This pandemic year has brought record growth for Amazon. The third quarter of 2020 was its most successful yet — it announced a 37 percent sales increase on the same period last year. According to Forbes, the personal wealth of founder Jeff Bezos climbed by $70 billion between October 2019 and November 2020.
Amazon’s efforts to provide the infrastructure for everything from online shopping to cloud services have attracted attention from regulators in Washington and Brussels. Civic activists speak of breaches in employee rights, tax avoidance, misuse of personal data, a large ecological footprint, and role as a de facto regulator of other companies’ access to customers. One burst of attention came with the worldwide Make Amazon Pay strikes and protests on Black Friday, organized by the multinational Uni Global Union together with the Progressive International and other groups.
Here in the Czech Republic, we can buy from Amazon only through its German page — resulting in delays for customers, as well as relatively high prices. But if Amazon has less business here than local platforms, it certainly does have Czech employees, predominantly supplying the German market. As an investigation by Voxpot shows, the country serves Amazon as a kind of warehouse — and source of cheap labor servicing wealthy consumers across its Western border.
Same Work, Half the Salary
“No one caring for other people’s rights can ever make so much money,” ponders twenty-something Kateřina Příbrská during our walk through the town of Most. Kateřina has much more experience with Bezos’s company than most Czechs — she worked for over two years in Amazon’s only Czech distribution center in the central-Bohemian town of Dobrovíz, before her son was born in 2019.
Kateřina trained to be a seamstress, dropping plans to attend a high school specialized in graphic design on account of her learning difficulties. She tried to make a living by sewing, but her monthly salary was 8,000 CZK (approximately $375), while she had to pay 2,000 CZK a month just to commute. She then tried other jobs.
“I never last anywhere a long time because I’m hypersensitive. I can’t stand unfairness,” she emphasizes. If she can get the money, after her maternity leave, she would like to open a tailor’s shop employing disabled people. She does not want to return to Amazon, although she is still actively engaged in union organizing at the company.
The Chomutov district, through which I traveled with Kateřina, provides an interesting backdrop to our conversation about working for a company whose incessant innovations drive to an extreme the capitalist imperatives of ever-higher profit, effectiveness and productivity. This North-Bohemian landscape is still scarred by remnants of the old communist regime, from its infamous brown coal mines to its chemical plants, flooded homes and half-demolished towns moved a few kilometers away. They stand as mementos to the projects of other visionaries with rather different opinions on work organization than Bezos and his Silicon Valley colleagues; it seems an appropriate place to contemplate the traces being left by the similarly bold visions of the captains of digital capitalism.
I ask Kateřina about Bezos’s reputation among Amazon’s Czech employees. Do they speak of him with respect, as a mythical figure?
“We tend to make fun of him. When there’s a lack of money for something, we say Jeff probably needed them for his rockets,” she says.
Still, the power of Bezos (owner of spaceflight firm Blue Origin) can be surprisingly pronounced in Dobrovíz. Uniform instructions regarding work and salary conditions in all Amazon’s distribution hubs come directly from the company’s main headquarters in Seattle — said to exert meticulous control over all these sites. But not everything is uniform: when Seattle ordered a $500 coronavirus bonus for all the distribution hub employees, Czechs received only a little over half this amount. The 160 CZK ($7.50) hourly wage for Czech warehouse workers is only half what Germans get (€12, $15); Poles get even less than Czechs.
Pickers Controlled by Algorithms
A person interested in working for Czech Amazon will get into the distribution center through the Ranstad or Adecco agencies, signing a fixed-term contract. Before Christmas, Amazon hires 3,000-4,000 people without an interview, conducting just a health check. Most will be laid-off after the Christmas bustle, while still undergoing their trial period.
“They do it in such a disgusting way, for example when people come for the shift and cannot get through the gate with their chip. Then they’re told to go home on their own or to wait for the bus which leaves only in ten hours after the shift ends. In 2016 I was really worried every morning I might not get to my work,” Kateřina says.
The lucky ones who get transferred from the agency directly to Amazon (so-called “blue badges”) then have to make it through the trial period, only then to sign an indefinite contract. Amazon thus has around three thousand permanent employees.
