THR Blog   /   May 13, 2021

Amazon and Us

Catering to and profiting from our greatest vulnerabilities.

Kyle Edward Williams

Amazon's Baltimore fulfillment center, BWI2.

One of the more revealing moments in recent American business history happened a few years ago when Amazon issued a request for proposals for its planned second headquarters. The request wasn’t for architectural designs or for bids in any technical or logistical sense. It was rather an invitation to municipalities and economic development corporations across North America to make their best case for why Amazon should put down roots in their city or region. More than 200 applicants did just that, providing proprietary information and boasting about their distinct cultural identities and the character and skills of their residents. The better off also promised tax breaks, tax credits, and, in some cases, straight cash. Although Amazon made much of its continent-wide search for “HQ2,” as they called it, the company settled on two entirely predictable locations: New York City and Northern Virginia.

What was revealing about this particular episode of corporate rent-seeking was not that cities were willing to compete for Amazon’s headquarters. After all, the company promised to employ tens of thousands and invest billions. Who wouldn’t want that? Besides, it now seems to be a part of the job description of any city manager, mayor, or councilwoman to recruit an NBA team, big box store, or large employer. Indeed, since at least the days of the transcontinental railroads when the placement of a line could make or break the investments of a fledgling town, ambitious cities have courted business development and cultivated a public perception of vitality and progress.

As the search for HQ2 shows, size matters in business because it changes the relationship between a corporation and everything else—whether economic, political, or social. There comes a point in the growth of a firm or the concentration of an industry when size ceases to be a quantitative descriptor—a mere gradation of market control—and takes on a qualitative difference. Up until quite recently, as fears over big tech have provoked a resurgence in antitrust ideas and policy proposals, America had largely given up on the antimonopoly tradition. But before the 1970s, when Robert Bork, Richard Posner, and other law-and-economics theorists convinced policymakers and jurists that size didn’t matter as long as consumers benefitted from mergers and acquisitions, the tradition of antitrust had been a mainstay of American legal and political life. This tradition held that any business granted special privileges or endowed with too much market power would tend hold on to that power and expand it—to the detriment of workers, consumers, other businesses, and the democratic system itself.

So when Amazon initiated a bidding war for its second headquarters, it wasn’t just entering a melee in which competitive civic boosterism had acquired continental scale. It was exercising a kind of political economic power that no business had ever possessed in the United States, not making a judgment about the most strategic location to move, but putting cities in competition with one another—from Toronto to Tulsa. And clearly people inside Amazon either didn’t care or failed to understand how this display of monopoly power might damage their brand.

As journalist Alec MacGillis observes in his recent book, Fulfillment: Winning and Losing in One-Click America, Amazon has assembled asymmetrical advantages for itself at almost every level of business. In its race to build its own infrastructure of delivery and logistics—a network of warehouses, trucking routes, and fleets of delivery vehicles— the company also learned how to initiate bidding wars among states and cities. Between 2007 and 2017, MacGillis writes, even as the company had successfully funneled away substantial sales tax revenues from state and local governments, it collected more than one billion dollars in subsidies for the construction of fulfillment centers. Amazon exercises a similar hold over its suppliers, notably those in the publishing industry, who are squeezed between two impossible choices: lower prices to near-unsustainable levels or forget about competing for Amazon customers (or staying in business, for that matter).

The most controversial expression of Amazon’s power appears in its dealings with the labor market. From the many stories (now verified) about delivery and warehouse workers being forced to urinate in water bottles to stay on schedule to high-profile (though so far defeated) union drives, the working conditions and economic plight of Amazon workers have become matters of public and, increasingly, political concern. But, as MacGillis shows, the lives of Amazon workers are not just a story about abusive employment practices. It’s also a story about the changing character of work that is playing out in the formerly industrial Rust Belt and the South, among other places. Sometimes, as in the case of a fulfillment center in Baltimore, Amazon had literally replaced old industrial plants:

That September [of 2015], the top elected officials from metropolitan Baltimore gathered at the site of the former General Motors plant on Broening Highway. There, on the same ground where thousands of men and women had assembled Safaris and Astros, now stood an enormous warehouse. It sprawled over one million square feet—equivalent to eighteen football fields—a boxy, light gray building with blank walls, nearly a third of a mile long and surrounded by 1,900 parking spots. Large black letters on its side read:

AMAZON FULFILLMENT

It was an arresting sight, those two words. It was, on one level, simply a term of the trade. The company called its primary warehouses, the cavernous buildings where workers and robots selected goods from racks and workers packed them for shipment, “fulfillment centers.” They were, after all, where customer orders were fulfilled

But the word, plastered in large black letters alongside the company name, seemed meant to conjure something larger than the building’s functional purpose. It advertised the company’s promise to all who passed by, all who had a longing—for what, exactly, they might still be trying to decide—and now knew from whence it would be delivered to them.

As MacGillis points out, the new Amazon pay paled in comparison to what the old GM jobs offered: now about $13 per hour on average with slight benefits compared to the old average of $27 per hour and generous benefits. Some workers had even experienced both first-hand, including one Amazon employee MacGillis interviewed who had worked in the same spot building Chevelles decades before. Younger workers called him “Pops” and “Old Man,” and he spent night shifts unloading trucks packed with foreign-made products.

After a hiring spree spurred by the online shopping boom during the pandemic, Amazon now employs an estimated 1.3 million people, making it the second-largest employer behind only Walmart. So it is little surprise that the kind of work life Amazon has fostered is transforming American work life more generally, making it more ephemeral in character. Workers are usually younger. Turnover is high. And the ranks of employees are often transient, like the character portrayed by Frances McDormand in the Nomadland film who takes seasonal jobs at fulfillment centers in Arizona.

But as historians of labor have long known from studies of the shop floor and even the plantation, working life is rarely a one-way story of control and abuse. Even the most coercive and destructive labor regimes depend on cooperation from those who do the work. Although Amazon continues to deploy new means of surveilling and controlling workers in their never-ending quest to tighten the “slack,” the company still attracts large numbers of applicants in jobs-starved regions of the rural South and in northern cities dotted with empty industrial plants. Sometimes it’s even the transience of the work—getting hired quickly, taking short-term jobs—that is most attractive to many workers. Coercion and cooperation, after all, often go hand-in-hand.

One legitimate criticism of Amazon is obvious: It is too big. Its ability to project power over large, overlapping markets in consumer goods, web services, entertainment, and labor has metastasized into undemocratic power in politics, culture, and society. But as with a job contract, so with the way America does business with Amazon: We cooperate with the company because it does something for us—fulfilling our consumer desires or providing solutions to real problems. Indeed, it is easy to trace the building of the company through the particular dysfunctions of twenty-first-century life: a consumer culture and app-mediated social life that undermine solidarity across class, race, and culture; entire regions and cities left behind in the shift to the so-called knowledge economy and suffering from the hemorrhage of jobs; a pandemic that made in-person shopping all but impossible; an inadequate social-welfare system; and, a de facto national economic policy that deems cheap consumer goods the highest priority.  

The problem with Amazon is not just that it is too big. It’s that we are distinctly susceptible to businesses that ingeniously cater to and profit from our greatest vulnerabilities.