As an expert in the retail industry and a discerning consumer advocate, I‘ve watched Amazon‘s ascent to dominance with growing alarm. While there‘s no denying the convenience and selection the e-commerce giant provides, a closer examination reveals that Amazon‘s explosive growth has come at a steep cost to workers, small businesses, local communities, and the fabric of our economy. In many ways, Amazon‘s practices are eroding the foundations of a fair, competitive, and equitable society.
In this piece, I‘ll take an unflinching look at the myriad ways Amazon is harming our social and economic well-being, backed up by data, expert analysis, and on-the-ground reporting. From its devastating impact on local businesses to its exploitative labor practices to its corrosive influence on public policy, it‘s time to reckon with the true cost of Amazon‘s dominance.
Amazon‘s Economic Takeover: Destroying Local Businesses and Jobs
One of the most damaging aspects of Amazon‘s unbridled growth is the way it has ravaged small businesses and local economies. As consumers have shifted to online shopping, with Amazon claiming a staggering 50% of all e-commerce spending, local retailers have been decimated.[^1] The number of independent bookstores alone has plunged by 50% since Amazon‘s launch.[^2] And it‘s not just retail—as Amazon expands into new sectors like groceries, pharmacies, and more, it leaves economic destruction in its wake.
The Institute for Local Self-Reliance has found that Amazon is directly responsible for the loss of at least 1 million retail jobs nationwide as local stores shutter under pressure from the e-commerce giant.[^3] That‘s on top of the countless indirect job losses as businesses that supplied or serviced those local retailers also collapse. As one Ohio small business owner put it, "Amazon is absolutely killing small businesses. The dominance of Amazon has forced many stores to close."[^4]
But the damage isn‘t just in terms of jobs lost—it‘s about the vitality of entire communities. Research shows that local businesses recirculate 52% of their revenue back into the local economy, compared to just 14% for national chains.[^5] With more and more spending siphoned off by Amazon, that‘s wealth that‘s no longer flowing to local workers, suppliers, and public services. The end result is a "fiscal death spiral," warns researcher Olivia LaVecchia, as communities trapped in Amazon‘s grip suffer declining tax bases and disinvestment.^6
Inside Amazon‘s Dystopian Workplaces
While Amazon touts its job creation statistics, the company‘s deplorable working conditions reveal the human costs behind its ultra-fast shipping and low prices. Amazon‘s fulfillment centers have gained a reputation as grueling, dehumanizing workplaces where intense surveillance, ruthless quotas, and minimal breaks are the norm.
Investigations have uncovered Amazon warehouse workers being pressured to pick up to 400 items per hour, walking up to 15 miles per shift, and persistently risking injury in the rush to meet quotas.[^7] Employees are electronically monitored down to the second, with reports of workers urinating in bottles to avoid taking bathroom breaks that would ding their productivity scores.^8 And when injuries do occur, Amazon has a history of aggressively fighting workers‘ compensation claims and shifting blame onto workers themselves.^9
The psychological toll is just as severe. As one former Amazon manager admitted, "Nearly every person I worked with, I saw cry at their desk."^10 Turnover is so high that Amazon has resorted to advertising for new hires on the sides of its own delivery vans.[^11]
Meanwhile, Amazon‘s much-touted $15 minimum wage still falls short of a living wage in many of the cities where it operates.[^12] And the company has fiercely resisted any attempts by workers to organize for better conditions, deploying union-busting tactics like mandatory anti-union meetings and even firing vocal worker activists.^13
Amazon‘s mistreatment of its workforce, particularly its lowest-paid employees, is a damning indictment of a company that puts profits and growth above human well-being.
Amazon‘s Tax Avoidance: Shortchanging Communities
For a company that generated $280 billion in revenue in 2019, Amazon is shockingly adept at avoiding taxes.^14 Thanks to an army of lobbyists, aggressive exploitation of loopholes, and sweetheart deals extracted from local governments, Amazon paid just $162 million in federal income taxes on over $13 billion in profits in 2019—an effective tax rate of just 1.2%.^15
How does Amazon get away with it? A big part of the story is the lavish subsidies and tax breaks the company has extracted from cities and states in exchange for placing its facilities there. By pitting municipalities against one another, Amazon has raked in over $2.7 billion in taxpayer subsidies since 2000.[^16] That includes $750 million in kickbacks for its much-hyped "HQ2" in Virginia and New York alone (before the New York deal fell through in the face of public outrage).[^17]
But the subsidies Amazon secures often far exceed the benefits to communities. Indeed, research has shown that counties housing Amazon facilities actually saw their overall job growth slow compared to neighboring counties without an Amazon presence.[^18] Far from the economic boost Amazon promises, its arrival can actually drain local economies and starve public services of funding.
According to the Institute on Taxation and Economic Policy, Amazon‘s tax avoidance deprived state and local governments of at least $2.8 billion in tax revenue in 2018.^19 That‘s money that‘s desperately needed for public education, infrastructure, healthcare, and other vital community needs. Instead, it‘s lining the pockets of Amazon shareholders as the company‘s valuation soars to over $1.5 trillion.^20
Amazon‘s Monopoly Power: Crushing Competition and Consumer Choice
Perhaps the most alarming aspect of Amazon‘s dominance is how it wields its vast power to crush competitors, squeeze suppliers, and limit consumer choice. Amazon now controls nearly 40% of all online commerce in the U.S., with its market share continuing to grow.^21 And Amazon leverages that clout in troubling ways.
