How Amazon Exploited a Weakened America
During the Covid-19 pandemic, one in four Americans has struggled to pay their bills, and as of mid-January, unemployment claims surpassed those of the Great Recession for the forty-third straight week. As of February, more than 24 million people reported that their households sometimes didn’t have enough to eat. Many lower-income Americans continued to report for in-person jobs without proper protective equipment in dangerously crowded environments like meatpacking plants, warehouses, and hospitals.For those who could work from home, it became “our patriotic duty” to buy online, wrote ProPublica reporter Alec MacGillis in a November New York Times op-ed. Flattening the curve put the nail in the coffin of in-person retail, which had already endured record closures in 2019. Amazon, meanwhile, hired 250,000 people, taking the total to over a million employees globally. Most of those jobs sucked: They were largely in warehouse and delivery, which have become notoriously brutal jobs at Amazon both physically and mentally (but we’ll get to that). Nine months into 2020, and six months into the pandemic, Amazon had already surpassed its 2019 earnings.Amazon CEO Jeff Bezos’s personal wealth has grown by about $70 billion during the pandemic, to bring his total wealth to $189 billion, a number so large that I find it hard to picture. Apparently other people struggle with this, too. One popular YouTube video asks viewers to imagine his wealth as almost 11 million Toyota Corollas, or as working for $8,000 an hour since the birth of Christ until now (you would still not have as much money as Bezos). After one stock surge in July, Bezos’s wealth increased by $13 billion in one day, a sum close to the GDP of Madagascar with its 26 million people.The gaping difference between the power and wealth of warehouse workers and that of Jeff Bezos is an extreme example of the growth in inequality globally, and it’s beginning to produce some of the same agitation. During the pandemic, some Amazon workers in the United States started organizing in order to confront their bosses about a lack of personal protective equipment and other unsafe working conditions. Though Amazon has fought unionization relentlessly, some workers figured that, this time, their lives were quite literally at risk. In July, Bezos was called to testify before Congress, which was conducting an antitrust investigation into the sprawling company. (He took the opportunity to tell members of Congress that Amazon was more trusted than they were.) But Amazon’s anti-worker activity hasn’t slowed: The company has conducted intense online surveillance of employees trying to organize (it got in some hot water for a creepy, now-rescinded job post for a “senior intelligence analyst” to confront “labor organizing threats”), has run expensive anti-union campaigns, and has fired organizers.Alec MacGillis’s new book, Fulfillment: Winning and Losing in One-Click America, captures America’s queasy relationship with its newest retail titan. What it reveals is a country that has been falling apart for quite some time, and a company that has been willing and able to turn a failure of public policy into private power.Books that have been written about Amazon over the last decade have reflected profound shifts in the company’s image. In 2013, business reporter Brad Stone published the rapturous bestseller The Everything Store after being allowed access to dozens of Amazon employees and Bezos himself. The book tells the inside story of Amazon’s rise and paints the sort of splashy picture of a brilliant, quirky, short-tempered, visionary, uncompromising entrepreneur that was popular in a moment when the tech industry claimed to represent a bold, democratizing idealism (and before concerns about privacy and misinformation ballooned). The Everything Store is long on Bezos’s vision of warehouse efficiency and short on talking to anyone who lifted boxes.The opposite sort of book has been published for slightly smaller audiences: A German warehouse employee and writer named Heike Geissler published Seasonal Associate in 2014 (it appeared in the United States in English translation in 2018), and she details the backbreaking work peppered with insults to her dignity like being timed, chastised, and sexually harassed. In the 2017 book Nomadland, journalist Jessica Bruder documented the phenomenon of cash-strapped senior citizens becoming a seasonal workforce for Amazon, and Emily Guendelsberger’s book On the Clock draws on her firsthand experience of the grueling work at an Amazon fulfillment center in Indiana.MacGillis’s book belongs to the age of devastating inequality, with a sense that the United States is not just unequal but divided in its politics and values, perhaps united only by an extreme skepticism that democratic governance is anything but a joke. The book is less an examination