Unions target Amazon

Thursday , March 06, 2014 - 9:18 AM

Bloomberg News, Megan McArdle

It looks like Amazon.com Inc. is the next front in the battle to save organized labor.

Bloomberg Businessweek reports

that the International Association of Machinists and Aerospace Workers union has filed an election petition with the National Labor Relations Board on

behalf of 30 equipment-maintenance workers at an Amazon warehouse in Delaware. By itself, this is unlikely to make much difference in Amazon’s

bottom line. But the union clearly views this as the camel’s nose under the tent. Amazon is a big employer, and its operation gets bigger every day. I don’t think it’s an exaggeration to say that if unions manage to make substantial inroads at Amazon, it will be the greatest advance that the labor movement has experienced in decades.

In many ways, Amazon is an excellent candidate for unionization. It has a lot of warehouses, to be sure, but it also has a lot more workers in a single place than a Wal-Mart or a Best Buy. And those workers are a lot more productive than your average Wal-Mart employee; the company does $61 billion in annual revenue with about 100,000 workers. Wal-Mart Stores Inc. makes $440 billion — but it takes more than 10 times as many employees do to it. The more productive your workers are, the easier they are to unionize, because there’s more value for the union to claim.

Amazon’s warehouses are also easier to unionize than a Wal- Mart because they represent a bigger capital investment. The harder it is to move your facility, the harder it is to fight a union.

Which is not to say that unionizing Amazon would be easy. For one thing, while Amazon does produce a lot of revenue from its workers, the company doesn’t produce a lot of profits; most of the surplus gets poured back into expansion. That complicates attempts to fatten worker paychecks.

But an even bigger risk is automation. Amazon is plowing a lot of money into automating its warehouse operations; it spent a fortune buying a robot company in 2012. So far, that automation — for example, having a central computer system that tells workers exactly which orders to pick — is mostly aimed at making workers more productive. But it’s clear that it has its eyes on robots, which will do a lot of the picking themselves. The easier workers are to replace, the less leverage they will have.

Of course, that may be an argument for unionizing quickly; if unions can take over Amazon’s workforce, they may be able to slow or halt the pace at which workers are replaced. That would probably be bad news for Amazon’s customers and shareholders. But it would be a big victory for a labor movement that hasn’t had many of those recently.

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