Left Voice journalist and comrade Luigi Morris spent a season last year working in a UPS sorting facility. He did not enjoy the experience, writing,
I get up for work at 3 am, with intense back pain from working this job, and deeply exhausted from working at UPS and various additional gigs to make ends meet. With this contract, there is no substantive change in my life. It doesn’t feel historic. I get better pay, but not enough to make ends meet. I get two more sick days, which as I reflect on the pain in my back, I know isn’t enough. I can only imagine what it feels like for single parents who not only need to struggle to make ends meet for themselves, but also for their children. I think about the parents who can’t even pick up their kids due to back aches and who cannot take days off to care for kids when they get sick.
Which gives him some street cred for this week's article about the new Amazon Labor Union (ALU) and its impending merger with the Teamsters. The article is entitled Amazon Labor Union Affiliates With Teamsters: What Does This Mean for Amazon Workers and the Labor Movement? (with co-author Pola Posen).
Mr. Morris' reaction to warehouse work is not necessarily representative. Indeed.com posts reviews from people who work at Amazon, and they're all over the map: some rate the experience excellent (5), others horrible (1), and most others in between. Among the most positive reviews (as an antidote to Mr. Morris' bad experience) reads
Working at Amazon as a warehouse worker has been a fantastic experience for me. The pay is competitive, and the benefits package is comprehensive, including health insurance and stock options. The management is supportive and encourages career growth through training and advancement opportunities. The work environment is dynamic yet well-organized, ensuring efficient operations while maintaining a positive atmosphere. Overall, I am grateful for the opportunity to work at Amazon and would highly recommend it to anyone seeking a rewarding job with a reputable company.
Indeed.com reports that salaries for NYC Amazon warehouse workers are around $17/hr. It's obviously not for everybody.
Mr. Morris clearly knows a lot about unions. The Amazon warehouse on Staten Island, NY, JFK8, was successfully unionized in 2022, due in large part to the efforts of Chris Smalls. For more I'll refer the reader to the excellent journalism of Left Voice authors Tatania Cozzarelli and James Dennis Hoff. My comments on their report are here.
Since the union vote, no contract has been signed with the company. To help speed the process along Mr. Smalls is resigning from any leadership role in the ALU, and has arranged (in Mr. Morris' opinion with some subterfuge) for the union to affiliate with the Teamsters--to be designated ALU-IBT Local 1. The idea is that negotiating a contract requires more and different experience than Mr. Smalls can offer--he being a charismatic and successful organizer, but not especially interested in the weeds of a contract negotiation. Presumably the Teamsters are better at negotiating.
I think it's going to be very difficult for any contract to be signed--especially now.
Mr. Morris--as is typical of Left Voice journalists--may know a lot about unions, but he knows nothing about economics. Even worse, he apparently never reads the business pages. For he surely should know (as I document here) that Amazon is actually three, largely independent businesses. By far the most profitable is Amazon Web Services (AWS), which competes in the cloud-computing space with Microsoft Azure and Google Cloud. By contrast, the Amazon Retail business is just barely profitable, and in 2021 was actually losing money. (The third business is Amazon Prime, which competes with Netflix, et al.)
Amazon retail goes head to head against Walmart, Aldi, Target and Dollar General, among many others. All of these businesses run on very thin margins--Walmart's margin is typically 3%, and we can assume that Amazon Retail's margin isn't any more than that. That means that if Amazon sacrificed its entire profit margin, the workers would get a 3% raise (after which the company would immediately go bankrupt).
3% hardly justifies Mr. Morris' descriptions as "hyper exploitation" and "unchecked exploitation." As a Marxist, Mr. Morris should understand this--Marxists keep yammering about the "declining rate of profit." In general this isn't true, but for commodities it is true--and Amazon and its competitors are very much in a commodity business. Profit margins are reduced to a minimum.
So there's not very much to negotiate for. If Amazon is forced to raise wages, then it will have to shrink the workforce and raise productivity. If Amazon raises prices it will lose market share and earn even less revenue. More, Amazon can't raise wages at JFK8 beyond what they pay at their other warehouses--that would be grossly unfair. There is no way Amazon can give workers any significant wage increase. (I mean in real terms. If inflation goes up then Amazon can raise wages with inflation--since prices and everything else will be going up simultaneously. But that doesn't increase anybody's standard of living.)
It gets worse. The Teamsters need to collect union dues. I'm not saying that's their only goal, but it certainly is essential to their business model. If union dues are 1% of a worker's paycheck, then a 1% raise will simply cover the dues. Given that there's only a 3% margin, letting the union get a third of that is probably a non-starter.
The only way this kind of works is if there is continued inflation. If inflation goes up 2.5%, then the union can negotiate a 2.5% wage increase. Of course this is phony, but they'll take credit for it anyway. And remember that the union is now gonna get its 1% cut, so in real terms the workers will be left worse off.
And it gets even worse than that! Even Mr. Morris should be aware that last Thursday and Friday the Dow Jones went down about 1200 points--3%. The reason is taken to be the weak labor report, showing only 114,000 new jobs were created in July, with unemployment edging up to 4.3%. This is commonly believed to auger the beginning of a recession. (Markets are not always right with their predictions.) Recessions are a terrible time to be asking for raises--indeed, Amazon is more likely to be laying people off.
Unionization efforts work best when there is a labor shortage, such as existed from 2021 into 2023, caused by the pandemic-inspired early retirement of about 4 million baby boomers. Those retirees have since been replaced by 8 million new immigrants--there is no longer a labor shortage, but possibly even a labor surplus. Unions do not do well in such an environment, and ALU-IBT Local 1 will be no exception.
I predict that no contract will be signed in the foreseeable future.
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