Amazon’s secret sauce? Turnover — and lots of it.

Amazon's winner-takes-all exports

Between earnings calls and super-yacht kerfuffles, it’s easy for tech reporters to end up glossing over Amazon’s impact on our social fabric. Alec MacGillis makes for a remarkable exception: His book, "Fulfillment: Winning and Losing in One-Click America," meticulously traces how Amazon has transformed cities such as Baltimore and Dayton, often starting with policy changes in state and local government. He embarked on a mini press tour for the paperback release, so I jumped at the chance to follow up on our conversation from last year. Here are some of the big ideas we discussed:

For Amazon, high worker turnover is a feature, not a bug. Warehouse turnover is integral to disrupting unionization since it stops employees from developing a sense of trust or mutual interest.

• Amazon workers in Bessemer, Alabama, are currently casting their votes on whether to unionize. The warehouse workers voted 2:1 in favor of not unionizing last year, but the results were thrown out because the National Labor Relations Board found Amazon broke the rules by installing a mailbox for receiving ballots.
• MacGillis expects the results will be largely the same as last time, and that it will show “how difficult it is to organize these warehouses given the incredibly high turnover.”
• Union officials estimate that nearly half of the 6,143 warehouse workers in the Bessemer facility are new, and therefore didn’t vote last year.
• The Staten Island unionization effort has a slightly better chance of succeeding, according to MacGillis, as there is a “friendler climate” for organizing in New York compared to Alabama. But turnover may still prove to be too much to overcome, as MacGillis noted the turnover in Staten Island was “hardly any less severe” than in Bessemer.

Columbus is the new New York (of Ohio). Intel’s investment in Ohio is an example of the winner-take-all national inequalities playing out within the regional level, according to MacGillis.

• Intel’s $100 billion investment in an Ohio chipmaking facility has been heralded as a big step toward lessening regional inequalities, which could help lessen animosity toward Big Tech outside of a handful of winner-take-all cities. For its part, the state of Ohio provided an incentive plan worth as much as $2 billion.
• But MacGillis sees this as a fundamental misunderstanding of regional inequalities, which don’t just exist between the coastal hubs and the rest of the country, but also within states such as Ohio.
• The median household income for 2015-2019 in New Albany, Ohio — Intel’s destination and the home to Amazon, Google and Facebook data centers — was a little over $203,000. That’s more than triple the national median and that of New York City (which isn’t an entirely fair comparison — Scarsdale, New York, would blow New Albany out of the water).
• “There are so many other places in the state that would have … benefited so much from that investment,” MacGillis said.

My takeaway: There are no easy fixes to techlash. Public resentment toward Big Tech will be a fixture in U.S. politics, just as growing economic inequality has become a permanent state of affairs. In the last century or so, it’s taken world wars, revolutions and state collapse to disrupt systemic inequality — our system likewise doesn’t seem to be capable of subtle remediation.

The Amazonification of Europe is no sure thing. MacGillis recently returned from a four-month trip to Germany. I was curious about his impression of the relationship between Big Tech and German society, and how that might impact the political climate there versus in the U.S.

• “What strikes you so much when you’re in Germany is the much more vital, healthy, vigorous brick-and-mortar world,” MacGillis said. He added that downtowns are still integral to civic life, even in smaller German cities. “There’s still this real culture of actually getting out of the house, even in pandemic times and wanting to be out, wanting to see people and wanting to go into actual stores.”
• One might think that culture would act as a bulwark against the Amazonification of Germany, but MacGillis isn’t so sure: “I was sort of torn between thinking this will be a defense for places like Germany against the Amazon wave, or that it just means that they have even further to fall.”

— Hirsh Chitkara (email | twitter)

In Washington

Peter Thiel has already spent $20.4 million to support 16 candidates for the House and Senate this year, making him one of the two biggest donors in the Republican party. According to a recording obtained by The New York Times, Thiel told attendees at a recent dinner, “My somewhat apocalyptic, somewhat hopeful thought is that we are finally at a point where things are breaking.”

The IRS’ facial-recognition saga ain’t over yet. Before reversing course on its decision to use ID.me’s facial recognition software this tax season, the agency had already directed 7 million Americans to it, raising questions about what will happen to all of their data.

The Securities and Exchange Commission wants more transparency around cyberattacks. Under a draft rule made public last week, investment funds and advisers would be required to have a formal policy in place for handling cyberattacks, as well as a requirement to disclose an attack within 48 hours of its discovery.

In the states

A Missouri-based journalist announced he won’t be chargedfor exposing a security flaw in a state website. The journalist, Josh Renaud, was called a hacker by Gov. Mike Parson. Renaud found the flaw using ordinary web browser tools and called Parson’s actions “a political persecution of a journalist, plain and simple.” Renaud added that prosecution would deter “people from reporting security or privacy flaws in Missouri, and decreasing the chance those flaws get fixed.”

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In the courts

IBM executives referred to older employees as “dinobabies” and plotted ways to make them “extinct” within the company, newly unsealed court filings show. The filings are part of an ongoing age discrimination case that accuses IBM of intentionally trying to phase out older employees.

A former Amazon employee was sentenced to prison for 10 months after pleading guilty in a bribery scheme. The DOJ previously charged six people who it said were part of a conspiracy to bribe Amazon employees to leak confidential information in order to give third-party sellers a competitive advantage.

On Protocol

The Biden administration wants to speed up EV adoption. It set a goal of 500,000 U.S. charging stations by 2030 with the help of a $5 billion investment earmarked within the bipartisan infrastructure bill. The Zero Emission Transportation Association expects it would take $30 billion in investment to actually build a successful national charging network. To get a share of the $5 billion investment, states can submit proposals through Aug. 1.

The Florida state legislature is set to vote on bills that will set the tone for nationwide residential solar policy. The pair of bills under consideration would limit net metering, the practice of residents selling solar-generated power back to the local utility. The California legislature attempted to reduce solar subsidies for residential homeowners in January, though the effort was thwarted.

Around the world

Google agreed not to kill cookies until the U.K.’s Competition and Markets Authority gives it the green light. The deal is part of a set of commitments Google has made as part of the U.K.’s investigation into whether its plans for Privacy Sandbox would harm competition.

Chip supply chains hang in the balance, again. The White House is warning the chip industry that a Russia-Ukraine conflict would damage supply of neon and palladium, which are used in the manufacturing process.

Facebook content moderators working for the outsourcing firm Sama in Kenya make as little as $1.50 an hour, according to a Time investigation. Workers alleged traumatic work environments that leave them living “hand to mouth,” with one worker, Daniel Motaung, telling Time he was fired by Sama after trying to organize.

In the media, culture, and metaverse

Heather Burns, a U.K.–based open-web advocate, claims that she was recently approached “to be the public face of a privately funded advocacy campaign on a big tech crusade.” In a blog post, Burns said the role with an unnamed group involved playing “a quasi-fictional character” who would speak as if she had suffered harms that had actually happened to others. She warned that even good causes can attract “darker money,” and that it’s wise not to reduce tech policy debates to “benevolent governments and evil corporations.” Cheers to that.

In data

1.15 trillion: That’s the (record) number of semiconductor units that were shipped in 2021 as chipmakers tried to address a shortage, according to the Semiconductor Industry Association. It represented nearly $556 billion in sales.

Happy Valentine's Day!

Here’s your annual reminder that romance scams are alive and well on the internet. Last year, they reached an all-time high, with Americans losing $547 million to phony love interests, according to the FTC. Speaking of which: “The Tinder Swindler” on Netflix is a must-watch.