Holders of Amazon stock may be doing a double-take today after the value of a company share fell by more than fourteen in one day.
The loses come after the company released its Quarterly Results Report showing slower than expected growth and great uncertainty in the near future. Investors responded to the news quickly, with the stock falling by the fastest level in eight years.
Many on Wall Street are worried that the company may have been overly optimistic about how the pandemic had changed consumer behavior. With people stuck at home, Amazon sales skyrocketed, and so did profits. To keep pace with greater consumer demand, the company made significant investments in staffing, doubling the total “size of [their fulfillment network [...] in just 24 months.”
However, online shopping levels have dropped as consumers return to brick-and-mortar retailers. The e-commerce giant noted that the uncertainty surrounding the “growth of the Internet [and] online commerce” could also force Amazon to reconsider some of the investments it made at the height of the pandemic when the sector was exploding.
These drops, and other issues identifed by the company, are reflected in the company’s earnings report, which showed a forty-one percent decrease in the operating cash flow; falling to $39 billion from the $67 billion earned in the first quarter of 2021.
Looking forward, the company warns of an uncertain future.
The company told investors that they expect net sales to increase between three and even percent compared to those in the second quarter of 2021. However, supply chain disruptions from the covid-19 pandemic and the Russian invasion of Ukraine could further weaken the company’s position.
Amazon Unionization Efforts: Have they impacted the company’s bottom line?
Amazon often touts its ranking on “top employer” lists in countries around the world, as evidence that they treat its workers fairly. But after a unionization election in Bessemer Alabama failed by a close margin last spring, Jeff Bezos responded saying “we need to do a better job for our employees.” The company continues to state publically, however, that they do not believe a union would benefit workers.
Earlier this month, Amazon workers in Staten Island made history by becoming the first warehouse to approve a union. Amazon has challenged the vote and made various allegations based on factors they believe invalidate the result.
Unionization has become a growing trend across the United States and for Amazon, part of what is motivating workers are poor labor conditions and low-wages.
Change to Win, a labor rights organization, released the results of a survey conducted in April 2020, based on the response of more than four thousand American workers.
The findings were concerning.
One in ten employees reported going to work when they felt sick, of which, more than half stated that they made the decision over fear of “being disciplined” or “losing hours” if they did not show up for their shifts.
Workers also reported being or seeing their peers disciplined or retaliated against for raising concerns over safety protocols within the workplace. During a global health crisis, when a deadly virus is circulating, it does not seem that “the best workplace” would create an environment where these sentiments were so widespread.
How much does the average Amazon employee make?
Business Insider reported that the median wage earned by Amazon employees was $29,007 in 2021. This is the median, not the average, meaning that more than half of workers made under this amount.
While Amazon has increased its minimum wage to $15 an hour in 2018, this does not mean that the salary is considered a living wage. For a household of four, where both parents are working full time, the living wage in 2020 stood at around $68,000. Divided by two, Amazon’s median salary does not reach this level. Additionally, since this data was released, inflation has risen to historic levels, cutting further into the purchasing power of many low-income households.
Low wages and extremely regimented and punitive workplace rules have motivated many Amazon workers to consider unionization. In addition to the Staten Island workers, Amazon employees at two other warehouses have submitted a petition to the federal government for a unionization election.
The Economic Policy Institute found that unionized workers made 11.2 percent more than their non-unionized counterparts. For racial minorities, union membership can make a significant impact on pay. The researchers found that “unionized Black workers [were] paid 13.7% more than their nonunionized peers, while unionized Hispanic workers [were] paid 20.1% more than their nonunionized peers” in 2019.
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April 30, 2022 at 02:06AM
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Amazon stock drops ten percent: what caused the loss? - AS USA
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