More stories

  • in

    A New Crop in Pennsylvania: Warehouses

    OREFIELD, Pa. — From his office in an old barn on a turkey farm, David Jaindl watches a towering flat-screen TV with video feeds from the hatchery to the processing room, where the birds are butchered. Mr. Jaindl is a third-generation farmer in Pennsylvania’s Lehigh Valley. His turkeys are sold at Whole Foods and served at the White House on Thanksgiving. More

  • in

    ‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

    The dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies, raising uncomfortable questions for their C.E.O.s.In the Great Recession more than a decade ago, big tech companies hit a rough patch just like everyone else. Now they have become unquestioned winners of the pandemic economy.The combined yearly revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is about $1.2 trillion, according to earnings reported this week, more than 25 percent higher than the figure just as the pandemic started to bite in 2020. In less than a week, those five giants make more in sales than McDonald’s does in a year.The U.S. economy is cranking back from 2020, when it contracted for the first time since the financial crisis. But for the tech giants, the pandemic hit was barely a blip. It’s a fantastic time to be a titan of U.S. technology — as long as you ignore the screaming politicians, the daily headlines about killing free speech or dodging taxes, the gripes from competitors and workers, and the too-many-to-count legal investigations and lawsuits.America’s technology superpowers aren’t making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic. It’s both logical and slightly nuts.The wildly successful last year also raises uncomfortable questions for tech company bosses, the public and elected officials already peeved about the industry: Is what’s good for Big Tech good for America? Or are the tech superstars winning while the rest of us are losing?Americans have more money in their pockets thanks to government stimulus checks and pandemic savings, and the tech giants are getting a significant share. Their combined revenue is equivalent to roughly 5 percent of the gross domestic product of the United States.Big Tech’s pandemic big bucks have an understandable root cause: We needed its services.People gravitated to Facebook’s apps to stay in touch and entertained, and businesses wanted to pay Facebook and Google, which Alphabet owns, to help them find customers who were stuck at home. People preferred to buy diapers and deck chairs from Amazon rather than risk their health shopping in stores. Companies loaded up on software from Microsoft as their businesses and work forces went virtual. Apple’s laptops and iPads become lifelines for office workers and schoolchildren.Before the pandemic, America’s technology superpowers were already influential in how we communicated, worked, stayed entertained and shopped. Now they are practically unavoidable. Investors have scooped up Big Tech shares in a bet that these companies are nearly invincible.“They were already on the way up and had been for the best part of a decade, and the pandemic was unique,” said Thomas Philippon, a professor of finance at New York University. “For them it was a perfect positive storm.”Times weren’t so good for these companies in the last economic rough patch. In the downturn from 2007 to 2009, Microsoft’s sales dropped slightly, and its stock price fell 60 percent from the fall of 2008 to March 2009, a low point for U.S. stocks. Google and Amazon each lost as much as two-thirds of their market value.One sign of how this time is different: Amazon’s revenue is growing much faster in 2021 than it did in 2009, when the company was one-fifteenth its current size. Sales in the first quarter rose 44 percent from a year earlier, and Amazon’s profits before taxes — which have never been exactly robust — more than doubled to $8.9 billion. Businesses are addicted to Amazon’s cloud computer services, where sales rose 32 percent, and shoppers can’t live without Amazon’s delivery. Investors love Amazon, too. The company’s stock market value has nearly doubled since the beginning of 2020 to $1.8 trillion.For the other tech giants, it’s as if their brief pandemic nosedive never happened. Advertising sales typically rise and fall with the economy. But as other types of ad spending shrank when the U.S. economy contracted last year, ad sales rose for Google and Facebook. The growth was even better for them in the first three months of this year.A year ago, analysts worried that Apple would be crippled as the pandemic gripped China, which is the hub of the company’s manufacturing operations and its most important consumer market. The fears didn’t last long. In the first three months of 2021, Apple’s revenue from selling iPhones increased at the fastest rate since 2012. Sales in mainland China, Taiwan and Hong Kong nearly doubled from a year earlier.Apple’s revenue from iPhone sales in the first three months of the year rose at the fastest pace since 2012.Agence France-Presse — Getty ImagesThe tech giants are not the only companies rallying in dark times. America’s big banks have also been on a tear. So have some younger technology companies, such as Snap and Zoom, the maker of the pandemic-favorite videoconferencing app. The crisis forced all sorts of businesses to go digital fast in ways that could help them thrive. Restaurants invested in online sales and delivery, and doctors went full bore into telemedicine.But the dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies. It’s all a bit awkward, really. It’s rocket fuel for critics, including some regulators and lawmakers in Europe and the United States, who say the tech giants crowd out newcomers and leave everyone worse off.Big Tech companies say they face stiff competition that leads to better products and lower prices, but their bank statements might suggest otherwise. Facebook’s profit margins are higher now than they were before the pandemic.Some of their success is explained by the peculiarities of the pandemic economy. Some people and sectors are doing awesome, while other families are lining up at food banks and while companies like airlines are begging for cash. Unlike the stock market clobbering in the Great Recession, stock indexes in the United States have reached new highs.The tech superstars have also capitalized on this moment. Alphabet and Facebook have used the pandemic to cut back in places that matter less, such as promotional costs and travel and entertainment budgets. And the tech giants have generally increased spending in areas that extend their advantages.Alphabet is now spending more on big-ticket projects, like building computer complexes, than Exxon Mobil spends to dig oil and gas out of the ground. Amazon’s work force has expanded by more than 470,000 people since the end of 2019. That deepens the moat separating the tech superstars from everyone else.Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money. More

