Amazon’s business model meets Sweden’s labor unions
politico.eu
politico.eu
I... wouldn't do that.
There are few type of those, and you are looking for someone who knows what they are talking about and talk about shortcomings of a given product. They are usually pro's that have some experience with given category of a product. So they know what they want.
If you find one like that its ease to judge what features you need vs features pros need.
Usually, 1 stars are by entitled complainers (unless product is cheap knockoff) and 5 stars are by people that don't know what they are talking about or brought reviews.
It makes sense in my mind that the buyer should be the one to pay for the handling of what they buy. I don't want to subsidise your shopping/shipping via my taxes, they're high enough as it is.
Another factor in the nonsensicality of this tariff is that Sweden is more or less the only country which starts charging sales tax (called moms here, comparable with VAT in the UK, BTW in the Netherlands etc.) from a value of 0kr (i.e. free, but sales tax is paid on the shipping costs). Where other European countries start charging sales tax when the value of imported goods rises above (e.g.) €20, Sweden starts at €0. Many parcels ordered from China fall under that rate which make it a very common thing to be represented with the following:
price of ordered goods including shipping: €4
sales tax: €1
"handling fee": €8
total: €13, of which €9 goes to the Swedish state (directly or through Postnord)
The so-called "handling fee" is nothing but an excuse to put a tariff on international trade for individuals, a way to make sure the fruits of globalisation stay out of reach of the public.
But whenever I see: "sold by X" through their platform you can usually find a cheaper offer on their own website.
Also, stock co-mingling. That alone makes me buy as little from amazon and as much from elsewhere as I can.
And I’m not sure we have co-mingling here because I never heard of the problems that seem to be common in the US (/ on HN) with it and also never experienced it myself (I spend around 2.200 € on Amazon per year)
We do, the seller setting for that ("Barcode preference") is there in the Seller Central Europe and the help text explicitly talks about commingling.
I've had one item sold by Amazon as new that was clearly a fraud return, though, i.e. the item inside the product package was switched for a different model.
I think it’s the type of issue where it would be a major problem for the producer of a specific product that got ripped off, and any customers who are fans of that product, but may never affect the average buyer.
The only reviews you can vaguely trust are the non-5 star ones.
It should also be mentioned that e-commerce is easier in Sweden than in some other countries. The ubiquity of electronic ID, the national address database and rapid bank transfers mean that even if you do not use PayPal, creating an account and ordering with a new website is very quick and requires entering almost no personal details yourself. Many websites even let you pay by invoice.
During the lockdown here in France Amazon was forced to close some warehouses and filfillment centers under pressure from unions (among other pressures, of course). It was big news for a week or so, and deliveries seemed to pause briefly before being picked up from German warehouses, too. After a week or so we started getting our deliveries again, usually with an extra day of delay because it was being fulfilled from Germany.
I suspect they will eventually do a deal with the Swedish unions but that, in the meantime, trucking things in from Germany will allow them to become established.
In some other industries (shipping) you have to be really careful to do that. There's various laws against breaking up (the effectiveness of) a strike. That's currently often only applied within one country. If Amazon does something similar more often enough they'll probably get hit with an EU-wide law instead.
It's always weird that internet based companies aren't treated like any other company. Unfair competition IMO.
They weren't shut down, that was Amazons decision. The court only told them to reduce operations to specific categories of its store site - the idea was to somehow reduce operations to a safe amount as Amazon had repeatedly failed to so by itself. Amazon then made up the nebulous "essential products" category and made sure to complain loudly about the supposed nonsense the court required while it shut down french warehouses completely.
I don't understand whats the problem with that?
According to Amazon they found it difficult to workout what was and wasn't an essential item according to the rules. I would imagine with a catalog as big amazon that's probably true. They decided to shutdown instead which is perfectly rational given the amount fines placed upon them if they did accidentally ship an item. The goverment got what they requested, no non essential items shipped.
I would imagine amazon would have preferred to keep operating, so I believe them.
> I would imagine amazon would have preferred to keep operating, so I believe them.
This was an union driven lawsuit. Shutting down operations to stamp out union activity is rather common with companies large enough to cover the short term costs of it.
