A Blog by Jonathan Low


Apr 28, 2022

Implications of the 'Amazonification' of the American Work Force

As more companies partner with, compete with or just emulate Amazon, work in the US is becoming less secure due to turnover, more dangerous due to injury while employers become less accountable for the results of their policies. JL 

Jason Del Rey reports in Re/code:

1.1 million people now work directly for Amazon in the US (which) will overtake Walmart as the largest private employer in the US in the next few years, meaning 1% of US workers will be employed directly by the tech giant. Its influence extends beyond actual employees, reaching a workforce employed by companies partnering and competing with Amazon. The ripple effects of it’s influence as an employer spread across retail, e-commerce, and delivery. Technology pushes “the line” faster, tracking workers’ every move. AAs more companies emulate Amazon’s operations, the downsides of Amazon’s success have labor experts deeply concerned about the well-being of workers. “It’s a race to the bottom."

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Amazon has transformed our expectations for how we buy things and how we interact with technology. It’s now intuitive for many of us to buy almost anything we want with a click — whether from Amazon or some other retailer — and to count on it being delivered within days, if not the same day. As Amazon has built the sprawling logistics and delivery empire that makes this possible, it has also begun to change the working lives of many Americans — in some ways for the better, and in some ways for the worse.

That shift is most clear in its own workforce: More than 1.1 million people now work directly for Amazon in the US, with some in its offices and the majority in its ever-expanding network of more than 800 warehouse facilities in North America alone. At its current hiring rate, Amazon will overtake Walmart as the largest private-sector employer in the US in the next few years — meaning about 1 percent of US workers will be employed directly by the tech giant.

However, its influence extends far beyond its actual employees, reaching a workforce employed by companies partnering and competing with Amazon. Some, such as Amazon delivery drivers in Amazon-branded vans and trucks, work for third-party companies that sign exclusive contracts with Amazon and are managed by Amazon technology and expectations. Others work for Amazon competitors, big and small, who are striving to keep up with the tech giant by expanding their e-commerce offerings and by imitating its business and employment practices. This shift is only in the early stages, but the ripple effects of Amazon’s influence as an employer will spread over time across the retail, e-commerce, and delivery industries.

“Anyone who wants to do business with Amazon has to conform,” said Rebecca Givan, a labor professor at Rutgers University. “And anyone who wants to compete — that’s kind of everyone — [has] to keep up with what they are doing with productivity, which seems to necessitate massive surveillance.”

Amazon’s workplace culture has long centered on “customer obsession” — doing everything and anything to satisfy customers. That mission has led Amazon to become a force of convenience the world has never seen before. Over the last decade, Amazon has outfitted its warehouses with robots, performance-tracking software, and reengineered workflows, all in the name of pushing the limits on what Amazon can offer its customers, and how quickly.

These innovations have created labor issues, including comparatively high injury and worker churn rates, turning a great American innovation story into a complex evaluation of what it takes to get what we want when we want it — and whether we should expect more from a company that’s setting the bar for what many American employers expect from workers.

To understand the potential consequences of what Amazon has built since its humble beginning as an online bookseller, it’s important to first understand how extraordinary its transformation has been.

This evolution was led early on by Jeff Wilke, a former manufacturing executive who joined Amazon in 1999 and eventually rose to the No. 2 position in the company as CEO of its core e-commerce business globally. Wilke set out to overhaul the layouts of Amazon warehouses and the software powering their processes in order to speed up shipping times and make more accurate promises to customers. To do this, Wilke and his team incorporated techniques he learned studying the lean manufacturing methodology, which aimed to maximize worker productivity while minimizing unnecessary steps. The warehouse work Wilke oversaw eventually led company founder and former CEO Jeff Bezos to feel confident in launching Amazon Prime and its two-day delivery promise.