  • in

    Amazon Workers Defeat Union Effort in Alabama

    The company’s decisive victory deals a crushing blow to organized labor, which had hoped the time was ripe to start making inroads.Amazon workers at a giant warehouse in Alabama voted decisively against forming a union on Friday, squashing the most significant organizing drive in the internet giant’s history and dealing a crushing blow to labor and Democrats when conditions appeared ripe for them to make advances.Workers cast 1,798 votes against a union, giving Amazon enough to emphatically defeat the effort. Ballots in favor of a union trailed at 738, fewer than 30 percent of the votes tallied, according to federal officials.The lopsided outcome at the 6,000-person warehouse in Bessemer, Ala., came even as the pandemic’s effect on the economy and the election of a pro-labor president had made the country more aware of the plight of essential workers.Amazon, which has repeatedly quashed labor activism, had appeared vulnerable as it faced increasing scrutiny in Washington and around the world for its market power and influence. President Biden signaled support for the union effort, as did Senator Bernie Sanders, the Vermont independent. The pandemic, which drove millions of people to shop online, also raised questions about Amazon’s ability to keep those employees safe.But in an aggressive campaign, the company argued that its workers had access to rewarding jobs without needing to involve a union. The victory leaves Amazon free to handle employees on its own terms as it has gone on a hiring spree and expanded its work force to more than 1.3 million people.Margaret O’Mara, a professor at the University of Washington who researches the history of technology companies, said Amazon’s message that it offered good jobs with good wages had prevailed over the criticisms by the union and its supporters. The outcome, she said, “reads as a vindication.”She added that while it was just one warehouse, the election had garnered so much attention that it had become a “bellwether.” Amazon’s victory was likely to cause organized labor to think, “Maybe this isn’t worth trying in other places,” Ms. O’Mara said.The Retail, Wholesale and Department Store Union, which led the drive, blamed its defeat on what it said were Amazon’s anti-union tactics before and during the voting, which was conducted from early February through the end of last month. The union said it would challenge the result and ask federal labor officials to investigate Amazon for creating an “atmosphere of confusion, coercion and/or fear of reprisals.”“Our system is broken,” said Stuart Appelbaum, the union’s president. “Amazon took full advantage of that.”Amazon said in a statement, “The union will say that Amazon won this election because we intimidated employees, but that’s not true.” It added, “Amazon didn’t win — our employees made the choice to vote against joining a union.”About half of the 5,876 eligible voters at the warehouse cast ballots in the election. A majority of votes, or 1,521, was needed to win. About 500 ballots were contested, largely by Amazon, the union said. Those ballots were not counted. If a union had been voted through, it would have been the first for Amazon workers in the United States. More

