[{"id":795,"link":"https:\/\/amazonworkersolidarity.ca\/2024\/10\/23\/aws-statement-on-the-laval-victory\/","name":"aws-statement-on-the-laval-victory","thumbnail":{"url":"https:\/\/amazonworkersolidarity.ca\/wp-content\/uploads\/2024\/10\/Laval-Cover-Photo.png","alt":""},"title":"AWS Statement on the Laval Victory","excerpt":"","content":"It\u2019s been over five months since the workers at the DXT4 Amazon delivery station in Laval, Quebec officially certified their union after 2 years of organizing. The victory brought 200 people into the union, The Conf\u00e9d\u00e9ration des syndicats nationaux (CSN), becoming the first in Canada and only the second certification in North America, after the JFK8 victory in Staten Island in 2022. For Amazon workers in Canada, this is an exciting first step.\n\n\n\nAmazon Worker Solidarity applauds the efforts of the workers and organizers in Laval. At a time when Amazon seems too big and powerful an enemy, and when organizing feels like an uphill battle, they remind us to remain steadfast, because no corporation is invincible.\n\n\n\nHowever, as anticipated, this important victory did not come without challenge by the company, who fought at every stage to contest the certification. When the Quebec Tribunal administratif du travail (TAT) officially accredited the union on May 10, Amazon filed a motion to not only revoke the union certification but announced it was filing a constitutional challenge to the Quebec labour code. The laws that enabled the victory through the process of card check, where a majority of workers sign union cards to certify the union, were denounced as \u201cundemocratic\u201d. Amazon complained that any union certification process other than a secret ballot vote was unacceptable.\n\n\n\nBut the truth is, to Amazon, any threat of unionization is unacceptable. The situation in Laval illustrates Amazon\u2019s willingness to go to all lengths to avoid unionization, including by dragging workers and the union through countless painful legal processes to avoid it. In a world where Amazon is used to having the deck stacked in their favour by politicians and lawmakers, their propensity for taking legal action shows they would rather change the existing rules to their benefit than play by them. Beyond putting down the Laval union, these intimidating legal tactics aim to scare workers elsewhere and prevent them from fighting for their dignity and rights as well.\n\n\n\nMore than challenging just one union, Amazon is coming after our rights themselves, dragging their issues with our labour laws all the way to the Supreme Court, and with them dragging all of Canadian society - because any challenge to labour protections that benefits Amazon will benefit all corporations. Thus, Amazon declares a new battlefront in their war against workers, a war in which all Canadians are implicated. In the same way that Amazon vies for control of society through the expansion of its logistics empire and cloud computing platform, it vies for control on the level of laws and policy, attempting to make an optimal environment for itself to generate profit, all at our expense.\n\n\n\nIn this way, Amazon presents an existential threat to the entire Canadian working class, not just its own workers, through its union-busting tactics. Labour laws that were fought for and won by Canadian workers, and that attempt to restrain corporate power in the most meager ways are not safe - any of these rights can be taken away. The labour movement in Canada must rise to the challenge of a corporation like Amazon if it hopes to survive, as Amazon relentlessly attacks the foundation the movement stands on. If labour develops the courage to seriously confront a beast like Amazon, it will surely find its feet again.\n\n\n\nDespite what is at stake and despite the scale of the fight ahead of us, Amazon workers have been and will continue to step up to the challenge. Throughout the United States, momentum is building within the Amazon movement daily, with the Teamsters leading efforts to organize Amazon drivers and, increasingly, warehouse workers. Building off of many years of independent organizing efforts, they are taking the fight against Amazon to the next level. In fact, Amazon workers attribute their recent $1.50 across-the-board raise (though meager and insufficient) to the uptick in organizing across the US and the world.\n\n\n\nCanadian Amazon workers are following suit, and we are proud of the workers in Laval for paving the way. Together, we must build a strong Amazon movement in Canada, involving workers from Quebec, Ontario and all other corners of the country. This way, our fellow workers in Laval won\u2019t be standing alone. Amazon Worker Solidarity supports the proliferation of worker organization across Canada, and places importance on organizing Amazon in the Greater Toronto Area, given the strategic importance of Ontario facilities in the network. Organizing one facility is not enough to win against Amazon, and more work is needed.\n\n\n\nIn the face of major challenges, Laval Amazon workers' resolve has been strengthened by the company\u2019s response to them. In fact, they wear Amazon\u2019s legal action against their union as a badge of honour. To stand up against an enemy and be met with a challenge means you are doing something right, and only increases workers' determination to fight back.\n\n\n\nIn the end, the only antidote to Amazon\u2019s seemingly unlimited corporate power is the thing that enables it in the first place, and the one thing that workers have -  their own labour power. By organizing and building up the capacity to disrupt production, Amazon workers can finally fight back. Through constant experimentation, fearlessness and the practice of steadfastness, Amazon workers are unlocking their own power.\n\n\n\nFor more information on the Montreal Amazon Workers Union, check out their website: https:\/\/sesyndiquer.org\/mawu\/english\/ ","author":{"name":"aws-admin","link":"https:\/\/amazonworkersolidarity.ca\/author\/aws-admin\/"},"date":"Oct 23, 2024","dateGMT":"2024-10-23 23:00:32","modifiedDate":"2024-10-23 19:00:32","modifiedDateGMT":"2024-10-23 23:00:32","commentCount":"0","commentStatus":"open","categories":{"coma":"News<\/a>, Statements<\/a>","space":"News<\/a> Statements<\/a>"},"taxonomies":{"post_tag":""},"readTime":{"min":4,"sec":27},"status":"publish"},{"id":695,"link":"https:\/\/amazonworkersolidarity.ca\/2024\/10\/09\/health-and-safety-amazon-fails-to-deliver\/","name":"health-and-safety-amazon-fails-to-deliver","thumbnail":{"url":"https:\/\/amazonworkersolidarity.ca\/wp-content\/uploads\/2024\/10\/Health-and-Safety-Amazon-fails-to-deliver.png","alt":""},"title":"Health and Safety: Amazon Fails to Deliver","excerpt":"Reality had exposed the shallowness of Amazon\u2019s commitment and\u00a0 Amazon\u2019s VP for Global Workplace Health & Safety was assigned to publish a rebuttal. The VP praised Amazon\u2019s \u2018transparency\u2019 in dealing with health and safety (H&S) and proudly shared concrete evidence of its new \u2018caring\u2019 trajectory. Amazon\u2019s injury rate at its FC\u2019s, it asserted, had fallen by some 28% over the previous four years. This, the rebuttal declared, brought it in line with or slightly above the warehouse industry standard.","content":"We are going to be Earth\u2019s best employer and Earth\u2019s safest place to work\u2019 - Jeff Bezos, April 2021\n\n\n\n\nArticle contributed by Sam Gindin. Sam has been a decades-long researcher with Canadian Auto Workers, continues to write on the labour movement, co-wrote  The Making of Global Capitalism: The Political Economy of American Empire with his lifelong friend Leo Panitch, and currently is a member of the Amazon Worker Solidarity research team.\n\n\n\n\n\n\n\n\n\n\n\nAt the end of March 2021, a unionization drive in Bessemer, Alabama by the Retail Workers (RWDSU) \u2013 one of the earliest attempts to organize an Amazon FC (Fulfillment Center) \u2013 failed to get the requisite numbers for certification. The campaign nevertheless highlighted workers\u2019 frustrations over health and safety and Amazon executives anxious about future unionization drives.\n\n\n\nThat apprehension was manifested a few weeks later. Amazon\u2019s founder, Jeff Bezos, was stepping down as formal head of Amazon (though remaining executive chairman) and felt compelled, in his \u2018farewell\u2019 letter to shareholders, to react to the growing criticisms of Amazon\u2019s treatment of its workers. Then the world\u2019s richest person, Bezos asserted that Amazon \u2018cared deeply for our hourly employees, and we\u2019re proud of the work environment we\u2019ve created.\u2019 \n\n\n\nHe did however go on to admit that Amazon clearly needed \u2018a better vision for our employees\u2019 success\u2019. This, he grandiloquently declared, would come from an \u2018addition\u2019 to Amazon\u2019s fundamental values: \u2018We are going to be Earth\u2019s Best Employer and Earth\u2019s Safest Place to Work\u2019. This promise was very quickly enshrined as one of Amazon\u2019s basic operating principles.\n\n\n\nFast forward three years to March 2024. Reality had exposed the shallowness of Amazon\u2019s commitment and  Amazon\u2019s VP for Global Workplace Health & Safety was assigned to publish a rebuttal. The VP praised Amazon\u2019s \u2018transparency\u2019 in dealing with health and safety (H&S) and proudly shared concrete evidence of its new \u2018caring\u2019 trajectory. Amazon\u2019s injury rate at its FC\u2019s, it asserted, had fallen by some 28% over the previous four years. This, the rebuttal declared, brought it in line with or slightly above the warehouse industry standard.\n\n\n\nTransparency?\n\n\n\n\n\n\n\nBefore taking a closer dive into this claim, a few words about Amazon\u2019s \u2018transparency\u2019 are called for. No company appreciates the power of information more than Amazon does and no company, lofty proclamations aside, outdoes Amazon in using that capacity to reproduce its overall control. Any information Amazon provides does not come out of any civic duty; Amazon provides only what it is pushed to divulge by community pressure, the law of the land, and fear of unions \u2018exploiting\u2019 worker injuries on the job.