In an ideal world, products would be made to last as long as possible and companies would strive to keep their workers content because such workers are more productive and you want them to stay because training new people to do jobs is disruptive and inefficient. But with unbridled capitalism that demands rising revenues and cutting costs, such a model no longer works.
First came planned obsolescence. Instead of making things to last as long as possible, some items are now built to last for just a limited time so that people have to periodically go out and buy a new item. This is not only expensive, it is bad for the environment, using more raw materials than necessary and filling up landfills.
Then came the attack on workers. Companies realized that long time workers cost more because their wages had risen over time. It became to be seen that profitability could be increased by forcing out older workers and replacing them with entry level people. The temporary loss in efficiency and continuity could be compensated for in lower wage costs. It used to be that the older workers who were forced out were at the higher rungs of the work force, those earning much more than entry level workers, while the lower level workers were spared.
But no more. It turns out that Amazon, a prime agent for introducing inhumane work practices, has decided that even its lowest level warehouse workers need to to pushed out after a few years because the longer they stay, the more they expect from the company in terms of wages and benefits. and the company finds all manner of reasons, some utterly trivial or cruel, for terminating employees.
Not surprisingly, turnover is high.
But even before the pandemic, previously unreported data shows, Amazon was losing about 3 percent of its hourly associates each week — meaning its turnover was roughly 150 percent a year. At that rate, Amazon had to replace the equivalent of its entire work force roughly every eight months.
Some of the practices that most frustrate employees — the short-term-employment model, with little opportunity for advancement, and the use of technology to hire, monitor and manage workers — come from Jeff Bezos, Amazon’s founder and chief executive.
He believed that an entrenched work force created a “march to mediocrity,” said David Niekerk, a former long-serving vice president who built the company’s original human resources operations in the warehouses.
Company data showed that most employees became less eager over time, he said, and Mr. Bezos believed that people were inherently lazy. “What he would say is that our nature as humans is to expend as little energy as possible to get what we want or need,” Mr. Niekerk said. That conviction was embedded throughout the business, from the ease of instant ordering to the pervasive use of data to get the most out of employees.
In his daily newsletter of June 14, 2021, New York Times reporter David Leonhardt describes the reasoning (no link unfortunately).
In his drive to create the world’s most efficient company, Jeff Bezos discovered what he thought was another inefficiency worth eliminating: hourly employees who spent years working for the same company.
Longtime employees expected to receive raises. They also became less enthusiastic about the work, Amazon’s data suggested. And they were a potential source of internal discontent.
Bezos came to believe that an entrenched blue-collar work force represented “a march to mediocrity,” as David Niekerk, a former Amazon executive who built the company’s warehouse human resources operations, told The Times, as part of an investigative project being published this morning. “What he would say is that our nature as humans is to expend as little energy as possible to get what we want or need.”
In response, Amazon encouraged employee turnover. After three years on the job, hourly workers no longer received automatic raises, and the company offered bonuses to people who quit. It also offered limited upward mobility for hourly workers, preferring to hire managers from the outside.
As is often the case with one of Amazon’s business strategies, it worked.
The constant churning of workers has helped keep efficiency high and wages fairly low. Profits have soared, and the company is on pace to overtake Walmart as the nation’s largest private employer. Bezos has become one of the world’s richest people.
Many people want to believe that being a generous employer is crucial to being a successful company. But that isn’t always true.
Companies can continue to squeeze their workers more and more because of the power imbalance due to the lack of strong unions. Is it any wonder that Amazon employs the most vicious anti-union practices?