Amazon is creating 100,000 U.S. jobs, but at what cost?
SAN FRANCISCO — Amazon may have raised the bar very high on jobs-creation ambitions in tech — it pledged Thursday to add 100,000 full-time jobs in the USA by mid-2018.
But at what cost?
The e-commerce behemoth, which employs 306,800 in full- and part-time jobs worldwide, said the positions are across all skill and experience levels. Most will be low-paying jobs at fulfillment centers, including ones under construction in California, Florida, New Jersey and Texas.
"Innovation is one of our guiding principles at Amazon, and it’s created hundreds of thousands of American jobs," Amazon CEO Jeff Bezos said in a statement.
Amazon says it will create 100,000 full-time jobs in U.S. by 2018
Though the creation of tens of thousands of jobs is likely to help local economies, please President-elect Donald Trump in his push for more U.S. jobs and signal a PR victory, it's hardly a ringing endorsement for American workers, especially those in retail whose jobs are threatened by the digital behemoth. Amazon has a troubling labor history, marred by lawsuits, picketing, grueling work conditions, complaints of management tactics and lower wages. Consider:
•Pilots contracted to deliver Amazon packages via its new in-house transportation network picketed in November because of a long-standing labor dispute with one of Amazon’s two airline partners.
•As Amazon readies its own shipping business, three company drivers filed a proposed class-action lawsuit in federal court in October in Seattle, alleging the company violated federal labor law by classifying them as contractors rather than employees.
•Amazon clashed with The New York Times over its investigation in late 2015 of allegations of oppressive working conditions and intimidating management practices at the Seattle-based company.
•Amazon is involved in a labor dispute with employees at its warehouses in Germany over pay and conditions.
Amazon has emphasized all 100,000 jobs are full-time, including competitive wages and benefits. It defended its company culture as workforce-friendly.
"We are proud of the work environment and the culture we have at Amazon,'" Amazon spokeswoman Kelly Cheeseman said in a statement to USA TODAY. "We encourage anyone to come see firsthand what it’s like working at Amazon through our public tours that we offer both in our fulfillment centers and corporate offices."
The impact is felt far beyond Amazon, labor and retail experts said. The breakneck growth of Amazon is "upending" the retail industry, which accounts for one out of every eight jobs in the USA, says Stacy Mitchell, co-author of a recent report that concluded Amazon eliminated about 149,000 more jobs in retail than it has created in its warehouses.
"Amazon pays its warehouse employees 15% less on average than the prevailing wage of other warehouse workers in the same region, and it is experimenting widely with ways, such as temporary and on-demand employment, to erode job security," Mitchell says.
“Because its technology can closely monitor worker productivity, Amazon takes surveillance and goals to a higher, grueling level,” says Beth Gutelius, a researcher at the University of Illinois-Chicago, who wrote a dissertation on warehouses.
The massive hiring plan over the next 18 months comes as retail sectors that compete directly with Amazon shed workers. Employment for electronics and appliances stores declined 2.6% year over year, as did those in clothing accessory stores (0.3%), according to the Bureau of Labor Statistics. Overall, retail jobs improved 1.6% — in line with the overall U.S. economy, says Jed Kolko, chief economist at job-search engine Indeed.com.
Amazon has been on a hiring binge. In 2011, it had 30,000 full-time employees in the USA. At the end of last year, it employed 180,000. In the first nine months of 2016, it added 26 warehouse facilities, raising its total worldwide to 149. Roughly half are in the USA. It is ramping up the use of drones and robotics, which could lead to the displacement of some of its workers.
Trump vowed during a news conference Wednesday to be "the greatest job producer that God ever created," and he has persistently pushed for American companies — including those in tech — to bring jobs back to the U.S. or create them here.
The Internet represents approximately 6% of the total U.S. economy, according to an economic policy white paper released by the Internet Society on Thursday.
Trump faces a high bar: President Obama has overseen an economy that created more than 11 million jobs and 75 straight months of jobs growth.
Amazon may please Trump and help get him there. Let's just hope its rank-and-file feel the same way.
Follow USA TODAY San Francisco Bureau Chief Jon Swartz @jswartz on Twitter.