Today's Opinions, Tomorrow's Reality
Better Than No Job at All
By David G. Young
Washington, DC, July 17, 2018 --
Walmart is the company everyone loves to hate, but Amazon's business practices are hardly any better.
When thousands of Amazon's European employees went on strike to protest poor working conditions1, shoppers across the Atlantic hardly noticed. In the United States, where about half of households have Amazon Prime memberships2, consumers were too busy shopping for bargains during Prime Day.
As fast growing Amazon takes its toll on smaller retailers, perhaps its biggest success has been its ability to avoid a consumer backlash. Front porches in upscale American neighborhoods are typically littered with Amazon boxes. Coastal elitists who wouldn't be caught dead at a Walmart rave about the benefits of their Amazon Prime memberships.
Walmart, which is still America's largest retailer, is hugely popular with Americans of more modest means. But it has been demonized by elitist Americans for abusing its employees and destroying family businesses.
But is Amazon really any better?
Amazon's warehouse workers report grueling 10 hour shifts with regulated bathroom breaks and constant monitoring from supervisors and surveillance cameras.3 Median pay of $14 per hour4 is about the same as the average for full-time employees at Walmart, although Walmart's army of part-time workers make less, starting at only $11 per hour.5
Compared with Walmart employees, Amazon workers do get better benefits — including health insurance.6 Walmart offers health insurance to full-time workers, but since the introduction of Obamacare, it no longer does so for part-time employees7 who make up half of its workforce8.
But by far the biggest difference between Amazon and Walmart when it comes to workers is that Amazon finds ways to get by with a lot fewer of them. Amazon not only treat its employees like robots -- it actually uses robots (and artificial intelligence) instead of employees wherever it can. These efforts are aided by the fact that Amazon's warehouses and electronic storefronts are much easier to automate than Walmart's retail stores.
Amazon's global workforce of 560,0009 is a quarter the size of Walmart's 2.3 million10. And while Amazon's 2017 sales of $178 billion11 lag behind Walmart's $486 billion12, its sales per employee is much higher. Simple division of these figures shows that for every $1 million in sales, Walmart employs 4.7 people whereas Amazon employs only 3.1.
If Amazon one day displaces Walmart while maintaining these ratios, this would mean a net loss of 800,000 jobs worldwide. While Amazon's benefits may be better than Walmart's, from the interest of workers, a job without health benefits is still better than no job at all.
When it comes to displacing family business, it's hard to argue that Amazon is any different than Walmart. Walmart takes most of the heat on this because it was destroying the retail landscape in small town America even before Amazon sold its first book online. But but had Walmart not already done so, Amazon would be doing the same thing today. And there is no question that in more upscale parts of America, where Walmart remains hugely unpopular, Amazon is now the primary driver of competition with small retailers.
Does Amazon deserve more consumer ire? For all the good deals that consumers get from Amazon, there is ample evidence that it made possible at least partly by its abusive behavior toward employees. While this abuse comes with included medical insurance, it's abuse just the same. Consumers concerned about free-range chickens, fair-trade coffee and cruelty-free products of all kinds should not look the other way when it comes to the abused humans who pack the boxes bound for their doorstep.
Related Web Columns:
Foolish Investment, July 15, 2014
Not Quite Cruelty Free, September 17, 2013
I Want it Now, July 23, 2013
1. CNET, Amazon Workers in Europe Go on Strike During Prime Day, July 16, 2018
2. Fast Company, Amazon Has Sold PrimeMmemberships to 100 Million of Us, April 18, 2018
7. New York Times, As Walmart Buys Online Retailers, Their Health Benefits Suffer, November 27, 2017
9. Seattle Times, Amazon's Employee Count Declines for First Time Since 2009, April 26, 2018
10. Walmart, Company Facts, as posted July 17, 2018
11. Digital Commerce, Amazon's Profit Tops $3 Billion as 2017 Revenue Grows 31%, February 1, 2018
12. Walmart, Walmart U.S. Q4 Comps Grew 1.8% and Walmart U.S. eCommerce GMV grew 36.1%, February 20, 2018