Prime Mover: How Amazon Wove Itself Into the Life of everyday Baltimore-Very Very long read.

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Prime Mover: How Amazon Wove Itself Into the Life of an American City

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For most people, it’s the click that brings a package to their door. But a look at Baltimore shows how Amazon may now reach into Americans’ daily existence in more ways than any corporation in history.

By Scott Shane

Nov. 30, 2019Updated 9:48 a.m. ET
BALTIMORE — Another big Prime Air 767 takes off from Baltimore-Washington International Airport — where Amazon’s shipping last year eclipsed that of FedEx and U.P.S. put together — and wheels above the old industrial city. Below, the online giant seems to touch every niche of the economy, its ubiquity and range breathtaking.

To the city’s southeast stand two mammoth Amazon warehouses, built with heavy government subsidies, operating on the sites of shuttered General Motors and Bethlehem Steel plants. Computers monitor workers during grueling 10-hour shifts, identifying slow performers for firing. Those on the floor earn $15.40 to $18 an hour, less than half of what their unionized predecessors made. But in Baltimore’s postindustrial economy, the jobs are in demand.

Near the Inner Harbor are the side-by-side stadiums of the Ravens and the Orioles, where every move on the field is streamed to Amazon Web Services for analysis using artificial intelligence. Football players have a chip in each shoulder pad and baseball players are tracked by radar, producing flashy graphics for television and arcane stats for coaches.

Up in northwest Baltimore, a pastor has found funding to install Amazon Ring video cameras on homes in a high-crime neighborhood. Privacy advocates express alarm at proliferating surveillance; footage of suspects can be shared with the police at a click. But the number of interested residents has already outstripped the number of cameras available.


In City Hall downtown and at Johns Hopkins University a few miles away, procurement officers have begun buying from local suppliers via Amazon Business — and even starred in a national marketing video for the company. Buyers say the convenience more than justifies interposing a Seattle-based corporation between their institutions and nearby businesses. Critics denounce the retail giant’s incursion into long-established relationships. It is a very Amazon dispute.

As federal regulators and Congress assess whether Amazon’s market power should be curbed under antitrust laws — and whether, as some politicians argue, the company should be broken up — The New York Times has explored the company’s impact in one American community: greater Baltimore.


Baltimore’s pleading pitch last year to become an additional headquarters city for Amazon, promising a whopping $3.8 billion in subsidies, did not even make the second round of bidding. But Amazon’s presence here shows how the many-armed titan may now reach into Americans’ daily lives in more ways than any corporation in history. If antitrust investigators want to sample Amazon’s impact on the ground, they could well take a look here.

Anirban Basu, a Baltimore economist who has studied the region for years, is skeptical of apocalyptic claims about Amazon, saying Sears and Walmart were both once seen as all-powerful. But he called Amazon a “profit-margin killer” and said it should be scrutinized, particularly because technological trends that include artificial intelligence, driverless trucks, drones and new payment systems all play to its advantage.

“All these things are a threat to other industries,” Mr. Basu said. “But they’re all good for Amazon. As powerful as it is, Amazon is set to be much more powerful.”

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The BWI2 fulfillment center, one of two major Amazon warehouses in Baltimore, is on the site of a former General Motors plant.Credit...Gabriella Demczuk for The New York Times
Ken Knight has felt Amazon’s long reach. He plans to close his 152-year-old Baltimore houseware and hardware store, Stebbins Anderson, at the end of the year. He pins most of the blame on Amazon.

“It’s put me out of business,” said Mr. Knight, 70, who had hoped to pass the business to his son. Mr. Knight is especially aggrieved by government subsidies to the company in the name of job creation; he will be laying off 40 employees.


Amazon insists, in an argument it is likely to use in antitrust proceedings, that its market power is nothing like what people imagine. Yes, it accounts for 40 to 50 percent of online retail in the United States — but that is only four to five percent of total retail. (Walmart’s revenue is still twice that of Amazon, though Amazon’s total value on the stock market is the fourth largest among American companies, more than double Walmart’s.) And while Amazon may sell nearly half of cloud-computing services, it points out that the cloud makes up a small fraction of information technology spending.

