In a capitalist economy that is unable to generate a sufficient number of good jobs at a living wage, we have become desperate for any sign of economic life. It is under these conditions that cities and states compete intensely for capital investment, corporate expansions and relocations of any form. Urban municipal governments that at one time saw their primary purpose as providing their residents with services designed to enhance the quality of life now devote more energy toward creating a favorable business climate for corporations, and using taxpayer dollars to subsidize corporate expansion and relocation. And the corporations, for their part, are happy to leverage the economic hard times, which continue lingering after the Great Recession, into tax breaks, incentives and subsidies.
How do states and localities justify these giveaways? Just as with the false promise of supply-side economics — that the concentration of income and wealth at the top would eventually trickle down — the assumption here is that the corporate welfare will have positive “spill over” effects into employment, income, spending and tax revenue. But while there is no guarantee that these positive projected outcomes for the citizenry will be realized, it is often the case that the economic benefits going directly to corporations are provided nonetheless.
Here in Jacksonville, large sums of taxpayer dollars have been spent on attracting, securing and retaining a corporate presence. In 2015 and 2016 to date, the city has pledged $49 million in incentives, grants and subsidies awarded to 19 projects/firms.
The most prominent, and one of the largest of these economic development awards, has been doled out to Amazon: $13.4 million, accounting for 27 percent of the allocated 2015-’16 development funds. The Amazon agreement, disguised as “Project Rex” prior to its unveiling, has been touted and celebrated by local officials. Jax Chamber of Commerce President Daniel Davis described the deal as “… great news for our entire community and another example of what we can accomplish if we are working together with the common goal of growing jobs.”
It is important for citizens to understand what this local “megaproject” entails. First of all, Amazon is not locating a corporate office or headquarters in Jacksonville, but rather a “fulfillment center.” This is the term Amazon uses to describe what will be a sprawling 800,000-square-foot distribution center designed to rapidly fulfill the orders of its customers in the region.
Jacksonville has not captured some rare commodity — there are already at least 70 such fulfillment centers nationwide.
The vast majority of jobs generated by this project — Amazon anticipates employing 1,500 workers — will be warehouse jobs. As the Amazon press release indicates, “At the facility, Amazon employees will pick, pack and ship small items to customers, such as books, electronics and consumer goods. Associates will work alongside innovative technologies to fulfill customer orders.” All of the warehouse jobs will pay $15 per hour or less. The company claims that 500 of the jobs will pay $50,000 or more in annual salary.
What can we learn about these kinds of warehouse jobs from the reports at other locations? The news is not good.
One March 2016 story on the website Gizmodo leads off this way:
It’s unspeakably awful to work in an Amazon warehouse. You have to walk between seven and 15 miles a day, enter and exit the buildings through a set of airport-style security scanners that take 30 minutes to get through, and you’re constantly being watched.
The Morning Call interviewed 20 former and current Amazon warehouse employees for a story published in 2011, reporting:
Only one of the employees interviewed described it as a good place to work.