  • in

    Amazon’s Clashes With Labor: Days of Conflict and Control

    Amazon was built on an underdog philosophy, but its workers are finding a voice. That presents a problem for the company that goes far beyond the union vote in Alabama.It has been Day 1 at Amazon ever since the company began more than a quarter-century ago. Day 1 is Amazon shorthand for staying hungry, making bold decisions and never forgetting about the customer. This start-up mentality — underdogs against the world — has been extremely good for Amazon’s shoppers and shareholders.Day 1 holds less appeal for some of Amazon’s employees, especially those doing the physical work in the warehouses. A growing number feel the company is pushing them past their limits and risking their health. They would like Amazon to usher in a more benign Day 2.The clash between the desire for Day 1 and Day 2 has been unfolding in Alabama, where Amazon warehouse workers in the community of Bessemer have voted on whether to form a union. Government labor regulators are getting ready to sort through the votes in the closely watched election. A result may come as soon as this week. If the union gains a foothold, it will be the first in the company’s history.Attention has been focused on Bessemer, but the struggle between Day 1 and Day 2 is increasingly playing out everywhere in Amazon’s world. At its heart, the conflict is about control. To maintain Day 1, the company needs to lower labor costs and increase productivity, which requires measuring and tweaking every moment of a worker’s existence.That kind of control is at the heart of the Amazon enterprise. The idea of surrendering it is the company’s greatest horror. Jeff Bezos, Amazon’s founder, wrote in his 2016 shareholder letter: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”For many years, Amazon has managed to maintain control and keep Day 1 going by dazzling with delivery and counted on the media, regulators and politicians to ignore everything unpleasant. The few stories about workers rarely got traction.But it is now the second-largest private employer in the country. There is widespread pro-worker sentiment in the United States and a pro-union president. In Bessemer, many of the pro-union workers are Black, which makes this a civil rights story as well.Amazon needs to measure and tweak every moment of a worker’s existence to maintain its edge, but it is facing more pushback against its control.Bob Miller for The New York TimesSo the costs associated with Day 1 are finally coming into view. And it is showing up not only in Alabama, but in the form of lawsuits, restive workers at other warehouses, Congressional oversight, scrutiny from labor regulators and, most noisily, on Twitter.In recent weeks, a heated discussion about whether Amazon’s workers must urinate in bottles because they have no time to go to the bathroom — a level of control that few modern corporations would dare exercise — has raged on Twitter.“Amazon is reorganizing the very nature of retail work — something that traditionally is physically undemanding and has a large amount of downtime — into something more akin to a factory, which never lets up,” said Spencer Cox, a former Amazon worker who is writing his Ph.D. thesis at the University of Minnesota about how the company is transforming labor. “For Amazon, this isn’t about money. This is about control of workers’ bodies and every possible moment of their time.”Amazon did not have a comment for this story.Signs that Amazon is facing more pushback against its control have started to pile up. In February, Lovenia Scott, a former warehouse worker for the company in Vacaville, Calif., accused Amazon in a lawsuit of having such an “immense volume of work to be completed” that she and her colleagues did not get any breaks. Ms. Scott is seeking class-action status. Amazon did not respond to a request for comment on the suit.Last month, the California Labor Commissioner said 718 delivery drivers who worked for Green Messengers, a Southern California contractor for Amazon, were owed $5 million in wages that never made it to their wallets. The drivers were paid for 10-hour days, the labor commissioner said, but the volume of packages was so great that they often had to work 11 or more hours and through breaks.Amazon said it no longer worked with Green Messengers and would appeal the decision. Green Messengers could not be reached for comment.An Amazon warehouse in the Canadian province of Ontario showed rapid spread of Covid-19 in March. “Our investigation determined a closure was required to break the chain of transmission,” said Dr. Lawrence Loh, the regional medical officer. “We provided our recommendation to Amazon.” The company, he said, “did not answer.” The health officials ordered the workers to self-isolate, effectively shutting the facility for two weeks. Amazon did not respond to a request for comment on the situation.And five U.S. senators wrote a letter to the company last month demanding more information about why it was equipping its delivery vans with surveillance cameras that constantly monitor the driver. The technology, the senators wrote, “raises important privacy and worker oversight questions Amazon must answer.”Amazon has presented a different opinion of what Day 1 means for workers. The first thing it mentions in its official statement on Bessemer is the starting pay of $15.30 per hour, double the federal minimum wage.Mr. Cox, who worked in an Amazon warehouse in Washington state, said the higher pay has paradoxically fueled the discontent. The pay “is better than working at a gas station, so people naturally want to keep these jobs,” he said. “That’s why they want them to be fair. I saw a lot of depression and anxiety when I worked for Amazon.”(Mr. Cox said he was fired by Amazon in 2018 for organizing. Amazon told him he had violated safety protocol).The confrontation between Day 1 and Day 2 has been sharpest over bladders.The topic erupted last month when Representative Mark Pocan, Democrat of Wisconsin, tweeted at the company, “Paying workers $15/hr doesn’t make you a ‘progressive workplace’ when you union-bust & make workers urinate in water bottles.”Amazon’s social media account fired back: “You don’t really believe the peeing in bottles thing, do you? If that were true, nobody would work for us.”This isn’t the way corporations usually talk to members of Congress, even on Twitter. On Friday, after days of being pummeled on the issue, Amazon apologized to Representative Pocan, saying: “The tweet was incorrect. It did not contemplate our large driver population and instead wrongly focused only on our fulfillment centers.” Amazon blamed Covid and “traffic,” not its punishing schedules.Representative Pocan responded on Saturday with a sigh. “This is not about me, this is about your workers — who you don’t treat with enough respect or dignity,” he wrote.The bathroom question is one on which the company has long been vulnerable. Enforcement files from regulators in Amazon’s home state of Washington indicate that questions about whether the company had an appropriate number of bathrooms in its Seattle headquarters have arisen over the past dozen years.The company has “insufficient lavatory facilities for male employees” according to a 2012 complaint received by the state’s Department of Labor and Industries. “Employees routinely traverse multiple buildings in search of available facilities.”A 2014 complaint filed by an Amazon employee to the same department said employees got 12 minutes a day for “bathroom, getting water, personal calls, etc.” outside of normally scheduled breaks. Those who needed further toilet time had to provide a doctor’s note “explaining why the need to void more than usual.”The complaints went beyond Amazon’s white-collar offices. A warehouse worker told Labor and Industries in 2009 that a manager and a human resources representative had told her that “there would be disciplinary action against me if I continue to use the bathroom on company time” — she meant unscheduled breaks. The employee added that the H.R. representative told her that “it was not fair to the company that I was getting paid when I’m not working because I’m in the bathroom.”Amazon’s headquarters in Seattle. Some employees have filed bathroom-related complaints, including saying some of the offices have too few restrooms.Miles Fortune for The New York TimesAmazon did not respond to questions about the enforcement reports. A spokesman for the Department of Labor and Industries declined to comment, except to note that outside of Amazon, “We really don’t get a lot of bathroom-related complaints.”Other technology companies have prided themselves on overriding mere bodily needs. Marissa Mayer, an early Google employee, attributed the search company’s success to working 130 hours a week — entirely possible, she said in a 2016 interview with Bloomberg Businessweek, “if you’re strategic about when you sleep, when you shower, and how often you go to the bathroom.”When Google was a start-up, the notion was that you gave up everything — family, sleep, diversion — so you might become successful and rich. But former workers at Amazon warehouses said that under the Day 1 philosophy, they suffered merely to stay employed.“I believe many employees have indirectly lost their job for going to the bathroom. You’re like, can I hold it to break time?” said John Burgett, who blogged for several years about working in an Amazon warehouse in Indiana.His conclusion on his last entry, in 2016: Amazon was “testing the limits of human beings as a technical tool.” More

