It’s the Intermediaries

Jon Michael Greer writes about what he calls the metastatic growth of intermediation, a phrase that furrowed my brow for a bit until I worked out that he was referring to the process by which supply meets demand within our increasingly dysfunctional economy. Also: what it means for workers and peasants when so many intermediaries insert themselves into that process.

Though it wasn’t among the examples cited, the food service industry was the first to come to mind, because that’s where I spent much of the last 20 years. During that time the giant food service producers began supplying much of what is served out of restaurant kitchens today. (Think your casual-dining restaurant is making that pumpkin ravioli from scratch in its own kitchen this fall? Not likely.)

Also quick to mind: the food delivery services that rocketed to ubiquity during the shut-down period of the pandemic, when nobody could go to restaurants but everybody still wanted to eat food prepared by others.

I was on my last months working in the industry at the time, managing a cafe, and these services were presented as a solution to the problem of continuing to serve customers during the lockdown.

They were not a solution. They were another service attempting to squeeze a few more pennies from an already strapped sector of the economy by inserting themselves into the supply-and-demand equation. Our margins could not accommodate them, and at a cost of 15-20% of a given ticket, I daresay few indie food businesses could.

Yet these delivery companies were everywhere, driven by demand. Many of my friends used them, believing they were helping their local restaurants stay in business. Clearly, more than a few food businesses were saying, “Sure, let’s give that a try.” So where did they find that extra 15-20%?

Understand that the largest cost of running any food-based business is labor, with the price of real estate a distant second. If your landlord won’t give you a break on rent, and you’ve tapped out — or don’t have — a line of credit with your bank — you’re probably going to look for cost savings on the labor side of your profit & loss sheet.

Which means shifts get cut, and work gets redistributed among three servers instead of five, and two cooks instead of four. It means those cooks get pressed into service as dishwashers, and the servers take on the duties of the bussers. It means exhaustion for those who remain, and impoverishment for those who are let go, not to mention poor service and long waits for the diners who come out, leave dissatisfied, and write pissy reviews on Yelp.

Many of those food service workers who were let go would have loved the chance to open their own business, my cafe’s chef among them. Little lunch counters and walk-up food joints, street carts and food trucks, in particular, ought to be relatively inexpensive options that have the added benefit of making for a vibrant food scene in any community. But even these options are not available, due in no small part to the parasitic scourge of intermediation. As JMG writes:

Go to any town in flyover country and walk down the streets, past the empty storefronts where businesses used to flourish. There are millions of people who would love to start their own business, but it’s a losing proposition in an economy in which governments, banks, and property owners demand so large a cut that most small startup businesses can’t break even. 

Once you start looking, you can’t not see it. So much of the vaunted “job creation” in our economy is really the insertion of intermediaries into the supply-and-demand equation. I’m thinking of my farming friends who employ a social media manager to maintain their online presence across the multiple platforms their customers expect to find them. The money to pay that manager is squeezed out of the produce these farmers grow, which is to say, out of their pockets. But without a social media presence, they flounder, and they don’t have time to do it themselves. They’re farmers, they already work 12-hour days.

And so it goes.

Speaking of farmers, and pumpkin ravioli, I am embracing October. I’ve been invited to go apple-picking, so I’m baking Deb’s apple cake this week. Don’t you wish you were my neighbor?

1 thought on “It’s the Intermediaries

  1. Please won’t you be my neighbor.

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