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ABA Criticizes President’s Choice of Venue for Jobs Speech
July 29, 2013
President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear President Obama:
On behalf of the American Booksellers Association, we are writing today to call your attention to how Amazon’s business practices are actually harming small businesses and the American economy. While Amazon may make news by touting the creation of some 7,000 new warehouse jobs (many of which are seasonal), what is woefully underreported is the number of jobs its practices have cost the economy.
For you to highlight Amazon as a job creator strikes us as greatly misguided.
As you’ve noted so often, small businesses are the engines of the economy. When a small business fails and closes its doors, this has a ripple effect at both a local and a national level. Jobs are lost, workers lose healthcare and seek unemployment insurance, and purchasing decreases. And while Amazon may now be boasting about the creation of jobs, any gains are elusive, and not a long-term solution.
The simple fact is that Amazon’s practices are detrimental to the nation’s economy.
The news this weekend that Amazon is slashing prices far below cost on numerous book titles is further evidence that it will stop at nothing to garner market share at the expense of small businesses that cannot afford to sell inventory below their cost of acquisition. In the end, monopolies are bad for consumers — and there are no examples in American history that prove otherwise.
For more than a decade now, Amazon has flouted sales tax laws in an effort to maintain a competitive advantage over Main Street businesses. To date, 16 states have passed sales tax laws to level the playing field for bricks-and-mortar businesses, and in all but three of those states Amazon (as well as Overstock.com) has fired its online affiliates in order to evade collecting and remitting sales tax to the state (two of the 16 states only just passed their sales tax laws). This has resulted in many online affiliates going out of business. Moreover, by eschewing its obligation to remit sales tax, Amazon has negatively impacted state budgets and services, as well as those of local communities.
In addition, Amazon’s continued practice of using books, both in print and e-book formats, as “loss leaders” in an effort to increase their already immense market share of the retail book trade and to up-sell large-ticket items has impacted Main Street retailers and the communities in which these stores are located in ways that can be calculated (job losses, store closures, a decrease in sales tax revenue, etc.) and in ways that simply cannot (urban blight, budget cuts affecting first responders and other community services, etc.).
All told, according to the Institute for Local Self-Reliance, every $10 million in spending that shifts from Main Street retailers to Amazon results in a net loss of 33 retail jobs. That would mean for 2012 alone — using Amazon’s own numbers about its increase in sales — Amazon cost the U.S. economy almost 42,000 jobs just last year!
At a time when Main Street retailers, including indie bookstores, show promise of recovering from the recession, we are disheartened to see Amazon touted as a “jobs creator” and its warehouse facility used as a backdrop for an important jobs speech, when, frankly, the exact opposite is true.
Conversely, the value of a local business to its community cannot be overstated — whether through job creation or in the myriad ways it gives back to the community.
We would love to continue this timely and important conversation with you. We’ll bring together a group of real job creators to meet at your favorite local, independent bookstore! And we’ll buy the coffee!
Oren Teicher, CEO
American Booksellers Association
White Plains, New York
Steve Bercu, ABA President
Betsy Burton, ABA Vice President
The King’s English Bookshop
Salt Lake City, Utah
DIESEL, A Bookstore
Santa Monica, California
Valerie B. Koehler
Blue Willow Bookshop
McLean & Eakin Booksellers
Bank Square Books
Third Place Books
Lake Forest Park, Washington
Talking Leaves Books
Buffalo, New York
San Francisco, California