Doing the rounds at the moment is a UK Sunday Star Times story about an undercover operation at an Amazon warehouse. Basically the reporter discovered terrible working conditions, very high demands on staff and not allowance for sick days off.

The thing that caused the shock for people (we all seem to have grown accustomed to near-slave labour in Eastern countries) was that this warehouse was in the UK – Milton Keynes to be precise.

Dennis Howlett posted about the incident saying;

If companies like Amazon can get away with this kind of exploitation then what next? Is this something that a civil society should tolerate? I don’t think so.

Reputation matters and to date, Amazon has ridden a wave of enthusiasm for its innovative approach to product distribution. But if exploitation is what it take to keep prices low then I’d rather pay a few coppers more if it ensures that workers are offered decent conditions.What the Times discovered does not qualify, even if it is technically within the law. What is the matter with Amazon management? Are they becoming the latest victims of excuse based decision making where if the law says it’s OK, then it’s OK?

Dennis is a fantastic guy and I bow down to his enterprise software pedigree but when it comes to the downstream effects of international trade and a consumer society, he is hopelessly naieve. As I said by way of comment on his post;

Dennis – I hate to say it but the fact that you’re surprised completely floored me. This Amazon story is a natural result of relentless downwards pressure on price. The move of (almost) all production to the east, and the rise of the super-consumer society has created a demand for low cost/high efficiency operations like Amazon – and how do they remain efficient and drive prices down? By sourcing goods from the lowest cost manufacturing countries and treating staff like disposable commodities.

Don’t people see that this is our fault? Amazon are just fulfilling a demand…

And that from someone who still proudly owns a business manufacturing 100% in the West (in this case and production entirely in New Zealand – well paid staff, clean /light/airy workplaces and a fun environment all included)

Of late I’ve bitten my tongue while those around me espouse the undeniable benefits of international trade. I too am a proponent of trade – but there is a difference between trade per se and fair trade. This is borne out by comments like this one;

The prices Amazon chooses to offer should have no bearing on whether they operate like slave camp owners. That’s a well understood business principle. People don’t realize this kind of thing is going on. That matters.

Price charged and cost structure are inextricably linked. As a society we have driven down the price we are wiling to pay but tried to ignore the social toll that the cost reductions needed to achieve that price have caused.

We shouldn’t blame the vendors for that.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • I was asked a few days ago why I didn’t want to use low cost labour… or build a business on it. I said I had ethical issues with it… but wasn’t able to articulate why. This article shows how you can set yourself up for a fall, long-term, if you don’t think about these things very carefully.

    It’s not as cut and dry… but it’s one of those slippery slope games.

  • Yes indeed. When we buy cheap Chinese-made goods and sports shoes made in Vietnam and Indonesia, how much do we know about the conditions under which they’re made? Next to nothing. The factories don’t have to be awful slave camps, but there has been enough stories to make me think most are; besides, if they weren’t, the goods wouldn’t be as cheap as they are.

    The worst thing is that the cheap and harshly exploited labour is getting stiffed hard in the present financial crisis. Chinese manufacturers for instance weren’t able to hike their prices despite increasing costs and wages going up because the big US and European buyers refused to pay more. They have no fat in these lean times when orders aren’t coming in. As a result, workers are being laid off as factories close down. There’s no social security net for them either.

    Maybe that whole labour rights movement thing wasn’t such a bad idea after all?

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