Ah! Free enterprise and glorious Capitalism.
Working on our behalf, while putting billions into select pockets.
King Midas has nothing on Amazon.
Carl Jarvis
On 12/21/16, Miriam Vieni <miriamvieni@xxxxxxxxxxxxx> wrote:
$1 of Every $2 Spent Online Goes to Amazon. Can We Break the Company's
Stranglehold?
Wednesday, December 21, 2016 By Mario Vasquez, Truthout | Report
Amazon Books, for now the online retailer's sole physical bookstore, at
the
University Village mall in Seattle, March 9, 2016. (Photo: Michael Hanson /
The New York Times)
Stories like this will always remain free to read at Truthout. But if you
can spare a small donation, please click here to ensure independent media
has a future!
Amazon.com is ubiquitous: It seems to reach into all the corners of our
lives, selling everything from toiletries to furniture. Yet, beyond the "A
to Z" selections offered on Amazon exists the reality that workers,
consumers and their communities are suffering from the retailer's
stranglehold on the American economy, researchers at the Institute for
Local
Self-Reliance (ILSR) say in a study released in late November. Not only
does
Amazon possess an increasingly dominant share of the retail market -- with
one of every two dollars spent online going to the company -- but it is
increasingly expanding into other low-road money-making schemes, at the
expense of public coffers. Amazon's grip on the US economy should be
worrisome for anyone seeking an egalitarian and fair society.
"A to Z"? The M Is for Monopoly
As ILSR puts it, when considering Amazon, imagine "if Walmart owned most of
our malls and Main Streets, decided the terms by which its rivals could
rent
these spaces, and oversaw every sale they made." Although Walmart has long
been the archetype for a corporation that drags down communities with
poverty-waged big-box store jobs and exploitative labor practices up and
down its supply chain, it has nothing on Amazon's gatekeeper status. Upon
inspection, Amazon's business practices, obfuscated behind the gleam of a
seamless, consumer-friendly online interface, reveal that the company is
what ILSR describes as a "monopoly hiding in plain sight."
First, Amazon uses its position as the owner of its massive retail
marketplace to its advantage when it comes to marketplace participants. For
third-party sellers on the site's marketplace, Amazon ends up taking a
portion of each sale: somewhere between 15 and 50 percent. If the sellers
do
not agree to these terms, and forgo a place on the company's platform, then
there exists the risk that their products won't be seen by the one-half of
online shoppers who start their shopping directly at Amazon instead of via
search engines. Amazon is currently the top toy retailer, and by end of
next
year, it will be the leading retailer of clothing and consumer electronic
goods. This will come on top of the company's dominance in book retail
(where much of publicized Amazon's strong-arming against smaller
competitors
occurs). Within the book industry, Amazon owns 65 percent of the market
share. This is as much as Standard Oil owned of the oil industry back in
1911, when it was broken up for acting as a monopoly.
Any success that third-party sellers do have usually leads to Amazon
creating its own knockoff product, decreasing sales of the original product
when Amazon's copy is boosted to the top of the results page. This practice
is underlined by Amazon's ability to track customer shopping habits,
boosting its chances of manufacturing a particularly successful product.
The
cumulative effect, ILSR believes, is limited choice and the stifling of
competition from smaller, independent online retailers and suppliers. It is
Amazon's control of several parts of the supply chain, as both a
manufacturer and retailer -- what is called vertical integration -- and the
power that comes with it that gives the company an exceptional edge.
Anyone hoping for a Standard Oil-like split up for Amazon, as ILSR
recommends, would have to acknowledge that the political will to act on
antitrust violators has shrunk since the 1970s and 80s, transitioning more
toward the mindset that as long as consumers are getting low prices,
everything is fine. Amazon's powerful position as a dual manufacturer and
retailer would have been viewed as an antitrust violation before the
ideological shift on breaking up monopolies began, but as law scholar Linda
Khan tells Truthout, "Current law has a very dim view of what constitutes
as
'anticompetitive' in vertical arrangements."
