Amazon backed out of a last-mile distribution center project near San Diego, California, because of a proposed law that would require it to pay workers more and offer them stronger protections, Motherboard has confirmed.
The law, known as the Working Families Ordinance, would require that employers that operate on San Diego-county owned land pay the prevailing wage—which is based on union wages—and mandate 56 hours of annual sick leave for workers.
In a statement, Maria Boschetti, a spokesperson for Amazon confirmed that Amazon had backed out of the deal, but did not specify the reason why Amazon backed out of the project. "While we have decided not to pursue the site in El Cajon, we continue to assess opportunities to invest and grow across the region," she said. "We appreciate the time and attention committed by the City of San Diego, as well as local community leaders and officials.”
"Amazon is a dynamic business and we are constantly exploring new locations," Boschetti continued. "We weigh a variety of factors when deciding where to develop future sites to best serve our customers. It is common for us to explore multiple locations simultaneously and adjust based on our operational needs."
But in a recent letter to the community obtained by Motherboard, Chesnut Properties, the developer of the Amazon warehouse in El Cajon, wrote that the Working Families Ordinance was the reason for Amazon's withdrawal from the project.
"Just the threat (mention) of this ordinance has already cost over 400 great jobs for the Weld Property that I have been working on for over five years," the letter from Chesnut Properties said. The Weld Property refers to the site of the Amazon warehouse.
"The proposed ordinance is, in my opinion, irresponsible in that the county leadership has put all business and ground lessees 'on notice' that a huge change is coming that will impose new wage costs on all of us," the letter continued.
In March, San Diego approved a proposal for the project. Chesnut Properties did not return a request for comment.
Amazon's decision to pull out of the warehouse project is yet another example of the tech giant's opposition to working with unions and raising wages for employees. It also falls within a pattern of the company ignoring communities' requests for a say in how Amazon operates. This year, Amazon has campaigned against union drives at its Bessemer, Alabama and Staten Island, New York City warehouses. The company has also withdrawn from warehouse deals when it didn't get the tax breaks it wanted.
"[Amazon's] rhetoric is we’re creating good jobs for the people of San Diego, and they have come into many communities with promises around creating economic opportunity," Terra Lawson-Remer, the San Diego County supervisor who brought forward the ordinance, told Motherboard. "But once there were real expectations to pay enough so people don't live in poverty, Amazon walked away."
The ordinance also requires that bidders on projects on public-owned land are held to certain safety, training, and living wage standards for warehouse workers.
"Amazon backed out because they don’t want to have to pay a living wage," Carol Kim, the political director of the San Diego Building Trades, which represents construction workers in the area, told Motherboard. The union has played a role in pushing for the passage of the legislation.
"Amazon often brag[s] about paying workers $15 an hour," Kim said. "That’s essentially the minimum wage more or less in California—or will be very soon. Their entire business model is about paying as little as possible and creating a fractured economy that allows them to circumvent countervailing measures that offset corporations."
The International Brotherhood of Teamsters pushed for the passage of the Working Families Ordinance, which is expected to appear before the San Diego Board of Supervisors on February 22 for a vote. The Teamsters, which represents 1.4 million workers in the United States, launched a coordinated national effort to unionize Amazon in June, and in recent months has claimed victory in Colorado, California, and Indiana—pushing local governments in these states to reject proposals for Amazon warehouse projects and deny the company tax abatements.
Since 2000, Amazon and its subsidiaries have collected at least $4 billion in tax breaks for warehouse projects in the United States, according to the policy group, Good Jobs First. Critics of Amazon, such as the Teamsters, say local governments should not be rewarding giant corporations this way. Amazon is expected to become the largest employer in the United states in the next year or two, surpassing Walmart.
"It's an unfortunate act [that Amazon backed out]," Sal Abrica, a Teamsters Local 542 union organizer in San Diego, told Motherboard. "Instead of saying 'hey we’re willing to participate and find a solution and adhere to standards,' they leave. No one was asking for anything unreasonable."
In El Cajon, the Teamsters canvassed 700 homes to engage and educate community members about Amazon's labor practices. Amazon pays its warehouse workers and delivery drivers significantly less than unionized workers in the same industries, and experts have noted that the company's presence often drives down wages.