  • in

    What is Going on with China, Cotton and All of These Clothing Brands?

    A user’s guide to the latest cross-border social media fashion crisis.Last week, calls for the cancellation of H&M and other Western brands went out across Chinese social media as human rights campaigns collided with cotton sourcing and political gamesmanship. Here’s what you need to know about what’s going on and how it may affect everything from your T-shirts to your trench coats.What’s all this I’m hearing about fashion brands and China? Did someone make another dumb racist ad?No, it’s much more complicated than an offensive and obvious cultural faux pas. The issue centers on the Xinjiang region of China and allegations of forced labor in the cotton industry — allegations denied by the Chinese government. Last summer, many Western brands issued statements expressing concerns about human rights in their supply chain. Some even cut ties with the region all together.Now, months later, the chickens are coming home to roost: Chinese netizens are reacting with fury, charging the allegations are an offense to the state. Leading Chinese e-commerce platforms have kicked major international labels off their sites, and a slew of celebrities have denounced their former foreign employers.Why is this such a big deal?The issue has growing political and economic implications. On the one hand, as the pandemic continues to roil global retail, consumers have become more attuned to who makes their clothes and how they are treated, putting pressure on brands to put their values where their products are. One the other, China has become an evermore important sales hub to the fashion industry, given its scale and the fact that there is less disruption there than in other key markets, like Europe. Then, too, international politicians are getting in on the act, imposing bans and sanctions. Fashion has become a diplomatic football.This is a perfect case study of what happens when market imperatives come up against global morality.Tell me more about Xinjiang and why it is so important.Xinjiang is a region in northwest China that happens to produce about a fifth of the world’s cotton. It is home to many ethnic groups, especially the Uyghurs, a Muslim minority. Though it is officially the largest of China’s five autonomous regions, which in theory means it has more legislative self-control, the central government has been increasingly involved in the area, saying it must exert its authority because of local conflicts with the Han Chinese (the ethnic majority) who have been moving into the region. This has resulted in draconian restrictions, surveillance, criminal prosecutions and forced-labor camps.OK, and what about the Uyghurs?A predominantly Muslim Turkic group, the Uyghur population within Xinjiang numbers just over 12 million, according to official figures released by Chinese authorities. As many as one million Uyghurs and other Muslim minorities have been retrained to become model workers, obedient to the Chinese Communist Party via coercive labor programs.Burberry created signature check “skins” for characters in the Honor of Kings video game, which its owner, the Chinese technology company Tencent, removed over the company’s stand on cotton produced in the Xinjiang region.via Honor of KingsSo this has been going on for awhile?At least since 2016. But after The New York Times, The Wall Street Journal, Axios and others published reports that connected Uyghurs in forced detention to the supply chains of many of the world’s best-known fashion retailers, including Adidas, Lacoste, H&M, Ralph Lauren and the PVH Corporation, which owns Calvin Klein and Tommy Hilfiger, many of those brands reassessed their relationships with Xinjiang-based cotton suppliers.In January, the Trump administration banned all imports of cotton from the region, as well as products made from the material and declared what was happening “genocide.” At the time, the Workers Rights Consortium estimated that material from Xinjiang was involved in more than 1.5 billion garments imported annually by American brands and retailers.That’s a lot! How do I know if I am wearing a garment made from Xinjiang cotton?You don’t. The supply chain is so convoluted and subcontracting so common that often it’s hard for brands themselves to know exactly where and how every component of their garments is made.So if this has been an issue for over a year, why is everyone in China freaking out now?It isn’t immediately clear. One theory is that it is because of the ramp-up in political brinkmanship between China and the West. On March 22, Britain, Canada, the European Union and the United States announced sanctions on Chinese officials in an escalating row over the treatment of Uyghurs in Xinjiang.Not long after, screenshots from a statement posted in September 2020 by H&M