Put itself above the law to gain a competitive advantage is unacceptable to me. And now they are making a lot of publicity on tv to remend the damage. A little too late, I'm boycotting them personally.
Amazon has a huge catalog compared to other retailers, and trying to categorise that without mistakes would be difficult and prone to errors.
And no, Amazon has the same catalog as other French retailer, at least in France. Amazon just chose to play dumb with both catalog filtering demands AND physical distances in warehouses.
They complied with the law and shut down. This further limited covid risks for their workers.
During this month they were to keep operations artificially low. As far as I could find the court cut down the categories they could sell to around 10% of what they normally sold to ensure reduced activity. They were also reminded to enforce the existing social distancing rules, avoid large meetings, etc. . I currently regret not keeping a link to the list of categories around when I found it shortly after the court case, now Google only seems to return a flood of news pages all repeating the same source free articles.
Whats the problem with that?
People seem resentful they closed because they calculated it wasn't worth operating. What do people expect? increase the difficulty of doing business and you won't have business operating.
I also suspect they felt they would be dealt with unfairly compared to native retailers, as the goverment has called Amazon a threat the French way of life and other rhetoric.
One notable difference with a strike is that employees kept receiving their pay.
Based on what I've read and this article, it doesn't sound like that much will change once it officially "launches" a Swedish site, although maybe Amazon will lower the minimum amount for free shipping or speed up regular shipping time. Re: this article, I can see them being willing to hold off for quite some time.
Also to note: During the Covid-19 peak in Sweden, Amazon provided to-the-door delivery using Postnord, which I figured was somewhat of an experiment for when the Swedish site launched. It's pretty rare here in e-commerce to get door deliveries - most online shopping is sent to local convenience stores and you need to go and pick up.
I always find it a great contrast to compare to premium shipping companies like DHL and FedEx, whenever I'm unlucky enough to get a delivery from them from overseas. They're still stuck in a world of "we'll deliver between 9am and 6pm, be ready" and they also make little attempt to ask for door codes if you live in the inner city, so most first attempts end up with "premises was not accessible" with no convenient way to give them the four digit code they need. I spent 1+ hour on hold last week with DHL and FedEx for this exact purpose. It will be interesting to see how "modern" of an approach Amazon takes.
It's quite weird at first but in my experience works surprisingly well. Very rarely one has to go queue in the post office to collect the parcel.
* edit: What meant say is that Amazon must offer a job that's better than the jobs that people currently have for them to switch.
(As a side note the current government is actually just about to abolish one of the corner stones of those laws (“LAS”, the law of employment protection). Due to a deal they cut with the opposition parties in order to be allowed to form government)
These agreements are not so much voluntary of course, since without an agreement in place it's hard to do any business in the country at all. Some try out of stubbornness but it's just an expensive way to accomplish nothing.
The alternative would be meddling politicians and nobody wants that. Unions are expected to have a bit more domain knowledge, and these agreements are re-negotiated every few years to get rid of obsolete rules and introduce new ones.
It helps that the labor unions are centralized, professionalized, and has vested interests in the long term survival of the companies they regulate, because of the trust required to make it work. If it is a good system I do not know, but it does provide for a stable labor market with almost no strikes, for which an agreement is a small price to pay.
Amazon is the quintessential hill to die on for the unions and the labour laws are incredibly strong in Sweden. Here's how I think it might play out if Amazon refuses to sign:
- Handels requests collective bargaining
- Amazon declines but are sued in court and loses (you are required to bargain)
- Negotiations fail and Amazon refuses to sign
- The union realises that this is their David v Goliath and blockades the company
- Amazon refuses to cave
- The union declares widespread "sympathetic strikes".
- in the end garbage collectors will refuse to pick up garbage at their warehouse. Electricians will refuse to service their warehouse. Plumbers will not plumb. Workers, builders, postmen etc will all simply stop servicing Amazon. Companies that deal with Amazon can also be put in a blockade.
- Amazon will also receive zero support for from politicians for two reasons, first it's not a political matter. Second even the right wing opposition party will know better than to go against the electorate on this matter.
It's simply not possible to operate a large scale business in Sweden without support of the labour unions (or by having workers conditions that exceed the perceived minimum). If a large scale business wants to operate in the country they _must_ sign a collective bargaining agreement.
