This post was written by Francesca Willow and was originally published on Ethical Unicorn. Used with permission just in time for Amazon Prime Day.
At this point I think we’ve all heard something shady about Amazon. A hint of unethical practice, a stray article about something in their warehouses. But when a mega-corporation starts to become pervasive and ever present in our daily lives it’s hard to imagine an alternative. Amazon has reached such a height that for many it may seem like a necessary evil in modern society, and it can almost seem fruitless to learn why they are problematic. If it’s unavoidable, better to not know just how bad it is.
But here’s the thing: for some of us, Amazon is avoidable.
Amazon thrives off convenience and low prices, meaning that for certain members of society it really can function as a valuable tool due to their lack of income or time outside of work, both larger systemic problems that need to be addressed in their own right. But for many of us it’s not necessary for our daily lives. It just isn’t. I’ve now gone for nearly two years without buying anything from Amazon, including digital purchases like Prime, Kindle or Audible and, while some of this is due to my own privilege and living about 5 minutes away from my local high street, it has been achievable.
Beyond questioning the ethics of a business that does best in a hyper-consumerist and unsustainable environment, when you start to look into it properly it seems like nearly everyone who works at Amazon is having a terrible time. Here are the reasons why I choose not to shop on Amazon, which I hope you’ll consider too.
More so than any company I can think of, Amazon appears to have built their profit maximization strategy around avoiding taxes at various levels
Taxes are important. And when the ultra wealthy aren’t paying them, they’re even more important. Taxes redistribute money in such a way that all citizens can receive the services they need (such as education and healthcare), addressing issues like poverty and income inequality by making sure our most vulnerable are able to have their needs met for free. When high earners, or big business, don’t pay their taxes it means there’s less to go around for everyone, and it’s the vulnerable who end up being hurt. Unfortunately not paying taxes is also what corporations apparently love to do (including the ones you think may be ethical, more info on Ecover’s tax avoidance here).
One serial tax avoider is Amazon. In fact it was avoiding tax that got them where they are in the first place. Founded in Seattle by Jeff Bezos in 1994, Amazon was created to exploit the loophole of not having to collect sales taxes when selling online, which at the time was only a requirement for physical stores. Although in the US Amazon now does pay sales tax in every state that has one, calculations suggest that if Amazon had been paying taxes from the start it would have paid a total of $20.4 billion in sales taxes from its founding until 2015.
In the US Amazon also barely pays any federal income tax, both through avoiding booking any profits for years, instead investing everything back into the business, and through aggressive tax planning. According to Matthew Gardner at the Institute on Taxation and Economic Policy Amazon paid no federal tax on $5.6 billion in U.S. profits, and in the past five years paid a rate of 11.4% on its profits of $8.2 billion, around a third of what they should pay.
Beyond this, Amazon is also adept when it comes to playing state and local governments against each other, demanding large subsidies in order to set up an Amazon facility in their area. Good Jobs estimates that Amazon has received at least $1.6 billion in tax incentives, many of which are given in the hope that Amazon’s presence will result in an economic boom and job opportunities in the area. Research suggests, however, that this doesn’t work. There is no return on investment for local areas, in fact it’s a huge waste of money. Employment remains stagnant after Amazon moves in, and economic development doesn’t materialise by incentivising big businesses. Amazon just gets to avoid paying more taxes.
Across the pond in the UK Amazon only paid £4.6 million in taxes in 2017, by routing sales through Luxembourg, a well known tax haven. Almost 75% of Amazon’s 2017 UK revenue, amounting to £6.88bn of UK sales, was registered through their Luxembourg subsidiary. These numbers suggest that Amazon’s tax rate ended up at 0.5%, leaving £50 million of tax unaccounted for. In October 2017 the European Commission also ruled that Luxembourg had improperly allowed Amazon to evade taxes on around 75% of its European profits, and ordered Luxembourg to recover $250 million plus interest from Amazon.
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Despite being a huge corporation, with a CEO who is literally the richest man in the world, in the US Amazon also ranks highly on the list of employers with huge numbers of warehouse employees enrolled in SNAP, aka food stamps. In Ohio 1 in 10 employees use SNAP, in Pennsylvania it’s 1 in 9, and in Arizona it’s nearly 1 in 3.
Amazon’s fulfillment center wages are, generally speaking, lower than the average wages for warehouse employees elsewhere. “The average warehouse worker at Walmart makes just under $40,000 annually, while at Amazon would take home about $24,300 a year,” CNN reported in 2013. “That’s less than $1,000 above the official federal poverty line for a family of four.”
A November 2016 study by the Institute for Local Self Reliance, a community development advocacy group, analyzed more than 1,300 wage postings on Glassdoor and found that positions at Amazon’s fulfillment centers paid about 9 percent less than the industry average. And when the researchers homed in on 11 major metro areas to account for differences in cost of living, they found that Amazon’s wage dip was even more pronounced: The company was paying 15 percent less than comparable positions in each area. A January 2018 study by The Economist using different methods found similar results.
While Amazon did announce in 2018 that it would finally be raising wages for warehouse workers, there are still many issues for those who take these jobs.
If you’ve heard something bad about Amazon it’s usually to do with their warehouses, where employees pick and pack products for delivery. There are multiple accounts of abuses at various Amazon warehouses, both in the UK and America, but certain details seem to appear again and again.