“We welcome the scrutiny,” said Jay Carney, Amazon’s top Washington representative and a former White House press secretary for President Barack Obama. “We operate in huge competitive arenas in which there are thousands and thousands, if not millions, of competitors. It’s hard to argue that if you’re four percent of retail you’re not in competition.”

Baltimore offers in microcosm the contentious issues that Amazon’s conduct has raised nationally: The erosion of brick-and-mortar retail. Modestly paid warehouse work and the looming job destroyer of automation. An aggressive foray into government and institutional procurement, driving local suppliers to partner with Amazon or face decline. A swift expansion in air cargo, challenging FedEx and U.P.S. The neighborhood spread of video and audio surveillance. And the steady conquest of the computing infrastructure that underlies commerce, government and communications, something like an electric utility — except without the regulation imposed on utilities.

Amy Webb, founder of the Future Today Institute, a strategy firm, who lives part time in Baltimore, said Amazon’s impact only began with its retail platform.

 

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It’s the invisible infrastructure that powers our everyday lives,” said Ms. Webb, who examines Amazon in her book on the tech giants, “The Big Nine.” “Most of us don’t know 95 percent of what Amazon is doing.”

She called the contest for Amazon’s second headquarters a “ridiculous parade, a beauty contest” in which communities nationwide offered up inducements while failing to make a cleareyed assessment of costs and benefits. With its capabilities, market sway and long-term strategy, she said, Amazon now conducts itself like a “nation-state.”

A River Through Commerce and Culture
None of this was imaginable in 1994, when Jeff Bezos paged through a dictionary in search of a name for an online bookseller and stopped at “Amazon.” Not only was it the largest river in the world by volume — it was four times bigger than the runner-up, which appealed to Mr. Bezos’ outsize ambitions. Books were just the start.

Some 25 years later, fueled by customers’ addiction to click-and-done convenience and speedy delivery, Amazon has quietly flowed into many areas of life, bringing to more and more arenas its tireless innovation, relentless focus on data, unforgiving employment practices and omnivorous competition. In many homes here, as across the country, it is the ultimate labor-saving device: supplier of electronics, clothes, groceries, books, movies, music, information and security. More than half of American households now have an Amazon Prime membership, and most shopping searches begin on Amazon, not Google. Globally, Amazon, whose critics call it the “apex predator” of digital business, delivered 10 billion packages last year — more than the number of people on the planet.


Greater Baltimore accounts for one percent of Amazon’s sales nationwide — just about its share of the population, according to data prepared for The New York Times by Rakuten Intelligence, which tracks e-commerce.

But as a transportation hub, with Interstate 95 and major rail lines converging near a busy port and airport, Baltimore punches above its weight — originating 2.38 percent of Amazon’s shipments in the United States, Rakuten said.

Even with all that shipping and logistics, Amazon ranks just 14th among local employers, according to The Baltimore Business Journal. Yet like an online shopper who realizes one day that half his possessions came from Amazon, a Baltimorean who looks for the company’s footprints can find them everywhere.

On a midtown back alley, Todd Blatt, one of 18,000 Maryland sellers on Amazon Marketplace, uses a laser printer to turn out little models of the iconic bus-stop benches that read “Baltimore: The Greatest City in America,” peddling them online with an assortment of toys and bric-a-brac. He’s battled counterfeits from competing sellers on Amazon but isn’t really complaining: “I haven’t had a real job since 2012,” he said.

When the Baltimore Behavioral Lab, a research organization, conducts consumer surveys, it posts them on Amazon’s Mechanical Turk microtask site. Users earn tiny sums of money for participating.

Amazon Smart Home is partnering in one Baltimore suburb with Lennar, the country’s largest homebuilder, to install Amazon Echo devices, which use voice-activated Alexa to control Amazon Ring video cameras outside. In a tough city neighborhood where drug dealers intimidate neighbors, the Rev. Terrye

 

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organizing a subsidized video setup after hearing a radio promotion for Ring by the N.B.A. great Shaquille O’Neal.