The Public Cost of an "Everything" Store
Beyond Amazon's predatory tactics lies the public damage the company causes
with its dominance. When accounting for the fact that retail shopping is
rapidly shifting online, ILSR estimates that Amazon has "displaced enough
sales at brick-and-mortar stores to force the elimination of about 295,000
retail jobs," while only creating roughly half as many jobs in its
warehousing and distribution operations. In almost half of the country,
Amazon generates billions of dollars in sales within each state without
employing a single person. The loss of retail jobs in physical locations
means store closures and subsequent vacancies, and as ILSR finds, because
on-the-ground shopping is one form of social interaction in the community,
the hyper-reliance on Amazon leads to a reduction in social bonds and
communal vibrancy.
The fiscal losses to public coffers at the expense of Amazon's private gain
could be just as damaging. The shift toward online shopping -- half of it
conducted on Amazon -- means that communities and states lose the property
taxes that would have been brought in through brick-and-mortar stores.
Furthermore, as the progressive advocacy group Good Jobs First notes in a
study released this week, politicians are encouraging Amazon's behavior via
public subsidies. Since 2005, Amazon has received approximately $900
million
worth of subsidies to construct and operate its facilities, with $241
million awarded since the start of 2015. These efforts grease the track for
a corporation that has to build these facilities, regardless of any
potential subsidies. The researchers at Good Jobs First conclude: "Public
officials must recognize their communities' value. They need to recognize
that the prize on the bargaining table isn't an Amazon facility: it's more
access to the local market for another aggressive retailer growing at the
expense of existing retailers."
The Squeeze on Labor
The people inside Amazon's oft-publically-subsidized warehouse and
distribution facilities, who keep its infrastructure functioning, are also
victims of Amazon's might. You'd never know it from the outside: One job
posting for its order fulfillment centers reads, "Our fulfillment centers
are where Amazon orders come to life, where we focus on delighting our
customers by delivering smiling boxes filled with everything under the
sun."
But the experiences of workers detailed in ILSR's study shed light on grim
conditions. A harsh quota system must be met at a breakneck pace. An
International Business Times report describes the company's manipulative
motivation technique: "Amazon's productivity numbers are apparently
purposely designed to be unattainable for most workers so that employees
feel that they are falling down on the job and push harder to hit the
impracticable levels. This strategy [is] known as management by stress."
With wages lower than at comparable facilities (9 percent to 22 percent
less, according to ILSR estimates), the quota system creates high turnover.
This makes for a tougher terrain to utilize a key tool that might
significantly alter the way the company operates -- unionization.
The massive volume of packages that go in and out of Amazon facilities also
gives the company leverage to affect the work at carriers who deliver
Amazon
orders. The start of the United States Postal Service's (USPS) partnership
with Amazon in 2013 opened the doors for Sunday package delivery, leading
to
a new "underclass" of postal employees often working more than seven
consecutive days, and dragging down standards for the entire workforce.
Meanwhile, Amazon has sought to reduce its dependence on the union-backed
workers at United Parcel Service (UPS). ILSR notes that in an effort to
reduce its shipping costs, Amazon has steadily decreased its use of UPS and
FedEx in the past few years, switching instead to regional couriers that
utilize independent contractors "who are in many cases treated like
employees but denied the benefits and security of the employer-employee
relationship." The proliferation of such potentially unjust contract work
lowers the standards throughout the delivery industry and provides an out
for management to extract concessions from unionized shops at USPS and UPS.
ILSR codirector and study author, Stacy Mitchell, tells Truthout, "Delivery
drivers at companies like UPS and the postal service, as well as freight
pilots, typically earn solid middle-income wages and have reasonable
workloads. But Amazon's intention is to impose the same arduous and
dehumanizing conditions and workloads on the people in its delivery system
as it does in its warehouses."
