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  • 16. December 2020

Amazon in Czechia: Forget higher salaries, all we want is a highway to Germany

Klára Votavová / Foto: Majda Slámová /
Klára Votavová / Foto: Majda Slámová /
The fairy-tale riches of the wealthiest man in the world Jeff Bezos have been on the rise again since the beginning of this year due to the coronavirus. However, it has had no effect on the payslips of his Czech employees who supply predominantly the German market. Does the Czech Republic serve as a cheap warehouse servicing wealthy consumers to the west of our border? We are bringing a report on Amazon’s activity in the Czech Republic.

The pandemic year 2020 has brought a record growth for the Amazon company and its founder Jeff Bezos. In its so far most successful third quarter, Amazon has announced a sales increase by 37% compared to the same period of last year. According to Forbes, the personal wealth of Bezos, the richest man in the world, has climbed by 70 billion USD between October 2019 and November 2020 to the present 186 billion. The owner of the Washington Post daily newspaper, the American Whole Foods supermarket chain, and the Blue Origin private company focused on space tourism has reached a wealth of more than a twofold value of this year’s expenses of the Czech Republic as inflated by the coronavirus.

Sometimes employees of Amazon learn that they were laid off by coming to the shift and not being let in through the gate with their chip. They are then told to go home on their own or to wait for the bus which leaves after the shift 10 hours later.

Amazon’s efforts to provide the necessary infrastructure covering everything from online shopping to cloud services to the management of your household has increasingly attracted attention from the regulators in Washington, DC and Brussels as well as from civic activists. The latter point out breaches in the employee’s rights, avoiding taxes, misuse of personal data, a large ecological footprint as well as the Amazon’s role as a de facto regulator of other companies’ access to customers. An example of this attention were the Black Friday world-wide protests and strikes called Make Amazon Pay, organized by the multinational labor Uni Global Union together with the Progressive International movement and a number of other groups.

However, in the Czech Republic, it may still seem like the growing ambitions of the wealthiest company in the world do not have much to do with us. Amazon does not focus on the Czech market and so Czechs can buy from Amazon only through its German webpage which results in delays as well as relatively high prices. Czech companies do sell to foreign markets through Amazon, however, in the global competition it is much more difficult for them, compared to local marketplaces such as Alza or Mall. Does Amazon actually leave any trace in the Czech Republic? And should its power tendencies make us nervous here in the Czech Republic?

Before Christmas, Amazon hires 3-4 thousand people through agencies. Most of them will be laid off after the Christmas bustle while still in the probationary period. Photo: Majda Slámová

Same work, two times lower salary

“No one caring for the rights of other people can ever make so much money,” ponders twenty-something Kateřina Příbrská during our walk through Most with regard to the wealthiest man in the world, Jeff Bezos. She has had significantly more experience with his company than most Czechs as she actually worked for over two years in Amazon’s only Czech distribution center in the central-Bohemian town of Dobrovíz – from 2016 until 2019 when her son was born.

Kateřina trained to be a seamstress after she did not venture to go to a high school specialized in graphic design due to her learning difficulties. After the training, she tried to make a living by sewing, however, her net monthly salary in the sewing workshop was 8 thousand CZK (approximately 300 EUR), while she had to pay 2 thousand CZK a month just for commuting. Consequently, she tried a number of other employments. “I never last anywhere a long time because I’m hypersensitive. I can’t stand unfairness,” she explains emphatically. If she can get the money, after her maternity leave she would like to open a tailor’s shop employing disabled people. She does not want to return to Amazon, although she is still actively engaged in its union organization and is still well informed on the situation in the company.

If I count in my commute, my gross income is 80 CZK per hour. You then have no time for anything else but work and sleep.

The Chomutov district, through which I traveled with Kateřina from Jirkov through Most to her hometown of Litvínov, creates an interesting background to our conversation about working for a company which by its incessant innovations drives to an extreme the capitalist imperatives of a continuous increase of profit, effectiveness and productivity. To this day, the North-Bohemian landscape is scarred by remnants of the competing ideology of communism such as the infamous brown coal mines, chemical plants, flooded towns or half-demolished towns moved a few kilometers away. They stand here as mementos of projects of other visionaries who had different opinions on work organization than Jeff Bezos and his colleagues from the Silicone Valley. The Chomutov district seems to be an appropriate place for contemplating the traces being left on our – not only Czech – lands by similarly bold visions of the captains of digital capitalism.

