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Amazon Warehouse Workers Lose Bonuses, Stock Awards for Raises
- savanaly 8y agoImpossible to judge the effect until someone investigates the relative sizes of the lost bonuses and the increased hourly wage. I did read Amazon's claim in the article that the increase outweighs the decrease. But I would like to see a journalist confirm that and also report on how big the difference is and whether it affects certain types of workers differently than others.
- notyourwork 8y agoStop being so pragmatic while riding the Amazon hate train.
- deleted 8y ago[deleted]
- paxys 8y agoThere is no way to really investigate this claim since only Amazon has all the numbers.
- NeedMoreTea 8y agoOver half the pay rise for Amazon workers in the UK. They gained a pay rise, but lose a yearly share (£1,500 or $1,950), and another share every five years.
- whoisjuan 8y agoI don't think there's anything to judge here. Amazon said multiple times that with bonuses and stock awards their average compensation was well above any compensation for fulfillment workers in the sector. People thought this was bullshit/paper money and kept demanding for a higher hourly wage. So Amazon did the logical thing. It increased the hourly wage, removed a highly unappreciated and misunderstood form of salary and simplified the compensation scheme so it could actually rebalance this value into a more predictable, easy to understand and liquid compensation. This should help anyone that felt exploited and of-course is going to piss off the people who actually understood the variable portion of their compensation and the ones who were already above the 15 USD mark. I don't think what were people expecting? Hourly wage raise + stock + bonuses? I mean I don't want to sound like a capitalist pig, but that doesn't make sense, especially when we are talking about this kind of job. People deserve livable wages but also they deserve to get recognized economically when they pursue advanced studies and put the effort to get into jobs that require more specialized skills.
- kmkemp 8y agoSaying that their compensation is higher than competitors in the sector says nothing about whether they will be paying out more total dollars after the changes than before.
- drakenot 8y agoFor those hourly workers, Amazon plans to replace its RSU grant program with a direct stock purchase plan by the end of 2019. The net effect, the company says, will mean "significantly more total compensation" for the workers. https://www.npr.org/2018/10/02/653597466/amazon-sets-15-minimum-wage-for-u-s-employees-including-temps https://www.npr.org/2018/10/02/653597466/amazon-sets-15-mini...
- s73v3r_ 8y agoAmazon is a trillion dollar company. They did not have to make any decision.
- rukittenme 8y agoAmazon is valued at $1 trillion but Amazon does not have $1 trillion. Amazon's total assets are only about $131 billion. $20 billion of that is cash.
- mmt 8y agoMoreover, it stands to reason that much of that excess (beyond assets) value is predicated on their unit economics, which depend on fulfillment costs, remaining good.
- jagger27 8y ago> only
- rukittenme 8y ago"Only" as in an order of magnitude less than originally estimated.
- crooked-v 8y agoBonuses for warehouse workers, presumably throughput-based, seem like a way to optimize for maximum output at the expense of worker health. It's good that those are going away.
- lighthazard 8y agoI thought it was more like required quotas to fulfill or risk getting fired?
- MBCook 8y agoI’m sure it is, but jobs that can tract workers piecemeal often pay extra to the highest performers to incentivize people to try and work harder.
- deleted 8y ago[deleted]
- andrestan 8y agoWhy? Are the workers completely and totally incapable of deciding for themselves what the proper tradeoff between increased income and whatever decreased health comes from working harder?? What is your calculus that helped you arrive at it being the case that the now former monetary incentives' value was outweighed by the decrease in worker health that you have perceived?
- robryan 8y agoThey will be making more now than what the bonus would have made them previously though.
- notfromhere 8y agoBecause people have a long-established inability to fully realize the long-term impacts of things when compared to short-term benefit?
- 8y ago
- xt00 8y agoThis will help with recruitment, but the sentiment that new workers will essentially get paid the same as older workers is going to immediately be a big sticking point. From watching the Boeing union strikes over many years, I get the sense that once a labor force unionizes they setup their own structure for pay and get that signed off -- where they have seniority and things like that. But it also means the company becomes very adversarial with their work-force and spends most of its time trying to figure out how to get around the demands of the union. I feel like the concept of unions needs to be rejiggered for the modern era where its less (But still to some degree) about worker safety and more about control over compensation / days off / healthcare stuff. Maybe somebody could come up with something that is like a union but meant to be more lightweight and more focused on compensation type things and has some self-imposed restrictions on things like strikes and bargaining hold-outs and things like that.
- stephengillie 8y agoThis is how grocery unions (like UFCW) operate. There isn't a lot of debate about health and safety, mostly thanks to government agencies. Most of what the union does is operate the health insurer, and push for pay raises & fewer pay scale steps.
- irrational 8y agoAre unions anti universal healthcare? It seems like they would be since it would be one less thing they could negotiate about.
- egypturnash 8y agoNo longer having to beg the bosses for healthcare would mean they could spend their time and energy pressing the bosses for other concessions.
- InTheArena 8y agoThey were in the Obamacare debate. Unions fought like hell against the Cadillac care provisions because it did in fact limit health care.
