N.Y. legislators seek to limit Amazon’s growth, protect its workers

An Amazon fulfillment center in Staten Island is shown in this file image. New York state legislators are seeking to protect workers in large warehouses such as this one.
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An Amazon fulfillment center in Staten Island is shown in this file image. New York state legislators are seeking to protect workers in large warehouses such as this one.

ALBANY — Amazon-bashing was one of the themes Tuesday at the state Capitol, and we’re not talking about everyone’s favorite tropical river.

Inside the Capitol, advocates rallied for the 21st Century Antitrust Act.

Outside, they rallied for the Warehouse Worker Protection Act.

Both measures are pending before the state Assembly and Senate but neither is very far along in the legislative process as the final days of the 2022 legislative session tick down.

Legislators and their advocates frame the proposals as broad-based protections for logistics workers, the economy and small businesses; they say the measures are needed in an era when e-commerce has skyrocketed and a few giant corporations dominate the industry.

The word “Amazon” doesn’t appear in any of the legislative proposals, but speakers Tuesday made it clear that the E-commerce giant is a target of their efforts.

The organized labor allies of the Democrats who control the state government are actively trying to get their feet in the door at Amazon, with limited success thus far.

ANTITRUST

“It will have a huge impact not only on the workers but also on the average consumer,” Assemblyman Jeffrey Dinowitz said Tuesday of the 21st Century Antitrust Act, which seeks to reign in monopoly and monopsony situations that advocates say are developing within the retail industries. The Bronx Democrat is sponsoring the Assembly version.

Pat Garofalo, director of state and local policy at the American Economic Liberties Project, helped write a report — “Why the 21st Century Antitrust Act is Critical for New York Workers” — on the effect dominant firms have on a region’s economy and on an economic sector.

The original anti-monopoly reforms came more than a century ago and have been hollowed out in succeeding decades, he said. The phrase “21st Century” is prominent in the title of the new legislation for a reason — the business world is a different place now than in the early 20th century.

There needs to be a renewed emphasis on the workers of these corporations, Garofalo said.

The 21st Century Antitrust Act would:

Outlaw any action or practice that seeks to create a monopoly (control of supply) or monospony (control of demand); bar persons who hold a dominant position in their field from abusing that dominance; establish pre-merger requirements; and allow recovery of damages through class-action lawsuits.

The state Attorney General’s Office would set the rules and enforce them. Penalties could range to $1 million for individuals and $100 million for corporations.

It is on the floor calendar in the state Senate, where Queens Democrat Michael Gianaris is the sponsor. It is still in committee in the Assembly.

WORKER PROTECTION

The Warehouse Worker Protection Act, meanwhile, would attempt to rein in the algorithm-driven management model with which Amazon maximizes productivity of its 1.1 million U.S. employees. 

Its massive warehouses are high-tech sweatshops, said state Sen. Jessica Ramos, a Queens Democrat who chairs the Senate Labor Committee and is sponsor of the Senate version of the act.

“This has actually resulted in outrageous numbers of worker injuries at the job and of course Amazon is one of the biggest culprits in creating these unsafe working conditions,” she said.

“We cannot leave what’s best for workers to the corporations,” added Assemblywoman LaToya Joyner, D-Bronx, chair of the Assembly Labor Committee and sponsor of the legislation in that House.

The bills are both still in committee with only 10 days left in the 2022 legislative session.

“We need to build our momentum, we need to get more of our colleagues on board before more workers get injured on the job,” Ramos said.

Christian Smalls also spoke Tuesday in favor of the Warehouse Worker Protection Act. Smalls helped lead the workforce at Amazon’s JFK8 distribution center in Staten Island to a landmark vote in favor of unionization last month. 

(Workers at LDJ5, another Amazon facility in Staten Island, last week rejected unionization, highlighting the so-far tenuous nature of the effort to organize Amazon workers.)

Smalls formerly was a manager who tracked workers’ productivity and bathroom breaks and fired them based on a computer algorithm that ignored factors other than their productivity.

Amazon notifies some people of their termination via text or email, he said.

“That is the reason why I’m here,” he said. “I’ve seen years upon years of people who work hard and get fired by a system for no reason. This bill is going to be a catalyst to put an end to that system.”

Among the provisions of the protection act: 

Quotas and the consequences for not meeting them would need to be transparent to workers; quotas could not interfere with rest periods, bathroom breaks or injury prevention; each duty would need to be evaluated by an ergonomist; employers would need to provide injury-reduction training; employees and their representatives would be consulted to develop and implement all aspects of this program.

The fast-paced nature of just-in-time logistics and next-day delivery has resulted in a rate of serious injury in warehouses (4.0 cases per 100 full-time workers) that is much higher than average (1.7 per 100), the supporting language of the Senate legislation states, citing federal data.

MONEY

Warehouse industry employment soared in the early 21st century, then the COVID pandemic goosed the already-soaring E-commerce sector even higher starting in 2020.

The report “Why the 21st Century Antitrust Act is Critical for New York Workers” by New Yorkers for a Fair Economy makes the allegation that Amazon has driven down wages in New York. 

It cites federal statistics that the private-sector warehouse workforce in New York jumped from 19,159 to 40,691 from 2010 to 2020, while the average inflation-adjusted annual pay dropped from $49,695 to $43,729.

For drivers, the numbers followed a similar trajectory.

The authors blame Amazon for this, but the cause-and-effect conclusion is potentially weakened by the limitations of that data: 

If the part-time percentage of the workforce increases, the average annual total pay may decline even if the hourly pay rate improves. And if one rapidly growing employer pays less than its industry counterparts, the average of all may shrink, even if the other employers increase wages or don’t reduce them.

Garofalo, the report’s co-author, didn’t know if either of these factors was at play with the decrease in average wage the report documented in New York.

But neither factor would reduce the validity of the report’s conclusion, he said: If the industry is relying more on part-time or temporary workers it’s not doing right by its employees, and if the dominant player is able to lowball its personnel costs, its competitors eventually will have to follow suit, or risk going out of business.

This is the danger of a monopoly or monospony, Garofalo said: It can control a segment of the economy to the detriment of public good.

“Amazon comes in, they bring down the industry standards that many that are here standing with me have fought for for centuries,” said Anthony Rosario of Teamsters Local 804 out of Queens, who spoke Tuesday from the Million Dollar Staircase in the state Capitol.

(There’s that word again — “Amazon.” The E-commerce giant did not return a request for comment for this story.)

Amazon has long enjoyed double-digit increases in annual revenue, but COVID-era changes in consumers’ shopping patterns accelerated this. Net sales for the last five years were:

  • 2017 $178 billion 
  • 2018 $233 billion
  • 2019 $281 billion
  • 2020 $386 billion
  • 2021 $470 billion

That’s a 164% increase in four years.

In the same period, Amazon’s worldwide workforce increased from 560,000 to 1.3 million, or 132%.

Among the employees are those running a million-square-foot distribution center in southern Rensselaer County that opened in 2020. Wages advertised there are less or substantially less than at regional competitors in the warehouse/logistics sector, including Ace, Dollar General, Ginsberg’s Hannaford, Target and UPS. 

This disparity can continue in the short term, Garofalo said, but if Amazon continues unchecked, it eventually will be able to set the labor market wherever it operates.

“They use their power to leverage other segments of the economy,” he said. “Competitors will be forced to respond in some ways.”

Categories: Business, News

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