\n\n\n\nWhen Amazon tells us that \u2018in the past several years, we\u2019ve made a practice of transparently sharing our safety data because it helps us continue to learn and improve\u2019, this merits more than a little skepticism. What Amazon seems unable to contemplate, never mind unwilling to act on, is that such information might not be something for Amazon to unilaterally and patronizingly \u2018share\u2019, but a matter of something that those directly experiencing the injuries \u2013 the workers \u2013 have a fundamental right to have.\n\n\n\nIn Ontario (Canada), where more than half of Amazon\u2019s Canadian fulfillment centres are located, the law only demands that Amazon provide an injury rate for its combined operations. This undermines identifying facilities with sub-par safety performance as obvious sites for deeper investigation. When workers request these rates for their own facility, Amazon\u2019s commitment to transparency quickly goes out the window. Amazon hides beyond the limited legal requirements and simply refuses to comply.1\n\n\n\nYet as positive as this is in comparison to Canada\u2019s meek legal information requirements, Amazon is hardly a cheery complier. The US Departments of Labour and of Justice have found it necessary to constantly levy citations and fines on Amazon for inadequate compliance with government information requests. Some twenty such cases were pending at last count [see for example here, and here].\n\n\n\nIn the US, the law does require that corporations provide injury data by facility. This allows for asking such questions as why FCs in the state of New York have much higher injury rates than Amazon\u2019s average and why some Amazon facilities have injury rates two and three times that of others.\n\n\n\nIn both countries, pressures to resolve health and safety problems would be materially reinforced if Amazon respected its workers enough to take transparency beyond the minimum information legally required. This would include providing information across departments so workers could also pinpoint departments with special problems. It would also pass on the information Amazon collects but hordes for itself on the impact of long shifts and consequent exhaustion on injuries. And it would openly and honestly investigate, rather than offer glib assurances about. whether new technologies actually ease workloads or rather intensify pressure on workers to work faster to pay off the cost of these investments.\n\n\n\nAbove all, if Amazon was genuinely concerned about the health and safety of workers, it would put the most taboo issue for the company on the table: the connection between production rates and injury rates (We will return to this).\n\n\n\nHas Amazon really improved its injury rates?\n\n\n\n\n\n\n\nIn 2016, US Amazon workers had under 6 injuries per 100 full-time equivalent workers (FTE) and this rose to 8.7 in 20192. In 2020, for reasons that haven\u2019t been clearly established. the injury rate dropped to 6.7 then bounced around and stood at 6.3 in 2023 (latest information).3\n\n\n\nAmazon\u2019s rebuttal conveniently set the base year at 2019 \u2013 its worst year for injuries \u2013 making it easier to show 2023 in a better light. (In the process the question of why Amazon allowed its injury rate to rise in the years to 2019 was of course not mentioned). Had Amazon compared its injury rate to where it was in 2016, before the rate climbed to a peak, the 2016-2023 period would have  shown a 7% deterioration in injury rates. And if it used 2020 instead of 2019 as the starting point (the latest data Bezos had when he made his dramatic promise on safety), the advance by 2023 would have been only 3% \u2013 a far cry from the 28% professed.\n\n\n\nAs for Ontario, Amazon\u2019s rebuttal completely ignores Canadian injury trends. In Ontario, injury rates have in fact drastically worsened whatever year we start from. Sticking to Amazon\u2019s reference to 2019-2023, Ontario\u2019s injury rates rose by a criminally astonishing 45%! While Ontario injury rates were generally lower than in the US in the past, by 2023 they surpassed the US.4\n\n\n\n\n\n\n\nIf we move on and compare Amazon\u2019s US injury rates to Amazon\u2019s overall global rates they are, based on Amazon\u2019s data, about a third higher in the US. Nor does that gap reflect a unique point; it has persisted over the years. (See data in Amazon\u2019s rebuttal, referenced above). And that stark difference is in fact larger than it seems: if we allow for the fact that the global data is inflated by the higher US data then the gap is significantly larger, perhaps closer to 50%.\n\n\n\nAmazon Injury Rates 2019-2023\n\n\n\nYearUSCanadaGlobal20198.74.96.720206.53.65.120217.65.05.720226.76.25.120236.37.14.72019-23-28%45%-30%2020-23 -3%97% (double)-8%Source: Amazon reports, Ontario WSIB\n\n\n\n This is not to suggest that Europe and non-US locations are a paradise  for working conditions \u2013 Amazon workers in Europe have been every bit as critical of the state of  health and safety at their FCs  as  their counterparts in the US and Canada. It is rather raised to emphasize the especially poorer safety performance in the US.                 \n\n\n\nAmazon\u2019s record relative to the rest of the warehouse sector\n\n\n\n\n\n\n\nBut let\u2019s get back to the assertion in Amazon\u2019s safety rebuttal: \u2018we don\u2019t aspire to be around the average\u2014we want to be the best in the industries in which we operate\u2019. There are three decisive problems with this measure of success.\n\n\n\nFirst, the warehouse sector has injury rates about double that of the overall private sector (which is itself no paragon of healthy and safe workplaces). Compared to Bezos\u2019 ambitious if insincere standard of having the safest workplaces \u2018on Earth\u2019, looking to match the industries \u2018in which we operate\u2019 is therefore already a conspicuous retreat.5\n\n\n\nSecond, this standard ignores the extent to which Amazon isn\u2019t just another player in the warehouse sector but its dominant actor.  The National Employment Law Project (NELP) and Strategic Organizing Center  (SOC), using the American data made available through the NLRB data, have rigorously broken down the commanding position of Amazon in the American warehouse sector: Amazon accounts for 37% of the sector\u2019s workers while Walmart, which ranks second, only has 5% and the rest is dispersed among some 7000 warehouses.\n\n\n\nGoing further, if we narrow this down to the facilities with more than 1000 workers \u2013 the largest facilities and those which effectively set the standards for the sector \u2013 Amazon accounts for a staggering 79% of the workforce. Walmart and TJX (which oversees TJMaxx, Marshall\u2019s, Home Goods, Sierra, and Winners) account for 4% each.\n\n\n\nMoreover, as the American researchers point out, the largest 48 warehouses in the US are all operated by Amazon, each employing more than 3,000 people. Of the 119 warehouses in the U.S. that employ 2,000 people or more, Amazon operates all but five. And of the 250 warehouses with over 1000 workers, Amazon has 163 warehouses while only Walmart and TJX have 10 or more warehouses of that scale.\n\n\n\nWhen Amazon compares itself to the \u2018warehouse sector\u2019 it is, as NELP puts it, a slight of hand that essentially has Amazon \u2018benchmarking against itself\u2019. Amazon effectively IS the large warehouse sector.\n\n\n\nThird, even if we compare injury rates among the three leading companies in the sector, Amazon\u2019s injury rate \u2013 whether across all the companies in the sector or just the largest ones \u2013  is about triple that of Walmart and 50% above TJX.  (In Ontario, the available data is very limited but from what we can discern, the gap with, for example, UPS warehouses, is in the range of  Amazon\u2019s  gaps with the largest warehouses in the US).\n\n\n\nComparing Amazon's injury rate with its competitors\n\n\n\nTotal warehouseInjury rate (across all warehouses)Facilities with over 1000 workersInjury rate (facilities with over 1000 workers)Amazon538 2006.5420 1006.3Walmart76 3002.323 6002.1TJX22 9004.222 5004.2Source: NELP Tables 1 and 2\n\n\n\nWorker surveys of the health and safety crisis\n\n\n\n\n\n\n\nWorker surveys \u2013 getting information directly from workers \u2013 supplement the company-generated injury data. UNI Global Union, a federation of service and logistics unions across the globe, commissioned \u2018the largest independent survey of Amazon workers ever conducted\u2019. The survey focused particularly on Amazon\u2019s invasive monitoring of work performance.\n\n\n\nMost of the workers surveyed found the monitoring to be not only \u2018excessive and opaque\u2019 but the corresponding production expectations that emerged \u2018unrealistic\u2019. The study documented that \u2018striving to meet these unrealistic expectations has negative effects on [workers\u2019] physical health and, even more acutely, their mental health\u2019.\n\n\n\nSimilarly, a worker survey conducted by the Center for Urban Economic Development at the University of Illinois (Pain Points: Data on Work Intensity, Monitoring, and Health at Amazon Warehouses found that:\n\n\n\n\nMore than 2\/3 of workers had to take time off the precious month to deal with pain and exhaustion; 1\/3 have done this three or more times.\n\n\n\nMore than half feel burned out from work.\n\n\n\nTwo in five feel pressures to work faster most of the time and the injuries and burnout are elevated among those feeling the pressure to work faster. Three in five workers say the monitoring is more intense than at their previous workplace, and 9% say it is less. \n\n\n\n\nLike the UNIGlobal survey, this survey\u2019s conclusions emphasized the link between production rates and health and safety: \u2018a logistics system geared towards unrelenting speed and maximum customer convenience exacts a heavy toll on the health and well-being of many Amazon warehouse workers\u2019.