Amazon takes Walmart’s spot as villain with BEZOS Act

Amazon workers protest against the company in
Germany.
Getty/Sean
Gallup

• Amazon‘s
  reputation is sliding among members of the general public,
  especially when it comes to issues of citizenship and its
  treatment of workers. 
• In a clear reference to Amazon founder and CEO Jeff
  Bezos, Sen. Bernie Sanders introduced a bill called the
  Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act last
  week. 
• The bad press mirrors what Walmart
  went through years ago, before it endeavored to fix its
  reputation in the 2000s.

If there was any doubt that Amazon
is increasingly being painted as the biggest villain in American
capitalism, it died last week with the introduction of the Stop
BEZOS Act. 

On September 5, Sen.
Bernie Sanders introduced the
Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act. The
bill, a clear reference to Amazon founder and CEO Jeff Bezos,
would create a welfare tax for large employers with workers who
receive federal benefits such as food stamps. 

Sanders’ office singled out Amazon in the press release, citing a
report from The New Food Economy that found one
in three Amazon workers in Arizona depend on food stamps.

Sanders’ office’s press release also mentioned Walmart, citing a
2014 report from the grassroots group Americans for Tax Fairness
that the retailer costs American tax payers $6.2 billion a year
due to workers’ reliance on food stamps, Medicaid, and public
housing. At the time when the report came out,
Walmart called it “inaccurate and misleading,” noting
that the percentage of Walmart workers who use government
benefits is similar to that of other retailers.

To be sure, Sanders’ proposed bill would affect Walmart, too. But
Amazon was still the focus. 

A growing problem

Amazon’s
reputation woes were put into concrete form when the
Reputation Institute issued its annual RepTrak ranking of
companies on Thursday. Amazon notably lost the top spot to Barnes
& Noble in the retail category.

Among all companies globally, Amazon fell from 18th to 23rd
place. It was the top company in the US from 2014
through 2016 but is now 10th.

Many of the listed companies fell in the ranking
year-over-year. The Reputation Institute determined its ranking
from a survey of 10,000 individuals, saying that it “quantifies
the emotional bond stakeholders have with leading companies and
how these connections drive supportive behavior.”

The company’s reputation fell in all categories of reputation,
but it was hit especially hard with relation
to citizenship — how it gives back to its
community — and how it treats its workers.

The haves and have-nots of Amazon

Amazon’s threat to small businesses
 was one of the
first strikes against the company in some people’s minds. For
mom-and-pop businesses, it is 
easy
to feel like a dying breed in the age of
Amazon,
 even as many small companies rely on
Amazon for sales.

“Today, millions of small and medium-sized businesses from around
the world are selling on Amazon and more than a million of them
are based in the US,” an Amazon representative told Business
Insider in July. 

The search for Amazon’s new second headquarters, known as HQ2,
has
helped put a microscope on Amazon’s local impact.
Skyrocketing housing prices, unrelenting traffic, and
overcrowding have inspired residents to dub Seattle “Armageddon.”
Local businesses have been forced out as prices increase and
Amazon’s headquarters expands into “Amazonia.”

In response to criticism, Amazon has touted its investments in
Seattle and how the HQ2 deal could pay off for the city that
becomes home to its new headquarters.

An Amazon
warehouse.
Sean Gallup/Getty
Images

Perhaps most damning are reports from Amazon workers. While
Amazon has been applauded for its 
impressive
benefits
, the company has also been plagued with
stories of white-collar workers dealing with a brutal working
environment in which people cry at their desks after
being 
pushed
to their breaking point
.

In July, Bezos became the richest man in modern history. As
of Monday, he has an estimated
net worth of $159.2 billion, according to Forbes. 

Warehouse workers have protested long hours and poor working
conditions.
Employees told Business Insider earlier this year that they
were constantly under surveillance while working in Amazon
warehouses, with intense targets that don’t even allow for
bathroom breaks.

“The metrics are brutally aggressive, and most of my colleagues
are in a state of constant anxiety that we could be fired at any
moment for not meeting metrics,” one current US employee said.
“Jeff Bezos has become the richest man in the world off the backs
of people so desperate for work that we tolerate the abuse.”

Amazon defends its working conditions strenuously. 

“We encourage anyone to compare our pay and benefits to other
retailers,” an Amazon representative said in August, noting that
the average hourly wage for full-time workers in fulfillment
centers was over $15 an hour before overtime. “Amazon is proud to
have created over 130,000 new jobs last year alone. These are
good jobs with highly competitive pay and full benefits.”

Walmart’s past problems look a lot like Amazon’s current ones

Amazon isn’t the only company to face criticism for its CEO’s
wealth, its ruthlessness in the face of competition, or its
treatment of workers. But because it is such a visible company —
with the richest CEO — it becomes a target for criticism that
could be applied to many retailers.

In this way, Amazon is in a similar
position to the one Walmart was in during the 1990s and early
2000s.

Lisa Poole / AP Images

Like Amazon, Walmart has been criticized for its impact on
small businesses, its
political actions
and inaction, and its working conditions. It’s the kind
of attention that is showered on any retailer that grows in
size to that of Amazon or Walmart.

Walmart, however, has turned things around. It’s made a
concentrated effort to change consumers’ perceptions.

The company raised its minimum wage and started
sustainability initiatives. Leadership is speaking out on
progressive political issues, with The Wall Street Journal
publishing an article earlier in July with the headline
“Walmart
Takes a Stand on Guns, Gay Rights to Get People to Like It
More.”

In January,
Walmart CEO Doug McMillon explained to hundreds of retail
influencers at the National Retail Federation conference
how the company had not cared much about its reputation for
decades. It didn’t pay attention to the positive press in the
beginning, and it didn’t pay attention when the tide started
turning against it.

“At some point, Walmart became big, and societal expectations
changed,” McMillon told the crowd. “And we missed the memo.”

McMillon said that Walmart had been ignoring its critics, but
then tried to combat the negative attention with facts.

“That didn’t really work,”
McMillon said.

Eventually, the company decided to confront its critics
head-on.

“Let’s find the people who dislike us the most and go figure
out why, and see if there’s some good in what they’re saying
— and then implement it,” McMillon said, paraphrasing words
from Lee Scott, who was Walmart’s CEO from 2000 to 2009.

That led to a watershed moment for Walmart as it started its
first large-scale humanitarian efforts in the wake of
Hurricane Katrina. McMillon said Walmart “unleashed” its
entire staff, sending products, money, and people down to
affected regions.

Walmart’s story is further along the timeline than Amazon’s,
but the tech giant is following the same path. Amazon has
pushed back against many of the criticisms thrown at it. It
argues that its workers are paid better than most retailers’,
and that the company is ultimately a force for good.

For comparison’s sake, it’s worth noting that Walmart does
not even appear on RepTrak’s top 100 companies ranking. Its
score hovers a bit above 60 points, according to Bloomberg,
while Amazon’s is 73.5. That may just go to show that it’s a
lot easier to maintain a reputation than it is to earn it
back.

“Walmart still has some prejudice to overcome,” Stephen
Hahn-Griffiths, chief reputation officer at the
institute, told
Bloomberg.