Saturday, 19 October 2013

Winning the Race to the Bottom.

Such were the words of Poland’s Minister of the Economy, after Amazon announced that it would  be moving its operations from Germany to Poland. However, rather than being a sign of Poland’s development it is further  evidence of how it has become one of Europe’s main suppliers of cheap labour and a site for social dumping.
Exploitative working conditions at Amazon in Germany came to light after a TV documentary showed the terrible living and working conditions of seasonal workers (including those from Poland) and how they were being harassed by security guards.
This year hundreds of Amazon workers have gone on strike in Germany, demanding higher wages and benefits in line with German wage agreements. Trade Unions in Germany have been asking that wages start at 12 an hour (up from the 9.30 that amazon were paying) in line with other retail and and catalogue industries in the country.
In response Amazon has announced that it will be moving some of its operations to Poland and the Czech Republic. It plans to open three logistic centres in Poland, employing 6,000 people plus a further 9,000 seasonal workers.
Despite huge numbers of people in Poland becoming increasingly skilled and educated over the past couple of decades, foreign investors are interested in moving to the country simply because it is a source of cheap, exploitable labour. The high unemployment rate, large numbers of people on contract work, low wages, and low level of unionisation make it a perfect location in Europe for companies to increase their profit rates through exploiting labour.
The presence of Amazon in Poland will not even lead to any significant inflow of funds to the government’s budget. Amazon pays most of its taxes through that part of its business that sells products (which are situated out of Poland) and not through its logistic centres. Amazon has in fact built its whole business model around avoiding tax, using its global dominance to exploit international tax loops. For example, over the last three years Amazon has made an estimated £7.5bn in profits through sales in Britain, but has paid no corporation tax as it has transferred the ownership of its main UK based business to a company situated in Luxemburg.
The Polish government is welcoming the creation of cheap exploitative jobs by an international tax evader, whilst claiming that this is evidence of the country’s economic development.

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