In his cover jacket intro of Alec MacGillis’ Fulfillment: Winning and Losing in One-Click America, Craigslist founder Craig Newmark refers to the 1937 Upton Sinclair novel, The Flivver King: A Story of Ford-America. Newmark contrasts the $30 billion market capitalization of Ford with the $1.5 trillion market capitalization of Amazon. In The Flivver King, Sinclair blasted Ford for underpaying its workers while forcing them to engage in repetitive and dangerous assembly-line work.
Newmark writes that Fulfillment is not an exposé of Amazon as much as it is an investigation of America as it falls under the growing operating shadow of our largest online retailer. After reading Fulfillment, I believe that this book is both an exposé of Amazon as well as an exposé of how our federal, state, and local authorities have subsidized the growth of Amazon and other companies through generous tax concessions, lax regulations, and deliberate waivers of oversight.
Mr. MacGillis sets the tone for the book by quickly outlining the changes in family incomes in the U.S. since 1980. In 1980, nearly every area of the U.S. had mean family incomes that were within 20% of the national average.
By 2013, that had changed. The Northeast corridor from Washington to Boston and the Northern California coast had incomes more than 20% above the national average. While those areas experienced income growth, the rural South and Southwest as well as much of the Great Plains and Midwest had mean incomes that were more than 20% below the national average.
According to Mr. MacGillis, the financial inequality between U.S. regions also worsened the inequality within each region. In the more prosperous cities, the rich got richer and the poor got poorer. As MacGillis saw that economic concentration and regional inequality were intertwined, he decided to tell the story through the lens of Amazon, a company that played an outsized role in this new economy.
The first chapter of Fulfillment describes the growth in prosperity for Seattle, thanks to the success of Microsoft and Amazon. More than 20 Fortune 500 companies opened engineering or research and development branches in the city. Tech company shareholder rewards lay in an innovation itself which, once developed, could produce outsized returns without additional capital.
Mr. MacGillis tells how artists, teachers, small business owners, and blacks were displaced in Seattle as the demand for housing from the more highly paid tech workers increased rents, land values, and home values. However, the rising wealth was not spread evenly.
While Seattle’s 2018 per capita income was $75,000, the average income for the top 20% of its households reached $318,000. This group took home 53% of all the income in the city.
Seattle’s ascent in growth and wealth powered by technology companies is in contrast to the descent of cities like Dayton, Ohio. In 1960, Dayton peaked in terms of population with the growth of local companies like National Cash Register (NCR) and Dayton Engineering Laboratories Co. (Delco).
The admission of China to the World Trade Organization (WTO) in 2001 accelerated the loss of 2.4 million manufacturing jobs from 1999 to 2011. Delphi auto parts plants in the Dayton area closed one by one. In 2008, the massive GM plant announced its closure.
A year later, NCR announced that it was moving its headquarters to Atlanta and taking 1,200 Dayton jobs with it. During the first decade of the 21st century, Dayton lost 25,000 residents, leaving it with a population slightly more than half of its 1960 peak.
In 2015, Amazon applied to build its first Ohio warehouse in the Columbus area. In 2017, it applied to build another warehouse in the Dayton area.
Both applications were shrouded in non-disclosure agreements and forced secrecy. Both deals resulted in substantial tax incentives for Amazon to locate their warehouses in these areas of Ohio.
According to Mr. MacGillis, Amazon collected well over $100 million in tax subsidies nationwide in 2017 to open fulfillment centers. The cumulative benefit was $1 billion in the previous decade.
While many jobs have been created in Amazon’s fulfillment centers, the pay isn’t great. Also, the physical exertion is taxing, and the company’s treatment of its warehouse employees is quite different than its higher-paid tech workers in Seattle.
More chapters include stories about communities like Baltimore, Maryland; El Paso, Texas; and York, Pennsylvania. These communities lost manufacturing jobs and high-earning residents as they added Amazon fulfillment centers employing non-union workers at much lower wages than the factories previously operating in those communities.
There are also stories about Amazon’s treatment of companies whose products it agreed to promote on its platform, only to later compete with those businesses and drive them out of business. According to Mr. MacGillis, Amazon’s plan was to become the dominant retail platform using the Internet, and it has succeeded through tax subsidies and aggressive business practices. No business is safe if Amazon chooses to enter its sector.
It’s no accident, according to Mr. MacGillis, that Amazon founder Jeff Bezos bought the Washington Post and selected the Northern Virginia suburb of Arlington for its second headquarters. The influence of Amazon and its lobbyists in Washington, DC, and elsewhere is painstakingly described by the author.
Mr. MacGillis writes that his agenda in writing the book was not to bash Amazon, but to write about the intertwining of economic concentration and regional inequality through the lens of Amazon’s growth and expansion in the U.S. He clearly succeeded.
I highly recommend Fulfillment to policymakers and others who want a clearer understanding of how our lax regulations of some of the major players in the growth of the Internet (Amazon, Microsoft, Apple, Google, and Facebook) contribute to the concentration of wealth as well as regional inequality.
The last book I read that impressed me with its similarly accurate portrayal of inequalities was Barbara Ehrenreich’s Nickeled and Dimed: On (Not) Getting By in America, published in 2011. It’s been 20 years, and we haven’t fixed the housing crisis. If we don’t find solutions to remedy some of the regional inequalities, the polarization that we see between “red” and “blue” states will only increase.