Has Amazon Contributed to America’s Political Unraveling?

CHRISTIANE AMANPOUR: Turning now to the power of big tech. Amazon is the second most trusted institution in the United States, trailing only the military, according to Georgetown and New York University’s recent poll. But with such influence, how is it reshaping America? That is the subject of a new book from the award-winning journalist, Alec MacGillis in “Fulfillment: America in the Shadow of Amazon.” MacGillis examines the company’s impact on the wealth and poverty of towns and cities across the country. And here he is speaking to Hari Sreenivasan about his new book and what’s behind that easy one click purchase.

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HARI SREENIVASAN: Christiane, thanks. Alec MacGillis, thanks so much for joining us. Now, there are a lot of books out there about what it’s like to work inside an Amazon warehouse or what the experience is for employees or even how a package gets to your house. But you’re using this time, really, almost to take a look at, well, America and how it’s changing through the lens of Amazon. Why did you do that?

ALEC MACGILLIS, AUTHOR, “FULFILLMENT: AMERICA IN THE SHADOW OF AMAZON”: Because over the last 10 years or so as a national political reporter, I was traveling around the country and I was just scrolling increasingly worried and aware of these growing disparities, regional disparities in America. We’ve always had richer and poorer places, of course, but the gap between what I call sort of win or take all cities and left behind places this America has gotten a lot, lot wider in recent years and has had a big effect on our politics, was a big reason why Donald Trump got elected. And I wanted to write a book that got at those disparities and why they’re so unhealthy for our country, and got at it in a deep kind of narrative kind of way. And at the frame that I chose to use to tell the stories of those disparities was Amazon. I use Amazon as a kind of lens onto the country, showing the role that the big tech giant like that is playing and exacerbating these inequalities and these gaps that are really so — just such a big role for factor and why things have sort of kind of unravel politically in America.

SREENIVASAN: Look, there are a lot of these changes that were happening between the coasts and the heartland, so to speak, that happened before Amazon. So, why look at it through this lens? What did Amazon do to these changes? Did it add fuel to them?

MACGILLIS: It did. And to put it very kind of crudely, what you’ve seen with the tech giants, not just Amazon but also Google and Facebook and some of the others is that you have a lot of commerce and business activity and this commercial life that used to be dispersed all around the country in different sectors that has now kind of hoovered, kind of sucked into the cities where those companies are based. We’ve seen it happen in media, my business, our business where you’ve had media ad revenue that used to be spread all around the country, in both newspapers and TV and radio, now being increasingly kind of drawn into Silicon Valley where Google and Facebook are based, two companies that now control the vast majority of digital ad revenue in this country. So, you’ve seen that happen in media and then you’ve seen it happen in retail where you used to have retail commercial life spread all around the country, both in terms of, you know, big chains, mom and pops, regional department stores, all this activity that now, as we’ve shifted more and more to e-commerce, so much of that wealth and prosperity in that sector has been just kind of hoovered into a city like Seattle where Amazon is bases or Washington, D.C., where Amazon is now building a second headquarters.

SREENIVASAN: You know, one of Amazon’s defenses is going to be, listen, we are one of the most trusted institutions in America, Democrats and Republicans who don’t agree on much agree that they have faith in us, that, frankly, we wouldn’t have earned this trust if it wasn’t for the fact that we did our jobs. We deliver people what they want very easily and quickly. So, what’s the cost here?

MACGILLIS: Well, it’s absolutely true. We have these surveys, these remarkable surveys showing just how high Amazon ranks as a sort of admired trusted institution in American life. And what’s striking about that is that, that they ranked highest, actually, among Democrats. So, you have this very interesting tension where Democrats, you know, broadly defined, rank and file Democrats, liberals in America, are actually even more kind of fond and dependent on this company and it actually become more so — even more so in the past year or two during the pandemic where Democrats, as we know, took a much more cautious approach, certainly, to COVID and were much more likely to buy things online, to sort of hunker down and kind of exist in a one click kind of way with other (INAUDIBLE) sort of delivered to them. And so, it actually became even more aligned on Amazon. At the same time, you have Democrats, some Democrats in Washington, elsewhere who are very worried about Amazon’s growing dominance and people like Lina Khan, who President Biden just recently appointed to chair of Federal Trade Commission, Elizabeth Warren and others who really see Amazon and the other tech giants as becoming the new monopolies of our time and believe that something has to be done. And what my book seeks to — one of the things my book seeks to do is to show that consumer who has become very reliant on Amazon in recent years, to show them the reality of what’s behind that easy one click, whether it’s the really, really tough conditions in the warehouses or all the tax avoidance that the company does and the effects that has on the local fabric being weakened or the effect on small businesses that are now losing more and more of their business and their profits to Amazon. The book really seeks to show you what lies behind it all. But it’s true, the reliance has grown considerably, the consumer dependence has grown considerably these last couple of years.

