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Amazon Tries to Prove It’s Not a Dickensian Workhouse

Shira Ovide
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Amazon Tries to Prove It’s Not a Dickensian Workhouse

(Bloomberg Opinion) -- You can identify companies’ sore spots by what gets them angry. Last week, the executive in charge of Amazon.com Inc.’s logistics operation tweeted a rebuttal to a television show. Comedian John Oliver had devoted one of his trademark scathing and hilarious HBO segments to the working conditions in warehouses that handle e-commerce orders. Amazon was not the only company pilloried, but it was the most prominent. “I am proud of our team and to suggest they would work in an environment like the one portrayed is insulting,” Dave Clark, senior vice president of operations for Amazon, tweeted to Oliver’s TV series.Clark last year also punched back against criticisms from Bernie Sanders, the U.S. senator and presidential candidate, who had repeatedly taken Amazon to task for what he said were low wages and poor treatment of warehouse workers. Soon afterward, Amazon essentially capitulated to Sanders by announcing it would increase the minimum wage for its U.S. workers to $15 an hour.  Nothing happens by accident, not even tweets. It’s clear from Amazon’s public relations efforts that it is sensitive about the perception that the company’s warehouses — where a material portion of Amazon’s more than 630,000 full- and part-time employees work — are Dickensian sweatshops that trap people in low-wage jobs until they can be replaced by robots.This perception is not new, but there’s a sharper edge now to Amazon’s refutations of these claims. Amazon also seems anxious at the mere idea floated by outsiders that its cashier-less technology for retail stores might spread beyond its experimental Go convenience stores. That is important context for Amazon’s announcement on Thursday that it plans to spend more than $700 million over the next few years to train its U.S. employees to move into more highly skilled jobs inside or outside of Amazon.The company already offers employee-advancement programs such as college tuition reimbursement, as do many other businesses. Amazon’s newly disclosed training initiatives aren’t limited to warehouse workers and have multiple elements. Non-technical Amazon workers can learn software engineering or information-technology support skills, technical ones can receive on-site training in more advanced software, and Amazon pledged to expand its existing training certification program for warehouse workers to get qualified for in-demand fields such as nursing. Of course, it remains to be seen how useful these new or expanding training programs will be, but it’s both a good thing to do and a pragmatic step. As the labor market tightens in the U.S., it’s sensible for companies to sweeten pay, benefits and perks to attract new employees and keep them from leaving. (Full disclosure: One of my family members works for a labor union that advocates for higher wages and other employee benefits.)It’s also useful for tackling that sweatshop perception, which gets more attention as Amazon’s heft and profile grow. The company’s stock market value is hovering again near that symbolic $1 trillion level. Jeff Bezos, Amazon’s founder and chief executive officer, is the wealthiest person in the world thanks largely to his holdings of Amazon stock.And Amazon is unique among U.S. technology superpowers in its reliance on a large number of blue-collar workers. The median annual total compensation for Amazon’s full-time U.S. workers last year was nearly $35,100, which reflected two months of the minimum wage increase. The median wage of one of the company’s peers, Google parent company Alphabet Inc., was about $247,000.(1)There are other things Amazon gets mad about now. Amazon is punchy at claims from some politicians that it doesn’t pay its fair share in taxes, or that it’s a muscular corporate giant swallowing America’s retail industry. It’s not clear that Amazon has changed how it behaves in reaction to those types of criticisms. But when it comes to the perception of Amazon as a sweatshop, the company’s rebuttals are more than just words. (1) The Alphabet and Amazon figures are not comparable. Amazon singled out a pay figure for full-time U.S. workers, for example, while Alphabet's pay number is global. Amazon says the annualized median total compensation of all its employees was less than $29,000 last year.To contact the author of this story: Shira Ovide at sovide@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

(Bloomberg Opinion) -- You can identify companies’ sore spots by what gets them angry. 

Last week, the executive in charge of Amazon.com Inc.’s logistics operation tweeted a rebuttal to a television show. Comedian John Oliver had devoted one of his trademark scathing and hilarious HBO segments to the working conditions in warehouses that handle e-commerce orders. Amazon was not the only company pilloried, but it was the most prominent. 

“I am proud of our team and to suggest they would work in an environment like the one portrayed is insulting,” Dave Clark, senior vice president of operations for Amazon, tweeted to Oliver’s TV series.

Clark last year also punched back against criticisms from Bernie Sanders, the U.S. senator and presidential candidate, who had repeatedly taken Amazon to task for what he said were low wages and poor treatment of warehouse workers. Soon afterward, Amazon essentially capitulated to Sanders by announcing it would increase the minimum wage for its U.S. workers to $15 an hour.  

Nothing happens by accident, not even tweets. It’s clear from Amazon’s public relations efforts that it is sensitive about the perception that the company’s warehouses — where a material portion of Amazon’s more than 630,000 full- and part-time employees work — are Dickensian sweatshops that trap people in low-wage jobs until they can be replaced by robots.

This perception is not new, but there’s a sharper edge now to Amazon’s refutations of these claims. Amazon also seems anxious at the mere idea floated by outsiders that its cashier-less technology for retail stores might spread beyond its experimental Go convenience stores. 

That is important context for Amazon’s announcement on Thursday that it plans to spend more than $700 million over the next few years to train its U.S. employees to move into more highly skilled jobs inside or outside of Amazon.

The company already offers employee-advancement programs such as college tuition reimbursement, as do many other businesses. Amazon’s newly disclosed training initiatives aren’t limited to warehouse workers and have multiple elements. Non-technical Amazon workers can learn software engineering or information-technology support skills, technical ones can receive on-site training in more advanced software, and Amazon pledged to expand its existing training certification program for warehouse workers to get qualified for in-demand fields such as nursing. 

Of course, it remains to be seen how useful these new or expanding training programs will be, but it’s both a good thing to do and a pragmatic step. As the labor market tightens in the U.S., it’s sensible for companies to sweeten pay, benefits and perks to attract new employees and keep them from leaving. (Full disclosure: One of my family members works for a labor union that advocates for higher wages and other employee benefits.)

It’s also useful for tackling that sweatshop perception, which gets more attention as Amazon’s heft and profile grow. The company’s stock market value is hovering again near that symbolic $1 trillion level. Jeff Bezos, Amazon’s founder and chief executive officer, is the wealthiest person in the world thanks largely to his holdings of Amazon stock.

And Amazon is unique among U.S. technology superpowers in its reliance on a large number of blue-collar workers. The median annual total compensation for Amazon’s full-time U.S. workers last year was nearly $35,100, which reflected two months of the minimum wage increase. The median wage of one of the company’s peers, Google parent company Alphabet Inc., was about $247,000.(1)

There are other things Amazon gets mad about now. Amazon is punchy at claims from some politicians that it doesn’t pay its fair share in taxes, or that it’s a muscular corporate giant swallowing America’s retail industry. It’s not clear that Amazon has changed how it behaves in reaction to those types of criticisms. But when it comes to the perception of Amazon as a sweatshop, the company’s rebuttals are more than just words. 

(1) The Alphabet and Amazon figures are not comparable. Amazon singled out a pay figure for full-time U.S. workers, for example, while Alphabet's pay number is global. Amazon says the annualized median total compensation of all its employees was less than $29,000 last year.

To contact the author of this story: Shira Ovide at sovide@bloomberg.net

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.

For more articles like this, please visit us at bloomberg.com/opinion

©2019 Bloomberg L.P.