I ask Kateřina about Jeff Bezos’ reputation among Amazon’s Czech employees. Do they speak of him with respect, as of some mythical figure? “We tend to make fun of him. When there’s a lack of money for something, we say Jeff probably needed them for those rockets of his,” replies Kateřina. Still, the power of Blue Origin’s founder can be surprisingly pronounced in Dobrovíz. Uniform instructions regarding work as well as salary conditions in all Amazon’s distribution centers come directly from the company’s main headquarters in Seattle which is said to exert meticulous control over all the centers. However, not everything is uniform: For example, when Seattle gave the instruction to pay all the employees of the distribution centers a coronavirus bonus of 500 USD, Czechs received only a little over a half of the amount. Also the hourly wage of 160 CZK per hour for Czech warehouse persons is lower approximately by half compared to Germans who are paid cca 12 EUR per hour. In contrast, Poles get paid even less than Czechs.

Pickers controlled by algorithms

A person interested in working for Czech Amazon will get into the distribution center through the Ranstad or Adecco agencies, signing a fixed-term contract with them. Now, before Christmas, Amazon hires 3-4 thousand people without an interview, just upon a health check. Most of them will be laid-off after the Christmas bustle while still in the trial period. “They do it in such a disgusting way, for example when people come for the shift and cannot get through the gate with their chip. Then they’re told to go home on their own or to wait for the bus which leaves only in ten hours after the shift ends. In the year 2016 I was really worried every morning I might not get to my work,” Kateřina reminisces.

The lucky ones who get transferred from the agency directly to Amazon (so called “blue badges”) then have to make it through the trial period only then to sign a contract of an indefinite duration. Amazon thus has around three thousand permanent employees.

Manual workers in Amazon work ten-hour shifts four times a week. Their starting wage of 160 CZK per hour should theoretically increase each year depending on the yearly assessment of the  competitiveness of wages against other companies. This year, however, there was no increase in salaries based on the revision, as employees received the following message:

Dear employees, this year’s wage revision where we compared wages on similar work positions, was just completed. The result of the wage analysis is that our basic wages are still competitive and so our remuneration plan remains the same. We very much appreciate the work you do for our company and most of all, for our customers. Thank you. Should you have any questions, do not hesitate to contact your HR department or your manager. Sincerely, Amazon

Instead of a pay rise, Amazon employees received only a text message informing them that their salaries were ok. Source: An Amazon employee

Although for salary of 160 Kč/hour is below Czech average, it it still relatively decent for manual workers from poorer Czech regions, such as the Ústí Nad Labem Region. “Even the sick leave alowance is often higher in Amazon than what people get paid here in the north when they go to work every day,” explains Ivo Mayer, president of the union organization ZO OSPO Amazon. Before she was hired by Amazon, his wife was paid a 14 thousand CZK gross salary as a seamstress. He adds, however, that the unpaid three hours spent on the bus commuting from North-Bohemian Jirkov to Central-Bohemian Dobrovíz and back and the delays before and after work should also be taken into account. “If I count in my commute, my gross income is some 80 CZK per hour. You then have no time for anything else but work and sleep,” reports another Amazon employee who did not wish to reveal their identity.

It is the long work days and commute why Kateřina doesn’t want to go back to Amazon, as she explains. “It’s incompatible with my family values,” she notes. She says that her husband, who is also employed in Amazon, now leaves for work at 4 a.m. and comes home at 7 p.m. In her opinion, such situation could only be solved by a boarding kindergarten where the child would be sent off to for entire four days. She says this solution to the situation is quite common in Most. “I just wouldn’t do that to my child,” she says firmly.

