Poll: How Ethical is Amazon?

How ethical is Amazon? That’s the topic for the poll at the end of this post (see previous posts for similar polls on Starbucks and laptops). I should have written this post before Black Friday but I decided to take a break over Thanksgiving and I also got bogged down with thinking about where to start when researching this massive company. So, I’ve decided to do a few posts on Amazon over the coming month or two, looking at the business from different angles. This post will just look at Amazon during Covid, Jeff Bezos, and then the survey for you to weigh in with your opinion.

Why you should avoid Amazon right now

This week, the Bay Area has gone back down into stricter lockdown conditions – no outdoor dining is allowed and most salons, etc., have to close down again. It’s really hard to watch local businesses that we love struggling so much. Bay Area restaurants employ over 300,000 people and, especially if you’re passionate about cooking and the food industry, you can imagine how tough it must be to be stuck at home. My version of this was to be stuck at home instead of “cooking” things in the laboratory – but I was still getting paid, unlike many in the restaurant business.

If you’re buying presents this year, consider buying gifts that support local businesses instead of relying on Amazon. A gift certificate for a favorite restaurant, café, salon, or day spa, would really help people out a lot more than buying something from Amazon. You could even get a gift certificate for yourself as a reward for getting through this year! Of course, Amazon is thriving: I don’t think a day has gone by in the last week where I haven’t seen at least one Amazon van in my neighborhood.

There was a time, years ago, when I used to wonder if Amazon might be more sustainable than physical stores. After all, constructing and powering buildings make up a significant part of our greenhouse gas emissions. But that hope for a sustainable Amazon went out the window when Bezos’s business model was driven more and more by the speed of delivery.

Faster shipping = a higher carbon footprint

At a work seminar a couple of years ago the speaker asked the audience how many of us are members of Amazon Prime. I was fairly shocked at how many people put their hands up – more than half the room. By December last year there were more than 112 million Amazon Prime members in the US – that’s over one third of the population! Considering that a good percentage of the ~ 330 million residents in the US are children, or adults who live together, it seems that Amazon Prime is getting close to 100% penetration in US households.

Yes – I just checked this and even by spring 2019, over 80% of US households had an Amazon Prime membership! The cost of membership is $13 per month, or $156 per year (so the US population hands around $20 billion to Amazon each year just for Prime membership!). Naturally, when you spend that much for something, you’re going to make use of it – in other words, Amazon will likely be your go-to online retailer.

There were an estimated 103 million U.S. Prime members at the end of the first quarter [of 2019], and they spend an average of $1,400 per year, according to the report. That’s quite a bit more than the $600 per year that non-Prime customers spend. – Motley Fool.

So, putting all of this together, an overwhelming majority of US adults are Amazon Prime members, and it’s a reasonable assumption that most of them will take advantage of Amazon’s fast free shipping, whether that’s 2-day, 1-day, or 2-hours (yes, 2-hour shipping for groceries). There are two main downsides to this business model of fast shipping:

  1. Faster shipping means a higher carbon footprint. This is well-known and it’s logical that there have to be more journeys when customers want their package delivered overnight. And Amazon has been widely criticized for not making much effort to reduce their carbon footprint. All of the Amazon vans driving around my neighborhood are brand new Ford Transit vans – why don’t they at least have an electric truck fleet that they charge with renewable power at their warehouses? Incidentally, Amazon Web Services also rates poorly for carbon footprint compared to its main competitors, Microsoft and Google.
  2. Faster shipping means more stress on workers. I won’t labor this point because you’ve probably already read something about the plight of Amazon warehouse or delivery workers – the higher risk of Covid, the draconian timekeeping app that tracks each of them, the regular elimination of slower staff, the anti-unionization efforts, and the gradual conversion of humanity into robots (until it becomes cheaper for robots to take over). Amazon has improved some conditions for workers but that’s always in response to media spotlight. Even now, it seems that the much-touted minimum wage of $15 per hour has loopholes that are abused by sub-contractors.

I’m not judging – most of my friends have Amazon Prime accounts and I used to have a trial account too until I got tired of watching The Man in the High Castle. I also know how it seems so much easier to buy from a retailer that you’re familiar with and think you can trust. In the next post I’m going to take a closer look at why you can’t trust Amazon as a retailer, but for now I’ll stick to my plan for this post – it’s easy to get sucked into a rant when it comes to Amazon 😉 Just consider this: If you do need to buy something online, consider selecting a slower shipping speed if you don’t really need it ASAP.

How ethical is Jeff Bezos?

Jeff Bezos gets a fair amount of criticism that just comes with the role of being the richest person on the planet. So I’ll try to be objective here, as much as possible. As you probably know, Amazon has been thriving during this pandemic, with the result that in August, Bezos became the first human with a “net-worth” (what a horrible expression!) of over $200 billion. What’s he doing with this money? Well, he doesn’t seem too sure, yet. He could use just 10% of his wealth to give each of his one million Amazon employees a $20,000 bonus – a life-changing sum for many warehouse employees or drivers. But let’s compare his philanthropic efforts to what others are doing.