\n\n\n\nProduction rates and health & safety\n\n\n\n\n\n\n\nNone of the above is surprising. For example, the Seattle Times (Seattle is Amazon\u2019s home base) quoted state regulators as pointing to a \u2018direct connection\u2019 between injuries and Amazon\u2019s pressure to \u201cmaintain a very high pace of work\u2019. The regulators further noted that the pace of work \u201cmakes it impractical for workers to follow Amazon\u2019s safety training.\u2019  An OSHA news release from February 2023  similarly quotes the  Assistant Secretary for Occupational Safety and Health urging Amazon to \u2018take these injuries seriously and implement a company-wide strategy to protect their employees from these well-known and preventable hazards\u2019.6\n\n\n\nCommon sense tells us that obsessively prioritizing speed is the enemy of workers\u2019 health and safety. The point of all of Amazon's monitoring of workers' stops and breaks and individual performance is overwhelmingly, if not singularly, used to pressure, threaten, and discipline workers to meet Amazon\u2019s ever-intensifying standards. As one Amazon worker in the UNI survey caustically observed, \u2018none of this information is ever used to actually improve conditions at work\u2019.\n\n\n\nIn fact, the most revealing aspect of the rebuttal of Amazon\u2019s Global Safety Division is that their report never \u2013 never \u2013 mentions this potential conflict between aggressive production rates and their impact on workers. The reason for this brazen bias is obvious. The business of Amazon is maximizing profits while the \u2018business\u2019 of Amazon\u2019s safety division is \u2013 at best \u2013 accepting the production rates as a given and, within that framework, doing what they marginally can about health and safety (perhaps more accurately, containing complaints from workers).\n\n\n\nWhat is to be done?\n\n\n\n\n\n\n\nIt\u2019s not hard to set out steps that could ease the crisis in worker health and safety at Amazon. A partial list would include:\n\n\n\n\nReal transparency over injuries: It\u2019s workers\u2019 bodies that are affected and they should have all the information that Amazon obsessively collects but doesn\u2019t pass on to its workforce. And worker health and safety reps should have the run of the plant to conduct surveys that give voice to worker frustrations over Amazon policies.\n\n\n\nTime to recover from the impact of work: More breaks, more days off, job rotation if desired and eventually, workers sharing in Amazon\u2019s remarkable technological advances through shorter work days for the same weekly pay.\n\n\n\nErgonomic improvements: Ergonomic solutions exist, and Amazon engineers know about them. But they are not implemented because they don\u2019t meet Amazon\u2019s cost-benefit analysis. Workers must have crucial roles in such decisions and be part of an overall assessment of all Amazon operations.\n\n\n\nHumanized production speeds: Rather than facing ever-more intensive demands, production rates should be moderated and additional workers hired (which would not undermine customer demands for prompt delivery but highlight its cost).\n\n\n\n\n\n\n\n\nThe question of course is how to win such changes against a powerful corporation opposed to them. The law and workplace regulators have a vital role to play because much as we describe our society as \u2018democratic\u2019, the workplace imbalance between workers and corporations is anything but.\n\n\n\nFines on corporate abuses are of course welcome, but they cannot fix the disparity in workplace power. As of 2022 the total fines levied on Amazon for ignoring or blocking labour relations law totalled $81,000 - an amount which, compared to Amazon\u2019s after-tax profits in the previous year (over $33 billion) represents under 25 cents on every $100,000 of net profits (yes, one rusty quarter per hundred grand!).\n\n\n\nTwo crucial limits, even where \u2018progressive\u2019 administrators are in office, limit how far the law and its regulators will go in a capitalist society. One is that the law generally doesn\u2019t set leading standards but focuses on minimum standards. The other is that even when the pressure for change exists, the law cannot, from on-high, adequately enforce the multitude of injuries in the multitude of workplaces that occur on a daily basis \u2013 especially in the face of corporate resistance in the name of property rights. Only workers effectively organized in unions with a powerful workplace presence can potentially play that decentralized role.\n\n\n\nA corollary of this argument is that as welcome as sympathetic workplaces standards might be, the most important legal reform would be to shift workplace power relations and ease the barriers to unionization. The central orientation must be that corporations have no right whatsoever to influence who should represent workers; the question of representation must be an exclusive right of workers.\n\n\n\nFines and complicated legal procedures will not get us there. What is needed is union access to members (as opposed to the current monopoly of corporations to mandatory meetings to sully unionism) and automatic certification of the union involved if there is any violation of their rights, alongside criminal prosecution of those who formally or informally endorse intervention in these fundamental rights.\n\n\n\nAmazon has \u2013 in a remarkably telling example of how they see the world \u2013 challenged the very notion of union certification, arguing that this violates the constitutional freedom to not associate, the alleged freedom to not be represented by a union. Amazon\u2019s sublimely hypocritical idea of individual freedom is that of each individual worker negotiating with the collective power of Amazon stockholders as embodied in Amazon management and Amazon resources.\n\n\n\nConclusion\n\n\n\n\n\n\n\nAmazon glibly promised to make our workplaces the best and safest in the world. It then showed itself to be the barrier to fulfilling that promise. It\u2019s up to us - the collective worker \u2013 to carry out the promise. This demands going beyond individual complaints or occasional protests. The health and safety crisis at Amazon cannot be truly addressed until workers organize \u2013 build the collective strategic power to challenge the priorities of management with our own priorities.\n\n\n\nShort of building that collective capacity and institutionalizing it in a union, there is no counterbalance to Amazon\u2019s greed and the competitive pressures on Amazon to stay on top at our expense. The issue is not just living with conditions as they are but recognizing that unless we effectively intervene, our workplace well-being will continue to get worse.\n\n\n\nHealth and safety struggles are paramount to building worker power because, unlike wage struggles (obviously very important) they are not reduced to collective bargaining every three-four (or five years) and left to our negotiators. Rather, H&S conflicts address the daily conditions of work \u2013 the pace of work, management\u2019s unilateral power over their labour power, and the dignity of workers. And they do so through maximizing worker democracy: the on-going mass participation of workers in struggles over their needs and the confidence and skills consequently developed to participate in the higher levels of union decision-making.\n\n\n\nAmazon is the second largest employer in the world, an iconic organizer of goods produced around the world and delivered to people\u2019s doorsteps, a high-tech leader in streaming and the Cloud. It is surely not demanding too much to now insist that workers and their health will no longer be trampled and sacrificed to Amazon\u2019s profit-driven march to capitalism\u2019s pinnacles.\n\n\n\nReferences","author":{"name":"aws-admin","link":"https:\/\/amazonworkersolidarity.ca\/author\/aws-admin\/"},"date":"Oct 9, 2024","dateGMT":"2024-10-09 22:15:35","modifiedDate":"2024-10-15 20:24:25","modifiedDateGMT":"2024-10-16 00:24:25","commentCount":"0","commentStatus":"open","categories":{"coma":"Health & Safety<\/a>, Research<\/a>","space":"Health & Safety<\/a> Research<\/a>"},"taxonomies":{"post_tag":""},"readTime":{"min":15,"sec":34},"status":"publish"},{"id":685,"link":"https:\/\/amazonworkersolidarity.ca\/2024\/10\/09\/a-prime-competitor-understanding-amazons-market-power\/","name":"a-prime-competitor-understanding-amazons-market-power","thumbnail":{"url":"https:\/\/amazonworkersolidarity.ca\/wp-content\/uploads\/2024\/10\/A-Prime-Competitor-logo-boxes.jpg","alt":""},"title":"A Prime Competitor: Understanding Amazon's Market Power","excerpt":"","content":"Amazon Worker Solidarity sought to understand how Amazon makes it money to inform organizing strategy in the Amazon movement. Our research team investigated how Amazon, a merchant capitalist firm, controls a network through which suppliers and sellers distribute and store commodity capital. Mastering competition and circulation time in its warehouses results in Amazon's competitive dominance in the logistics industry and beyond. \n\n\n\n\n\n\n\n\nReport authored by Stephen Maher and Scott Aquanno. Dr. Stephen Maher is an Assistant Professor of Economics at SUNY Cortland and co-editor of The Socialist Register and a member of the Amazon Worker Solidarity research team. Dr. Scott M. Aquanno is Associate Professor of Political Science at Ontario Tech University, and a Visiting Associate at the Global Labour Research Centre at York University. Maher and Aquanno recently published \u00b4The Fall and Rise of American Finance: From JP Morgan\u00a0to\u00a0Blackrock'.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nA large body of scholarship has emerged in recent years attempting to assess if Amazon is a monopoly. Such accounts generally define monopoly in terms of the neoclassical \u201cquantity theory of competition,\u201d which measures competition by the number of sellers in a market.1 According to this framework, \u201cperfect competition\u201d gives way to increasingly \u201cimperfect competition\u201d over time as the number of firms in a particular sector declines through concentration and centralization. As the market comes to be dominated by a smaller number of giant firms, it becomes impossible for new challengers to compete \u2013 what economists call \u201cbarriers to entry.