Also: The latest information on Fed leadership changes and the results of the first year of New York State bond reform.
Amazon’s biggest source of income? High fees charged to small businesses selling on the platform, report finds
In 2021, Amazon was expected to raise around $ 121 billion in advertising fees and revenue alone from third-party small business sellers on Amazon Marketplace, according to a new report from the Institute for Local Self-Reliance. On a granular level, this translates to sellers in Amazon’s marketplace returning around 34% of every sale to the online retailer.
TechCrunch and The Verge report that this is the tech giant’s biggest source of revenue, up from some $ 60 billion in 2019. Previously, Amazon Web Services (AWS) was considered the biggest ‘cash cow’ in the world. ‘business. But according to the ILSR report, Amazon’s Toll Road, “Based on analysts’ estimates of the margins Amazon likely earns on seller advertising and other selling costs, we find that Marketplace may have generated. operating profits of $ 24 billion in 2020 – far more than the $ 13.5 billion in profit Amazon reported for AWS.
Amazon disputes the report’s findings, saying in a statement to TechCrunch that the figures quoted “confuse Amazon’s selling fees with our optional add-ons,” and calling the fees they rate “competitive” with other retailers. in line. But report co-author Stacy Mitchell responds that “optional” add-ons are hardly so, given the preferential treatment Amazon’s algorithm gives to sellers who pay them. “If you are a company that makes or sells consumer products,” Mitchell told The Verge, “You are damned if you don’t sell on Amazon and damned if you do.”
Fed Happenings: Jefferson Eyed for Governor; Brainard and Powell nominations go before committee
Lots of staff movements at the Fed in the New Year. First, Bloomberg reports that the Biden administration intends to appoint economist Philip Jefferson to one of three vacant positions on the Federal Reserve Board of Governors. Jefferson, currently vice president of academic affairs, dean of the faculty and professor of economics at Davidson College in North Carolina, would only be the fourth black man to serve as governor in the history of more than a century from the Fed. Additionally, Banking Dive reports that next week Senate Banking Committee hearings are scheduled for both the re-appointment of Jerome Powell as chairman of the U.S. Federal Reserve and the appointment of Lael Brainard as the one of the two vice-presidents of the Fed (she is currently governor).
For more background on these moves and what they mean for U.S. monetary policy in the years to come, check out Oscar Perry Abello’s insightful report on Next City on the Fed’s reckoning with racial fairness. Biden administration to appoint three of seven board members, which could affect monetary policy for years to come and considerably diversify a traditionally very white and very masculine leadership. Abello’s story examines the Fed’s long-standing refusal to prioritize full employment as a means of economic empowerment for traditionally marginalized populations, and how their “color blind” approach to tracking employment numbers has allowed racial disparities in unemployment to flourish.
Now that the Fed has changed its monetary policy, Abello says, the balance is tilted slightly towards workers, especially workers of color. “The Fed has always had this information, but it never had the right framing, it never said to specifically take into account whether everyone is really at the unemployment level they should be,” Andre said. Perry, Next City board member. , who was interviewed for this story and is a senior fellow at the Brookings Institution. “I would give credit to the many advocates who have been screaming out loud waiting for someone to hear that black unemployment should be the bar on whether we have a healthy economy.”
New York Bail Reform’s first year results both approved and criticized
City and state report data from the first full year of the bail reform program that New York State enacted in 2019 and say “opponents and supporters” of the program say that numbers reinforce their views.
In this first year of the program, nearly 100,000 people were released as a result of the new reforms, which eliminated cash bail for most arrests for misdemeanors and non-violent felonies. While awaiting trial, less than 4% have been re-arrested for a violent crime, representing around 3,400 people. Two-thirds of the 100,000 released have not been re-arrested; the others were charged with misdemeanors or non-violent crimes.
Advocates for criminal justice reform, including new Manhattan District Attorney Alvin Bragg, intend to build on current legislation and pass further reforms on prosecution and sentencing for minor offenses. But Democratic gubernatorial candidate Representative Tom Suozzi told a press conference that 3,400 new arrests for violent offenses indicated a “serious problem” in the state. “These are not just statistics,” the city and state said, citing Suozzi. “This is real life stuff.” Suozzi is in favor of judges having greater discretionary power for defendants deemed to be “dangerous”.
Regarding the very different interpretations of the first-year data, City and State said, “Activists on both sides have used this data to justify themselves – it’s either ‘almost 4%’ re-arrested for violent crimes and a whopping 1 in 3 in total re-arrested, or it’s “only 4%” with a two-thirds majority of defendants not having committed any new suspected crimes. “