
What Amazon Does to Poor Cities - clebio
https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/?single_page=true
======
garybro
A common theme I see with these articles is how "grueling" the work is. People
need some perspective on what grueling work is. I worked at a UPS hub during
college, where I'd load, unload, and sort the contents of trailers. What they
do seems pretty easy compared to what I did at UPS. Picking and packing orders
is a lot less grueling than unloading trailers full of 60 pound paper boxes,
or loading hundreds of packages an hour into outbound trailers (where if you
backed up too much you could shut down the entire line), or sorting over a
thousand packages an hour. None of us ever complained that the work was too
hard or grueling -- at best we just wanted another person in our trailer to
split the load with and BS with. I honestly miss that work; it's just too bad
I can't make as much doing that as working in tech.

Compare that to an Amazon fulfillment center, where from what I've seen they
walk a lot to pick packages (but even that's being automated away by Kiva
robots), put the contents into boxes, and load the boxes into trailers. Amazon
packages are relatively light compared to most business shipments of stuff
that went through UPS (which are usually things packed in bulk). Maybe it's
mind-numbing, but the horror stories about how physically grueling it is (save
for maybe when they weren't properly air conditioning the facilities) seem
overboard. Even then, there were days in the summer where I'd be unloading a
trailer that was baking in the sun all day, and we didn't get AC in there --
we just sweated it out and drank a lot of water.

I don't really know what people expect when they work in a warehouse. It's not
glamorous and it's not easy, and it doesn't require that much skill so it
doesn't command that much pay. But it's better than no job at all.

~~~
lotsofpulp
The reason it doesn't command much pay is not because it doesn't require much
skill. It's because either there are more people willing to do that job that
doesn't require much skill, or there are fewer jobs available to those that
don't have skills (in a given area).

~~~
nlawalker
>> there are more people willing to do that job that doesn't require much
skill

There are more people _able_ to do that job that doesn't require much skill.
Additionally, for any given job (especially high-skill jobs), it also much
more likely for able and unwilling people to become willing than it is for
willing and unable people to become able.

------
AlexandrB
It frequently seems to be the case that when tech companies interact with
unskilled labor, the unskilled labor gets a worse deal than they would before
the tech economy. See Uber, Amazon, Blue Apron, and many others.

In me this inspires a high-level of cynicism. Now when I hear a startup
wanting to "change the world" I'm always curious whose underpaid labor is
going to subsidize that change. Underneath all the Silicon Valley virtue
signalling about improving the state of mankind you see the same gears and
levers of labor exploitation as old-school sweatshop manufacturers like Nike.

And make no mistake, the ultimate goal is to make the "knowledge workers" at
these companies just as expendable.

~~~
amarkov
Does Amazon offer a significantly worse deal to its warehouse staff than
Walmart? My impression is that it doesn't, so I don't think this is a problem
with tech companies specifically.

~~~
AlexandrB
Probably not [1]. But shouldn't we reach for something better?

Really, I'm just upset about my own disillusionment. As a little kid I thought
Silicon Valley was going to usher in a new era of technology and plenty.
Something like Star Trek's utopian ideal of a society where scarcity is a
thing of the past.

What I see instead is the same old corporate bullshit of maximum exploitation
for maximum profit.

[1] [http://www.huffingtonpost.ca/entry/walmart-warehouse-
workers...](http://www.huffingtonpost.ca/entry/walmart-warehouse-workers-
fired_n_3787659)

~~~
ars
It did. Sort of.

Even someone poor has a magic device in his pocket that can show almost any
video ever, can talk to anyone, and give directions.

People today have never been better off. A poor person today lives better than
a king of old.

Except that people always compare to each other. And that's never going to
change.

~~~
Clubber
>A poor person today lives better than a king of old.

That is an illusion to help people with their conscience. It does sound nice,
but ...

The poor maybe eat better and maybe have better shelter, and certainly access
to cleaner water, but they have significantly less control over their destiny.
Also, kings didn't have to work and they were (usually) extremely wealthy, had
servants, and could do whatever they wanted to. Kings had people to help them
raise their children. Kings also didn't die from an easily treatable but
ultimately unaffordable medical condition. Kings usually didn't get evicted
for not paying rent on time. Kings didn't get arrested for trivial things and
have to spend time in jail because they couldn't afford a lawyer. I could go
on and on.

~~~
dragonwriter
> Kings also didn't die from an easily treatable but ultimately unaffordable
> medical condition.

Worse, they died from medical conditions which could be survived with no
treatment, because treatments with negative utility based on lore with no
scientific basis were applied which the common folk would not have access to.

