Amazon’s near sweatshops and awful conditions: It doesn’t have to be this way

Labor conditions at Amazon and Wal-Mart are like the pre-New Deal era. These reforms, working elsewhere, would help

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Amazon's near sweatshops and awful conditions: It doesn't have to be this wayJeff Bezos (Credit: Reuters/Shannon Stapleton)

Amazon and Walmart are prime examples of how in the early twenty-first century, state-of-the-art information technologies can be used to re-create the harsh, driven capitalism of the pre–New Deal era. With their reliance on tens of thousands of workers to shift goods in stores and warehouses, the two corporations depend heavily on a steady supply of unskilled labor very much in the manner of early-twentieth-century industrial sweatshops. But in their capacity to track employee performance, to speed it up, to measure it against targets, managers at Walmart and Amazon are empowered in ways that their predecessors of a century ago could only dream of.

The countervailing powers of labor unions are needed to offset this management hegemony and to defend the dignity of employees— in securing wage increases that match their increased output, in placing limits on shop-floor “speedup,” and in protecting employees against unfair and arbitrary dismissal. The need for a strong union presence is all the greater because most work in Walmart stores and Amazon “fulfillment centers” is by its very nature unskilled, and employees cannot realistically expect that technology will at some time in the future enhance their skills and add to their earning power.

But there are also sectors of the manufacturing and industrialized service economies where the relationship between technology and skill is more complex, where a given technology can coexist with different levels of skill, and where the relationship between technology and skill that prevails reflects a particular business history and culture. In the American case the close identification of information technology and of Computer Business Systems (CBS) with an authoritarian, mass-production model, heavily influenced by Taylorist Scientific Management, is an outcome of this history and culture and is not an intrinsic quality of the technologies themselves. Again, as with Amazon, it is the contrast between American and northern European and specifically German workplace practices that can show that this American model is not a universal norm but an American phenomenon whose reach is finite and can be contested.

Perhaps the best way to illustrate this pluralism is to compare production regimes from the two industrial cultures. They may rely on similar technologies to turn out broadly similar goods, but the histories embedded in the two models make for very different relationships between men and machines, with these differences showing up in the differing sophistication and quality of goods produced under the two regimes. At play here is the distinction between craft labor, which is skilled, and industrial labor, which is not skilled, a distinction that has its origin in the machine age but continues to yield valuable insights in the digital present.

In the fall of 1992, two years after the reunification of Germany, I visited the former East German city of Chemnitz, known as Karl-Marx-Stadt during the years of the German Democratic Republic (GDR). In prewar, united Germany, Chemnitz had been a center of the German machine-tool industry, but following World War II and the division of Germany, much of the industry had migrated westward to the Rhineland Land of Baden-Württemberg. But a residual East German machine-tool industry had remained intact in Chemnitz, and I was interested in seeing how it was getting along following German reunification in October 1990. I visited a company that was considered one of the best of the East German industry and at the time was under the control of the Treuhandanstalt, the state holding company that after reunification had been given the task of taking control of those East German companies that, in the view of West German experts, could be turned around and eventually sold off to a West German or foreign buyer.

I had originally become interested in the West German engineering industries, and the machine-tool industry in particular, when in the 1970s and early 1980s they invaded the British market and, with their superior quality and performance, effectively destroyed the old British engineering industries that had their origins in the Industrial Revolution and had managed to survive World War II more or less in tact. A remarkable series of research papers published by the London-based National Institute of Economic and Social Research showed in detail how the superior skills and more disciplined work habits of the German engineering workforce enabled the German industries to beat the British on product reliability and delivery times and to market engineering products of a technological sophistication that the less skilled British workforce could not match.

My most memorable encounter with the German machine-tool industry took place in the spring of 1989 when, shortly before the coming down of the Berlin Wall, I was in the press party that accompanied Mikhail Gorbachev to Stuttgart, capital city of Baden-Württemberg and so at the heart of the West German machine-tool industry. Because the supposed achievements of the Soviet machine-tool industry had played a central role in the mythology of Soviet industrialization, the West German machine-tool industry had organized a mini exhibition at Stuttgart University, where the industry’s most advanced products were on display so that Gorbachev could inspect them and perhaps be persuaded to have his Machine Building Ministry back in Moscow place orders for some of them.

These were the world’s most advanced grinding machines and special-purpose machines for making very high-precision components for machining systems and for machine tools themselves. The machines were objects of elegance, even beauty, and I watched carefully as Gorbachev inspected them. He was used to huge, clunky Soviet machines so heavy that they sometimes fell through factory floors that could not bear their weight. Gorbachev was deeply impressed, even mesmerized by the German machines, and I wondered what was going through his mind; was this the moment when he realized that the backwardness of Soviet industry was beyond remedy, or, in the traditional Soviet manner, did he think that with one big push led by himself, the gap could be closed?

