Amazon Has Turned a Middle-Class Warehouse Career into a McJob

https://www.bloomberg.com/news/features/2020-12-17/amazon-amzn-job-pay-rate-leaves-some-warehouse-employees-homeless

by longdefeat • 6 years ago

50 64 6 years ago

dnissley• 6 years ago

This is amazingly dishonest:

"Six years ago, before the company opened a giant fulfillment center in Robbinsville, New Jersey, warehouse workers made $24 an hour on average, according to BLS data. Last year the average hourly wage slipped to $17.50."

Guess what? Low-skill immigrants have a similar effect on local economies. But it doesn't mean that those workers are "stealing" higher paid jobs. Seems likely to me that those higher paying jobs are still there, and it's just the average that's gone down.

chordalkeyboard16• 6 years ago

Despite a starting wage well above the federal minimum, the company is dragging down pay in the logistics industry and bracing for a fight with unions.

Sadly, the author doesn't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided.

toomuchtodo3• 6 years ago

Consumers should not expect slave labor, but they would happily consume it if regulation did not prevent it.

Disclosure: I donate to progressive efforts in this space to drag the minimum wage up, which has not kept pace with inflation for many years.

chordalkeyboard16• 6 years ago

Have you considered why there is inflation which always drives down real wages?

LordDragonfang• 6 years ago

You know what else comes out of the pocket of the consumer? Paying for government assistance for people employed full time by a company.

more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time.

In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.

gruez4• 6 years ago

I see this sentiment on reddit often. However, the logic only works if the worker in question had a higher paying job prior to getting the job at amazon. If the worker got paid less, or was previous unemployed, then the the act of amazon hiring him reduced the government's burden. Also, let's say amazon replaced his job with a robot. Now the worker won't be on amazon's payroll and he's no longer amazon's problem, but now there's one more unemployed person and less money being paid out to workers. Is that much better?

emit_time• 6 years ago

Amazon’s minimum wage is higher than the wage of 1/3rd of the workforce.

chordalkeyboard16• 6 years ago

You know what else comes out of the pocket of the consumer? Paying for government assistance for people employed full time by a company.

I think you mean "taxpayer"

In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.

Imagine how much assistance they would need if they didn't have jobs.

living wage.

what constitutes a "living wage" is dependent on the cost of consumer goods which is in turn dependent on the cost of labor. You're not going to escape the fact that some people's labor isn't worth enough to earn them the standard of living that you or they would prefer by wishful thinking or statutory fiat. You can, however, limit their options and distort the market in a vicious circle of economically ignorant mandates.

jelliclesfarm3• 6 years ago

All low paying jobs should be automated. I say this coming from the Ag side because farm labour is grossly underpaid and exploitative. But we can’t raise the cost of food because raising cost of food to pay for labour means more people will find food dear.

It’s wages chasing price chasing wages. And we need more and more food for exponentially increasing population with a smaller work force and lesser land. Only solution is to eliminate such jobs and automate field Ag.

And grow indoors as much as possible. Indoor Ag can increase productivity, use less land and water and also can employ workers from an educated pool because automation requires some skill. So we are also tackling unemployment instead of exploiting poor undocumented immigrants and paying them slave wages.

I see amazon warehouse jobs with low pay the same as farm workers doing repetitive manual work. Automate. Automate. Automate.

ardy425• 6 years ago

Sadly, the author doesn't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided.

Those pesky abolitionists apparently missed that too. Don't you think they'd have given up had they realized what emancipation would have done to the price of their clothing?

charlesu4• 6 years ago

Same thing with child labor. Apparently it being outlawed was the end of American industry.

chordalkeyboard16• 6 years ago

Thats a well-poisoning non sequitur.

charlesu4• 6 years ago

More often than not shareholders and management can just pocket the difference not consumers. Levi jeans today are low quality compared to a few decades ago but they aren’t any cheaper. Same thing with colleges. Low wage adjuncts as far as the eye can see, but higher education has never been more expensive.

gruez4• 6 years ago

Levi jeans today are low quality compared to a few decades ago but they aren’t any cheaper.

A simple search contradicts your claim: nytimes says: "A pair of Levi's 501 jeans cost $50 in 1998, and $46 in 2008"[1]

Same thing with colleges. Low wage adjuncts as far as the eye can see, but higher education has never been more expensive.

