Homeless and working for Amazon: the trap of the seasonal job cycle

When President Barack Obama visited an Amazon's fulfillment center in Chattanooga, Tennessee last year, he compared it to Santa's workshop. "This is kind of like the North Pole of the south right here," he said. Then speaking of the workers, he added, "Got a bunch of good-looking elves here."

What went unsaid and unnoticed was that the Amazon "elves" would not have jobs or prospects after the holidays. Many of the people in those Amazon warehouses were among the long-term unemployed – shuffling from one temporary job to another to another. Due to this unstable employment, number of them have found themselves living in shelters.

Working away in warehouses, beyond the pages of Amazon's website, the seasonal workers and the effects that temporary contracts have on their lives are kept out of public's eye and often avoid scrutiny.

Andrew Cummins, 43, was one of these elves last year, working north of Chattanooga at an Amazon warehouse in Jeffersonville, Indiana. For three months, he stowed away clothes, working 40 hours a week at $10 an hour. He enjoyed the job and saw it as his ticket out of the Haven House, a shelter where he lives with his wife, Kristen, and stepson.

"They had this big hype that they were going to hire on and stuff and that didn't happen. They just worked you until the time was up and then they let everyone go," he says. According to him, about 50 other seasonal workers like him who were hired through Integrity Staffing Solutions – a staffing agency working with Amazon in Jeffersonville – were let go at the same time. "They just said they would email everybody that they let go but we never heard anything back. And then you can't apply for [another Amazon job] for another year after you worked for them."

Amazon makes no secret of the fact that it relies on seasonal work force.

"Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends 31 December. We recognized 34%, 35%, and 36% of our annual revenue during the fourth quarter of 2013, 2012, and 2011," read the 2013 annual report. "We employed approximately 117,300 full-time and part-time employees as of 31 December 2013. However, employment levels fluctuate due to seasonal factors affecting our business."

Amazon could not be reached for comment on how many seasonal workers it employes or on how many the company retains after their initial contract is up. The company is expected to hire 70,000 full time seasonal workers for the 2013 holiday season, a 40% increase over the previous year, reported Bloomberg.

The Working Poor

The underlying situation at the Chattanooga facility belied the president's speech. He spoke about the recession, noting that "it cost millions of Americans their jobs and their homes and their savings." He spoke of the long-term unemployed and their struggles in finding a job. He spoke of the great job that Amazon and Jeff Bezos were doing taking care of their employees.

Since Amazon opened its warehouse in Jeffersonville, one homeless shelter, Haven House, has been a home to between two and six of its employees at all times, says Barbara Anderson, the shelter's director.

"The impact is profound. One man was sleeping in a car when he landed his 'permanent job' with Amazon," she says. His good luck didn't last long. "He lost everything all over again. The jobs are good but the temporary status sets people up for failure."

More than half of the shelter's tenants are working poor, according to Anderson. Often times they are either in between jobs or working jobs that pay just enough to make ends meet, but not enough to help them break out of the cycle of homelessness.

With lack of subsidized housing affordable at their level of income, they are stuck. They have no one to co-sign an apartment for them and no way to save up for a security deposit, much less the first and last months' rent that many landlords now require before one moves in.

“When you live in a shelter, the first thing you want to do is get out,” says Anderson. People often view their first paycheck as ticket out, but as soon as they lose that job, they are back at the shelter. “They get that first paycheck and they are gone. Then four to six weeks later, I see them again. They leave too early.”

When Cummins was hired on by Amazon, he too moved out of Haven House.

"Andrew's is a family who moved out too soon. People want their own space and that first paycheck allows that. He and his family moved to a hotel at $189 per week. No food", says Anderson, who would rather people stay at the shelter and save up before moving out. "Their food stamps were lost due to income limits. When they lost the job, they lost the housing."

Searching for jobs

Cummins didn't always live in Indiana.

"I am originally from Harrisburg, Pennsylvania. I arrived by bus. I took my last paycheck and came down here, because I was told there were jobs here," he says, adding that his jobs in Pennsylvania were also temporary placements obtained through staffing agencies. Instead of finding a job, Cummins ended up at Wayside Christian Mission where he earned $60 and a bed to sleep on for a full week's worth of work.

I kept looking for jobs. I got part-time jobs at staffing places, stuff like that. Then I met my wife. We have been married going on two years and she has a son, my stepson. He is eight now. I have had him since he was four, so he calls me dad. It's been on and off with jobs. I can't find a permanent one. These agencies take you for 90 days and then, you know, that's it.

There are about 3.5 million Americans who have been out of a job for longer than six months, according to the most recent unemployment report. Only one in 10 of them is likely to find stable employment down the road, according to Brookings Institute. While some give up looking altogether, those who keep looking are often only able to find part-time, sporadic employments.

