Wednesday, October 24, 2018

Party For Your Right To Fight

Whether wasting valuable resources or being a brutal employer, Party City is a corporation that gives us very little reason to celebrate

Image by by pixel2013

In March 2013, the Northeastern retailer iParty was bought out by its much larger competitor, Party City.  While the demise of iParty can be attributed to various factors, the final blow came from Hurricane Sandy, which arrived in the company’s main market at the end of October 2012, the biggest time of year for party suppliers.  Sandy was the second-costliest storm in U.S. history at the time, temporarily wiping out the economy across multiple states.  The relatively small 54-store company was swallowed for $38 million, or the amount of gross profit that Party City currently makes in about three months.  In other words, Party City acted as something that we can expect to see a lot more of in the coming decades: a climate change opportunist.

All signs indicate that this is a cycle that the brand intends to perpetuate moving forward.  Their entire business model is based upon using resources as quickly as possible, with inevitable environmental damage.  The sooner that a plastic cup breaks or is otherwise thrown away, the sooner a consumer will buy a new one, with the entire mining, manufacturing and transport footprint (much of which the company controls) sitting within it.  This is another way of saying that the Party City business model is to run themselves out of business as quickly as possible, by bumping up against ecological boundaries that prevent them from continuing the frenzy (the hurricanes, after all, now point towards the stores that they’ve acquired).  The first boundary particular to a party supplier might well be helium. As it is a non-renewable resource with a multitude of important uses, the helium balloon business is both unsustainable and irresponsible.

The modern balloon industry has grown in recent decades with the help, essentially, of massive public subsidies.  In 1996 the U.S. government decided to begin
selling off a giant helium reserve that it had been building up for the previous seven decades in Texas, known as the Cliffside Storage Facility.  Distributors were able to buy helium at about half the market price, discouraging them from investing in their own prospecting. Under current conditions, the reserve will be sold out or privatised by 2021, when today it provides some 30% of global supply.  Since 2013 the reserve has been selling its diminishing helium using a controversial auction system that has allowed huge industry players to buy entire offerings and shut out competitors.  At the most recent auction in August (the last one open to non-government users), prices jumped 135% over the previous year, driving costs up throughout the supply chain.  U.S. imports of helium (coming from second largest producer Qatar, at 32% of worldwide supply) went from zero or trace amounts in 2011 to an estimated 10 million cubic metres by 2015.  This is a relatively small figure, but a telling development in a country still producing over half the global total.

In the summer of 2017 all exports from Qatar were
temporarily blockaded by surrounding Middle Eastern countries over political disagreements, leading immediately to a shortage.  In a move somehow reeking both of desperation and corporate deference, last year the House passed the Helium Extraction Act, that allows public land to be leased for helium extraction under the same “streamlined” terms as natural gas and oil drilling.  Helium production is mostly a byproduct of gas drilling (which today often means fracking), and while it can be obtained through other methods it is generally not financially worthwhile.  This means that using helium based products often financially supports the fossil fuel industry. The growing climate movement against fossil fuel infrastructure and investment ($6 trillion of endowments and portfolios have been divested from fossil fuel companies so far) poses a further risk to helium supplies and prices.  In 2012 John Lee, chairperson of the UK balloon industry body NABAS, claimed that the problem was so severe that by 2020 party balloons filled with helium could be a relic.

So it is perhaps not surprising that the helium world has been discussing bottlenecks in supply for much of 2018.  Global forces finally outstretched Party City’s corporate reach in August, when it was forced to reluctantly allow its employees nationwide to limit balloon sales where necessary.  This rationing is still in effect months later with no indication that it will end anytime soon. Exact figures on how much of the total helium supply is used for recreational balloons are difficult to come by (although the National Research Council described it as
“significant”), with most statistics mixing their portion in with weather balloons and blimps.  But what is not in doubt is that Party City is a major component.  They regularly describe themselves, not unbelievably, as the world’s market leader in party goods.  Their subsidiary Anagram is responsible for 60% of the global mylar market (the shiny foil balloons made from non-biodegradable NASA grade nylon), popular because they are more detailed and float longer than conventional latex balloons.  Any lack of helium for this use, however, is the least of our problems.

Concerns over a stable supply of helium don’t seem so insidious when you learn that the two largest uses for it are MRI machines and scientific research, responsible for around
one third of all demand.  These fields rely on liquid helium’s extremely low boiling point to cool superconductors, and there is no substitute material.  Fourth-generation nuclear reactors, that many believe will play a vital role in decarbonising the electricity supply and disposing of nuclear waste, also rely on helium as a coolant.  The element is used in the fibre-optic cables that make the internet possible, semiconductor chips found in modern tech, welding, leak detection, diving, space shuttles, airbags and (perhaps of most concern to the U.S. government) heat-guided missiles, among other military functions.   Many of these applications require helium that is at least 99.99% pure.

