Amazon is spending $700 million retraining workers, but critics say it should attend to other housekeeping duties first

Amazon is spending $700 million to improve the job skills of workers.

Amazon announced Thursday it would investing that sum to retrain 100,000 U.S. workers, which is roughly one-third of its U.S. staff. The initiative will stretch through 2025 and the programs will allow workers to move into “highly skilled technical and non-technical roles” in corporate offices, warehouses, retail stores and elsewhere. Participating workers don’t have to stay at Amazon AMZN, +0.50%  if they take the training, the company notes.

The training program is billed as Amazon’s look to the future, as automation becomes increasingly common in all sorts of workplaces. But the company could be spending its time and energies on more immediate problems, critics say. The online retail giant could also afford to increase wages, improve working conditions and change its attitude towards unionized labor, they say. Here are some of the company’s other priorities, according to workers’ rights advocates.

Amazon did not respond to a request for comment.

When Amazon was planning to make New York City one of its two HQ2 locations last year, the company drew fierce criticism for allegedly being anti-union over the years. The company at one time even had a video instructing workers how to spot impending unionization, according to outlets reporting a leaked video. It backed away from its New York City plans in February, saying it had support from local residents, but not from some state and city politicians. The Seattle, Wash.-based company is going ahead with its plans for its Crystal City, Va. campus.

Lawrence Mishel, a labor-market economist at the left-leaning Economic Policy Institute, told MarketWatch that Amazon “should be neutral to collective bargaining.” He added, “I think it’s important to have workers’ voices in what’s going on.”

Working conditions

Amazon Prime Day — the annual discount bonanza — runs on July 15 and July 16, and it’s obviously a busy time for the retailer. But in Minnesota, workers are planning a six-hour work stoppage at one warehouse (or, to use Amazon terminology, “fulfillment center”) to protest job conditions they say are a grind. It’s the latest allegation that working for Amazon can be tough, especially in warehouse jobs where some workers allegedly urinated in trash cans to meet deadlines.

‘Testing hundreds of thousands of workers physical limits as though they were trained triathletes is the wrong approach. Amazon needs to understand that human beings are not robots.’

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said Prime Day is a two-day event this year, but with a one-day shipping policy that basically doubles the pace for warehouse workers.

“Testing hundreds of thousands of workers physical limits as though they were trained triathletes is the wrong approach,” Appelbaum said in a statement. The company needs to hire more workers than push the ones it has. “Amazon needs to understand that human beings are not robots,” he said.

“Anytime anyone thinks about Amazon and work, you have to think about the quality of the job,” Mishel said. In addition to the retraining effort, which he applauded, he said the company could pump money into better conditions. “Amazon is a large force, and so it sets a pattern. It has the power and the profits to do better.”

Higher wages

When Amazon announced its “upskilling investments” with no cost to workers, the company noted that came on the heels of the $15 minimum wage, parental leave and a 401(k).

Amazon announced last fall that it was raising the minimum wage of all American workers to $15. Senator Bernie Sanders — a Democratic presidential candidate who knows how to lay into the company — called it “a shot heard around the world.” (The federal minimum wage is $7.25 per hour.)

But Mishel said Amazon could inject more money into wages, because workers at the lowest rung didn’t necessarily have to get a mere minimum wage. “Since when does paying a minimum wage become flattering if it’s your going wage?” he said.

The average U.S. Amazon worker made a little over $34,000 a year in 2017, according to Securities and Exchange Commission filings. The median household income was $61,372 in 2017.

The average U.S. Amazon worker made a little over $34,000 a year in 2017, according to Securities and Exchange Commission filings. For perspective, the median household income was $61,372 in 2017, according to U.S. Census Bureau data, although households can include more than just one salary.

Mishel noted he supported the retraining effort, because there was “no sense of workers being eliminated.” Amazon was using its retraining to complement automation, he said. “When firms change how they produce and they automate, it’s a good sign when they also invest in the worker.”

Not everyone agreed.

United Food and Commercial Workers International Union president Marc Perrone said Amazon CEO and founder Jeff Bezos had a clear vision: “He wants to automate every good job out of existence, regardless of whether it’s at Whole Foods, Amazon warehouses, or competing retail and grocery stores. Amazon is throwing money at a problem it created and somehow thinks that it deserves applause.”

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