In those early years, as Amazon began to expand beyond selling books, one of the most common criticisms of work in its facilities was how much walking workers had to do — as much as 12 to 15 miles a day for some roles. That changed when Amazon started adding warehouse robots to its facilities after acquiring a startup called Kiva Systems in 2012. In warehouses with robots, workers no longer had to traverse endless aisles of merchandise all day; instead, Kiva’s robots carried portable shelves to them at stationary stations. The robots’ arrival also boosted worker productivity, which was the main goal — essentially turning the Amazon warehouse into the 21st-century version of a manufacturing assembly line, one where the goal is assembling e-commerce customer orders.

Eventually, labor historians say, Amazon’s warehouse environment began resembling a blend of at least two different manufacturing approaches pioneered in the early 20th century. One is Taylorism, a dehumanizing system for factory work invented by the mechanical engineer Frederick Taylor. Taylorism, or “scientific management,” broke complex manufacturing down into limited, repetitive tasks; managers were the experts responsible for coming up with the best way to accomplish those tasks, and workers were treated like simpletons. “Amazon is an example of a company which is ultra-Taylorized,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor, and Democracy at the University of California Santa Barbara.

The other approach involved the moving assembly line innovation pioneered by Henry Ford’s automobile factories. However, this innovation increased the monotony of the job and the pace in Ford’s factories. Workplace churn increased. And in 1914, Ford was compelled to nearly double a day’s wages to $5 in an attempt to stabilize the workforce. Similarly, at Amazon, company leaders increased the hourly wage minimum to $15 in 2018, amid significant external pressure led by Sen. Bernie Sanders (I-VT). That move led retailers like Walmart and Target to raise their wages too.

Amazon spokesperson Richard Rocha opposed comparisons between the company’s working conditions and the harsh factory work of past centuries. He said Amazon has been investing heavily in safety initiatives, pointing to a company report published in January that said Amazon spent $300 million on safety initiatives in 2021 alone, and employs nearly 8,000 safety employees worldwide. The report also argues that robots reduce the physical demands on workers because they reduce the amount of walking previously necessary in key roles.

But to some labor historians, Amazon’s warehouse workplace could be viewed as a further evolution — or blend — of the approaches of Taylor and Ford, and one where technology pushes “the assembly line” faster and faster by tracking workers’ every move, from how many items they pick or stow per hour, to how much time they spend on informal bathroom breaks. Because of the robots, the goals for roles like pickers and stowers have multiplied, from having to fetch or stow about 100 pieces of merchandise an hour, to closer to 300 to 400 units per hour, warehouse workers have told Recode.

“In the history of warehouses, we’ve never seen these levels of automation coupled with these rates,” said Marc Wulfraat, a longtime consultant in the logistics industry who runs the consulting firm MWPVL International.

That has led to a scale of production mostly unmatched inside any other US warehouse operation — for now.

“It’s very rare to walk into a warehouse in any industry at all and see a million units being shipped,” Wulfraat said. “A million a week is a high-volume operation, but Amazon, on a peak day, is doing a million units a day.”

That productivity helped Amazon upend the retail and e-commerce worlds. As more Americans became Amazon Prime subscribers — the program boasts more than 200 million members worldwide as of April 2021 — it precipitated a shift toward more online shopping that only intensified in 2020. Prior to the pandemic, e-commerce sales were growing steadily between 10 and 15 percent a year, compared to less than 5 percent growth for brick-and-mortar retail. In the first two years of the pandemic, though, e-commerce sales grew more than 50 percent from 2019; meanwhile, brick-and-mortar sales trailed behind with two-year growth of 22 percent. As e-commerce sales have risen, so too has the demand for more workers fulfilling online orders in warehouses and delivering them to customers’ addresses — whether for Amazon or one of its many competitors.

Unsurprisingly, the mind-boggling pace of production that Amazon has pioneered is the envy of, and inspiration for, Amazon’s business partners and competitors. As they try to keep up with Amazon, many of them are starting to emulate its business practices, workplace culture, or labor standards.