We know that the second richest person on the planet, Bill Gates (with accumulated wealth of around $116 billion, as of August) set up the Giving Pledge along with his billionaire buddy, Warren Buffet.

The Giving Pledge is an effort to help address society’s most pressing problems by inviting the world’s wealthiest individuals and families to commit more than half of their wealth to philanthropy or charitable causes either during their lifetime or in their will.

There are plenty of well-known names on the pledge, from Elon Musk to media tycoon Michael Bloomberg and investing mogul Bill Ackman (what strange language we use when talking about money!). Even when polarizing and widely disliked people like Mark Zuckerberg and Carl Icahn have joined the list, the most notable absence is Jeff Bezos. He’s the only one of the five richest people in America who hasn’t signed the pledge – and the absence seems even more notable now that MacKenzie Bezos signed up after her record-breaking divorce from Jeff.

Although he is the richest man in the world, he still does not rank high when it comes to the percentage of his extreme wealth that he redistributes. On the other end of the spectrum from Bezos’s measly 0.1 percent is Bill Gates. Gates directed 22.2 percent of his wealth during the same period. Warren Buffett directed a whopping 71.1 percent of his wealth to charity between 2000 and 2017. – Market Realist.

Perhaps we shouldn’t judge him yet – maybe there are some great things on the way. Just before Covid lockdown began, Bezos announced a $10 billion climate fund. Although he’s really thin on detail on this fund (making announcements on Instagram), he did announce the first set of donations, amounting to $791 million, last month. I still have to be a little skeptical here – is this primarily just a tax break for Bezos? Last year Bezos bought a Beverly Hills mansion for $165 million – that’s more than Amazon paid in corporate tax for 2019. He also spent $65 million last year on a Gulfstream jet that seats eight people. More importantly, if he really cared about climate change, Bezos would make Amazon shipping and AWS data centers more sustainable.

Is there not a responsibility for the richest person in the world to contribute more to solving global problems? Let’s face it: we face some serious problems, several of which are caused in part by Amazon Corp., and it would be really great if Bezos would step up a bit more. He should start with making Amazon more sustainable and socially responsible.

I haven’t really delved into the social and environmental impact of Amazon Corporation yet, but I’d like to hear your opinion before I write a post on that. Ultimately, we need to assess Amazon the company rather than Bezos the person – if I came to the conclusion that Amazon is changing the world for the better, I’d be more inclined to ignore Bezos’s wealth and think, oh he deserves it, working so hard to make the planet a better place.

How Ethical is Amazon? The Amazon logo is shown: the word Amazon with an arrow pointing from A to Z.
Amazon has everything from A to Z. But how ethical is the company?

How ethical is Amazon?

For reasons that actually overlap with my next post on Amazon, I’ve decided that a rating scale, whether it’s Green Stars or a regular rating, should range from zero to five (not one to five) in half-point increments. I’ll get into that in the next post. Meanwhile, please chime in by voting below on an ethical score for Amazon.

How would you rate Amazon for social and environmental impact on a scale of 0 to 5 green stars? Vote below.

Thanks for voting! I discussed the results in the next post in this series: Ethical Review of Amazon.

20 thoughts on “Poll: How Ethical is Amazon?

  1. Hiya, James. Can I explain why I can’t vote on the scale – well – not easily? Amazon is an employer that, as you’ve noted, millions support. Ethical? As compared to…? More or less than Ford, UPS, Walmart? Ethics can be solipsistic, cultural even in the green world. Are they doing what we’d love companies to do going forward? NO. Do they strive to be green? Don’t know if they care. Are they paying out a living wage? Hm. Do they have benefits etc.? Not likely as they fight unions (mixed issues there) and control payouts and time so that the fee per hour is not what it could/should be when the company’s profits are what they are. This can be said of many, many corporations. Bottom line for me? I find ways to not shop Amazon by ordering locally, or in Canadian stores. After all, Amazon sells brand names. Why not buy from the source? Anywho, my struggle to rate them is because they do perform a service, employ a whack of people, and do what they promise. If they are unethical – and I believe they are low on your scale – does everyone see it that way? The law and a whole lot of people are perfectly happy to let Jeff Bezos do things his way. Kind of reminds me of a few other narcissistic types flouting their brand of ethics around these days. LOL. Hope all is well in your world. Looking forward to the follow-up. Oh, and if I’m way off base on this, let me know. I rated them 0.5 but feel they could be 0-2 depending on perspective.

    1. Hey Frances! Thanks for the comment. See my response to Sal’s comment too as I think I was partly responding to you in that ramble!
      As far as who to compare Amazon to, I would include both physical and online retailers. You could include comparisons of Amazon unit operations (like delivery) to relevant companies like UPS and so on. You can also decide on whether to include consideration of other Amazon branches like Web Services, which is a huge part of the company – check out the link above for a comparison to Google and Microsoft. I thought of comparisons to UBER at times, while writing this, and also Tyson foods, which clearly rates lower than Amazon in terms of brutal working conditions. To be continued when I’m back on my laptop!

