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Thinking Long-Term
April 11, 2014
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                                          Via: Flickr 

Evidently, this man is evil?

Yesterday on The Passive Voice there was posted an article about Amazon. Nothing unusual there, but this one started a debate that has raged on for over 200 comments as of this writing.

The article was from Business Insider and titled:

Amazon Pays Its Staff Up To $5,000 If They Quit — No Strings Attached

The gist of the story is a quote from a letter Jeff Bezo’s sent to Amazon shareholders discussing some new things for Amazon employees;

 

“The second program is called Pay to Quit. It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer.” We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment a possesses a minimum of education and/or job skill, this does not appear to be a bad entry-level or college-type job. There were arguments trying to define the effect of these jobs on the current economy and job market and if you insist on looking big-picture-only then you may have a point or two. But to the guy who needs a job and can’t find one, these are weak points.

Here’s what we know; An Amazon warehouse job comes with starting pay that is around $10-11 dollars an hour. That’s well above the minimum wage right there. Amazon also offers something called Career Choice;

<view, and that is defining an Amazon warehouse worker as one who possesses a minimum of education and/or job skill, this does not appear to be a bad entry-level or college-type job. There were arguments trying to define the effect of these jobs on the current economy and job market and if you insist on looking big-picture-only then you may have a point or two. But to the guy who needs a job and can’t find one, these are weak points.

Here’s what we know; An Amazon warehouse job comes with starting pay that is around $10-11 dollars an hour. That’s well above the minimum wage right there. Amazon also offers something called Career Choice;

“Career Choice is a program where we pre-pay 95% of tuition for our employees to take courses for in-demand fields, such as airplane mechanic or nursing, regardless of whether the skills are relevant to a career at Amazon. The goal is to enable choice. We know that for some of our fulfillment center employees, Amazon will be a career. For others, Amazon might be a stepping stone on the way to a job somewhere else – a job that may require new skills. If the right training can make the difference, we want to help.”

In addition to this they provide a safe, indoor working environment and offer a program by which employees can get sizable discounts on a locally  purchased home. On top of that they offer an employee stock plan, and now, when the employee decides they are ready to leave for the next stage of their life, Amazon gives them up to $5,000 to quit?

I’m failing to see a downside for the employee.

But nobody really asked the big question;

Why would Amazon do this? What’s in it for them?

I have a theory.

Jeff Bezos has said many times that his vision for Amazon is based on a 7-year projection. While most companies are looking at the next fiscal year or even the next quarter he’s looking 7-years down the road.

With that in mind let’s look again at our entry level employee. Most likely they fall into two groups. A; they are straight out of high school and without the financial means to go to college or even a trade school or B; they were employed in a field that has been made redundant and now have no marketable skill that they can offer a new employer.

Each employee, should they land at an Amazon warehouse, now has the tools and financial means to change the things that are holding them back. After four years working at Amazon, and attending school on their dime, they can now have a marketable skill and the diploma to go with it. It can be in any field that they choose (except apparently ornithology).

 So now our four-year employee has an education and skill that he can use to better his life. He no longer needs Amazon. He’s ready to start a new higher-paying career. To help them find that new job Amazon kicks in $5000 as a parting gift.

What happens to them? They build a life. They enter the workforce. They make more money.

What do they do with that money? They spend it.

And where do many people now do a majority of their spending these days?

Online.

At Amazon.

Jeff Bezos always puts the customer first. While most companies are shipping their unskilled labor overseas, he’s doing the exact opposite. He’s not only serving every customer he has today, he’s making new customers for tomorrow.

Juan in Juarez is earning less money with no benefits making cars he’ll never be able to own, but John in Seattle is climbing the education ladder so that someday he’ll be a Prime member. He’ll drive the car Juan made for him home from his good-paying job in time to watch the game on his Amazon Fire TV. And he’ll do it while sitting in the leather chair he bought online from his previous employer. Only I wouldn’t call him a previous employee of Amazon.

I think the better term is Amazon Alumni.

This is called a win-win, but you can only see it if you look down the road far enough.

 

About author

Randall

Randall Wood is the author of the popular Jack Randall series of thrillers as well as several short stories surrounding the main characters.

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There are 2 comments

  • Jim Self says:

    Of course he’s evil. His first name is Darth, duh!

    The reasoning you lay out is pretty much the same as Henry Ford’s reasoning behind reducing the work week and raising pay. In pretty short order he had all the best unskilled and skilled labor around, too.

    I agree that there’s little to find fault with here. I worked in a factory one summer, and I’ve also done roofing during the summer. Those were both harder than the descriptions of Amazons fulfillment center jobs. There weren’t a lot of older people doing those jobs, and not a lot of ladies. Of the people that did work the jobs, though, the main ones that quit were the lazy ones (and everyone knew who they were.)

    I have to wonder if some people haven’t become so disconnected with the realities of industry and production that they don’t understand what goes into it. Yeah, we’re evolving into a kind of information-driven, knowledge- and skill-based cyber economy. That doesn’t mean we can get by without the guy holding the blow torch. I also wonder if people think that America is so developed that we’re above blue collar work. Maybe it’s all just the people writing the hate articles?

    I also have to wonder if Bezos has political aspirations. That would put a lot of new meaning behind buying the Washington Post, as well as combating bad publicity with a move like this.

    • Randall says:

      Jim,

      Henry Ford is an excellent example.

      Make your employees customers.

      It seems so simple, yet it’s so rarely seen these days. The current mindset seems to be outsource everything I can to the cheapest labor I can find. Close the factory in Flint and move everything to Mexico. Keep the corporate headquarters here in the states, but keep the profits offshore. The next fiscal year/quarter/week is all that matters. Meet my projections at all cost and secure my bonus.

      Let some other company support the middle class.

      I think Bezos is so far ahead of them he can’t help but win. He doesn’t just view the consumers out there as customers, he views EVERYBODY as a customer. Employees, suppliers, distributers, everybody.

      That’s why I’m not worried about Amazon changing its terms for self publishers. I think if they do change they will just get better. Chuck Wendig did a piece awhile back saying that Amazon is not your friend. That they were a business partner and a distributor for your books and nothing more. By the textbook definition he’s right. Only Bezos threw that textbook out years ago.

      I think Bezos views me, and all self-publishers, as suppliers and customers. Look how he treats us compared to other companies. Can you be an affiliate with Kobo? How about B&N? Ever talk to Kobo customer support? When I talk to Jeff’s people they get back to me in less than 24hrs every time. That’s treating me like a customer, not a supplier.

      Is it good for Amazon? Sure. Why can’t it be, why shouldn’t it be. After all, they are a for-profit company. If it gets Amazon a bigger share of the consumer pie then maybe that should tell the Big-Six something. The Big-Six keep crying that Amazon’s goal is to kill them off, as if that was the end-goal from the start. I think the goal was always to gain customers, killing off the Big-Six is just a by-product.

      As for political aspirations? I don’t see it. One, he’s having too much fun doing what he’s doing. Two, the bureaucracy would drive him insane. Right now he’s free to do almost anything he wants, when he wants, without the approval of any elected idiots. I think politics are beneath him. Unless he got tired, retired from Amazon, and maybe went the Bloomberg route.

      I think he’ll take the Buffet/Gates road. Someday he’ll let out a sigh, stick his head up and say. “Well, I’m sitting on this giant pile of money, I should probably do some good with it before I start looking like an asshole.” Then he and Bill and Warren and a few others will have a meeting on a Blue Origin space station, and when they come back down they’ll build a bridge across the straights of Gibraltar.