What Amazon does today, its competitors seem to do tomorrow. That is why the arrival of Amazon’s futuristic shops are both troubling and important. The company’s new grocery stores do away with cashiers and use a Big Brother-style camera surveillance system that allows customers who swipe an app to walk in and walk out with their shopping. A bill is computed and cash automatically debited. Rivals are not waiting to be left behind. Both Tesco and Aldi are trialling similar technology. The market is a rich target: £180bn was spent in UK food shops in 2020 – a 7% rise on 2019.
Already Britain’s largest online retailer, Amazon is also one of the UK’s biggest digital streaming services and cloud computing businesses. By aggregating millions of data points, Amazon’s algorithms can extract information about consumption, transportation and work activities. These are then used to target the right consumers at the right time, and to pursue workplace changes that increase productivity. This way Amazon dominates markets while keeping customers happy. But at what cost to society?
The company is blamed for sucking sales out of Britain’s high streets and threatening to automate workers out of existence. Its UK division doesn’t recognise trade unions. Of the UK’s 3 million retail workers, about a tenth are unionised. As Amazon expands its stores, that proportion risks shrinking further, thus reducing retail workers’ bargaining power. Last year, 54 retailers collapsed, affecting 5,200 stores and 109,000 jobs. Covid has also accelerated the move to shopping online. The web accounts for about a third of all retail sales, up from 20% pre-pandemic. Amazon’s new department store exploits this trend by offering products at lower prices to shoppers there who are online Amazon customers already.
With a workforce of 55,000, Amazon now employs more people in the UK than familiar names such as Barclays Bank, Vodafone and GlaxoSmithKline. Many of these jobs are in Amazon UK Services, the group’s warehouse and logistics operation. It paid just £18.3m in corporation tax on division profits of £128m in 2020, an effective tax rate of about 14%.
Amazon is smuggling into the British economy a low-tax, lightly regulated corporate form of work intensification where staff are tracked to ensure they meet exacting targets. It says more about the decrepit state of the care sector than Amazon’s warehouses that workers are choosing the latter over the former.
Last year, a Trades Union Congress report described 10-hour working days at Amazon warehouses, with 300 items picked and packed hourly, and workers sacked for not keeping up. The company’s new CEO says Amazon could do more to treat workers better. Perhaps he could back the call from Sharon Graham, Unite’s general secretary, to unionise the company’s UK warehouses? Amazon is signing agreements with unions in Europe. The government’s promised employment bill could help. It should adopt Labour’s idea for collective agreements between unions and employer groups that set a floor on pay and conditions across a sector. The TUC says it would take Amazon warehouse workers outside London 294 hours to match what the company’s founder Jeff Bezos earns per second. If this is not a sign of a broken system in need of urgent repair, then it’s hard to know what is.
