The Teamsters Are Coming for Amazon’s Tax Breaks

This summer, communities around the United States have been declaring stunning victories in struggles to block Amazon warehouse projects in their cities and reject tax breaks that the tech giant demands from the localities and states where it opens facilities. 

In June, Arvada, Colorado rejected a proposal for an Amazon delivery hub. In July, Fort Wayne, Indiana shot down a $7.3 million tax incentive for Amazon. Last month, Oceanside, California abandoned an approved plan for a new Amazon warehouse. The victories have united communities around a host of issues including Amazon's labor practices, traffic congestion, and environmental pollution, and sent the message to other communities facing Amazon projects that they have the power to stand up to Amazon and win. 

A running presence throughout each of these victories has been members of the Teamsters—the country's fourth largest labor union with 1.4 million members—which launched a nationwide project to unionize Amazon workers in June. Recent efforts to disrupt Amazon's projects are part of the larger effort to organize Amazon workers, which has resisted unionization since its 1994 founding, and handily defeated a union election at a warehouse in Bessemer, Alabama in April. 

The Teamsters have taken a holistic approach to organizing at Amazon, which includes engaging its members and Amazon workers, antitrust enforcement, industry pressure campaigns, and engaging and educating the public about Amazon's impact on communities.   

"The term organizing has many more layers to it than just some pathway to a [National Labor Relations Board union] election that most people are accustomed to," Randy Korgan, the Teamster's national Amazon director, told Motherboard. "Part of what we're doing at the International Brotherhood of the Teamsters is connecting the general public, elected officials, and interested parties about how Amazon is eroding working conditions, and how it's going to have a long-term effect on the local community." 

While many of these local struggles remain low-profile, Korgan says in the near future, the Teamsters are gearing up to go public with more local fights against Amazon projects. Since 2000, Amazon and its subsidiaries have collected at least $4 billion in tax breaks in the United States for warehouse projects, according to a running tally by the policy group Good Jobs First. Meanwhile, Amazon has opened at least 800 warehouses and has plans to open 1,500 delivery stations. Amazon is slated to become the largest employer in the United States in the next year or two. 

Amazon did not respond to a request for comment. 

In Fort Wayne, Indiana, after months of speculation about a development known as "Project Mastodon," Amazon announced in April that it was building a robotics fulfillment center that would bring 1,000 new full-time, $15 an hour jobs. The local city council agreed to a $16 million tax break for construction of the warehouse. 

When Amazon approached the city a second time for an additional $7.3 million tax cut this summer, members of Teamsters Local 414 organized to push back against the proposal. They spoke out to local reporters, organized their members against the project, and contacted city council with a list of reasons why Amazon should not receive another tax break from Fort Wayne at a time when it was struggling to fund its public schools. (LocalTeamsters warehouse jobs start at $26 an hour and come with generous pension plans, a significant step up from Amazon, where pay starts at $15 an hour.)

"We thought it was a bad investment for the community based on depressed wages and working conditions and the high turnover at Amazon. The city already has struggling tax coffers because of COVID," Ehren Gerdes, a business agent at Teamsters Local 414 told Motherboard. "Why would we invest in one of the richest corporations in the country when we could spend it in other places?" 

More than 2,800 Teamsters union members live in the Fort Wayne area; some of them deliver Amazon packages, according to Gerdes. 

As has become a typical approach for Amazon, which has cancelled expansion plans and threatened to stop hiring when it doesn't receive the tax breaks it asks for, the company attempted to push Fort Wayne to give them the second set of tax breaks by offering to add $.50 to the hourly wages of warehouse workers, Gerdes said. 

On July 30, the Teamsters declared victory, when the Fort Wayne council members voted 5-to-3 to reject the $7.3 million tax break.

While many communities desperate for jobs welcome Amazon jobs, the Teamsters has been a vocal critic of Amazon—arguing that the tech giant offers dangerous jobs with little opportunity for advancement and has eroded conditions across the entire logistics industry by lowering wages and encouraging turnover. 

According to the Bureau of Labor Statistics data for 68 counties with large Amazon warehouses, the average pay for the warehouse industry declined by more than 6 percent two years after Amazon arrived. Meanwhile, Amazon's turnover rate has been calculated at more than 150 percent annually, and serious injury rates are nearly 80 percent higher at Amazon than the rest of the warehousing industry. 

"Amazon is thinking about how low they can pay people and then asks for infrastructure incentives and tax credits," said Korgan. "It’s gross to think about the amount of value that Amazon has pulled out of local communities, and now we’re stuck with hundreds of thousands of these jobs."

In many instances, Amazon hides behind its warehouse developers for months or years—making it difficult for communities to prove that Amazon is the tenant of a new project until it's too late for communities to push back. 

In Oceanside, California, a San Diego suburb, residents of a planned community began organizing this summer to halt the construction of an Amazon delivery hub, 1,500 feet from their homes.

When the local planning commission voted to approve an Amazon warehouse project in June—neighbors, activists, and members of Teamsters Local 542 set about canvassing the neighborhood, protesting at city council meetings to vocalize a range of concerns that include traffic congestion, environmental pollution, and low wage, dead end jobs. 

"We launched an all-out campaign," said Sal Abrica, a Teamsters Local 542 organizer. "We aligned with local community groups that had been working on this for quite some time, canvassed the neighborhood, put in e-comment, and asked our 500 members living in Oceanside to email council members." 

On August 4, city council members voted unanimously to reject the project, and shortly after, Amazon, which had a chance to litigate, withdrew its plans. 

"This was a milestone achievement," said Bill Roth, a resident of Oceanside who filed an appeal for the proposed Amazon project. "It's a major change in how projects have been approved here in our community. The community feels great about the outcome." 

"It’s not just politics as usual. Communities can fight back if you get in there in time," Jeanne Leeper, a resident of Oceanside, who has lived in the city for 50 years and spearheaded the fight, told Motherboard. Leeper held a pizza party with her neighbors to celebrate the victory. 

In the city of Arvada, Colorado, after residents and Teamsters union members collected more than 9,800 signatures and hundreds of public comments against an Amazon fulfillment center project, the local city council voted down a proposal for an Amazon warehouse in June. Teamsters members showed up in full force to protest the project on the council's voting day.  

Not everyone in these fights is against Amazon as an employer itself. Community activists had other reasons for not wanting the warehouse abutting their neighborhood.

"Amazon isn’t our foe," Leeper said. "Everyone likes Amazon because it gives us good service. But this warehouse was going to be right where we’re living and sleeping and going to school. The loading docks were facing where the people lived." 

The Teamsters say that participating in these struggles is an important opportunity for their members to engage and educate their communities and local politicians about the pernicious effects of Amazon on the communities where it operates. 

"You have the environmental impact and the community impact that local organizations are focusing on," said Korgan. "They want [the Teamsters] as an institution to tell the workers' stories because we can add a lot of color to this area in explaining the negative consequences."

Korgan said that the Teamsters' experience of living and working in these communities shows that while Amazon can create a lot of jobs, its business model will have a negative effect on the logistics industry. 

"When Amazon comes into a community they say 'hey we're going to promise 1,000 jobs,' we say 'Okay, so what kind of jobs? What's the future of those jobs? How many workers will be able to buy a home in the very community in which they're working?'" Korgan said. "If they can't do that, then what's the point?"