Regulating Capital in the Logistics Chain Gang

Amazon plays a special role in the twenty-first-century US economy, which should make it a top priority for labor movement organizers hoping to improve the conditions of labor in the country as a whole. The company is located at the heart of the nation’s for-profit logistics sector, which has developed a unique significance in US supply chains over the last fifty years.

As US industry was restructured in the 1970s and 1980s, and millions of workers were displaced from manufacturing through automation, offshoring, and just-in-time production methods, the labor movement suffered many defeats, from the rise of concessionary contracts to the severe decline of union density overall. This decline owed partly to a successful employer offensive, but it was also bolstered by stagnating employment in manufacturing (even as output soared), which made it easier for employers to wring out concessions.

Yet throughout this period, and continuing into recent years, logistics has grown to employ a massive 5.8 million workers. Unlike other sectors that can be automated and offshored, logistics is labor intensive, geographically rooted, and fortified by the lengthening of supply chains and the global integration of markets.

The logistics industry was also centralized over this period as employers implemented lean production methods, which squeeze more productivity out of fewer workers by reducing redundancies in the supply chain. Lean production led to the concentration of much of the United States’ economic flows into a series of logistical choke points, which act as hubs for the rest of the economy. Kim Moody describes these “nodes” in his book On New Terrain as being “enormous logistics clusters of transportation hubs, massive warehouses and distribution centers . . . that bring thousands of workers into finite geographic concentrations.”

Thus, while much of the labor force suffered from the disorganizing effects of layoffs and decentralization, logistics workers have by contrast grown increasingly concentrated and structurally powerful. Amazon exemplifies this unique concentration of logistics workers. A majority of workers in the United States work in shops with fewer than one thousand workers. Meanwhile, 25 percent of all workplaces in the US with one thousand or more workers are Amazon workplaces.

While the union density and job conditions in logistics have declined as elsewhere, there remain strong bastions of organized labor in the industry, particularly in the International Brotherhood of Teamsters (IBT), whose 1.4 million members primarily work in this sector. But despite its large membership, the IBT is at a crossroads. Amazon and other nonunion competitors have increasingly penetrated the industry, and the massive cost advantages a company like Amazon has will rapidly put pressure on unionized competitors like UPS.

For example, while a top-paid UPS driver makes around $40 an hour and has full family health care and a pension, most Amazon drivers make less than $20 dollars an hour, with limited (if any) health care and no pension. Amazon warehouse workers likewise lack the health care and pension benefits that Teamsters enjoy, as well as the vacations, holidays, and scheduling perks enshrined in union contracts. How can UPS, whose 260,000 Teamster employees in the United States make up the largest plurality of IBT members, compete with such a low-cost behemoth? In the long run, it can’t.

For now, union employers like UPS enjoy the advantages of existing infrastructure and contracts, while Amazon has only just started to enter the shipping field. But these advantages are rapidly being eroded as Amazon pivots to vertical integration of its operations, building out its own shipping and delivery infrastructure rather than rely on other shipping companies. The massive amounts of cash generated by Amazon’s other fields of business, such as web services, facilitate this expansion. Since 2014, Amazon has invested $60 billion in shipping infrastructure alone, positioning it as the fourth-largest delivery company in the United States, with its market share rapidly increasing.

As Amazon builds out low-cost and high-volume shipping infrastructure, it will become what Anwar Shaikh calls a “regulating capital,” a company whose prices are determinative for a given market. Other companies have to match the prices regulating capitals set, even taking a cut in profits to do so if necessary. If they don’t, they’ll lose market share, and eventually go bankrupt.

But companies hate taking cuts in profits, and are only able to do so up to a point. Realistically, once companies like UPS begin to feel their profit margins shrinking in a few years under the competitive pressure of Amazon, they will fight like hell to wring out concessions in their labor contracts, putting the burden of this competition on an increasingly exploited workforce. In fact, UPS already secured some two-tier concessions in its last 2018 contract with the Teamsters, even without Amazon directly eating into its profits yet. The company has also started finding ways to work around its unionized labor force, such as using nonunion “private vehicle drivers” during peak season, and acquiring the gig delivery service company Roadie.

One can only imagine how UPS will dig in its feet in five or ten years from now, when competitive pressures pose an actual threat to profitability. We could see massive layoffs and givebacks, which would severely weaken the IBT and reduce the ability of militant tactics like strikes to win gains for workers. This will have a cascading effect, whereby workers will see less of the benefits of unionism, making new organizing drives harder and letting nonunion competitors expand even further.

A form of this anti-labor chain reaction occurred across the United States starting in the 1980s, continuing in many sectors to the present day. If something similar occurs in the logistics sector, the most strategically concentrated for-profit sector of the US economy, what remains of the labor movement will face immense pressures in its continuing decline throughout the rest of the economy.

However, while we should heed this grim potentiality, it is by no means foreordained. In fact, conditions for organizing Amazon, and achieving a revitalizing breakthrough for unionism, have never been better.