\u201d Since the monopoly firms are largely free from competition, they can effectively fix prices and thus rake in monopoly \u201csuper profits.\u201d Consequently, they have little incentive to invest in new technologies, improve efficiency, or intensify the exploitation of labor.\n\n\n\nAn apparent paradox therefore emerges in characterizing Amazon. Its \u201cbigness\u201d and lack of a direct competitor would seem to suggest that it should be considered a monopoly. And yet, far from exhibiting the tell-tale signs of increasing monopoly prices, inefficiency, and technological stagnation, Amazon has engaged in cutthroat price competition, built a highly efficient and technologically advanced logistics system, and unleashed competitive forces whose effects have reverberated across the retail sector and beyond. Moreover, Amazon\u2019s distinct vertically integrated structure, competing across a range of sectors including retail, e-commerce, logistics, online search engines, and media entertainment \u2013 each dominated by large firms \u2013 suggests that today\u2019s giant corporations are not significantly encumbered by barriers to entry. All this indicates that the understanding of \u201cmonopoly\u201d within mainstream economics (as well as significant sections of the left) has popularly obscured the intensely competitive nature of modern corporate capitalism.\n\n\n\nAs we\u2019ll argue, Amazon\u2019s dominance is not rooted in a static \u201cmonopoly\u201d position, but rather emerges from a competitive \u201cwar among firms.\u201d2 As such, it must continuously fight to sustain and renew its power through unceasing innovation and restructuring. In addition to offering very low prices, the efficiency of its advanced logistics, warehousing, and transport system allows Amazon to profit from circulating the commodity-capital of a large number of \u201cindependent\u201d capitals \u2013 increasingly, that of other large firms. These capitals also benefit, as selling on Amazon enables them to increase profits and reduce costs, even despite the fees it charges. To make sense of this, we draw on the \u201creal competition\u201d school of Marxian economics, which holds that competition is not merely an effect of the number of sellers in a particular market, but occurs as all firms seek to maximize their share of the total social surplus. From this perspective, competition is not reduced but intensified as units of capital get larger.\n\n\n\nCirculation, Competition, and Market Power\n\n\n\n\n\n\n\nThe case of Amazon makes it especially clear that neoclassical economic theory fails to capture the competitive dynamics of contemporary corporate capitalism. As Marx demonstrated, competition is not a matter of the number of sellers in a particular sector. Capital is not intrinsically connected to the production of any specific use-value (i.e. concrete good or service) but is oriented around maximizing monetary accumulation. Capitalists will invest in producing whatever commodities are able to facilitate the realization of surplus-value in the money-form through sale on the market. As such, particularly for large corporations that can marshal huge financial power, barriers to entry are ephemeral and temporary. Indeed, \u201cas capital requirements increase throughout the economy, this simply means that the necessary armaments for waging a successful competitive battle are also increasing.\u201d3\n\n\n\nAs Marx emphasized, competition takes place both among producers of identical use-values (intra-sectoral), as well as firms in different economic sectors (inter-sectoral). That is, competition occurs not just within individual product markets, but across the entire economy as capital flows into investments with higher returns and away from those with lower returns in search of maximum profits. The primary choice every capitalist faces is thus where to invest. As the circulation of capital across space and among the different branches of production becomes easier, quicker, and cheaper \u2013 what economists call increased \u201ccapital mobility\u201d \u2013 competitive pressures are intensified across all sectors and assets to either maximize returns or face the withdrawal of investment. Since the large corporation is the most mobile, it is the most competitive form of capitalist organization.\n\n\n\nCorporate capitalism, therefore, has become more, not less, competitive over time. Larger firms are more easily able to restructure by moving into profitable markets while divesting from others. Moreover, such firms are capable of competitively allocating capital across operations, and even individual facilities, with minimal transaction costs. In this way, competition also occurs within large firms. They also possess the most substantial research and administrative capacities for assessing the value of different operations and investment opportunities. These competitive disciplines have propelled the process of \u201cfinancialization,\u201d whereby the role of money-capital, as the most abstract and most mobile form of capital, has been enhanced.4 Since money can be invested in producing any commodity, firms organized around the allocation of money-capital cannot simply be identified with particular economic sectors, but are able to invest in whatever economic activities are most profitable.\n\n\n\nCompetition also disciplines capital to accelerate turnover time, or the amount of time it takes capital to complete the circuit from investment to sale, summarized by Marx in the formula M-C-M\u2019. The faster capital is turned over, the more surplus value is produced within a given period of time. To understand this, it is necessary to break down the M-C-M\u2019 process further. After being advanced in the money-form (M), capital is transformed into the commodities labor-power and means of production (C). This allows capital to take on its productive-form (P), entering a process through which a new commodity is produced (C\u2019). Marx calls this new commodity \u201ccommodity capital,\u201d as it is pregnant with surplus value waiting to be realized in the money-form through a sale (M\u2019). Marx expressed this in the extended formula M-C\u2026P\u2026C\u2019-M\u2019. The circuit of capital is thus a unity of production and circulation: while M-C and C\u2019-M\u2019 take place within circulation, P\u2026C\u2019 occurs within production. Turnover time, then, consists of production time plus circulation time.\n\n\n\nCirculation time comprises both selling time and buying time. Selling time denotes the time required to convert commodity-capital into money, thereby realizing surplus value. It encompasses the entire period during which capital takes the form of the commodity \u2013 from the conclusion of the production process to the sale of the product. Buying time, on the other hand, refers to the period during which this money awaits conversion back into the commodities labor power and means of production. This encompasses the entire time in which capital remains in the money-form prior to re-entering production. Just as \u201cthe capital as C\u2019 is anxious to assume the money form,\u201d so \u201cthe capital as M\u2019 is anxious to get rid of it\u201d because \u201cas long as it exists in the shape of money\u2026 the capital remains idle.\u201d5 Capital is thus driven to compress circulation time, as a component of overall turnover time, as much as possible.\n\n\n\nJust as capital\u2019s competitive drive to minimize production time demands the implementation of new technologies, that same drive also compels firms to reduce circulation time through the improvement of transportation, logistics, and communications infrastructures. The transformation of capital into \u201cthe different forms which [it] clothes itself in its different stages, alternately assuming them and casting them aside\u201d involves an abstract movement. However, as the circulation of capital is the \u201cmovement of abstraction in action,\u201d it also depends on the physical movement of goods and money. While commodities may \u201cremain in the same warehouse while they undergo dozens of circulation processes, and are bought and sold by speculators,\u201d circulation ultimately requires \u201ca motion of the products in space, their real movement from one location to another.\u201d6 Reducing circulation time, therefore, necessitates continuously developing the physical conditions of circulation.\n\n\n\nCapital is not a thing, but rather \u201cvalue in motion.\u201d7 Yet the continuity of the circulation process is complicated by the fact that it is carried out by individual capitals, which are linked together into value chains even as they compete with one another to maximize their share of surplus value. Each form that capital adopts as it moves through the circulation process roughly corresponds to a particular economic sector or \u201cbranch of business.\u201d Money-capital therefore becomes the specialized function of the financial sector, productive-capital that of the industrial sector, and commodity-capital that of the merchant or retail sector. These different activities are performed by competing (and often diversified) firms, which become \u201cmodes of existence of the various functional forms\u201d capital \u201cconstantly assumes and discards\u201d that have been \u201crendered independent by the social division of labor.