crisis. The country isn’t facing a fiscal crisis. The feds can still borrow for cheap. It’s OK if a few businesses receive aid they don’t absolutely need, if it also means getting help to those in peril.

What’s most frustrating about PPP is that it wasted money yet still failed to reach all of the mom and pop shops that needed assistance. Its complicated rules, meant to ensure that firms spend most of their loan proceeds paying workers, make it a poor fit for some businesses, especially ones that are entirely shut down and don’t want to recall their staff.

According to the Census Bureau, a quarter of small businesses never even applied for the program, and as of now, $130 billion of PPP’s total funding still remains untouched, even as many firms are shuttering permanently across the country.

Congress could have justifiably spent even more money to build a simpler program providing a backstop to all businesses. Or it could have designed something narrower targeting businesses whose revenues plummeted during the crisis. Instead, it built something that gave a lot of money to the businesses that needed it least while hanging some that needed it most out to dry. 

I hope the Clean Energy Jobs Bill makes me pay more at the pump

We Oregonians aren't paying enough for the gasoline that fuels our cars and trucks.

Hopefully Oregon's Clean Energy Jobs Bill, also known as cap and trade, will pass in this legislative session and increase the state gasoline tax to a level that comes a heck of a lot closer to reflecting the long-term costs of the carbon pollution that is fueling global warming to increasingly dangerous levels.

A recent story in the Portland Oregonian has some good news on this front:

Almost three quarters of the revenues expected from the bill would come from increases in transportation fuel prices. The Legislative revenue office expects that to translate to about 22 cents a gallon increase at the pump in 2021, when the policy kicks in, increasing to 78 cents a gallon 10 years later and $3 a gallon by 2050.

Excellent! The higher gas prices go, the more incentive there will be for people to buy electric cars/trucks in some form: all electric, plug-in hybrid, or regular hybrid. 

My wife and I bought a 2019 Toyota RAV4 Hybrid about a week ago. We're enjoying it a lot. It gets about 40 mpg, which is pretty darn good for a decently-sized all wheel drive SUV.

We're avid environmentalists, but have resisted jumping back into the 100% electric car pond after experiencing some range anxiety after buying a 2012  Nissan Leaf (there were other more important reasons we sold the Leaf and got a Chevy Volt, though).

Thus we serve as a good example of why the Oregon legislature needs to overcome the resistance of industry groups, along with the always-irritating theatrics of pseudo-Democrat Sen. Betsy Johnson, who has proposed a bunch of amendments to the bill that would dilute its carbon-reducing impact considerably. 

Government action is essential if the world is to escape the worst effects of rapidly rising temperatures. A big reason why is the Tragedy of the Commons situation that I learned about way-back-when in my Systems Science graduate school days. 

The notion is simple.

Everybody in a town wants to graze their sheep on commonly owned land. It makes sense for each sheep owner to do this, since the grass is there for the asking. Or rather, grazing. But when everybody does what makes sense for them, the commons is over-grazed, the grass dies, and everybody suffers.

Likewise, every car and truck owner wants to do what makes sense for them. Sometimes this is good for everybody -- buying an electric car and charging it with solar panels, for example -- but usually it isn't. 

Which is why the Clean Energy Jobs Bill is crucial for Oregon.

Carbon pollution can't be solved by individual actions. Greenhouse gas emissions are rising too rapidly. Market forces work fine for pricing bananas, but not for pricing greenhouse gas emissions.

Only government can do that. So let's do it, Oregon legislature. The arguments against the bill in the Oregonian stories are very weak.

Oregon has little impact on global emissions. So what? Every country in the world could say something similar, as could every state in the United States, every city in each state, and so on. A global problem requires global action at every level. 

Oregon would be only the second state to institute an economy-wide limit on greenhouse emissions, behind California. Again, so what? Oregon used to take pride in being an environmental leader. Bottle bill. Public beaches. Land use planning. We led the way in these areas. So let's lead the way in limiting greenhouse gas emissions.

Hopefully the Democrats who control both houses of the state legislature and the Governor's Office will realize that this is the moment to take a stand for the habitability for humans of our one and only Earth.

If they fail to pass the Clean Energy Jobs Bill in the nest two weeks, the opportunity may never come again.

 

Robots could replace many of Salem's 1,000 Amazon warehouse jobs

Amazon is betting big on robots handling many, if not most, of the order fulfillment tasks now being carried out by humans in its giant packing and shipping warehouses. 