TL;DR: refusal to sign a collective agreement escalated into an all-out boycott of the company. In the end, the workers won.
"Toys “R” Us was both an exception to the rule —even McDonald's was forced to sign a collective agreement — and a warning for other corporations that they must adapt to the Swedish model or fail"
This is maybe not a fight Amazon is eager to have in any case. So I think it will play out slightly different.
Indeed, the median disposable income per person (adjusted for purchasing power) in the US is almost $20,000 higher than in Sweden, even after further adjustments for transfers in kind received by households, such health or education provided for free or at reduced prices by government and NPISHs.
I don't know, that sounds off to me. I have seen article about US preparedness for covid, and it said that some crazy percentage of people have no more than $1000 in savings. It was something around 40%.
Maybe this $20,000 higher than in Sweden, is result of median outliers ultra rich that push the true average income of an average person.
I'm not so sure, and I'll explain why below on one of your points.
> in the end garbage collectors will refuse to pick up garbage at their warehouse. Electricians will refuse to service their warehouse. Plumbers will not plumb. Workers, builders, postmen etc will all simply stop servicing Amazon. Companies that deal with Amazon can also be put in a blockade.
Outside of employing builders directly, it's my understanding that Amazon has previously operated in-house alternatives for those, particularly to reduce the costs in their supply chain and operations. I wonder if this would lead to Amazon instead scaling up the self sufficiency instead?
The Toysrus strike has been mentioned and at the time the unions did not even use all means at their disposal.
In the event of a general strike bus drivers could well refuse to stop at bus stops servicing the warehouse. Banks will refuse to process transactions for the company. Members will refuse to give them their business (4 million or so out of the total 10 million population). All of this happened to Toysrus.
Nearly 90% of workers in the country are members of a union and most will follow a general boycott if urged to do so.
There really isn't much of a choice here. They don't have to sign an agreement, but they certainly will not be profitable unless they do.
As was stated in the article, there is no government mandated minimum wage in Sweden as most jobs that would be covered under a minimum wage are negotiated union wages. Union members looking out for other union members, that way all workers benefit in the end.
Everybody? I dont. Im in Sweden. So your statement is false.
The few Swedish friends I showed this article to were actually happy to hear that they might have a local Amazon coming soon?
They are bloodsucking leeches, benefiting from the work done by real proper unions, and their members are rightfully shunned in some workplaces.
We have government that is built on anti-communist PR, whilst using Soviet guidebook on how to run a country. Including censorship, misinformation, erosion of democratic institution and processes.
Heck they even have an ex-communist prosecutor in government!
So you can bet Poland is political concrete block.
(this is attempt at slightly humorous post through gritted teeth)
And if they think they need to revolutionize the labor market to be profitable (enough), would they really establish a presence in Sweden then?
My feeling is they'll establish a business like everyone else and not even try to pull a Toys'R'Us.
Sweden has mostly sectoral bargaining. Many/most things are negotiated between the unions and trade associations, not between union and individual enterprise. When Amazon sits to talk with unions (70% of workers belong to union), they discover that many things have been settled in a bigger table.
> If they can operate in Germany, they can operate in Sweden.
Am I missing anything?
I'll continue supporting the local competition (for books and media) in any case.
This is how democracy is supposed to work.
Have you looked at the current Swedish government? You'll be hard pressed to find people with "working class backgrounds" there, they're mostly political broilers who started their career in the SSU (social democrat youth movement) or Grön Ungdom (environmental party youth movement). Stefan Löfven is one of the few who at least made a start torwards becoming a worker in that he was training to become a welder before he became a full-time labour union representative followed by a career in the SAP (social democratic worker's party).
I'd say that most of our politicians don't have any of those. They might be career politicians, but if they didn't become politicians they would have had a working class career. You can't say the same for many American politicians.
Not exactly, your class is as much determined by your friends and family as your job. People with a background in Ivy leagues, law school or wealthy parents like basically all American politicians don't have many or even any working class friends so face no peer pressure to protect working class people.
> They can manipulate an entrte country of strangers to get elected but not the people over whom they have an information advantage and other more direct sources of power (including rewards)?