of the company than an examination of America through its lens. MacGillis began with an interest in regional inequality, which has gotten less attention than wealth inequality. He noted that a few “winner-take-all cities” like New York, Washington, D.C., and San Francisco were becoming massively wealthier while rural areas and midsize cities were taking a huge hit. Regional inequality and the concentration of wealth were related, and “one of the most natural ways to tell this story was through Amazon, a company that was playing an outsized role in this zero-sum sorting.” The book ranges across the country, from El Paso to Seattle, Baltimore to Dayton. Each chapter is a portrait of a location that is meant to represent something about how America operates now, “in the company’s lengthening shadow.”Todd Swallows of Dayton, Ohio, grew up comfortably enough, with a father who ran a small transport company. The family’s decline followed that of their city during George W. Bush’s presidency. Auto parts plants began shutting down; one in three local manufacturing jobs “vanished in less than a single presidency.” Dayton simultaneously lost NCR, a major manufacturer of ATMs. Unemployment soared further. At the time, people blamed NAFTA for Dayton’s woes, although economists would later come to blame the 2001 admission of China to the World Trade Organization. Swallows Trucking tanked, setting Todd on what would become a harrowing search for work and an unforgiving journey for his whole family.Swallows finds himself in and out of shitty jobs, selling vacuums door to door, making pizza, working at a frozen food warehouse. His inability to make a good living drives fallings-out with the mother of his children, setting the scene for domestic fights that see each of them arrested at different times. Swallows develops an opiate addiction after being prescribed Percocet for an injury, and then survives a debilitating withdrawal. He had voted for Obama twice, but in 2016 he votes for Donald Trump, because he thought Trump would create jobs: “He’s gonna raise the economy back to the way it was when my parents were working,” Swallows said. In 2018, he starts working at a factory, building boxes primarily for Amazon, which moves to the Dayton area to hoover up the remnants of what was once the Silicon Valley of the industrial age. Amazon moved to Ohio after gaining inducements worth over $18 million from a city and state desperate for employers. Swallows is offered $10 an hour, about the same as he had made at a pizza shop almost a decade earlier. At the end of the chapter, the family is living in a shelter.One of the most tragic aspects of stories like Todd Swallows’s is the extent to which they reveal how easily the victories of bloody labor battles were reversed when industry shifted. Many of the autoworkers in Dayton had been unionized; Amazon workers are not. Another chapter takes place in Baltimore, following workers like Bill “Bo” Bodani, a 69-year-old Amazon warehouse employee who, after a traumatizing stint in the military (in part under Lt. John Kerry), spent the bulk of his career at Bethlehem Steel at Maryland’s Sparrows Point shipyard, which offered good jobs because of decades of labor struggle for pay, protection, and desegregation. After Bethlehem Steel’s collapse amid globalization, his pension is cut, and he’s forced back to work—now at Amazon—to care for his sick wife. One of the oldest employees at the warehouse, he’s chastised for taking too many bathroom breaks. Amazon received millions in subsidies to open warehouses in Maryland, and has ensured that its businesses aren’t unionized. When it comes to workers’ rights, Baltimore is back to square one.Baltimore is, of course, adjacent to Washington, D.C. And the nation’s capital is one of the primary locations in which MacGillis sets his scenes of one percenter decadence and self-dealing amid the rubble. Jeff Bezos has personally bought the biggest house in D.C., a $23 million former textile museum, which he is renovating and expanding to the tune of $12 million. In the book, MacGillis depicts Bezos being feted and “honored with a full presentation by an air force color guard” at an absurd 2018 dinner hosted by the Economic Club of Washington, D.C., overrun with ambassadors, lobbyists, and politicians.Among the select of the select were Tom Daschle, the former Democratic Senate leader turned lobbyist; Mike Allen, the insider Washington scribe; Katharine Weymouth, the former publisher of the newspaper her family had sold to tonight’s guest of honor; and Muriel Bowser, mayor of the city in which he now owned the largest home. Also in attendance this evening: seventeen ambassadors from around the world; the U.S. postmaster general, who oversaw the discounted shipping that the guest of honor’s company depended heavily on; and the head of the General Services Administration, who oversaw the federal