Credit has to be given where it’s due. Vermont’s senator (and former Democratic Presidential candidate) Bernie Sanders may be anything but mainstream, but he’s not afraid to speak his mind about organizations run by other liberals. Earlier this week, Sanders called out Amazon.com (NASDAQ:AMZN) Jeff Bezos — fellow liberal and owner of left-leaning Washington Post newspaper — for allowing working conditions and pay at Amazon fulfillment centers to deteriorate to inhumane levels.
His chief complaint? The senator explains, “From what information we’ve gathered, one out of three Amazon workers in Arizona, as we understand it, is on public assistance. They are receiving either Medicaid, food stamps or public housing.”
Amazon responded, of course, continuing a feud that’s been underway for years. The e-commerce giant’s opening salvo this time around: “Senator Sanders continues to make inaccurate and misleading accusations against Amazon.” Amazon’s blog post/response then went on to clarify its claim, though even a careful read of the response doesn’t actually address Sanders’ concerns.
It all begs the question — what is the actual truth of the matter?
Everyone’s Selling Something
It’s unlikely a coincidence that Sanders’ effort to gather working-condition and paycheck stories from current and former Amazon employees has materialized at the same time he’s preparing legislation that would ultimately tax large companies with workers receiving some sort of government assistance. The crux of the bill — any corporation with 500 or more employees would essentially compensate the government, dollar-for-dollar, for the subsidies or assistance those individuals are receiving.
The potential fiscal impact on Amazon.com isn’t entirely clear. Sanders claimed that one out of every three Amazon workers in Arizona is receiving some sort of federal assistance, while a separate report from New Food Economy said the ratio was along the lines of one out of every 10 Amazon workers in Pennsylvania and Ohio.
Support for the premise of the bill thus far is minimal.
Amazon, conversely, is looking to sell itself as a fair and decent employer in the wake of multiple horror stories about employment at Amazon fulfillment centers.
Reality of Amazon Fulfillment Centers
They’re likely isolated cases for the company, which operates 75 fulfillment centers in North America alone, plus another 25 sorting centers. But, even a relatively small handful of reports that point to overwhelming workloads and unfair working conditions — like mandatory overtime and limited access to restrooms — has left the organization’s publicity department on the defensive.
To that end, Amazon made clear in its rebuttal that full-time associates at Amazon fulfillment centers in the U.S. are paid an average of just a little over $15 per hour — well above minimum wage. The company further claims that the median annual salary for workers at its U.S. warehouses is $34,213.
The figure sounds fair enough — but note that Amazon chose the median, or midpoint, of all the annualized earnings of employees at its warehouses. That’s not necessarily the mean, or average, compensation that may well be a considerably lower figure.
Still, Amazon’s benefits package is unusually generous for that pay-grade, offering not just health insurance and stock-based compensation, but also significant tuition reimbursement that’s been utilized by more than 16,000 employees.
It’s not clear, however, how many of those employees worked at actual Amazon fulfillment centers. Workers giving 40 hours or more to the company, doing a grueling job, may not have the time or energy to use such a perk. More than a few now-former warehouse workers have concurred it’s a very tough job, bordering on being unreasonable in some locales.
The formation of union might help, but Amazon has mastered the art and science of keeping unions at bay, quelling such efforts again in 2014. Somehow even a pro-union Sanders may find that idea to be a non-starter with Amazon employees.
The Last Word
Sanders says he will visit an Amazon warehouse in September, and undoubtedly he will. Neither he nor the company has said which facility it will be, but it’s difficult to think it won’t be one that hasn’t been well-groomed for such a high-profile visit.
Bolstering that theory is recent cheerleading by Amazon fulfillment centers known as “ambassadors,” who have taken to Amazon-issued Twitter accounts to tout how great working at an Amazon warehouse is. Problem: These ambassadors are being paid a little something extra (perhaps the right to keep their jobs?) for their positivity. Paying for tweets doesn’t exactly help Amazon’s case, or hurt Bernie Sanders’ argument.
Will all the public wrangling be enough to incite any needed change at Amazon’s warehouses? Probably not directly. But, inasmuch as change happens gradually, one step at a time, putting the spotlight back on the wealth disparity between Jeff Bezos — the wealthiest man in the world — and the people who work for him pushes that rock a little further up the hill.
Amazon delivered a decent counterpunch, but Sanders appears to have won this round.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.
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