Tim, 56, who asked to only be identified by his first name, has been at Haven House since February. From 2005 to 2009, Tim worked in Ireland and has previously traveled the world working as certified accountant, fraud examiner and internal auditor.

"I decided to leave Ireland, because things were quite severe in Europe, and to return to the States. But it's been a struggle as far as getting long term contracts, which I prefer, or at least getting succeeding contracts after I finish particular contract," he says.

Working for Robert Half, a global accounting and finance staffing firm, Tim traveled to Africa. When he returned in January 2013, he found himself without a job and without housing.

"When I returned from Africa, I stayed at Salvation Army in Atlanta, Georgia for a couple of months before landing a contract that got me out of there and into a four bedroom house in the suburbs of Georgia," he says. "What's concerning is that shelters don't provide resources for job search. You have to go do it yourself. I didn't have any contacts and then you rely on the internet and the library to do your search."

For Cummins, searching for jobs while living in a shelter presents a different set of barriers.

I don't mention that I live in a shelter. That way they don't discriminate against me, figuring that I won;t work. And I am a good worker, not to toot my own horn. I just don't want to take the chance of them saying, 'Oh, he lives in a shelter? No.'"

If offered a job with evening shifts, those living in the shelter have to get a written note from their employer stating that they are at work. "It's embarrassing. 'I live in a shelter. Can you write me a note?' Like a two-year-old," says Cummins.

Recently, Tim has started a new job at Amazon.

"It's completely out of my specialty. It's manual labor, basically doing inventory counts or stowing inventory," he explains. "I was desperate to find something that at least provides some level of economic resources so that I can go forward and try find the next permanent job or the next contract."

The job pays $10.50 an hour. "I have never made that in my life," says Tim, whose usual rate for contracting work is much higher. According to him, his weekly paycheck is likely to be around $300 a week, "which is not something that is comfortable when I am used to making, you know $1,000, $1,500 to $2,000 a week".

A portion of his first paycheck from Amazon will be used to cover his debt with Anderson. The rent at the shelter is $35 a week. For five hours of volunteerism, the rent can be waived. Haven House does not receive government funding, according to Anderson, and is run on private donations. "We don't kick people out if they don't pay," say Anderson.

"I haven't been able to pay much rent in the present so there is an amount in arrears," he says. "But I'm not going to put myself in a stressful situation where I don't have any economic resources to pay for food and things like that."

For Tim, the job at Amazon is just a short-term solution. "I can't live on $10 an hour," he says, adding. "If I am at Amazon longer than a month, I'd be very disappointed frankly."

It's his hope that warmer weather will bring better news. "Temporary or contract jobs are going to pick up, because employers are still a little skittish about bringing on permanent employees and so to keep the costs down, they are going to increase their contracting levels. That's what I am counting on," says Tim.

Living in a shelter

Living in Haven House has been hard on Cummins' family.

"She sleeps upstairs. I sleep downstairs. We can see each other from seven in the morning to nine in the evening when we are inside the shelter. Other than that, that's it, " he says. "If our son is sick, she has to deal with him, because I can't come up because there are women on [that] floor. It's hard."

"I tried to live in the motel so we can all be together, but then it drains all the money," Cummins says of his reason for moving out of Haven House, upon being hired by Amazon last year. "Last time when I had that job, I thought 'OK, we have it made now. We are now on our feet, we can go ahead.' But then they ended the job and we had to come back here."

The living situation had put a strain on Cummins' relationship with his wife. At some point, he offered to divorce her so that she and her son could collect more benefits. "It really hurt her feelings. She doesn't want that," he says.

"We can't find anything permanent and I don't know what to do. It's frustrating. You get upset. Then me and her bicker, because I thought I was going to get hired on and nobody hires on. I guess, it's the economy," he says.

With summer and end of the school year approaching, there is even more weighing on his mind. "We don't know what's going to happen after school. I don't know what he is going to eat," Cummins says of his stepson, who currently eats lunch at school. "I have to take any job I can get, because [while] they serve meals here, he is picky about what he eats. I mean, I won't even eat the spinach, but you have to eat what they make."

Update: Amazon, which earlier had not commented, responded after publication on May 4:

As a way of finding high-quality permanent employees and to manage variation in customer demand, we employ seasonal associates. On average, seasonal associates earn 95% of Amazon permanent starting wages. During the holidays, seasonal associates play a critical role in helping meet increased demand from customers. In 2013, Amazon hired more than 20,000 employees into full-time jobs at its US fulfillment centers and more than half of those hired started as seasonal employees.