Research has shown that Amazon uses its sales data to identify popular products and copy them with its own private label goods, which it then gives prominent placement on its site to undercut competitors.^22 Amazon‘s size also allows it to pressure suppliers into accepting worse terms—and if they refuse, Amazon simply makes its own version and cuts them out entirely.[^23]
"I don‘t think any company should have that much power over other companies and industries," says Barry Lynn of the Open Markets Institute, a think tank critical of Amazon.^24 Indeed, in many ways Amazon is becoming the gatekeeper to the online marketplace, able to make or break other businesses on a whim. That unchecked power is a recipe for economic stagnation, declining wages, and less innovation as Amazon faces dwindling competitive pressure.
Even Amazon‘s "last mile" delivery operations are squeezing out other courier services and local delivery companies. With over 100,000 vans, the company now delivers nearly 60% of its own packages, up from 15% just five years ago.[^25] As Amazon vertically integrates every aspect of its operations, it leaves less and less room for other businesses to compete.
The end result, writes antitrust scholar Lina Khan, is that Amazon has become the "critical infrastructure" of the modern economy.[^26] It exerts unseen but pervasive control over what products make it to market, and what ideas reach the public square. That‘s a dangerous level of power for any one corporation to wield.
The Policy Failures Enabling Amazon‘s Abuses
Amazon‘s economic harms are able to flourish in large part because of the policy failures that have allowed the company to evade accountability and exploit weaknesses in our laws.
On the antitrust front, the shift since the 1970s to evaluating mergers and monopolies primarily through the lens of short-term price effects has given Amazon cover, since its predatory pricing and market dominance tend to lower prices, at least initially.^27 But that narrow focus neglects the long-term harms to competition, innovation, and economic dynamism. Lax antitrust enforcement has allowed Amazon to gobble up competitors like Diapers.com, cementing its market power.[^28]
Tax policies riddled with loopholes, like the ability to indefinitely defer taxes on foreign earnings, have allowed Amazon to game the system and minimize its tax bill.^29 And weak labor laws and enforcement have left Amazon free to exploit its workers with minimal repercussions.
But it‘s not just sins of omission. Amazon has also translated its economic might into political power, lobbying aggressively to shape policies in its favor. In 2018 alone, Amazon spent $14.2 million on lobbying, the second highest of any U.S. company.[^30] Most prominently, Amazon played a key role in defeating the proposed "head tax" in Seattle that would have funded affordable housing, even threatening to halt construction in the city unless the measure was killed.[^31]
At every turn, Amazon has worked to defang or dismantle the public policies that should protect workers, communities, and competition from its predations. The political influence of such a powerful corporation, accountable only to its own bottom line, is deeply troubling for a healthy democracy.
Conclusion: Time to Rein in Amazon
The evidence is clear and mounting: Amazon‘s rise has come at an unacceptable cost to society. With concentrated economic power comes concentrated political power, and Amazon is using that clout to bend policymakers and the public square to its will. But we cannot allow the short-term conveniences and efficiencies Amazon provides to blind us to its structural harms.
We need a revival of robust antitrust enforcement to break up Amazon‘s market power and restore dynamism and competition. We need tax reforms to close loopholes and make mega-corporations like Amazon pay their fair share. We need stronger labor laws to protect workers from abuse and exploitation. And we need campaign finance reform to prevent dominant corporations like Amazon from converting their economic power into outsized political influence.
The time has come to rein in Amazon and demand a new social contract, one where corporations are accountable to more than just their shareholders, but to workers, communities, and the public good. Because no company, no matter how innovative or successful, should have the power to unilaterally shape our economy and our society. We must act now, before it‘s too late.
[^1]: U.S. Census Bureau, "E-Commerce Retail Sales"[^2]: American Booksellers Association, "Indie Bookstores by the Numbers"
[^3]: Institute for Local Self-Reliance, "Amazon‘s Stranglehold"
[^4]: Cleveland Plain Dealer, "Amazon is Absolutely Killing Small Businesses"
[^5]: Institute for Local Self-Reliance, "Key Studies: Why Local Matters" [^7]: The Verge, "The Ruthless Reality of Amazon‘s One-Day Shipping" [^11]: Business Insider, "Amazon is Hiring Fewer Workers"
[^12]: USA Today, "Where Does $15/hr Minimum Wage Provide a Living?" [^16]: Good Jobs First, "Amazon Tracker"
[^17]: Washington Post, "Amazon‘s HQ2"
[^18]: Economic Policy Institute, "Unfulfilled Promises" [^23]: The Nation, "Amazon Doesn‘t Just Want to Dominate the Market…" [^25]: Business Insider, "Amazon Now Delivers Nearly 60% of Its Own Packages"
[^26]: Yale Law Journal, "Amazon‘s Antitrust Paradox" [^28]: Open Markets Institute, "Amazon Timeline" [^30]: Washington Post, "Amazon Increases Lobbying"
[^31]: The Stranger, "Secrets of the Tax Revolt"
