An attempt to unionize employees at Amazon’s Alabama yard is seen as an indicator of whether the U.S. workers’ movement will rebound after years of being at a low ebb. President Joe Biden also issued a statement in support of the unionization drive. However, more employees voted against unionization than in favor of it, and the unionization bill was finally defeated.
The pro-union advocates pointed out that the management did not allow the union supporters to propagate in the company, but the management lobbied the employees to vote against the unionization by nailing them 24/7, and the employees did not dare to vote for it for fear of retaliation by the company. Those who oppose unions point out that unions raise wage costs, causing companies’ profits to fall and forcing them to reduce the number of workers by accelerating automation, and that unions will only harm workers in the end.
Economist Paul Krugman, writing in the New York Times after the failure of Amazon to unionize, pointed out that the golden age of high economic growth and reduced income disparity in the United States in the three decades after the war was due in large part to the union movement. The decline of the union movement from the 1980s onward has led to the widening gap between rich and poor in the United States today and all the political and social problems that come with it.
The business model and problems created by Amazon, one of the most successful companies in America today, reflect the problems of today’s American capitalism that has fattened the bosses and China and thinned the workers.
In the midst of a global plague, online shopping has become more common. The Federal Reserve desperately expanded the money supply to support the federal government’s borrowing and stimulus programs. Increased unemployment benefits and government stimulus checks for almost everyone translated much of it into a volcano-like eruption of spending power. Amazon’s profits, in this environment, soared 86 percent in 2020, while its employees’ wages, including extra income from overtime and work during the epidemic, increased by a disproportionate 6 percent, according to a recent report by the Brookings Institution, a U.S. think tank.
Amazon has been unusually aggressive in recent years in finding online vendors in China to replace U.S. vendors who sell directly to customers. As of 2019, 40 percent of Amazon’s sales came from direct sales to Chinese vendors, and during the 2020 epidemic, Amazon expanded its operations, adding 74 percent of new direct sales vendors from China. Amazon has not been banned in China, but Jack Ma’s Taobao has successfully squeezed Amazon into abandoning China’s online shopping market in China for years with the protection and convenience provided by the party’s powerful elites. Amazon’s business in China has become dominated by soliciting Chinese vendors to sell directly to European and American consumers.
Many of these vendors who sell directly to the U.S. market through Amazon are also Taobao vendors, with varying business ethics and quality of goods sold. As a result, Amazon has become Taobao-ized in recent years. The media began to widely report that American consumers were buying counterfeit and substandard goods online. Last year, many people in the U.S. inexplicably received seed packets from China, and many speculated that this was related to the operation of Chinese vendors to create fake online positive reviews of certified customers.
Faced with this problem, Amazon introduced a convenient return and refund service. Regardless of whether the problem of counterfeit substandard goods has been solved, the indisputable fact is that online shopping platforms such as Amazon have become an important channel for Chinese exports to be turned into countless small vendors to further penetrate the U.S. consumer market. China’s surplus with the United States during the epidemic, Chinese exporters orders soaring, is the result. The online shopping platform was an important channel for the US Federal Reserve’s newly created liquidity to flow to China in a big way, allowing the Chinese economy to rebound after the epidemic.
Of course, most U.S. retailers similarly expanded their online ordering services during the epidemic, actively recruited Chinese vendors, and squeezed the wages of U.S. logistics employees. Amazon was just one of the companies that did this most successfully. The result is that no matter how much the government stimulates the economy, most of the benefits go to China and the big American bosses rather than to American workers. The Biden administration’s policies and bills to push production back, link free trade to human rights wages, and make it easier for workers to unionize are designed to correct this fattening-up, fattening-in, thinning-down economic model.
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