The problem here are price insensitive consumers given tons of free money by the government (in the form of guaranteed student loans, regardless of ability to pay back). If you were given the gift of one free TV of your choice (valued up to $2000), your purchasing decision would be very different than if you were simply given $2000 in cash.

[1] https://www.nytimes.com/2008/05/29/fashion/29PRICE.html

ab_testing2• 6 years ago

I think the author has a beef with Amazon. The labor market is based on supply and demand . If the labor supply is more than the demand, then wages will fall. Except for forklift drivers, most warehouse jobs are unskilled Jobs and during times of high unemployment, prices for unskilled labor tends to fall down. The United States also admits close to a million immigrants every year - mostly via the family based categories. Those also tend to have a downward effect on wages as they compete with local talent for the same jobs .

charlesu4• 6 years ago

If the labor market is based on supply and demand, why are teacher salaries stagnant in the face of perpetual teacher shortages? Why do nice school districts pay more than bad ones despite having far more applicants?

zp33• 6 years ago

Because teachers are not operating in a free market. Teacher salaries come from local governments, who may have to cut budgets.

0xy2• 6 years ago

This is misleading considering the average teacher salary is 50% higher than the average salary in general. In some states, that's only the starting salary.

defertoreptar3• 6 years ago

Here's one possible explanation:

The vast majority of states adopted new high-stakes teacher evaluation systems between 2011 and 2016.
We find that high-stakes evaluation reforms reduced the supply of newly licensed teachers by 16 to 18%.
Evaluation reforms increased the probability a school had at least one unfilled teaching vacancy with effects concentrated in traditionally hard-to-staff schools.
Evaluation reforms also increased the quality of new teachers by decreasing the supply of teachers coming from less competitive undergraduate institutions.

https://www.sciencedirect.com/science/article/abs/pii/S00472...

ab_testing2• 6 years ago

Because teacher salaries are not driven by market demand but by taxpayer dollars. Taxpayers everywhere are averse to increasing taxes - hence the teaching budgets tend to stagnate and as a result the teacher salaries stagnate.

jelliclesfarm3• 6 years ago

https://transparentcalifornia.com/salaries/2019/school-distr... : teachers salaries are not stagnant.

Almost half the state budget goes to schools. Ave 70% of school budget goes to staff and teachers salaries. There are Union negotiated raises every single year. And their last drawn salaries as pension for the rest of their lives.

All school districts are distributed funds with a LCFF formula where in all the school budget monies goes into a big pot and redistributed according to need and not according to property tax collected.

California decided that school budget shouldn’t be decided based upon whether it’s an affluent district or not. And hence the redistribution . Who gets the most? If there are homeless students, ESL parents/students, below poverty line, special Ed , inner cities etc. Why? Because sometimes you need teachers who are bi lingual. Counselors, school security, special Ed teachers etc all need more budget. Even if there is one student with special needs, the school has to hire staff.

Schools have gotten creative to get funding. For example..in my medium affluent Bay Area district, spending per student is less than 10k/student. It’s less than average. With a large Asian population, many kids..even though they are American and their immigrant parents can speak English..will be streamed into ESL. Some kids who stay with their grandparents or a home under a trust with utilities in grandparents names are considered ‘homeless’ so they can boost numbers. In California, if someone is homeless, they don’t have to provide proof of their status and schools cannot turn down their children for admission. The more students they can show as needing special Ed, they can avail more funds. They can even apply for federal grants and funds. It’s the only way because the funds meant for our schools is redistributed to rest if Ca.

There is another Bay Area school with no swimming pool. So the city voted to pay parcel tax to fund the swimming pool and gym. Then the union wanted to tap into that fund to increase teachers pay. But it’s an earmarked bond and by the time the dust settled, the construction estimates had doubled and the bond money is no longer sufficient. The parents who voted for the parcel tax have their kids in college and still no pool. I am not talking 2-3 years. This is almost 8-9 years.

Teachers do get lower salaries than the average tech worker(Altho on average equal to or more than other professionals) but they get their last pay as pension. Unions negotiate it that way. In a way, unionized teachers are to teachers unions what San Francisco’s homeless population is to politicians. If there is no grievance, they have no reason to represent them and to exist. CTA is involved in a lawsuit because they enroll teachers into union with or without their consent to show membership numbers.

