On Amazon, Automation and Antimonopoly

Amazon's threatened mass layoffs speak to its power - and the need to end it.

Automation has been a blue collar boogeyman since the dawn of industrialization. Some threats of lost jobs have been real, many more imagined -- and certainly nothing as bad for labor as the disastrous effects of NAFTA, globalization and many hundreds of unchecked corporate mergers.

But the automation boogeyman feels very real this time.

Last week, the New York Times broke the story that Amazon is planning to slash as many as 600,000 jobs over the next several years as it replaces much of its human workforce with robots and AI tools in its warehouses, fulfillment centers and delivery hubs. For the country’s second-largest private employer, it’s a shocking number of future job losses that will reshape a swath of the American workforce and inflict harm in towns across the country.

Amazon’s internal plans to gut its logistics workforce offers a lesson for the antimonopoly movement. The deep impact of Amazon’s proposed job cuts on workers and communities is a clear display of the company’s immense monopoly power. It’s something that two key elements of the antimonopoly movement - antitrust and organized labor - could have avoided, and could possibly stop.

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The move toward robotic automation in its warehouses is not a new push from Amazon; the company bought its way to warehouse robotics domination more than a decade ago. But it is accelerating. At its fulfillment centers, the main hubs of its employment and its most automated facilities, employment has already fallen over the last few years, according to OSHA statistics reported by the Guardian. It already operates more than a million robots across its logistics system. Amazon’s robot revolution has been a long time coming.

Still, the reported numbers in the company’s internal documents are staggering. Over the next two years, accelerating automation could stop new hiring for more than 160,000 positions. By 2033, that number could rise to 600,000, reducing the company’s logistics workforce by more than half. The company ultimately wants robots to do a full three-fourths of its warehouse work, according to internal Amazon documents the Times reviewed.

Amazon jobs are far from great. They’re among the most dangerous jobs in the country, including jobs like working on power lines and being a cop. Amazon warehouse workers are about twice as likely to suffer injuries on the job AND get paid less than workers at a rival warehouse -- especially a unionized warehouse run by UPS or the postal service.

Having robots do the backbreaking work at Amazon warehouses instead of vulnerable, underpaid workers doesn’t sound like the worst idea. The problem is that we’ve painted ourselves into a proverbial corner in which Amazon has acquired a kind of unilateral power to dictate the lives and livelihoods of millions of workers and hundreds of communities around the country.

Before the neoliberal decimation of American industrial capacity, we were a country of factories and unions. We made things here, and the workers who made those things got paid a fair wage to do so. Those fair wages helped support the communities in which they lived; the banks, restaurants, bars, barbers, bookstores, grocers and every other variety of shop and service in a community existed because industrial America existed and unions helped raise wages for workers throughout a community and across the economy.

As America de-industrialized throughout the neoliberal heights of the 1980s and 1990s, driven by a combination of offshoring and government-approved, blatantly anticompetitive mergers, the industrial landscape of the country changed. Driven by an economy that largely imported finished products to meet the demands of online shopping, warehouses became the new anchor for company towns. The number of warehouses in America has grown by 75 percent between 1989 and 2019, and came to dominate employment near major cities -- the suburbs of New York and Chicago, the Inland Empire of California, Dallas, Atlanta and beyond. We transformed from a country that makes things to Warehouse Nation.

For a time, those warehouses at least somewhat replicated the high unionization rates found in industrial America. In 1983, nearly 30 percent of all warehouse workers were covered by a union contract. That rate fell steadily through the 1990s -- and then came Amazon.

The company used a litany of anticompetitive tactics, including sustained predatory pricing, to grow its ecommerce empire, and by the time most shoppers and online sellers came to rely on its monopoly shopping platform, Amazon began forcing its sellers to use its shipping and storing business or lose the lucrative “Prime” badge on their products. By tying its retail monopoly to its growing shipping and storage business, Amazon has become the largest private logistics business in the country.