~~~
Clubber
I think George Washington was actually bled to death as a medical treatment.

------
mhneu
These Amazon jobs are most useful to think about by comparison.

Four decades ago, analogous jobs (manual labor, no college degree) were in the
car industry: at Ford and GM. Those jobs were good middle-class jobs with good
salaries. On those jobs, one could raise a family with a 40 hour work week,
and do very well working 50-60 hours a week.

Today, the similar jobs are in Amazon warehouses. What is different? A big one
is that we have removed worker protections from our economy. By going to an
unregulated free market, now Jeff Bezos is a multi-billionaire and his workers
are living in near-poverty.

~~~
lotsofpulp
I think the biggest ones are cheaper transportation to and from areas of the
world with lower production costs and drastic increases in automation, both
which lower the demand for human labor in the USA (and other developed
countries).

You can regulate all you want, but it would be better to focus on getting as
much of the population ahead of the curve as possible as opposed to leaving
them behind. At the end of the day, we just don't need secretaries, travel
agents, much of the automobile assembly workers, etc.

~~~
andrewjl
It's interesting to see this reduction in labor demand is coupled with new
lows in the unemployment rate.

There's a shortage of labor but employers don't seem to be willing to pay more
to incentivize more people to enter the workforce (which is partially
reflected in the so called "shadow" unemployment rate, which is higher). An
increase in the minimum wage will cause one of two things to happen, both net
good IMO: either employers to invest more in capital / automation or cause
them to give all current and new employees a raise.

~~~
TheHegemon
> employers to invest more in capital / automation or cause them to give all
> current and new employees a raise

Or more cynically: fire employees and do more with the remaining employees.

~~~
andrewjl
They'll need to make capital investments in order to do that.

------
dj-wonk
Yes, intensively competitive companies like Amazon sometimes press workers
hard. Without endorsing nor assigning blame to the company (which faces
pressures from globalization and shareholders), there are many potential
approaches to the problems:

1\. Amazon could build a brand around treating workers better (UPS has at
times had this reputation) and thus differentiate themselves and justify the
cost of better pay and benefits.

2\. Government regulations could require a certain standard of job creation or
insurance coverage. These could be coupled with incentive programs.

3\. Workers can organize. (i.e. into unions)

4\. Consumers can vote with their dollars.

5\. Investors can vote with their dollars.

There are many more variations on these themes.

If these kinds of solutions don't work, workers tend to get squeezed. Due to
the complexities of our economic and political systems, in practice, certain
companies end up treating human resources (people) as expendable assets to
exploit. Sometimes they do so for a long time. That is why other power centers
(government, labor organization, consumer activism, investor activism) are
necessary to achieve broader goals.

~~~
_rpd
Amazon is already working to fully automate these warehouses. Actions that
increase the cost of labor will simply accelerate this process.

~~~
crdoconnor
Actions that increase the cost of labor will take _big_ chunks out of their
profit margins.

Amazon will respond to this threat by telling agitated investors to _calm
down_ because they have a plan to automate every human out of existence by the
year 2025.

Unsophisticated investors are appeased by the tasty kool aid.

Sometimes the general public will drink it too and react with downvotes thrown
at the people hinting that the emperor might not be wearing any clothes.

~~~
_rpd
Anyone betting against warehouse automation should review their investment
strategy. The process is well underway.

------
Mitchhhs
I feel like journalists are just trying every way possible to create an anti-
tech sentiment. Crazy how fast things can change from all hail the tech titans
to oh these tech companies are creating a dystopia. Theres way too much noise
in every aspect of information these days to help society focus on the
problems that actually matter.

~~~
nkrisc
I think the tech companies themselves are doing a fine job of creating anti-
tech sentiment on their own.

~~~
cbHXBY1D
Public sentiment has turned at this point. Tech companies are no longer the
intrepid, utopic little guy fighting the good fight -- they are the
incumbents.

I would bet serious money that one of the hallmarks of the next presidential
election is regulation of big tech. The backlash is building. That wave will
have some mainstream politicians calling to break up big tech.

------
mrgreenfur
Most folks I know seem blissfully unaware or uninterested in these realities
behind their next day delivery. Even supremely liberal folks in boston and new
york seem to think that complaining that their prime delivery being a day late
or poorly packed is reasonable to gripe about, totally ignoring the human cost
behind such offerings.

