In the course of the pandemic, many consumers have shifted to doing more of their shopping online. That's been great for online powerhouses like Amazon (NASDAQ: AMZN), but it's also put a strain on the company's warehouse workers, who are tasked with fulfilling orders quickly enough to keep up with customer demand.
Early on in the pandemic, warehouse workers were horrendously overwhelmed as they found themselves busier than ever and forced to work in cramped corners at a time when health experts couldn't stop screaming about the need to maintain social distancing. Not surprisingly, thousands of COVID-19 cases were linked to Amazon warehouses during the early days of the pandemic, and the company came under fire more than once for its mistreatment of warehouse employees during that time. In response, it implemented a series of safety updates designed to protect warehouse workers.
The online giant then started to relax a bit in that regard. In May, it removed its mask mandate for fully vaccinated warehouse employees but continued to offer other safety measures, like COVID-19 testing, in an effort to keep workers safe. But now, Amazon has announced that it will be ending its on-site COVID-19 testing program for warehouse workers this month. And that move couldn't come at a worse time.
Throwing warehouse workers to the wolves once more
Earlier this year, Amazon was sued in New York for the mistreatment of warehouse workers at the start of the pandemic. And while the company did eventually implement a coronavirus testing system, it's now pulling the plug on those tests.
That decision is coming at a time when COVID-19 cases have surged on a national level thanks to the delta variant. Delta is now the predominant variant in the U.S. and is said to be far more transmissible than previous iterations of the virus. In fact, health experts are so concerned that some are even imploring the fully vaccinated to resume the habit of mask-wearing in crowded indoor spaces so as to curb the spread of the outbreak.
As such, Amazon's announcement that it will be ending its testing program makes little sense. If anything, now would be a good time for the online giant to increase testing and other safety measures, not get more lax.
Now to be fair, when Amazon announced the end of its on-site testing, it said testing could resume at any point should it become necessary. But based on the trajectory of the pandemic, it's also fair to say that we're at that point right now.
The danger, too, is that if Amazon decides to pull the plug on testing, other warehouse operators may go a similar route. But if outbreaks at warehouses emerge on a national level, it could be very bad news for the sector.
Warehouses are a solid real estate investment, partly because they're high in demand but also because they've historically been relatively inexpensive to operate. But if worker safety is left to fall by the wayside, regulatory changes could come down the pike that make running a warehouse a more costly endeavor -- something that could impact industrial REITs and the people who invest in them.
The Millionacres bottom line
Amazon may once again change its tune on testing, especially if enough backlash ensues. The company is already in the process of fighting off unionizing efforts so as to retain full control over its warehouse employees. As such, Amazon doesn't need any more negative press on the topic of worker mistreatment.