Credit...Gabriella Demczuk for The New York Times
“Why can’t we use technology to be the virtual eyes of the citizens and not have to worry about retaliation?”


Public libraries are stocked with digital audiobooks from Amazon’s Audible, and browsers can check reviews on Amazon’s Goodreads. Down the road in Annapolis, Amazon Studios filmed scenes in the Jack Ryan television series.

Amazon owns two Whole Foods grocery stores in Baltimore and is opening a third, and recently began free delivery to Prime members. In a dozen convenience stores, it operates Amazon Lockers, where customers can pick up purchases. It has enlisted Kohl’s stores to handle returns. Its trucks and vans are everywhere.

Experts at Baltimore’s academic medical complexes are discussing whether Amazon is preparing to disrupt their industry too. In just the past 18 months, the company joined the health care venture Haven and bought the e-medicine pioneer Health Navigator as well as Pillpack, now part of Amazon Pharmacy.

Through Amazon Web Services, the biggest provider of cloud computing, the company is building the country’s digital backbone. A.W.S. employs a small staff of software engineers in Baltimore — the company declined to say how many — and provides the computing infrastructure for many institutions, from Johns Hopkins to the investment firm T. Rowe Price and the sportswear company Under Armour. Even the secretive National Security Agency, south of Baltimore at Fort Meade, acknowledged that it relied on A.W.S. “for various administrative and mission needs.”


The arms of Amazon sometimes cross in unexpected ways. Though Under Armour uses A.W.S., the clothier has had to balance its own online sales with its Amazon.com “storefront.” The Maryland Department of Human Services downtown partners with A.W.S. in a cloud-computing effort called MD THINK, designed to streamline social services. At the same time, the department said, it provides food stamps to nearly 600 local Amazon employees, largely part-time warehouse workers.

Even as its omnipresence draws antitrust scrutiny, Amazon seems unlikely to pull back. In June, Mr. Bezos, by most accounts the world’s richest person, trumpeted a new Amazon plan to launch 3,200 satellites to provide internet service around the world. He argued that Amazon’s size meant it should take on huge, new challenges.

“Amazon is a large enough company now that we need to be doing things that, if they work, can actually move the needle,” Mr. Bezos said.

Mr. Bezos, who is renovating a $23 million house in Washington, an hour south of Baltimore, has long pushed the mantra of “customer obsession,” and it has paid off. In the Harris Poll on the popularity of major American companies, Amazon has ranked No. 1 or 2 each year since 2012. By comparison, Google fell to 41 this year, and Facebook to 94.


But putting customers’ convenience first, a key to Amazon’s spectacular growth, can put a big squeeze on everyone in the company’s long supply chains — warehouse workers, independent sellers, delivery drivers, cargo pilots — not to mention smaller competitors.

A New Kind of Assembly Line
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Amazon built the BWI2 warehouse on an enormous scale, fitting it with 14 miles of conveyor belts across 27 acres of floor space.Credit...Gabriella Demczuk for The New York Times
Shaquetta Taylor, who goes by Shaq, scanned an item — a bag of glazed pecans. Her screen directed her to “Stow Item,” and the digital clock started counting — 1, 2, 3, 4, 5, 6, 7 — as she found space for it in the robotic pod. Then there were cactus-shaped tea lights — 17, 18, 19, 20 — and a children’s crafting kit and a magnetic door screen (“Actually, I have this myself,” she remarked).

Ms. Taylor, 43, in glasses and a “Toy Story” T-shirt, mother of two sons and grandmother of a 3-year-old, arrived four years ago at Amazon’s warehouse awed by the company’s cachet. “When I first came here, I thought, ‘I’m not good enough for Amazon,’” she said, taking a brief break from Stow Station 3301.

 

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But after a year, she was asked to become an “ambassador,” helping out newer colleagues at this Amazon Fulfillment Center, shorthand name BWI2, built where G.M.’s Baltimore Assembly Plant operated for seven decades. Its scale is mammoth: 27 acres of floor space, 2,500 employees, 14 miles of speeding conveyor belts.