An early example of this traces back to around 2012, when Amazon began overhauling its fulfillment centers by installing robots. Suddenly, investors began pouring money into robotics. Investments in startups that make warehouse and factory robots increased from $300 million in 2015 to a startling $1.9 billion in 2020. Along the way, Amazon competitors have gobbled up some of these robotics companies to try to keep up. In 2019, the e-commerce software company Shopify spent $450 million to purchase a company called 6 River Systems, which makes mobile robots used in e-commerce warehouses that offer to boost worker productivity by two to three times.

Even some businesses outside of the e-commerce and delivery sectors are taking inspiration from Amazon’s work culture. A cottage industry run by consultants and former Amazon employees has started to spring up in recent years, offering to train other business leaders on the ins and outs of the Amazon Way.

Colin Bryar, a former Amazon executive and the co-author of a book about the secrets to Amazon’s success called Working Backwards: Insights, Stories, and Secrets From Inside Amazon, told Recode that the consulting firm he founded with his co-author, Bill Carr, works with business leaders and companies from “around the world, in a number of different industries,” to teach them how to create company cultures and management practices similar to Amazon’s.

“Amazon has proved that [its approach] works for small groups, large groups, and different types of businesses,” Bryar said.

While some companies willingly want to learn and embrace the Amazon Way, others adopt it out of necessity. Take Amazon’s home-delivery network, which makes the company’s same-day shipping speeds possible. Amazon doesn’t technically employ the hundreds of thousands of drivers in this network; instead, these people work for thousands of small delivery firms that contract with the e-commerce giant. Still, Amazon controls much of these drivers’ work lives — they wear Amazon uniforms and drive Amazon-branded vans, and apps on their phones and cameras in their vehicles track their performance and driving.

It’s also Amazon — rather than the drivers’ actual employers — that sets these drivers’ demanding delivery quotas, which is a main reason some drivers say they sometimes have to pee in bottles while on the job. Amazon says the average delivery route includes 250 packages during a 10-hour shift and that 90 percent of drivers complete their routes on time; that’s in contrast to reports by some drivers that routes can total as much as 375 packages, even outside of peak shopping weeks.

The small delivery firms that employ these drivers are also often at the mercy of Amazon. The company promises them consistent package volume when they deliver exclusively for Amazon, but it comes with a big caveat: Amazon can end the relationship without having to explain why.

“I fought in Iraq and Afghanistan and being deployed was better than [the anxiety of] working for Amazon,” said Ted Johnson, a military veteran who told Recode in the summer of 2021 that his delivery business handled more than 2 million Amazon deliveries before he had to shut it down when Amazon did not renew his contract and offered no explanation.

Amazon’s influence is evident in its direct competitors, too: In recent years, Amazon’s two largest mass retailer competitors, Walmart and Target, have hired top logistics executives from Amazon to lead their warehouse and shipping strategies, in a clear bid to learn the Amazon Way. And a number of up-and-coming e-commerce sites, including the online pet goods retailer Chewy and apparel platform and retailer Rent the Runway, have done the same.

At Walmart, former employees say that new warehouse leaders hired from Amazon developed a reputation for treating workers more harshly than prior warehouse bosses — but they did, at times, improve productivity.

For many in the business world, that trade-off is worth it because productivity and financial success are main priorities. That’s why Amazon has so many emulators. That’s a good thing, argues Mark Cohen, the director of retail studies at the Columbia Graduate School of Business.

“It would be nice if Amazon and other companies were a tad more empathetic,” he told Recode, “but we should be so lucky to have other Amazons in how successful they’ve been and how much they’ve grown. Amazon is the embodiment of the American success story,” he said.

As more retailers and logistics companies begin to emulate Amazon’s fulfillment and delivery operations, the downsides of Amazon’s success story have some labor experts deeply concerned about the well-being of workers across these industries. “It’s really a race to the bottom,” Givan, the labor professor at Rutgers University, told Recode. She said Amazon is setting a dangerous example for other companies and their employees by how fast it expects its warehouse employees to work and how closely it tracks their every move.

