State of the Unions
As much as I wish I could talk about the Evergiven jammed in the Suez Canal for meme and comedy purposes, I need to talk about Amazon. In the likely event that the ship is still stuck in the Canal the next few days, I’ll write a short piece about that, but right now, what’s happening at Amazon is just part of a broader crisis within capitalist economies. The outcome of the Amazon situation can change the way businesses operate in the short- and long-terms. In the coming weeks, we’ll see how this country feels about billionaires, the accumulation of wealth, and the humanity of the working class.
In short, Amazon has been underpaying workers to work in inhumane conditions, but the nitty-gritty details are far uglier. Workers at Amazon are now claiming, as they have been for years, that they get forced to work long hours with no breaks and inadequate heating/AC for their work stations. Warehouse workers and delivery drivers alike have put forth testimonies saying they get punished for unproductivity during bathroom breaks, so many have resorted to using empty bottles and plastic bags to go on the clock. Warehouse workers also have claims of working in sweltering pods as they pack boxes while being told by upper-level management. Not only are these atrocities being committed, but the underlying trend is that the most valuable companies tend to be the biggest perpetrators of suboptimal working conditions and paying workers less than what their work is worth.
The employees at Amazon, namely the warehouse in Birmingham, Alabama, are seeking to unionize. The effort comes after decades of pro-union activists got fired from Amazon for their activism. Amazon’s business model and profitability rely on exploiting workers and paying them less than the value of the work they do. A union would give the workers the power and solidarity necessary to stand up to the corporate giant that is Amazon and fight for humane working conditions and adequate compensation.
The broader stigma against unions is mostly a myth perpetuated by the rich to keep workers complacent with the inadequate benefits they receive for work. Unions introduced weekends, child labor laws, and 8-hour work-days, innovations taken for granted in modern history. Anti-union efforts since the mid-1950s have slowly chipped away at union membership and slowed the progression of workers rights in an increasingly capitalist economy. Capitalists have posted propaganda in the workplace advertising corrupt, expensive unions that draw membership fees from member paychecks and contribute little in financial gain. Though corruption is possible in a union (as it is literally anywhere else in society), unions are successful in fighting for the workers in the long run and return benefits such as higher wages that far outweigh the membership dues they require.
The purpose of unions is to set educational, technical, wage, and lifestyle standards for people of a profession or specialty. Although unions established minimums for compensation, training, and lifestyles early on, a constantly changing economic landscape necessitates a continued union presence. In the case of Amazon, the Retail/Warehouse/Department Store Union (RWDSU) is demanding Amazon treat workers with the respect they deserve. Although Amazon is paying its employees $15/hr, well above federal and state minimum wages, the union claims the jobs being done by warehouse employees command a wage north of what they currently get. If RWDSU and the Amazon workers win their fight, or even a couple of battles, expect to see a revitalization of unions in industries beyond retail and e-commerce.
Much of the pushback unions get in a larger societal/political context claims that unions demand unreasonable benefits from employers that would lead directly to job losses and/or lower wages in the workplace. Though these claims may seem intuitive as a business wouldn’t increase labor costs above the minimum, these arguments fail to materialize in reality. Take Amazon, for example: $15/hr for warehouse labor adds up to the business as thousands of employees work millions of hours each year. If (purely hypothetical) union demands push Amazon to pay $25/hr, heating/AC to the tune of $.50/hr provide 2 hours of paid breaks to employees for each 8-hour shift, an 8-hour shift of labor at Amazon goes from costing $120 to $255, an increase of 112.5%. Regardless of how undesirable for Amazon this may be, AMAZON CAN’T CUT HOURS! Say a warehouse requires 500k labor hours to fulfill orders for a given year. Just because labor costs double doesn’t mean amazon can now get by doing those same jobs with only half the labor hours. THEY STILL NEED 500K HOURS OF WORK! Of course, the company tries to recoup some of its costs by raising prices, but because Amazon has competitors like Wal-Mart and Target, they can’t raise prices too much because they will lose business to cheaper retailers.
I’m no accounting czar, but for those interested in the financial wellbeing of Amazon for the sake of its existence and for the jobs it provides, it’ll still be profitable. The company spent $291.824 billion to make $386.064 billion in 2020 for a gross profit margin of 75.59%. Assuming a very generous 2/3 of their expenses went to paying wages, that would total $194.549 billion paid out last year. After some math, Amazon could increase by 50% before they take a loss for the year, or by 25% and still maintain 13% profitability. I’ll put the calculations for these numbers at the end of the article for anyone interested in the computation. These figures go to show that Amazon is financially capable of meeting union demands but chooses not to so the owners of the company (many of which have incomes in the top-10% of society) can quite literally buy more yachts.
Amazon is far from the only company profiting off of exploited labor while shooting down employee unionization attempts. Wal-Mart, McDonald’s, Barstool Sports, and multiple other companies actively dissuade union membership for employees to take away the leverage collectivism/unity brings to the workers. With few exceptions, policymakers refusing to intervene in these crises perpetuate the pandemic of cheap labor in America. With no intervention, Americans will continue to work 40 hour weeks and still rely on underfunded welfare programs to get out of poverty. There aren’t many ways out of these issues that don’t involve drastic action by the government. If, ever, you come across an opportunity to support or get involved with a union, please take it if you can afford it. Union membership is a small step towards achieving greater economic equality for all.
accounting figures: revenue ($386.064B) and cost of revenue ($291.824B) taken from Amazon’s Income Statement for 2020. profit margin=1-(cost of revenue/revenue). 2/3 of expenses as wages is an estimate, the true figure is probably far lower than 50% (even more damning for Amazon)
side note 1: If you support the working class, you need to support unions and higher wages. Just because a wage is what it is doesn’t mean it’s justified. People work for less than they should all the time.
side note 2: Amazon engages in wage theft by any form of the word. Paying $15/hr for grueling warehouse labor is wage theft, even if they disclose $15 up front. The work is worth more than that. Disagree? Check out this wage theft instead. $61 million in tips to drivers booked as profits for shareholders.
side note 3: Please don't think their workers should be thankful they get such a high paying job. A full time warehouse worker makes $31,200 each year before taxes, barely above the poverty line for many. And no, Amazon warehousing is not unskilled labor. When is the last time you heard of a high school/college student working at Amazon full-time? Probably never. Amazon employees deserve a living wage.
side note 4: Don’t even bother boycotting Amazon, call your Senators and Representatives instead. Amazon owns Amazon Web Services, a cloud computing company that Netflix, ESPN, Twitter, Facebook, McDonald’s, Spotify, Pfizer, BMW, and so many more services run on. If you wanted to boycott Amazon you’d have to go off the grid. A phone call is far easier and more effective in achieving actual change.