Party industry mouthpieces
located in Europe claim that they are actually supporting medical and scientific facilities by selling balloons: these industries capture escaped helium when filling their instruments, and sell on the air-contaminated “balloon gas” product.  This recapturing of helium by the large scale industrial users is, according to the U.S. Geological Survey, rare in the United States (perhaps because the artificially low price of government helium made it not worth the effort).   The Connecticut-based distributor for Party City, Praxair, does sell a 97.5% helium blend intended for balloons, but it also sells multiple pure varieties for the same purpose, suggesting that there isn’t enough of the balloon-grade stuff to satisfy party companies.  Even if more impure helium was available, distributors would need to invest more money in an almost completely separate supply network.  It therefore seems reasonable to assume that the majority of floating Party City balloons, if not all, are competing directly with hospitals and science labs.  Scientists have expressed frustration at such frivolous use of the gas, with Nobel Prize winning helium expert Robert Richardson suggesting that an accurate market price for a helium filled balloon would be around $100.

All industries in the business of turning the natural world into waste respond to talk of scarcity in
the same way: technology will improve, expensive reserves will become financially viable, and we will continue scouting the globe for new sites regardless of the effects on the people who live there.  Every time we believe these claims in order to justify current consumption patterns, we are crossing our collective fingers and taking a leap of faith. It is an unnecessary risk to human health and wellbeing to use helium in disposable balloons when we don’t know what the future level of supply will be.  If Party City had any sense of responsibility or even self-preservation, they would keep rationing measures in place at all times, tighten them down going forward, and create an absolute cap. Logic dictates that it will have to happen eventually for a non-renewable resource: no amount of efficiency will create helium from nothing.  If they’re as innovative as they claim to be they will still make money, but instead they pursue their own obsolescence as fast as possible. Throughout this shortage, ground level store management has shown more finesse in resource facilitation than the company at large has shown any sign of employing.
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Anagram has its foil balloon production facility in the affluent suburb of Eden Prairie, Minnesota.  At least that sounds pleasant and sustainable, right? The jobs in Eden Prairie count towards Party City’s stated goal of owning more of their manufacturing base, and making those jobs here in the U.S.  What’s not put in the press release is that after leaving the factory the balloons are shipped out to Minnesota prisons, where they are packaged by inmates earning as little as 25 cents an hour, or 6 cents after deductions from their paychecks are made such as room and board.  The remaining bounty is generally needed to purchase hygiene products at the prison commissary.  The commissary and the prison labour program are operated by MINNCOR, a profit-generating body working throughout the state.  Party City is their biggest private customer, with a contract worth over $9 million in 2016 representing 19% of MINNCOR’s total revenue.  “At times, some businesses have problems finding workers willing to perform tedious, low-skill tasks, such as counting and packing balloons,” states a 2009 MINNCOR audit report.

The savings made stiffing
victims of the wording of the 13th amendment are not going back into the maintenance of the prison; in fact the work program seems to be calling the shots.  One longtime facility manager said safety concerns are often overlooked to get inmates back to work on product orders.  In July a guard was allegedly killed with a hammer in a MINNCOR workshop on a floor where no security cameras had been installed.  A former worker described an Anagram packaging space as “a sweatshop with low light, no windows and poor ventilation that led to smells that resembled a gymnasium,” with some prisons in the state packing balloons at all hours of the day.  MINNCOR CEO David Milton makes $58 an hour.

Against the rise of abusive prison labour, inmates have organised hunger strikes, work stoppages and commissary boycotts in recent years, including a wave of actions this past August and September that cut across
at least sixteen states.  That number might have included Minnesota -- disrupting the timely delivery of birthday balloons for Party City -- had it not been for the fact that activist prisoners in that state have been thrown in solitary confinement, had phone privileges cut, and been transferred to other facilities.  These are the conditions under which the majority of the world’s foil balloons are packaged.  Anagram has a ridiculous promotional video, in which people on the job are surprised with the delivery of a mylar balloon from a smiling spokesperson.  How thoughtful: the workplace can indeed be unpleasant.

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In further evidence of Party City’s desire to improve the lot of American workers, sourcing of certain items is now being taken out of China -- and moved into the sweatshops of the surrounding countries.  A company document from 2017 features the following quote: “ … we have been diversifying away from China to take advantage of lower wages and duties in Vietnam, India, Indonesia”.  Their vertical control over large segments of their distribution and manufacturing allows Party City to have what CFO Dan Sullivan recently described as "almost un-retail-like economics."  I would additionally describe what the company engages in as the pursuit of uneconomic growth: more money might be circulating in the economy, but the damage being done in the pursuit of making that money (such as resource depletion and lower real wages) causes more overall harm to society than good.  Even when the economy of a company or country grows, the benefits are not likely to spread out evenly, with the business class claiming the lion’s share of additional income, while regular people earn little extra or even see their proportion decline.

