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  • Ian Ritchie : Scottish Business Insider

Amazon helps put workers on Skid Row - so why does our government do so much to help them?

THE CITY OF SEATTLE at the top left hand corner of the United States has become famous for successful global businesses such as Boeing, Microsoft, Starbucks and Amazon. But back in the nineteenth century it became famous for coining the original term for an downmarket area in which indigent people gather – skid row

It was so named because logs were ‘skidded’ down this slope to be loaded onto ships to supply the timber trade, and skid row subsequently became the name adopted for run-down parts of cities around the world where poor and homeless people tend to settle.

And although that term is an old one, the problem stubbornly persist to this day. In Seattle, executives at fast growing local businesses such as Amazon have put such upwards pressure on house prices that they have priced poorer individuals out of the housing market and collections of tents and shacks have once again been growing in alleyways and under bridges to provide some shelter for the homeless.

The city has been struggling to cope with this problem and had sought to impose an emergency $500 per annum tax on employees of large companies – subsequently reduced after massive protests to $275 – to raise $48 million to tackle this housing crisis.

The company that has been most vehemently opposed to this tax is the one that, more than any other, has created the problem – yes, its Amazon.

Perhaps we should not be surprised, because Amazon has become the world’s largest company by, among other things, exploiting every avenue to reduce its labour costs, avoid taxes, and seek out every dollar of public support that it can find.

It is currently planning to open a second HQ operation elsewhere in the USA and cities have been queuing up to offer huge incentives to attract them, seeking the highly paid executives that they hope will boost their local economy.

When they opened their giant fulfilment centre in Dunfermline, Amazon was awarded over £9,000 public funding for every job created – even though these jobs are notoriously insecure and poorly paid. And despite making assurances to Scottish Ministers, the company still fails to pay its staff the living wage.

And of course the aggressive competition wreaked by Amazon has led many high street retailers to go bust. The likes of Maplin, Borders, Toys 'R’ Us, and BHS were never ever able to win £9,000 per job created, but unlike out-of-town warehouses, their crushing rent and rates ensured that they could no longer trade economically. The number of jobs that have been lost is many times the number of poor quality jobs created at Amazon.

In order to enable its on-line shopping service, Amazon created a business called Amazon Web Services (AWS) and that division has grown to become the largest business providing internet services in the world today. But according to its Companies House filing, AWS has been no more willing to pay tax than its parent. Last year Amazon Web Services paid £404,000 in UK tax on a turnover of £53.5 million.

But all this aversion to paying tax doesn’t seem to worry our government one little bit – the Driver and Vehicle Licensing Agency and Ministry of Justice moved their internet hosting to AWS; and, unbelievably, last year Her Majesty’s Revenue and Customs also switched its internet hosting to AWS, causing its previous supplier, UK owned business, DataCentred to go into administration.

Presumably DataCentred, the poor deluded suckers, paid their taxes.

You couldn’t make it up.


Note - after this column was written, Seattle abandoned it's plan to raise a 'homeless tax' after extreme pressure from the city's larger employers.

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