\u201d8\n\n\n\nAccordingly, industrial capital undertakes the production of surplus value, while merchant capital and financial capital profitably circulate commodities and money. However, Marx argued that \u201cstorage and transport of goods in a distributable form\u201d can also be productive of surplus value. The continuity of the production process requires that inputs and outputs be transported across space between the individual capitals fulfilling particular stages of the process, making transportation of the unfinished commodity itself a stage in the production process. Similarly, the ultimate consumption of a finished good requires that it be transported to the place where consumption occurs. Those activities necessary to affect such a \u201cchange of place\u201d must therefore be seen as \u201cproduction processes that continue within the process of circulation.\u201d Consequently, as an agent of the circulation of industrial capital, merchant capital is, in practice, also involved in producing surplus value, as Marx recognized.9\n\n\n\nThe circulation of capital takes place through the unplanned and competitive interaction between individual capitals. These are linked into value chains, meaning that the inputs purchased by one capital are the outputs sold by another. The turnover of individual capitals is dependent on the production of inputs, and purchase of outputs, by other individual capitals. Obstructions can lead to crises. If the transition of commodity-capital into money-capital is impossible, for example, surplus value cannot be realized and commodities pile up, potentially leading to a crisis of overproduction. Similarly, if the commodity inputs necessary to begin production are not available, or not available in the right quantities, a crisis of disproportionality can emerge. While markets may be able to adjust to resolve local disruptions, if the problem becomes generalized a crisis of overproduction could result.\n\n\n\nThat the circulation of capital takes place across competing individual firms also creates opportunities for the exercise of power. In addition to warding off competition from producers of the same or similar products, firms also compete to maximize their share of surplus value within value chains. By leveraging control over strategic points within the general circulation of capital, firms may increase their bargaining power relative to suppliers and customers \u2013 seeking to prevent value from \u201cleaking\u201d to others in the supply chain by minimizing the prices paid for inputs and maximizing those charged for outputs. This competitive struggle shapes the division of surplus value both within and across sectors. Thus, even the most concentrated sectors are not static, but highly dynamic, with the distribution of surplus shifting as the balance of power between firms is shaped and reshaped by changing economic, organizational, regulatory, and technological conditions.\n\n\n\nCrucially, competition does not only drive firms to seek higher prices for their output but also to develop new technologies and labor processes that reduce costs. This includes not only increased productivity within the sphere of production, but innovations in circulation processes as well. To maximize profit, merchant capitals are compelled to reduce circulation costs and turnover time, which in turn accelerates the compression of space and time for all capitals reliant on these infrastructures.10 Consequently, merchant capital plays a pivotal role in the general circulation of capital and in the competitive struggle among all firms. The valorization of each capital within a value chain hinges on the realization of surplus value once the commodity enters the realm of consumption. Thus, control of commodity capital confers influence over the realization of surplus value for all capitals in a value chain.\n\n\n\nWhile from the perspective of the individual productive capitalist, the product is transformed into money as soon as it is acquired by the merchant, all that has happened from the point of view of the product \u201cis a change in the person of its owner.\u201d Indeed, \u201cit is still commodity capital as before, a saleable commodity; but now it is in the hands of the merchant instead of the producer.\u201d11 For this reason, Marx argues that commodity capital should not only be viewed as \u201ca form of motion common to all individual industrial capitals, but at the same time as the form of motion of the sum of individual capitals\u201d linked into value chains \u2013 that is, \u201cof the total social capital of the capitalist class.\u201d From this perspective, \u201cthe movement of any individual capital simply appears as a partial one, intertwined with the others and conditioned by them.\u201d12 Only when the commodity is finally consumed does it cease to be capital, which then sheds its commodity form and returns to the capitalist in the form of money.\n\n\n\nPossession of commodity capital can thus confer significant leverage in the competitive struggle among all capitals for surplus value. Merchant capitals may acquire control over commodity capital as a result of their ownership of infrastructures and distribution systems which offer unique access to markets, or which facilitate the especially rapid transportation of products \u201cfrom one separate place of production to another\u201d and from \u201cthe sphere of production to the sphere of consumption.\u201d13 Merchant capitals that develop superior transportation and distribution systems can offer productive capitals the opportunity to reduce circulation time and increase profit rates. Thus while control over commodity-capital confers power on merchant capital within the circulation process, this does not necessarily entail raising prices: in fact, prices could decrease in tandem with reduced turnover time and circulation costs.14\n\n\n\nThe struggle among all firms for strategic advantage, then, is not about negating competition, but occurs on the basis of a continuous \u201cwar among firms.\u201d Firms in the same sector seek to produce similar products more efficiently and cheaply, while firms across all sectors compete for investment, and try to leverage their control over strategic points within the circulation process to increase their bargaining power vis-a-vis customers and suppliers. Merchant capital occupies a particularly strategic position within this process. Yet merchant firms must both attract productive capitals to sell their output as quickly as possible to the largest markets, and consumers to purchase it at competitive prices. They are thus competitively disciplined to continuously revolutionize the means of circulation, developing new infrastructures and technologies to reduce transaction costs and turnover time for all capitals.\n\n\n\nAmazon's Competitive Dominance\n\n\n\n\n\n\n\nAmazon is a merchant capitalist firm, embodying the circuit of commodity capital in organizing the circulation of commodities pregnant with surplus value. It acquires products from manufacturers or other retailers, stores them in warehouses, manages this inventory, sells to consumers, and transports commodities from the sphere of production to the sphere of consumption. Thus, in addition to the \u201cpure\u201d merchant capitalist practice of \u201cbuying cheap and selling dear,\u201d Amazon has invested a staggering amount of capital to construct a vast circulatory system for transporting, dispersing, and storing commodities \u2013 all productive activities. Like all merchant capital, Amazon is compelled by the \u201ccoercive laws of competition\u201d to continuously reduce circulation time and circulation costs, thereby accelerating turnover and enhancing circulating efficiency for all capitals utilizing its infrastructure.\n\n\n\nLarge warehouses known as Fulfillment Centers (FCs) are responsible for receiving incoming shipments from suppliers and sellers, storing products, picking items from shelves to fulfill orders, packing goods into boxes, and preparing them for shipment. Sortation Centers (SCs) focus on sorting and organizing packages of commodities received from FCs, which have already been purchased by customers, and sending them out for delivery. The competitive drive to compress circulation time, slash circulation costs, and maximize profits compels Amazon to maximize the efficiency of these facilities through work discipline and productivity improvement. This drive toward \u201ctime-space compression\u201d has also been reflected in the expansion of Same-Day Delivery Centers, where particularly in-demand commodities are stored for delivery to customers\u2019 homes the very same day the order is placed.15\n\n\n\nIn addition, Amazon operates a cloud-computing business, Amazon Web Services (AWS). Cloud computing allows firms to purchase computing capacity on demand, without needing to invest in permanent IT infrastructures. AWS is therefore an extension of Amazon\u2019s merchant capital activities, leasing out means of production to other capitalists. Centralizing computer capacity in this way creates economies of scale, enabling other firms to reduce their own costs. Amazon continues to make substantial investments in expanding this capacity, which entails low marginal costs while yielding high margins. Consequently, although it represents a relatively small portion of Amazon\u2019s revenue, AWS is responsible for a very large portion of its profits (68%), thus strongly appealing to investors. AWS has now become a major business in its own right, serving as the \u201cback-end\u201d for a significant portion of internet traffic and generating a steady stream of income which supports all the firm\u2019s operations.\n\n\n\nAmazon is dominant within the cloud sector, although it faces increasing competition: AWS maintains a 30% market share, Microsoft and Google have captured 25% and 11% shares, respectively. Some view the cloud sector as the paradigmatic example of a monopolistic \u201crentier\u201d market, and in more extreme accounts, even as the leading edge of a new \u201ctechno-feudal\u201d mode of production supposedly distinct from capitalism.16 However, what we observe is not the stagnation of uncompetitive monopoly (let alone feudalism), but the characteristic dynamics of capitalist competition. Such competition has propelled technological development, cost-cutting, and capacity expansion. It has also reinforced the integration of AWS and Amazon\u2019s other operations, as it has encouraged clients to use additional logistics and supply-chain management services tailored to their operations. This, in turn, has reinforced Amazon\u2019s need to continue investing in its cutting-edge logistics capacities.