citing “deep concerns” about reports of forced labor in Xinjiang, and confirming that the retailer had stopped buying cotton from growers in the region, began circulating on Chinese social media. The fallout was fast and furious. There were calls for a boycott, and H&M products were soon missing from China’s most popular e-commerce platforms, Alibaba Group’s Tmall and JD.com. The furor was stoked by comments on the microblogging site Sina Weibo from groups like the Communist Youth League, an influential Communist Party organization.Within hours, other big Western brands like Nike and Burberry began trending for the same reason.And it’s not just consumers who are up in arms: Influencers and celebrities have also been severing ties with the brands. Even video games are bouncing virtual “looks” created by Burberry from their platforms.Backtrack: What do influencers have to do with all this?Influencers in China wield even more power over consumer behavior than they do in the West, meaning they play a crucial role in legitimizing brands and driving sales. When Tao Liang, otherwise known as Mr. Bags, did a collaboration with Givenchy, for example, the bags sold out in 12 minutes; a necklace-bracelet set he made with Qeelin reportedly sold out in one second (there were 100 made). That’s why H&M worked with Victoria Song, Nike with Wang Yibo and Burberry with Zhou Dongyu.But Chinese influencers and celebrities are also sensitive to pleasing the central government and publicly affirming their national values, often performatively choosing their country over contracts.In 2019, for example, Yang Mi, the Chinese actress and a Versace ambassador, publicly repudiated the brand when it made the mistake of creating a T-shirt that listed Hong Kong and Macau as independent countries, seeming to dismiss the “One China” policy and the central government’s sovereignty. Not long afterward, Coach was targeted after making a similar mistake, creating a tee that named Hong Kong and Taiwan separately; Liu Wen, the Chinese supermodel, immediately distanced herself from the brand.The actress Zhou Dongyu, the actor Wang Yibo and the singer and actress Victoria Song, all Chinese influencers who had deals with Western brands that they then  repudiated when their products were said to disrespect the Chinese people and government.VCG/VCG, via Getty ImagesAnd what’s with the video games?Tencent removed two Burberry-designed “skins” — outfits worn by video game characters that the brand had introduced with great fanfare — from its popular title Honor of Kings as a response to news that the brand had stopped buying cotton produced in the Xinjiang region. The looks had been available for less than a week.So this is hitting both fast fashion and the high end. How much of the fashion world is involved?Potentially, most of it. So far Adidas, Nike, Converse and Burberry have all been swept up in the crisis. Even before the ban, additional companies like Patagonia, PVH, Marks & Spencer and the Gap had announced that they did not source material from Xinjiang and had officially taken a stance against human rights abuses.This week, however, several brands, including VF Corp., Inditex (which owns Zara) and PVH all quietly removed their policies against forced labor from their websites.That seems squirrelly. Is this likely to escalate?Brands seem to be concerned that the answer is yes, since, apparently fearful of offending the Chinese government, some companies have proactively announced that they will continue buying cotton from Xinjiang. Hugo Boss, the German company whose suiting is a de facto uniform for the financial world, posted a statement on Weibo saying, “We will continue to purchase and support Xinjiang cotton” (even though last fall the company had announced it was no longer sourcing from the region). Muji, the Japanese brand, is also proudly touting its use of Xinjiang cotton on its Chinese websites, as is Uniqlo.Wait … I get playing possum, but why would a company publicly pledge its allegiance to Xinjiang cotton?It’s about the Benjamins, buddy. According to a report from Bain & Company released last December, China is expected to be the world’s largest luxury market by 2025. Last year it was the only part of the world to report year on year growth, with the luxury market reaching 44 billion euros ($52.2 billion).Is anyone going to come out of this well?One set of winners could be the Chinese fashion industry, which has long played second fiddle to Western brands, to the frustration of many businesses there. Shares in Chinese apparel groups and textile companies with ties to Xinjiang rallied this week as the backlash gained pace. And more than 20 Chinese brands publicly made statements touting their support for Chinese cotton. More

  • in

    Google Aims to Be the Anti-Amazon of E-Commerce. It Has a Long Way to Go.

