Could Amazon German Strikes Spread to U.S.?

Jobs

Published: June 2, 2014 6:41 am

The strikes by Amazon.com Inc. (NASDAQ: AMZN) warehouse workers in Germany are no longer just a pesky problem. The Verdi labor union continues to protest what it believes are low wages. As is often the case with unions, Verdi wants to move to collective bargaining to improve the lot of almost 10,000 warehouse workers. Other Amazon warehouse workers may take a page from the German book. The e-commerce company’s U.S. workers apparently have little leverage either.

Amazon has spent what many analysts believe is over $2 billion to build warehouses in the United States. The company currently has more than 100 of them. They are part of a hub system that allows Amazon to get merchandise to customers more quickly, and presumably more cheaply. To run these warehouses, analysts estimate the company needs 30,000 workers. One union — the International Association of Machinists and Aerospace Workers — has already moved to add workers at Amazon.

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Amazon does not disclose what it pays its warehouse workers, but presumably it is not very much. Many are temporary, which means they are likely paid very low hourly wages. The full-time staff face the fact that warehouse employees are close to a commodity. Skill levels are low, and presumably job candidates plentiful.

So far, most of the effort to get large corporations to raise the minimum wage has been directed at fast-food firms like McDonald’s Corp. (NYSE: MCD) and huge retailers, particularly Wal-Mart Stores Inc. (NYSE: WMT). However, the movement has been savvy in terms of its public relations effort. Amazon is a visible target, not just because of its factory worker population, but also because of its balance sheet. Amazon holds $8.7 billion in cash and cash equivalents.

ALSO READ: States With the Weakest Unions

Many large U.S. companies have effectively kept their workers from organizing and collective bargaining. Amazon is among them. However, the recent action to push the minimum wage higher has not discriminated against companies based on whether their workers are union members. The critical issue is what they paid their lowest paid workers in general. Amazon’s labor problem may be isolated to Germany. However, that could change very quickly.

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