Amazon is also a legendary union buster. Despite serious efforts to unionize Amazon warehouses and delivery facilities around the country, the company’s nasty tactics have beaten back nearly every push to organize. Little surprise, then, that by 2022, union coverage rates in warehousing had fallen to just 5 percent, according to Bureau of Labor Statistics data compiled by Union Stats.

So that’s the picture of Amazon today: A brazen monopoly that has a massive, ununionized workforce vulnerable to whatever shareholder-focused whim the company might indulge. Its plan to shed the majority of its workforce is not hypothetical; just this week it began laying off 30,000 corporate workers, and that’s just the start. Yes, lots of companies are shedding workers amid broad economic struggles; UPS, Amazon’s unionized rival, has cut 48,000 workers this year. But because of Amazon’s vast scale and economic footprint, the coming culling of Amazon’s workforce will be devastating.

There’s very little silver lining here. There is no fully automated luxury communism waiting for us on the other side of Amazon layoffs, in which robots work so that we may reap the benefits of their productivity and live free to pursue our dreams. Amazon’s decision to automate their warehouses will instead push hundreds of thousands of Americans further into poverty. And since Amazon often operates in de facto company towns in which Amazon is the main employer, the hollowing out of small town America that began with corporate consolidation and the decline of domestic manufacturing will accelerate.

The forces of antimonopoly have tried to chip away at this power. Unions have fought mightily to organize Amazon logistics facilities for years -- Teamsters, the Retail Wholesale and Department Store Union, and the less formal Amazonians United. They’ve made inroads for sure, including the successful union vote at the JFK8 Fulfillment Center, now represented by Amazon Labor Union Local 1. But labor as a force opposing monopoly power must be widespread enough to prevent Amazon’s push to replace workers with robots. Union contracts can and do contain restraints on automation and, increasingly, the use of AI to replace workers. But one or even a few organized shops can’t stop the kind of workforce reduction Amazon is planning. Realistically, doing that would require a couple of different policies that cut at the heart of monopoly power: A strong National Labor Relations Board and labor law that could truly deter Amazon’s union busting and force the company’s neutrality when its workers organize; and a labor law that permits sectoral bargaining -- organizing workers across an entire industry rather than shop-by-shop. That’s a true antimonopoly labor policy.

Antitrust, the other key antimonopoly policy here, remains in play. The Federal Trade Commission and scores of states have sued Amazon for abusing the power of its monopoly retail platform. One of the FTC’s central allegations is that Amazon leverages its ecommerce dominance to force third party sellers on the platform to use Amazon’s own shipping and storage business. Amazon tying success on its monopoly ecommerce platform to its logistics business is the engine that has allowed it to become the country’s second-largest private employer, setting the stage for these planned mass layoffs.

But if all goes well for the government, a court will decide what to do about Amazon’s monopoly to prevent its abuse in the future. One possibility is forcing Amazon to spin off its logistics business; after all, the one surefire way to break a monopoly tying arrangement is by forcing a company to break itself up. If the judge overseeing the FTC’s lawsuit does indeed decide that Amazon must sell off its logistics business, the court could force Amazon to keep that business intact, employees and all, in order to give whomever takes over the newly-independent company the best chance to compete after breakup. That could include preserving jobs.

What’s more, an independent, formerly-Amazon logistics company could be far easier to organize without its union-busting parent company running the show. The FTC could also ask the court to ensure that whomever comes to operate the new, independent company honors existing union votes and remains neutral if other shipping and storage facilities organize. This would ensure the company operates on a level playing field with its unionized rivals, would make it more competitive as a buyer of labor, and could potentially help save jobs in the process.

This is all a little theoretical and any decision in the FTC’s Amazon case is a long way off, with trial set for February 2027. But it’s crucial that workers, policymakers and law enforcers continue to work to break down Amazon’s power, now and in the future. It’s not just jobs on the line, it’s that one company has gained such unilateral power over so much of the real economy. Antimonopoly, in all its forms, is key to stopping that power from growing.

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