The UN’s Special Rapporteur on extreme poverty and human rights, Olivier De Schutter, has issued a resounding call to the CEOs of prominent US corporations, including Amazon, Walmart, and DoorDash, alongside the US government. De Schutter has urged them to address the disturbing allegations that major US corporations are paying such abysmally low wages that they ensnare their employees in the clutches of poverty, coercing them to rely on government assistance programs for their mere survival.
In a publication made on October 31st, De Schutter has brought to light several disconcerting allegations, which include the 2020 US Government Accountability Office’s discovery. This report found that Amazon and Walmart were among the top 25 employers in nine states, where their workers heavily relied on the Supplemental Nutrition Assistance Program (Snap), previously known as food stamps, or Medicaid. Walmart ranked atop this list, with Amazon in the sixth position.
The concerns raised by De Schutter apply to an extensive spectrum of workers in the United States. They pertain to how the minimum wage is legislatively established, either at the federal or state level. Moreover, they revolve around wage theft by employers, the arduous, unyielding working schedules, the vulnerability of undocumented workers, infringements upon union rights, and the impact of automation.
De Schutter has emphasized that what these corporations primarily undertake is not illegal, but rather they exploit the existing legal loopholes. For instance, they engage in the misclassification of workers as independent contractors, evading the designation of employees. This utilization of legal loopholes remains a governmental responsibility, and De Schutter eagerly awaits the Department of Labor’s response.
Drawing from the US Bureau of Labor Statistics’ definition of the “working poor,” individuals earning $14,850 or less annually, totaling 6.3 million people and accounting for 4.1% of the US workforce, fall within this category.
The UN Special Rapporteur has stipulated a deadline of 60 days for these corporations and the government to respond to the letters. So far, Amazon has been the only company to submit a response, although De Schutter contended that their response did not adequately address numerous concerns raised in his letter. DoorDash issued a response after the publication of these letters, disputing the allegations, and has pledged to provide a more comprehensive response in the forthcoming weeks.
In the missive to Amazon, De Schutter noted the ongoing investigation by the Department of Labor regarding the company’s high injury rates and their history of anti-union practices at their facilities in the United States.
DoorDash has confronted scrutiny due to its practice of classifying workers as independent contractors and determining wages based on active time rather than on-call hours. Furthermore, it has opposed ordinances for wage increases, while their gig worker model has elicited complaints about meager compensation.
Walmart, the largest US employer, has been a subject of prolonged scrutiny for the stark contrast between its modest wages and the colossal profits the company rakes in. The estimated net worth of the majority owners of the company, the Waltons, exceeds $240 billion, rendering them the world’s wealthiest family. Walmart has also exhibited a history of aggressive union-busting tactics in response to workers’ efforts to organize.
Of all these corporations, Amazon has been the sole respondent within the stipulated 60-day timeframe. In their response, Amazon negated the allegations of low wages and did not challenge the fact that some of its workers depend on federal assistance programs. Amazon contended that their wages render employees ineligible for programs like Snap. They argued that employees may have received federal assistance before joining Amazon while they were unemployed or that they receive assistance based on other criteria such as household size or a household member’s qualifying disability.
Amazon, in its response, refuted accusations of violating the union rights of its workers. Nevertheless, they restated their opposition to the successful unionization of workers at the Staten Island Amazon warehouse in New York in 2022.
As of October 1st, there were 222 pending or resolved charges of unfair labor practices filed against Amazon with the National Labor Relations Board. Reportedly, Amazon spent over $14.2 million on anti-union consultants in 2022.
De Schutter highlighted that the rate of unionized workers in the United States has dwindled significantly over the past four decades, far more than in other OECD countries. While countries such as Italy and France cover 100% and 98% of their workers, respectively, through collective bargaining agreements, the corresponding figure in the United States stands at a mere 11.7% based on 2018 OECD data.
He underscored the stagnant federal minimum wage of $7.25, which has remained unchanged since 2009. Remarkably, 20 states have not instituted a higher minimum wage, perpetuating gross wage disparities that disproportionately affect female workers in the United States.
The wages in the US have failed to keep pace with the escalating cost of living. In many countries, wages are methodically adjusted in tandem with the increase in the cost of living. However, this alignment does not hold true for the US. De Schutter was taken aback to observe that individuals with a high school diploma in the US today are earning 2.7% less, in real terms, compared to 1979, an astonishing decline over almost half a century. Remarkably, this transpired during a period where worker productivity doubled.
In conclusion, the issues surrounding low wages and their pernicious consequences for workers in the United States have drawn the attention of a UN expert. The disparity between corporate profits and employee compensation remains a contentious issue. The ramifications extend to a significant segment of the workforce in the United States, accentuating the importance of robust labor regulations and a more equitable economic landscape.