If a major firm opened a new facility in an otherwise depressed area, that would be good news, right? An article in the Financial Times suggests that there may be some caveats on that conclusion in the modern economy (Amazon unpacked, Feb 8). The firm in question is Amazon and the location is Rugeley, Staffordshire, in the West Midlands region of England. As the article tells it, the town was once a booming coal mining center but has steadily been on the skids since the mine closed in 1990. Hence, there was much excitement when Amazon announced it was opening a fulfillment center in 2011. Amazon also brought modern management techniques to Rugeley with kaizen events and gemba walks.
How has all that played out for the workforce?
What did the people of Rugeley make of all this? For many, it has been a culture shock. “The feedback we’re getting is it’s like being in a slave camp,” said Brian Garner, the dapper chairman of the Lea Hall Miners Welfare Centre and Social Club, still a popular drinking spot. …
Others found the pressure intense. Several former workers said the handheld computers, which look like clunky scientific calculators with handles and big screens, gave them a real-time indication of whether they were running behind or ahead of their target and by how much. Managers could also send text messages to these devices to tell workers to speed up, they said. “People were constantly warned about talking to one another by the management, who were keen to eliminate any form of time-wasting,” one former worker added.
The former shop-floor manager and another worker described a strict “three strikes and release” discipline system – “release” being a euphemism for getting sacked. In the early days, people were “released” frequently and with little warning or explanation, workers said. A very large number were laid off after the first busy Christmas period, some of whom had assumed their jobs would be permanent. Chris Martin says his job lasted less than a week after he took a day off for blisters and returned to find the night shift he was on had been abruptly cancelled.
It is this job insecurity that has most disappointed Glenn Watson at the district council. “Our definition of a good employer is someone who takes on people and provides them with sustainable employment week in week out, not somebody who takes on workers one week and gets rid of them the next,” he said. The council had understood Amazon would use the first 12 months to gradually build up its own workforce, transferring agency staff on to its payroll, but by last autumn Watson thought there were still only about 200 Amazon employees, with the rest of the workers supplied by Randstad and two smaller agencies. One young man strolling out of the warehouse last September said he was still an agency worker, even though he had been there since the site opened.
Now the complaint of fulfillment center as sweatshop is not overly new. Indeed, we have had a several posts on this over the past few years (see here, here and there). It is a recurring theme of workers tracked at a fine level while held to a difficult (if not impossible) standards. All of this is facilitated by staffing firms that deal with the bulk of the workers while giving the retailer the ability to scale up and down its workforce with the flow of orders. While the retailer gets flexibility, the worker bears risk for an employment opportunity that is nasty, brutish, and short.
So what makes this story different? One is the setting. I must admit that I am a little surprised that Amazon is able to operate in the EU much as it operates in the States with respect to its fulfillment center staff. OK, fine, the United Kingdom may not quite be France when it comes to labor regulations, but the pervasiveness of the warehouse-wage-slave model is still a little eye-opening.
The second is a matter of timing. Over the last several weeks there have been a few posts on different sites discussing why Amazon is special and Apple is less so. (Here is The Atlantic’s take on things.) In a nutshell the argument goes that Apple’s fat margins make it a target for competitors while Amazon’s low margin but massive scale make it essentially bulletproof. In theory, lots of retailers would love a slice of Amazon’s business but they don’t have the wherewithal to build up to Amazon’s scale or the expertise to match Amazon’s efficiency in order to make pennies on the dollar.
This is what that efficiency looks like.
Even with these efficient routes, there’s a lot of walking. One of the new Rugeley “pickers” lost almost half a stone in his first three shifts. “You’re sort of like a robot, but in human form,” said the Amazon manager. “It’s human automation, if you like.”
It may not be pretty and it may create some days when it’s awful to be Amazon’s public relations office, but it is the cornerstone of their success. It gives them a scale and efficiency that no one else can really match.