The independent contract situation within the courier industry will grow
further entangled with Amazon in the near future. As a part of a strategy
that company insiders call "Consume the City," Amazon is seeking to flesh
out its own shipping and delivery infrastructure -- described in one report
as an "e-commerce Walmart with a FedEx attached." Amazon is supplementing
its own Uber-like delivery service called Amazon Flex, which is already
operating in 30 cities across the US. Like other "gig economy" companies,
Amazon touts that its platform enables the flexibility of supplemental
income. But given Amazon's proven record of dragging down job standards and
killing retail jobs, the question of whether the company has an obligation
to make Flex participants actual employees is a real one.
The Fight Back
Amazon's move toward controlling more of its package delivery logistics has
also led it toward investing in cargo airlines, what it calls Prime Air.
Earlier this year, Amazon announced plans to lease as many as 40 planes
from
two carriers, Air Transport Services Group (ATSG) and Atlas Air, with the
option to purchase 20 percent and 30 percent stakes of each respective
company in the next few years. Here, Amazon is running into its first
pockets of real resistance, and it is turning into a battle to set the
standards of labor at Amazon's air investments.
On November 22, 250 pilots at ATSG's Amazon-servicing subsidiary, ABX Air,
went on strike to protest the lack of compensatory time off granted after
the pilots were forced to work extra hours to make up for the understaffing
at the airline. The pilots, members of Teamsters Local 1224, were forced
back to work the next day after an injunction was ordered by Judge Timothy
Black of the US Court for the Southern District of Ohio. Judge Black
remarked, "Absent an injunction, ABX, its customers, and the public will
suffer immediate, irreparable harm. Imagine Christmas without Amazon!"
Over at Atlas Air, home of the first Boeing 747 jet flying Prime Air
branding, 1,700 pilots are considering their own strike. The same
understaffing issues, as well as low pay and benefits, are at the center of
the conflict. The pilots, also members of Teamsters Local 1224, picketed at
Amazon headquarters on December 7 with signs reading, "Santa won't deliver
on time without us." They hope that Amazon will push Atlas to come to the
negotiating table in good faith. "You reach a point where no matter what
you
offer, pilots don't want to work there because it's their livelihood. You
spend a lot of time in these jobs here and you want to work in a place that
is rewarding," says the head of Atlas' union pilots, Robert Kirchner.
Considering Amazon's treatment of workers across the supply chain, as
described in ILSR's findings, it should perhaps be no surprise that Amazon
chose these specifically low-road cargo airlines as its bases for Prime
Air.
However, the Teamsters Local 1224 chose to fight back, and their fight
could
provide a model of resistance for other workers under the thumb of Amazon.
"If the time comes, if the situation happens, there will be no hesitation
about going on strike at all," says Kirchner.
The labor fight could also stimulate policy makers to wake up to the
stranglehold that Amazon has on society at large. Could the stranglehold
not
be more evident than when a federal judge used "Imagine Christmas without
Amazon!" as his logic for squashing a strike?
ILSR recommends strengthening labor law to allow greater room for
successful
unionization and bargaining, saying that tougher enforcement on
misclassified independent contractors is key to loosening Amazon's drag on
the economy. Additionally, antitrust laws must be expanded and brought back
from the "dim view" that Khan describes to break up Amazon's
anti-competitive measures as a retailer and manufacturer.
"Without a strong and thoughtful public policy response to Amazon's growing
monopoly power, and the high costs it's imposing on competition, small
businesses, workers and consumers, many of the benefits of the digital
revolution will not be realized," ILSR concludes.
Copyright, Truthout. May not be reprinted without permission.
MARIO VASQUEZ
Mario Vasquez is a writer from southern California interested in labor and
grassroots progressive movements. His work has been previously featured at
In These Times and Salon. Follow him on Twitter: @mario_vsqz. Email him:
mario.vasquez.espinoza@xxxxxxxxx.
