Jeff Bezos is the richest man in the world. His wealth officially reached an obscene £116 billion last week.
Profiles of the Amazon boss make much of the rags to riches story of the Princeton graduate who made a killing on a hedge fund. He used his own ill-gotten gains and a £235,000 gift from his impoverished parents when he started Amazon.
Media profiles talk of how frugal he is. Bezos is currently spending £30 million building a clock inside a hollowed-out mountain that he owns in Texas.
It is a “symbol for long-term thinking” and he claims it is meant to last 10,000 years. Just for fun a mechanical cuckoo will pop out of a hole every 1,000 years.
Bezos said, “In the year 4,000, you’ll go see this clock and you’ll wonder, ‘Why on Earth did they build this?’” Perhaps people will ask even earlier than that.
His business empire makes Bezos the 25th largest landowner in the US, and he owns at least five houses in the US.
This includes two adjacent properties in Beverly Hills, California. A four-bedroom home with a swimming pool is worth £9.5 million. Then there’s an £18 million, 28,000-square-foot mansion complete with tennis courts and a six-car garage.
In 2012, Bezos purchased four linked apartments worth a collective £12.5 million in an Art Deco building in Central Park, New York.
His latest home is a former Textile Museum in Washington, which he bought for £18 million and is having converted into a house.
His frugality also extends to a top-of-the-line, £50 million private jet, the 2015 Gulfstream G-650ER.
The jet is of course technically owned by a holding company—Poplar Glen—just to optimise the taxation.
In 1994 Bezos quit his hedge fund to found a company that could ride the growth of the early commercial internet. He originally thought of calling the firm Relentless.
Bezos said that Amazon intended to sell books as a way of gathering data on affluent, educated shoppers. After collecting data on millions of customers, Amazon could figure out how to sell everything else on the internet.
Taxes are airbrushed away. For years, Amazon fought furiously against paying sales taxes where it had no warehouses—and even where it did.
A growing part of Amazon is now its web server hosting—storing stuff on the internet. Because after the firm has collected all the data, it needs somewhere to store it.
Amazon hosts the web servers for the US military and the Central Intelligence Agency. It sells its cloud service to Immigration and Customs Enforcement (ICE), which conducts raids and detains immigrants.
Amazon also sells facial recognition software to police departments across the US and to the Department of Homeland Security.
It’s moving into the cop business in Britain too. Lancashire cops will store crime reports on Amazon’s servers. And they hope to use Amazon to hold crime records for the cops’ day to day use.
There are pigs in space too. The current trend is for billionaires to delve into space exploration. Partially this is vanity, but it is also about looking to grow their businesses.
Importantly the new boom in privatised space projects is just like privatisation on the ground—it gets a slice of the state’s cash and business.
Back on the ground in the US, Amazon is set to begin accepting grocery orders from US customers using the Supplemental Nutrition Assistance Program (SNAP). These used to be called food stamps.
This is a double subsidy for the company. In Arizona one in three of the company’s own employees depends on SNAP to put food on the table. In Pennsylvania and Ohio, the figure is one in ten.
So in Pennsylvania, for instance, an estimated £19 million in state subsidies supports 13 warehouses employing around 10,000 workers. At the same time, more than 1,000 of those workers don’t make enough money to buy food. But graciously Amazon will now accept the vouchers so they can buy its goods.
Amazon is bringing back the “company town” of the late 19th century. The company demands tribute from governments worldwide, requiring billions in tax breaks and free handouts in exchange for building its warehouses.
It forced over 200 US cities into a bidding war to lure the company’s second headquarters with massive handouts.
Chicago offered Amazon a £1.8 billion “incentive package,” while Stonecrest, Georgia’s city council, voted to change its name to “Amazon” and appoint Bezos as “mayor for life”.
When Amazon opened a fulfilment centre in Miami-Dade County last year, county officials promised the warehouse would bring 2,300 jobs at an average salary of £28,000.
The company secured £1 million in tax rebates and a £4 million bond for infrastructure improvement.
But by the time negotiations concluded, the number of jobs necessary to qualify for the bond had been cut to 1,000, and the salary promise fell to £18,000.
In Britain the pattern is repeated. Amazon’s tax bill on 11 of its gigantic “fulfilment centres” rose by less than £80,000 in total last year.
That is barely half the tax bill of an average department store.
A Treasury Committee heard earlier this month that HMRC had been “instructed not to go too hard on Amazon”. One MP said this was a “secret policy”.
Maybe that explains why last year the company’s corporation tax bill was just £7.4 million, despite UK sales reaching £7.3 billion. And after a series of deductions, it actually received a £1.3 million credit to deduct from future payments to HMRC.
In other words, the British state ended up owing Amazon money!
Though happily you can now use the Amazon Ask Alexa service to renew your tax credits for you in a joint scheme with the HMRC.
All Bezos’ cash comes from the exploitation of workers. Workers at warehouses in Britain have told of sleeping in tents and under bridges just to get to work on time.
Timed toilet breaks, impossible targets and exhausting, “intolerable” working conditions are frequent complaints.
Before workers can go home at the end of their shift, or go for their 30-minute break, they must walk through a set of security scanners.
Next to the scanners is a life-sized cardboard image of a cheery worker. “This is the best job I have ever had!” pronounces a speech bubble.
Workers are divided into groups. There are the people on the “receive lines” and the “pack lines”.
Some unpack, check and scan every product arriving. And some pack up customers’ orders at the other end of the process.
Another group stows away suppliers’ products somewhere in the warehouse. They put things wherever there’s a free space.
Workers use handheld computers to scan both the item they are stowing away and a barcode on the spot on the shelf where they put it.
So only Amazon’s computers know where everything is.
The “pickers” push trolleys around and pick out customers’ orders from the aisles. Amazon’s software calculates the most efficient walking route to collect all the items to fill a trolley.
Pickers holding computerised handsets are perpetually timed and measured as they fast-walk up to 15 miles per shift. Managers can text the hand held screens to tell a worker to hurry up or to issue a warning.
Every warehouse has its own “continuous improvement manager”. As Marc Onetto, the senior vice president of worldwide operations, put it, “They are not consultants, they are insultants. They are really not nice.”
Some people also patrol the warehouses pushing tall little desks on wheels with laptops on them. They are “mobile problem solvers” looking for any hitches that could be slowing down the operation.
Employees wear blue ID badges. Agency workers wear green ones. There is a strict “three strikes and release” discipline system—“release” being a euphemism for getting sacked.
But there are other strikes too.
The news of the scale of Bezos’ wealth came on the same day as Amazon Prime Day. Prime Day, one of a number of 36-hour events to extract more money out of people, also coincided with a global strike by Amazon workers over poor working conditions.
Amazon workers in Spain, Germany and Poland all struck despite being threatened with the sack. In Spain riot police attacked workers who shut down Madrid’s fulfilment centre.