    Google presents itself to independent sellers as cheaper and less restrictive. But it is not clear whether it can change people’s habits of going straight to Amazon.OAKLAND, Calif. — Google tried to copy Amazon’s playbook to become the shopping hub of the internet, with little success. Now it is trying something different: the anti-Amazon strategy.Google is trying to present itself as a cheaper and less restrictive option for independent sellers. And it is focused on driving traffic to sellers’ sites, not selling its own version of products, as Amazon does.In the last year, Google eliminated fees for merchants and allowed sellers to list their wares in its search results for free. It is also trying to make it easier for small, independent shops to upload their inventory of products to appear in search results and buy ads on Google by teaming up with Shopify, which powers online stores for 1.7 million merchants who sell directly to consumers.But like Google’s many attempts during its two-decade quest to compete with Amazon, this one shows little sign of working. Google has nothing as alluring as the $295 billion that passed through Amazon’s third-party marketplace in 2020. The amount of goods people buy on Google is “very small” by comparison — probably around $1 billion, said Juozas Kaziukenas, the founder of Marketplace Pulse, a research company.Amazon is a fixture in the lives of many Americans. It has usurped Google as the starting point for shoppers and has become equally essential for marketers. Amazon’s global advertising business grew 30 percent to $17.6 billion in 2020, trailing only Google and Facebook in the United States.But as the pandemic has forced many stores to go online, it has created a new opening for Google to woo sellers who feel uneasy about building their businesses on Amazon.Christina Stang, 33, opened Fritzy’s Roller Skate Shop near Pacific Beach in San Diego last March. Shelter-in-place orders forced her to set up an online storefront on Shopify.She got lucky. She was sitting on a huge supply of skates when demand surged as skating videos became popular on TikTok during the pandemic.Christina Stang, the owner of Fritzy’s, avoided selling on Amazon because of its fees, but now Google has suspended her account because of a discrepancy in shipping costs.John Francis Peters for The New York TimesShe linked her Shopify account to Google’s retail software and started buying so-called smart shopping ads. Working within an allotted budget, Google’s algorithms pick where to place ads and what products to feature. In 2020, she spent $1,800 on the ads, which were viewed 3.6 million times and led to $247,000 in sales, she said.She considered selling her products on Amazon’s marketplace, but she worried what Amazon’s fees would mean for her already-thin profit margins. She also liked that Google redirected people to her carefully curated website rather than keeping them inside its own store, as Amazon does.“I could sell on Amazon and not make any real money but have a bigger online presence,” Ms. Stang said. “It didn’t seem like a great idea.”Recently, however, she has experienced one of the drawbacks of being stuck in the middle of the partnership between Google and Shopify. Her shop has been unable to list any products since January because Google suspended her account. It said her shipping costs appeared more expensive on Google than on her Shopify-powered website, even though they were no different.Shopify told her that it was a Google issue. Google’s customer service representatives recommended that she hire a web designer. She continues to manage without Google, but it has tainted her largely positive experience.“This has completely cut me off at the knees,” she said. “I’m a small business, and I don’t have hundreds or thousands of dollars to resolve this.”Sellers often complain about Amazon’s fees, which can account for a quarter of every sale, not including the cost of advertising, and the pressure to spend more to succeed. Merchants on Amazon do not have a direct relationship with their customers, limiting their ability to communicate with them and to generate future business. And because everything is contained within the Amazon world, it is harder to create a unique look and feel that express a brand’s identity the way companies can on their own websites.But since 2002, when it started a price comparison site called Froogle, a confusing play on the word “frugal” that required a rebranding five years later, Google has struggled to chart a cohesive vision for its shopping experience.It tried to challenge Amazon directly by piloting its own same-day delivery service, but it shuttered the project as costs ballooned. It tried to forge partnerships with traditional retail giants, only to see the alliances wilt from a lack of sales. It built its own marketplace to make it easier for shoppers to buy the things they find on Google, but was not able to break consumers from their Amazon habit.Last year, Google brought in Bill Ready, a former chief operating officer at PayPal, to fill a new senior position and spearhead an overhaul of its shopping strategy.Around the time of his hiring, Sundar Pichai, Google’s chief executive, warned senior executives that the new approach could mean a short-term crimp in advertising revenue, according to two people familiar with the conversations, who requested anonymity because they were not allowed to discuss them publicly. He asked teams to support the e-commerce push because it was a company priority.When the pandemic spurred huge demand for online shopping, Google eliminated fees, allowing retailers to list products for free and walking back a 2012 decision to allow only advertisers to display goods on its shopping site.Three months after hiring Mr. Ready, Google said the free listings would show up on its main search results. Then Google said customers could buy products directly from merchants on Google with no commissions. It also said Google would open its platform to third parties like Shopify and PayPal so that sellers could continue to use their existing tools to manage inventory and orders and processing payments.Google brought in Bill Ready to spearhead an overhaul of its shopping strategy.Kendrick Brinson for The New York TimesThe partnership with Shopify was especially meaningful because hundreds of thousands of small businesses have flocked to the software platform during the pandemic. About 9 percent of U.S. online shopping sales took place on storefronts powered by Shopify as of October, according to research firm eMarketer. That was up from 6 percent the prior year and second only to Amazon’s share of 37 percent.Harley Finkelstein, Shopify’s president, said Google and Shopify were developing new ways for merchants to sell through Google services, such as experiments to allow customers to buy items directly on YouTube and to display what products stores are carrying in Google Maps.Mr. Ready walked a fine line when it came to Amazon, which is a big buyer of ads on Google, but he made it clear he believed Amazon’s dominance in e-commerce posed a threat to other merchants.“Nobody wants to live in a world where there is only one place to buy something, and retailers don’t want to be dependent on gatekeepers,” he said in an interview.Google said it had increased the number of sellers appearing in its results by 80 percent in 2020, with the most significant growth coming from small and midsize businesses. And existing retailers are listing more products.Overstock.com, a seller of discount furniture and home bedding, said it had paid to list products on Google in the past. But now that listings are free, Overstock is adding low-margin products, too.“When all shopping starts and stops at Amazon, that’s bad for the industry,” said Jonathan E. Johnson, Overstock’s chief executive. “It’s nice to have another 800-pound tech gorilla in this space.”What remains unclear is whether increasing the number of merchants and listings on Google will ultimately change online shopping habits.BACtrack, a maker of breathalyzers, has more than doubled its advertising spending on Amazon in the last two years because that is where the customers are, it said, while it has spent 6 percent less advertising its products on Google.“It seems like more and more people are skipping Google and going straight to Amazon,” said Keith Nothacker, the chief executive of BACtrack. More

