3. 23. 2022

Fighting Amazon’s New Fordism

Mostafa Henaway

“In our retail business, we know that customers want low prices, and I know that’s going to be true ten years from now. They want fast delivery; they want vast selection.”

In these well-known words, Amazon executive chair Jeff Bezos sums up that company’s business strategy. The ability to offer lower-cost and free rapid delivery is central to how Amazon organizes its logistics operations and, particularly, how it manages its workers. As the second-largest employer in the US (behind only Wal-Mart), and as a monopoly, Amazon’s activities have vast implications for extensive parts of the working class. The public outrage directed toward Jeff Bezos and Amazon has rightfully focused on inequality, attacking Bezos as a symbol of the new gilded age of American capitalism. These critiques are all correct – Amazon pays hardly any tax, for example, and in some years has even received a tax rebate – but they miss a number of important underlying dynamics. In a period when the coordination of logistics is playing an increasingly central role in how global firms seek a competitive advantage, Amazon is revolutionizing work to maintain its position as a monopoly. We must understand our enemy if we hope to organize effectively against it.

A logistics “revolution”? 

In 1962, the management guru Peter Drucker described logistics as the business world’s last unexplored continent. Since then, global capitalism has become even more reliant upon an expansive, yet fragile, global logistics infrastructure: ports, shipping lines, container ships, third-party logistics firms, warehouses, etc.  

Today, many of the world’s largest corporations are engaged in the circulation and distribution of goods. The huge retailer Walmart, for instance, is known to business management experts primarily as a logistics company, according to critical logistics scholar and activist Deborah Cowen. For Amazon to capture markets through its ability to guarantee rapid delivery, its control over space is paramount. As the policy resource centre and corporate watchdog Good Jobs First puts it: “To execute rapid delivery, Amazon couldn’t get away with only a handful of warehouses. It had to locate warehouses in many markets where the greatest number of Prime households are located.” Thus Amazon’s advantage is made possible by an extensive network of distribution centres. Its competitive edge, like Walmart’s, is rooted also in new technologies such as digital inventory systems, which let firms process real-time data from consumers to manage the just-in-time provision of specialized products. These technologies effect a kind of space-time compression, allowing firms to reduce costs and increase the turnover of commodities. Flexible, rapid, low-cost logistics means profit. 

The importance of these developments cannot be overstated, given the global supply chain crisis unleashed by the pandemic. Since 2020, the world has witnessed the fragility of global capitalism’s just-in-time distribution systems. This fragility is due to capital’s need to limit the time, and therefore the cost, of goods’ journey from production to consumption – forces that Marx observed a century-and-a-half ago in the second volume of Capital. In other words, the so-called Amazon effect is not exactly new, and not unique to Amazon. Today’s logistics “revolution” has developed out of, and even been necessitated by, capitalism’s fundamental dynamics.

To remain competitive, firms everywhere are adapting to e-commerce and lean, efficient last-mile delivery. Warehouse occupancy has grown by 614 percent in the UK. Bloomberg News reports that in Canada, “retailers are rushing to build logistics hubs to fulfill orders, making the country’s three largest cities, Toronto, Vancouver, and Montreal, the three tightest markets for industrial space in North America.” Amazon is a leader in substantial investments in warehouses, automation processes (such as its Kiva robotics program), and airport infrastructure. These physical assets allow Amazon to “compress space and time” to accumulate capital, and to hone an advantage in an industry structured around what labour theorist Kim Moody has called “time-based competition.” The tendency towards monopoly through increased logistics infrastructure, and through a related intensification of work, is built into not just Amazon but the whole of the global capitalist economy. Yet, as the dominant logistics company, whose behaviour has ripple effects across multiple business sectors, Amazon is a critical fault line – and a key site for building working-class power.

The new Fordism

In his essay “Americanism and Fordism,” the Italian Marxist Antonio Gramsci described how the reorganization of auto factories, and changing methods of workplace organization more generally, had altered American capitalism and social relations by the 1920s. For Gramsci, Henry T. Ford was not just a pioneer of the automotive industry, leading the way with his firm’s innovation, but was part of a significant transformation of the very nature of work in the manufacturing sector. Gramsci went as far as to ask whether Ford was ushering in a new epoch in American capitalism. 

The term “Fordism” refers in part to this reorganization of factories, retooled to facilitate mass production, a process that was coupled with mass consumption in the post-war period. The automobile firms Ford and General Motors, in particular, achieved mass production of standardized products through a new technical division of labour, breaking down tasks to simple repetitive motions along an assembly line. This reorganization took away power from skilled workers by ensuring that tasks remained repetitive and could be completed in seconds, thus requiring little training, and reducing workers’ control over and knowledge of the production process – a technique of labour management that has become known as “deskilling.” These transformations were paired with wage increases; famously, Ford introduced a wage of five dollars a day, generous at the time, a move that has been mythologized as intended to support mass consumption, and particularly to build a market for Ford cars. But these wage increases had much more to do with the need to slow worker turnover. At wages of $2.25 a day, Ford’s factories were bleeding workers, which caused disruptions on assembly lines. The turnover became an obstacle to selling cars at a low cost.

