Back to top Jump to featured resources
ILSR Press Room filed under Independent Business

The cutthroat jobs strategy Amazon uses to conquer retail

| Written by Nick Stumo-Langer | No Comments | Updated on Apr 25, 2017 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/the-cutthroat-jobs-strategy-amazon-uses-to-conquer-retail/

The New York Post – April 25, 2017

By Lisa Fickenscher

Jonathan and Michele Rhudy recently moved their Richmond, Va., consulting business into new digs and bought all new stuff — office supplies, furniture and even a coffee maker.

There was no question in their minds where all of those items, plus paper clips, reams of paper and every last doodad, would come from: Amazon. …

In addition to capturing 50 cents of every dollar spent online, Amazon, according to a report by the Institute for Local Self-Reliance, a nonprofit research organization, is used for half the online shopping searches undertaken by US consumers.

In other words, Bezos knows what you want to buy before you buy it.

Critics are beginning to wonder if Amazon — with such control over retail sales, jobs, ad dollars and more — is good for America. …

Most of the jobs Amazon creates are low-paying warehouse and customer-service positions. The warehouse jobs pay, on average, $12.32 an hour, 9 percent less than the industry average at other warehouses, according to ILSR, which looked at 1,300 Amazon wage postings on Glassdoor.com.

Amazon says its employees receive a “comprehensive benefits package,” including healthcare, 401(k) and company stock awards, in addition to performance-based bonuses that add to the overall value of base pay. …

But research shows that Amazon’s job gains have come at the expense of other jobs and that the quality of the Amazon positions is inferior, with about 40 percent of the workforce in its warehouses considered contract or temporary employees, according to ILSR.

Amazon counters, claiming that on average nearly 90 percent of its warehouse workers are regular, full-time employees, though the number of temporary workers rises during peak demand times.

For years, one of Amazon’s biggest edges over competitors was that it didn’t collect state sales tax, giving it a price advantage equaling as much as 9 percent in states like New York. That income, experts say, deprived states of revenue and contributed to budget shortfalls.

That changed on April 1. Amazon is now collecting state taxes in the 45 states that have them, according to the Tax Policy Center.

“But the damage was done,” said Flickinger. “The money that was not collected can’t be made up, and those budget deficits are going to force state governments to lay off employees at unprecedented rates.”

Read the full story here.