Chris Smalls, Amazon union advocate – Source: Instagram/@jenfl23; Starbucks unionization rally – Source: Instagram/@704_spclc
Should retail fear or embrace organized labor’s comeback?
In early April, workers at an Amazon.com warehouse on Staten Island voted to form the e-commerce giant’s first U.S. union, building on successful organizing efforts at Starbucks and leading to speculation that a new American union movement is underway.
At Starbucks, more than 180 of the company’s 9,000 corporate stores have petitioned for union elections with 16 voting to unionize after a unionization campaign went public last August. An REI location in Manhattan last month voted to unionize, as well.
The elections follow years of union decline with the share of U.S. workers in unions dropping to 10.3 percent in 2021, down half a percentage point from 2020 and the lowest rate in decades.
The tight labor market and pandemic-related work pressures, however, have created a rare opportunity for workers to rally around better pay and treatment. President Joe Biden ran on a promise to be the most pro-labor president, and a September Gallup poll found 68 percent of Americans approve of unions, the highest favorable since 1965.
The reason labor law reform proponents are hopeful is because the unionization efforts have been initiated by employees at the local level rather than the traditional centralized labor approach led by seasoned union officials. The local approach counters traditional anti-union tactics that contend outside unionizers fail to understand workers’ concerns and are only interested in dues.
Amazon in a statement said the company was “disappointed” with the vote’s outcome “because we believe having a direct relationship with the company is best for our employees.” It has launched an appeal.
The New York Times reported that Amazon’s “ability to speed packages to consumers is built on a vast chain of manual labor that is monitored down to the second. No one knows what will happen if the newly organized workers try to change that model or disrupt operations.”
Last Monday, Howard Schultz, Starbucks’ longtime leader, returned as interim CEO and told employees at a town hall meeting that he sees Starbucks as a pro-worker company “that does not need someone in between us and our people.”
- UNION MEMBERS — 2021 – U.S. Bureau of Labor Statistics
- Statement from Amazon on Staten Island union vote – Amazon.com
- How Two Best Friends Beat Amazon – The New York Times
- Starbucks Hires New Strategy Chief as More Baristas Unionize – The Wall Street Journal
- Amazon, Starbucks and the sparking of a new American union movement – The Conversation
- Approval of Labor Unions at Highest Point Since 1965 – Gallup
- Amazon Intends to Appeal Union Victory in New York – The Wall Street Journal
- Amazon says landmark Staten Island union vote should be thrown out. – The New York Times
- Is Organized Labor Making a Comeback? – The Atlantic
- Is union’s victory at Starbucks a sign of things to come? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Will retailers likely be seeing unionization drives with greater frequency in the years ahead? How might tactics have to change to discourage such efforts, or should retailers be looking to work with unions?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Doug Garnett
President, Protonik
Workers have not had this much power in decades, and they’re exercising that power now. Historic low unemployment coupled with the ability to organize and communicate through online channels has put the power in the hands of workers like never before. The unionization movement of Starbucks and Amazon workers may very well lead to unionization efforts by other retail workers. Management needs to focus on employee relations in a very serious way. It can’t be lip-service and platitudes. If management wants to have great relations with their employees, then they need to engage with them in a meaningful way.
It’s notable that the successful Amazon unionization campaign in New York came from a grassroots movement rather than an established national union. Perhaps these more localized efforts represent the future of unions. As for the subject of unions more widely, I am not particularly keen on them and never have been. To me they are an entirely extraneous component that neither owns a company nor works there. And I am very, very strongly opposed to anyone who does not want to be a part of a union being forced to pay union dues.
If, a big “if,” it provides benefits to all the workers, should not all the workers pay for supporting those benefits?
If people don’t want to be part of a union they should not be forced to pay dues against their will. That’s a complete breach of their rights. Equally, if enhanced benefits negotiated by a union only go to union members that is also fine.
I agree fully. There should be no free rides.
I’d like to say, “workers of the world, unite” but the days when unions were critical to American business may be long gone. In an over-stored retail world, don’t be surprised to see unionized stores closed. A wake-up call for companies who do not treat their employees well, but if my local fast-food restaurant strikes for higher wages, I’ll eat elsewhere. Sooner or later, they’ll go under.
