Amazon (NASDAQ: AMZN) has dominated the online retail space for years, and the core of its success is its ability to not only innovate but turn shipping and distribution into an art form of sorts. But its treatment of warehouse workers through the years has been questionable, and during the pandemic, certain practices have been brought to light in a very unflattering way. In fact, there have been numerous complaints about fulfillment center workers risking their health in unsafe conditions as demand for online orders skyrocketed.
So it's not surprising to learn that one group of Amazon warehouse workers is thinking of unionizing. In early February, around 5,800 warehouse employees in Bessemer, Alabama, will vote on whether to join the Retail, Wholesale and Department Store Union. This will be the first Amazon union election since 2014, when a group of Delaware technicians actually voted against unionizing.
Of course, for a company that loves shaking up different industries, this isn't the sort of shake-up it's looking for. And if workers vote in favor of unionizing, it could change how Amazon runs its business in a very meaningful way.
Resistance to unions
There's a reason Amazon has historically done everything it can to avoid unions -- it wants complete control over its operations.
Now on one hand, Amazon has done its part to create decent working conditions for its employees. In 2018, the company instituted a $15 minimum wage for all workers, and in 2019, it pledged to spend $700 million by 2025 to help a third of its U.S. workforce grow its skills. Furthermore, Amazon makes a point to offer competitive benefits to its entire workforce. And all warehouse workers are required to undergo safety training before they're thrown into the mix.
But in spite of that, workers have continued to lash out at Amazon over poor working conditions. During the pandemic, a number of strikes have been organized, and the company has taken steps to retaliate by terminating employees who stir things up. By unionizing, workers gain protection from those types of events. And chances are, unionizing will be their ticket to a safer working environment -- and possibly other perks to follow.
How will unionizing impact real estate investors?
If Amazon's warehouse workers begin to join unions on a massive scale, it could change the way the company operates its warehouses. For one thing, Amazon may require added safety features that make warehouses more costly to operate. Historically, warehouses have been known as low-maintenance facilities, and that specific point has been a draw for investors.
New union standards could also change Amazon's approach to opening up more warehouses. Added costs on the company's part could force it to slow down its expansion efforts, which means investors with open space could lose out on revenue. Remember, unions can advocate on workers' behalf for more than just better working conditions. They can also push for higher pay (even though Amazon is already fairly competitive in that regard) and other benefits that cost money.
The Millionacres bottom line
To be fair, Amazon has plenty of money to spare. Other retailers may not, though, and if Amazon warehouse workers vote to unionize, it could spark a trend that other companies can't afford. The impact could, in turn, trickle down to warehouses and industrial REITs, or real estate investment trusts, so the result of the upcoming Bessemer vote won't just affect a group of 5,800 workers -- it could impact countless warehouse employees and investors on a national level.