\n\n\n\nIndeed, although AWS has become an important business in its own right, its competitiveness cannot be understood in isolation from its interconnection with Amazon\u2019s core logistics, retail, and retail operations, which comprise nearly 85% of Amazon\u2019s net sales. If Amazon\u2019s logistics support the competitiveness of AWS, so does AWS support the competitiveness of its logistics. As we have seen, merchant capital is competitively disciplined to accelerate circulation velocity and reduce circulation costs by developing communications and transportation technologies and infrastructures. AWS emerged through this very process and remains important for Amazon\u2019s efficient circulation of commodity capital. The computing power and data analytics it offers enhance inventory and route management as well as demand forecasting. Moreover, AWS connects Amazon\u2019s logistics network to consumers, instantly responding to orders and minimizing the physical circulation of commodities.\n\n\n\nAmazon\u2019s competitiveness is rooted in its advanced logistics and lightning-fast delivery, which are sustained through the firm\u2019s very high levels of investment in these infrastructures. While all merchant capitals are compelled to maximize circulation velocity and efficiency, Amazon faces specific pressures in this regard. Unlike brick-and-mortar retailers, which provide the opportunity to acquire commodities on the spot but require the customer to travel to a physical location, Amazon organizes the circulation of commodities directly to the customer\u2019s door \u2013 but requires that the customer wait for delivery. Competitive success, therefore, means bringing delivery time to an absolute minimum. Amazon has been remarkably successful at this, however, as over 200 million people are now enrolled in Amazon Prime, which promises even shorter delivery times, and free shipping, for designated products the pressures for efficiency continue to be intense.17\n\n\n\nAmazon\u2019s drive to accelerate circulation velocity and rapidly deliver commodities to consumers is reflected in the spatial structure of its warehousing and logistics system, which operates across integrated national and regional scales with key commodities warehoused near major urban centers. This means that the flow of commodity-capital through Amazon\u2019s logistics infrastructure is by no means \u201cfrictionless,\u201d but spatially segmented at the regional level. In fact, 76% of orders are shipped from an FC within the customer\u2019s region.18 Moreover, Amazon\u2019s high levels of investment enable it to maintain substantial surplus capacity, which is underutilized except during certain peak times. This affords the system considerable flexibility in re-routing the flow of commodities to circumvent any interruptions or blockages.19 Nevertheless, the spatial fragmentation of commodity circulation across Amazon\u2019s logistics network creates contradictions and potentialities for disruption, which well-organized workers may strategically exploit.\n\n\n\nDespite this spatial decentralization, Amazon centralizes control over the flows of commodity-capital acquired from other productive and merchant capitals. These include first-party sellers (1P), who sell their inventory directly to Amazon, making it \u201cthe seller of record\u201d; second-party sellers (2P), or retailers whose independently-owned inventory is integrated with and supplements Amazon\u2019s own; and third-party sellers (3P), who use Amazon to sell to consumers, although their inventory is frequently managed by Amazon via third-party logistics (3PL) contracts in the form of a service called Fulfillment by Amazon (FBA). Smaller 3P sellers supply a large and growing proportion of the commodities Amazon circulates. At the same time, Amazon is now positioning itself to manage the inventories and supply chains of other large corporations by offering \u201cSupply Chain by Amazon\u201d services.\n\n\n\n1P sellers primarily include mid-market brand owners, which lack the cache or brand value that could support their ability to sell independently. 3P sellers are smaller retailers or manufacturers. That \u201cthere is only one Amazon\u201d leaves these firms little alternative but to rely on the logistics system it owns and operates. Moreover, because suppliers and sellers are fragmented, while Amazon is concentrated, the former actually compete with one another to supply Amazon on terms favorable to the latter. Competition among fragmented 1P suppliers and 3P sellers thus reinforces Amazon\u2019s market power and strengthens its bargaining position vis-a-vis these firms \u2013 compelling 3P sellers to accept the fees it imposes and 1P sellers to sell inventory to Amazon on favorable terms. Nevertheless, suppliers and sellers benefit from selling through Amazon insofar as it speeds up turnover time, reduces circulation costs, and connects them with a wider market.\n\n\n\n3P sellers constitute a distinct type of business that specializes in nothing other than selling on Amazon. That Amazon controls 80% of the US e-commerce marketplace market, and the superiority of its logistics and inventory management, means that these firms have little ability or incentive to diversify to other platforms. Amazon also blocks sellers from marketing products more cheaply elsewhere, effectively internalizing the fees charged by Amazon within product prices.20 While these anti-discounting practices are facing an antitrust challenge from the Federal Trade Commission, and this has not stopped other platforms from competing with Amazon in specific markets (electronics, home improvement, pet supplies), the vast majority of 3P sellers today see little alternative to selling through Amazon.21 Thus, in centralizing commodity capital, Amazon also centralizes these smaller productive and commercial capitals. Investments in these \u201cindependent\u201d businesses are, in effect, investments in Amazon itself, as their products are exclusively marketed, handled, transported, and sold by Amazon.\n\n\n\nAmazon\u2019s market power has been reflected in its ability to negotiate favorable wholesale prices with 1P sellers, as well as to impose substantial fees on 3P sellers \u2013 which can exceed 50% of sales revenue. Amazon applies three kinds of fees: referral fees, fulfillment fees, and advertising fees. Referral fees are a percentage of each item sold, typically 15%, although this varies by product \u2013 with some (computers) as low as 8% and others (eyewear) as high as 17%. Fulfillment fees are charged for Amazon\u2019s 3PL services, covering picking and packing, shipping and handling, customer service, and returns. Sellers are required to use Amazon\u2019s 3PL services in order for products to be labeled \u201cPrime,\u201d making them more attractive to Prime members. As a result, 90% of Amazon\u2019s top 10,000 sellers use FBA. Finally, advertising fees are charged for access to preferential screen space, including search rankings and \u201chighly rated\u201d product designations.\n\n\n\nWhile referral fees have remained relatively static, Amazon has continuously hiked fulfillment fees and captured growing revenues from advertising fees. Since search results are by no means \u201corganic\u201d but are purchased by sellers, successfully selling products on Amazon effectively requires sellers to pay fees in order for their products to be visible in search results. Amazon has allocated greater space for paid results over time, such that today few of the first 20 search results are typically \u201corganic\u201d or based on \u201cmeritocratic sorting.\u201d The intensification of competition among sellers for screen space has allowed Amazon to capture a larger portion of the surplus, as these firms are compelled to devote more revenue to advertising. Amazon has also raised FBA fees to cover logistics costs, including for heavier or larger items, for carrying low inventory, and for high return rates.\n\n\n\nAs a result, Amazon\u2019s cut of seller revenues has steadily grown every year, increasing by a total of roughly 49% since 2016. Annual revenue from fees is now as much as $185 billion \u2013 more than twice AWS revenue, and seven times greater than AWS profits.22 These fees are nearly sufficient to cover all operating expenses for Amazon\u2019s logistics and retail system, as well as all new investment.23 This means that Amazon can use the revenue from fees to cover fulfillment costs for its own inventory, allowing it to undercut competitors by selling at lower prices. Importantly, the increasing fees 3P sellers face have not led to higher market prices for their products. Instead, these fees have intensified downward pressure on costs, leaving North American sellers unable to compete with Chinese and other firms with lower costs. Consequently, most of the largest sellers on Amazon today are Chinese.\n\n\n\nThe globalization of Amazon\u2019s supplier and seller value-chain has been reflected in the expansion of Inbound Cross-Dock (IXD) facilities, which receive and store inventory from foreign vendors. In order to streamline the flow of newly imported commodities into Amazon\u2019s FC network and minimize transportation time, IXDs are located as close as possible to major ports. In addition to receiving shipments, these facilities also act as \u201cbuffers,\u201d holding goods until FCs need new inventory. At that point, commodities are aggregated onto trucks and distributed to the appropriate FC locations. IXDs are thus structured to ensure the continuous flow of commodity capital into Amazon\u2019s logistics system, reducing the risk of interruptions caused by delays or uncertainties in international shipping and maximizing circulation velocity.