Low Wages And No Stability: How Amazon’s Use of Perma-Temps Is Hurting Workers

Max Parrott August 29, 2018

Across the U.S., Amazon warehouses are capitalizing on depressed areas to boost profits. (Photo by Emanuele Cremaschi/Getty Images)

Every day at 4:30 a.m., Dwayne Wil­son, 25, wakes up to find out whether he’s going to be need­ed as a fork­lift dri­ver at the ware­house he works at in the Los Ange­les neigh­bor­hood of Wilm­ing­ton. Some­times he gets a call telling him not to come in. Some­times he goes in to find out that he’s not need­ed that day. On aver­age, he works just three eight-hour days per week, at $15 per hour. 

Even if I work every day and I have an amaz­ing work eth­ic,” Wil­son says, I still could be sent home after wait­ing for so long because they fill the spot.”

The prod­ucts that Wil­son moves are des­tined for Ama­zon cus­tomers, but Wil­son doesn’t work direct­ly for the e‑commerce giant. He works for Cal­i­for­nia Cartage, a logis­tics com­pa­ny that has a con­tract to unpack ship­ping con­tain­ers full of Ama­zon goods. Wil­son says that the major­i­ty of the car­go mov­ing through his ware­house is head­ed straight to Ama­zon ful­fill­ment facilities.

The nation­al unem­ploy­ment rate hit 3.8 per­cent in May, the low­est lev­el since 2000, and com­pa­nies across the coun­try are com­plain­ing about the dif­fi­cul­ty of find­ing work­ers. Yet Ama­zon has been able to staff its ware­hous­es with work­ers who fre­quent­ly earn lit­tle more than the local min­i­mum wage. Many of them are con­tin­gent work­ers like Wil­son, who get none of the sta­bil­i­ty and ben­e­fits that often come with work­ing for one of the country’s largest companies.

Ama­zon has been able to keep find­ing work­ers for its ware­hous­es — and keep­ing wages low — in part by tap­ping into areas where the eco­nom­ic recov­ery has been weak. New Jer­sey and Cal­i­for­nia con­tain two of the largest num­bers of Ama­zon ful­fill­ment facil­i­ties in the Unit­ed States.

In 2012, Ama­zon opened a ware­house in San Bernardi­no, Calif., a city about 70 miles east of Wilm­ing­ton. San Bernardi­no has a per capi­ta income of $14,922 accord­ing to the lat­est Amer­i­can Com­mu­ni­ty Sur­vey in 2016, less than half the nation­al aver­age of $29,892.

San Bernardi­no didn’t regain the num­ber of jobs it lost in the reces­sion until 2015, accord­ing to the Bureau of Labor Sta­tis­tics. Ama­zon, on the oth­er hand, recent­ly released fig­ures show­ing prof­its of $2.5 bil­lion for the last quar­ter, the third con­sec­u­tive quar­ter the com­pa­ny pro­duced a prof­it of more than $1 billion.

The 2016 per-capi­ta income of Carteret, New Jer­sey, anoth­er port city where Ama­zon opened a ware­house, is $24,926. On the whole, New Jersey’s recov­ery has been slow­er than California’s. The state did­n’t gain back the num­ber of the jobs it lost dur­ing the reces­sion until 2016.

Wil­son left a bet­ter-pay­ing job in the ware­house of an ani­mal phar­ma­ceu­ti­cal man­u­fac­tur­er in Oma­ha, Neb., to move in with his moth­er who was liv­ing on dis­abil­i­ty in Long Beach and need­ed his sup­port. In Cal­i­for­nia, the two live togeth­er in a two-bed­room apart­ment where they pay $1,400 per month. Wil­son ini­tial­ly began work­ing at Cal­i­for­nia Cartage because it was the eas­i­est job he could get with his back­ground in ware­house work.

Wilson’s sit­u­a­tion could improve if he gets a job work­ing direct­ly for Ama­zon. But he faces long odds, not to men­tion that Ama­zon work­ers don’t have it easy either. A report from the Insti­tute for Local Self-Reliance showed ful­fill­ment cen­ters often pay less than the indus­try aver­age for com­pa­ra­ble work.

She­heryar Kaoosji, an orga­niz­er at the Ware­house Work­er Resource Cen­ter, an Inland Empire-based work­er cen­ter, says that the demand for Ama­zon jobs in the area is so high that it’s often a chal­lenge for work­ers who are hired on a part-time basis to secure a reg­u­lar full-time posi­tion. Those part-timers are often not told what time their shift begins until two hours before they’re expect­ed to show up.

Those work­ers have to hus­tle to try to take every oppor­tu­ni­ty they’re giv­en,” Kaoosji says. If they pass some­thing up. If they say, hey, I can’t make it this day, they’re much less like­ly to actu­al­ly get that per­ma­nent position.”

Even when work­ers do get hired by Ama­zon, those jobs don’t nec­es­sar­i­ly last.

Often we have folks who stick around after the Christ­mas rush, and they get laid off because Ama­zon — espe­cial­ly com­pared to a lot of com­pa­nies — they have a real­ly, real­ly exag­ger­at­ed kind of sea­son­al hir­ing,” says Kaoosji.

Wilson’s job is char­ac­ter­is­tic of many work­ers in the low­est rung of the logis­tics indus­try, which is increas­ing­ly being pro­pelled direct­ly or indi­rect­ly by Ama­zon. Both in Ama­zon facil­i­ties, and even more so in ware­hous­ing cen­ters that han­dle Ama­zon freight, a large part of the work­force is often part-time or con­tin­gent­ly employed through staffing agencies.

North­ern New Jer­sey exurbs like Newark and New Brunswick are logis­tics hubs with a high con­cen­tra­tion of per­ma-temp” posi­tions — where a temp agency con­nects work­ers to the same job at ware­hous­es on a con­sis­tent basis. Car­men Mar­ti­no, a labor stud­ies pro­fes­sor at Rut­gers, says it’s com­mon for temp agen­cies to pop up in neigh­bor­hoods with a high con­cen­tra­tion of immi­grant work­ers where the per-capi­ta income is low.

Actu­al­ly, some years back, we mapped wher­ev­er the staffing agen­cies were locat­ed in prox­im­i­ty to where the work­ers lived,” Mar­ti­no says. And you can see in places like New Brunswick where the agen­cies were like a pick­et fence, right around the high­est con­cen­tra­tion of immi­grant workers.”

Mar­ti­no says it’s cheap­er for ware­hous­es to use temp agen­cies because they don’t have the respon­si­bil­i­ties of pro­vid­ing for injured work­ers or pay­ing for state and fed­er­al tax­es on employ­ees. It’s also more effi­cient for the temp agen­cies because they have to spend less time on training.

Mean­while, work­ers like Wil­son, stuck under these con­di­tions, con­tin­ue to work with no ben­e­fits and unsta­ble hours, while com­pa­nies like Ama­zon see their prof­its increase with no end in sight.

Max Par­rott is a New York-based writer and reporter.
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