You can see this at play at the storefront level.  Companies such as Party City tell their employees, often with a straight face, that if they work harder and sales rise the number of available work hours will increase, when the correlation between the two is so weak it’s arguably non-existent.  If a location is doing adequately, as far as corporate is concerned, it does not need more time to get the work done. As general policy, the company is going to spend as little as it can possibly get away with while pocketing any extra cash. And even that spending floor is subject to interpretation.  Payroll fluctuates down to the bone following the calendar of holidays, leaving associates to survive on 4 or 8 hours a week for much of the year and managers scrambling to fill the gap. Stores that do millions of dollars of business a year are operated by 2 or 3 employees at a time. Days generally begin at 7 or 6 in the morning, the only way to squeeze more productivity out of it being to work hours before the doors open, with the never-ending conveyer belt of freight that pours in not to be pushed after 11am.  Stores expect annual payroll cuts for seasons too, sometimes losing hundreds of weekly hours or half the original amount over the course of just a couple of years. I have to imagine that the famous
Sam Walton quote (“payroll is one of the most crucial things you have to fight to maintain your profit margin”) is on some huge plaque at Party City’s New York HQ, because they make a sport of it that challenges even The Great Wal.

The workload generally increases in conjunction with such hour cuts.  The absolute rules of time are not any more understood than the absolutely physical laws of resource use.  It would be absurd to try and explain in any detail the increased operational workload that Party City unloads on its employees on an almost weekly basis.  If, at checkout, the cashier hasn’t asked you a half-dozen questions (for which there is an enforced target for each one), they are cutting corners. Customers are faced with a choice between helping an employee and protecting themselves from corporate data gathering designed to make them spend more.  The recent addition of a buy online, pick up in store service, where workers do customer’s shopping with no additional time given, is also a good example. Anyone who has been in the carnage soup that is Party City around Halloween -- or experienced the balloon-counter crush of a weekend -- has seen the wild-eyed chaos of back-to-back-to-back Black Fridays, and has a good idea of an employee’s mental state all year round.  It’s not so much what the business world calls “stretch goals” (aspirational targets) as stretch rack goals, where low-wage workers’ bodies and sense of self-worth are dashed on the altar of profits. The minimal hours granted, fractured schedules and casualised nature of the job all make union-building efforts all but impossible. If you have found it difficult to get assistance in these establishments, here is your explanation.

Hourly pay in no way compensates for these payroll cuts or increased physical and mental burdens.  There is obviously some variance due to state laws, but new employees can expect to make minimum wage (currently $7.25 at the federal level), with measly 2% increases for each year of service.  Few workers hired last this long and these increased rates don’t get bumped up on the rare occasions that the local minimum rises. The only way to get a remotely sustaining income with more hours is to pursue a rare chance at promotion, which Party City, through either malice or incompetence (or malice disguised as incompetence), will routinely string out over many months to keep employees working above their pay grades.  Even so, supervisors and lower management are lucky in many states if they make double digits. Adjusted for inflation, the minimum wage in 1968 was
$11.39 per hour.  Last year’s total compensation for the 6 top executives at the company?  10.6 million dollars.  Grab the plastic pitchforks.

This poverty-striking approach is becoming less fashionable, even in corporate America.  Target will have a
$15 minimum wage by 2020.  Costco now pays $14, and Disney will pay $15 by 2021.  Following a barrage of criticism, Amazon just announced that it will be paying all its workers, including temporary and seasonal ones, $15 an hour starting November 1st, when most Party City employees will be submerging their broken bodies into vats of cheap epsom salt.  Even Walmart now pays a starting wage of $11.  I used to say Party City was Walmart with brighter colours, but that no longer seems fair.  Many of these firms have accompanied the changes with various price hikes, layoffs and other trickery, but it’s still more progress than Party City has felt any pressure to provide.  I would encourage the Fight For $15 movement, responsible for many of the recent wins on this front, to look in their direction. As one goading number on the in-store playlist goes without any sense of self-awareness, “Get up, stand up / Stand up for your rights.”

Given these attitudes towards the human beings that keep their business running, it should hardly surprise to learn that their 2018 product line continues to include
unapologetically ghoulish depictions of the peoples largely exterminated from this continent so we could have these nice things, cartoonish accessories for “witch doctors,” pimps and Mexicans, a very diverse variety of cop and military apparel (presumably to keep all the other costumes in check), and a roster of women's and girl’s costumes perhaps best exemplified by another in-store playlist choice, The Writer, by English popstress Ellie Goulding (“Why don't you be the artist and make me out of clay? / Why don't you be the writer and decide the words I say?”).