Multiple reports can be found of employees pushed to meet extremely high targets, subjected to strict breaks and a terrifying work environment, monitored electronically, and worried that not meeting targets will result in immediately losing their jobs. People talk about peeing in bottles out of fear of being disciplined or terminated for ‘wasting time’ going to the toilet, to the point where employees deliberately decide not to drink water so they don’t have to pee while working. One employee became sick while pregnant and was given a warning, one was hospitalised after having an epileptic seizure at work and received a strike for not showing up the next day, another turned up for work with gastric bug, had to go home after two hours and was given a strike despite getting a sick note from their doctor. One woman tragically suffered a miscarriage while working, which she believed was ‘partly as a result of continuous pressure to hit targets’.
In UK warehouses there are also records of increased depression, anxiety, and suicidal thoughts in employees, alongside bullying and harassment.
The links between Amazon warehouses and ill health is sadly not new. In 2011 staff in a Pennsylvania warehouse worked in 100-degree heat with ambulances waiting outside, taking away workers as they fell. In the UK a 2018 Freedom of Information request revealed that ambulances had been called out 600 times to Amazon’s UK warehouses in the previous three years. The request showed 115 call-outs to Amazon’s site in Rugeley, near Birmingham, in comparison to only 8 calls to a nearby Tesco warehouse of a similar size.
And, heartbreakingly, in 2018 The Huffington Post reported on the case of Jeff Lockhart Jr. In 2013 Jeff, an employee at Amazon’s warehouse in Chester, Virginia, collapsed at work and was pronounced dead less than two hours later. His autopsy cited heart problems as the cause of death, and it’s impossible to know whether the exertion or intensity of the job was a contributing factor. What we do know, however, is that a public records request revealed the following about the Chester warehouse:
In its first two and a half years of operation, more than 180 calls were placed to 911, many of them for patients in their 20s and 30s. The most common issues cited were difficulty breathing, chest pains, cardiac problems, spells of unconsciousness or other undefined illnesses. The frequency of calls tended to climb during peak season.
Beyond suggesting a correlation that can’t be definitively proved, we also know that Jeff’s wife and children were left vulnerable. Jeff was employed as a temporary worker at Amazon, meaning he had no life insurance or health insurance through his workplace. When he died, the family received nothing.
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Exploitation of temporary workers
“Somebody did studies and spreadsheets and crunched those numbers,” he said, “and figured out that the cheapest way to get that job done is to treat people like that.”
Jeff’s situation was not a unique one. Amazon warehouses are often staffed by numerous temps hired by external companies who Amazon outsource to. Some of these temps, like Jeff, are hired for the extra work created around the holidays, known as ‘peak season’, and let go shortly after with minimal notice. Some are kept on, as Jeff was, and some are brought in as temps outside of that season altogether. The idea is that eventually these temps should graduate to proper employee status, which will provide more security, better pay and benefits, however there seems to be no proper protocol for how this happens. Jeff had died in January, well after peak season had ended and confident that he would become permanent staff, but there was nothing to indicate if or when this would happen. A separate report talks about other warehouses where no one had been made permanent for 6 months and two years respectively, and past temps from Jeff’s warehouse emphasised that there was no guarantee he would ever have become a permanent employee. It seems this is a common pattern of behaviour for more than one Amazon warehouse (although not necessarily all of them). As his widow explained:
What bothers her most is how expendable her husband seemed to be inside the warehouse system. She believes that had he not died as a second-class temp worker, his family might have been in a better position to sustain the loss. “Just feeling like he wasn’t human, like he was just a piece of paper,” she said. “You know, [they] can dispose of you. It kind of hurt.”
Exploitation of Chinese workers
Amazon also have factories for manufacturing with similar issues to those in their warehouses. Chinese factories often take on temporary workers which are hired from external agencies, known as dispatch workers. It is the law in China that each workplace can’t have more than 10% of their workers be dispatch workers, however an investigation from China Labor Watch found factories in China manufacturing Amazon electronics, such as kindles and smart homes, had workforces that were illegally comprised of over 40% dispatch workers. Working conditions between dispatch and normal workers were found to be decidedly different, despite positions being the same.
The investigation found that regular workers received five days of training while dispatch workers only received eight hours of training, despite the legal stipulation being 24 hours of pre-job safety training. Dispatch workers were also required to pay physical examination fees, take sick leave unpaid, receive no extra wages for overtime, receive no social insurance, and have no contributions made to their housing provident fund (even though dispatch workers are meant to be registered for social insurance and employers are meant to make social insurance contributions). Beyond this, often dispatch workers are sent on leave during the factory’s off season, often for months at a time with no payment.
Despite these differences, all workers in the factories are subject to long hours, low wages, and poor conditions.
Workers put in over 100 overtime hours during peak season, and there was an instance of workers working consecutively for 14 days. The average monthly wage in Hengyang is 4,647 RMB ($725.22 USD), however, workers at the factory on average earned wages between 2000 – 3000 RMB ($312.12 – $468.19 USD) during off-season. As wages are low, workers must rely on overtime hours to earn enough to maintain a decent standard of living. In spite of that, the factory cuts the overtime hours of workers as a form of punishment for those who take leave or have unexcused absences.
Other major issues at the factory include inadequate fire safety in the dormitory area, lack of sufficient protective equipment, absence of a functioning labor union at the factory, and strict management who subject workers to verbal abuse.
A toxic environment for white collar workers
Nearly every person I worked with, I saw cry at their desk.
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