Manual workers at Amazon work ten-hour shifts, four times a week. Their starting wage of 160 CZK per hour should theoretically increase each year, depending on a yearly competitiveness assessment calculated relative to wages in other companies. This year, however, there was no increase — and employees instead received the following message:
Dear employees, this year’s wage revision where we compared wages on similar work positions, was just completed. The result of the wage analysis is that our basic wages are still competitive and so our remuneration plan remains the same. We very much appreciate the work you do for our company and most of all, for our customers. Thank you. Should you have any questions, do not hesitate to contact your HR department or your manager. Sincerely, Amazon
This hourly rate is below the Czech average, but relatively decent for manual workers from poorer areas like the Ústí Nad Labem Region.
“Even the sick leave allowance is often higher in Amazon than what people get paid here in the north when they go to work every day,” explains Ivo Mayer, president of the ZO OSPO Amazon union.
Before she was hired by Amazon, his wife was paid a 14,000 CZK ($650) gross monthly salary as a seamstress. He adds, however, that the unpaid three hours a day spent on the bus commuting — and the delays before and after work — should also be considered.
“If I count my commute, my gross income is 80 CZK ($3.75) per hour. You then have no time for anything else but work and sleep,” reports another employee.
The long workdays and commute explain why Kateřina doesn’t want to go back to Amazon.
“It’s incompatible with my family values,” she notes. She says that her husband, also employed at Amazon, now leaves for work at 4 AM and comes home at 7 PM. For her, such a situation could only be solved by a boarding kindergarten where the child would be sent off for a whole four days. She says this solution is quite common in Most; “I just wouldn’t do that to my child,” she insists.
According to Ivo and Kateřina, Amazon is particular about each employee knowing how to do everything – being able to receive, store, pick as well as pack the goods for the customer. It is during the so-called “pick” that employees up to ten miles per shift.
Both trade unionists note that the infamous control system using scanners is not so strict as is sometimes claimed. For example, it is not a problem for them to go to the bathroom so long as they meet hourly norms. But neither they nor top management in Prague can explain how these norms are actually determined.
“It’s some kind of algorithm, only about five people in Europe understand it. It is more or less based on the results of comparable distribution centers, where they determine the average that needs to be reached,” explains Ivo.
If a person falls short, they can be subjected to a procedure called ADAPT; after a few unsuccessful steps, this may lead to the employee’s termination. But they explain that in this weekly evaluation, the word of individual managers also counts.
These Czech trade unionists agree with reports from other countries on Amazon’s sometimes extreme hostility towards unions. According to their information, Amazon managers were instructed to report everybody who as much as mentioned the word “unions,” so that Amazon could fire them before they managed to unionize. The person who founded the unions in Dobrovíz in 2016 kept his intentions secret until notifying Amazon that the organization was established — according to the labor code, members of union organizations’ committees may not be fired. Instead of unions that have their role stipulated by law and the rights to represent employees’ interests, Amazon sets up so called “employee forums.”
According to Ivo, however, these serve Amazon as red herrings, without dealing with employees’ real problems. In spite of repeated efforts, the union organization in Amazon has not been able to sign a collective agreement that would attend to employee rights beyond the Czech labor code.
Next Stop: Dobrovíz-Amazon
The Dobrovíz municipality lies several kilometers west of the outskirts of Prague, combining a historical center with a typical suburban satellite housing development. It is located near the airport as well as the R6 express road, an important connection between Prague and Western Europe. This good accessibility draws in Prague inhabitants seeking a calmer life outside the city well as developers of logistics parks.
The local industrial zone was created twenty years ago. The Panattoni Europe development company lets their buildings to eight companies. The largest, 95,000-square-meters building is rented by Amazon, whose distribution center — taking up an area of thirteen soccer fields — is the largest separately standing industrial building in the Czech Republic. Just by looking at it, it becomes clear how pickers can walk up to ten miles a day there.
All is calm on the adjacent parking lot on a Wednesday afternoon. Dozens of buses are parked here — some plastered with signs “go to work with a smile.” Amazon drives people daily to work for free from approximately fifty destinations in the Central-Bohemian and Ústí nad Labem Regions. After 5 PM and 4 AM, the buses start moving, ferrying the employees who work in the continuous two-shift operation of the distribution center. In the lit entrance hall in the evening, Amazon’s mottos show up like “Work Hard. Have Fun. Make History.”
There is also the Dobrovíz – Amazon train stop financed by the company. The train from Prague comes here three times a day, two times as a connection designed for the Amazon shift. The highway is connected with the logistics center by “To Amazon street,” a part of the bypass that the municipality exacted from the development company. Despite frequent cleanups, it is littered with waste thrown out of the windows by truck drivers.