Credit...Gabriella Demczuk for The New York Times
“When I first came here, I thought, ‘I’m not good enough for Amazon.’ I became an ambassador about a year ago.”

SHAQUETTA TAYLOR, STOWER AT BWI2

If Ms. Taylor doesn’t make her numbers, she can be fired. She’s thrived because she’s fast and accurate, over a demanding 10-hour shift with two half-hour breaks, one of them paid.

The warehouse is run by Preet Virdi, general manager, an Amazon true believer who moved from India to attend Georgia Tech 13 years ago. Mr. Virdi, 35, said his top priority was safety — a whiteboard recently listed 40 head injuries and 109 foot injuries so far in 2019 — and added that his next priority was “how we make the workplace more fun.”

The real boss is data, however, as it is everywhere in Amazonland. Everything that happens is timed and measured in a way that efficiency experts of earlier generations could only dream about. If the computers say Ms. Taylor or other “associates” are too slow or sloppy, they’re out. And if Mr. Virdi doesn’t make his numbers, he’ll be out too.

That is nothing new in industrial practice. But Amazon, with an unparalleled mastery of digital tools and the coolly calculating tone set by Mr. Bezos, has brought it to a rare extreme. The company’s astonishing success has made it, in turn, a powerful influence on other companies.

Some workers thrive despite the pace. “The day goes by quick,” said Robert Taylor, 51, a leader in the warehouse chapter of Glamazon, for L.G.B.T. employees. “All these other people go to the gym. Amazon pays me to stay in shape.”

Some see a path to advancement. Samaira Johnson, 26, a high-school graduate with a pet iguana at home, is already a leader among the employees trained to work with the warehouse robots. Asked where she saw herself in 10 years, she replied, “Running an Amazon building like this one.”

Others falter. Sharon Black, 70, a veteran Baltimore activist who has held assembly-line jobs at G.M. and other plants, worked for a few months at BWI2 last year and found a striking difference: At Amazon, the computers ruled.

That wasn’t entirely negative, she said. In the application process, Amazon didn’t care about age, gender or race — only that a person could walk several miles a day and lift 50 pounds. “They’re an equal opportunity exploiter, I’ll tell you that,” Ms. Black said. “You could come in with three arms and they wouldn’t care.”

Ms. Black said she quit after two written warnings that she wasn’t meeting productivity standards, knowing a third would get her fired.

“The machines determine so much,” she said. “You’re clocked from beginning to end. They grind through people.”

When another employee told the National Labor Relations Board that he had been fired for complaining about working conditions, the company said he had it wrong: He had been fired for working too slowly.

In fact, an Amazon lawyer wrote to the N.L.R.B. last year, it had fired “hundreds of other employees” at the Baltimore warehouse for failing to make their numbers. The letter, obtained by The Verge, listed more than 800 workers fired in the previous year, but the company now says the correct number was 309.

Automated dismissals are a feature, the letter said, not a flaw. “Amazon’s system,” the lawyers wrote, “automatically generates any warnings or terminations regarding quality or productivity without input from supervisors.” Amazon says termination decisions are ultimately made by managers.


Workers at Amazon who run into that kind of trouble have no unions to represent them — a shift from Baltimore’s past. G.M. employees were represented by the United Automobile Workers. At the second warehouse, on the old Bethlehem Steel site, United Steelworkers held sway. At both plants, the pay was adequate to support a family.

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Robert Taylor, one of 2,500 employees at BWI2, said he liked the high pace of the job. Credit...Gabriella Demczuk for The New York Times
In the G.M. plant’s final years, line workers made an average of $27 an hour, equivalent to more than $35 today. G.M. workers could make $80,000 annually with overtime, according to contemporary news reports, equal to $102,000 in 2019 dollars.

The vehemently anti-union Amazon has raised its lowest hourly pay to $15.40, which is a little over double the federal minimum wage, the company points out. But even a veteran worker at its BWI2 warehouse would have to put in considerable overtime to get to $40,000 a year, less than half of what a G.M. worker could make in the past.