According to Ivo and Kateřina, Amazon is particular about each employee knowing how to do everything – i.e. being able to receive, store, pick as well as pack the goods for the customer. It is during the so called “pick” that employees walk the legendary long kilometers, allegedly up to fifteen of them over one shift. Both unionists note with regard to the infamous control system using scanners that it is not as strict as it is sometimes claimed on the internet. For example, it is not a problem for them to go to the bathroom as long as they meet the hourly norms. On the other hand, they admit that neither they nor the highest Prague management can explain how these norms are actually determined. “It’s some kind of algorithm, only about five people in Europe understand it. It is more or less based on the results of comparable distribution centers, where they determine the average that needs to be reached,” explains Mr. Mayer. If a person fails to meet the system, he or she can be subjected to a procedure (called ADAPT) which after a few unsuccessful steps may lead to the employee’s discharge. On the other hand, the unionists explain that in this weekly evaluation, the word of individual managers also counts and they can intercede on their employees’ behalf.

Among other things, people are afraid they might get removed from the draw of 100 thousand CZK in which Amazon includes only employees with a spotless attendance.

One thing which the Czech unionists completely agree on with the reports from other countries, is the sometimes extreme hostility of Amazon towards the unions. According to their information, Amazon managers were given the instruction to report everybody who just as much as utters the word “unions”, so that Amazon can fire them before they manage to establish a union organization. The person who founded the unions in Dobrovíz in 2016 kept his intentions secret until the moment he notified Amazon that the organization was established – according to the labor code, members of union organizations’ committees may not be fired. Instead of unions that have their role stipulated by law and the rights to represent employees’ interests, Amazon sets up so called employee forums. According to Mayer, however, the employee forum serves Amazon as a red herring without actually dealing with the real problems of employees. In spite of repeated efforts, the union organization in Amazon has not been able to sign a collective agreement with Amazon that would attend to employee rights beyond the labor code.

Czech Amazon unionists are engaged in various international forums, yet they did not participate in today’s Make Amazon Pay strike. According to Ivo Mayer, members of Amazon unions would not be able to paralyze the operation of the Dobrovíz warehouse, anyway. He thinks people are also afraid they might get removed from the draw of 100 thousand CZK in which Amazon includes only employees with a spotless attendance.

Next stop Dobrovíz – Amazon

The Dobrovíz municipality which lies several kilometers west of the outskirts of Prague, combines in itself a historical center with a typical suburban satellite housing development. It is located near the airport as well as the R6 express road which is an important connection between Prague and Western Europe. It is the good accessibility what draws here Prague’s inhabitants searching for a “good living in their own” as well as developers of logistics parks.

The local industrial zone was created twenty years ago. The Panattoni Europe development company lets their buildings to eight companies. The largest building of a surface area of 95 thousand square meters is rented by Amazon whose distribution center taking up an area of 13 soccer fields is the largest separately standing industrial building in the Czech Republic. Just by looking at it, it becomes clear how pickers can walk up to 15 km daily there.

All is calm on the adjacent parking lot on a Wednesday afternoon. Dozens of buses are parked here, some plastered with signs Go to work with a smile. They are marked with destinations of Jirkov, Most, Děčín, Příbram, Kladno and a number of other towns. Amazon drives people daily to work for free from approximately fifty destinations in the Central-Bohemian and Ústí nad Labem Regions. After 5 p.m. and 4 a.m., the buses start moving, bringing in or taking out the employees who work in the continuous two-shift operation of the distribution center. In the lit entrance hall in the evening, Amazon’s mottos show up, Work Hard. Have Fun. Make History as well as Jeff Bezos’ favorite rule: Customer always comes first.

Just by looking at the Amazon building, it becomes clear how pickers can walk up to 15 km daily there. Photo: Majda Slámová

 Next to the premises, there is also the Dobrovíz – Amazon train stop financed by the company, the ceremonial opening of which was attended in 2016 by the then Central-Bohemian Region council president Jaroslava Pokorná Jermanová. Just like from the main Dobrovíz train stop, the train from Prague comes here three times a day, two times of which in such a way as to connect to the Amazon shift. The highway is connected with the logistics center by the To Amazon street, a part of the bypass that the municipality exacted from the development company. Despite frequent cleanups, it is littered with waste thrown out of the windows by truck drivers.