Stand Up, Fight Back

In June of this year, at the 30th International Convention of the Brotherhood of Teamsters, delegates overwhelmingly passed a resolution prioritizing Amazon organizing, creating and funding an Amazon organizing division to do so. The IBT has suggested that this organizing drive will focus on building rank-and-file power at Amazon on the shop floor, which it hopes will escalate toward area- and company-wide organizing drives — as opposed to the more top-down, NLRB-vote-focused approach other unions have hitherto taken with the company.

A militant, company-wide organizing effort echoing the CIO organizing drives and recognition strikes of the 1930s would serve as a clarion call to the rest of the labor movement that it’s once again time to organize or perish. In the best-case scenario, it could catalyze organizing efforts throughout the service, manufacturing, and logistics industries, which make up the unorganized core of the US economy. The parallel timing of such an organizing drive with UPS contract negotiations in 2023, which could very well lead to the first national UPS strike in over twenty years, could spark a new era of labor organizing in the twenty-first century.

In order to be successful, this endeavor will require a lot more than millions of dollars and staff organizers. First and foremost, it will take a network of dedicated organizers building collective power on the shop floor. The Teamsters’ organizing plan is centered around such an approach. In fact, the Teamsters’ national director of Amazon organizing, Randy Korgan, has explicitly stated that the Teamsters will be mobilizing the existing interpersonal relationships of their members as well as training rank-and-file Teamster workers to engage in worker-to-worker organizing in order to build power at Amazon.

In addition to the ambitious company-wide organizing efforts of the Teamsters, Amazon workers around the country are already organizing for better conditions in a variety of embryonic labor organizations, such as the Amazon Labor Union, Athena, and Amazonians United. The latter group in particular has had success in building community and shop-floor committees which have already won real gains for Amazon workers.

From a walkout that shut down a Queens facility after a worker tested positive for COVID-19 to strikes in Chicago over twelve-hour megacycle shifts, workers with Amazonians United (AU) have organized a variety of impressive shop-floor actions around the country. They’re also winning. For example, AU workers in Sacramento successfully won the rehiring of two workers after they were unjustly fired for taking time off due to deaths in their families. Subsequently AU organizers around the country began a campaign for paid time off, which succeeded in pressuring Amazon to offer it nationally.

In addition to organizing shop-floor actions, AU tries to build a community of Amazon workers by hosting barbecues, publishing leaflets, and building social groups at Amazon warehouses, which are otherwise notorious for their social disorganization and worker isolation (by Amazon’s design). These slow, cellular aspects of organizing will be crucial in forming a conscious, organized, and militant layer of workers at Amazon ready to take on the boss in the long run.

The New Militant Minority

While Amazonians United organizers have made great strides building power on the shop floor, we will need hundreds more disciplined and inspired organizers to take on Amazon across the country.

As Peter Olney and Rand Wilson have argued, one key element in this militant minority of shop-floor activists and leaders will be “salts,” or workers who get a job with the intention of organizing. Democratic socialists, who understand that the viability of the socialist project is built on the organized strength and capacity of the working class to fight for its interests through the labor movement, are precisely the type of people who should be willing to get jobs at Amazon to help build a union.

Fortunately, the Democratic Socialists of America (DSA) recently passed a resolution at its national convention declaring support for Amazon organizing. As Teamster trucker Ryan Haney has argued, if DSA can rally even a small fraction of its nearly one hundred thousand members toward the goal of organizing Amazon, it could have a significant impact, as many of these members have experience in the basics of organizing from other social-movement work. Moreover, with dozens of elected politicians throughout the country, as well as dedicated offices and staffers, DSA chapters have significant political and social resources they could direct toward Amazon organizing efforts in creative ways.

Historically, the labor movement has been built and led by an organized militant minority of rank-and-file progressives who have had the discipline and vision required to make organizing breakthroughs. From the socialist Reuther brothers, who led the sit-down strikes of 1936–37 and built the United Auto Workers (UAW), to the Trotskyist Teamsters, who led the 1934 Minneapolis general strike, to the red longshoremen, who built the International Longshore and Warehouse Union (ILWU), almost every major breakthrough in the labor movement has had disciplined activists from the organized left at its forefront. DSA members should take up the mantle by supporting — and, better yet, becoming — Amazon workers.

There is no doubt that we face an uphill battle at Amazon, with high turnover, subcontracted delivery-driver operations, and a variety of disparate labor organizations working in relative isolation against a multibillion-dollar behemoth. But so too did William Z. Foster and other early left industrial unionists one hundred years ago, while contending with their own fragmented craft unions and their own novel and brutal industrial conditions.

Just as Foster and others proved the ubiquitous naysayers of their era wrong by weaving together dozens of craft unions and leading the first national industrial organizing drives in steel and meatpacking, we too must see these barriers as problems to be solved by creative forms of organizing. Only by building a united front between DSA, the Teamsters, Amazonians United, and other labor groups, and by mobilizing all the resources at our collective disposal, will we stand a chance of organizing Amazon before it’s too late.

To turn this possibility into a reality, the Left must make organizing Amazon its number-one labor priority. To do otherwise is to forfeit the historic responsibility we have to rebuild the union movement, merge it with the movement for democratic socialism, and build a Left that can win.