Cheap Justice

Writing about the opening of an Amazon fulfillment center, The Economist says:

Alas, the influx of jobs has not boosted wages for the region’s forklift drivers and order-fillers. In the years since Amazon opened its doors in Lexington County, annual earnings for warehouse workers in the area have fallen from $47,000 to $32,000, a decline of over 30%

In a story from its January 2018 print edition, The Economist takes Amazon to task for underpaying its employees, probably. What “underpaying” means is unclear, coming from a publication founded, one assumes, on economic principles. In the online edition the article carries the suggestive sub-head “Is the world’s largest online retailer underpaying its employees?” Then, after five paragraphs of implying that Amazon somehow systematically causes people to lose income, The Economist finally allows that:

Another possible explanation for Amazon’s pay is its reliance on unskilled workers with minimal qualifications. David Neumark of the University of California, Irvine, who has written about the impact of Walmart’s growth on retail wages, says Amazon’s highly automated warehouses may not require as many workers who can, say, operate a pallet jack.

Hmmm, maybe.

A forklift carrying a load can total about eight tons (16,000 lbs or about 7,200 kg). The actual weight can vary quite a bit depending on what’s on the pallet and how high the pallet will need to be lifted, among other things, but just to get a sense of the weight, that would be around four times the average car in the USA. Heavier objects are harder to stop, and forklifts often move in spaces where there are literally only inches (two or three) to spare between the vehicle and something that isn’t meant to be hit. Forklifts do move much more slowly than cars on public roads, but when it comes to damaging things, 16,000 lbs will crush most things even if it is moving slowly.

Forklifts are mainly used to move pallet loads, and pallets are usually stacked with cases or cartons.

Amazon is in the business of shipping usually small quantities of diverse things going to diverse places. While Amazon might consolidate parcels going to the same distribution point on a shared pallet as the last stage in the shipping process before loading onto a truck, most of the handling of objects in an Amazon warehouse involves people handling the items directly, one at a time or one case at a time. Rather than sending a forklift to go fetch a pallet of corn chips to be sent to a corner store, Amazon will dispatch a person to pick one fitness tracking band and one pair of earbuds.

In short, Amazon’s warehouses will be designed mainly for human traffic. E-commerce and the mail order catalogs of yesteryear will general have this human-traffic based warehouse design.

But most of our warehouses have been built for traditional supply chains, which mostly move pallet loads of goods: pallets upon pallets of frozen chickens from the slaughterhouse to the grocery distribution warehouse, and then from there one pallet for this store, one pallet for that store, etc, etc.

So it is quite likely, not just possible, that on average, Amazon employs fewer forklift drivers than the pre-Amazon average warehouse.

It is also quite likely that a person required to safely operate a 16,000 lb vehicle in tight space would be paid more than a person required to walk, read labels, and pick things up.

The complain that Amazon lowers wages for “warehouse workers” is like complaining that McDonald’s lowers wages for chefs, because after a McDonald’s opened on the same block as Le Snootier’s, average wages for restaurant workers on that block went down. Nobody at Le Snootier’s got paid any less; but people who were not qualified to work at Le Snootier’s got paid more than they were getting before.

This sort of insinuation that Amazon is somehow taking away from people something that they already had is familiar work for rabble-rousing, any time someone needs a rabble roused, but it is particularly deplorable for a publication calling itself The Economist. That highly relevant possibility that perhaps apples are being compared with oranges was admitted somewhere in the article does not absolve them of headlining the question and leading off with all kinds of spurious facts.

The “average” wage for warehouse workers may have been lowered because of the increase in the number of workers who are doing jobs that have always been priced at the lower end of the range. If you are trying to examine the effect that Amazon has on “warehouse workers,” why not look at the total wages paid to all warehouse workers after Amazon opened a warehouse in a given area? Or if you are trying to examine the effect on the community, why not look at total count of people employed, or average income per capita? Those measures may very well have gone up. But we don’t know, because The Economist didn’t consider them worth examining.

Is Amazon virtuous in all of its dealings? I hardly think so. But let it be found guilty of crimes it has committed, rather than being found guilty because it has done well for itself.

Imagine that Bob’s truck has gone missing. “I think Frank stole Bob’s truck,” I say.

“Why do you think Frank did it?” you ask.

“Well, Frank buys cheap boots. A guy that buys cheap boots seems like the kind of guy that would steal a truck,” I answer.

Maybe Frank did steal the truck! But the evidence offered is utterly irrelevant to the charge.

The Economist should be heartily ashamed of printing such insinuation-mongering.