“What I get from talking to Amazon workers … is that the pay is not the worst, especially for non-union workers, and the benefits are okay,” she said. “But the physical demands and the surveillance are grueling and much, much worse than other employers in the same sector.”

One of the most troubling results of Amazon’s labor practices is that its workers have a higher chance of suffering a serious injury on the job than at competitors’ warehouses, according to data from the Occupational Safety and Health Administration (OSHA).

“In 2020, for every 200,000 hours worked at an Amazon warehouse in the United States — the equivalent of 100 employees working full time for a year — there were 5.9 serious incidents, according to … OSHA data,” the Washington Post reported last year. “That’s nearly double the rate of non-Amazon warehouses. In comparison, Walmart, the largest private US employer and one of Amazon’s competitors, reported 2.5 serious cases per 100 workers at its facilities in 2020.”

And in March of this year, Washington state’s labor department hit Amazon with a $60,000 fine for a “willful violation” of state labor laws, saying “ergonomists found that many Amazon jobs involve repetitive motions, lifting, carrying, twisting, and other physical work … at such a fast pace that it increases the risk of injury.” Amazon is contesting the citation.

In response to a request for comment on the OSHA injury data, Rocha pointed Recode to the safety report Amazon published in January, which states that the company saw a 43 percent improvement from 2019 to 2020 in the rate of worker injuries that necessitated missing work. The report argues that if you compare Amazon injury rates to other large transportation and logistics companies, rather than retail warehouse rivals, “our performance is comparable, and in some cases better.” That comparison, however, would have limitations because no other US company oversees such a massive, complex network of both order fulfillment and delivery.

In the past, Amazon defended its comparatively higher injury rates by arguing that the company is more aggressive than its peers when it comes to documenting injuries. But Ken, a former Amazon employee who worked in first aid and safety roles over four years from 2016 to 2020, told Recode that managers sometimes discouraged him from referring injured workers to external doctors, in part because that could result in the company needing to record the injury with OSHA. (Ken asked not to use his full name out of concern that it could impact his career.) This pressure didn’t come in cases of severely injured employees, Ken said, but rather for “gray area” injuries.

That raised alarms for him. “They basically want you to influence or sell it that, ‘Hey, we can treat you here, we can do follow-ups here, we can keep icing your ankle,’” said Ken, who was a paramedic and firefighter before joining Amazon. “If [a doctor gives them] any job restriction or prescription or physical therapy, it’s gonna be an OSHA-reportable event.”

During weeks where he referred an above-average number of employees to outside doctors, Ken said he would hear about it from a manager.

“You were gonna get some heat and you were gonna get interrogated,” he told Recode.

Amazon’s spokesperson said the company had no record of this employee raising concerns, and that warehouse workers are free to seek care outside of work. Rocha also said that the company’s onsite medical representatives have guidelines on what type of injuries should be treated in-house versus at an outside facility, and disputed the claim that care and treatment are determined by what is or isn’t reportable to OSHA.

Despite the comparatively higher risk of injury than some other warehouse jobs, Amazon can still attract employees because of the wages and benefits it offers. In more than nine years covering Amazon, this reporter has interviewed many workers who are content with working at Amazon for the time being. Some are worried about injury or feel their work is like a dead end, but for many, it’s better than the alternatives.

Walter, who asked to use a pseudonym because he still works at Amazon, understands these trade-offs well. He’s worked in the same type of role — picker — at Amazon warehouses in New Jersey for the past seven years, an unusually long time. Before Amazon, which Walter joined in his late 40s, he worked a variety of jobs, including working in a different warehouse for a regional apparel retailer, that gave him the time to pursue personal passions, like music.

While Walter said his other warehouse job was less arduous, he has stuck with Amazon because of consistent hours, decent pay (he now makes more than $21 an hour), and considerably better health benefits than those offered by many other potential employers where he lives.

The irony is that his employment that offers relatively good health benefits is also taking a toll on his body. When Walter first started, his managers expected him to pick 290 items an hour off of the shelves robots carried to his station — nearly five items every minute. But, over the course of three years, Amazon leaders ended up pushing that goal more than 20 percent higher, to 360 items an hour, or six items a minute, he said. Walter developed and was diagnosed with tendonitis in his forearms during this time.