The historical center of Dobrovíz, a municipality of five hundred inhabitants, is within walking distance of Amazon. In front of the local municipal authority, we meet Hana Veselá, one of the founders of the Citizens for Dobrovíz association. The group was established in 2013, when neighbors from the local new housing development wanted to protest against the noise coming from the now defunct Amazon complaint center, located in the industrial park behind their houses. When citizens started to complain about Amazon’s activities, they found out that the Central-Bohemian Region in cooperation with the CzechInvest government agency had promised Panattoni the construction of a new giant warehouse for Amazon. This would include the construction of a two-lane road right under the new inhabitants’ windows.
When the association became interested in the construction of the new center, it emerged that the municipality had agreed to alter its own zoning plan without expecting anything in return from the developer. However, Citizens for Dobrovíz did not agree with such a settlement. “I had my contacts, and I knew what we could afford to demand of the developer,” Ms Veselá explains.
At the turn of 2013–14, the municipality thus became the center of media and political attention. Local authorities were visited alternately by the Minister of Industry and Trade, CzechInvest representatives as well as Panattoni and Amazon managers. Citizens for Dobrovíz questioned the environmental impact and whether it was appropriate to build this site in the vicinity of Prague where unemployment is not a problem, in contrast to other regions.
“The guys from CzechInvest were all excited. They explained how everything would work and behaved like the sun would always shine. So I asked them what would happen if by chance it rained,” Veselá says.
In the end, the municipality and Panattoni negotiated the construction of the aforementioned bypass around the town, an expansion of the waste-water-treatment facility and 1 million CZK ($50,000) annually to the local budget. Subsequently, the Citizens for Dobrovíz association, an independent participant in the building permit procedure, signed their own agreement with Amazon, based on which Panattoni built a noise barrier between the warehouses and family homes. In the end, the Amazon distribution center near Dobrovíz started to operate in September 2015.
“I believe we have exacted all we could,” comments Hana Veselá on the agreement. It is also why the association ended up deciding not to block the construction — something which some neighbors resented. “Once Panattoni was promised the warehouse construction by the Region, the building couldn’t be prevented. All we could do was negotiate the conditions with the developer,” she explains, pointing to surrounding municipalities that receive nothing from the logistics warehouses of other companies.
Ms Veselá emphasizes the marked improvement of the traffic situation in the town which had waited years for a bypass before Amazon. “Most of the time, you don’t even notice the trucks, buses, or actual Amazon employees in the town center,” she remarks. In the town, she points out a new children’s playground built with Panattoni’s finances and the local soccer club sponsored by Amazon. She mentions that besides the negotiated contributions, Panattoni also pays the municipality a property tax for the warehouses. In addition to other contributions from the nearby airport, it makes Dobrovíz a relatively wealthy town.
So Long as It’s Near Germany
In 2013, when Amazon first focused attention on the Czech Republic, it was facing a series of protests by German distribution hub employees. This was the point at which it turned to CzechInvest to help it open branches in the Czech Republic instead, to serve German customers. It promised to provide permanent employment in distribution centers in Dobrovíz and Brno to four thousand (at a peak times, up to ten thousand). In 2013–14, when there was high unemployment after the economic crisis, this was an enticing offer for Czech authorities.
However, after this announcement, the situation did not unfold as smoothly as Amazon had envisioned. While in Dobrovíz the described disagreements with locals led only to a few months delay (Amazon did not make it in time for the planned 2014 Christmas season), dealings in Brno became so protracted that Amazon decided to cancel the investment. For the same reason, Amazon did not build a logistics center for returned goods in Dolní Počernice in 2016.
Objectors to the construction of Amazon distribution centers faced pressure on several fronts during the building permit procedures. Developers that were supposed to build the Amazon sheds complained of holdups threatening the expected Christmas sales. They blamed citizens’ dissatisfaction on bad communication by the municipalities and threatened to shift Amazon and its jobs to some other investment-welcoming town in Central Europe, or even to sue over the company’s marred investment and reputation.
Moreover, the prospect of a big US company promising thousands of jobs enjoyed major support from then-Prime Minister Bohuslav Sobotka’s Social-Democratic government, including his finance minister (and current premier) Andrej Babiš and his colleague at the Ministry of Industry and Trade Jan Mládek. President Miloš Zeman said that the disapproval of contracts that would enable the warehouse construction in Brno in time was “stupid.” Meanwhile, political and economic commentators worried that the country might get a bad reputation among global investors.