procurement that the company was gaining an increasing share of.The eagerness of D.C.’s power brokers to toast Bezos showed the direction in which power was beginning to run. What may be most alarming about Amazon is how easily it seems to have converted government to its own purposes. At the local level, Amazon overpowers politicians and oversight committees. The company is beginning to dominate procurement for state and local governments—a $2 trillion slice of the economy that previously supported many local businesses, which have struggled (and largely failed) to keep Amazon off their turf. And choosing locations for Amazon’s warehouses has been turned into an opportunity to squeeze localities for all they’re worth. The tax breaks and demands for secrecy that appear throughout this book are breathtaking. There’s that $18 million in Ohio, and when the company decided it wanted to build near Columbus—a city, MacGillis notes, “wealthy enough to support good schools for employees’ kids, but also sufficiently insecure in their civic infrastructure and identity to be easy marks”—it demanded a 15-year break on property taxes from the three towns in which it would do business. They all complied, and the Ohio Tax Credit Authority threw in breaks worth $77 million. One town offered 69 acres of farmland free of charge for Amazon’s data center and promised that the project “would not be required to contract with unionized labor for its construction.”These deals go through quickly, with elected officials often hiding negotiations from their own constituents during the process. The book is littered with code names for new Amazon projects, used by Amazon and officials alike: “Project Granite,” “Project Marble,” “Project Lux,” the unfortunately named “Project Big Daddy.” Politicians present these arrangements to citizens as done deals.In Baltimore, Amazon got $43 million in incentives from state and local leaders to open a warehouse. At the opening, politicians lined up to flatter the company in the most obsequious terms.“I don’t have to take off my sweats to get deodorant anymore,” said Dutch Ruppersberger, a Democratic congressman from Baltimore County. “You’re very trustworthy for making sure my moisturizer gets to me on time,” said the Baltimore mayor Stephanie Rawlings-Blake.The tax breaks often add insult to injury. When a forklift crashed at the Obetz, Ohio, Amazon warehouse (the driver was legally blind, and when an OSHA complaint was filed, it was discovered, unbelievably, that another legally blind person had been training as a forklift driver before the incident), EMTs rushed to the scene. It was nothing they couldn’t handle, but “what rankled them was that they were providing their services for free.” The deal that Amazon had negotiated with the state meant that the company wouldn’t pay property taxes—which supported local services like schools, ambulances, road repair, and the fire department—for 15 years. In 2017, one of the counties asked voters to approve a $6.5 million tax levy to support their fire department, filling in a funding gap to which Amazon contributed nothing.Bezos has spoken with admiration about the founder of Walmart, and Amazon has followed in its tradition of allowing government welfare programs to make up for the unlivable low compensation it offers. Because of low wages, Walmart’s employees have infamously subsisted on food stamps. A 2018 report found that one in 10 Amazon employees in Ohio was on food stamps. There are the millions that states give in explicit subsidies, and then there are these hidden ones.Only places wealthier than Dayton have been able to refuse Amazon’s demands. In 2019, New Yorkers famously rejected the package of incentives negotiated by the governor and mayor in secret in exchange for Amazon locating its headquarters in Queens. Amazon may have finally pulled out of the deal in order to continue union busting. During discussions, Governor Andrew Cuomo brokered a meeting between Amazon executives and labor leaders, who wanted assurances that, if the company expanded in New York, it would not aggressively discourage employees from organizing. The next day, Jay Carney, the senior vice president for global corporate affairs at Amazon, called to say the deal was officially off.Amazon is the perfect mechanism for exploring modern America, if only because its tentacles may be the last things connecting us all.It’s at the national level where Amazon has been making some of its most astonishing gains, and this is where Carney really shines as a smarmy supervillain of the inequality era. Carney was a journalist for 20 years before going to work in the Obama administration, eventually becoming press secretary. He went from government to Amazon, making millions smoothing the way for the corporate behemoth that crushes unions and drains local government. If average Americans lack faith in the civic virtues of those in