Robert Reich
The Coffee Klatch with Robert Reich
The secret to Amazon workers' extraordinary win

The secret to Amazon workers' extraordinary win

And how corporate America plans to take back power

Yesterday was a big day for American workers. I want to start with the remarkable worker victory at Amazon’s giant warehouse on Staten Island and then move to yesterday’s great jobs report — and the real danger lying within it.

First, the victory. America’s wealthiest, most powerful, and fiercest anti-union corporation — with the second-largest workforce in the nation (union-busting Walmart being the largest) — lost out to a group of warehouse workers who voted to form a union, by a remarkable 2,654 to 2,131. Even more remarkably, the workers won without any assistance from an established union or professional organizer.

If anyone had any doubts about Amazon’s determination to prevent this from ever happening, the corporation’s scorched-earth anti-union campaign in its Bessemer, Alabama warehouse should have put those doubts to rest. In New York, Amazon used every tool it had used in Bessemer, and then some. Many of its techniques are illegal under the National Labor Relations Act (hence the decision of the National Labor Relations Board to hold another election in Bessemer), but Amazon couldn’t care less. It’s rich enough to pay any fine or bear any public relations hit.

To put it bluntly, Amazon is one of America’s worst employers. It treats its warehouse workers like dog dung. The company has repeatedly fired workers who speak out about unsafe working conditions or who even suggest that workers need a voice. The corporation doesn’t mind a yearly turnover rate of warehouse employees exceeding 100 percent, because the jobs are designed to induce burnout so workers don’t stay and organize.

As its corporate coffers bulge with profits — and its founder and executive chairman practices conspicuous consumption on the scale not seen since the robber barons of the late 19th century — Amazon has become the textbook exemplar of 21st-century corporate capitalism run amok.

Much of the credit for yesterday’s victory over Amazon goes to Christian Smalls (see interview below), whom Amazon fired in the spring of 2020 for speaking out about the firm’s failure to protect its warehouse workers from COVID. Smalls refused to back down. He went back and organized a union. It was an extraordinary feat. Talk about David and Goliath.

But Smalls had something else working in his favor — which brings me to yesterday’s jobs report from the Bureau of Labor Statistics. The report showed that the economy continues to roar back to life from the COVID recession. With consumer demand soaring, employers are desperate to hire. This has given American workers more bargaining clout than they’ve had in decades. Wages have climbed 5.6 percent over the past year, according to yesterday’s jobs report. The acute demand for workers has also bolstered the courage of workers (such Amazon’s warehouse workers on Staten Island and Starbuck’s baristas) to demand better pay and working conditions, even from the most virulently anti-union corporations in America.

Is something to worry about? Not at all. America workers haven’t had much of a raise in over four decades. Since the late 1970s, most of the economy’s gains have gone to the richest 10 percent, largely to the richest 1 percent of the richest 10 percent. It’s about time average workers took home a piece of the pie. Besides, inflation is running so high that even the 5.6 percent wage gain over the past year is far less in terms of real purchasing power.

But corporate America believes these wage gains are contributing to inflation. As the New York Time solemnly reported yesterday, the wage gains “could heat up price increases at a time when the Federal Reserve is trying to cool them down.”

This is pure rubbish. Unfortunately, Fed chair Jerome Powell believes it. He worries that “the labor market is extremely tight,” and to “an unhealthy level.” As a result, the Fed is on the way to raising interest rates repeatedly in order to slow the economy and reduce the bargaining leverage of American workers.

Pause here to consider this: The Commerce Department reported Wednesday that corporate profits are at a 70-year high. You read that right. Not since 1952 have corporations done as well as they are now doing. Across the board, American corporations are flush with cash. Although they’re paying higher costs (including higher wages), they’ve still managed to increase their profits. You see, they have enough pricing power to pass on those higher costs to consumers, and even add some more for themselves.

So when American corporations are overflowing with money like this, why should anyone believe that wage gains will necessarily “heat up price increases,” as the Times blindly reports? In a healthy economy, corporations would not be passing on higher costs — including higher wages — to their consumers. They’d be paying the higher wages out of their profits. But that’s not happening. Corporations are using their record profits to buy back enormous amounts of their own stock in order to keep their share prices high. The labor market isn’t “unhealthily” tight, as Jerome Powell asserts; corporations are unhealthily fat. Workers don’t have too much power; corporations do.

So let’s celebrate the extraordinary win of the workers of Amazon’s Staten Island warehouse. Let’s hope that it marks the beginning of a renewal of worker power in America. Yet here’s the reality: Corporate America doesn’t want to give up any of its record profits to its workers. If it can’t fight off unions directly, it will do so indirectly by blaming inflation on wage increases, and then cheer on the Fed as it slows the economy just enough to eliminate American workers’ new bargaining clout.

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