Monday, July 23, 2012

 

Amazon?

I did not see this coming.

Amazon.com is offering to pay up to $2,000 per year towards educational costs for its warehouse employees if they pursue Associate’s degrees in certain high-demand fields, including fields like aircraft mechanics that have no obvious value within the company.  

I had heard that Amazon was giving up its fight against collecting state sales taxes, so that it could build warehouses in more states and speed up its delivery.  But I did not see this coming.

The contrast with, say, Wal-Mart is instructive.  Wal-Mart contracted with a single national for-profit provider -- American Public University -- and only pays for employees who enroll there.   As the 800-pound gorilla of a customer, Wal-Mart will likely exert tremendous influence over APU’s course offerings, which are offered entirely online.

Instead, Amazon is giving employees the means with which to choose where they want to study.  The programs supported have to be designated by the Bureau of Labor Statistics as high-demand and high-wage, and the providers must be accredited, but bachelor’s and master’s degree programs are ineligible.  Between those rules and the low reimbursement, I’d guess that most of the people who take advantage of this will do so at community colleges.  $2,000 per year won’t go far at many four-year schools, and many of the applied programs they’re supporting tend to be found in the community college sector.  

So far, I’m liking this.  Increase my state’s tax revenues while also providing jobs here, send my college motivated adult students, and get me my stuff quicker.  I’ve certainly heard worse ideas.

I can guess that part of the motivation stems from heading off bad press in new locales about working conditions in the warehouses.  But honestly, it’s hard to get mad at a company for responding to public concerns about how it treats workers by treating them better.  If anything, that strikes me as positive.  

Given that employees have to work in a warehouse for three years before becoming eligible, and given the physical demands of warehouse work, I doubt that we’ll be inundated with people.  But the ones who do show up will likely be very motivated, conscientious students, and those are always welcome.  And if some folks are able to move from the warehouse to a higher-paid occupation with minimal student loan debt, again, I find it hard to get terribly upset about that.

Of course, the long term outcomes may not be entirely great.  Should Amazon fall on hard times, there wouldn’t be much stopping it from changing its mind.  If the “speedy delivery” thing really takes off, the local Best Buy should be very, very worried.  If Amazon pushes other retailers into the same death spiral that it did Borders, the long-term effects on local jobs and tax revenues could be negative.  I’m probably not the only shopper who sometimes uses Best Buy as a showroom for stuff I later buy on Amazon.  Take away the store’s advantage of speed, and the showrooming effect could get even worse.  And on the student side, Bureau of Labor Statistics are notoriously imperfect, so it’s possible that someone could take advantage of the program and emerge with the wrong credential at the wrong time.  

But those risks mostly exist anyway.  In the meantime, Amazon is willing to create jobs in new places, to commit to helping employees attend community colleges, and to pay taxes.  

I know there’s no such thing as an unalloyed good, but this strikes me as one of the better ideas to come along in a while.  Wise and worldly readers, am I reading this right, or have I been bamboozled?

Comments:
It's... a step forward, I suppose. $2000 for workers who have finished 3 years of grueling warehouse labor seems like a very small bonus. And the message seems kind of odd- "if you can survive our crappy job for 3 years, we'll help you get a job somewhere else that doesn't suck so much!" Why not just use that money to raise their employees own wages, instead?
 
This strikes me as an incredibly cynical move on Amazon's part. Only full-time, permanent workers are eligible for the program- and Amazon won't say what percentage of its fulfillment center employees are full-time and permanent. It's also not clear if this program will include fulfillment centers which contract with Amazon but are owned by a third party, where many of the worst labor abuses occur. In addition, I would LOVE to see data on how many employees last three years in a fulfillment center. I'm betting...not that many of them.

Insult to injury: Many fulfillment centers start mandatory overtime during the Christmas season, which is roughly October to December. Or, as students call it, "midterms to finals." This sounds like a recipe for disaster for the students who DO manage to take advantage of this program, particularly if they try to take more than one class per semester: get your $1000 from Amazon, borrow another $1000 for the second class or for materials/lab fees, wash out in November when you've missed enough classes to get a mandatory drop, owe payments on $1000 immediately. Ugh.
 
link?
 
I want to echo the other comments. This is an extraordinarily cynical and doubtless cost-efficient move by Amazon. It will cost them very little (what, they couldn't even offer some bigger-money scholarships to 4-year colleges as well? Do Amazon employees not belong at 4-year colleges, ever?) especially given that so few employees last anywhere near long enough to qualify precisely because they're such awful employers.

But they hope to gain great PR for having done it; something this blog goes someway to providing, unfortunately.

There WAS a time when companies accepted that they had to both pay their taxes and train their workers.
 
Agreed with JJ. One of the big reasons Amazon's labor practices are under scrutiny is that they're so reliant on temp labor - so many of their workers don't count as "employees" and won't be eligible for this. How about basic levels of job security and benefits for the jobs people are IN? "Benefits" aren't supposed to mean "extras based on whatever seems cool or cheap to the company," there are standard packages and protections that Amazon is refusing to provide in its reliance on temporary workers.

It would be one thing if they were already doing OK, this would be a great extra investment in employees. But it doesn't make up for not even covering the basics of having employees.
 
I found this article on what it's like to work in an Amazon-esque shipping warehouse instructive: http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor
 
I agree with all of the other commentors. Doing anything less than covering room, board and full tuition on day 1 is total crap.
 
For purpose of comparison, UPS warehouse workers have access to a similar program. And the job itself is attractive to students because a FT shift is 5 hours, not 8. But then, the reason the shift is short is because the work is so hard; not many last beyond orientation, and this is even a union workplace (not the best union in the world; a Teamster local). However, for those who can keep up with the heavy lifting, I see no problem with the benefit; UPS actually likes to hire students and this is a way to attract them even more.
 
I agree joe@5:45AM, it would be much better for them to offer nothing at all than to not cover the cost of room and board for a full time permanent employee. (sarcasm)

What CC were you thinking of, JJ@7:58PM? There might be private AS programs that charge $2000 per class, but that money would go a LONG LONG way at my CC and even further in California.

The best thing about this proposal hasn't been mentioned by anyone: it frees working students from the straightjacket of taking 12 hours to qualify for any kind of aid.

I see this as a kind of retention bonus for warehouse employees who would cost a lot to replace. I don't see it as a PR stunt, because I didn't hear anything about it until read it in DD's blog.
 
Congrats DD! You've been Instalaunched!

http://pjmedia.com/instapundit/147282/

Good points from CCPhysicist.
 
in reply to CCPhysicist, just because you first heard of it here (as did I) doesn't mean it's not a PR stunt. It's how many more times anyone who challenges their terrible employment practices are going to hear about this piece of meaningless window-dressing, and for years to come, that matters. And it will be a lot.

We've had green-washing and pink-washing, I guess this is ethics-washing. And few who've read the details of life in an Amazon warehouse will fall for it.
 
@CCPhysicist, I was being sarcastic. I think this is a good thing.

@Everyone else: Just because it could be better doesn't mean that this is bad. Calling this ethics washing is a joke. It's a crummy job. It's a hard job. But now it's compensated just a little bit better. How is that a bad thing?
 
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