Economy of Shortages & Wealth Inequality 📭

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Small Business In The Economy of Shortages

We’re living in the economy of shortages. 

The Great Food Shortage

At its start, the pandemic brought us images of vast trenches of rotting onions, piles of abandoned produce, and lakes of wasted milk, dumped by farmers who no longer had restaurants to buy their products. 

But over the course of the pandemic, small businesses have faced constant snags when ordering from major produce and specialty food purveyors. The way that the vendors treat small businesses has been overwhelming and crazy. Most of them have raised prices, and their minimum order is now higher than it used to be. But for small businesses, being forced to spend hundreds of dollars on a minimum order makes it hard to turn a profit.

Not just this, but the inconsistency with which ingredients are available is also frustrating. Local food is not even local anymore. Often restaurants will order something local and when the delivery box will come it’ll be from another state or even country.

The Great Material Shortage

When indoor dining was shut down and restaurants pivoted to outdoor seating, they were required to outfit their sidewalk spaces with reflective tape to protect them from passing cars. Homeowners with newfound WFH freedom, tried to rebuild/redecorate their houses and patios. Construction companies were running record orders to build isolated workstations and office rooms. Only the materials were near impossible to find. 

The material shortage has been so bad that restaurants couldn’t even find reflective tape. The plywood needed to build outdoor patio is exponentially more expensive than it had been in 2019 — the price of lumber was, for a time, sky-high, spurred by a housing boom, renovation projects, and the fact that while demand is extremely high, many mills shut down temporarily to institute new safety measures.

These shortages aren't just limited to the U.S. The U.K. and other European countries are also facing a food shortage. Recently, Bloomberg projected the global auto industry to lose $61 billion of 2021 sales due to chip shortages. Supply chain disruptions and lockdowns around the world coupled with labor crunches are the main reasons for the economy of shortage. 

Influencers and the Wealth Inequality

Plenty of the influencers clogging our TikTok and Instagram pages are people who still can’t legally drink, but the savvy required to make it online is distinctly corporate. Creators are drafting contracts, negotiating pay for nebulous freelance assignments, and sending stern follow-up emails — tasks Millennials didn’t master until college.

But do these skills and savviness translate to wealth equality? 

A report from UK-based influencer marketing agency - SevenSix, found that 37% of influencers surveyed said the fees they can charge can decrease because of their ethnicity. And 99% of those influencers were people of color. 

Just like how the child who’s a double legacy at Harvard has a leg up in college admissions, the same goes for the influencer born into privilege. White creators have a built-in network of lawyers; they are better primed to know where to look for secrets of social media algorithms, payouts, and influencer sponsorship deals. Meanwhile, BIPOC influencers are left to navigate a new space that is a breeding ground for the same pay inequality and discrimination that contaminated virtually every other industry before it.

Collab Crib, TikTok’s first-ever 9-member Black content house, says creating a unique post on their accounts can start at $50,000, which works out to about $5,000 per creator. By comparison, Addison Rae is said to earn over $69,000 per sponsored Instagram post, while the Clubhouse Beverly Hills can rake in about $1.3 million for group content.

Their fame stems from an algorithm that may favour white creators, with TikTok facing consistent charges of racial bias in its algorithm and content moderation. For every Shawn Mendes and Dixie D’Amelio, there are hundreds of BIPOC creators who get bogged down by predatory managers and racial inequalities. Their accounts are also heavily monitored, with Kenny Knox losing a Target gig for using the N-word in a recent video. Other white influencers like Felix Kjellberg appeared to get away with worse, including anti-Semitic jokes, filming dead bodies, and throwing un-masked parties during the coronavirus pandemic.

3 Things I Wish I Knew Before Starting My Business
To build a business that lasts for the rest of our life, it has to be extraordinary. But how do we determine that the great business idea we just got is actually a great business idea?

Biden's $25B Small Business Plan

Build Back Better has plenty of goodies for small businesses. 

The $3.5 trillion budget reconciliation package--also known as President Biden's "Build Back Better" agenda -would inject $25 billion into small-business-related programs.

The bill would allow the U.S. Small Business Administration to make its popular 7(a) and 504 loans directly, instead of through a commercial bank. It allocates about $4.5 billion over 10 years for 7(a) for direct lending, and $2.8 billion over 10 years for 504. Further, the bill allows for 7(a) loans of up to $1 million for manufacturing companies and up to $150,000 for other small businesses. 

The new bill would also create SBIC subprograms, called venture small business investment companies (VSBICs). They would invest $9.5 billion in "underserved markets and critical industries” and allocate another $20 million for a mentorship program for less experienced fund managers.

Shorts ⏳
  • Apple with Putin - Apple and Google shut down a voting app in Russia meant to help opposition parties following President Vladimir Putin's directive. 
  • TikTok bans theft trends - A new trend on TikTok dubbed "devious licks" which requires students to steal supplies from schools (including microscopes and Covid tests) has been banned by the app. 
  • Netflix deal for Dahl - Netflix has bought rights to all the works of Roald Dahl with plans to turn them into live-action films, TV series, games, theatre and consumer products.
  • UK's A.I. Plan  - The U.K. government released a 10-year plan to make the country a global “artificial intelligence superpower”, rivalling the likes of the U.S. and China.
  • The rich lonely guy car - This startup's $18,000 electric car has only one seat.
  • France for Startups - France ranks first for small business survival in Europe with 70% of startups in the country still in business after 5 years. 
  • Iceland for Women - Iceland elected Europe's first female-majority parliament with 33 out of 63 seats being held by women lawmakers. 

Stash Recommends: Tools to Explore
👨🏽‍💻 LANSA: Visual LANSA’s unmatched hybrid low-code development platform enables the rapid building, deployment, and operation of the apps that make your business run.

🐞 ShakeA bug reporting tool for mobile apps that helps testers to report bugs easier and enables developers to solve them faster.

🎤 GitPitchA specially designed Markdown presentation tool to create slide decks for conferences, meetups, and tech training.

🧦 Shadowsocks: An innovative tool that serves as a highly secure socks5 proxy. The tool has been designed for providing protection to your internet activity.

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