- Amazon‘s reputation is sliding among members of the general public, especially when it comes to issues of citizenship and its treatment of workers.
- In a clear reference to Amazon founder and CEO Jeff Bezos, Sen. Bernie Sanders introduced a bill called the Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act last week.
- The bad press mirrors what Walmart went through years ago, before it endeavoured to fix its reputation in the 2000s.
If there was any doubt that Amazon is increasingly being painted as the biggest villain in American capitalism, it died last week with the introduction of the Stop BEZOS Act.
On September 5, Sen. Bernie Sanders introduced the Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act. The bill, a clear reference to Amazon founder and CEO Jeff Bezos, would create a welfare tax for large employers with workers who receive federal benefits such as food stamps.
Sanders’ office singled out Amazon in the press release, citing a report from The New Food Economy that found one in three Amazon workers in Arizona depend on food stamps.
Sanders’ office’s press release also mentioned Walmart, citing a 2014 report from the grassroots group Americans for Tax Fairness that the retailer costs American tax payers $US6.2 billion a year due to workers’ reliance on food stamps, Medicaid, and public housing. At the time when the report came out, Walmart called it “inaccurate and misleading,” noting that the percentage of Walmart workers who use government benefits is similar to that of other retailers.
To be sure, Sanders’ proposed bill would affect Walmart, too. But Amazon was still the focus.
A growing problem
Amazon’s reputation woes were put into concrete form when the Reputation Institute issued its annual RepTrak ranking of companies on Thursday. Amazon notably lost the top spot to Barnes & Noble in the retail category.
Among all companies globally, Amazon fell from 18th to 23rd place. It was the top company in the US from 2014 through 2016 but is now 10th.
Many of the listed companies fell in the ranking year-over-year. The Reputation Institute determined its ranking from a survey of 10,000 individuals, saying that it “quantifies the emotional bond stakeholders have with leading companies and how these connections drive supportive behaviour.”
The company’s reputation fell in all categories of reputation, but it was hit especially hard with relation to citizenship – how it gives back to its community – and how it treats its workers.
The haves and have-nots of Amazon
Amazon’s threat to small businesses was one of the first strikes against the company in some people’s minds. For mum-and-pop businesses, it is easy to feel like a dying breed in the age of Amazon, even as many small companies rely on Amazon for sales.
“Today, millions of small and medium-sized businesses from around the world are selling on Amazon and more than a million of them are based in the US,” an Amazon representative told Business Insider in July.
The search for Amazon’s new second headquarters, known as HQ2, has helped put a microscope on Amazon’s local impact. Skyrocketing housing prices, unrelenting traffic, and overcrowding have inspired residents to dub Seattle “Armageddon.” Local businesses have been forced out as prices increase and Amazon’s headquarters expands into “Amazonia.”
In response to criticism, Amazon has touted its investments in Seattle and how the HQ2 deal could pay off for the city that becomes home to its new headquarters.
Perhaps most damning are reports from Amazon workers. While Amazon has been applauded for its impressive benefits, the company has also been plagued with stories of white-collar workers dealing with a brutal working environment in which people cry at their desks after being pushed to their breaking point.
In July, Bezos became the richest man in modern history. As of Monday, he has an estimated net worth of $US159.2 billion, according to Forbes.
Warehouse workers have protested long hours and poor working conditions. Employees told Business Insider earlier this year that they were constantly under surveillance while working in Amazon warehouses, with intense targets that don’t even allow for bathroom breaks.
“The metrics are brutally aggressive, and most of my colleagues are in a state of constant anxiety that we could be fired at any moment for not meeting metrics,” one current US employee said. “Jeff Bezos has become the richest man in the world off the backs of people so desperate for work that we tolerate the abuse.”
Amazon defends its working conditions strenuously.
“We encourage anyone to compare our pay and benefits to other retailers,” an Amazon representative said in August, noting that the average hourly wage for full-time workers in fulfillment centres was over $US15 an hour before overtime. “Amazon is proud to have created over 130,000 new jobs last year alone. These are good jobs with highly competitive pay and full benefits.”
Walmart’s past problems look a lot like Amazon’s current ones
Amazon isn’t the only company to face criticism for its CEO’s wealth, its ruthlessness in the face of competition, or its treatment of workers. But because it is such a visible company – with the richest CEO – it becomes a target for criticism that could be applied to many retailers.
Walmart, however, has turned things around. It’s made a concentrated effort to change consumers’ perceptions.
The company raised its minimum wage and started sustainability initiatives. Leadership is speaking out on progressive political issues, with The Wall Street Journal publishing an article earlier in July with the headline “Walmart Takes a Stand on Guns, Gay Rights to Get People to Like It More.”
In January, Walmart CEO Doug McMillon explained to hundreds of retail influencers at the National Retail Federation conference how the company had not cared much about its reputation for decades. It didn’t pay attention to the positive press in the beginning, and it didn’t pay attention when the tide started turning against it.
“At some point, Walmart became big, and societal expectations changed,” McMillon told the crowd. “And we missed the memo.”
McMillon said that Walmart had been ignoring its critics, but then tried to combat the negative attention with facts.
Eventually, the company decided to confront its critics head-on.
“Let’s find the people who dislike us the most and go figure out why, and see if there’s some good in what they’re saying – and then implement it,” McMillon said, paraphrasing words from Lee Scott, who was Walmart’s CEO from 2000 to 2009.
That led to a watershed moment for Walmart as it started its first large-scale humanitarian efforts in the wake of Hurricane Katrina. McMillon said Walmart “unleashed” its entire staff, sending products, money, and people down to affected regions.
Walmart’s story is further along the timeline than Amazon’s, but the tech giant is following the same path. Amazon has pushed back against many of the criticisms thrown at it. It argues that its workers are paid better than most retailers’, and that the company is ultimately a force for good.
For comparison’s sake, it’s worth noting that Walmart does not even appear on RepTrak’s top 100 companies ranking. Its score hovers a bit above 60 points, according to Bloomberg, while Amazon’s is 73.5. That may just go to show that it’s a lot easier to maintain a reputation than it is to earn it back.
“Walmart still has some prejudice to overcome,” Stephen Hahn-Griffiths, chief reputation officer at the institute, told Bloomberg.
Business Insider Emails & Alerts
Site highlights each day to your inbox.