Amazon eventually lowered the rate down to 300 items an hour because the warehouse was churning through too many workers too quickly, he said. But he still has pain. While his body has adjusted to the speed of the work, he believes that flaws in the ergonomic design of his workstation, and the way other workers position merchandise on shelves that he must later remove, exacerbate his ailments.

“My arms are so damned sensitive now it affects activities I seek to do outside the job,” he wrote to Recode, noting how a simple household chore or wrong move at the gym can result in his forearms lighting up “with electric pain.” He said that over the years, he has learned how to use leverage while picking to minimize his pain. But his cocktail of pain solutions also includes compression sleeves, lidocaine, and occasionally CBD cream.

On his worst days, Walter misses his previous warehouse jobs. He jokingly refers to those facilities as “free-range” warehouses.

“Here, I’m like a veal calf,” he said.

Rocha, the Amazon spokesperson, said in a statement that “[u]nnamed sources make it difficult to validate the veracity of claims and don’t present a full or accurate picture.” The company has said that its workers’ performance goals are “based on safe and achievable expectations, accounting for tenure, peer performance, and adherence to safe work practices.”

Yet Jeff Bezos’s successor Andy Jassy has acknowledged the challenge of improving the company’s safety issues. In a shareholder letter in April, he wrote that after he became Amazon’s CEO in 2021, he couldn’t find “a silver bullet that could change the [injury] numbers quickly.”

Instead, he said Amazon was working on a variety of solutions in tandem, including “rotational programs that help employees avoid spending too much time doing the same repetitive motions.” The company has said in a safety report that a pilot test of the rotation program reduced certain types of injuries from repetitive motions by more than 40 percent.

Perhaps, under Jassy’s leadership, Amazon will find ways to reduce injuries that will become a model for other companies that already emulate more customer-focused traits of Amazon’s labor practices. But, in a capitalist society like the US, Amazon’s investors mainly judge its success on different metrics: sales growth and profits. As long as its employee injury rates don’t dramatically alter those metrics for the worse, it’s fair to be skeptical that the company will altogether prioritize injury reduction over the productivity that has made Amazon one of the biggest business disruptors in decades. How this push-and-pull plays out may very well determine how seriously Amazon’s followers prioritize the well-being of their workforces as they try to compete and satisfy their customers’ demands for speed and convenience.

The other key aspect of Amazon’s workplace that labor experts are worried about is how quickly it loses and replaces its employees — a problematic quality for a labor leader to have.

Even before the pandemic, the company’s turnover rate at times reached 150 percent, according to the New York Times — and that was a feature of the company’s employment system, not a flaw.

When Amazon talks about its workplace in hiring settings, it uses the tagline: “Come Build the Future with Us.” But many Amazon workers don’t last long enough at the company to enjoy the spoils of the future. And the precedent the company is setting for its emulators is something to pay attention to.

It is true that Amazon’s starting pay is often higher than what comparable jobs will pay workers. Amazon’s leaders often respond to critics of its labor practices by pointing to wage increases for new hires in recent years, as well as the fact that it offers employees medical insurance benefits starting on their first day on the job — which isn’t always the case at other companies.

Company officials also nod to how influential Amazon is, saying that the company’s pay minimum sets expectations for the broader industry that other big companies eventually copy. A recent study published by researchers at the University of California Berkeley and Brandeis University gives their point some credence; it found that Amazon wage increases in recent years have led to rising pay for workers employed by other companies near Amazon facilities. But the relatively higher pay and superior benefits don’t matter much for all the Amazon workers who leave the company after a short time, without having a real opportunity to climb the ladder and build better lives for themselves.

The Amazon spokesperson pointed Recode to a statement Amazon has previously used to discuss its workplace turnover, which says that many hires at Amazon are rehires, though the company declined to reveal the exact percentage. “We’re proud to create both short-term and long-term jobs with great pay and great benefits,” the statement adds. “Some employees stay with us throughout the year and others choose to only work with us for a few months to make some extra income when they need it.”

