Be skeptical about claims that Amazon will create ‘good, middle-class jobs’

ANALYSIS: The online retailing giant has a reputation for tough working conditions — and there’s evidence the company destroys as many jobs as it creates, writes Adam McDowell
By Adam McDowell - Published on July 19, 2018
a man working in an Amazon warehouse
Amazon seems to have used its mastery over data to figure out how hard a person can work, and it sets a high bar accordingly. (Patrick Samansky/CP)

Comments

X

When online retailing giant Amazon announced last week that it would be building a new “fulfilment centre” in Navan, an exurban part of eastern Ottawa, politicians were as excited as a customer anticipating a package delivery.  

Andrew Leslie, the area’s Liberal MP, told the CBC in May that his government had been discussing the project with Amazon for months; he said that the company “will employ approximately 1,000 people” in “good, middle-class jobs.” (Leslie was not available for an interview with TVO.org this week.) The press release quoted local MPP Marie-France Lalonde, Ottawa mayor Jim Watson, and Premier Doug Ford expressing similar sentiments.

There will indeed be jobs: Amazon says it will hire 600 full-time, permanent employees to work at the facility. (In the company’s parlance, a “fulfilment centre” is a massive warehouse for products awaiting purchase and delivery. The million-square-foot building planned for Ottawa will specialize in oversize objects — think home decor and sporting goods.)

However, based on what we know of Amazon’s employment and labour practices, we should take a closer look at Leslie’s claim.

First, will the company actually create net jobs? According to a study released earlier this year, Amazon fulfilment centres fail to raise overall employment levels in U.S. counties where they’re located. The authors concede that the reason remains unclear, but when Amazon jobs appear, other jobs often disappear — resulting in a break-even effect.

Second, are Amazon jobs good? Front-line employees, particularly those working in the company’s global supply and logistics system, might say no. Amazon’s warehouse “associates” (as the lowest-tier workers are known) must move briskly as they pluck products from shelves and prepare them for delivery, or else face discipline for falling short of their “work rate.”

Economist Jim Stanford, director of the Centre for Future Work, in Sydney, Australia, says that the company’s proprietary technologies — which include software that guides associates through the facility to grab items — make the work especially intense. There are “lots of concerns about the mental and physical health implications of the intensification of work within Amazon workplaces,” Stanford says.

TVO.org spoke with an employee at one of the company’s Toronto-area facilities, who noted that Amazon seems to have used its mastery over data to figure out how hard a person can work, and it sets a high bar accordingly. Sometimes it miscalculates, however, with consequences that can range from the absurd to the tragic. (See, for example, stories about British warehouse workers peeing into bottles in order to hit their work-rate targets and warehouses so hot that ambulances had to line up outside to treat workers for heat stress.)

On the positive side, the employee said that many workers enjoy the challenge and that the company encourages strong performers to develop their skills in order to move up the ladder.

The company also notes that its full-time associates receive benefits, including supplementary health-care coverage and stock awards (although its workforce incorporates many part-time, contract, and temporary employees, who aren’t entitled to such benefits).

“We believe Amazon fulfilment centre jobs are excellent jobs that provide a place for people to learn skills and start to develop a career,” said a spokesperson for Amazon in an interview with TVO.org. “[And] a positive working environment is a priority.”

Third, are Amazon warehouse jobs middle-class? The company will hire people for roles in IT, human resources, and engineering to work in Ottawa, and those jobs will presumably qualify. But Stanford says that when it comes to floor-level warehouse positions, “it’s highly unlikely that the work is going to remotely constitute what we would traditionally call ‘middle-class jobs.’”

Here’s an ad for Amazon warehouse jobs in the GTA that pay $14.40 an hour, or just above minimum wage. We can assume fulfilment centre associates won’t be getting a ticket to the middle class in Ottawa either.

Amazon’s promise to be the fastest of all online retailers depends in part on a fluctuating and precarious workforce. In most markets, including Ontario, the company lacks a delivery fleet of its own. Canada Post and big-name courier companies deliver a certain number of its packages here, but other boxes arrive via unmarked cube vans leased by small, private courier companies; some are even delivered by independent drivers who use their own cars. (The driver stuck next to you in evening rush-hour traffic might have a dozen Amazon boxes in the back seat.)

When a growing, well-known company such as Amazon promises to come to town and hire people, politicians reflexively applaud — and sometimes offer tax breaks. (Broccolini, the construction firm slated to build the Amazon warehouse, received an $800,000 interest waiver from the City of Ottawa last week.)

Instead, they should ask tough and specific questions about what kinds of jobs such companies will create, and how they plan to address workers’ well-being — and minimize any potential negative effects on traffic and local businesses.

It’s exciting when a delivery arrives on your doorstep — whether it’s a parcel or a million-square-foot warehouse — but what really matters is what’s inside, and how it works.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.

Related tags:
Author