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________________________________________
Show Comments
Error! Hyperlink reference not valid.
$1 of Every $2 Spent Online Goes to Amazon. Can We Break the Company's
Stranglehold?
Wednesday, December 21, 2016 By Mario Vasquez, Truthout | Report
. font size Error! Hyperlink reference not valid. Error! Hyperlink
reference not valid.Error! Hyperlink reference not valid. Error! Hyperlink
reference not valid.
. Amazon Books, for now the online retailer's sole physical
bookstore, at the University Village mall in Seattle, March 9, 2016.
(Photo:
Michael Hanson / The New York Times)
. Stories like this will always remain free to read at Truthout. But
if you can spare a small donation, please click here to ensure independent
media has a future!
Amazon.com is ubiquitous: It seems to reach into all the corners of our
lives, selling everything from toiletries to furniture. Yet, beyond the "A
to Z" selections offered on Amazon exists the reality that workers,
consumers and their communities are suffering from the retailer's
stranglehold on the American economy, researchers at the Institute for
Local
Self-Reliance (ILSR) say in a study released in late November. Not only
does
Amazon possess an increasingly dominant share of the retail market -- with
one of every two dollars spent online going to the company -- but it is
increasingly expanding into other low-road money-making schemes, at the
expense of public coffers. Amazon's grip on the US economy should be
worrisome for anyone seeking an egalitarian and fair society.
"A to Z"? The M Is for Monopoly
As ILSR puts it, when considering Amazon, imagine "if Walmart owned most of
our malls and Main Streets, decided the terms by which its rivals could
rent
these spaces, and oversaw every sale they made." Although Walmart has long
been the archetype for a corporation that drags down communities with
poverty-waged big-box store jobs and exploitative labor practices up and
down its supply chain, it has nothing on Amazon's gatekeeper status. Upon
inspection, Amazon's business practices, obfuscated behind the gleam of a
seamless, consumer-friendly online interface, reveal that the company is
what ILSR describes as a "monopoly hiding in plain sight."
First, Amazon uses its position as the owner of its massive retail
marketplace to its advantage when it comes to marketplace participants. For
third-party sellers on the site's marketplace, Amazon ends up taking a
portion of each sale: somewhere between 15 and 50 percent. If the sellers
do
not agree to these terms, and forgo a place on the company's platform, then
there exists the risk that their products won't be seen by the one-half of
online shoppers who start their shopping directly at Amazon instead of via
search engines. Amazon is currently the top toy retailer, and by end of
next
year, it will be the leading retailer of clothing and consumer electronic
goods. This will come on top of the company's dominance in book retail
(where much of publicized Amazon's strong-arming against smaller
competitors
occurs). Within the book industry, Amazon owns 65 percent of the market
share. This is as much as Standard Oil owned of the oil industry back in
1911, when it was broken up for acting as a monopoly.
Any success that third-party sellers do have usually leads to Amazon
creating its own knockoff product, decreasing sales of the original product
when Amazon's copy is boosted to the top of the results page. This practice
is underlined by Amazon's ability to track customer shopping habits,
boosting its chances of manufacturing a particularly successful product.
The
cumulative effect, ILSR believes, is limited choice and the stifling of
competition from smaller, independent online retailers and suppliers. It is
Amazon's control of several parts of the supply chain, as both a
manufacturer and retailer -- what is called vertical integration -- and the
power that comes with it that gives the company an exceptional edge.
Anyone hoping for a Standard Oil-like split up for Amazon, as ILSR
recommends, would have to acknowledge that the political will to act on
antitrust violators has shrunk since the 1970s and 80s, transitioning more
toward the mindset that as long as consumers are getting low prices,
everything is fine. Amazon's powerful position as a dual manufacturer and
retailer would have been viewed as an antitrust violation before the
ideological shift on breaking up monopolies began, but as law scholar Linda
Khan tells Truthout, "Current law has a very dim view of what constitutes
as
'anticompetitive' in vertical arrangements."