SREENIVASAN: I also wonder, as you point out, now with this administration in place and Lina Khan heading the FTC and certain comments that President Biden has made, is there going to be a change in whether and how we regulate Amazon?

MACGILLIS: There’s a lot of discussion now and real movement in Washington, both on the legislative side, in Congress where you have some bills moving through the House right now that would, in various ways, break up or rein in the tech giants. And then, you have — also on the regulatory side, you have Lina Khan and some others in the administration taking a very close look, really scrutinizing these new quasi monopolies or monopolies and what can be done about them. But you hit on a very important point about the fact that they have now — these companies have now become so central in our lives, they actually have (INAUDIBLE) utilities and that’s — it’s one reason that one of the approaches being contemplated, there’s sort of two different avenues being contemplated for dealing with this dominance now. One is to somehow break them up. And there are arguments for doing that. But it’s tricky because they’ve gotten so big and so central to our lives that it’s almost hard to imagine life without Google, life without Facebook. Still, other approaches being contemplated are to actually treat them as we treat utilities and take what’s called a common carrier approach to them where their acceptance, their dominance in our life is accepted as a fact just the way the railroads or the telecom or an earlier era were accepted as a fact as just things that — or have become essentially like utilities. And so, we accept their dominance and then, we regulate them heavily. We actually start to treat them as we would the water utility or the rail or other facets of life that are just now basically unavoidable, in a sense. And so, that’s the other approach that could be taken.

SREENIVASAN: One of the interesting things about your book is it also almost chronicles the role and power of labor. I mean, here’s the second largest employer in America with close to a million employees. Most of them working in warehouse jobs for an hourly wage. And yet, still no unionization. I mean, most famously, there was an effort in Bessemer — at the Bessemer plant which failed. And now, it’s going back up for a vote and employees there are going to have another chance to vote. Do you think that that vote will change because the company says, we’re looking forward to it?

MACGILLIS: The fact is that the laws in our country have, for decades now been — the deck has now been so slanted against labor organizing, that it makes it really tough to organize in the private sector. There’s so much that a company like Amazon can do — can legally do to exert pressure on workers and dissuade them against organizing. That said, this fight matters a lot. And this really is — as you mentioned, Amazon is now second largest employer in the country, they’ll probably soon surpass Walmart to be the largest one. This — when you talk about sort of the conditions of working in modern America and contemporary America, this is where it’s at, the warehouse has become the new site of massive employment. It really is the — it has replaced, in the sense, the factory or shopping mall as the place where you go to get a job. If you just need a job, you don’t have specialized training or college degree, you’re going to go — you go to a warehouse to get that job. And so, lifting up workers in those warehouses is going to be such a major part of sort of improving the life of working-class America generally.

SREENIVASAN: Amazon often pushes back with the idea that, hey, you know what, we’re paying $15 an hour minimum. That is something that unions have not been able to deliver in several places. Certainly, the national — there has been no national minimum wage increase in a long time. So, why pick on us? Why are we the problem? If we are the second largest employer, look at the good that we’re doing.

MACGILLIS: A couple of points in response to that, and that’s absolutely one of the things I heard from Amazon when I spoke to them for the book. Many jobs — many, many jobs have been created by Amazon, absolutely. Hundreds of thousands of new jobs in this past year or two alone to handle this surge of orders that we all sent to the company. But one always has to remember the broader context of those new jobs. The fact is that there’s been a whole swath of jobs lost with the shift to e- commerce. One of the biggest areas of job loss in this country, much more so than by fellow newspaper reporters or coal miners has been brick and mortal retail, just hundreds if not millions of jobs lost in that sector. And so, these Amazon warehouse jobs are in a sense replacing another form of retail work. The — and we should note, replacing it with a form of retail work that is often much more strenuous, much more socially isolating than the job of the department store clerk needs to be. The — on the pay, absolutely, Amazon has been forced in this tight labor market to raise its starting wages. In some places, it’s now — it’s up to $18 an hour for the warehouse jobs because they really have to compete for workers. The fact of the matter is though, that the reality of those jobs is still bleak. And we know how bleak it is not only through books and reporting like mine and others but also the basic fact that the turnover of this has jobs is extraordinary. The turnover is so high. Most of these warehouses have 100 percent turnover in the course of a year. That suggests that this work is still not what we would hope to be — not what we consider a good job that someone wants to stay at with a career around if they’re leaving those jobs that quickly. And in fact, Amazon actually encourages that high turnover because the more they turn workers over, the less likely they are to build solidarity and organize.

