BOOKFORUM
MAR/APR/MAY 2021 <https://www.bookforum.com/print/2801>
You have 5 free articles remaining.Subscribe
<https://www.bookforum.com/subscribe?tid=pws1>for unlimited access.close
<https://www.bookforum.com/print/2801/amazon-s-role-in-american-inequality-24382#>
Prime Mover
<https://www.bookforum.com/print/2801/amazon-s-role-in-american-inequality-24382>
Amazon’s role in American inequality
ALEX PRESS <https://www.bookforum.com/contributor/alex-press>
*FULFILLMENT: WINNING AND LOSING IN ONE-CLICK AMERICA*BY ALEC MACGILLIS.
NEW YORK: FARRAR, STRAUS AND GIROUX. 400 PAGES. $28.
The cover of Fulfillment: Winning and Losing in One-Click America
*GET BIG FAST*was an early Amazon motto. The slogan sounds like a fratty
refrain tossed around at the gym. Jeff Bezos had it printed on T-shirts.
More than twenty-five years after leaving his position as a Wall Street
hedge-fund executive to found Amazon, Bezos’s size anxiety is long gone.
(At least as it pertains to his company; the CEO’s Washington, DC, house
has eleven bedrooms and twenty-five bathrooms, a bedroom-to-bathroom
ratio that raises both architectural and scatological questions.) Bezos
is now worth $180 billion. Amazon, were it a country, would have a
larger GDP than Australia.
Such numbers are nonsensically large—there’s no way to make them stick.
But in 2017, Bezos demonstrated what they mean. That was the year the
company conducted a nationwide sweepstakes to choose a location for its
second headquarters, or HQ2, as it was called. Seattle was already a
company town: Amazon had more than 40,000 employees there, and as much
of the city’s office space as the next forty largest employers combined.
It was time to take over a new city.
Local and state governments raced to undercut each other. It wasn’t only
tax credits that in some locations amounted to over $1 billion; the
subsidies offered to Amazon were a display of abject creativity. Bezos
is a Trekkie, so Chicago had/Star Trek/star William Shatner narrate the
city’s pitch video. Tucson, Arizona, sent a giant saguaro cactus to
Amazon headquarters. Sly James, Kansas City’s mayor at the time, bought
and reviewed one thousand Amazon products, giving every item five stars.
But the locations Bezos selected—New York City and Northern
Virginia—were always going to win. Together, the chosen bids gave the
company over $3 billion in tax incentives and grants.
The spectacle was about more than financial benefits; the company sought
to flex its power over elected officials. Amazon had engaged in these
displays before, such as when it threatened to move jobs out of Seattle
after the city council passed a law that would’ve taxed large employers
for each employee earning over $150,000 to fund homelessness-outreach
services. Indeed, New York had its winning status revoked after a
coalition of working-class organizations, left-leaning politicians, and
pissed-off residents made too much noise about the downsides of hosting
HQ2. The point is to beg on one’s knees; ingratitude is disqualifying.
But the contest was also about Amazon’s life-blood: data. The company
learned exactly what each location was willing to give up. It received a
precise picture of the strengths, weaknesses, and points of resistance
in each corner of the nation. How many NDAs would Alabama officials
sign? What did Boston’s elected officials think the region’s future
looks like? How many young people in Columbus were entering the
workforce each year? How low would Orlando go? The HQ2 affair was a
national demonstration of fealty to a private corporation by publicly
elected officials. Sure, everyone already knew Amazon was powerful, but
this was different: a corporate entity told politicians to jump, and
they asked “How high?” How did this happen?
Alec MacGillis’s/Fulfillment: Winning and Losing in One-Click
America/goes a long way toward answering that question. MacGillis, a
reporter for ProPublica, investigates the country left in Amazon’s wake,
crisscrossing the United States from what he calls the winning cities to
those regions on the losing side. His contention is that corporate
concentration creates geographic bifurcation. Places like Boston, New
York, Washington, DC, the Bay Area, and Seattle win the lottery,
attracting an influx of well-heeled residents. Capital divests from
other areas—midsize cities in the Midwest, much of the Rust Belt—leaving
them hollowed out. Low-wage jobs and drug addictions replace union
benefits. But the division is internal to the winning regions too. Poor
residents within the lucky cities suffer. Desperation reigns,
expectations are lowered, and elected officials become increasingly
willing to give Amazon anything in exchange for the promise of jobs.
Peter Fend, CRIME, 2020, UV print on cardboard, 16 x 20".
<https://www.bookforum.com/print/2801/amazon-s-role-in-american-inequality-24382#>*Peter
Fend,/CRIME/, 2020*, UV print on cardboard, 16 x 20". Courtesy the
artist and Essex Street/Maxwell Graham, New York
Using the tech giant as a focal point allows MacGillis to show that this
state of affairs was a choice, not an inevitability. It’s not that “good
jobs left”; the transformation of work was
engineered./Fulfillment/meticulously documents how that process plays
out, with the fate of millions haggled over by a handful of people in
tucked-away conference rooms.
When Amazon wanted to build two new warehouses in 2015, it reached out
to JobsOhio, a private nonprofit created by then-governor John Kasich to
oversee negotiations over tax incentives with companies. “Every month,”
writes MacGillis, “a board called the Ohio Tax Credit Authority approved
the incentives negotiated by Jobs-Ohio.” On July 27, 2015, it was
Amazon’s turn to meet with the tax board. The company promised two
thousand full-time jobs. In exchange, it wanted a fifteen-year tax
credit worth $17 million in addition to a $1.5 million cash grant from
the state liquor-monopoly profits controlled by JobsOhio. The result?