Workers said they were forced to endure brutal heat inside the sprawling warehouse and were pushed to work at a pace many could not sustain. Employees were frequently reprimanded regarding their productivity and threatened with termination, workers said. The consequences of not meeting work expectations were regularly on display, as employees lost their jobs and got escorted out of the warehouse. Such sights encouraged some workers to conceal pain and push through injury lest they get fired as well … ”
There have been several first-hand accounts of working conditions by those who have actually toiled in these fulfillment centers:
I walked approximately 10 to 15 miles a night while I worked, the warehouse was stifling hot, and there wasn’t any fresh air to breathe. It had to be pushing 110 degrees on the third floor … Management grew increasingly despotic and the worst among them barked and hollered and carried on in ways that I have never experienced in any other workplace … . Everything was non-negotiable … . If an employee accrued six demerit points, his or her assignment was terminated. We could also be written up if we did not adhere to bizarre safety standards. Pickers could be written up if they were caught steering their cart with one hand or holding their scanner while they were pushing the cart … . Management effectively pitted worker against worker in a struggle to survive and there was pain on people’s faces as they pushed through 55-hour weeks. (“Surviving the Amazon,” by Nichole Gracely, Aug. 2012, Murphy Institute for Worker Education and Labor Studies)
I have been hired as a picker, which means my job is to find, scan, place in a plastic tote, and send away via conveyor whatever item within the multiple stories of this several-hundred-thousand-square-foot warehouse my scanner tells me to … . With an hour left in the day, I’ve already picked 800 items. Despite moving fast enough to get sloppy, my scanner tells me that means I’m fulfilling only 52 percent of my goal. (“I Was a Warehouse Wage Slave,” by Mac McClelland, March/April 2012, published on Mother Jones)
These descriptions of the Amazon workplace are consistent with much of what is contained in a representative Amazon warehouse job posting. It includes the following: “you must be able to lift up to 49 pounds with or without reasonable accommodation, stand/walk for up to 10-12 hours, and be able to frequently push, pull, squat, bend, and reach”; “[we want you to join the team if] you’re able to continuously climb and descend stairs safely”; “flexibility is key, associates should be open to extra hours, time off, and a rapid pace”; “temperature in the fulfillment center may vary between 60 and 90 degrees, and will occasionally exceed 90 degrees”; “you’ll stand in one place for extended periods of time, and be walking a good distance around the facility”; and “noise level varies and can sometimes be loud.” The hourly compensation for this Amazon warehouse job, aka “Full-Time Fulfillment Associate,” is $13.50.
In the interest of balance, I sought out and was able to find one testimonial published on LinkedIn in 2015 that was intended to present a less critical and “fair account” of the Amazon workplace. It stated, “In terms of the amount of work expected from a Tier 1 associate, it is taxing, but far from impossible. Employees with poor work ethic typically do not last long at an FC … .”
The remainder of the piece was devoted to a description of all aspects of work in the Amazon warehouse. But none of it contradicted what was reported in the more critical appraisals; it was just reported in a more neutral tone. What was particularly enlightening was the detailed description of how each employee’s productivity level is measured:
Our work is monitored in a number of ways, but the two that tend to be most important are Rate and Time Off-Task … . Rate is the primary way an associate’s productivity is measured. It is a very important metric for Amazon. It is measured in units per hour and is compared against an expected rate in the given process path. For example, the expected rate in one process path might be 75 units processed (stowed, picked, packed, etc.) per hour. This is the standard you are expected to meet, and your actual rate for any given unit of time is measured as a percentage of the expected rate. If the expected rate is 75 units per hour and you only picked 50 units in one hour, you were at 67 percent to plan.
67 percent to plan is a horrible rate at Amazon. In fact, the minimum acceptable rate that will not warrant disciplinary action is 100 percent. At Amazon, 99 percent is not good enough. The general manager at my building has said at an all-hands meeting that rate is intended to be aggressive.”
What does it say about the current state of American capitalism when workers and communities alike are clamoring to work for and host a warehouse that uses digitally enhanced methods of worker exploitation modeled after the 19th-century sweatshop? At one time, visions of technological progress imagined a world where work was less physically onerous and monotonous, and more mentally gratifying. But, as sociologists have always warned, technology is not an inevitably progressive force. It depends who controls it and for what purpose — human liberation or oppressive surveillance. Amazon has chosen the latter in the interest of maximizing productivity and profitability.
For Amazon workers, the apparatus of social control even extends beyond the security scanners through which they pass as they exit the workplace. Amazon requires workers, even temps, to sign a contract that includes a confidentiality and non-competition clause. The former prohibits sharing information about the Amazon business operations; the latter is a promise by employees that they will not enter employment with another firm that in any way (“directly or indirectly”) competes with Amazon products or services for a year and a half.