SREENIVASAN: Alec, just so I have it on the record here, when your book came out last year, Amazon’s a statement was, that it has been a positive force in the U.S. economy creating 400,000 much needed jobs last year alone. The truth is, this is their quote, that Amazon has helped lift communities across this country with industry leading pay and benefits including a starting wage of at least $15 an hour and invested billions in COVID related initiatives to keep employees safe and deliver for our communities. You also tell some poignant human stories to try to help illustrate all of this. One is a guy named Bill who worked at a factory in that Baltimore area early on. And then, here he is decades later now working at an Amazon warehouse. Tell us a little bit about Bill Badoni Jr (ph).

MACGILLIS: One of the people I spent a lot of time with is Bill Bodani (ph) who worked for decades in the Bethlehem Steel Mill here outside of Baltimore, largest steel mill in the world. Had all of these different jobs there, often very dangerous jobs. He got injured a few times, but he found such purpose and meaning in the work and camaraderie. He really, really liked the work. That’s why he stayed with it for 30, 35 years. He then went — the mill got shut down. He retired when the mill shut down. Then eventually, a few years later, had go to back to work because he lost his pension. He pensions slashed, so he had to go back to work. He goes back to work at the Amazon warehouse that was built on the exact same piece of land that used to hold this great steel mill. He goes for less than half as much money as he was working — as he was making at the steel mill. He feels — has none of the purpose and sense of camaraderie that he had on the old job, which is completely different kind of existence. And so, I used his story to sort of show you that the transformation of working America and what it looks like in a very human way. He ends up just barely lasting a couple of years at that new job. He’s driving a forklift. He’s under such pressure to deliver more and more palettes on his forklift. He doesn’t have enough time to go to the bathroom. He’s an older guy, he needs to go to the bathroom a fair amount. Finally, a few times, he has go into the corner of the warehouse, park his forklift and, you know, go quickly behind the forklift and hope he won’t get caught, completely undignified, completely different sort of life than he had when he was actually making things at the steel mill on the exact same piece of land.

SREENIVASAN: Give us an idea of how much power a company like Amazon has on Capitol Hill.

MACGILLIS: Oh, just extraordinary level of power. And it goes beyond just lobbies. And Amazon now has second or third largest spending on lobbying — federal lobbying in the entire country. So, you have that core presence. But then, it goes beyond that. You have — Amazon that has now — is one of the great sort of overlooked stories in recent years that I try to get at in fulfillment, Amazon has grown its presence in Washington, D.C. so much, not just through lobbying but all other sorts of ways. The — Jeff Bezos, of course, bought the “Washington Post” some years ago. So, he owns the newspaper. He has — the company has massive federal contracts to — all so much of — Amazon has this whole other arm of the company that beyond selling stuff they also run so much of the Cloud, you know, where the data centers that all of our — so much of our digital life now runs through and Amazon has all these contracts with the CIA and other branches of the federal government to run its Cloud operations. So, you have that presence in Washington. You have the — now, you have the second headquarters that Amazon is building right across the Potomac from Washington to Northern Virginia. You have the enormous mansion that Jeff Bezos bought some years ago, that’s biggest mansion in Washington, D.C. that he’s turned into a kind of salon, a sort of VIP salon to bring everyone together. And, again, exert kind of soft power in the city. So, Amazon’s presence in the seat of our federal government has become enormous in all sorts of ways, and that’s not an accident. The company knows that its biggest threat right now is not so much corporate competition, these are faces so little corporate competition, it’s biggest threat is the threat of federal intervention. So, if you build up the soft power in Washington, then Amazon becomes no longer the big scary tech company but just the company that employs the nice guy who lives next door and — or you see at your daughter’s soccer games, you’re much less likely to feel that this is a — you know, a big scary giant that needs to be broken up.

SREENIVASAN: Alec MacGillis, the author of “Fulfillment: America in the Shadow of Amazon” and also a reporter at ProPublica, thanks so much for joining us.

MACGILLIS: Thanks for having me.