"Did you know that Amazon.com (NASDAQ:AMZN) CEO] Jeff Bezos is a slave driver?"
My mother rarely pays attention to Corporate America unless its dirty deeds creep onto the front page of her local newspapers. So it immediately caught my attention when she asked me about Bezos and Amazon, which have long gotten a free pass on their draconian warehouse labor practices. If the moms of America are finally catching on, can the rest of the country be far behind?
To understand the wide gulf between perception and reality, try this simple social experiment: Just ask a few people you know what they've heard about how Amazon treats its workers. You'll probably get a few blank stares and little else. If you follow up by asking what they've heard about Wal-Mart's (NYSE:WMT) workforce, many people will at least know that the typical Wal-Mart employee gets paid very little, which pushes many of them onto public assistance to cover the gaps in their meager salaries.
Amazon's convenient online-only operation, so seamless on its surface, has consistently earned it the highest marks on consumer perception surveys, while Wal-Mart's public perception now trails far behind that of most other major retailers. Most people know far more about Wal-Mart's labor practices than Amazon's, but it's Amazon's labor practices that are arguably worse and more oppressive.
Less than human
At its peak on Cyber Monday, Amazon will process more than 400 items per second. The company's ability to manage this tidal wave of orders -- and the steady torrent of purchases that flow in from around the world on the other 364 days of the year -- depends far more on the workers in its gargantuan warehouses than it does on the software running its many servers. For most online shoppers, these workers might as well be ones and zeroes, pieces of code running silently in the background to keep the whole thing working.
But ones and zeroes don't get tired if they spend 10 hours a day racing back and forth across a dozen football fields' worth of warehouse space. They never suffer while working in 100-degree heat, or through sub-zero chills. They don't have to eat and drink to keep their energy up through these grueling extremes, and they aren't punished if they spend one second more than allotted to do so.
However, in one crucial way, Amazon's warehouse workers are simply ones and zeroes to Amazon itself, which monitors every employee's every action down to the second with personal GPS trackers that every employee in every warehouse must wear at all times. These trackers give Amazon a steady flow of data that it uses to squeeze every possible ounce of optimized speed and performance out of countless sub-tasks, every one of which is analyzed and given exacting time targets down to the second in the name of ceaseless, ruthless efficiency. If a worker falls behind, they'll soon find themselves out of a job.
In your most dystopian visions of the future, you might see workers reprogrammed to work like robots because human beings are still cheaper than robots. That future is already here, and it's happening in Amazon's warehouses -- although Amazon will surely replace every worker with a robot as soon as it's economically feasible.
Dystopias also tend to accept death as a byproduct of dehumanization. In the past year, two people have died on the job at Amazon's warehouses after being crushed by fast-moving machinery. The first accident happened during the 2013 holidays. Amazon avoided any responsibility in the subsequent investigation because of its frequent reliance on outside contractors, while the staffing and management companies directly overseeing the worker in question were fined a mere $6,000 each.
An invisible army
Amazon now employs approximately 150,000 people around the world, according to a recent New York Times profile on company diversity. That's more than all but two other tech companies based in the United States.
Like most of its peers, Amazon's workforce is dispersed globally. But unlike most of its ostensible peers in the tech industry, Amazon employs most of its workforce in decidedly low-tech jobs at its 131 massive distribution centers, 62 of which are scattered across the United States.
Amazon offers little information on the people who work in its warehouses, and many of these workers aren't counted in Amazon's official employment tally due to the company's heavy use of outside staffing agencies. But, at least 100,000 of Amazon's 150,000 workers around the world are probably warehouse employees, based on the thin data available.
The true number would probably be at least twice as high if third-party workers were counted. A wide range of first-hand and deeply researched accounts have been published on what these workers live through -- and, rarely, die from -- on a daily basis during the past several years.
Some of the better examples can be found:
- at Gawker, which has published former employees' experiences
- at Salon, which excerpted a book on the "mechanization" of human labor that focuses on Amazon's abuses
- in The Guardian, which embedded a reporter in Amazon's largest British warehouse for a week
- in Mother Jones, which also published the first-hand account of a reporter who worked in one of Amazon's U.S. warehouses
- in the International Business Times, which confirms through first-hand accounts that Amazon would love to replace its warehouse workforce with robots
- at the BBC, which notes that workplace psychology experts believe Amazon's workforce is at a higher risk of both mental and physical illness
- in The Seattle Times, which highlights a number of instances where Amazon has fought to hide the extent of its workforce's injuries from authorities
- in the Huffington Post, which has covered both the extreme temperatures in Amazon's warehouses and its refusal to pay employees for time spent in mandatory security screenings
Worse than Wal-Mart?
Amazon expects to earn as much as $30.3 billion in revenue this holiday quarter. As much as $25 billion of that revenue will come from the sales of millions of products. That means that each Amazon warehouse employee will be responsible for shipping as much as $250,000 worth of stuff -- or almost $2,800 worth of stuff every day -- in the three months of this holiday season.
To put that in perspective, one Wal-Mart employee is responsible for processing fewer sales in an entire year than one Amazon warehouse worker is during the holiday season.
Yet, Amazon's warehouse workers are not paid significantly more than Wal-Mart's low-level associates, making an average of $12 an hour compared to an average hourly wage of $9 at Wal-Mart, according to employee-feedback portal Glassdoor. For an additional $3 an hour, Amazon employees endure what are arguably far worse working conditions and enjoy far less job security -- examples abound of Amazon firing its employees for all sorts of frivolous reasons, as you'll find in many of the stories I linked to earlier.
Wal-Mart actually outdoes Amazon by a wide margin when it comes to its warehouse workforce. Glassdoor shows that Wal-Mart's warehouse employees receive an average hourly wage of roughly $17.
Amazon may have escaped the welfare-sponge accusations that have dogged Wal-Mart in recent years -- the company's associates took more than $6 billion in public assistance last year -- but its low wages and harsh working conditions cost American taxpayers, as well. The company's reliance on a temporary workforce means that many of its warehouse employees fall into the "working poor" trap, with inconsistent job prospects that can push them into homeless shelters after seasonal hiring gives way to seasonal layoffs.
Unlike Wal-Mart, which is required to collect sales taxes in its stores, Amazon has spent most of its corporate life avoiding what by now amounts to billions in lost sales taxes across the country. No sales taxes means no government revenue, which means less money available for public assistance, or for anything else. The means that Wal-Mart and Amazon use to avoid social responsibility might be different, but the ultimate costs to American citizens look much the same.
This holiday season, millions of Americans, and millions of others around the world, will go to Amazon.com to find the perfect gift. Most of them won't know the human costs of their holiday shopping. If they did, many might not even care.
The price of low prices has often been the dehumanization of the workers who make it possible, which is a cost most consumers have grudgingly accepted as part of capitalism's progress. But human beings aren't robots, and workers aren't machines.
At some point, consumers will realize that Amazon is just as bad as Wal-Mart when it comes to the way it treats its warehouse workforce. When that happens, will it still be the retailer of the future, or will the truth finally undo more than a decade of goodwill, and turn Amazon into the next corporate pariah?
Alex Planes holds no financial position in any company mentioned here. Follow him on Twitter @TMFBiggles or connect with him on LinkedIn for more insight into investing, markets, economic history, and cutting-edge technology.
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