If Jeff Bezos Was Smart, He’d Get Ahead of the Worker Revolution
Instead of trying to colonize space, Jeff Bezos could reward workers on the pandemic’s front lines
In a job market defined by swift and merciless brutality, the delivery economy right now offers something resembling a rare bright spot. Amazon, for example, announced it is hiring 100,000 workers to bolster its everything-to-your-door infrastructure. And Instacart, specializing in grocery home-deliveries in thousands of U.S. cities, said it wants to bring on 300,000 more (contract) “shoppers.” It’s easy to understand this niche labor demand: In the Covid-19 era, people are being urged to avoid the store and have their food delivered.
But instead of enjoying a wave of huzzahs for announcing hiring sprees, Amazon and Instacart and others have been greeted with strikes and walkouts by delivery-infrastructure workers who feel underpaid and endangered. The actions captured tons of press attention — glaringly spotlighting the concerns, fears, and challenges facing a category of worker that’s become increasingly vital. And that has also become increasingly vulnerable and exposed to health risks.
They could get ahead of the revolution with bold gestures that reframe the entire conversation around labor.
There is, however, a real opportunity here for these cutthroat delivery-centered businesses that could alter the trajectory of their company and their image. Rather than swat away the perils and complaints shaping a brewing gig-worker rebellion, they could take a very different position: They could get ahead of the revolution with bold gestures that reframe the entire conversation around labor.
In short, one brave tech/retail/delivery company — like Amazon or Instacart or Shipt or maybe even Domino’s — could unveil and commit to radically and definitively improving the work lives of their delivery infrastructure employees and contractors. After all, the most celebrated figures in business, from Larry Page and Sergey Brin to Elon Musk to Jeff Bezos and beyond, have spent their careers speaking of “moonshot” projects — fantastical private-enterprise equivalents to the awe-inspiring American space program of the 1960s: colonizing Mars or building a floating city or providing universal internet access through a network of balloons in the stratosphere. Why not redirect that spirit to something more urgent, yet equally ambitious? That is, a moonshot — for workers.
Imagine, for example, something on the scale of Henry Ford’s decision, in 1914, to offer factory labor cranking out the budding-hit Model T a guaranteed $5-a-day wage — double the going rate at the time. There were caveats to that offer, but it was absolutely a lightning-bolt maneuver, a fearless and agenda-setting stroke that benefited the company, and ultimately the broader economy and culture, as much as workers.
Indeed, it’s often asserted that boosting the pay of workers helped turn them into potential consumers of Ford’s product — effectively helping create a new middle class. That’s probably exaggerated. But the sensational move, offering tangible and blunt improvements to its workers’ lives, certainly stabilized Ford’s workforce at a crucial moment, paving the way for a wildly successful stretch for the carmaker.
What would a similarly powerful, history-making gesture look like today?
As a starting point, according to experts on work and labor in the gig-economy era, some delivery giant could commit, in the boldest possible terms, to a guaranteed safe workplace — no matter the cost and effort it takes to back up that promise. Then, such firms could not just match but decisively exceed their workers’ pay demands.
Imagine, for example, something on the scale of Henry Ford’s decision, in 1914, to offer factory labor cranking out the budding-hit Model T a guaranteed $5-a-day wage — double the going rate at the time.
Here’s some quick context on what these workers are paid, and what they want. As is the case with many gig-worker setups, Instacart shoppers’ pay depends on the specifics of orders, volume, distance, level of demand, tips and so on; one estimate suggests $10 to $17 an hour might be typical, though these days $20 or more an hour seems likely. Glassdoor estimates the average Amazon warehouse worker’s pay at $15 an hour. Striking Instacart workers asked for an extra $5 “hazard pay” per order, and a tweak to the default tip setting on that app to increase the suggested minimum.
Why not exceed that demand in a way that becomes even more of a PR boon than, say, Bezos’ HQ2 theatrics or Musk’s Hyperloop hype?
This would ultimately have benefits far beyond labor. Conflicted customers relying on deliveries from Amazon (and its Whole Foods subsidiary), Instacart, or anybody else ought to be extremely interested in delivery workers who are healthy, safe, and satisfied. And the right plan would pay off long-term for the company’s bottom line, too.
“Ford’s move to pay $5/day had dramatically beneficial consequences for the workers involved, but, crucially, also benefited the firm,” Jake Rosenfeld, a sociology professor at Washington University in St. Louis with a focus on labor and income inequality, said via email. He pointed to this paper by Daniel Raff and Lawrence Summers, concluding that Ford reported “significant increases in productivity and profits” after the wage increase. “There is no theoretical reason to think that a similarly bold move by an Amazon or an Instacart wouldn’t lead to a happier, more productive workforce,” and attract the best job candidates, he says.
