The effort by the Retail, Wholesale, and Department Store union to organize 5,800 workers at Amazon.com Inc.’s (NASDAQ:AMZN) Bessemer, Alabama, warehouse is being seen as a defining moment for the organized labor movement. The union has pushed the world’s most powerful company to the limit, earning plaudits from supporters and observers for its cohesion and determination. It even won the support of President Joe Biden, who in a near-unprecedented step for a sitting U.S. president defended the Amazon workers’ “free and fair choice to join a union.”
Even if the current drive falls short, there is a safe bet that the union, emboldened by a groundswell of support in recent days, will be back for another crack at the world’s largest e-tailer.
The final tally should be announced in the next few days, at which time it will likely be met by a barrage of lawsuits from the losing side. Even if the employees vote for representation and their decision is upheld by the courts, it may take months, maybe years, before a contract is ratified. Consider that none of XPO Logistics Inc.’s (NYSE:XPO) 210 unionized U.S. employees — out of approximately 46,000 — currently work under contracts.
While the battle in Bessemer may light a fire under the U.S. labor movement, it’s very far from a slam dunk it will improve the dismal record of union efforts to bring warehouse workers, the vast majority of whom are company employees paid by the hour, under the labor umbrella. In 2017, the Teamsters union tried to expand its organizing into areas of the non-trucking supply chain, which included warehouse workers. Not much has happened on that front, however.
XPO workers at a since-shuttered Memphis, Tennessee, warehouse, who were part of an October 2018 New York Times exposé on allegedly adverse working conditions at the facility, never came close to being organized. The story, which was very sympathetic to the workers’ situation, was considered as prime a chance as any to organize a warehouse. XPO insiders believed the Teamsters pushed the story to the Times in the hopes of whipping up enough support for the workers that would lead to representation.
The irony of unions’ inability to organize warehouse workers is that there is a fertile field of labor to work with. The growth of e-commerce and the need for warehouse and distribution centers to meet fulfillment demand is attracting more people to the industry than at any time in recent history. Warehouse automation, though clearly on the rise, still can’t begin to replace the number of needed workers, especially as the industry continues to expand.
In theory, those macro factors should be tailwinds for union organizing. Yet labor’s efforts remain thwarted by deep-pocketed corporations that intimidate workers by threats of shutdowns, layoffs, shifting work out of the facility and even personal ratilitation, said Ken Paff, national organizer for the Teamsters for a Democratic Union (TDU), a Teamster dissident group that often takes hard lines with employers as well as with mainstream Teamster leadership.
In an e-mail, Paff said that “unions are more popular than [they’ve been] in years.” He said, however, that the “laws are stacked against unions,” without going into detail. “I think the issues [with warehousing] are generally the same as what the labor movement faces overall.”
One of the most important business and cultural trends of the past 75 years has been the decline in organized labor participation in America. Union membership peaked in 1945 at 35.5% of the total labor force, according to combined data from the Labor Department, the Bureau of Labor Statistics and conservative think tank the Heritage Foundation. Even in the late 1970s, union membership made up about 23% of the private sector workforce. Today, about 6.3% of private sector workers are unionized, according to BLS data.
Another obstacle for unions is that the key reason for their presence, to help improve worker wages, benefits and conditions of employment, is being muffled by employers’ own efforts to better their workers’ status. The average warehouse worker today makes nearly $17 an hour, with wages running roughly $2 an hour above that for higher-skilled workers like forklift operators, according to Brian Devine, senior vice president of ProLogistix, which staffs industrial facilities with logistics and manufacturing workers.
After lagging the Consumer Price Index for years, warehouse wages are now handily lagging the general inflation rate, with year-over-year increases in the double digits, Devine said. What’s more, employers are improving the working environment and are providing amenities that would not have been thought of 15 years ago, Devine said.
Opportunities for advancement are also becoming more common, Devine said. He spoke on Friday with a client that was training floor workers with virtual reality software to man forklifts, a skill set the employer badly needs. Once trained and certified, the workers will see their wages rise, he said.
Amazon has a reputation for being a demanding, if not ruthless, warehouse employer. Yet it is an abundant source of jobs, it pays well, provides comprehensive benefits and offers avenues for advancement. The consensus is that should the Bessemer workers reject representation, it would be because their satisfaction with Amazon as an employer makes the need for a union irrelevant.
As recently as 10 years ago, employers accepted warehouse worker churn as a cost of doing business. With the growth of e-commerce, that mindset has changed. According to Devine, employers are keenly interested in minimizing turnover. The industry is growing, demand for qualified workers is strong and employers know that satisfied workers are productive workers. Employers also know that another job is waiting for them should they be unhappy where they are. No company wants to be caught short of good warehouse workers in an era of rising pressure on fulfillment and delivery performance.
Kate L. Bronfenbrenner, director of labor education research at the Cornell University School of Industrial and Labor Relations, said organizing efforts have succeeded when labor has strategically levered the warehouse’s “choke point” for goods moving through the supply chain, and when warehouse workers are part of a large ecosystem, such as the automotive industry, where suppliers and auto workers are also unionized.
Bronfenbrenner recalled a situation in the U.K. in 2006 when warehouse workers at grocery chain Asda, a subsidiary of Walmart Inc. (NYSE:WMT) threatened to walk off the job before a quarterfinal match of the World Cup unless it recognized their right to organize, ASDA agreed to recognize the workers, according to Bronfenbrenner. Eventually, all of ASDA’s U.K. warehouse employees were recognized as union workers, she said.