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U.S. President Barack Obama shakes hands before speaking to employees at the Amazon Fulfillment Center in Chattanooga, Tenn., on July 30, 2013. (LARRY DOWNING/REUTERS)
U.S. President Barack Obama shakes hands before speaking to employees at the Amazon Fulfillment Center in Chattanooga, Tenn., on July 30, 2013. (LARRY DOWNING/REUTERS)

Retail

Amazon’s media mask can’t hide the ugly reality forever Add to ...

By the time Barack Obama arrived at the Amazon Fulfilment Center in Chattanooga, Tenn., on Tuesday, Jeff Bezos may have been hoping he could just send him back to the White House by express delivery.

Mr. Obama visited the one million square-foot warehouse to trumpet Amazon.com Inc. as a paragon of the new economy. But as the buzz built in the days leading up to his whistle-stop tour, booksellers across the U.S. attacked Amazon as a near-monopoly that uses its extraordinary market power to squeeze small retailers, authors and publishers half to death. When the five biggest publishers tried to claw back some power by conspiring with Apple to raise prices, the U.S. Department of Justice charged them all with antitrust activity, while Amazon sat purring on the sidelines, an Internet Cheshire cat.

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Some viewed the Obama visit as another sign that Amazon and the White House are too cozy. Sure enough, about 24 hours after the visit, Amazon published a Kindle Single e-book of an exclusive interview the President had done at the warehouse with David Blum, Kindle’s chief editor. The book is free, but only available to those who have downloaded Amazon’s Kindle app.

Amazon has worked hard in the past few years to present itself as a new media powerhouse, through its promotion of Kindle and other digital businesses. One industry estimate last year put its share of the North American e-book market at 50 per cent. Like Netflix, another company built on logistics that is pivoting to become a content creator, Amazon is striking deals to stream network TV shows and ordering up its own original TV series. The Toronto-based Sinking Ship Entertainment is currently in production on the Amazon animated kids series Annebots.

The company’s media segment, which includes software and digital downloads, as well as music, movies, video games and consoles, took in about $4.4-billion (U.S.) worldwide in the quarter ended June 30, or about 28 per cent of its total revenue. Media – notably the digital kind that can be read on sleek devices such as Kindles that take pride of place on the Amazon website – is a sexy business to be in. That’s especially true for a company that still depends on the postal services, and their fleets of planes and trucks, to reach its customers. There’s a futuristic, environmentally-friendly halo that comes with being in media, which seems to sprinkle stardust in people’s eyes. We’re rendered slack-jawed and giddy by apps and the devices they play on, so we don’t tend to look too closely at the ecosystem that provides them.

It takes a lot of money to manufacture stardust. In the past month, Apple has been spending heavily on feel-good ads (it rarely makes any other kind these days) touting the fact that every product it makes is “Designed by Apple in California.” That’s because it would prefer you to not dwell on the fact that some of its products are manufactured in awful conditions. (On Monday, the New York-based China Labor Watch issued a new report alleging serious safety and environmental violations, and poor living conditions, at Pegatron, an Apple supplier that has been picking up some work from the notorious Foxconn, which experienced a rash of suicide among workers over the past couple of years.)

Amazon’s shipping operations are the envy of the logistics industry: the Chattanooga fulfilment centre has shipped out 100 million items in less than two years. But even though President Obama stood in the gleaming warehouse and declared, to cheers from workers, that: “Nobody who works full-time in America should have to live in poverty,” Amazon is hardly a model of the new economy he would like to see created. When State of Tennessee career offices announced last summer that Amazon was looking for fulfilment centre workers in Lebanon and Murfreesboro, the starting hourly wage was listed at $11. That’s just below the poverty line, which the federal Medicaid program defines as $23,550 for a family of four.

And workers would need the Medicaid: The basic job qualifications include the ability to “lift up to 49 pounds, stand/walk for shifts 10-12 hours long,” and be “willing to frequently push, pull, squat, bend, and reach.” A report in September, 2011, by The Morning Call of Allentown, Penn. found many local warehouse workers who complained of brutal conditions: One doctor in a nearby E.R. called federal regulators to report an “unsafe environment” due to the heat, which regularly hit 100 F. Other workers have talked of walking 10 miles during a typical shift and of the hard toll wrought on their bodies by the labour.

True, there aren’t a lot of jobs to be had in places like rural Tennessee and Pennsylvania’s Lehigh Valley, which once hummed with industry and mining. On Monday, one day before Obama flew in, Amazon said it was looking for another 5,000 workers for its shipping centres around the U.S. The company has also opened centres in Mississauga, Ont. and Delta, B.C.

The jobs are certainly better than welfare cheques, but behind the shiny promise of Amazon’s new media mask, there’s an ugly bit of reality that needs to be seen.

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