Monday, December 5, 2022
HomeTechnologyMorgan Stanley explains how unions could affect Amazon's bottom line

Morgan Stanley explains how unions could affect Amazon’s bottom line

Workers and supporters hold signs after filing a petition requesting an election to form a union outside the National Labor Relations Board (NLRB) regional office in the Brooklyn Borough of New York, on Monday, Oct. 25, 2021.Gabby Jones | Bloomberg | Getty ImagesAmazon workers on New York’s Staten Island on Friday voted to join a union, and Morgan Stanley analysts say the landmark decision could drive up costs for the e-commerce giant depending on how the situation evolves.The Amazon Labor Union, which is representing workers at JFK8, has called for the company to increase hourly wages for all workers to a minimum of $30 an hour. The average hourly starting pay at U.S. fulfillment centers is $18 an hour, according to Amazon. The union also is seeking vacation improvements and more paid breaks, among other demands.In a note to clients on Monday, Morgan Stanley analysts estimated that 2023 operating expenses could increase by $203 million if Amazon boosts JFK8 employees’ hourly wages to $29.That’s a tiny fraction of the company’s annual operating expenses, however, which topped almost $445 billion last year.The election at the Staten Island warehouse, known as JFK8, has broad implications. It is the first union in Amazon’s sprawling U.S. operations — and could be the beginning of additional attempts to organize the company’s vast number of warehouse and delivery workers. A second union election is set to kick off at another Staten Island site later this month.Morgan Stanley analysts said they “don’t expect a rapid trend towards unionization.” But if more warehouses opt to unionize, Amazon’s costs are expected to increase.”Every 1% of Amazon’s front-line workforce that unionize would lead to an incremental $150 million of annual [operating expenses],” the analysts wrote.Amazon employs roughly 750,000 workers across its U.S. fulfillment and transportation operations, Morgan Stanley analysts said.The new union will now have to negotiate a contract with Amazon, which could be a protracted fight. Amazon has said it is exploring whether to file objections against the National Labor Relations Board, which could delay the process.In a statement Friday, Amazon accused the NLRB of improperly influencing the vote. It didn’t specify instances of any meddling, but said the company and some business-advocacy groups witnessed the same behavior.— CNBC’s Michael Bloom contributed reporting to this story.WATCH: Workers vote for union at Amazon NYC warehouse

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Most Popular

%d bloggers like this: