Obama and Amazon: Booksellers Speak Out

The President pointed to the online retailer as a beacon of economic recovery — but one group disagrees

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President Obama waves at Amazon employees as he finishes a speech about the economy and jobs at an Amazon Fulfillment Center in Chattanooga, Tenn., on Jul. 30, 2013. =

In today’s business section, TIME’s Chris Matthews examines some reasons why a Chattanooga, Tenn., Amazon fulfillment center was an odd choice as a location for President Obama to speak yesterday about middle-class jobs. While the company has made admirable investments in business and has provided jobs for many Americans, Matthews says, Amazon also illustrates some of the problems with the types of jobs being added during our current recovery.

But it’s not just the business community that is questioning the President’s decision to highlight Amazon as a beacon of recovery. Soon after the speech was announced, another group became vocal in its anger—and disappointment: booksellers.

On Jul. 29, the American Booksellers Association (ABA) published an open letter criticizing the choice of location, making clear that its members believe that Amazon is hurting the U.S. economy rather than helping it:

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 practices called out in the letter are the kind of thing that booksellers can noticed firsthand. According to the letter, Amazon can afford to sell books at a loss—aiming for market share and making up the lost profit on other products—and thus undercuts fair-market pricing. In addition, they point out that Amazon avoids paying sales tax in many locations, and cite a report claiming that “every $10 million in spending that shifts from Main Street retailers to Amazon results in a net loss of 33 retail jobs,” emphasis theirs. (Though, to nitpick, that finding does not take into account whether or not there are non-retail job gains, warehouse jobs for example.)

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Booksellers have spoken up in other outlets as well. Publishers Weekly quotes a Massachusetts bookseller comparing the President’s actions to “the christening scene in The Godfather” in terms of giving his blessing to something damaging, and a sales rep in the same piece points out that the President’s identity as a writer and reader ought to help him identify with those in the book industry who are feeling the pressure from Amazon. PW also reports that many independent booksellers have joined the ABA in sending letters to the White House; none reported hearing back. At Salon, Daniel D’Addario wrote that “Amazon is worse than Walmart” because their loss-leader-focused strategy doesn’t always end up working and, as the ABA pointed out, the online retailer doesn’t always end up paying the taxes that a brick-and-mortar store does. This comes in the same week that Amazon’s pricing strategies, particularly discounts of more than 50% on several current bestsellers—perhaps part of a pricing war with Overstock.com, according to industry site Shelf Awareness—were already drawing the anger of traditional bookstores.

Amazon did not respond to a request for a comment on this issue.

The booksellers’ arguments are maybe not so far from the larger macroeconomic point about Amazon and the middle-class recovery. It’s not a contradiction that the President could praise Amazon as a source of new employment even as there’s a need for deeper consideration of what exactly the jobs of the future will look like—and, likewise, as the booksellers raise important questions about what the bookstores of the future will look like too. Those questions aren’t just about where the President speaks or even where readers buy books. They’re questions about the role of a bookstore in a community, about the impact of the new economy on the book industry and about how, given the existence of Amazon, literature can continue to provide sustenance for those who sell it as well as those who consume it.

After all, that’s the note struck by President Obama in his sit-down interview with Amazon for a free Kindle Singles download the site released today:

What we have to recognize is that those old times aren’t coming back. We’re not going to suddenly eliminate globalization. We’re not going to eliminate technology … If that’s the case, then where are the new opportunities?

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