“The board approved the credit 4-0.”
Surveying Amazon’s operations in the state, MacGillis writes that “the
company had, in a sense, segmented its workforce into classes and spread
them across the map: there were its engineering and software-developer
towns, there were the data-center towns, and there were the warehouse
towns.” Amazon chose the Columbus area as its location for Amazon Web
Services US East, and picked three towns north of the city for its
centers. Hilliard, Dublin, and New Albany were “the right sort of
exurban communities to target: wealthy enough to support good schools
for employees’ kids, but also sufficiently insecure in their civic
infrastructure and identity to be easy marks.” The company secured its
standard extractions: a fifteen-year exemption from property taxes—worth
around $5 million for each data center—accelerated building permits, and
waived fees. It required the community to sign NDAs before negotiations
could even begin. Dublin threw in sixty-eight acres of farmland for
free, and a guarantee that the company did not have to contract with
union labor.
The warehouses, by contrast, are south and east of the city, areas
poorer than those in the north. The sites in Obetz and Etna are near
I-270 and “close enough to the struggling towns of southern and eastern
Ohio to be in plausible reach of a long commute for those desperate
enough to undertake it.” Amazon’s warehouses come with the standard
suite of exemptions—even though ambulances and fire trucks are often
called to the locations, which one investigation showed have twice the
rate of serious injuries as other warehouses, the company does its best
to avoid paying taxes for emergency services.
Tax avoidance is foundational to the company’s empire. MacGillis
enumerates a long, damning list of the company’s schemes:
There was the initial decision to settle in Seattle to avoid
assessing sales tax in big states such as California. There was the
decision to hold off as long as possible on opening warehouses in
many large states to avoid the sales taxes there. Amazon employees
scattered around the country often carried misleading business
cards, so that the company couldn’t be accused of operating in a
given state and thus forced to pay taxes there. In 2010, the company
went so far as to close its only warehouse in Texas and drop plans
for additional ones when state officials pushed Amazon to pay nearly
$270 million in back sales taxes there, forcing the state to waive
the back taxes. By 2017, the company had even created a secret
internal goal of securing $1 billion per year in local tax subsidies.
This is predictable behavior for a company run by a man whose focus has
always been on getting as rich as possible. But the government’s support
for this cause testifies to its class character. A capitalist state
takes its cues from executives. When a region has mostly low-paying work
and little in the way of a social-welfare net, it’ll beg employers for
jobs with a higher wage (even if that wage is below the industry
average, as is true of Amazon’s warehouses). There is no neutrality,
only officials groveling at Bezos’s feet, deferring to his
fake-business-card-carrying minions. Working-class immiseration is the
direct result.
The influence never ends. There is Amazon’s unparalleled lobbying:
against the regulation of drones, which it hopes to use for delivery;
for government procurement, as the company bulks up its relationship
with federal agencies; against antitrust investigations. There is the
trickle-down even to enforcement agencies like the Occupational Safety
and Health Administration. When fifty-nine-year-old Phillip Lee Terry
was crushed to death by a forklift in a Plainfield, Indiana, Amazon
warehouse in 2017, the state’s osha director told the company how to
blame Terry for his own death and negotiate down the fines. Not long
after issuing citations and a $28,000 fine, the agency quietly deleted
these penalties from the books. Indiana, after all, was hoping to get HQ2.
The past year has been a godsend for the company. “COVID-19, in our
view, has injected Amazon with a growth hormone,” noted an analyst at
Wall Street firm D.A. Davidson last summer. What was good for Amazon was
never good for America, and now the evidence was irrefutable. In one
four-month period, Bezos’s net worth rose by $24 billion. Amazon was
already one of the largest employers in the United States, but in 2020,
the company added more than 425,000 jobs around the world. It increased
its workforce by more than 50 percent from the previous year; the/New
York Times/compared the surge to the shipbuilders’ hiring spree at the
start of World War II. By November, 1.2 million people worldwide were on
Amazon’s payroll—a number that doesn’t include an estimated 500,000
delivery drivers. That workforce is contracted with a third party,
saving the company from liability for accidents; most of their drivers,
unlike those at other corporations, get their training by watching
instructional videos on their phones.
Get Big Fast, indeed. As a motto, it’s reminiscent of the one used by
Eugene Grace: Always More Production. Grace was the president of
Bethlehem Steel Corporation for thirty years, overseeing the company’s
stratospheric growth. By the middle of the twentieth century, its steel
mill at Sparrows Point, near Baltimore, Maryland, was the largest in the
world. Today, Sparrows Point is Tradepoint Atlantic, a logistics hub.
Amazon opened its second warehouse there last year.
/Alex Press <https://www.bookforum.com/contributor/alex-press>is a staff
writer at/Jacobin/magazine. She lives in Pittsburgh./
-=-=-=-=-=-=-=-=-=-=-=-
Groups.io Links: You receive all messages sent to this group.
View/Reply Online (#7038): https://groups.io/g/marxmail/message/7038
Mute This Topic: https://groups.io/mt/81132394/21656
-=-=-
POSTING RULES & NOTES
#1 YOU MUST clip all extraneous text when replying to a message.
#2 This mail-list, like most, is publicly & permanently archived.
#3 Subscribe and post under an alias if #2 is a concern.
-=-=-
Group Owner: [email protected]
Unsubscribe: https://groups.io/g/marxmail/leave/8674936/21656/1316126222/xyzzy
[[email protected]]
-=-=-=-=-=-=-=-=-=-=-=-
