Amazon is expected to bring at least 250 jobs to North Pekin next year when it opens its newest Illinois fulfillment center.
Some delivery jobs will be full-time and come with benefits. But the web-based retail giant will also hire independent contractors through its Amazon Flex program.
Unlike full-time drivers, part-time Flex drivers can set their own schedules via an app. But they must provide their own vehicles and pay their own insurance, and they will not receive health benefits or worker's compensation.
Labor lawyer and University of Illinois professor Michael LeRoy has studied the gig economy for years. He spoke with WCBU reporter Hannah Alani about what Flex jobs might look like for Peorians:
Michael LeRoy: There's a lot of work that's out there that is just app-driven. And they upsell you at the front. They tell you your gross pay. But they never tell you your net pay.
Today, I looked at the Amazon Flex website from the perspective of somebody who wanted to sign up for work. And I was struck by how misleading it is. Up front, it's telling you the good stuff, you'll get paid $18 to $25 an hour for each run. And you have to go deeply into this to then get to the tab about like, ‘What are my costs?’ And even at that, it is opaque. It just says well, ‘You have to pay for your gas, and your own insurance and your maintenance.’ And it stops there.
Hannah Alani: When you look at that $18 to $25 an hour wage that's being marketed, how disingenuous do you think that is? How much are those other costs?
Michael LeRoy: There is a minimum coverage requirement for insurance. As a lawyer, I can't even begin to imagine what does that actually cost? They’ll tell you that it has to meet these minimums. How much is this insurance going to cost me? What kind of maintenance here? This sort of replicates the Uber model. … In the same way, the very first thing they tell you is your cell phone has to have these minimum capabilities. That's highly problematic.
They evade a whole lab of employment taxes and obligations. And they also evade harassment laws and similar kinds of protections. It's a very cynical use of technology that exploits people. It's actually made me think that we're going back in time, not forward in time, in terms of working conditions. We’ve created, in effect, 21st century version of sweatshops. And that, that's just disheartening.
Hannah Alani: They're calling it the ‘last mile delivery.’ How far is this ‘last mile’ truly gonna be? Is it ‘last mile,’ or ‘last miles,’ plural?
Michael LeRoy: Workers sign up for what are called ‘blocks.’ And so they're typically two-to-four hour routes for the day. They're paying you up front. ... $72 for a four-hour block. Okay, well, that's about $18, $19 an hour. Looks pretty good. The ideal for somebody is, 'I drop off packages from house to house to house, and they're located right next to each other. So my cost per delivery is low.' But if you have to go across town or in the country, and that's relevant to Peoria, because you could have town and country drops in your block, it's a variable cost.
…So I think with Amazon Flex, but I would also say Uber and a host of other app-driven work platforms, they have an Orwellian quality. They use terminology that penetrates the mind of somebody who needs money, now. You have a variety of people who are looking for flexible work. And that's the hook, is the ‘flexibility.’ And it's only after you start to incur expenses, and you figure out your net pay, then you start to have to think seriously about, ‘Well, what am I getting for the flexibility that I'm being granted?’
Hannah Alani: Is that really a sustainable business model, even for Amazon? And what happens if a worker gets hurt?
Michael LeRoy: These drivers are delivering packages. They can get a back injury, they can get into a car wreck. They fall outside of workers compensation coverage. There will be a small number of cases where people in gig work, whether it's Amazon, Uber or elsewhere, really have a catastrophic injury that they incur in the course of their employment.
…The mass shooting in Boulder, Colorado in March of this year. I was struck by the fact that three employees were murdered, and the rest were people who were in the store. But there was a fourth person in there who was a DoorDash worker. What I find heartbreaking is her family gets no death benefit through workers comp. She doesn't even get counted in OSHA’s tally of employment-related workplace fatalities. But she was working. And she was killed in the course of working. She's not even a statistic.
Hannah Alani: Wow, that is really shocking, and so sad. … What do you think is the responsibility now moving forward, for local municipal leaders to protect residents who might take these jobs?
Michael LeRoy: There needs to be some thought about partnering more effectively, and cultivating some kind of corporate citizenship. When people don't strive to create that kind of community connection, it puts stress on the good employer. We're talking about the worker, but we should also be talking about the employer who is also stretched in making ends meet, and living billing cycle to billing cycle. They're treated unfairly in this, too.
…As our communities battle each other to bring in the fulfillment centers and the like, it sets up a competition between the low wage gig employer and the traditional employer who is paying into a worker's comp fund, who is paying employment taxes.
Hannah Alani: I'm glad you brought that up. Because one of our local sources here, he thought a plus of Amazon's fulfillment center would be that it would spur wage competition among local employers that do exist in the Peoria area. You're saying there might be some drawbacks to that?
Michael LeRoy: It depends. It depends what they're going to pay. And it depends what the market is. I don't doubt that it will stimulate competition, I don't doubt that it will drive down unemployment. And those are good things.
It also needs to be pointed out that there's a high degree of churn in fulfillment centers. The New York Times did a feature on this in the past year. At many large fulfillment centers in the New York area, the churn is 150 percent approximately a year. What emerged from that story was the narrative that they can live with the churn. It's okay.
…The implication of having 150 percent turnover in a warehouse job is you're at the bottom of what is acceptable to people, and that people are taking the job because they need it. And then they've reached a point in their short career where they say, ‘Even though I need this job, I'm out of here.’
I think at the start, it'll be good for the community. I have no illusions, that long term, these are going to be high paying jobs, high benefit jobs. They tend not to be that way.
Hannah Alani: Is there anything I didn't ask you about that would be good for our listeners to be thinking about?
Michael LeRoy: For anybody who is thinking about working as a flex job, read the full website. … I think the most important things to know are at the bottom of the FAQ's. They're not at the top. And so, I would just offer that humble advice, to read the whole thing. There are some positives, but there are some costs that you have to consider, too.
In a statement to WCBU, Amazon spokesperson Caitlin Polochak said average wages for Flex drivers exceed $25 per hour.
Drivers receive safety training before working and have 24/7 access to a company safety hotline, she said.
While drivers must provide their own personal auto insurance, Amazon provides additional coverage at no cost, except for in the state of New York, Polochak said.
With regard to scheduling, Polochak said drivers can select a location of a delivery block. Drivers can cancel scheduled work up to 45 minutes before a "block" start time, she added.