Nice school districts don’t pay their teachers more. They pay less than bad school districts. Because they don’t have enough ‘special needs’ to justify a larger share of the formula. In nice affluent cities, main streets are filled with tutorial centers and kumon and test prep centers and more. They are the best business to run in California Bay Area.

With high density housing becoming mandatory at the risk of cities being sued and fined, schools are getting overcrowded. You hear stories of children having to choose between having lunch and standing in line to go to the restrooms because there aren’t any. And because construction is also unionized, the cost of one extra class room in California is $1-1.5 million.

https://www.constructiondive.com/news/making-the-grade-why-s...

Also: [..] 1024 square feet The average class size for secondary schools is 1024 square feet and should house approximately 14 - 15 students. These findings have strong implications for government policy. If smaller is better, then fewer students per existing classroom is the answer.[..] the average number of students in my Bay Area city classroom is 30-33.

This is also why I am not in favour of high density developments. They place so much stress on the school system and the costs of running these schools shoot upwards astronomically. And that is borne by everyone in the city even though the collected funds go to other parts of CA that are actually low density. As Fremont and Oakland and Cupertino become more and more crowded due to high density developments, it costs more but they get less and less due to redistribution as well as more student numbers. Everything from music to arts to home ec to PE budgets are cut. Meanwhile Visalia or Manteca where the population is sparser get more per student even though they don’t contribute as much to the public education pot. This leads to their teachers being paid more than affluent Bay Area teachers even though the latter has more students and need more budget to build new school infrastructure.

Public school system needs to change. There are two ways to do it. Public schools should only be for those who cannot afford private schools. Just reduce tax burden and everyone pays to support those who can’t afford their children’s education. This way, parents can educate their children as they see fit. Be it special Ed or home schooling or religious schools, parents can decide. It will also stabilize demand for homes in high density zip codes. Everyone pays a flat education tax.

Another way is for parents to pay a public school/education/children’s tax for the 12 years they send their kids to public school. This would be in addition to the flat tax everyone pays for public school education.

When general citizenry pays in taxes for infrastructure of all of the state’s school districts and parents pay for teachers salaries and education expenses, they are funding according to their capability and finding teachers suited for their district. For example, cost of living in Shasta is less than in Bay Area. Teachers salaries can be adjusted to the schools they teach. Now..affluent Bay Area schools, for example..have to get their teachers from Manteca or Stockton because Bay Area is too expensive for them to be locals. This adds travel time and just overall resentment. I hear tech workers complain about driving on the 880 from one part of Silicon Valley to another. But these teachers take the train and then drive from there to their homes between Bay Area and Stockton or Bay Area or Manteca. It’s just wrong on so many levels. And the only one to blame is regional governance in Sacramento who don’t know what they are doing. And now with the HST shelved, public transport isn’t going to get better. With ABAG and MTA combined as one govt org, the body that is forcing Bay Area cities to build high density is the same one that is managing public transport. Needless to say, they are not interested in solving the problems of tax payers.

The only way is to increase parcel taxes. It only increases tax burden for everyone with everyone being unhappy. With local control rather than regional governance, each school district is able to direct and steer their special needs according to their abilities.

Finally, teachers who cause agitation and bring their politics to the classroom should be fired. Unionized or not. Teaching may be a noble profession, but it’s still a job. This trend of professionals bringing all their baggage and politics and grievances to their job is ruining our state. This is what I have to tell teachers: It’s a job. Teach. They are not your children. Let the parents do the parenting.

Daishiman• 6 years ago

Yes, I too took Econ 101.

trianglem• 6 years ago

None of this is going to work. Let the robots do these jobs and bring on the Universal Basic Income. Anything short of that is unsustainable and inconsistent with capitalism.

krapp3• 6 years ago

Thing is, we're going to get the robots and not UBI, so that's going to be a problem.

0xy2• 6 years ago

UBI is inconsistent with basic math, because any notable UBI has a cost that exceeds the entire budget of the U.S. government. Let alone the fact that it'll slash the amount of money spent on disabled and old people (because UBI usually includes the lacking plan of cutting other welfare to pay for it).

rufus_foreman• 6 years ago

> Middle-Class Warehouse Career

Middle class warehouse career?