Amazon today, like Ford and GM before it, has become key to the development of American capitalism and an epochal reorganization of labour. Amazon, like Ford, is in a constant struggle to consolidate its monopoly power. Amazon mirrors many other characteristics of the Fordist production model as well: a deskilling division of labour, standardized workplace organization across warehouses, and the use of technology akin to the assembly line, to control workers and increase productivity. With more than 2000 facilities globally as of the end of 2021 – sortation centres, delivery stations, and more – Amazon has established an important model of the new factory. And as of last year, it has expanded to 47 facilities in Canada, with 26 more on the way. 

Though technology plays a critical role in Amazon’s organization of work, the company’s vast workforce is also vital, because warehousing is one of the most challenging sectors to automate. The way Amazon views its workforce departs from Fordism. David Niekerk, a former Amazon HR vice president, has explained that Bezos wants turnover. Niekerk claims that Bezos imagined Amazon as akin to the Marine Corps, a gauntlet designed to churn through most recruits. The company places immense pressure on workers to achieve unsustainable levels of efficiency; in a leaked document, Amazon used the term “industrial athletes” to describe its warehouse staff. But those workers are not athletes. Neither are they automatons. As they put it during a unionization drive in the US: “We are not robots. We are human beings.” 

Amazon imposes inhumane quotas on its workers regardless of the facility or the part of the world in which they work. Whether picking items, stowing them, scanning and labelling them, or placing them into bags for last-mile delivery, an entry-level associate may be tasked with handling 300 to 400 items an hour. This repetitive work can have dire consequences. According to a report by Québec’s labour standards commission, 79 workers in two Amazon facilities in Montreal were on occupational leave between 2020 and 2021, a staggering number as the two facilities employ only 800 workers. Amazon brands itself as safety-obsessed, telling the world that its managers offer workers daily reminders about how to move items safely. And it’s true that Amazon has implemented health and safety committees that, at least in theory, incorporate input from workers. Yet Amazon’s approach to safety does not confront the single issue that contributes most to high injury rates in its warehouses: the pressure to move goods with maximum efficiency during every single shift, while scheduling workers for 10-hour shifts four days a week, plus overtime during peak season.

The way Amazon uses technology in every aspect of its work process ratchets up that pressure. Artificial intelligence cameras monitor entire warehouses and deliver reports to managers every day. Smartphone-like devices tell workers what their tasks are and track the rate at which those tasks are completed, allowing for greater deskilling and greater productivity. This intense supervision, standardization, and speed of labour leads to worker burnout – the result Amazon wants, or the “unregretted attrition rate,” in the words of a leaked company memo. Amazon’s high turnover is central to its labour strategy.

In my observation as a former Amazombian (night-shift worker), Amazon does not fire workers en masse. Instead, its facilities’ work conditions lead workers to quit. Amazon has made quitting incredibly easy. In the US, you can open your Amazon HR app on your phone (Amazon A to Z) and tap on the resignation button. Amazon’s worker turnover rate is roughly 150 percent a year, meaning it replaces its entire workforce every eight months. The company’s division of labour and simplified work tasks lower the costs associated with high turnover. So does technology: the hiring process is entirely automated, no interview required. For most capitalists, high worker turnover is seen as a problem, since it increases training costs and may lower productivity. To deliver the efficient services that secure its customers’ loyalty, and to maintain its monopoly, Amazon accepts those costs. For Amazon, the revolving door generates profit. 

Yet, despite the fact that Amazon deliberately treats its “industrial athletes” as disposable, worker resistance has made little progress. Why has labour organizing in North America struggled to gain ground against Amazon?

The Flexible Fordist era

Amazon has been able to hold unions at bay, while absorbing vast amounts of labour, in part because it has positioned itself as a higher-wage employer of workers who might otherwise be pressed into lower-wage work – an element of the Fordist model. In the US, Amazon workers now start at an average wage of USD $18 an hour. In Canada, the starting rate is now between CAD $17 and $21.65 an hour. Amazon boasts that it helps to finance education for its workers. It offers extensive medical and dental benefits, and paid parental leave for up to 20 weeks. Workers have paid time off. This can amount to an appealing employment package in the absence of any real welfare state, and in a job market otherwise marked by insecure, low-paid work, non-unionized and with little potential to turn into a lifelong career. Many workers see the potential for that kind of career at Amazon – at least at first. 

This seductive aspect of Amazon’s labour model is often overlooked by critical observers on the left. When I began to work at Amazon, I realized that many of my coworkers didn’t see their employment there as temporary. Amazon promotes the idea that if you remain in their workforce long enough, you will be promoted to a higher employment tier, with greater job security and other benefits. This internal incentive structure is another method by which Amazon controls its workforce and instills loyalty in workers who remain. It winnows workers into “the weak,” who last only weeks or months in the warehouse, and “the strong”: loyal Amazonians who tolerate the work’s pressures, often since they know their job is better-compensated than any job they could get elsewhere.