All eyes on the municipality

The historical center of Dobrovíz, a municipality of 500 inhabitants, is within walking distance from Amazon. In front of the local municipal authority we are meeting Hana Veselá, one of the founders of the Citizens for Dobrovíz association. The group was established in 2013, when neighbors from the local new housing development wanted to protest against the noise coming from the now defunct Amazon complaint center which was also located in the industrial park behind their houses. When the citizens started to complain about Amazon’s activities, they found out that the Central-Bohemian Region in cooperation with the CzechInvest government agency promised Panattoni the construction of a new giant warehouse for Amazon. Part of it was also supposed to be the construction of a two-lane road directly under the new inhabitants’ windows.

Work hard. Have fun. Make history. This slogan is supposed to motivate Amazon’s employees in Dobrovíz and all over the world. Photo: Majda Slámová

When the association started to become interested in the construction of the new center, it was found out that the municipality counts on the needed update of the zoning plan without expecting any reciprocal service from the developer. However, Citizens for Dobrovíz did not agree with such settlement. “I had my contacts and I knew what we could afford to demand of the developer,” Ms Veselá explains.

At the turn of the years 2013 and 2014, the municipality thus became the center of medial as well as political attention. Local authorities were visited alternately by the Minister of Industry and Trade, CzechInvest representatives as well as Panattoni and Amazon managers. Citizens for Dobrovíz dealt with them regarding the impact on the environment as well as the question whether it is really appropriate to build the shed in the vicinity of Prague where unemployment is not a problem, in contrast to other regions. “The guys from CzechInvest were all excited. They explained how everything would work and behaved like the sun would always shine. So I asked them what would happen if by chance it rained,” Veselá reminisces.

In the end, the municipality negotiated with Panattoni the construction of the mentioned bypass around the town worth 50 million CZK, an expansion of the waste water treatment facility which provides local citizens with zero sewer charge, and one million CZK annually to the budget. Subsequently, the Citizens for Dobrovíz association which was an independent participant of the building permit procedure, signed their own agreement with Amazon, based on which Panattoni built a noise barrier between the warehouses and family houses instead of the previously announced road. Besides, Panattoni pledged to send another half a million CZK annually for ten years to the newly created Foundation for Dobrovíz aimed at cultural, social and educational events. In the end, the Amazon distribution center near Dobrovíz started to operate in September 2015.

“I believe we have exacted all we could,” comments Hana Veselá on the valid agreement with the developer. It is also why the association ended up deciding not to block the construction which some neighbors resented them for. “Once Panattoni was promised the warehouse construction by the Region, the building couldn’t be prevented. All we could do was negotiate the conditions with the developer,” she explains, pointing to surrounding municipalities that receive nothing from the logistics warehouses of other companies. Ms Veselá emphasizes the marked improvement of the traffic situation in the town which had waited years for a bypass before Amazon. “Most of the time, you don’t even notice the trucks, buses or actual Amazon employees in the town center,” she remarks. In the town, she points out a new children’s playground built with Panattoni’s finances and the local soccer club sponsored by Amazon. She mentions that besides the negotiated contributions, Panattoni also pays the municipality a property tax for the warehouses. In addition to other contributions from the nearby airport, it makes Dobrovíz a relatively wealthy town.

Mayor of the Dobrovíz municipality Jana Krupičková refused to give Voxpot an interview. However, she noted that cooperation with Panattoni works as per the contracts and that there are no complaints.

Hana Veselá and the Citizens for Dobrovíz society exacted compensations for the municipality. They decided not to block the construction itself which some neighbors resent them for. Photo: Majda Slamová

Needs to be close to the highway and Germany

In 2013, when it first focused attention on the Czech Republic, Amazon was dealing with a series of protests by German distribution center employees. The company therefore turned to CzechInvest to help it open branches in the Czech Republic to serve German customers. It promised to provide permanent employment in distribution centers in Dobrovíz and Brno to 4 thousand and, at a peak time, up to 10 thousand people. In the years 2013 and 2014, when there was high unemployment in the Czech Republic after the economic crisis, it was an enticing offer for the Czech authorities.