The national soul-searching was fed by the rhetoric of Amazon’s top management, when Amazon Europe chief Tim Collins declared that the problems they encountered before the warehouse construction in the Czech Republic were quite unique. “We put so many things on the table – a lot of jobs, a high investment, our plans are an economic stimulus for many areas, and we didn’t even ask a financial incentive of the Czech Republic,” he noted in an interview for business daily Hospodářské noviny.
For Miroslav Pazdera, coauthor of Steel Cities: Logistics Architecture in Central and Eastern Europe, “companies like Amazon are not interested in protracting the construction process as they need to build their centers as fast as possible. There was a sole key requirement for the construction of the Amazon distribution center in the Czech Republic — a maximum distance of 300 km from the German border and the shortest possible connection to the highway network. Amazon could not care less if its new warehouse would stand near Prague, Brno or perhaps Pardubice.”
Hence its impatience. Since such conditions could be offered by any number of Czech and foreign towns, Amazon had few reasons to waste their time on one unwilling community.
For Pazdera, the problem also lies in local authorities’ weak approach to planning for logistics centers. “Important decisions and responsibilities fall upon local governments that are often too weak a partner in the discussion with a much richer developer. The town’s zoning plan is considered an administrative burden rather than an effective tool for the layout of our environment. From the state’s perspective, these investments are frequently viewed uncritically positively. There is no expert debate as to how to work with this type of infrastructure,” he explains.
Casper Gelderblom, the main organizer of the Make Amazon Pay protests for Progressive International, judges Amazon’s behavior in 2014 as a typical example of the “race-to-the-bottom.” “Individual jurisdictions stand against another and try to offer the company the biggest tax concessions, the best infrastructure, and the cheapest work force. The corporation can just walk around and take its pick, or transfer the production whenever it dislikes something in the particular jurisdiction,” he explains.
Wealthier jurisdictions, just like Germany in 2013, are kept in this system in constant fear that the company may leave for a cheaper work force. “Amazon is by no means the only multinational corporation to behave like this. It is, however, one of those that excel in this game,” Gelderblom remarks.
Race to the Bottom
As there are no plans for an Amazon to enter the Czech market, some problems connected with this firm in Western Europe and the US do not pertain to the Czech Republic. There is not the problem of Amazon’s monopolistic practices hiding offers from smaller online stores on its pages when it cannot agree on something with them. In the USA, where Amazon covers approximately 40 percent of the electronics trade, this is one of the most frequent grounds for criticism.
Yet this like other countries in the region is still affected by the firm. The Czech Republic provides Amazon with physical infrastructure in the form of its warehouse in Dobrovíz — and thus questions regarding the position of Amazon’s employees, the firm’s environmental footprint, and its impact on local towns cannot be ignored.
Lower salaries than Western Europe for the same work are a standard here as in other post-communist countries. Conditions in other firms are — judging by the evidence provided by employees — comparable if not worse than those in Amazon. Yet the Czech Republic serves Amazon primarily as a reserve of cheap labor for the German market — and here, Amazon can get away with things that would never pass by in Germany, indeed without public discussion.
All the Amazon employees I spoke with expressed grievance at only receiving half the firm’s coronavirus bonus. It could be argued that these are the very practices that make Czechs feel like second-rate EU citizens — a feeling not to be underestimated. Ivo Mayer, who cited accurately paragraphs from the labor code during our interview and told me about all the pan-European initiatives in support of Amazon trade unionists, still remarked as I was leaving that he would prefer to “leave the EU just like the English did.”
Amazon did not come to Dobrovíz to help with unemployment here, but to be as close as possible to the highway to Germany. It does not employ many people from the town or its surroundings and does not cultivate a sense of belonging among locals. Amazon does employ the people it brings here by buses from socially weaker Czech regions, but does not develop services, infrastructure or community bonds in their places of residence.
At the same time, the intermingling of strangers from different towns makes self-organizing more difficult for the employees, making it easier for Amazon to successfully campaign against the unions. Meanwhile, agricultural land (not only) on Prague’s periphery is being built upon by new logistics sheds. Their use, should the current logistics boom in Central Europe come to an end, is unclear.
In the context of changes on the labor market, the mounting economic crisis and the increasing popularity of online shopping, it cannot be ruled out that both the supply and demand for warehouse jobs will continue to increase. If that should happen, let’s hope that Czechs will be more forward-thinking in their dealing with Amazon and other logistics centers than they were in 2014. The first step is obvious: to start speaking critically even about US investors bearing gifts.