The Public Cost of an "Everything" Store
Beyond Amazon's predatory tactics lies the public damage the company causes
with its dominance. When accounting for the fact that retail shopping is
rapidly shifting online, ILSR estimates that Amazon has "displaced enough
sales at brick-and-mortar stores to force the elimination of about 295,000
retail jobs," while only creating roughly half as many jobs in its
warehousing and distribution operations. In almost half of the country,
Amazon generates billions of dollars in sales within each state without
employing a single person. The loss of retail jobs in physical locations
means store closures and subsequent vacancies, and as ILSR finds, because
on-the-ground shopping is one form of social interaction in the community,
the hyper-reliance on Amazon leads to a reduction in social bonds and
communal vibrancy.
The fiscal losses to public coffers at the expense of Amazon's private gain
could be just as damaging. The shift toward online shopping -- half of it
conducted on Amazon -- means that communities and states lose the property
taxes that would have been brought in through brick-and-mortar stores.
Furthermore, as the progressive advocacy group Good Jobs First notes in a
study released this week, politicians are encouraging Amazon's behavior via
public subsidies. Since 2005, Amazon has received approximately $900
million
worth of subsidies to construct and operate its facilities, with $241
million awarded since the start of 2015. These efforts grease the track for
a corporation that has to build these facilities, regardless of any
potential subsidies. The researchers at Good Jobs First conclude: "Public
officials must recognize their communities' value. They need to recognize
that the prize on the bargaining table isn't an Amazon facility: it's more
access to the local market for another aggressive retailer growing at the
expense of existing retailers."
The Squeeze on Labor
The people inside Amazon's oft-publically-subsidized warehouse and
distribution facilities, who keep its infrastructure functioning, are also
victims of Amazon's might. You'd never know it from the outside: One job
posting for its order fulfillment centers reads, "Our fulfillment centers
are where Amazon orders come to life, where we focus on delighting our
customers by delivering smiling boxes filled with everything under the
sun."
But the experiences of workers detailed in ILSR's study shed light on grim
conditions. A harsh quota system must be met at a breakneck pace. An
International Business Times report describes the company's manipulative
motivation technique: "Amazon's productivity numbers are apparently
purposely designed to be unattainable for most workers so that employees
feel that they are falling down on the job and push harder to hit the
impracticable levels. This strategy [is] known as management by stress."
With wages lower than at comparable facilities (9 percent to 22 percent
less, according to ILSR estimates), the quota system creates high turnover.
This makes for a tougher terrain to utilize a key tool that might
significantly alter the way the company operates -- unionization.
The massive volume of packages that go in and out of Amazon facilities also
gives the company leverage to affect the work at carriers who deliver
Amazon
orders. The start of the United States Postal Service's (USPS) partnership
with Amazon in 2013 opened the doors for Sunday package delivery, leading
to
a new "underclass" of postal employees often working more than seven
consecutive days, and dragging down standards for the entire workforce.
Meanwhile, Amazon has sought to reduce its dependence on the union-backed
workers at United Parcel Service (UPS). ILSR notes that in an effort to
reduce its shipping costs, Amazon has steadily decreased its use of UPS and
FedEx in the past few years, switching instead to regional couriers that
utilize independent contractors "who are in many cases treated like
employees but denied the benefits and security of the employer-employee
relationship." The proliferation of such potentially unjust contract work
lowers the standards throughout the delivery industry and provides an out
for management to extract concessions from unionized shops at USPS and UPS.
ILSR codirector and study author, Stacy Mitchell, tells Truthout, "Delivery
drivers at companies like UPS and the postal service, as well as freight
pilots, typically earn solid middle-income wages and have reasonable
workloads. But Amazon's intention is to impose the same arduous and
dehumanizing conditions and workloads on the people in its delivery system
as it does in its warehouses."