It is important to emphasize that warehouses, which are now called distributions centers, have long been some of the most grueling and unpleasant workplaces. Based on my research on the logistics sector, warehouse/distribution center jobs increasingly fall into the category of “precarious work.” This is work characterized by employment and financial insecurity with increasing numbers employed through temp/staffing agencies. Consistent with this trend, Amazon uses Integrity Staffing Solutions to recruit a large proportion of its warehouse labor force.
Based on the many complaints, negative media reports, and lawsuits pertaining to the warehouse working conditions, one might expect Amazon to consider modifying its management practices. But, so far, rather than address the obvious sources of discontent, Amazon has decided to attack the human symptom. They recently unveiled a “pay to quit” policy, which pays workers up to $5,000 to quit their warehouse job if they are dissatisfied. What might at first appear to be a generous and innovative human resource policy can more accurately be interpreted as a form of hush money designed to eliminate and silence the sources of discontent that might spread through the organization and mobilize collective action.
If that strategy doesn’t work, the other current Amazon innovation is simply to eliminate humans altogether through automation. In 2012, Amazon acquired Kiva Systems, the leading producer of warehouse robotic systems. In 2015, the name was changed to Amazon Robotics with the supply of production directed exclusively toward Amazon warehouses, thus reducing the likelihood of automated warehouse competition. The long-term vision appears to be a nearly fully automated warehouse operation with robots replacing the potentially recalcitrant humans.
Given what we know about warehouses/distribution centers generally, and now Amazon in particular, should cities be providing Amazon with hundreds of millions of dollars in incentives and subsidies? According to the Good Jobs First subsidy tracker, Amazon has already received 72 subsidy awards totaling $533 million.
As the largest online retailer in the world, Amazon is hardly a struggling enterprise in need of government assistance.
Further, there is no reason for large cities to pay Amazon to locate a fulfillment center when the core objective of their business model is based on strategically locating their warehouses all over the country, within easy striking distance of major population centers, like Jacksonville, in order to expand their market by fulfilling online orders expeditiously.
Despite these logical arguments against publicly subsidizing Amazon fulfillment centers, there is the single retort that trumps any objection or criticism to these pro-corporate economic development policies — jobs. This is the great silencer of dissent. No one wants to be labeled a “job killer,” no matter the quality of jobs. And Amazon has pledged to create 1,500; on Nov. 22, the company revealed plans to open a second distribution center in Jacksonville, creating up to an additional 1,200 jobs.
But in the case of Amazon, even this job creation claim rests on very shaky grounds. As the Institute for Local Self-Reliance has pointed out, based on its research of Amazon fulfillment centers, the long-term aggregate impact of Amazon’s national expansion is, in fact, the elimination of jobs. This is because online retail has been replacing consumer spending in the brick-and-mortar establishments that make up the local business community. “Brick-and-mortar retailers employ 47 people for every $10 million in sales … But Amazon employs only 14 people per $10 million in revenue. As Amazon grows and takes market share from other retailers, the result is a decline in jobs, not a gain. In 2012, Amazon expanded its share of retail spending in North America by $8 billion, which works out to a net loss of about 27,000 jobs.”
And while we are on the subject of job numbers, we should all be asking Amazon what percentage of these 2,700 jobs will be temporary and seasonal. And what percentage will be slated for elimination through robotic automation?
Perhaps it would be more economically effective if the $13.4 million in incentives and tax rebates were used to seed and support a larger number of locally owned businesses that have a real financial need and also have demonstrated their commitment to the Jacksonville community. The wealth generated by these local businesses would also be retained and reinvested in the community, rather than paid out to distant shareholders who may actually profit from the less-than-humane working conditions within the Amazon warehouse.
It is time that cities consider alternative economic development strategies devoted to building and sustaining local wealth, rather than luring it from the outside. Citizens of the community should also be permitted to play a role in deciding whether millions of their dollars should be devoted to these megaprojects. Given the current scarcity of fiscal resources, it is irresponsible to shower corporate behemoths with subsidies and tax breaks they don’t need, and for jobs that show little respect for the dignity of workers.
Jaffee is a professor of sociology at the University of North Florida.