“A lot of companies, and Amazon would be one of them historically, have kind of accepted eye-watering levels of turnover as just Newtonian physics — an act of God,” Joseph Fuller, a professor at Harvard Business School and the co-director of the school’s Managing the Future of Work initiative, told Recode.

That’s a departure from how top employers worked in decades past, when they offered, to some extent, support to help their employees move upward. Thomas Kochan, a professor of industrial relations at MIT, pointed to the 1950 Treaty of Detroit, in which General Motors and the United Automobile Workers union agreed to a five-year contract that helped workers employed by some of the biggest manufacturers in the country achieve middle-class status.

“We are going in the opposite direction,” he said.

Fuller is studying why so many working Americans get caught in “poverty cycle traps” and what leading US employers like Amazon might be able to do to pull these workers up. About 44 percent of working people in the US have low-wage jobs (defined as roles that pay less than $20 an hour), according to a 2019 Brookings Institution report.

Fuller’s research included a 2020 survey of working people in the US in low-wage jobs, as well as people who have risen out of low-wage jobs. The survey found that most low-wage workers would rather remain at their current companies than jump around for an extra 10 cents an hour or a slightly shorter commute. And the keys to keeping these workers in place revolve much less around entry-level hourly pay than they do opportunities to progress internally, as well as managers who show interest in a worker’s success and connect them with programs that may help them move up.

Fuller said his research doesn’t suggest that companies need to focus on turning every front-line worker into a career employee. For companies like Amazon with more than a million employees in the US alone, that just wouldn’t be feasible. But by investing money and time into building a ladder to more senior jobs, Fuller believes that companies like Amazon can extend an average worker’s tenure from a few months to potentially a few years, which helps the company by reducing the costs of hiring while promoting another American out of the low-wage job trap. Since other employers large and small already emulate Amazon’s existing management and labor practices, such a move could have considerable ripple effects for workers across the US economy.

Amazon has long heralded its Career Choice program, which currently will pay up to $5,250 a year for full-time warehouse employees, and $2,625 for part-time employees, toward tuition, books, and fees at partnering colleges and trade schools. Amazon also announced in 2019 a broader commitment to provide free “upskilling” training to 100,000 employees, including warehouse workers, by the end of 2025. It will take years to judge the effectiveness of such a program.

In the meantime, Amazon workers are trying to change the company from the inside. In April, an Amazon warehouse in Staten Island, New York, became the first in the US to successfully vote to unionize. The Amazon Labor Union organizers, who are all current or former Amazon employees, want to push Amazon leadership in contract negotiations for large hourly raises, longer breaks for workers, and union representation during all disciplinary meetings to prevent unjust firings that may exacerbate staff turnover.

The winning vote was just a first step, as Amazon indicated in an April 7 filing that it plans to file objections to the vote. Either way, the union’s success in Staten Island will likely inspire other workers, both inside and outside of Amazon, to attempt to organize their own workplaces. Already, a vote is scheduled at another Staten Island warehouse beginning April 25, and the results of a union election in Bessemer, Alabama, currently too close to call, are pending a hearing to scrutinize hundreds of contested ballots.

The pressure from the union drives seemed to have forced Jeff Bezos himself to reconsider the company’s treatment of its workforce. In his final shareholder letter as CEO in 2021, he said his company needs “to do a better job for our employees.” His new mission for the tech giant: “Earth’s Best Employer and Earth’s Safest Place to Work.”

“On the details, we at Amazon are always flexible, but on matters of vision we are stubborn and relentless,” he wrote. “We have never failed when we set our minds to something, and we’re not going to fail at this either.”

The stakes couldn’t be higher. If history is any indication, Amazon’s business lines will continue to grow, its warehouse footprint will continue to expand, and so too will its powerful impact on the lives of workers — its own as well as those employed by partners and competitors.


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