However, after this announcement the situation did not unfold as smoothly as Amazon had envisioned. While in Dobrovíz the described disagreements with locals led just to several months of the project’s delay (Amazon did not make it in time for the planned 2014 Christmas season), dealings in Brno became so protracted that Amazon decided to cancel the investment. For the same reason, Amazon did not build a logistics center for returned goods in Dolní Počernice in 2016.

Individual jurisdictions stand one against another and try to offer the company the biggest tax concessions, the best infrastructure, and the cheapest work force. The corporation can just walk around and take a pick, or to transfer the production whenever it dislikes something in the particular jurisdiction.

Objectors to the construction of Amazon distribution centers were facing pressure on several fronts during the building permit procedures. Developers that were supposed to build the Amazon sheds were complaining of holdups in the permit procedure which were threatening the expected Christmas sales. They blamed the citizens’ dissatisfaction on bad communication by the municipalities and threatened with the withdrawal of Amazon and its jobs to another investment-welcoming town in Central Europe, or even with suing for marred investment and reputation. Moreover, a big U.S. company promising thousands of jobs was enjoying a lot of support from the then Prime Minister Sobotka’s social democratic government, including the then Minister of Finance and current PM Andrej Babiš and his colleague at the Ministry of Industry and Trade Jan Mládek. In the meantime, President Miloš Zeman in his typical witticism said that the disapproval of contracts that would enable the warehouse construction in Brno in time was “stupid”. Meanwhile, political and economic commentators were busy worrying that the Czech Republic’s approach might give the country a bad reputation among global investors.

The national heart-searching was enhanced by the rhetoric of Amazon’s top management, when Amazon Europe chief Tim Collins declared that the problems they encountered before the warehouse construction in the Czech Republic were quite unique. “We put so many things on the table – a lot of jobs, a high investment, our plans are an economic stimulus for many areas, and we didn’t even ask a financial incentive of the Czech Republic,” he wondered back then in an interview for the business daily Hospodářské noviny.

“Companies like Amazon are not interested in protracting the construction process as they need to build their centers as fast as possible. There was a sole key requirement for the construction of the Amazon distribution center in the Czech Republic – a maximum distance of 300 km from the German border and the shortest possible connection to the highway network. Amazon could not care less if its new warehouse would stand near Prague, Brno or perhaps Pardubice,” explains Amazon’s impatience Miroslav Pazdera, the coauthor of the book Steel Cities: Logistics Architecture in Central and Eastern Europe. Since the above mentioned conditions could be offered to Amazon by a number of Czech as well as foreign towns, the company did not have many reasons to waste their time on one unwilling community.

At the same time, Pazdera points out that Central and Eastern Europe are characterized by non-conceptual approach to planning as far as the construction of logistics centers is concerned. “Important decisions and responsibilities fall upon local self-governments that are often too weak a partner in the discussion with a developer who’s much richer. The town’s zoning plan is considered an administrative burden rather than an effective tool for the layout of our environment. From the state’s perspective, these investments are frequently viewed uncritically positively. There is no expert debate as to how to work with this type of infrastructure,” he explains.

Casper Gelderblom, the main organizer of the Make Amazon Pay protests for Progressive International, judges the described Amazon’s behavior in 2014 as a typical example of the so called  race to the bottom. “Individual jurisdictions stand one against another and try to offer the company the biggest tax concessions, the best infrastructure, and the cheapest work force. The corporation can just walk around and take a pick, or to transfer the production whenever it dislikes something in the particular jurisdiction,” he explains. Wealthier jurisdictions, just like Germany in 2013, are kept in this system in constant fear that the company may leave for a cheaper work force. “Amazon is by no means the only multinational corporation to behave like this. It is, however, one of those that excel in this game,” Gelderblom remarks.

Amazon.cz? Not for now

So far, Czechs have been among the customers within Europe who buy less frequently online: While in 2018 at least one thing was purchased online by over 80 percent Danes and 77 percent Germans, in the Czech Republic it was just under 59 percent. Compared to Western Europe, Czech Republic is typically characterized by a predominance of independent individual brand and retail online stores over the so called marketplaces like Amazon that for a fee advertise the goods of various smaller companies. In contrast, in neighboring Germany almost 60 percent of online purchases are made through the internet marketplaces, of which Amazon makes almost a half.