\n\n\n\nFar from Amazon\u2019s market power leading to higher monopoly prices, therefore, competitive disciplines have driven the globalization of Amazon\u2019s value chain, the intensification of time-space compression, and forced prices down. Indeed, Amazon has engaged in ruthless price competition to undercut its rivals. As we have seen, Amazon\u2019s very structure internalizes price competition, including through its e-commerce marketplace where a vast range of commodities compete for consumers\u2019 dollars. Amazon has consistently ranked as the lowest-price retailer since 2016. In 2023, Amazon\u2019s prices averaged 4% lower than Wal-Mart\u2019s for identical products and were a whopping 16% lower on average than rival retailers overall. That 70% of Amazon and Wal-Mart products have identical prices today suggests a process of price slashing and convergence at a lower level.24 This clearly challenges the idea that Amazon, Wal-Mart, and other retail giants can be seen as monopoly firms setting prices through oligarchic collusion.\n\n\n\nIn addition to extracting fees and negotiating favorable wholesale prices, Amazon\u2019s control over commodity capital enables it to accumulate a monetary hoard, which helps it to finance its very high levels of investment. As it controls capital at the moment surplus is realized (i.e., at the point of sale), Amazon regulates the reflux of this money back to suppliers and sellers. By \u201cdamming up\u201d the circulation process, and temporarily preventing the money in which surplus value has been realized from flowing back to suppliers and sellers, Amazon accumulates a monetary hoard. It then transforms this hoard into money-capital, setting it in motion within merchant and productive circuits. The quicker Amazon sells products and receives money, and the longer it defers payment to its suppliers and sellers, the more this hoard grows.\n\n\n\nAmazon amasses this fund by managing the difference between the circulation time it achieves in absolute terms and that which it imposes on its suppliers. In effect, Amazon passes on only a portion of the total gains in circulation time to its suppliers, though this reduction must still be sufficient to provide suppliers with a competitive incentive to rely on Amazon for the circulation of their commodity capital. Recall that circulation time = selling time + buying time. While Amazon reduces the overall circulation time, it speeds up selling time more than buying time \u2013 quickly converting commodity-capital into the money-form (selling time), and then freezing the circulation process and retaining this money under its control for a certain duration (buying time). By holding cash owed to suppliers, Amazon gains continuous access to interest-free capital, while displacing the debt and interest load onto weaker supplier firms.25\n\n\n\nThe profitability of AWS, as well as Amazon\u2019s strong cash position and minimal debt, are widely recognized as key factors supporting Amazon\u2019s high share price. These factors have enabled Amazon to sustain this high market valuation even without conducting dividends or buybacks as other large corporations do. Amazon is one of only five companies today with a market capitalization (i.e., total value of outstanding shares) exceeding $2 trillion, yet it has never paid a dividend. In contrast, Apple, another $2 trillion company, spent half a trillion dollars on buybacks over the last decade. Wal-Mart has devoted $102 billion to buybacks since 2009. Meanwhile, Amazon spent only $7.2 billion on buybacks over the same period. Avoiding transferring surplus to investors through such mechanisms allows Amazon to retain these funds, further strengthening its liquidity position and supporting its high levels of investment.\n\n\n\nInvestment and Market Power\n\n\n\n\n\n\n\nAmazon\u2019s control over the channels through which its network of sellers and suppliers distribute and store commodity capital, and realize surplus value, has enabled it to absorb these ostensibly \u201cindependent\u201d capitals. Insofar as these capitals operate as extensions of Amazon, their investments are, in essence, investments in Amazon itself. Amazon\u2019s ability to provide opportunities for these capitals to profit \u201cindependently\u201d supports a specific form of centralization in which value is continuously funneled into Amazon through various fees and payment conditions, while sellers and suppliers retain a share of this value in the form of \u201cindependent\u201d profits. Through this structured relationship, Amazon collects fees and interest-free loans from suppliers which together are nearly sufficient to finance all new investment as well as day-to-day operations. The profitability of AWS and its integration with Amazon\u2019s logistics is especially critical for its strength.\n\n\n\nAmazon\u2019s competitiveness is rooted in the exploitation of labor. Strict work discipline is essential for accelerating circulation velocity and reducing circulation costs, which underpin the firm\u2019s market power and accumulation of surplus. It is this which incentivizes 3P sellers to pay increasing fees and 1P sellers to sell inventory at low cost, and which enables the reproduction of the firm\u2019s monetary hoard. Insofar as Amazon\u2019s market strategy for AWS depends on leveraging this efficiency, the competitiveness of that business, too, hinges on labor exploitation. Amazon also engages in productive activities. Intensifying work and increasing labor productivity thus not only minimize circulation costs for supplier and seller firms, but are also means for producing surplus value. Given that Amazon\u2019s transportation and logistics operations add value to commodities, competition with brick-and-mortar retailers especially compels the company to intensify exploitation to keep prices low.\n\n\n\nThat Amazon\u2019s competitive position hinges on the exploitation of labor has led it to undertake massive R&D expenditures to improve productivity, in addition to \u201cfilling up the pores of the working day\u201d by limiting breaks and free time.26 Amazon is today the leading corporate R&D spender \u2013 surpassing, for example, high-tech and aerospace companies.27 This spending is heavily focused on improving the productivity of labor through robotization, artificial intelligence, and algorithmic discipline and coordination. The deskilling and intensification of the labor process through such means facilitates the acceleration of circulation velocity, reduction of circulation costs, and production of surplus value. Additionally, insofar as wage goods are purchased on Amazon, the cheapening of these commodities eases pressure for wage increases among all workers and facilitates the production of relative surplus value across the economy.28\n\n\n\nAmazon\u2019s strong emphasis on R&D investment challenges the idea that it is a non-competitive monopoly firm. In the absence of competition, Amazon would have little incentive to undertake technological innovation. The reality, as we have seen, is quite the opposite. Amazon has been compelled to reproduce its market power by continuously developing \u2013 even revolutionizing \u2013 the technical bases of production and circulation. This underscores the persistence of competitive pressures bearing down on Amazon. Indeed, the market position of any dominant firm emerges and must be continually defended through an ongoing war among all capitalist firms. Any temporary reprieve that barriers to entry may provide to dominant firms should not be overestimated, as inefficiencies resulting from the use of outdated methods or technologies can be exploited by rival firms and new market entrants.\n\n\n\nAmazon\u2019s very high levels of investment and other strategic maneuvers have established the firm as an economic juggernaut, and make it very difficult for other capitals to challenge its dominant position. Amazon\u2019s continuous development of the technical bases of production and circulation mean that any potential rivals must undertake extremely high fixed costs in order to pose a serious challenge. In addition to financing its own in-house R&D operations, Amazon operates an internal investment fund for undertaking strategic acquisitions of firms that have developed critical new technologies. The fact that Amazon can purchase these firms without needing to borrow, but can do so effectively \u201cfor free,\u201d constitutes a major competitive advantage. The objective, of course, is to ensure that Amazon controls any innovative technologies that could potentially challenge its dominance.\n\n\n\nAmazon has supplemented the low margins of its retail business through aggressive diversification, including investing in AWS as well as major acquisitions in media and streaming services. These operations are strategically integrated such that the whole is more valuable than the sum of its parts. Thus, Amazon entered the streaming video sector as the market leader, surpassing Netflix, as its 200 million Prime members were automatically subscribed to Prime Video (which is now also being offered as a standalone service, including versions with and without advertising at different price points). Amazon\u2019s purchase of MGM also yielded not only a high-margin business but also one that has been vertically integrated with its streaming service, producing content that can be cheaply featured on its platform.\n\n\n\nMainstream economics assumes that competition declines as the units of capital become larger, with \u201cperfect competition\u201d giving way to increasingly \u201cimperfect\u201d competition over time. The reality, as Marx argued, is that larger investment in fixed capital does not impose insuperable barriers to entry. On the contrary, the organization of capital on an increasing scale into gigantic corporations tears down barriers to the operation of the forces of competition. This especially the case as the financial system enables the competitive circulation of investment and allocation of credit across all sectors of the economy.29 As a result, while \u201ca growing number of relatively small capitals will be forced to the wall, those larger capitals that continue to survive and expand will continue to do battle on an ever-enlarging scale.