Environment and Energy

The Internet Economy: 21st-Century Technology, 19th- Century Labor

March 24, 2014
By Steven Wishnia

The Internet has been hyped as a utopian panacea for everything from democracy to music, but the economic changes it has wrought—coupled with those from globalization—have made workers easier to exploit and harder to organize. By cutting the cost of producing and distributing some goods and services to virtually nothing, it has eliminated thousands of jobs and reduced thousands more to precarious fragments.

Kodak, which invented the first digital camera, once employed more than 140,000 people and was worth $28 billion, computer scientist Jaron Lanier notes in his book Who Owns the Future?. But as digital photos require neither film nor processing, and can be easily altered and posted, “today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people.”

Online shopping has battered traditional retailers, from bookstores to shoe shops. Online media, which are available for free and don’t have to pay printing bills, have decimated newspapers and magazines, with a predictable effect on salaries: The Huffington Post is notorious for paying writers in “exposure.” Voice-over Internet telephone technology has enabled companies to outsource call centers to India and the Philippines. At its worst, the Internet economy is a huge high-tech sweatshop: “Crowdworking” operations like CrowdFlower and Amazon’s Mechanical Turk pay an average of $2 an hour for piecework tasks like verifying the accuracy of online business listings or writing one-line descriptions of porn video clips.

 As online shopping requires shipping and distribution, though, it has stimulated rapid growth in “logistics” jobs—warehousing and shipping online orders, along with imported goods headed to Walmart and electronics retailers. The cluster of logistics businesses in the Chicago area, the nation’s biggest rail and highway junction, employs 150,000 workers. Southern California’s Inland Empire—San Bernardino and Riverside counties, where Interstates 10 and 15 head east and northeast from the ports of Los Angeles and Long Beach—has more than 115,000 logistics workers, almost three times as many as in 1990, with 5,000 new jobs added in the first six months of 2013.

These warehouse workers endure the low pay and abusive conditions that inspired people to join unions in the tire plants of 1937 or the lettuce fields of 1970. A relentless work pace and hiring temps through a third-party “logistics provider” are common industry practices. Amazon’s “fulfillment centers” in Pennsylvania’s Lehigh Valley became infamous for keeping ambulances in the parking lot because it was cheaper to treat workers for heat prostration than to cool the building below 100°. At Walmart’s “consolidation center” in Hammond, Indiana, night-shift employees stopped working Jan. 5 after the temperature in the unheated plant fell to -15° and three workers were hospitalized for frostbite, says Leah Fried of Warehouse Workers for Justice in Chicago. The company finally installed space heaters in February.

In the Inland Empire, the median income for blue-collar warehouse jobs is $22,000, less for women, and barely $10,000 for temps, according to a 2013 University of Southern California report. Direct employees make slightly more than temps, who start at $8-9 an hour, but many of them too work on a contingent basis, says Sheharyar Kaoosji, director of the Warehouse Workers Resource Center in Los Angeles. Amazon and Walmart study data to determine the busiest times, and then call workers in for shifts as short as two hours.

“Things are so bad it’s almost easy to improve on them,” says Fried. But the multilayered structure of contractors and subcontractors makes traditional union organizing extremely difficult. “You can’t organize with the company who actually controls your job,” she explains. If workers from one temp agency organize, the logistics provider can simply cancel its contract, and it’s also hard to protect individual workers against retaliation.

Instead, both groups now function as worker centers—“essentially like a non-majority union,” says Fried—although Warehouse Workers for Justice is backed by the United Electrical, Radio, and Machine Workers of America, and the Warehouse Workers Resource Center was formerly funded by Change to Win. They educate workers about their rights, safety, and avoiding wage theft; support their efforts to organize; and try to hold the companies at the top legally responsible for abuses.

In a case slated to come to trial this summer, the Resource Center is backing a lawsuit against six companies, including Walmart, Schneider Logistics, and two temp agencies, for cheating workers at three Inland Empire warehouses out of their proper pay. Walmart, which owned or leased the warehouses, claims it is not responsible for its contractors’ actions, but the workers allege that it set a price and dictated operating procedures that made it impossible for Schneider to pay minimum wage or overtime and make a profit.

Management, says Kaoosji, had the workers spend days waiting for deliveries to come in, had them do other jobs like sweeping and packing while they waited, but only paid them for the trucks they unloaded, piecework.

“Their dream is to have workers on call all the time and not be paid for waiting time,” he says. “It’s not that the companies can’t do better, it’s that they feel they can get away with this.”

March 24, 2014

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