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Scathing reports document negative impacts of Amazon warehouse model

Among the findings: The serious injury rate in some facilities is double the national average for the warehousing industry, and for every $1 in wages, Amazon workers receive 24 cents in public assistance.

(Photo: Amazon)

Updated: This article has been updated to include a statement from Amazon.

Days before the Black Friday shopping crush, an investigative journalism outlet and a California think tank separately released two scathing reports documenting the social, environmental and economic costs of Inc.’s (NASDAQ:AMZN) breakneck-speed package delivery and fulfillment model.

The investigative piece, a joint project between the Reveal Center for Investigative Reporting and The Atlantic, examined injury records from 23 of the company’s 110 fulfillment centers nationwide.

The rate of serious injuries at these centers was more than double the national average for the warehousing industry —  9.6 per 100 full-time workers in 2018, compared with an industry average that year of four, according to the investigative article, which was published Nov. 25.

The second report, released Nov. 26, is a project of the Economic Roundtable, a nonprofit research group that focuses on social and economic issues in Southern California. The Los Angeles County Federation of Labor underwrote the study.

Titled “Too Big to Govern,” the analysis found that just over half of Amazon warehouse workers in Southern California live in substandard housing. For every $1 in wages, they receive 24 cents in public assistance.

The Economic Roundtable authors also documented the environmental cost to communities hosting Amazon fulfillment centers.

“Every day, ships, trucks, trains and airplanes bring an estimated 21,500 diesel truckloads of merchandise to 21 Amazon warehouses in the four-county region,” they wrote. Amazon trucks last year created $642 million in “uncompensated public costs” for noise, road wear, accidents and harmful emissions, the report said.

Adding to the mounting criticism, a group of three dozen grassroots organizations this week announced the formation of a new coalition, Athena.

“We are joining together to stop Amazon’s growing, powerful grip over our society and economy,” the Athena website states. “We’re going to write new rules so that our economy puts people first, our public officials ensure that no corporation is above the law or too big to govern — and that our democracy, finally, represents all of us.”

Responding to a request for comment, an Amazon spokesperson emailed the following statement:

Self-interested critics, particularly unions and groups funded by our competitors, have a vested interest in spreading misinformation about Amazon but the facts tell a different story. Amazon has invested more than $270 billion in the United States since 2011 and created more than 400,000 direct jobs in the U.S. and over 680,000 additional jobs in areas like construction, logistics, and other professional services.

Large shopping events have become an opportunity for our critics, including unions, to raise awareness for their cause – in this case, increased membership dues. These groups are conjuring misinformation to work in their favor, when in fact we already offer the things they claim to be able to provide.”

The statement noted that Amazon provides $15 minimum starting wage and comprehensive healthcare cover maternity leave.

As we’ve grown, so have the small businesses from every state who sell alongside us. Amazon is a force for good in communities where we operate, to pay and over the last three years we have paid $2.6 billion in corporate tax and reported $3.4 billion in tax expense.

The release of the two reports, as well as the formation of the Athena coalition, comes as Amazon expects to spend $1.5 billion in the fourth quarter to support its ambitious plan guaranteeing one-day deliveries — down from two days — on products ordered through its Prime service.

The e-tailing giant reported third-quarter revenue of $70 billion, a 24% increase over the same period in 2018, as well as a 46% surge in worldwide shipping costs as it made massive transportation and logistics investments to upgrade delivery times and take more control of the shipping process amid continued demand for its products and services.

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to [email protected]