Retail giants’ competition spurs holiday job speedup

BY SETH GALINSKY

The big-business media are full of reports on how Black Friday sales show that things are looking up for retail storeowners and e-commerce operators. Brick-and-mortar store sales didn’t drop as much as they expected and online sales were booming, they say. “Black Friday Turnout the ‘Best of the Last Few Years’” headlined the New York Post.

Shoppers spent $5 billion in 24 hours, a 16.9 percent increase from last year, CNN reported, mostly due to online orders. Amazon, which dominates internet sales, said it sold over 200,000 toys in the first five hours on Black Friday.

Sales between Thanksgiving and Christmas — not counting groceries — account for as much as 40 percent of the annual income of retail businesses.

A closer look shows that the picture for retail bosses — and especially their workers — is not so rosy. Walmart, Amazon’s main competitor, boosted its internet sales, largely by matching Amazon prices or undercutting them. Walmart’s profit margins have declined four quarters in a row.

A key way the retail giants are trying to cut their costs is by tightening the screws on workers.

Retailers report they added some half million temporary workers for this holiday season — 120,000 of them at Amazon in 30 states, mostly in their distribution centers. This is the lowest number since at least 2003, with the exception of the two years following the world financial crisis that began in 2007.

Grueling conditions for workers

Walmart slowed the pace of seasonal hiring this year and has cut many positions, making its employees work longer hours and sometimes six days a week.

In another cost-cutting move, Walmart Chief Financial Officer Brett Biggs said that the company hopes to save $20 million a year by using smaller plastic shopping bags. Store cashiers say the bags break more easily, making work harder, at the same time as the bosses press workers to speed up.

Amazon refused a request by Jacksonville Action News in Florida to visit their distribution center there, after workers told them the pace was brutal.

Workers are constantly monitored by supervisors for speed and accuracy, Action News said. “We had a girl get written up for that, for taking too many bathroom breaks,” one worker told the TV station. And for breaks, “you have to take that 10-15 minute walk down stairs and then clock out,” she said. That time is counted as part of their break.

Amazon, like other retailers, has automated, computerized and robotized as much of their operation as they can to ramp up output per worker.

The Mirror newspaper sent its reporter Alan Selby undercover to work in the Amazon warehouse in Tilbury, England. Selby found workers were required to pack and seal one order every 30 seconds. He was told the quota would be raised to 200 items an hour.

Besides squeezing their workers more, Walmart, grocery giant Kroger Co. and other large retail companies are putting it to their suppliers, who in turn come down on their workers. The Wall Street Journal reported Nov. 27 that Kroger is fining suppliers $500 for every order that arrives more than two days late at its 42 warehouses. Walmart is charging suppliers monthly fines of 3 percent for deliveries that don’t arrive exactly on time, including if they arrive too early or aren’t complete.

One of the biggest losers has been 130-year-old Sears, the largest retail chain until 1989, when Walmart overtook it. In a bid to stave off bankruptcy, Sears has been selling off its most profitable assets, such as the Craftsman tools brand. Sales still dropped in half from $53 billion in 2006 to just $25.1 billion in 2015, and they’re still falling.

But don’t worry, rich coupon clippers still hope to make a bundle on retail stores. In November, two new Exchange-Traded Funds were launched — “Decline of the Retail Stores ETF” and the “Long Online Short Stores ETF.” Well-heeled investors, lacking profitable opportunities to put their cash into increasing production and trade, can bet their bucks that brick-and-mortar stores are going down the tubes and online outfits will keep rising. If they bet right, they make money.

As retail bosses push workers to try to maintain profit levels, they’ll face a reaction. Some 2,500 workers went on strike at six Amazon distribution centers in Germany and one in Italy on Black Friday, demanding “dignified salaries.” In Berlin, workers held a banner that read, “Make Amazon Pay! We Are Humans Not Robots or Data.”

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