Here in Seattle, Amazon is growing like crazy, adding thousands of jobs and building several skyscrapers just off downtown, something that will add hundreds of construction jobs. But at what cost?
That’s what The Seattle Times asks in a tough, excellent four-part series that riffs off the company’s logo to go “Behind the smile in Seattle.”
I’m particularly interested in this series because I live here and because I’ve been critical of Amazon, a company I’ve given lots of business since 1999, when, like a true Gen X college kid, I bought a copy of The Baffler, a Nirvana book, and some Pavement Maxi singles, according to my order history on the site.
But the company’s anti-sales tax policies, which have included threatening to move if a state requires them to collect them like their competitors do, and the reporting we’ve seen in the last year on working conditions in its warehouses raise serious questions about how Amazon does business (and have caused me, for one, to buy elsewhere when possible).
With this series the Times has given us the most complete portrait yet of a corporate culture that leads to exploitative warehouse working conditions, monopolistic behavior, and an anti-tax battle to deprive states of revenue and maintain an unfair advantage in the marketplace.
Some of these behaviors are in the DNA of the company, embedded from the start by founder Jeff Bezos and his libertarian bent. Taxes particularly are a critical part of the Amazon origin story.
Bezos started Amazon in the Seattle area, the Times reminds us in its piece on the company’s anti-tax campaign, for tax purposes. The Supreme Court had just issued its ill-timed (right as the Web era was beginning) nexus ruling that said states couldn’t force companies to collect sales taxes if they didn’t have a physical presence there, and Bezos saw that this gave online retailers an unfair price advantage of up to 10 percent. He thought about locating on an Indian reservation, but that was “impractical,” in the Times words, so he went to Washington state, which had relatively few people, especially back then, which meant that fewer of his potential customers would have to be charged sales tax.
That was all well and good back then. But as the company has expanded and Internet retail has matured into a giant industry, it has continued to fight states that have tried to get it to collect taxes. And it plays hardball:
Code-naming their effort “Project ASAP,” South Carolina officials offered up more than $33 million in incentives, including free land, a property-tax cut and payroll-tax credits. They even agreed to loosen the area’s Bible Belt moral code, repealing a decades-old Lexington County “blue law” so Amazon’s warehouse could stay open Sunday mornings.
As they discovered, that wasn’t enough.
Amazon also insisted on an exemption from collecting the state’s 6 percent sales tax on purchases by South Carolinians. When the state Legislature balked, voting down the sales-tax break last spring, Amazon stopped construction on its million-square-foot warehouse and prepared to leave, throwing thousands of jobs into jeopardy
South Carolina caved, naturally.
Another of the four Times pieces looks at Amazon’s absence from the civic/philanthropic scene in Seattle. Unlike Boeing and Microsoft, the $85 billion giant doesn’t really give money to philanthropies, and it doesn’t encourage its workers to volunteer.
I have to admit, at first I thought this was a bit much. It’s not necessarily wrong for a company, particularly one with low margins, to not give money to charity. But after reading the entire series I changed my mind on the merits of the story: This is an essential piece of the puzzle The Seattle Times puts together.
Amazon isn’t an evil corporate citizen. It just doesn’t much believe in the concept of corporate citizenship. That’s its right, and it’s almost refreshing to see a sort of pure American capitalism devoid of gauzy marketing efforts to obscure that fact—however dependent it is on direct and indirect government subsidies.
Amazon’s gift to society, it says, is to run its business, which consists of “lowering prices, expanding selection, driving convenience, driving frustration-free packaging, creating Kindle, innovating in web services.” Some people would argue that that’s indeed the case, but you always have to question when someone claims their own self-interest is in the public interest.
And you can see how that ethos leads to the darker practices of the company. Dominant market positions are meant to be leveraged to get ever-more-dominant market positions, at the expense of suppliers and competitors. Governments are meant to be rolled on tax subsidies and tax avoidance. Workers are meant to be used up, discarded, and replaced with robots as soon as possible.