First, a brief crack of history. The Economist, an English-language weekly magazine, was established in 1843 to promote the the repeal of the Corn Laws in the UK. The Corn Laws were tariffs that protected British farmers from cheap American and Continental corn (or grains). The Economist, a pro-business magazine, supported the repeal because it wanted to keep wages low. Cheap American food in that world would have the same effect on labor costs as cheap Chinese products in ours. I bring this bit of economic history up because The Economist, which has championed free trade from 1843 to today, recently published a story about how Amazon warehouses depress wages in their surrounding areas. I first learned about this story through a tweet by Seattle Times' business reporter Mike Rosenberg. As he points out, the Economist concludes that Amazon's aircraft-carrier-big warehouses can have a direct impact on the wages of a county or town by offering "wages that are well below those of its competitors."
One Virginia county, Lexington, has seen all regional warehouse wages collapse by 17 percent since Amazon opened a distribution center there in 2011. The pro-free trade magazine reports that Lexington is not alone. This happened in other regions in the US, though the fall in wages was not as dramatic as in Virginia. But the story has another, more disturbing side. It involves the working conditions of these fulfillment centers. If a robot is not doing a job, the human who is tasked with it can be considered no better than a robot.
From The Economist:
To keep costs in check, Amazon must not only maintain dozens of warehouses, but run them efficiently. Whereas traditional shop workers might remain idle for hours at a time, Amazon’s workers—the “stowers” that stock inventory, the “pickers” that pluck items from shelves and the “packers” that box them up for shipment—are constantly moving. Pickers are equipped with hand-held devices that show them what each item looks like, where it may be found, and how to get there as quickly as possible. As they navigate row after row of shelves, timers count down the seconds needed to retrieve each item. To meet performance targets, pickers must collect as many as 1,000 items and walk up to 15 miles in a single shift.
The future of this kind of work does not look good. The Guardian recently reported that Amazon patented a wristband that can accurately keep track of fulfillment workers. When you order something on the computer, the information is sent to the relevant warehouse and received by a worker, who, guided by vibrations of the wristband, locates the item. The wristband also exposes an employee's free or dead time. The worker becomes more and more a robot. But why not just replace the human entirely? Because, as the head of the Bullitt Center Denis Hayes once put it to me, a brain is still cheaper than a computer that can process and respond to the conditions and challenges of a fulfillment. A worker in such warehouses earns about $4,000 less than the national average for a warehouse employee. Expect wages in this line of work to continue falling.