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When a company’s only goal is increased and rapid money gathering, it can be hard to tell whether its greedy actions are coming from a place of economic desperation or confidence; in other words whether things are going poor or well on the balance sheet.  For the last two years Party City reported declining sales at its stores compared to previous years.  Even so, according to Dan Sullivan, their control over their supply chain means that it doesn’t entirely matter; they can move manufacturing to places where workers earn less and visibly lower the quality or size of certain products.  They are able to tell investors that they have seventeen straight years of growth under their belts.  Following predatory practices once again, the company, in the wake of the death of Toys “R” Us, opened fifty Toy City locations (some in the newly empty stores) for the holiday season, and began a pilot project with Amazon to shore up against the company positioned to eventually take over everything.  But in a sense, for everyone outside the boardroom, it doesn’t matter how things are going internally. The results are the same: namely that we all suffer as Party City increasingly grinds its employees and our environment into dust in its pursuit of never-ending expansion.

If you aren't convinced that colourful floating balloons represent a significant threat to human prosperity, consider them a symbolic representation of everything else Party City does.  The company could be said to be efficient in one way, in the sense that every square inch is always stuffed to the brim with merchandise. Short customers and employees cannot reach items on top rows.  Backrooms are scarcely navigable cramped mazes of cardboard. They introduce over
8,000 new products a year.  “Sustainable growth remains an inherent characteristic of our business,” said CEO James Harrison in the 2017 company report for investors.  But sustainable growth is a contradiction in terms that threatens our future.  Three recent major empirical studies have shown that under even the theoretically most efficient conditions, the decoupling of economic growth from increased resource use is impossible on a global scale: you can have ever more money for shareholders or a planet for us to live reasonably well on, but not both.  Like most major corporations, the stated goals of Party City are incompatible with human civilisation. One of the reasons that retail now accounts for so much employment in countries like the U.S. is that pointless, worthless consumerism is largely the only way to keep the engine of economic growth moving forward in societies that already have all the wealth that they need.  If we are to ever take the urgent steps needed to bring the economy back within our planet’s physical boundaries, a company with such microscopic social value as this one should be an early candidate for being scaled down or abolished.

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To all this criticism, Party City has a tantalising emotional defense.  “Sure, nobody needs our products that help to destroy the life support systems of the planet, but we deal in celebration and mirth.”  Who wants to stop kids having their Ninja Turtle birthdays? Do you want life to be joyless? As such a sentiment demonstrates, the majority of the business deals in some level of guilt tripping.  Like many companies, Party City is one that has created a certain demand, then innocently claims to be providing the necessary supply. It adds yet more obligations to the endless list of modern life, in conjunction with children’s franchises and their marketing technique of pester power.  If kids honestly can’t be happy with a balloon filled with air, it's because some adult wanted to make their parents pay for helium instead of using their own lungs.  You might say that, beyond causing harm to others, to each their own, and I would agree, but that also means our thoughts and desires should be free from the manipulations of corporate advertisers and their expensive visions of what a celebration looks like.

In most of the world and throughout most of human history no such wide-reaching industry has existed, and people still somehow manage to celebrate birthdays, weddings and other occasions with a more modest selection of items.  If anyone feels that their happiness would be seriously harmed by not having this supply of cardboard, plastic and blinking lights, I would suggest not only that they consider what is done to people to get the products into their hands, but that their lust for life has been seriously and intentionally dulled.  For all that most of these products add to the sum of human pleasure, you’d get more of a lasting rush by eating them, and
riding the wave of toxic ingredients.  When we teach our children to consume products as if there’s no tomorrow, we set them up for disappointment (and much worse) tomorrow, when the resources will be even more noticeably dwindling.

Party City is looking to change more people’s habits, selling to all the world even as the planet buckles.  While brick-and-mortar stores are presently in just a handful of countries, the tentacles of the wholesale business mean their products are sold in some capacity in
over 100.  Their American store footprint is fast approaching a thousand.  The company appears to feel untouchable. It has a niche that has allowed it to grow hugely, relatively shielded from the threat of online shopping, but hidden from the sight of anyone who has not yet fallen for their ploys.  What they deserve is the wrong kind of interest. This is the distillation of our entire extractive economy, total destruction hidden behind sanitized novelty. It’s a perfect vision of our work culture, contributing to ill health, stress, depression and a lack of life satisfaction.  All people of good conscience should boycott this company until the party that its executives and investors are enjoying is popped, and sent back down to Earth.