Amazon’s $15 Minimum Wage: What’s behind it? PART III

Amazon Warehouse Image

On November 1, 2018, the retail giant Amazon voluntarily raised its minimum wage for US employees to $15 per hour. No one made them do it. What prompted the raise?

Amazon may be hoping to reverse negative press coverage with its new minimum wage.

Here’s a further look at some of the recent bad press that may have driven the decision:

Amazon reputedly actively discourages unionization. Last September, Gizmodo discovered a video the company showed its managers. The video trained them to look out for certain behaviors that may indicate possible organizing efforts.11

Reports of terrible warehouse working conditions: Amazon workers accuse the company of prison-like warehouse working conditions. In April, The Sun reported “Over the course of a single day a picker could walk as far as 24 kilometres [about 15 miles]. We were paid the minimum wage to do this…. A recent survey of Amazon warehouse workers in England by the group Organise found that 74% were afraid to go to the toilet during a shift out of fear of missing productivity targets. On one occasion I found a Coca-Cola bottle containing urine sitting incongruently on a warehouse shelf amid the assorted miscellany, evidently left there by a worker too scared to take a toilet break.” Workers must pass through extensive airport-like security checkpoints to leave the work floor, where sitting down is not permitted. Security stations, often with waiting lines, are located far from work stations, allowing less than minimal rest time. Handheld scanners make workers’ locations and work rate available to management. Workers are under such drastic time constraints that they have been warned not to waste time speaking with fellow employees, and rack up “points” for taking sick time, even with prior notice.8 Drivers have also reportedly used their vans as improvised bathrooms, urinating and defecating in them to meet their lofty delivery goals deadlines, the New York Post reported.  A reporter for the Mirror, Alan Selby, went undercover for five weeks and reported employees collapsing at work, suffering panic attacks, pulling muscles and more. A driver for a shipping company used by Amazon told Business Insider that when he accidentally slammed his hand in his van door, he was shamed at work and asked to finish his deliveries before seeking medical care.9  Another employee reports “I had a [seizure] at work and was taken to the hospital. The next day, it was still marked, ‘no call, no show.’10  

Reports of unsafe and uncaring working conditions are refuted by the company. According to James Bloodworth, a former Amazon employee, “My first week there [two] [people] collapsed from dehydration. It’s so [commonplace] to see someone collapse that nobody is even shocked anymore. You’ll just hear a manager complain that he has to do some report now, while a couple of new [people] try to help the guy (veterans won’t risk helping [because] it drops [their] rate). No sitting allowed, and there’s nowhere to sit anywhere except the break rooms. Before the robots (they call them kivas) pickers would regularly walk 10-15 miles a day, now it’s just stand for 10-12 hours a day. [People] complain about the heat all the time…There’s been deaths, at least one in my building… Amazon likes to keep it all hush hush. Heard about others, you can find the stories if you search for it, but Amazon does a good job burying it… 12

Amazon drives its competition out of business. “Amazon’s business model has been described as predatory pricing. It offers very low pricing on a large assortment of products, creating thin profit margins that grow through high volume and low wages. “What is interesting is that whereas this would have drawn the attention of antitrust authorities in past years, current antitrust doctrine leaves [companies] alone on the theory that this has to be a rational move, and that at some point they will recover from the predatory pricing,” said  Marshall W. Meyer, emeritus management professor at Wharton. There is a growing national conversation about companies such as Amazon that employ a large number of workers in one sector. Monopoly and antitrust are among the chief concerns. Many believe that Amazon will simply drive its competitors out of business, then raise its prices. If that happens, workers won’t have much recourse.”, especially with workers that have little, if any, bargaining power. “They are the labor market in certain areas.”13

A raise didn’t cost too much.

Amazon’s $15 pay raise was funded in part by the company’s elimination of the monthly bonuses and stock awards formerly available to employees. The change in wage structure is good for new employees, who won’t have to wait years to see the benefits of stock options. But it’s been hailed as a “slap in the face” to longtime Amazon warehouse workers, many of whom relied on the bonuses and the value of Amazon’s stock. Amazon promises to adjust the pay of these workers on case by case basis.

To sum up, what prompted Amazon’s spontaneous generosity? In short, Amazon has a LOT of bad press to overcome, and they want to appear as a progressive, caring company that is a great place to work, as they break into ever newer markets and change the face of retail in the 21st century. This is a company to watch.





Be the first to comment on "Amazon’s $15 Minimum Wage: What’s behind it? PART III"

Leave a comment

Your email address will not be published.