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The Amazon Union Vote Is Over: What Investors Need to Know


[Updated: Apr 09, 2021 ] Apr 09, 2021 by Maurie Backman
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Much of Amazon's (NASDAQ: AMZN) success over the past number of years has stemmed from its ability to ship goods out efficiently. And to do that, it needs to run a tight ship as far as its warehouses go.

It's for this reason that Amazon has historically done everything it could to avoid having its warehouse workers unionize. When unions step in, players like Amazon relinquish control, which can lead to higher costs and impact output.

Back in February, a group of Amazon warehouse workers in Bessemer, Alabama, caught the union bug and decided to put things to a vote. Amazon, in turn, didn't take to that news very well, and in the weeks that followed, the online giant did everything it could to halt that effort in its tracks, from legally appealing the union election to producing a robust marketing campaign loaded with anti-union messaging. The company even took to Twitter (NYSE: TWTR) with its deftly crafted #doitwithoutdues hashtag.

But after weeks of drama, we finally have an answer as to whether Amazon will have its first group of unionized workers on its hand. And not shockingly, that answer is a no.

No union for now

Most of Amazon's Bessemer workers voted against joining the Retail, Wholesale and Department Store Union. The final count was 1,798 votes against unionizing versus 738 votes in favor of it -- about a 71% no vote.

Given the pressure Amazon has put on workers to avoid unionizing, this outcome isn't particularly shocking. It also means Amazon has dodged a major bullet. Now, it can retain control over how its warehouses are run, and it can continue to impose the tough standards workers have come to expect -- long hours, aggressive quotas, and, in some cases, cramped conditions.

Of course, Amazon isn't a total bad guy. The online giant pays warehouse workers a very respectable wage (its starting pay is $15 an hour, more than twice the national minimum wage) and provides a host of benefits, like health insurance, dental coverage, and even a retirement savings plan. But Amazon has also come under fire recently for the mistreatment of warehouse workers during the coronavirus pandemic. As of last fall, roughly 20,000 of its employees had tested positive for COVID-19 or were presumed positive. And many Amazon warehouse workers maintain that social distancing was impossible early on during the outbreak, when online orders really exploded.

Of course, now that the workers in Bessemer have put the idea of unionizing out there, it'll be interesting to see if more warehouse employees mobilize to pursue a union vote -- something investors in the industrial and warehouse space should keep an eye on. Amazon's argument is that workers have nothing to gain by joining a union. And workers argue that Amazon does not have its best interests at heart, whereas a union might.

Unionizing may not actually do much for warehouse workers, but talking about it could prompt Amazon to step up its game and do its part to provide better conditions for the employees who help it succeed. And that alone would constitute a victory.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Twitter and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.