  • in

    Organizing Gravediggers, Cereal Makers and, Maybe, Amazon Employees

    A group of gravediggers in Columbus, Ohio, who just negotiated a 3 percent raise. The poultry plant that processes chicken nuggets for McDonald’s. The workers who make Cap’n Crunch in Iowa. The women’s shoe department at Saks Fifth Avenue in Manhattan.The Retail, Wholesale and Department Store Union is not the largest labor union in the United States, but it may be one of the most eclectic. Its membership, totaling about 100,000 workers, seems to reach into every conceivable corner of the American economy, stretching from the cradle (they make Gerber baby food) to the grave (those cemetery workers in Columbus).And now it is potentially on the cusp of breaking into Amazon, one of the world’s most dominant companies, which since its founding has beaten back every attempt to organize any part of its massive work force in the United States.This month, a group of 5,800 workers at an Amazon warehouse in Bessemer, Ala., are voting whether to join the R.W.D.S.U. It is the first large-scale union vote in Amazon’s history, and a decision by the workers to organize would have implications for the labor movement across the country, especially as retail giants like Amazon and Walmart have gained power — and added workers — during the pandemic.The Amazon campaign, said Stuart Appelbaum, the union’s president, “is about the future of work and how working people are going to be treated in the new economy.”For some labor activists, the union and its early success at the Bessemer warehouse represent the vanguard of the modern organizing campaigns. It is outspoken on social issues and savvy on social media — posting a TikTok video of support from the rapper Killer Mike and tweeting an endorsement from the National Football League Players Association during the Super Bowl.“It’s a bit of an odd-duck union,” said Joshua Freeman, a professor emeritus of labor history at Queens College at the City University of New York. “They keep morphing over the years and have been very inventive in their tactics.”The union is also racially, geographically and politically diverse. Founded during a heyday of organized labor in New York City in 1937 — and perhaps best known for representing workers at Macy’s and Bloomingdale’s — most of its members are now employed in right-to-work states, across the South and rural Midwest.Workers lowering a lid onto a vault at Union Cemetery in Columbus. Their organization is known as “a bit of an odd-duck union” for the variety of industries it covers.Brian Kaiser for The New York TimesLou Willis, operating a backhoe at the cemetery.Brian Kaiser for The New York TimesBrian Kaiser for The New York TimesWhile the union’s overall membership has stagnated over the past decade, the number of members in its Mid-South office, which includes Alabama, Tennessee and Louisiana, has nearly doubled, to about 9,000 from 4,700 in 2011, driven by aggressive recruitment efforts in the poultry, warehouse and health care industries. More than half of its members across the country are workers of color.In the Mid-South office, which is leading the organizing at Amazon, local officials begin almost every meeting with a prayer, lean in favor of gun rights and say about half their members supported Donald J. Trump’s re-election bid. (Unlike the national union, which publicly backed President Biden, the southern office did not issue an endorsement of either candidate.)“We are known as the church union,” said Randy Hadley, president of the Mid-South Council. “We put God first, family second and then our jobs.”The retail and wholesale workers union is run nationally by Mr. Appelbaum, a Harvard Law School graduate and former Democratic Party operative from Hartford, Conn., who has written about his identity as a gay, Jewish labor leader.Since becoming union president in 1998, Mr. Appelbaum has created a niche by organizing workers from a wide variety of professions: airline caterers, employees in fast fashion stores and gardeners at a cannabis grow house. “When you buy a joint, look for the union label,” Mr. Appelbaum said jokingly.Stuart Appelbaum, the union president, in 2016. The Amazon effort, he said, “is about the future of work and how working people are going to be treated in the new economy.”Christian Hansen for The New York TimesThe strategy has helped the union to keep flourishing, even as its core work force in brick-and-mortar retail stores continues to shrink as shopping moves online.The union often ties its organizing campaigns to the broader struggle to advance the rights of vulnerable workers, such as the predominately gay, lesbian, trans and nonbinary employees in sex toy shops in New York and undocumented immigrants working in the city’s carwashes.After World War II, the union advocated for Black servicemen who were being shut out of jobs at Macy’s, which paid the highest commissions. “It has a history of being a militant, feisty, left-wing crowd,” Professor Freeman said.Even the Alabama office, which leans further to the right on some issues, has stood up for workers in ways that are locally unpopular.Mr. Hadley said one of his biggest accomplishments was negotiating a paid holiday on Eid al-Fitr, marking the end of Ramadan, at a Tyson poultry plant in Tennessee, where a large number of Somali immigrants work.