“Why not announce, at least for the duration of the crisis, $25 an hour for all warehouse and delivery workers, guaranteed?” Rosenfeld says. Plus generous sick leave, and a working environment that stressed safety. “Maybe toss in some company stock as well!” he added.
Similarly, U.S. House Rep. Ro Khanna, a Democrat whose district includes a chunk of Silicon Valley, has publicly argued that such companies should “show leadership” partly by “doing something dramatic like doubling wages for folks, for a few months.”
Another idea: completely restart the contractor/company relationship. A company such as Instacart could “recognize workers and contractors as partners with management and engage them in an ongoing consultative process,” suggests Thomas Kochan, a professor at MIT Sloan School of Management focused in part on work and employment. An “Instacart guild” made up of and representing workers and contractors could work with management to raise and address labor concerns as part of an ongoing institutional process — avoiding periodic divisive confrontations that threaten the business’s image. “The result, I predict,” Kochan continues, “would be productivity enhancing — just as Ford’s $5 a day move was.”
Ann Skeet, senior director of leadership ethics at the Markkula Center for Applied Ethics at Santa Clara University, underscores that the most crucial thing these companies must do is guarantee their workers’ safety. “To contribute productively, people need their basic needs met,” she recently wrote. That has to precede grander gestures such as doubling pay, she said in an interview.
“One of the most grand gestures right now would be for a gig economy company to take on all its current contractors as employees,” she continued. “That’s a pretty grand gesture. And this is a time that’s really asking for that level of shift, I think. There are real opportunities here for companies that can see them.”
The objections by these companies to all these ideas are obvious. For starters, the whole “gig economy” model — in which a business provides a kind of platform for independent contractors or freelancers and takes a cut of their earnings — is designed partly to avoid taking on the expense of employing lots of people. Besides, we’re heading into a major recession or worse, so many businesses see this as a time to be extra-conservative and focus on survival.
True, but grocery delivery services are one of the very few industries right now experiencing record demand — in the range of a 65% increase by some estimates. And while Amazon’s e-commerce business may have tight margins, its cloud computing business is reportedly thriving, and it has an estimated $55 billion in cash on hand. The strain it’s showing from delivery demand could be partly eased by investing a stable, happy workforce — just as Ford did. At a moment when the company’s dominance of online retail is being uncomfortably underscored, it might benefit from an audacious display of benevolence.
Okay (a skeptic might counter), but the weekly jobless numbers are unprecedented and eye-melting. So while it’s possible that making noise on social media gives workers a potential new tool, the bottom line is that labor is not in a position of strength right now.
Also true. But maybe there’s room to balance short-term goals against the longer term. And even if, say, higher wages chip away at profits, for now, it seems plausible to pass along at least slightly higher prices to consumers, and train shoppers to expect that delivery is a thing that entails costs. (And if profits still take a hit, deal with it; even Jim Cramer is advising businesses to “kill your earnings” if it helps the broader economy.)
Instacart has called its shoppers “a community of household heroes” — but has responded to their demands in a piecemeal, lowest-common-denominator way, acquiescing to paid time off for shoppers placed under quarantine, and recently committing to providing sanitizer, among other measures. But it dismissed the recent strike that organizers say included thousands of workers as having “absolutely no impact” on its operations, boasting that it continues to fulfill orders at record levels. Amazon similarly flicked away a localized strike as a minor sideshow — and brazenly fired the worker who organized it for supposedly violating “social distancing” guidelines.
Those are the exact opposite of bold, history-making, game-changing declarations and decisions. And boldness is what we need.
Not surprisingly, the pandemic and the economic havoc it is creating, is already hitting the lower-to-middle classes hardest. Maybe it’s time to admit that if a business model depends on a bottomless supply of cheap labor, particularly one drawn from an increasingly desperate underclass, then that business model needs to be revised.
Ann Skeet, the leadership ethics expert, optimistically suggests that companies are figuring this out. That there’s an “awakening” stirring, and the c-suite is starting to “get” that blows to short-term profit will be worth it for those who make decisions now that mean “they will have a good story to tell if they take the long view.” It’s notable, for instance, that Amazon’s white-collar employees seem to be showing increasing solidarity with warehouse and delivery workers.
At the very least, there is a kind of rhetoric gap that a bold stroke on workers’ behalf would finally address. The techno-utopianism that has made vast fortunes for entrepreneurs and investors willing to bet on the most audacious and outlandish business dreams always somehow morphs into a reactionary “it can’t be done” when the goals involve labor standards.
Somehow it seems we can disrupt any industry, reimagine fundamental civics, and seriously entertain space tourism — but providing a safe, fair, life-improving living for “household hero” delivery workers on the front line of a pandemic is just too hard?
Please. If there’s ever been a time for a moonshot for workers, this is it.