There is no balance of worker power versus management power in the U.S. Though the two companies that made the headlines are two of the more progressives companies in terms of recognizing the value of labor, 90 percent of the companies see dealing with employees as a cost to be minimized instead of a valuable asset that should be able to add success to the company’s future.
Did you read this article about the Rhodes scholar who organized Starbucks? This was not coming from Starbucks being awful but was merely an opportunity to organize.
As such this appears to be a movement against some of the most progressive companies in the U.S. This is not Norma Rae. I am wondering how many of these workers will take to seeing union dues coming out of their paychecks and for how long.
As unionization crumbled in the U.S., so did the wages of the average worker and the increase in financial equality. It is no coincidence that the golden age of unions in the 1950s corresponded to the golden age of the U.S. economy and the smallest gap of inequality in the country’s history.
Today, the power of the leadership far outweighs the workers’ power. Imagine a company with even 20,000 or more workers having no say in the company’s future nor their own.
Germany requires just under half of the Board of Directors to be worker representatives. I find this rule to be extraordinarily beneficial to the company. Though not required, Volkswagen uses this philosophy in their local management board.
If retail doesn’t embrace worker representation as a way for both labor and management to move the company forward, they should be fearful of the outcome. Companies should not patronize workers in voice or action, they should see them as the fuel that determines the company’s long-term success.
Great points Gene. I especially like the idea of having worker representation on the board of directors.
Having a pragmatic labor union is nothing harmful. On the contrary, a healthy balance between interests of the employer and the employees is in the end better for every company. Important is that the labor union has a pragmatic mindset.
Absolutely!
Unions complicate the relationship between management and employees. According to a September 2021 Gallup poll, 68 percent approve of labor unions, the highest since 1965, with union membership steady at 9 percent of U.S. adults. This increased receptivity reflects the widening disparity between CEO and floor or shop worker salaries. Between 1978 and 2019, CEO pay went up 948 percent, while typical worker pay rose 12 percent. The disparity has widened during the pandemic, with CEOs making 351 times as much as the typical worker.
No retail CEO wants to deal with a union and, on the whole, most employees would rather not be in unions. However the widening pay gap, low wages in the face of inflation, unsafe working conditions, uncaring management, and lack of job security all contribute to a climate of unionization. Leaders like Starbucks’ Mr. Schultz have rebuilt employee trust in management in the past and can do it again. Retail CEOs can’t wish this away; they have to face the issue head-on.
Agree, Mohamed, that most workers are concerned that unions will be an additional complication and expense, but they reach a point where they need the leverage and the organizational advice. It’s sort of like using lawyers in a dispute — often the two parties would prefer not to get lawyers involved and pay them for their services, but they get the job done, even though the results typically are not ideal for either party. Short of calling unions a “necessary evil,” let’s call them, in some cases, a “less-than-desired necessity.”
These retailers excel at the customer experience. Now they need to prioritize the employee experience.
Recent union wins could very well galvanize and embolden more retail workers. The labor shortage and pandemic boosted workers’ power and their intolerance of the status quo.
Now workers yearn for a safe, respectful community. Listening to workers is integral to satisfy their needs, rebuild their trust and derisk the threat of more unions.
Retail, especially front-line store teams, are some of the worst jobs in the labor market. For most store employees wages aren’t enough to live on, access to benefits is limited to a few full time positions at the store level, and workers are expected to be 100 percent flexible in their availability, limiting their ability to plan day care or school or normal life events.
Before the pandemic many companies in the sector were complaining that they couldn’t find workers. What they really meant was they couldn’t find workers at the wages they wanted to pay. As evidence there were plenty examples of retailers, Costco and Target come to mind, that had very little trouble finding employees.
Now we find ourselves in a situation where workers, in all sectors, have more power than they have had in decades. I’m not surprised to see organized labor make a comeback. It’s difficult to quit a job, or go on strike, when other options aren’t available. Now that’s not the case and workers are voting with their feet. If a retailer doesn’t want an organized workforce, they need to look at their own policies and compensation. During the pandemic, Walmart announced that they were going to dramatically expand the number of benefited full-time positions in their stores. They also raised wages and added some additional benefits for employees. This demonstrated a commitment to their teams.
Granted this move was driven by market conditions. But still, Walmart recognized an issue and reacted too it. I would compare that approach to the internal memo from a restaurant franchise in Kansas that showed such disdain for the people making up their teams that it’s no surprise to me that their hourly employees have reached out to Hospitality Workers Union to get their process started.
