Amazon working conditions critiqued by trade unions

Unions urged Italian consumers to boycott Amazon’s products for the day on Monday where 40,000 of the company's logistical workers held a national strike over working conditions.

The worker’s union’s main demands were concerning workloads, such as long working hours for drivers, results-linked bonuses, lunch vouchers, and stabilizing temporary contracts. The unions also pushed for workers to be paid an allowance for having worked during the pandemic.

The Unions state that Amazon’s delivery infrastructure is dependent on 40,000 workers as well as those who are in the logistical unit, where 9,500 staff are employed on full-time contracts.

Furthermore, Michele De Rose, the national secretary of Filt Cgil, commented that delivery drivers “work 44 hours a week, and very often for the entire month, following the indications of an algorithm that does not understand work-life balance nor the traffic times of our cities.”

Due to the large size of the workforce which is willing to strike, the trade unions gain significant power as a strike can put Amazon's operations in jeopardy.

This is because 40,000 workers cannot be easily replaced, if these workers go on strike Amazon will likely see a large reduction in revenue as they will be unable to maintain their current levels of output.

Hence, due to the large collective bargaining power which the trade unions have due to the size of the workforce which is striking, as well as public support from consumers, Amazon will likely have to succumb to the trade unions demands which will benefit the workers involved as they will see improvements in the quality of the conditions in which they work in.

Additionally, the vouchers which the trade union has proposed, if agreed upon, will lead to an increase in disposable income for these workers. This rise in disposable income will enable these individuals to buy better quality products, normal or luxury goods, thus increasing their standard of living.

Amazon currently employs 1,298,000 workers worldwide, illustrating the disproportionate monopsony buying power which Amazon has which can be exploited to force down labour costs.

This diagram indicates that the current trade unions’ concerns of working conditions may be largely justified as amazon’s large buying power enables Amazon to force down wages from the competitive wage, W, to Wmon showing the effect of Amazon’s monopsony power in the labour market.

This results in a reduction in the quantity of labour supplied due to the reduced wage rate causing the quantity of labour supplied to fall from Q to Q1 to illustrate the concerns of amazon workers being overworked.

However, the use of trade unions acts as a balance to the monopsony power of Amazon as the trade union negotiates better pay and working conditions for Amazon employees returning the market to the equilibrium at point E.

Overall the interference from trade unions is likely to be effective as the threat of strikes holds significant financial loss to amazon, thus increasing trade union bargaining power.

This will benefit workers through increased pay, this attracts more workers alleviating pressure from overworked employees, and raises living standards. Additionally, increased working conditions will provide workers with greater satisfaction in their workplace, which may lead to an increase in productivity which also benefits Amazon with a fall in average costs.


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