They didn't manipulate people to get elected, they got elected since they represent the people well. They can't give rewards to their friends and family or it would be a scandal, Sweden has very little tolerance of corruption. Simple things like buying groceries with tax money instead of their salary or creating hard to find job postings to get friends into jobs creates headlines and has forced people to resign.
Politicians can't be shittier than you let them be. If you tolerate corrupt behavior you will get corrupt behavior. If you don't then they will conform since they don't want to lose their positions.
Just "lol" to the rest.
This is why it works. It's also why it isn't very sensitive to corruption and political changes.
Generally it's funny how this region (Nordics) is reported in the media as some kinds of rationalist demi-gods, when in reality most politics here are just your regular smokescreen mixed with wishful thinking and a lack of understanding the real world.
In conclusion, politicians will do as politicians do nowerdays - drive their own career over the 'public good'.
The ruling Social Democratic Party has strong ties with the unions though.
its the other way around.
But hasn't this already happened with recent reforms regarding the limiting of strike rights [1] and current LAS negotiations.
[1] https://www.arbetaren.se/2019/06/19/riksdagen-klubbade-inskr...
It is abstractly a huge deal and practically a huge deal for Hamnen, SAC, Brandmännens Riksförbund and other alternative unions because it excludes all competition among unions and channels all reform through the internal political workings of those unions like LO/Kommunal. As the a laywer in Arbetaren explained (and others have explained elsewhere) previously, it allows for company (i.e. "yellow") unions which is a realistic problem now considering Amazon is involved.
Worst case-scenario for Amazon is that we'll see some kind of stand-off where multiple labor unions prevent their members from working for Amazon, or doing work for Amazon (usually things like truck drivers at other businesses going on strike instead of delivering good to/from Amazon).
Amazon have a pretty good alternative, so they'll only warehouse in Sweden if it makes economic sense vs Germany + Poland. As for the unions, their incentives and alternatives may be different to the union members too.
[1]: https://www.theverge.com/2018/4/16/17243026/amazon-warehouse...
Why compare Sweden with a Polish warehouse workers and not investigate how e.g. Amazon.fr operates? That country at least goes on strike significantly more often (probably more so than the rest of the EU combined). Meaning, one year I noticed them on strike every other week to protest some intended government plan, even though the company had nothing to do with that, plus they only went on strike during the night.
> Initially, Swedish and Nordic clients will be mainly served from German warehouses — known as fulfillment centers in Amazon-speak — with trucks driving up to Sweden through Denmark, and a fulfillment center operated by local partner Kuehne + Nagel in the Swedish town of Eskilstuna, near Stockholm.
So partly they question if they'll operate a warehouse, but at the same time, there's going to be a warehouses. Only difference is that someone else does the logistics for them.
What usually happens with different standards of living is that the companies raise their prices a bit. Not sure why the article does not go into that.
EU is planning some changes in the trucking cabotage laws, see e.g. https://www.europarl.europa.eu/news/en/headlines/society/202.... This might (according to articles) make it more difficult to only use truckers from certain countries (e.g. whomever has the lowest standard of living / wage). Might also benefit the environment by ensuring companies might reduce the amount of trucking.
Sweden is a little unique in that we have fewer strikes than most European countries. The reason is the "fredsplikt": as long as there is a collective bargaining agreement in place, if a worker goes on strike they can be legally laid off for shirking work.
So, strikes will only happen at most every two-three years when the current agreement expires. And while then there may be a threat of strike, it seldom comes to that.
In contrast, in most contries (notably France), unions may do "political strikes" to express opinions.
Amazon won't be worried about their Swedish employees unpredictably going on strike for better terms. They will be worrying about having to agree to the same collective agreement as competing businesses. They will not get to push salaries lower than others, or squeeze slightly more hours or shorter breaks. So, they will have to look forward to their profits coming from economy of scale and not mistreatment of their warehouse workers. They will not be able to keep prices 10% lower than competitors while keeping the same profit margin, the way they do in the U.S.
Until they sign an agreement, workers at other companies will likely put them under blockade, which means truckers from suppliers will refuse to ship to Amazon's Swedish warehouse; Postal workers will not pick up shipments to consumers; Caterers and conference centres won't service management meetings; Electricians will not service their warehouse; Garbage will not get picked up, etc. They can do some of this themselves, instead, but that's a very high threshold to cross on day 1.
