Amazon: Any New Jobs Are Welcome, But …

by Dan Burrows | August 6, 2013 1:09 pm

Amazon (AMZN[1]) isn’t just the future of retailing — in too many ways it’s also the future of American employment, which is increasingly part-time, temporary and low-paid.

The company recently announced that it will be hiring 5,000 people to work in its so-called fulfillment centers — the massive warehouses where it stores and ships its vast array of goods.

That’s a lot of jobs considering the sluggish pace of U.S. employment growth; the economy has been averaging net new job creation of just 192,000 a month this year. Heck, Amazon itself only has about 90,000 full-time employees.

Sure, another 5,000 jobs isn’t going to move the needle on the unemployment rate or the more than 11 million Americans who are out of work. But it’s not a drop in the bucket, either.

Too bad those jobs are so dreadfully crappy.

Gawker has been running letters from people who toil in Amazon’s fulfillment centers — and the work is miserable[2]. It’s backbreaking, monotonous, humiliating and even freezing cold.

Even worse, the pay comes to $11 an hour, at least for the 5,000 new hires Amazon is bringing on. Yes, that’s 50% greater than the federal minimum wage of $7.25 an hour — but it’s still essentially poverty pay.

The federal poverty level for a family of four is $23,550 (pre-tax) a year or less. If you work for $11 an hour, 40 hours a week, 52 weeks a year, your annual income comes to $22,880.

Amazon is just the most prominent recent example of the depressing reality of post-recession employment in the U.S. Although the economy is indeed adding jobs and the unemployment rate is slowly coming down, the fact remains that the majority of new jobs are part-time, temporary and/or low-paid.

Of the 162,000 jobs created last month, more than 65% were part-time positions[3]. As we’ve seen in InvestorPlace’s monthly jobs report card[4], bars, restaurants and retail have consistently been among the best places to look for work.

Indeed, the best industry for job-seekers last month was in retail, which added 47,000 jobs in July and has added 352,000 during the past 12 months, the Labor Department said. Within retail trade, the best places to find jobs were general merchandise stores, motor vehicle and parts dealers, building material and garden supply stores, and health and personal care stores.

After retail, the best place to find a job was in the leisure and hospitality industry — led by restaurants and bars, which gained 38,000 positions in July and has added 381,000 jobs over the past 12 months.

Needless to say, it’s tough for even a single person to make a go of it with part-time or minimum wage work. Even full-time employment at minimum wage — taking no vacation or sick days — pays only $15,080 a year.

No wonder 54% of Americans think the economy is still in recession[5] even though it officially ended more than four years ago[6].

Sure, corporate profits and the stock market are at record highs, but wages have gone backward. Zero Hedge points out that after accounting for inflation, 40% of U.S. workers make less than what a full-time minimum-wage employee made[7] in 1968.

Yes, of course it’s relatively good that Amazon is hiring 5,000 people. After all, even a bad job is better than no job at all.

But that doesn’t mean it’s good enough.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

  1. AMZN:
  2. the work is miserable:
  3. more than 65% were part-time positions:
  4. monthly jobs report card:
  5. 54% of Americans think the economy is still in recession:
  6. ended more than four years ago:
  7. make less than what a full-time minimum-wage employee made:

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