There is a good reason Amazon (NASDAQ: AMZN) CEO Jeff Bezos has become obsessed with robots and artificial intelligence. His company’s 230,000 person labor force is ripe for unionization.
In recent years, Amazon has made a big push into robotics and AI, it purchased the robot maker Kiva, offered a $25,000 prize to the designer of the best robot for picking packages off the shelves and reportedly bought the artificial intelligence company Orbeus. Bloomberg reported that Orbeus has developed a neural network based artificial intelligence solution that can identify photographs.
This could be used by Amazon to create robots that can identify packages or goods in its giant fulfillment center. The ultimate goal of this is to develop a robot that could identify a book on a shelf, pick it up and put it in a package or hand it off to a human packager. The idea is to speed up the shipping process and to reduce labor costs.
Why Jeff Bezos is scared to death of Unions
Another obvious goal is to eliminate workers that can unionize and go on strike. Unlike most tech companies Amazon is highly vulnerable to unions and strikes.
Amazon’s business model is after all based on the ability to ship stuff quickly and accurately to customers. Unionized workers could quickly and easily disrupt that, just imagine the havoc they could wreak on Amazon and its stock price, if they went on strike two weeks before Christmas.
Bezos might have no choice but to meet any demand the union asks for to get the packages moving again. This could include ridiculously high wages, or other benefits such as free Amazon Prime for all union members.
Since working conditions are notoriously lousy at Amazon’s fulfillment centers the ground seems ripe for unionization. Amazon has dodged that bullet so far; largely because of the inept and uncreative leadership in America’s labor movement, but it is coming sooner or later.
Is a Union Brewing at Amazon?
Business Insider reported that a group called Former and Current Employees of Amazon or FACE has created a web page that takes anonymous complaints about the Everything Store’s work environment. The current version of the group’s website now contains these words: Union Petitions Almost Ready!
The site also contains a long list of complaints about Amazon and open letter to Amazon. It looks like a front for a union to me but I cannot tell which one.
There is no way to tell how many Amazon workers are involved in the effort or where it is based. A phone number at the site contains a 425 area code which covers the Seattle suburbs.
The site is largely anonymous to stop the kind of anti-union tactics Amazon has deployed before. Back in 2014 repair and maintenance technicians at an Amazon fulfillment center in Middletown, Delaware, voted not to organize after a company propaganda blitz.
Is it possible to Unionize Amazon?
Skeptics will wonder if it is even possible to unionize workers at a tech company like Amazon. After all, Silicon Valley has resisted the labor movement for decades largely because of its highly independent work force and high salaries.
The difference here is that Amazon is not a pure tech company, because it is also a logistics provider and a retailer. Unlike Alphabet or Microsoft, Amazon has tens of thousands workers doing basic labor jobs like carrying boxes around. Bezos’ plans to offer delivery services and establish his own trucking line could add thousands more workers to the payroll.
This could bring Amazon into conflict with some powerful unions including the Teamsters. One way Amazon has avoided union exposure until now has been to outsource those positions most likely to get organized to companies that already have unions such as UPS.
Now that Amazon is entering logistics it will either have to find a way to avoid unions or cut some sort of deal with them. An obvious solution would be to provide workers with an incentive not to unionize such as very high pay. Another would be to agree to let some workers unionize, but not others; an example of this would be to sign a Teamsters contract for the truck drivers if the union agreed to stay outside the fulfillment center.
Is the Union Movement itself the Real Problem?
Many people are probably wondering why unions have not penetrated Amazon yet. The main reason is the lack of effective or aggressive leadership in the American labor movement.
Many people are afraid to admit it but there is no real leadership in today’s labor movement. Ask yourself can you name a single living American union leader? The only one I could think was Teamster’s boss, Jimmy Hoffa Jr. and then only because of his infamous father.
Today’s unions lack the kind of aggressive, bold, creative and imaginative leaders that built the labor movement. Instead we have bureaucrats that hide in offices and hope the government will do their job for them. A prime of example of this is the way in which many union apologists blame a dead President; Ronald Reagan, for their present day problems.
Until unions get new leadership comparable to that in business, companies like Amazon will have the upper hand in labor disputes. The unions have no leadership, while Amazon has a strong visionary leader in the form of Bezos – who is prepared to wage an aggressive battle for the company’s interests.
The FACE page indicates that could be changing. It looks as if there could be some intelligent leadership capable of devising an effective strategy in at least one union.
If this is the case, Amazon is going to have to pay workers more or invest a large fortune in robots or both. All three of those scenarios entail spending a lot of money. One has to wonder how that’s going to affect the bottom line at a company that famously often operates at a loss.