\u201d30 Far from monopolistic stagnation, competition constantly drives the dynamic restructuring of all economic sectors through the development of new technologies, new organizational forms, new substitute products, and new entrants.\n\n\n\nThe case of Amazon perfectly illustrates how market power and economic concentration do not negate capitalist competition. Despite the conclusions of mainstream economists and policymakers as well as some on the left, it is impossible to conclude that Amazon\u2019s power has in any way mitigated the forces of competition.31 As we saw, Amazon defends its dominant position by investing to build up and reproduce barriers to entry, preventing other capitals from replicating its structure and challenging its market dominance. However, Amazon also demonstrates the ephemeral nature of these barriers and the continued dynamism of capital even in the most concentrated markets. As Amazon enters and competes across sectors, it challenges what might be seen as the most monopolistic firms, not only including Wal-Mart, but also Netflix, Microsoft, Google, FedEx, and Disney.\n\n\n\nAmazon thus not only exemplifies the turbulent process of achieving market power but also highlights the reality that even a dominant market position is always only partial, and must constantly be defended amid the relentless competitive dynamics of capitalist restructuring and innovation. A decade ago, it might have been argued that FedEx and UPS held monopolistic positions; today, Amazon delivers more parcels than either of these firms.32 Similarly, Wal-Mart\u2019s market position might have been thought unassailable before Amazon totally upended the retail sector based on a combination of technological change, organizational innovation, and market strategy. Equilibrium and stasis are myths of neoclassical economics textbooks; they bear no resemblance to the reality of modern corporate capitalism.\n\n\n\nCrucially, this means that Amazon is vulnerable. Amazon has constructed a unique infrastructure for efficiently circulating commodity capital. Yet this uniqueness should not be overstated. Amazon\u2019s model could be replicated or replaced, and it faces relentless pressure from other firms racing to accelerate circulation and delivery. Some aim to improve their own logistics, while others form partnerships with firms such as UPS, DHL, and FedEx offering 3PL or delivery services.33 In fact, the integrated nature of Amazon\u2019s model means that a challenge could have wide-ranging effects on its market position. Furthermore, as Amazon increasingly markets \u201cunknown\u201d products from low-cost 3P sellers, space has opened for rivals to emerge in particular markets.34 Though possibly offering slightly longer delivery times, consumers may perceive these alternatives as more reliable. Meanwhile, it has sought to undercut competitors through price competition, which is internalized within the firm\u2019s very structure.\n\n\n\nIn theory, there should be significant space for workers to win wage increases from monopoly firms, whose very high profit margins mean that they may be willing to trade increased labor costs in exchange for labor peace \u2013 effectively \u201cbuying off\u201d workers with higher wages. Moreover, their so-called \u201cmonopoly pricing power\u201d would supposedly allow them to pass on higher wages by raising prices. That Amazon continues to face competitive pressures, on the other hand, means that we should not be surprised by its ruthless suppression of worker struggles. But this also points to opportunities for workers to disrupt the firm\u2019s operations. If Amazon\u2019s competitiveness depends upon its ability to compress circulation time, impeding the rapid circulation of commodities by slowing down or even altogether suspending the functioning of variable capital \u2013 that is, labor \u2013 would seem to be a potentially powerful weapon.\n\n\n\nAt the same time, as Sam Gindin has pointed out, Amazon\u2019s ability to sustain significant surplus capacity through massive investment allows it to circumvent and undermine smaller-scale or more limited blockages such as those envisioned within the \u201cchoke-point\u201d approach that has become influential in strategic discussions about working class power in the logistics sector.35 Absent the formation of large groups of organized workers capable of undertaking a larger-scale and longer-term disruption, this view holds, the most effective strategy is to mobilize smaller numbers of militant workers positioned at strategic points within the production-circulation process. Yet if Amazon can quickly and cheaply redirect the flows of commodity capital elsewhere, such a strategy seems more like a recipe for guaranteed defeat, which can only result in dampening worker activism rather than catalyzing a broader struggle.\n\n\n\nBut, as Gindin also emphasizes, scale alone is not enough. Restricting worker activism to routine collective bargaining, as in the \u201cbusiness unionism\u201d model of the large unions, grants Amazon ample time to prepare for strikes or other job actions, ensuring that it operates from a position of strength. The adaptability afforded by Amazon\u2019s investment strategy means that workers must build equally dynamic capacities for disruption. Amazon\u2019s model of minimizing delivery time by warehousing goods near major urban centers highlights the potential effectiveness of a regional organizing strategy, in which workers maximize their leverage within specific zones of circulation. And, given Amazon\u2019s imperative to accelerate circulation, such struggles would be most effective if they extend beyond wage bargaining to demands for greater control at the shop-floor level. All this points to the need for a fundamentally different organizing model than that of the big unions.\n\n\n\nFCs are central to Amazon\u2019s circulation of commodity-capital: receiving inflows from sellers and suppliers and holding the bulk of the inventory, which flows out to SCs and delivery centers once it is purchased. As such, they are critically important for sustaining its competitive dominance through the continuous compression of circulation time and have particular strategic significance. Yet the scale of these facilities suggests that it is not sufficient to merely mobilize a \u201cmilitant minority\u201d of workers to wield power there; rather, this requires broad and deep organizing to mobilize large numbers of workers. Moreover, Amazon\u2019s dominance ultimately rests upon the efficiency of its entire logistics operation, from the time it gains possession of commodity-capital to the moment goods are transported to the consumer\u2019s door. It is therefore possible for workers to exert pressure on Amazon in a variety of different ways \u2013 or, better yet, at many points simultaneously.\n\n\n\n\n\nReferences","author":{"name":"aws-admin","link":"https:\/\/amazonworkersolidarity.ca\/author\/aws-admin\/"},"date":"Oct 9, 2024","dateGMT":"2024-10-09 21:19:40","modifiedDate":"2024-10-14 12:14:59","modifiedDateGMT":"2024-10-14 16:14:59","commentCount":"0","commentStatus":"open","categories":{"coma":"Amazon's corporate interests<\/a>, Fulfillment Centres<\/a>, Research<\/a>","space":"Amazon's corporate interests<\/a> Fulfillment Centres<\/a> Research<\/a>"},"taxonomies":{"post_tag":""},"readTime":{"min":35,"sec":2},"status":"publish"},{"id":421,"link":"https:\/\/amazonworkersolidarity.ca\/2024\/07\/23\/amazon-ontario-quebec\/","name":"amazon-ontario-quebec","thumbnail":{"url":"https:\/\/amazonworkersolidarity.ca\/wp-content\/uploads\/2024\/07\/1.png","alt":""},"title":"Notes on Amazon in Ontario and Quebec","excerpt":"","content":"Amazon has, over the last decade, steadily moved towards regionalizing its operations so as to get products to its customers as quickly and cheaply as possible. This has meant making massive investments in its \u2018fulfillment centres\u2019. This pattern is clear in most major US markets and also in the Greater Toronto Area (GTA). But it does not hold for Montreal. Below we summarize the position of Montreal relative to Toronto.\n\n\n\n1. Amazon workforce\n\n\n\nAmazon has about 43,000 workers in Canada according to its 2023 data (this includes tech workers). About 25,000 of these workers work in Ontario (almost 60%) and the GTHA alone (Greater Toronto Area plus Hamilton) includes about 21,000 workers - almost 1\/2 of Amazon\u2019s total Canadian workforce.\n\n\n\n2. FCs in Canada\n\n\n\nAmazon has 20 FCs in Canada and over half (11) are located in Ontario and of these, 7 are in the GTHA. Another 3 FCs lie between the GTHA and Quebec (1 in Belleville and 2 in Ottawa). Quebec has only one FC (plus another warehouse that is sometimes categorized as sortation centre and other times as a small FC). There are reports of another FC being on the way. Quebec also has 5 smaller operations (sortation centres and delivery stations) with one of them representing the only Amazon facility with union certification in Canada.\n\n\n\n3. Comparing Amazon in the GTHA and Greater Montreal\n\n\n\nGreater Montreal (4.3 million) has a bit less than 60% of the population of the GTHA but the GTHA has 7 facilities to Montreal\u2019s single facility. And the overall employment ratio is about 11\/1. Clearly the Montreal market, unlike other major markets, is being met from facilities in other regions: Toronto, Ottawa, and the New York\/New Jersey region (New Jersey has about the same number of FCs as all of Canada).\n\n\n\nAWS Notes on Amazon Quebec & OntarioDownload","author":{"name":"aws-admin","link":"https:\/\/amazonworkersolidarity.ca\/author\/aws-admin\/"},"date":"Jul 23, 2024","dateGMT":"2024-07-23 19:57:50","modifiedDate":"2024-10-13 16:43:58","modifiedDateGMT":"2024-10-13 20:43:58","commentCount":"0","commentStatus":"open","categories":{"coma":"Fulfillment Centres<\/a>, Research<\/a>","space":"Fulfillment Centres<\/a> Research<\/a>"},"taxonomies":{"post_tag":""},"readTime":{"min":1,"sec":32},"status":"publish"}]