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Working In These Times

Monday, Oct 28, 2013, 8:25 pm

Only One Cheer for Amazon

BY Bruce Vail

Though Mayor Stephanie Rawlings-Blake exalted Baltimore's acquisition of an Amazon warehouse like this one in Bedfordshire, local residents aren't so sure it's a boon. (David M. Jones / Creative Commons)  

BALTIMORE—It’s a “great day for Baltimore,” exulted Mayor Stephanie Rawlings-Blake last week when she announced online retailer Amazon’s plan to build a huge new warehouse complex in the city.

At a time when Baltimore’s official unemployment rate is more than 10 percent and about 25 percent of the population is living in poverty, Rawlings-Blake celebrated the fact that the warehouse could add 1,000 new full-time jobs. But the mayor didn’t bring up the possible negative implications of the Amazon deal in her Wednesday press conference. 

First, it turns out that city and state agencies put together a package of tax incentives worth more than $43 million to entice Amazon to come to Baltimore. While rich incentive packages are common in large-scale development deals in Baltimore and elsewhere, local activists immediately raised questions of whether the already prosperous Amazon was an appropriate recipient for such government largesse.

“There is a feeling that economic incentives like this ought to be saved for what we call ‘market imperfections.’ This would be for something like the opening of a grocery store in a food desert, or tax breaks to a company that hires released convicts who can’t find work otherwise,” says Greg LeRoy, Executive Director of the national union-backed advocacy group Good Jobs First. Under this standard, he says, mega-retailers like Amazon shouldn’t qualify. “Retail subsidies rarely make sense, because a company like Amazon or Wal-Mart chooses a location because it has specific advantages for their business. So you are paying them to come to a place where they would come anyway.”

Bill Barry, a local activist who has run for the City Council as a Green Party candidate, points out Amazon’s reported history of unsatisfactory treatment of workers as another reason to question the mayor’s celebrations. “The fact that it’s a company well known for its crappy labor practices doesn’t matter to [the City Council] at all,” he says.

Indeed, the quality of the jobs to be created at the proposed 1-million-square-foot “fulfillment center” was a clearly a sensitive point for Amazon, which produced a statement in conjunction with the mayor’s press conference stating that the jobs would provide good pay and benefits. The positions will “pay an average of 30 percent more than traditional retail jobs” plus stock awards and other benefits, according to the Amazon statement.

But Luis Larin of the community organizing group United Workers was unimpressed by Amazon’s claims. “I don’t know exactly what numbers they are using—and it’s suspicious that they aren’t more specific—but a traditional retail job around here is a minimum wage, poverty-level job,” he says. “They are also known for relying on a lot of temporary workers, [who] don’t get any benefits,” Larin says.

Larin notes exposés on Amazon labor practices in mainstream media. A 2011 investigation into a local Amazon fulfillment center by the Allentown, Pa.-based The Morning Call drew national attention to poor working conditions and heavy reliance on temporary workers by a staffing agency responsible for much of the hiring. A more recent report from CNN Money television suggests Amazon’s claims to provide comparably good pay and benefits are often exaggerated.

These concerns have also been reflected overseas. On Tuesday, October 29, the German services trade union Verdi called one-day strikes over inadequate pay and working conditions at the company's warehouses in Leipzig and Bad Hersfeld. Reuters reports that these were just the latest of several short strikes Verdi organized against Amazon already this year, and that the union predicts additional job actions during the busy holiday shipping season. 

In addition to its problems with Amazon's treatment of employees, United Workers has been highly critical of deals like Baltimore's, in which they feel government agencies have generously financially supported big corporations that provide only poor-paying jobs to city residents.

“It’s shocking that city officials are celebrating” the Amazon deal, Larin says. “It was negotiated in secret, without consulting the community in any way. It’s presented to us as a ‘done deal’ and there is nothing we can do … It’s a violation of all the fair development principles” espoused by United Workers, Larin says.

Rod Easter, president of the Baltimore Building and Construction Trades Council, confirmed to Working In These Times that the deal took place in secret. “We were asked a couple of months ago to have our companies put in a bid, but it was all hush-hush. We didn’t know it was Amazon till later.”

There has been no agreement yet that construction of the giant Amazon project will be unionized, he adds. “Our contractors put in their bids, and we’re told they are still under consideration,” Easter says, though he has no direct knowledge of competing non-union bids.

Nor is there any official agreement addressing unionization of the warehouse workers, adds Ernie Grecco, President of the Baltimore Metropolitan Council AFL-CIO. “We hope it will be union … There are certainly unions that would be interested in organizing,” he says. 

“The warehouse would be a terrific opportunity” for new union organizing, says Barry, a retired professor of labor studies at Community College of Baltimore County. “The location is strategic, so it can’t be moved” to escape union organizers by going to non-union states or overseas.

But warehouse workers would face other obstacles in an effort to form a union, he adds. “It would be a huge challenge” for local labor groups, he says, because of a hostile legal environment and the indifferent attitude of most leaders of the local Democratic Party toward organized labor. “There is a downside to living in a one-party state. Labor has felt that here,” the Green Party activist says. 

In general, Barry, like other activists, feels that the move may not be to the benefit of Baltimore’s citizens. “There isn’t much you can say about this that is new. It speaks to set of financial priorities [by local elected leaders] that is all backwards. They are ready to pour millions into one of the richest companies in the world,” he says. “Meanwhile, more than quarter of the people of this city lives in poverty.” 

Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA's Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper's New York City headquarters and in the Washington, D.C. bureau.

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