Nor are the job numbers comparable. The G.M. plant employed 8,000 at its peak; Bethlehem Steel employed 30,000. Amazon has a total of 4,500 workers at the two warehouses.

 

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In a statement, the company called its jobs “safe and innovative,” noting that the warehouses were built on “blighted property” that was vacant for years before Amazon “injected life (and jobs)” back into the East Baltimore brownfields.

In a city that has shed most unionized industrial jobs, Amazon gets plenty of applicants. Its hourly pay is $2 or $3 higher than at many comparable employers, and benefits are also more generous: medical, dental and vision coverage and a 401(k) with a 50 percent match. The company will reimburse an employee up to $3,000 a year for further education, or give a worker $10,000 to start a business delivering Amazon goods.

Under the circumstances, government officials here are grateful for Amazon’s presence. The company has gotten $65 million in tax incentives and loans to build the two big warehouses and related smaller facilities, according to the Maryland Department of Commerce.

The company said it had spent about $1 billion on infrastructure in Maryland to date; hired about 7,000 full-time direct employees, nearly all at warehouses; and used contractors who hired another 2,100 people.


But economists say online shopping has also erased thousands of retail jobs, and critics point to other costs, including traffic congestion and environmental effects, so assessing the company’s net impact is difficult. Few of the Amazon jobs in Baltimore are the highly paid tech and management positions appearing in Northern Virginia, which Amazon chose for its 25,000-strong second headquarters, called HQ2. (Amazon chose New York City for a similar hub but withdrew in the face of local opposition.)

Such a boon might have been transformative for Baltimore, a struggling city surrounded by wealthier suburbs. But the city ended up on the company’s long list of also-rans, 230 locales that turned over reams of valuable work force and work site data to Amazon in elaborate applications — and got nothing in return.

In a statement, Amazon said the top criterion for choosing a location was “the availability of tech talent.” It added, “Nowhere did Amazon say HQ2 was a project designed to help communities in need.”

Credit...Gabriella Demczuk for The New York Times
“This is all by the numbers. There’s no leeway.”

SHARON BLACK, WHO LEFT HER JOB AS A PICKER AT BWI2

For Ms. Black, the former employee, one experience captured what she thought was the eerily inhuman warehouse culture. In November last year, two contract workers were killed when a tornado collapsed a wall of a smaller Amazon warehouse opposite BWI2.

Ms. Black said she drove to work the next morning, steering around fallen trees, wondering how the company would handle the deaths at the brief standing meeting that began each shift.

“I thought they’d have two minutes of silence,” she said. “Nope. We didn’t pause.” Instead, she said, there was the usual tribute to the “power picker” — the outstanding performer in her unit, as measured by the computers. Michael Jackson music played, she said, and the supervisor shouted, “Let’s have a better day than yesterday!”

It was a reference to production levels, not to the overnight catastrophe.

Rachael Lighty, an Amazon spokeswoman, said the company offered counseling and hosted the most affected employees for a meal. “We are committed to constantly improving how we communicate with and engage with our employees,” she said.

 

[Sonic Boom of the South]

Can some 1 give cliff notes?

Is this an article shaming Amazon? Or is it positive?

 

[Strapped]

This is what these clowns on here wanted , give them subsidies so they can wipeout retailers, small businesses & keep wages low or more like half of what it should be . Overworked & underpaid it's workers . Amozon is just bad for business & consumers need to ditch amazon because it's services will impact you in a negative way soon. @DEAD7 @88m3 your free markets

 

[DEAD7]

This is what these clowns on here wanted , give them subsidies so they can wipeout retailers, small businesses & keep wages low or more like half of what it should be . Overworked & underpaid it's workers . Amozon is just bad for business & consumers need to ditch amazon because it's services will impact you in a negative way soon. @DEAD7 @88m3 your free markets

Subsidies and “free market” in the same post...

HL hasn’t changed a bit.

 

[Strapped]

Subsidies and “free market” in the same post...

HL hasn’t changed a bit.

Welcome back

 

[Strapped]

Can some 1 give cliff notes?

Is this an article shaming Amazon? Or is it positive?

Shaming , amazon needs to be broken up