~~~
usaphp
Customer is paying for a service that was promised to him and it’s reasonable
to complain that the service was not provided.

~~~
MrFoof
This. This is what customer service is about -- taking care of the customer
when things go badly. In the span of five weeks, Amazon had A) "lost" two
packages (in reality, they were shipped to the wrong distribution center and
weren't rerouted), B) were two days later on one, C) four days late on
another, and D) EIGHT days late on the fifth.

For every single one, I contacted customer support and complained. As
performance got worse, I actually got on the phone.

* The first time I was comped a month of prime. $8.

* The second time I was comped $20 in Amazon credit, and they reshipped the package ($55 in goods). I was told if the other one showed up, to keep both. The other one showed up the next week.

* Third time I was comped a month of prime ($8) and package was reshipped. This was $160 in electronics. I was told if the other showed up, to keep both. The second one showed up 2 weeks later.

* The fourth time I called I asked why I was paying for prime. After 10 minutes, the rep agreed. They refunded my entire year of prime ($100).

* Fifth time they didn't care. They admitted their performance was awful, and were confused how their logistics operation was doing so poorly, but if I didn't like the service I should go elsewhere.

To their credit, I was compensated $351 for five failures in five weeks, all
of which were not in peak season (this was 60 days in advance of Holiday
shopping season).

------
saosebastiao
It would be convenient to think that the Amazon ops executives have this all
figured out and that the numbers support their labor strategy, but after
having been one of the people whose job it was to put data in front of those
executives, I wouldn't trust their judgment with data at all. Their ideologies
and their incompetence trap them to inferior analysis.

They think their pay is good because it is higher than other warehouse jobs.
They don't actually compare the workload at other warehouse jobs, but needless
to say nobody is worked anywhere near as hard in those other jobs. Their
hiring and retention costs are insanely high, but they don't recognize their
role. They view their retention as belonging in two categories: those who are
fired and those who quit. Both are much higher than competing warehouses. They
fire more because they have zero tolerance policies for too many things and
three strikes for everything else...with no forgiveness for anything ever.
Voluntary quits are high because they don't pay enough for the job that they
are hiring for, but they see voluntary quits as being a problem with
management. So they churn the management like crazy too. And since they churn
management like crazy, they institute policies that basically take all
judgment out of the hands of managers and only use them to enforce policies.
Besides, retention, training, and hiring costs don't fall into the ops budget,
it falls into HR, so it's not their problem anyway.

At least from one anecdotal exchange with a local ops manager, they would
likely need to be paying _double_ their going rates if they wanted to bring
their retention and hiring rates in line with the rest of the industry. But
it's not gonna happen. They're gonna keep playing this musical chairs blame
game until it breaks them.

~~~
logfromblammo
Article stated that Amazon warehouse pay was higher than non-warehouse jobs,
but lower than comparable warehouse jobs with other companies (at least in the
Inland Empire of California). But all the other warehouses already have enough
employees to meet their needs, and Amazon is the only one actually hiring.

I'm sure all those other warehouses love how Amazon is training up so many
employees that can be poached at will.

------
wehadfun
I think the issue may be with poor cities. If a city is poor it should have
cheap housing, low utility cost, low taxes. I can't speak to San Bernardino,
but one of the issues in Detroit is that they are taxing people like the city
is rich

------
tzs
About another company's warehouse:

> Wages start at $26 an hour, but many workers make a lot more than that
> because Stater Brothers operates an incentive program in which people who
> grab orders—doing similar tasks to workers at Amazon—are rewarded if they go
> faster than the average speed.

I wonder if it would be possible for a group of workers to pay another group
of workers to slow down, thus lowering the average speed so that the first
group ends up in the rewards group without having to raise their speed?

------
southphillyman
I couldn't help but to think about basic income while reading this article. It
seems like the vast majority of people in these Amazon warehouse stories hate
working there but really have no other options at the moment. Basic income
would allow these individuals to perhaps work at lower paying companies that
prioritize worker morale over profitability.

------
refurb
Sure, Amazon fulfillment center jobs might not be high-paying, middle class
jobs, but what's the alternative for these areas? High unemployment and
stagnation?

~~~
krapp
There is a middle ground between "barely subsistence wages" and "high-paying,
middle class wages" that Amazon could meet, and still be profitable.