However, these differences between the Czech Republic and Western Europe will probably at least partly be erased by the coronavirus pandemic. Both pandemic waves resulted in a marked year-on-year increase in online sales in the Czech Republic (by 39 percent in March and by 31 percent in October). According to Jan Kotek from the online comparison service Heureka, it can be presumed that in the coming months, customers will tend to gravitate towards bigger and more proven players in the field of internet trade.

Amazon did not come to Dobrovíz to help with local unemployment but to be as close as possible to the highway to Germany.

For now, Amazon is not preparing to expand into the Czech Republic. However, from the beginning of the year there have been speculations regarding the launching of a Polish version of the page that might subsequently also service the Ukrainian market. Similar to the Czech Republic, Poland has so far served Amazon primarily as a source of logistics spaces and cheap work force for servicing Germany. In such case, it will be interesting for the Czech Republic to observe how popular Amazon will become on the Polish market in the competition of local proven players (especially the online marketplace Allegro which is dominant in Poland).

Just like from the main Dobrovíz train stop, the train from Prague comes to the Dobrovíz – Amazon stop three times a day, two times of which in such a way as to connect to the Amazon shift. Photo: Majda Slámová

Other problems than in the West

Due to Amazon’s limited presence in the Czech Republic, it can be stated that some problems connected with this company in Western Europe truly do not pertain to the Czech Republic. For example, there is not the problem of Amazon’s monopolistic practices that can hide the offers of smaller online stores on its pages when it cannot agree on something with them. In the USA, where Amazon covers approximately 40 percent of the electronic trade, it is one of the most frequent reasons for criticism.

It does not mean, however, that the Czech Republic and other countries of Central and Eastern Europe need not be interested in Amazon at all. The Czech Republic provides Amazon with the physical infrastructure in the form of its warehouse in Dobrovíz and therefore the questions of the position of Amazon’s employees or Amazon’s environmental foot-print or its impact on local towns cannot be ignored.

Lower salaries for the same work in comparison with Western Europe are a standard in the Czech Republic and other post-communist countries. Documented work conditions in other multinational as well as Czech companies are, judging from the evidence provided by their employees, comparable if not worse than those in Amazon. Yet, Czechs should realize that the Czech Republic serves Amazon primarily as a reservoir of cheap work force for the German market, and that here, Amazon can afford things without a public discussion that would never pass in Germany.

A feeling of grievance over the half coronavirus bonus for Czechs was spontaneously expressed by all the Amazon employees I spoke with. It could be argued that these are the very practices that make Czechs feel like second-rate EU citizens, and this feeling is not to be underestimated. Mr Mayer, who cited accurately paragraphs from the labor code during our interview and told me about all the pan-European initiatives in support of Amazon unionists, still remarked as I was leaving that he would prefer to “leave the EU just like the English did”.

It is also important to emphasize that Amazon did not come to Dobrovíz to help with unemployment here but to be as close as possible to the highway to Germany. It does not employ many people from the town of Dobrovíz and its surroundings and does not cultivate a sense of belonging among locals. Amazon does employ the people it brings here by buses from socially weaker Czech regions, however, it does not develop services, infrastructure or community bonds in their place of residence. At the same time, the intermingling of strangers from different towns makes self-organizing more difficult for the employees, making it easier for Amazon to successfully campaign against the unions. Meanwhile, agricultural land (not only) on the Prague’s periphery is being built upon by new logistics sheds, the use of which after a possible end of the logistics boom in Central Europe is unclear.

In the context of changes on the labor market, the beginning economic crisis and the increasing popularity of online shopping, it cannot be excluded that the offer as well as demand for jobs in logistics warehouses will continue to increase. If it should happen, let us hope that Czechs will be more self-confident and conceptual in their dealing with Amazon and other logistics centers than they were in 2014. The first step is obvious: It is necessary to start speaking critically about Amazon in the Czech Republic.

*During the preparation of the article, we were in touch by the phone with the Amazon’s press agent Miroslava Jozová and asked her several times for an interview. She has not answered our questions by the closing date.