Maybe if they embraced the idea of fair labor, they wouldn’t have so much trouble hiring people. Give it a try — the ’90s are over.
Unions have suffered from silly opposition based on theory more than reality — and from their own bureaucratization. Yet there are also tremendous benefits they can bring companies and which companies should embrace. I’ll especially point out that the Great Resignation wouldn’t be happening if we had more unions in place as they wouldn’t have accepted the decades long degradation in employee working conditions.
This myth about “between the company and the employee” looks like a lobbyist talking point. It’s is also paternalistic which reflects exactly the reason unions are popping up again – because in their paternalism companies abuse the relationship with employees.
That said, unions need to focus on the important matters – not on mere bureaucratic control which can be abused to stop progress. Hopefully new blood in the union movement can return it to a focus on the things of most importance.
Great points, Doug. With reference to the Great Resignation, according to NY Times reporting, the turnover rate at the type of Amazon facility that voted for union representation is 150% — in the reporter’s words, that’s the equivalent of complete turnover every 8 months. So, yeah, something’s way out of balance, and that’s when unionization grabs hold.
Nearly all U.S. retail is comprised of businesses under 500 employees and, of those, the vast majority have less than 20. So for Starbucks or Amazon’s hundreds of thousands of employees, labor issues are radically more complex. Organization/protection of workers is healthy and necessary in those settings, in order for cultures of that size to function at all. For businesses at much, much smaller scales, literal unionization may not be a big concern for workers – however, business owners can take a cue from unionization drives and renew an investment in programs which support worker wellbeing at any level. Open dialogue both ways about expectations, safety, conflict resolution, fairness, and compensation are key.
Happy workers don’t unionize. It is that simple.
Let’s flip it the other way. Management will have to decide that it costs less to have a union than it does to fight it.
Having a union will mean paying higher wages and benefits, and less flexibility. That is a cost.
It will provide savings in terms of far less employee turnover and a smaller HR function because of fewer points of contact.
Everything in between is up to the company to manage skillfully.
Organized labor in today’s age never works out for either party. It creates a zero sum game, which never works in the medium to long term. So to avoid this companies have to give their people avenues and outlets to express and share their ideas and grievances. And finally they have to listen and act.
Aside from the interest, of (mainly) retail workers considering unionization, in gaining better wages and working conditions, there has been a slowly growing awareness, over the years, that how they worked had devolved greatly. It is as if they felt—and actually experienced—a decline in treatment and compensation. And, if not for certain states, like California and New York, having strong (and in some cases some may say far-overreaching) OSHA-backed rules, their situations would be worse. So, it is no surprise they (we) would look to the idea of a union as a way to progressively protect jobs, wages and benefits.
Meanwhile they were not wrong. The higher echelons of these retail operations were looking further and further askance at their lowest-level (all the way to middle management) employees. Through the decades of customers’ buying habits transforming—and now on the precipice of being almost entirely “virtual”—how could they not think of this line of workers, constantly needing to be paid and placated, as moving towards obsolescence?
With that in mind, fellow workers, go get those unions. But know that in due time your big bosses won’t fear these aggressive actions as much as you think. Why not? Because they are the ones with the ultimate frontline power. Which is to nearly (or completely, if they choose) destroy their own company’s entire front line workforce. And to replace them with less personable though more efficient machines—that don’t need care (beyond a mechanic) and never need pay or placation.
These locally-led efforts can be looked at as a report card for management, and a chance for leadership to listen and bridge the gap that exists between corporate strategy and field operations.
I assume workers will now have to pay union dues and that they will beget corruption as they always do. We’ll see how this works out. Maybe I’m colored by my father’s experience. His union went out on strike for 9 months. He had no other source of income. When the strike ended, he had no job to go back to because they put the company on the brink of going out of business. He never forgot nor forgave.
There has been an ongoing trend towards self-service and AI that has been driving retailers towards reducing labor costs. Whether there is a fear or not, an organization of labor seems to be on the uptick, meaning that retailers must address this concern head-on. I don’t see “stile breakers” or “Union busters” but there will be negotiations at the table and intrinsic improvement for better working conditions and wages, especially with the high demand for labor and low unemployment rates. Whether this is done formally through union-management or informally through hr-employee is a matter of organizing skill for worker groups. Retailers will need to cope.