government, they need look no further than the revolving door between government and business and people like Carney, who profit by passing through it. If many are skeptical that the Democratic Party stands with the worker and against big business, well, they need only look to the tech industry to have their fears confirmed a hundred times over. (There’s little difference between Democrats and Republicans in this book, because both parties have close relationships with the company.) In 2020, Amazon set a lobbying record in the second quarter by spending $4.38 million. The federal government’s billion-dollar procurement and web hosting contracts may be Amazon’s real holy grail. It has made major gains in federal, state, and local procurement, along the way destroying small businesses accustomed to filling those orders.In other words, America’s inequality has been Amazon’s gain: It exploits the desperation of small cities and towns, to sponge off their meager infrastructure and battered workforces, and floods the sparkling centers of influence with cash.One result has been the political polarization of the country. This polarization certainly has many roots, including right-wing media, Astroturfed Koch brothers campaigns, deep-seated racism, and a longstanding rural-urban divide. But companies like Amazon reinforce the divide by hiring highly educated tech workers in places like the Bay Area and hiring people for their muscle everywhere else. This leads to increasing segregation based on education and wealth.One of the book’s most gut-wrenching chapters is about Taylor Sappington, the young Democrat from Nelsonville, Ohio, who ran for a seat in the state House of Representatives. His own life was riddled with all the tragedies playing out in his town: low wages, bad health care, and despair, leading to, among other horrors, the suicide of his boyfriend. In 2016, he saw Democrats in his town moving toward Bernie Sanders. Then, he saw more and more people moving to Trump. (He ultimately lost his own race to the wealthy and conservative scion of a powerful local family.) Although Sappington “was appalled by this drift,” MacGillis writes, “he also saw what else Trump was tapping into—the sense that this part of the country had been left far behind the rising islands of prosperity.” Since the financial crisis, cities with populations over one million had accounted for nearly three-quarters of the nation’s employment growth, benefiting substantially from tech jobs, but only 1 percent of job growth had occurred in counties like Sappington’s, which lacked a city of at least 50,000. The Democratic Party had done little to help places like Nelsonville, and MacGillis describes the party’s 2016 convention as a celebration of the upper middle class. It was hardly surprising that people in Nelsonville did not embrace it.Each chapter of Fulfillment is a beautifully written and sometimes overwhelmingly detailed story. You get the feeling that MacGillis is fighting to overcome the perceived gap between his likely white-collar, winners-taking-all readers, and the workers he writes about, through sheer force of detail. In this, the book has something in common with classic works that exposed the plight of the poor to those better off, like George Orwell’s The Road to Wigan Pier or Michael Harrington’s The Other America.Throughout, it is abundantly clear that Amazon is all too happy to prey on the weaknesses of an increasingly feudal society, and to exacerbate them. Deindustrialized towns are easy pickings, local businesses don’t stand a chance, labor law is all but useless in twenty-first–century America, and there are hardly any limits on legalized bribery. In many ways, Amazon is the perfect mechanism for exploring modern America, if only because its tentacles may be the last things connecting us all.What you don’t get a sense of in this book is Amazon’s structure and the range of its activities. To be fair, this isn’t the direction in which MacGillis is pointing his lens. But it’s important for understanding what might happen in Amazon’s future and ours. MacGillis takes us on a tour of all kinds of effects—gentrification, small- business bankruptcy, poverty, death on the job—all concentrated wherever Amazon chooses to situate a certain kind of work. He is focused primarily on the places where Amazon interacts with working-class people—the warehouse, for example. This emphasis makes Amazon look somewhat like Walmart. MacGillis also touches on Amazon’s growing transport business, designed to facilitate next-day, or even same-day, delivery. Its rapid movement into this industry makes it look like a successor to the railroad barons of old.But Amazon is unusual in the range of things that it does. In a revealing story in The New York Times about Baltimore and Amazon, reporter Scott Shane showed how the city was enmeshed in Amazon from top to bottom: Airplanes take Amazon’s