Fulfillment: Winning and Losing in One-Click America

Amazon has been closely tied to many of the changes in society today. The big coastal cities have boomed. Meanwhile, small town America is in bad shape. Most well-paying industrial jobs have long since left. The new economy jobs tend to focus on the already well-endowed big cities. (Tech workers prefer to go to cities that already have a large number of tech jobs.) Local retail has also been moving away from small towns.

With little job opportunities available, small towns are eager to have an Amazon fulfillment center located nearby. Alas, Amazon plays off the desire for jobs by extracting significant subsidies. Thus, the city typically gets very limited tax revenue from the Amazon location, yet still need to provide the appropriate services. Amazon engages in great secrecy in the process.

Data centers are also sprouting up in multiple locations. These typically consume huge amounts of electricity, but do not generate many jobs. In some cases, the other ratepayers are forced to pay for the extension of the high voltage lines to the location.

Amazon has also made extensive use of "third parties". Many workers start out as contractors. Amazon delivery drivers are almost all independent contractors. The Amazon website also includes many third party sellers. When Amazon pushed into business procurement, they included the talking point that they could still buy from their local provider on Amazon's site. However, the provider would now be required to pay a commission to Amazon. (And Amazon now has information about the provider and the ability to undercut them.)

The book includes many anecdotes about people that have negative changes in their life connected to Amazon. Bethlehem Steel had well paying union jobs. However, they got very fat and content, with both executive and union payed extremely well. International trade and technological advances led to the fall. There are many other jobs that fell similarly, leaving limited opportunity for those without college educations. The fall of family structure and drug addiction makes life even more miserable.

Amazon is a huge company with a number of small organizations. Each group tries its best to maximize individual profitability. They are like small companies trying to get the best deal, while having a giant company behind them. This can lead to large negative impacts without even trying. Is it time to split it up?