~~~
amarkov
Is there? Amazon's retail business runs on a razor-thin profit margin, and in
fact Amazon was famous for _not_ being profitable until a few years ago.

~~~
deegles
... and most of their profit comes from AWS.

------
aaavl2821
I wish the article talked more about what Amazon and other companies can do to
better invest in their communities and employees: how they can train employees
for advancement, how they can proactively recognize and nurture talent instead
of churning and burning through workers, how they support the community to
attract better jobs and help more people, etc. it presents unionization as the
only solution. I worry that unionization might increase the cost of labor and
just push jobs elsewhere.

Perhaps I'm naive, but how hard would it be for Amazon to really commit to
investing in its workforce and community rather than just strategizing to
avoid unionisation? The article states they invest in schools in whatnot, but
are they just doing this for political points or actually dedicated to
investing in the workforce / community and helping its workers grow?

------
marsrover
> “It’s a step back from where we were,” said Pat Morris, the former mayor,
> about the jobs that Amazon offers. “But it’s a lot better than where we
> would otherwise be,” he said.

That makes complete sense. /s It sounds like where you were was a city without
jobs.

> San Bernardino is just one of the many communities across the country
> grappling with the same question: Is any new job a good job?

Yes, if you don't have a job then any job is a good job. Sentiments like this
article is why people are "too good to work for McDonalds."

> The share of people living in poverty in San Bernardino was at 28.1 percent
> in 2016, the most recent year for which census data is available, compared
> to 23.4 in 2011, the year before Amazon arrived.

Something that can't be attributed to rising inflation? These are meaningless
stats.

I didn't read the rest.

~~~
danans
> Something that can't be attributed to rising inflation?

Sure, but probably a very particular type of inflation: housing cost. Wages
for unskilled labor haven't increased at a rate to account for rising housing
costs, exacerbated further by insufficient housing supply, and demand for
housing has gone up due the increased number of jobs.

Median household income in San Bernardino is 39k/yr (pretax) [1]. Median rent
is 16k/yr [2]. So the median household spends nearly 42% of their pretax
income on housing. The other necessary expenses of life (especially if you are
far below median income and have dependents) will quickly eat through the
rest.

There is a dynamic at play in which several factors, including the increase in
lower paid jobs and population, is increasing poverty rates.

[1]
[http://www.bestplaces.net/economy/city/california/san_bernar...](http://www.bestplaces.net/economy/city/california/san_bernardino)

[2] [https://www.rentcafe.com/average-rent-market-
trends/us/ca/sa...](https://www.rentcafe.com/average-rent-market-
trends/us/ca/san-bernardino-county/san-bernardino/)

EDIT: found a more conservative median rent citation and updated the figures
based on that.

------
RestlessMind
Amazon (and other companies) should just leave these ungrateful areas. I mean,
San Bernardino should be thanking Amazon but instead they are complaining.
Once the big companies threaten to leave and ignite a race to the bottom,
these cities will come back crawling on their knees begging for jobs, any
jobs.

It's not like worker are going to politically unite and retaliate. All (both)
the political parties are controlled by 1%. Any popular movement is either
squashed (Bernie) or appropriated (Trump) by this moneyed elite. Unions too
are successfully stigmatized and restricted legislatively ("right to work").

</s>

------
danjoc
Amazon Fulfillment centers are cold calling cell phones with employment
advertising. That's a $1,500 fine _per call_ under the TCPA. These poor people
shouldn't apply to work for pay, they should contact a lawyer and get paid.
Amazon is flagrantly breaking the law. Easy money.

------
stuaxo
You can do one line summaries without reading the article - without reading it
the answer will be along the lines of "fucks them".

------
lowbloodsugar
I think its time that instead of reporting "what percentage of a made up
number of people have jobs", and instead report "salary percentiles". 5%
unemployment isn't that great if 50% of the people have a $24k/year job, and
if that number is 5% of only 40% of the population because everyone else gave
up.

------
wehadfun
I think the best people for jobs like this are those that just want
supplemental income. Teenagers, College Kids, Part-time or temp workers.

~~~
_rpd
I think it is pretty clear that we should automate box packing as soon as
possible. It is a waste of human talent to have people doing this.

~~~
s73ver_
The problem is, those people need to have jobs.

~~~
_rpd
Even moving them to quality control or edge case handling is a win. No one is
going to miss box packing.

~~~
s73ver_
It's only a win if they don't get laid off or have their paychecks cut.

And I'm pretty sure that the people who do it for their job, if they aren't
able to find another one, would miss it.

Automation can be good, but we can't forget that these are actual people, with
rent payments, food bills, and possibly families, that are currently doing
these jobs. Blindly following the "Automation is great" mantra, while
forgetting about them, is going to be disastrous.