Along with the beauty of the machines and Gorbachev’s interest in them, another remarkable feature of the Stuttgart event was that the task of explaining to Gorbachev how the machines worked and what they did was entrusted not to executives of the parent machine-tool companies, but to the craft workers, the master machinists, or Meisters, who had actually built the machines. Teams of them clustered around each machine and took their turn explaining its finer points to Gorbachev. These machining Meisters were at the pinnacle of the German craft-worker hierarchy and not just because of the preeminent role of the engineering industries in the German export economy. They were graduates of a highly demanding system of study and on-the-job training that can take as long as ten years to complete.

This scene was very much on my mind when I visited the Treuhand-owned machine-tool company in Chemnitz in the fall of 1992. I expected the company still to be scarred by the heavy hand of the East German industrial and planning ministries whose rule the company had endured for forty years. But I was wrong, and this was in part because the East German regime had hung on to the prewar system of German industrial training from which the West German system itself was descended. During the GDR years, the caliber of the training had inevitably lagged behind its West German counterpart, but it still provided a base of reliable expertise that the Treuhand management brought in from West Germany had been able to work with in upgrading the skill levels of the Chemnitz workforce toward West German levels.

This history is a necessary background for an understanding of what I came across on the shop floor at the Chemnitz plant, which was as remarkable in its way as the event with Gorbachev at Stuttgart. I saw a group of machinists clustered around a pile of blueprints. The machinists explained that the arrival of the blueprints at the plant that very morning was a major event in the post-GDR history of the company. The blueprints had come from Daimler-Benz in Stuttgart, and they contained the designs for engine components for a new Mercedes-Benz S-class sedan. But the arrival of the blueprints did not mean that the company had already won an order from Mercedes, a very significant achievement for a Chemnitz engineering company.

The blueprints were there as part of a test to see whether the standards of machining at the plant were advanced enough for Mercedes-Benz to take the risk of placing an order with a former East German company. It was the task of the Chemnitz team to work out how best to machine the Mercedes components, mindful always of the need to achieve very high accuracies without undue sacrifice of machining speed. Working with component prototypes, they had to decide how best to allocate the machining task between different computer-controlled machine tools and work out the machining program for each of them, which would then be fed into the machine’s digital controller. They also had to know how to alter their own programs in light of orders for component design changes that would be coming down from Mercedes-Benz during the lifetime of the S-class model.

There was no one from management supervising their work. Already the West German workplace model of strong unions (in this case IG Metall), work councils, and employee-management codetermination was making itself felt in operation at the Chemnitz plant and shaping its day-to-day division of labor. In the case of the Mercedes components, it was ultimately up to the Chemnitz management to decide whether the component prototypes were good enough to send to Mercedes for approval. But it was for the skilled machinists to create the components in the first place. I later found out that the Chemnitz machinists were successful on both counts.

Let’s now fast-forward and move from the former Karl-Marx-Stadt to two American industrial communities with absolutely no connection to Marx: Waterloo, Iowa, home to a John Deere plant making agricultural equipment, and Peoria, Illinois, home of the giant Caterpillar plant, making heavy equipment for the construction industry, such as bulldozers, excavators, and heavy trucks. My interest in visiting the two midwestern plants in 2001 was to look at the role of labor in two large mass-production plants already deploying the manufacturing versions of CBSs. But with my Chemnitz experience in mind, I was also interested in seeing how the skilled work of component prototyping was done in an American industrial setting.

It was done very differently. Right at the outset of my visit to the John Deere plant, I was introduced to a gentleman called Merrill Oakman, who described himself as “vice president for machining.” It was he who drew up the machining programs for component prototypes and who, for the actual prototype machining, relied on a team of machinists who were under his direct control and were not part of the shop-floor machining workforce. The same arrangement existed at Caterpillar’s Peoria plant, with the difference that the prototyping machinists were located at a facility well away from the main manufacturing plant, so that there could be no day-to-day interaction between these elite machinists, who of necessity had to be skilled, and the main shop-floor workforce, which was kept largely unskilled.

At the Peoria plant these arrangements reflected the strong antiunion bias of Caterpillar management and its poor relations with a workforce still organized by the United Automobile Workers union. At UAW Local 974 in Peoria, I met a dozen UAW members who, according to the union, had been unfairly dismissed by Caterpillar and whose cases were pending at the National Labor Relations Board, an interminable process. Both the Caterpillar and the Treuhand models relied on identical technologies to produce the prototype components. But in the Chemnitz model, power and responsibility lay principally with the skilled shop-floor workforce, with management signing off on their work. In the Caterpillar model, the shop-floor workforce was excluded from the prototyping work, with power and skill vested in management, assisted by small teams of machinists under tight management control. The moral of these histories is that although the rootedness of most American CBS regimes in mass production may seem immutable, it is not.

Excerpted with permission from “Mindless: Why Smarter Machines Are Making Dumber Humans” by Simon Head.  Available from Basic Books, a member of The Perseus Books Group. Copyright © 2014. All rights reserved.

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