So even though it's good news that Amazon is going to build a warehouse here in Salem that reportedly will employ a thousand full-time employees, this excerpt from an article in a recent issue of The New Yorker, "Welcoming Our New Robot Overlords," gives good reason for concern about how long those jobs will last.

For low-skilled workers, warehouse jobs have seemed to be something of a bright spot. Even if fewer people are required to staff a Target or a Sam’s Club outlet, the movement of products requires a network of warehouses to store and ship goods.

Amazon—the world’s largest online retailer—currently has more than ninety thousand employees at its U.S. distribution centers, and plans to hire tens of thousands more. Workers still do the “picking” in a warehouse, using their dexterous fingers and discerning brains to take soap and coffee and tubes of toothpaste and millions of other products off the shelves and put them into boxes to fulfill the online shopping orders that make up an increasing portion of consumers’ buying patterns.

But the same factors that make warehouses a draw for labor have made them a tempting target for automation. In 2012, Amazon spent almost eight hundred million dollars to buy a robotics company called Kiva, which makes robots that can zoom around a factory floor and move tall stacks of shelves of up to seven hundred and fifty pounds in weight.

A Deutsche Bank research report estimated that Amazon could save twenty-two million dollars a year by introducing the Kiva machines in a single warehouse; the savings company-wide could reach into the billions. With such a powerful incentive, Amazon is on a quest to acquire or develop systems that can replace human pickers. When, in June, it announced plans to buy the Whole Foods supermarket chain, speculation quickly spread that the company intended to automate the grocer’s food-distribution centers as well as its stores.

Robots aren't going to replace human "pickers" overnight, given the difficulty in designing machines that can do a task that's easy for people but complex for current machines.

But that day is coming. In "Grasping Robots Compete to Rule Amazon's Warehouses," this Wired story says:

Squat wheeled machines carry boxes around in more than 20 of the company’s cavernous fulfillment centers across the globe. But it falls exclusively to humans to do things like pulling items from shelves or placing them into those brown boxes that bring garbage bags and pens and books to our homes.

Robots able to help with so-called picking tasks would boost Amazon’s efficiency—and make it much less reliant on human workers. It’s why the company has invited a motley crew of mechanical arms, grippers, suction cups—and their human handlers—to Nagoya, Japan, this week to show off their manipulation skills.

...Amazon has run versions of its challenge in two previous years. This time around, though, the retail giant has revised the rules in ways that make the competition more difficult. “I think it’s getting closer to the real conditions you would find in a warehouse,” says Juxi Leitner, who leads a team from the Australian Centre of Excellence for Robotic Vision. “They’re getting people to work on a problem they think they will need to solve to stay competitive without needing to hire anyone.”

...When asked to estimate how long before a commercial-grade robot could do tasks similar to those presented in Amazon’s contest, Rodriguez of MIT guesses five years. Robotic fingers are getting nimbler but still have much to learn. Amazon’s mechanized picking contest could be an annual event for a while yet.

A previous 2014 Wired story contains a quotation from an Amazon executive that shows the optimistic spin the company is trying to put on its major push into robotics.

But if robots move Amazon's merchandise faster while costing less overall, won't Amazon try to find ways to replace as many of those human workers as possible? Clark says that won't happen, because the rise in productivity will give Amazon the means to grow. And growth means Amazon will need to hire more people.

Well, that has held true so far. But my bet is that robots are going to be replacing workers in Amazon's Salem warehouse within five years. 

A Statesman Journal story had some glowing comments from Oregon Governor Kate Brown and Salem Mayor Chuck Bennett.

Brown heralded the move, saying in a statement: “Amazon’s continued expansion in Oregon means more jobs and bright futures for the Oregonians who work there and live in the surrounding communities."

Salem Mayor Chuck Bennett welcomed Amazon to town with a statement: "Salem is looking forward to partnering with Amazon to create innovative jobs and develop a lasting relationship with our vibrant community."

Hmmmm.

With ever more sophisticated warehouse robots being developed by Amazon, there's good reason to doubt that the people who will be hired initially for the warehouse jobs have "bright futures." And the "innovative jobs" Bennett speaks of will require considerable technological expertise.

Meaning, robots will be doing most of the work now being done by humans. The role of people will be to keep the robots functioning smoothly, and that won't be an entry-level job.