As a former member of the warehouse class, this article is complete bullshit.

zaptheimpaler2• 6 years ago

There's a much bigger debate brewing around what the purpose of a company really should be.

Turns out that focusing only on the cost to the customer means the majority of people work shitty jobs just so they can buy slightly cheaper stuff from other people working shitty jobs. You have to wonder, maybe what's best for people is to pay slightly more for everything and get better jobs all around instead. Even if purchasing power goes down as a result, a slightly more enjoyable 8 hours could well be worth the tradeoff because we spend most of our waking hours working.

If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.

chordalkeyboard16• 6 years ago

How is that slightly more money people are paying for goods going to do anything if people are just paying more for goods? There's one consumer at the end, there are thousands of laborers contributing between extraction of raw materials and delivery of finished product. It seems that in order for appreciably more to be paid for labor, the cost of goods would skyrocket and people would have to learn to have less stuff.

If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.

Doubtful. There's not much juice to squeeze from mgmt and labor. Have you looked at returns relative to investment recently?

keeganpoppen• 6 years ago

right... think of a supply chain where each one of the steps is 10% less efficient than it used to be... doesn't take large n for 1.1^n to be approximately infinity

defertoreptar3• 6 years ago

I would agree that I'd enjoy my job more if I got paid more, but it sounds like you're trying to say this will result in jobs that are just over all better. Why wouldn't it mean the exact same "shitty jobs" but with better pay?

zaptheimpaler2• 6 years ago

Management in any business wants employees to be as efficient as possible to squeeze the max output per dollar paid out. Exceptions exist, but that is roughly the incentive structure created by how companies are valued by markets. If productivity wasn’t the only goal, jobs could get easier in many ways - devs might get longer time to work on a feature, warehouse workers might get less aggressive targets on how many boxes are shipped per day, employees might get more vacation or longer breaks or 4 day work weeks.

CryptoPunk2• 6 years ago

Jobs are "shitty" only in relation to what the worker can purchase with the wages they receive. As consumer prices go down, the purchasing power of the average salary increases, and jobs become less shitty.

It's through this dynamic that wages have grown 20 fold, in inflation adjusted terms, since 1820. Companies finding ways to reduce costs is how that happened.

So Amazon reducing consumer prices is in effect a wage hike for everyone.

And this same dynamic explains why wage growth has slowed since 1970. Social welfare spending has increased on average 4.8 percent per year between 1972 and 2011:

https://fivethirtyeight.com/features/what-is-driving-growth-...

This was one of the most rapid expansions of social democratic policies in human history. This transformation from a more market-oriented economy to a more politically directed one had the predictable effect of reducing labor productivity growth, which evidence shows was the primary cause of the slowdown in wage growth:

http://www.brookings.edu/research/opinions/2014/12/22-source...

In other words, we need MORE profit-motivated capital investments and companies like Amazon flourishing, not less. The seemingly miracalous advancement of income and quality of life since 1800 was because of breakneck rates of industralization. Change, in this context, is good, and anti-capitalist policies that reduce the expansion of capital are bad.

tarboreus• 6 years ago

This is fine if you're spending all your money on junk ordered through the mail, which admittedly is a perk. Not so great for paying rent, attending college, or going to the hospital.

Pushing back comparisons to the 16th, 17th, or 18th century will produce a flattering comparison, and people should be aware of how much things have improved since then, but in a conversation about Amazon it's not relevant. Companies like Amazon and Walmart have led to monopsony (buyer advantage) dynamics that have gutten communities, stifled innovation, and led to stagnant wages. The issue is that these companies wind up not just competing on their own comparative strengths, but take advantage of their size and market advantage. I notice you're not singing the praises of, for example, Spectrum (formely Time Warner), because the obvious market power and complete lack of competence or innovation in that sector is hard to talk around. Amazon's Bezos is actually pretty savvy, and Amazon leads to some lower prices for consumers and occasional innovation, so the damage to competition in various markets is easier to ignore. But these companies are dangerous, in that they can turn market power and cash in hand into political power, and they do. Size matters.

tsjq• 6 years ago

There's this documentary from long ago, "Walmart: the high cost of low prices" .

Now, Amazon joins the clout

Amazon Has Turned a Middle-Class Warehouse Career into a McJob

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