shipping, which has eclipsed that of UPS and FedEx put together; workers rush through timed shifts in the local warehouses; Ravens players have chips embedded in their uniforms that stream their movements to Amazon Web Services; the local government and university are now handling procurement through Amazon Business. Amazon’s huge power comes not just from its wealth, but from its ability to spy on competing products that vendors sell through its site; the fact that it hosts some of its own rivals on Amazon Web Services; and its ability to force an industry like publishing to its knees by choking off consumer access on its site.These advantages have drawn the attention of antitrust advocates who have made a clear and compelling case that Amazon needs to be broken up. The most widely known theorist of applying antitrust law to Amazon, Lina Khan, showed that tech companies have been protected by an outdated theory of monopoly that says a company should only be broken up if its size leads to higher prices for consumers. Amazon keeps prices low, so it hasn’t faced an antitrust suit. Yet, antitrust law was not designed to be applied so narrowly. As law professor and former Demos think tank president K. Sabeel Rahman has noted, the primary concern of anti-monopoly thinkers in the early twentieth century was that too much power would accrue in private hands. A company could get so big that it could dominate a whole society, dictating policy and even defining living standards. As Rahman wrote in the technology magazine Logic, progressive reformers found the result of such concentration “was a fundamental threat to liberty, opportunity, and democracy.” These firms, they argued, changed the character of society, representing a “profoundly oligarchical mode of social order, where the public good remained dependent on the will and whims of [chairmen] and chief executives.”It seems obvious today that we need antitrust law to be applied to Amazon, but not only antitrust law. What MacGillis’s book makes obvious is that Amazon will not stop squeezing every drop from workers until those workers have more power. In recent years, there have been extraordinary international organizing efforts among Amazon warehouse workers, including a strike in Shakopee, Minnesota, by mostly Somali American workers, along with some walkouts by white-collar workers. Some of these groups are in contact with one another, attempting to bridge the gap that MacGillis describes in his book. It won’t be easy. Workers are pitted against one another in games and competitions on the warehouse floor, and people last such a short time that organizing, even in a former union town, is difficult. The gulf between blue and white collar remains real. When Logic interviewed a militant Polish warehouse employee and asked about collaboration with tech workers, the worker offered wary support but noted, “[Tech workers’ inventions] spy on us every second of our ten-hour shift, constantly increase our productivity, and literally work us to death. Last week, a worker in our warehouse died on the shop floor. The tech workers don’t see that.”During the Covid-19 pandemic, it’s been hard to avoid the conclusion that capital is sucking so much out of society that society itself is going to crumble. Mass death must be blamed in part on the crumbling public health infrastructure from which private businesses have been extracting cash like so many ATMs. Crushing unions has meant nurses have struggled to win battles over safe staffing ratios for years. Economic inequality offered politicians and businesspeople an opportunity to ally themselves with a seething far right, which may benefit business as long as it bloodies the left, but hardly seems like a safe long-term bet.In February, Jeff Bezos announced he was stepping aside as CEO of Amazon and would become executive chair of the board. He wanted, he said, “the time and energy” to focus on his nonprofit, the Day 1 Fund, along with “the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.” Yet he had given relatively little to charity in the past. An early Amazon investor, Nick Hanauer, has described him as uninterested in righting social wrongs. People close to Bezos have long suggested a different purpose behind his pursuit of enormous personal wealth (and committed exercise routine). “The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel,” Bezos said in 2018. “That is basically it.”Amazon has put a drill into the cracks of American society and won’t stop until it’s extracted everything it can. A world left in fragments may not bother Bezos, since he plans (perhaps a touch optimistically) to leave it. The rest of us, however, are likely to remain earthbound. And a prerequisite of making a good life here on the ground is to bring the power of companies like Amazon and of CEOs like Bezos crashing down.
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