“We had Muslims in the facility, they said, ‘We look at that day like Christmas,’ and I thought, ‘Who am I to judge?’” recalled Mr. Hadley, a former meat cutter. “I said, ‘Let’s do it.’”The president of the union’s Mid-South Council, Randy Hadley, back row, center right, with other leaders and staff in Birmingham, Ala. The Mid-South office is leading the organizing at Amazon.Retail, Wholesale and Department Store UnionRatified in 2008, the Muslim holiday took the place of Labor Day as one of the paid holidays that workers were allowed at the facility, and was criticized by some as being un-American.Over the years, the union has faced some powerful enemies. In the 1960s, its Black organizers were threatened — one was even shot at — while trying to sign up food industry workers across the South.Johnny Whitaker, a former dairy worker who started as a union organizer in the 1970s, said he had grown up in a white family in Hanceville, Ala., without much money. Still, he was shocked by the working conditions and racism he witnessed when he started organizing in the poultry plants years ago.Black workers were classified differently from their white counterparts and paid much less. Women were expected to engage in sexual acts with managers in exchange for more hours, he said. Many workers could not read or write.Despite threats that they would lose their jobs if they organized, thousands of poultry workers have joined the R.W.D.S.U. over the past three decades, though the industry still is predominantly nonunion.Roberto Cuellar, a union member and flight coordinator at Flying Food Group, an airline caterer whose workers are represented by the R.W.D.S.U.Meghan Marin for The New York TimesMr. Cuellar checked meals at Kennedy International Airport before a flight.Meghan Marin for The New York TimesMeghan Marin for The New York TimesWhen a small group of Amazon workers contacted the union in late August about their interest in organizing the Bessemer warehouse, Mr. Whitaker acknowledged, “there was a lot of doubt” internally about the idea.The R.W.D.S.U. had tried to lay the groundwork for organizing Amazon’s warehouse in Staten Island in 2019, but the effort failed when the company pulled the plug on its plans to build a second headquarters in New York, known as HQ2, partly because of political pressure to allow organizing at its facilities.“What we learned from HQ2 was that Amazon was going to do anything it possibly could to avoid having a union at any of its workplaces,” Mr. Appelbaum said.At the time, Amazon said it canceled its plans after “a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project.”But the more the workers in Alabama kept talking to the union about their working conditions, the more Mr. Appelbaum and others believed the warehouse was fertile ground for organizing.The employee cafeteria at Flying Food Group.Meghan Marin for The New York TimesThe workers described the control that Amazon exerts over their work lives, including tracking their time in the restroom or other time spent away from their primary task in the warehouse. Some workers have said they can be penalized for taking too much time away from their specific assignments.“We are talking about bathroom breaks,” said Mr. Whitaker, an executive vice president at the union. “It’s the year 2021 and workers are being penalized for taking a pee.”In an email, an Amazon spokeswoman said the company does not penalize workers for taking bathroom breaks. “Those are not our policies,” she said. “People can take bathroom breaks.”The campaign in Bessemer has created some strange political bedfellows. Mr. Biden expressed his support for the Alabama workers to vote freely in the mail-in election, which ends later this month. Republican Senator Marco Rubio of Florida went even further, encouraging the Bessemer workers to unionize in order to protect themselves against the “woke culture” at Amazon.A greenhouse in the PharmaCann facility near Montgomery, N.Y. The company grows cannabis for medical use in several states; the R.W.D.S.U. has organized workers there.David Steinberg for The New York TimesMark Etri Jr. assembling cartridges.David Steinberg for The New York TimesLiz Ferran tending to plants.David Steinberg for The New York TimesIf the union wins the election in Bessemer, the effort to court workers will continue. In a right-to-work state, workers are not required to pay union dues even if they are represented by a union.At a Quaker Oats plant in Iowa, which is also a right-to-work state, the R.W.D.S.U. finds ways to motivate workers to join the union by posting the names of workers who have not yet joined on a bulletin board.“In a right-to-work state, you are always organizing,” Mr. Hadley said.Early in the afternoon of Oct. 20, Mr. Hadley met with about 20 organizers before they headed out to the Bessemer warehouse to begin their campaign to sign up workers. The plan was for the organizers to stand at the warehouse gates talking to workers early in the morning and in the evening when their shift changes. In a pep talk with the group, Mr. Hadley invoked the story of David and Goliath.“We are going to hit Goliath in the nose every day, twice a day,” he told the group, referring to Amazon. “He’s going to see our union every morning when he comes to work, and I want him thinking about us when he closes his eyes at night.” More