- deleted 8y ago[deleted]
- newintellectual 8y agoGuess what, lobbyists? Nothing comes for free.
- NeedMoreTea 8y agoMuch more detail, with figures, although for UK Amazon workers here: https://www.theguardian.com/technology/2018/oct/03/amazon-offsetting-pay-rise-by-removing-bonuses-union-says https://www.theguardian.com/technology/2018/oct/03/amazon-of... The TL;DR for the UK is they lose over half the pay rise from losing the bonuses. They got one share, worth £1,500 or $1,960 after every year, and an additional share once every five years. That can be tax-free if held for 2 years. They also lose the possibility of cash bonuses for meeting targets.
- mmt 8y agoThat seems like an overly simplistic anlysis, unless an employee who quits or gets fired not on an anniversary receives a pro-rated partial share at departure. Otherwise, a separation before the first anniversary (presumably a certainty for seasonal workers) results in losing none of the raise, at just shy of the second anniversary only one quarter of the raise. Half the raise is an upper bound, and we'd have to know at least the average tenure of a warehouse employee to guess how much an average worker loses.
- hsdistefa 8y agoThis doesn't take into account that the stock didn't begin to vest until a worker was at Amazon for one year, and with such high employee turnover few made it to that mark.
- softawre 8y agotax free? how? You mean you can pay only cap gains if you hold it versus income tax?
- ComputerGuru 8y agoI’ve always thought the answer to the union “problem” was easy: multiple unions. Mandate that no more than, say, 30% of the workforce may be part of a single union, then let them fight it out. Monopolies suck both when it comes to corporations and the workforce. In my experience corruption sinks in on both sides when people can get away with putting in place policies to protect the status quo. When there are multiple options, and the same antitrust policies that are in place to prevent collusion between employers are also enforced to prevent “unionization of unions,” I believe that is when the individual worker actually wins.
- Bjartr 8y agoThat's a cool idea, anyone know if anything like this has been put in place somewhere?
- maerF0x0 8y agoTaken to the limit most regular employees are a union of 1 and it doesnt work like a union. How would collective action (strikes) work? What about tragedy of the commons (join the cheaper union, but get the better collective bargain) ?
- deleted 8y ago[deleted]
- toyg 8y agoIn Italy that’s basically what happened. Because each political party had its own trade unions, and there were quite a few parties after WWII, pretty much any unionised workforce is split between three or more unions. The results differ by sector. In some cases, this plurality allowed for classic “divide & rule” strategies from management; in others, it produced chaos because each union can (and will) call for strikes at different times with little or no coordination, or refuse to agree on deals that everyone else has accepted. The best outcomes have been consistently obtained in companies and sectors where the plurality was reduced to one or two dominant unions. Some competition is good, but it significantly increases complexity in all related processes.
- la6470 8y agoAmazon is such a big target ... come on Bernie if you have guts take on Trump and his rabid base.
- just_myles 8y agoHaving worked in an Amazon warehouse before this would have been nice. Some families need their money right away and can't really afford to wait for a bonus or stock options.
- manigandham 8y agoThis is a direct attack on competitors, designed to enlist the help of the federal government to raise payroll and put pressure on arch nemesis Walmart and any other company that has lots of retail other jobs that are not conducive to automation. Remember that Amazon thinks 5 years ahead, and they waited for the perfect PR and political threshold to announce these changes and capitalize on the news.
- dboreham 8y agoIf you compare the UX at Walmart vs, say, Costco (which pays higher wages) I'm not so sure that paying the lowest is good business. i.e. is 1 Costco employee equal in productivity to 1 Walmart employee? I suspect not.
- manigandham 8y agoI'm not sure why they have to be 1 to 1 in worker productivity. They fill the specific roles they're looking for, and the companies aren't very interchangeable in either products or scale so it's hard to compare UX in any standard metric other than marketshare and goods throughput, in which case Walmart is bigger and better.
- dboreham 8y agoSeriously? A checkout operator at Costco is doing a significantly different job than one at Walmart? You will get to compare the UX if you walk into any Walmart store...
- manigandham 8y agoIt seems like you're conflating several things. Productivity of the worker is different from the UX of the store brand and neither have anything to do with the job role. A checkout operator at Costco can be 2x as efficient as a checkout operator at Walmart while having a completely different customer UX (both the worker and the store itself) and being paid different wages. So what? Walmart and Costco serve different markets and sell different products so of course they will be differently run businesses. Nothing about this is abnormal so I don't understand your comparison. They are not interchangeable other than looking at them as general retail companies.
- tareqak 8y agoIf unions can do some bad thing X and corporations can do that same bad thing X, then why are unions judged more harshly for doing the same bad thing?
- whatever1 8y agoAre we really comparing the tangible leap from $7.5 -> $15/hour that will help people get out of the government sponsored poverty, to the potential gains that some workers who already make more than $15/ hour would make in the future (if AMZN does not become GE)?
- br3n7 8y agoThe expected bonus never comes.