    2. Another thing to bear in mind is that it’s OK to focus on just a couple of aspects of the company. Ultimately the differences between reviews should balance out in the average score – in the same way that different people reviewing the same laptop or restaurant will focus on different things (Laptop: battery life, screen, processor, weight, etc.; Restaurant: service, decor, food, ambiance, noise level, etc.). It’s also acceptable to focus on something quite broad like Amazon’s role in encouraging excessive consumerism. Or alternatively you can be more detail-oriented, looking at numbers such as hourly wages and benefits, etc.

      1. Thank you. The scholar in you shines in this response. 🙂 Me? I’ll need to let your advice sink in – I don’t easily grasp what to me are complex ideas so I very much appreciate your explanations. If I can ‘get it’ I’ll be that much ‘bigger’ when it comes to processing ideas. 🙂

  2. Great post and really good idea to look at Amazon in depth. I’m always a bit worried that Amazon seems to be the go-to retailer for so many people, especially around Christmas too. I always hear negative things about their track record in how they treat employees, so will be following your Amazon posts with interest… I wonder if they have any redeeming qualities at all?

    1. Thanks Sal! I’ll try to live up your expectations 🙂
      Yeah I think there are some redeeming qualities – like many large corps, Amazon is a mix of good and bad. Its a case of figuring out how much of the bad stuff we are willing to live with (or actively subscribe to). Perhaps even more importantly, just going through the process of shining a light on the company (and each considering how we feel about it) induces change. Change in ourselves as we examine the stuff in our lives and decide what we are comfortable with. And change in the Corporation too as it sees that the public won’t put up with x or y any more and has to adapt (as Amazon did to some extent with employee benefits).

  3. I would give Amazon (not considering AWS) 0.5 for 1) creating an efficient logistics and delivery system and 2) giving some small businesses a platform to sell. As you say, fast shipping is bad for the environment but I see Amazon’s role in enabling our overconsumption culture perhaps a bigger issue. Those listarticles with the title “29 things you didn’t know you needed from Amazon” annoys me so much. I don’t think Amazon/Bezos deserve any extra points for the climate fund or initiatives like buying electric fleet because I see those only as a passive PR response to the public’s criticism.

    1. I agree with you, Yue – Amazon’s role in encouraging overconsumption is perhaps the biggest issue. That’s what I’m focusing on for the upcoming post, in a way.

      1. Great – looking forward to reading it! In many ways, overconsumption is so embedded in Amazon’s business model and success that I see it as the biggest issue and hardest to solve. Being able to deliver massive quantities/categories of cheaply manufactured stuff is the competitive advantage what Amazon has over other retailers – if they change that to be more socially responsible, will Amazon still be Amazon?

  4. I know, I know I should always shop local, but there are times when you just can’t find it locally and Amazon makes it very easy, especially during these covid times. Maybe if they started a carbon offset program and planted a gazillion trees…

  5. I so agree! While they don’t have Amazon in New Zealand where I live…it is highly unethical and anticompetitive, it seems they try and crush local businesses. I hate that. There is a new website that’s allows you to buy books from multiple local shops online which is cool and competitive to Amazon. I need to try and find it

    1. Lucky you, living in NZ! Can I visit? 🙂
      It’s great that Amazon is not really needed there. Yes, the company will probably come under scrutiny in the US this year as it becomes more monopolistic.

      1. Absolutely, you are welcome to visit any time and I’ll show you around in Wellington. It’s not like some paradise New Zealand, one of my latest posts goes into that, there’s good and bad in all places I guess. Amazon being unethical doesn’t surprise me really. Once organizations reach an oligarchy level they seem to lose integrity. Google it was the same thing – it’s up to consumers to be informed and boycott them.

  6. Sorry I missed this post originally. Judging ethics in American business is a tangled web. I try to look at carbon footprint, sustainability of packaging and business model, and how they treat employess. Amazon fails in how it treats employees–never more clear than in this pandemic. As a self-published author, I also have some insight in how Amazon treats “content providers,” and the answer there is also, not so good. The problem may just be an issue of economies of scale…you get so big that big seems to be the objective. But I know that my local coop treats farmers and employees very well–and I’m willing to pay a little more for that, and for a vendor that works hard on the carbon footprint and to provide organic. Even Costco, no small outfit, treats employees well–so Bezos has no excuse. The company comodifies everything, and everyone.

    1. I’d love to hear more about how you feel about Amazon as an author. I was thinking of you and the other author-bloggers out there when I was writing the latest post on Amazon. Thanks for going back and reading this one!
      Having read your pantry stocking post, just now, I’m contemplating a trip to the store! What will the next 7 days bring?

  7. Good question – thanks! Others have written articles on alternatives to Amazon so I’ll post a couple of links below. When buying gifts for Christmas, last year, I used eBay (for things like records or books, I don’t think people care that much that it’s not new). I only bought a couple of new things last year but I found that buying directly from the manufacturer worked out fine (e.g., a laptop from ASUS).
    I see eBay and Etsy recommended a lot for gifts and general purchases, and for books you could try Hive or Better World Books.
    Of course, thrift stores generally rank among the best places to pick up items.
    More options here:
    https://www.thegoodtrade.com/features/amazon-alternatives

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