Amazon’s ascendancy has implications for the working class as a whole. Its model will shape the future of work for many of us. Amazon may soon overtake Walmart as the largest employer in the US, and e-commerce is only expanding. Capitalists who must compete with Amazon stare it down in fear and awe. Its efficiency drives other businesses to emulate its model in their own supply chains and warehouses. Amazon, one step ahead of its competition, now allows other firms to rent out elements of its workplace metrics and management system.

Amazon has combined a flexible labour regime premised on extremely high turnover rates with a Fordist promise of job stability, decent wages, and promotions. The sociologist Steven P. Vallas, among others, has described this model as “Flexible Fordist.” It has proven to be a powerful weapon, allowing Amazon to secure its monopoly position and ensure there are no unions in its North American facilities. Gramsci suggested that Ford’s hegemony rested upon a combination of coercion and consensus: the coercion of destroying trade unions, along with the worker consent won by good wages and benefits. Amazon’s control of its workers relies on a similar combination of factors, creating challenges and opportunities for radicals who view Amazon as not simply a labour organizing target like any other, but one of our time’s most critical sites of struggle.

Organizing in the belly of the beast

Recent attempts to organize Amazon workers show that the challenges involved are immense. Those attempts, mostly unsuccessful or incomplete, include the high-profile organizing drive at an Amazon warehouse in Bessemer, Alabama; union drives by the Teamsters Union; and the grassroots efforts of the Amazon Labor Union organizing group at New York’s JFK8, one of the largest fulfillment centres on the continent. For union organizers, building genuine relationships and developing worker leaders is daunting in a workplace with high turnover, because such organizing takes time. The workers who remain at Amazon over the longer term have hopes of job stability and often do move up the ladder. Workers are exhausted at the end of every shift, wanting to run to their homes to deal with the pain of the workday, not linger to have conversations about the problems they face at work. 

Another crucial factor is Amazon’s reliance on a racialized workforce. Would-be Amazon organizers need to understand the specific realities and needs of workers’ communities. The Awood Center, organizing East African workers in Minneapolis (awood means “power” in Somali), modelled a successful approach when it confronted Amazon with demands around Ramadan in 2018, seeking prayer space and lowered quotas while the mainly Somali workforce was fasting that month. This organizing paved the way for the walkout of around 100 Minneapolis Amazon workers in 2019.

Amazonians United (AU) represents another promising model. A grassroots organization of Amazon workers building power within their facilities, Amazonians United organizes around winnable immediate demands. It builds power through building community, sometimes using direct action tactics and otherwise operating outside the traditional union model. At the DCH1 Amazon delivery station in Chicago, AU’s organizing won paid time off and access to clean drinking water in the facility. Its tactics included workers making demands in unison in front of managers. The victories in Chicago, like their equivalents in Minneapolis, led to changes being implemented across Amazon’s far-flung warehouses. And they showed how vulnerable Amazon is to workers’ collective action.

Campaigns by unions have helped to pressure Amazon to implement wage increases, but the logistics giant cedes no ground to unions on one vital point: controlling productivity. Here, Amazon is fragile. It needs to fulfill orders constantly, and any disruption or slowdown in its integrated system impacts the rest of the distribution chain. Workers’ control over production – real workers’ power – would thus significantly affect Amazon’s profits, far more than wage increases do. 

Those workers, whether in Alabama, Laval, Edmonton, or New Jersey, all labour under the same scheduling and pay structure. They go to the same kinds of daily company meetings (called “stand-up meetings”) designed to give them a sense of shared understanding and unity. They have their own private Facebook groups, with tens of thousands of members. There is a foundation for solidarity among Amazon workers, because over a million of them around the world have a workplace experience in common. 

One of Amazon’s fundamental weak points is that its warehouses and other delivery facilities cannot be offshored; most of them can’t even be relocated. Amazon requires that they be located near population centres in order to achieve delivery speed targets. These features of the firm’s business model can be turned to workers’ advantage. But to transform this advantage from potential to reality will require organizers to think beyond traditional labour campaigns. We need to build rank-and-file committees in existing Amazon workplaces, and reach out to former Amazon workers as well. Organizing strategies must centre the issues those comrades face in- and outside of the workplace, from racism to immigration battles. They must prioritize real shop-floor democracy, aim to build a mass movement across many worksites, and fight the battles that Amazon workers consider most important.

Only by engaging the entirety of those workers’ life circumstances can labour and the left help build the power we need to confront the giant. And confronting this giant is not about reigning in just one corporation or CEO. It’s about challenging the whole system that has produced Amazon and its ilk – and changing the world.

Mostafa Henaway is a community organizer with the Immigrant Workers Centre and a PhD candidate at Concordia University. He is based in Montreal. Find him on Twitter @mostafah.