- drawkbox 8y agoIsn't it better to get your money and not be hoping for a bonus or stock award? Most people would take the guaranteed pay raise over the non-guaranteed bonus or profit sharing/stock awards. Let people decide what to do with their money, 'benefits' largely benefit the company not always all individuals. The problem is real pay/share of GDP to persons has gone down consistently [1] while 'real compensation' [2] has supposedly gone up and supposedly makes up over 30% of everyone's pay on average, that includes bonuses, healthcare, other benefits that most people don't see or use regularly. Even real compensation is dwindling. [3] As an example of increasing wages over benefits, I'd rather people got paid and then purchased healthcare for instance on their own as it would be a more consumer, rather than employer, focused market. Raises should be given on the regular and the base way to reward value creating employees, not some might be bonus or stock award tied to the company instead. A bonus oro profit sharing on top of increasing wages is still ok but not in spite of it. What if the employee wants to buy other stock, pay them so they can. Give raises, quit with the 'real compensation' gains that don't put actual money in your accounts, people would always take actual money over benefits. The velocity of money (domestic money that changes hands) has also fallen off a cliff [4] because pay to persons/raises have been efficiently worked out of the system in favor of 'real compensation' which does not get money in accounts consumers can spend. [1] https://fred.stlouisfed.org/series/W270RE1A156NBEA https://fred.stlouisfed.org/series/W270RE1A156NBEA [2] https://fred.stlouisfed.org/series/COMPRNFB https://fred.stlouisfed.org/series/COMPRNFB [3] https://fred.stlouisfed.org/series/PRS85006151 https://fred.stlouisfed.org/series/PRS85006151 [4] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
- rincebrain 8y agoAIUI the problem with individual medical insurance, in the US, is that without group bargaining and a requirement that all people must have it, there's both little incentive for insurance providers to compete for business, and the nasty reality that lots of people not having many expensive problems subsidize the few that do, and if you cut the long tail of people with problems that are cheaper than their premiums, you end up with exorbitant costs for the remaining people, and then a death spiral as "more healthy" people continue to opt out of rising costs, and the cost needle keeps moving up. I'd probably prefer something more like a logical inverse of that - baseline guaranteed coverage for everyone by a government agency, and then if necessary private providers can wrestle over offering various incentives to use them beyond the guaranteed coverage. (Not that I have an incredible amount of faith in most governments acting efficiently, but they almost always have a better record than for-profit agencies, and I'd prefer to avoid a government mandate of a non-government agency.) (I'm not going near the convoluted structure of compensation types because I don't think I'm informed enough.)
- hef19898 8y agoSO, that explains the business case behind the pay raise just fine. Reducing the $ 4.2 billion stock based compensation (2017 figures) and giving the blue collor workers an added sense of stability. In Germany, one of the main complaints used by Unions was that RSUs and bonuses are not what workers want. So both problems solved, kind of.
- _Codemonkeyism 8y agoI thought the main complaint is that Amazon regards it's warehouse staff categorized as logistics, while the unions want them categorized as (higher paid) retail.
- hef19898 8y agoThe underlying reason for this are salary levels. In Germany Retail agreements are higher paid (and almost dead, another reason why unions want them). In France it's the contrary, so Amazon put warhouse worker in the logistics category.
- chapekaloco 8y agoHi, I work at an Amazon warehouse in Pennsylvania. I agree with one of Amazon's sentiments regarding these changes - that it's better to get more direct pay than to "hope" for a bonus" However, the nature of our VCP (variable compensation pay) bonus is such that half of it is actually completely and fully within an individual's control. Half of the VCP bonus is given based on our own personal attendance. If we use personal time or approved vacation time that's all fine and dandy, but using something called "Unapproved Time Off" (UPT) is what will end up lowering or negating our monthly VCP bonus for attendance. The other half of VCP is granted based on building productivity. So yes, that's largely out of control by the individual. But it also provided actual incentive for us to do well. Now we don't really have any incentive to do anything more than the bare minimum. In any case, the personal attendance thing is completely within an individual's control and is not just mere "hope" for a bonus. VCP is up to 4% for attendance and 4% for building productivity normally. But during Oct-Dec (peak season) these figures double to 8% each. If you average together the 4% attendance VCP (totally within our control) for 9 months and 8% for 3 months, you get a yearly average of 5% bonus, totally within our control. I was earning $15/hr prior to this "wage boost". A 5% bonus on top of that would make my effective wage $15.75. This is without receiving any VCP bonus in regard to building productivity. This is also before you consider any "income" we were receiving through stocks. After the wage boost, my hourly wage is becoming $16hr. But I will never be able to increase that through VCP and I will never receive company stock again. I am glad that employees across the country who were previously at $11/hr and that new starts at my warehouse are jumping from the starting $12-$13 immediately to $15, but it's hard for existing employees such as myself to see these changes as anything but a pay cut.
- deleted 8y ago[deleted]
- ioulian 8y agoSlightly off topic, but I'm from Europe, and when you are saying "you get $15 an hour", do you include taxes or not and how much taxes do you have there?
- concerned_user 8y ago