Amazon actually lobbies for higher salaries, it hurts the competitors who don't use as much automation and are not great at operational efficiency.
It's a myth the amazon pay low salaries. They they just optimise the heck out of everything.
It's pretty smart in many ways, as its great PR and destroys your competitors if its national law.
A lot of people think they forced amazon take this action, but strategically its great for amazon if they can raise the minimum wage. It will force other people out of business before causes them issues. It's calculated. They deliver more items per unit of labour then anyone else.
Collective bargain agreements are more difficult because its not national law. You can pay more but your competitors won't. But unions being unions will always ask for more if they think they can, even if they already pay well compared to other companies.
Do you have information on how well they are paid in Germany? I can't find any information on it other than amazon stating they pay well.
Companies are a lot smarter than people given them credit for. They use regulation to their own advantage, they're not against it. They will lobby for nice sounding regulation for PR reasons if they've calculated it harm others more then themselves. They just position themselves to take advantage of the regulation.
Most of the time companies with large amounts of capital are best place to do this. It's the small companies that get screwed.
I don't think salary levels are necessarily the chief way Amazon squeezes their workers harder than competitors - you're right that their minimum wage in the US is higher than the law mandates - but I would also love to see evidence of what their competition is paying. I'd bet they're not on the federal minimum wage, either!
It's not all automation though! Amazon is notorious for extreme work pressure. Too few and too short breaks, for example. This will absolutely not fly in Sweden. Not adapting properly to COVID-19 is another example of putting profits before working conditions.
If its the same rules, amazon will just use its huge amount of capital investment to gain those advantages instead. As it does now. In fact it will in Amazons advantage to raise conditions for entire country if it can.
The problem comes when governments intervene to disadvantage foreign companies over native companies to provide an advantage.
Talking about automation and then the warehouse bit:
Automation in warehouses is something that was in the news in Netherlands recently. Some supermarket opened an partly automated warehouse, the news brought it as something unique. From the comments it was clear that various other supermarkets did that already either years ago, recently or they have such more automated warehouses under construction. Apparently fully automated is very difficult.
Having an automated warehouse isn't something that another company cannot do and/or requires unique expertise. Apparently various supermarkets hired the same company to build their warehouse.
It's about operational efficiency. It's the culture. Things like kaizen, optimising everything, having teams that work out exactly where the products should go etc etc. How should the packing stations be positioned, how should they be designed? What slows down the workers on the packing stations? Small improvements to the tools they every day. Constant small improvements everyday. Anyone should be able to suggest improvements. Try multiple experiments, most of them won't work. It builds up like a flywheel overtime, and then other companies won't be able to catch up.
Companies try to replicate it, buts its harder then just buying a warehouse from company x. Frankly you need the leadership for it, and whole lot of time, money and patience for it to pay off.
Comparing any European country to France for striking is a bit absurd honestly.
Political strikes to express opinions is not really common in most European countries. It happens, rarely.
Obviously I don't know Swedish labour law.
What I'm after is something completely different: Amazon is able to operate in France just fine. I think France is NOT an easy country to operate in. Meaning, I think the article is not trying to pretend things are more difficult than they are in practice. Or: a non-story.
The bits you mention about collective labour agreements also applies to e.g. Netherlands. It partly there to also prevent unfair competition. The prices might be a bit higher or something, but again, not really a story.
It's interesting that other businesses restrict/block other companies. Within Netherlands the government (or at most a judge, possible due to unions) would ensure that such the company is forced to comply.
If the article actually mentioned the details where Amazon might try to ignore it, then go into detail why it would backfire, that would add something interesting. At the moment the article is poor and a non-story.
I don't believe this is strictly true. The "fredsplikt" (lit. "Duty of Peace") only applies to members of a signing, or co-signing union. So while the benefits of the collective bargaining agreement apply to all employees, the "sacrifices" do not apply to members of, say, other unions that do not sign the agreement. The most common example of this in practice is "SAC Syndikalisterna".
In practice though, strikes are unusual as they are a very ineffective means of negotiation unless very large, and therefore very expensive.