The independent contract situation within the courier industry will grow
further entangled with Amazon in the near future. As a part of a strategy
that company insiders call "Consume the City," Amazon is seeking to flesh
out its own shipping and delivery infrastructure -- described in one report
as an "e-commerce Walmart with a FedEx attached." Amazon is supplementing
its own Uber-like delivery service called Amazon Flex, which is already
operating in 30 cities across the US. Like other "gig economy" companies,
Amazon touts that its platform enables the flexibility of supplemental
income. But given Amazon's proven record of dragging down job standards and
killing retail jobs, the question of whether the company has an obligation
to make Flex participants actual employees is a real one.
The Fight Back
Amazon's move toward controlling more of its package delivery logistics has
also led it toward investing in cargo airlines, what it calls Prime Air.
Earlier this year, Amazon announced plans to lease as many as 40 planes
from
two carriers, Air Transport Services Group (ATSG) and Atlas Air, with the
option to purchase 20 percent and 30 percent stakes of each respective
company in the next few years. Here, Amazon is running into its first
pockets of real resistance, and it is turning into a battle to set the
standards of labor at Amazon's air investments.
On November 22, 250 pilots at ATSG's Amazon-servicing subsidiary, ABX Air,
went on strike to protest the lack of compensatory time off granted after
the pilots were forced to work extra hours to make up for the understaffing
at the airline. The pilots, members of Teamsters Local 1224, were forced
back to work the next day after an injunction was ordered by Judge Timothy
Black of the US Court for the Southern District of Ohio. Judge Black
remarked, "Absent an injunction, ABX, its customers, and the public will
suffer immediate, irreparable harm. Imagine Christmas without Amazon!"
Over at Atlas Air, home of the first Boeing 747 jet flying Prime Air
branding, 1,700 pilots are considering their own strike. The same
understaffing issues, as well as low pay and benefits, are at the center of
the conflict. The pilots, also members of Teamsters Local 1224, picketed at
Amazon headquarters on December 7 with signs reading, "Santa won't deliver
on time without us." They hope that Amazon will push Atlas to come to the
negotiating table in good faith. "You reach a point where no matter what
you
offer, pilots don't want to work there because it's their livelihood. You
spend a lot of time in these jobs here and you want to work in a place that
is rewarding," says the head of Atlas' union pilots, Robert Kirchner.
Considering Amazon's treatment of workers across the supply chain, as
described in ILSR's findings, it should perhaps be no surprise that Amazon
chose these specifically low-road cargo airlines as its bases for Prime
Air.
However, the Teamsters Local 1224 chose to fight back, and their fight
could
provide a model of resistance for other workers under the thumb of Amazon.
"If the time comes, if the situation happens, there will be no hesitation
about going on strike at all," says Kirchner.
The labor fight could also stimulate policy makers to wake up to the
stranglehold that Amazon has on society at large. Could the stranglehold
not
be more evident than when a federal judge used "Imagine Christmas without
Amazon!" as his logic for squashing a strike?
ILSR recommends strengthening labor law to allow greater room for
successful
unionization and bargaining, saying that tougher enforcement on
misclassified independent contractors is key to loosening Amazon's drag on
the economy. Additionally, antitrust laws must be expanded and brought back
from the "dim view" that Khan describes to break up Amazon's
anti-competitive measures as a retailer and manufacturer.
"Without a strong and thoughtful public policy response to Amazon's growing
monopoly power, and the high costs it's imposing on competition, small
businesses, workers and consumers, many of the benefits of the digital
revolution will not be realized," ILSR concludes.
Copyright, Truthout. May not be reprinted without permission.
Mario Vasquez
Mario Vasquez is a writer from southern California interested in labor and
grassroots progressive movements. His work has been previously featured at
In These Times and Salon. Follow him on Twitter: @mario_vsqz. Email him:
mario.vasquez.espinoza@xxxxxxxxx.
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